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South African Airways v Bogopa and Others (JA 36/05) [2007] ZALAC 10 (3 August 2007)

.RTF of original document

IN THE LABOUR APPEAL COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
Case No: JA 36/05

In the matter between:

SOUTH AFRICAN AIRWAYS Appellant

and

MOGAGABO AVC BOGOPA First respondent
LAWRENCE MABUNDA Second Respondent
SINDY ANGELIQUE MABE Third Respondent
VICTOR THOMAS MANGANYI Fourth Respondent
BRADLEY SIBUSISO ZIKHALI Fifth Respondent
MERYLIN ANNE POWYS Sixth Respondent
BAVESH DESAI Seventh Respondent


JUDGMENT


ZONDO JP
Introduction

[1]      This is an appeal against a judgment of the Labour Court given by Pillay J after a trial concerning a dispute between the South African Airways, the appellant herein, and the respondents about the fairness of the appellant’s dismissal of the respondents from its employ on the 30th June 2000. The Labour Court found the dismissal to have been both procedurally and substantively unfair. It declined to order the reinstatement of those of the respondents who had sought reinstatement. It ordered the appellant to pay each one of the respondents a certain amount by way of compensation. The appellant sought and obtained leave from the Labour Court to appeal against that order. The respondents who had sought reinstatement did not note a cross-appeal against the Labour Court’s refusal to order their reinstatement.

         The facts
[2]      The appellant, as already stated above, is the South African Airways. The respondents were employed by the appellant in its Inflight Service Department in Johannesburg as crew managers. If it becomes necessary later on to give more precise details of the positions that they each held, I shall do so then. They were dismissed from the appellant’s employ with effect from the 30th June 2000. The appellant’s dismissal was said to be for operational requirements of the appellant. The respondents’ dismissal was the culmination of a series of events and communications that took place between the appellant and its employees in the In-flight Service Department in general but with the respondents in particular. I deal with those events and communications hereunder.

[3]      Mr Desai, the only one of the respondents to testify, gave his evidence on a number of issues and events. Mr Desai testified that about 28 January 2000 an entity known as Bain and Company, an independent consultancy that had been brought in by the Chief Executive Officer of the appellant at the time, a Mr Colman Andrews, made available a report compiled pursuant to an audit that it had conducted on the Inflight Service Department across the board. Mr Desai said that in terms of that report Bain and Company’s audit had found that with regard to the Inflight Service cabin crew management there was only “a need for process of engineering and reaffirming of the key performance areas of the individual cabin crew managers”. Mr Desai testified that on the 4th to the 6th February 2000 there was a “strategic break away to conform our key performance areas to the recommendations of the Bain and Company audit”. This evidence given by Mr Desai was not challenged.

[4]      Mr Martin Kemp, who was the immediate superior of the respondents, and Mr Basson, who was the human resources Manager, testified on behalf of the appellant. The appellant did not call any other witness. Mr Kemp testified that at some stage in April or May 2000 a meeting took place which was attended by the senior managers of the Inflight Service Department. Those who attended the meeting included the Vice-President: Inflight Services : Ms N Isaacs, Mr Kemp, Mr Basson and others whose identity is of no significance for present purposes. According to Mr Kemp the meeting was a strategic session. None of the respondents had been invited to that meeting nor had there been any prior discussion with them about the subject of the meeting. Mr Kemp testified that the senior management had found that there was “lack of efficiencies” within the Inflight Service Department some of which were due to the way that the Inflight Service Department was structured. He said that there was no accountability. In this regard Mr Kemp made the example that there would be three managers responsible for a group of employees on a specific rank of cabin crew.

[5]      Mr Kemp said that in the Inflight Service Department there were a crew management side and an operational side. He said that it was at that strategic session that it was decided to do away with the old structure of the department and to adopt a new structure. He said that the senior management believed that through the new operational structure the department would be able to achieve higher service levels, cost savings and efficiency. Mr Kemp said that in the new operational structure two positions among the positions that had been occupied by the respondents in the old structure were going to be done away with. He said that the appellant decided that the best competency fit test would be used to decide who would be appointed to positions in the new structure of the department. He further stated that except for three of the members of the management in the department - that is the senior management – each employee in the department would be required to submit his or her curriculum vitae and apply for positions in the new structure. When he gave evidence, Mr Kemp said that these decisions could be changed if, during consultation with the employees, it was shown that they should be changed. This evidence by Mr Kemp was not challenged.

[6]      Mr Desai testified that on the 19th May 2000 an electronic mail information circular was sent out notifying the respondents and other crew managers in the Inflight Service Department that on Monday, the 22nd May 2000, there would be what Mr Desai referred to as “a mass inflight services general management meeting”. He said that no agenda was provided for the meeting.

[7]      On the 22nd May 2000 a meeting took place between the senior management of the Inflight Service Department and the crew management. It was addressed by Ms Isaacs. A letter was given to each one of the crew managers, including the respondents, dated the 22nd May 2000. There is a dispute between Mr Kemp and Mr Desai whether that letter was given before the commencement of the meeting or after the meeting. Mr Desai testified that the letters were given to the crew managers on their arrival at the meeting. Mr Kemp testified that this occurred after the meeting. In the view I take of the matter it does not matter much whether the letters were given before or after the meeting. However, I am prepared to assume that they were given before the commencement of the meeting. Actually, Desai’s version in this regard seems very persuasive.

[8]      At the meeting of the 22nd May Ms Isaacs made a presentation to the crew management. Mr Kemp’s evidence was that most of what she said was what was contained in the letters of the 22nd May 2000 referred to above which were addressed to the crew managers. For that reason and the reason that the contents of that letter are very important I propose to quote a sample of those letters. The body of such letter read as follows:
“As a result of the stringent demands placed by the aviation market on SAA and the need to deliver a more effective In-flight Services operation it has been decided to restructure certain operations at In-flight Services. A number of options have been considered and it has been decided that the revised organisational structure would be the most cost effective manner in which to provide an effective managerial control.

This has resulted in the new positions being created, which differ significantly from the current positions and also the number of jobs in the new structure. The new structure effectively renders all current Crew Management positions redundant and as a result you are an affected employee.
It is our intention to fill the new positions at In-flight Services by way of recruitment and selection on the criteria of best competency fit. Should you be interested in these positions you are required to hand your C.V to Recruitment and Selection by no later than 12H00 on Monday, 29 May 2000. Selection processes will be completed by 15 June 2000.

In the event that you are not successful in being appointed to one of the new positions you will then be effectively redundant and informed of that decision. Redundant employees may elect to take voluntary severance or apply for alternate positions in S.A.A on the basis that they are successful in any recruitment and selection procedure followed for such positions.

It is envisaged that any redundant employees’ services will therefore be effectively terminated by no later than 30 June 2000 with payment in lieu of notice.
        
You are hereby invited to provide and discuss any inputs or alternative options you may have, with your Senior Manager, Martin Kemp.”

[9]      The respondents’ version of what happened at the meeting of the 22nd May and afterwards was given by Mr Desai. Mr Desai testified that on Monday, the 22nd May 2000, the crew management assembled in the boardroom for the meeting. He said that all managers were present. He said in part: “As we arrived in we were handed out brown envelopes and on the cover there was a title ‘retrenchment packs’. We took up our seats. We were informed not to open our packs until the information session was over. Ms Noedene Isaacs, our vice-president at the time, went on to do a presentation regarding [the] restructuring of Inflight Services and notification to us. I am just summing up in the gist, notification to all crew managers. Well specifically I am talking about crew managers, but just notifying all managers at 110 level and 109 level, in some cases, that they were now effectively redundant and would have to re-apply for their positions. She completed quite an extensive presentation and then she invited questions”.

[10]     It is important to note that the following were some of the points made in the letter:
(a)     
a decision had already been taken to do away with the structure which was operational at the time and to use a new structure;

(b)     
the crew managers, including the respondents, were being informed that they were effectively rendered redundant by the new structure;

(c)     
new positions had been created which “differ significantly from the current positions and also the number of jobs in the new structure;”

(d)     
there would be a recruitment and selection process to fill the positions in the new structure;

(e)     
the criterion that would be used to select people to fill positions in the new structure would be the “best competency fit”;

(f)     
each crew manager who was interested in filling a position in the new structure had to hand in his or her curriculum vitae to the Recruitment and Selection section by no later than 12h00 on the 29th May 2000;

(g)     
the selection process would have to be completed by the 15th June 2000;

(h)     
the respondents were invited to “provide and discuss any inputs or alternative options” that they may have had with Mr Kemp;

(i)     
if the respondents and the other crew managers did not succeed in being appointed to any of the positions in the Department, they would effectively be redundant and would be informed of that decision at which stage they would have an election to make. They could either take a voluntary retrenchment package and leave or they could apply for any vacant positions within the appellant but outside the Inflight Services Department. If they took the latter option, the recruitment and selection procedure would be followed;

(j)     
it was envisaged that the services of employees who were redundant would be terminated by no later than 30 June 2000.

[11]     Mr Desai further testified that a new structure for the department was handed out to the crew management. He said that on seeing the new structure he noticed that some people had already been assigned positions in the new structure. He said that he then asked why some people had been slotted in the new structure when they were being required to apply. He said that, for example, there was a Mr Paul Naicker who was a fellow colleague of his and a 110 manager who had suddenly been placed in the new structure. He also referred to a Mr Lenley Sharp who, Mr Desai said, was busy on a certain project for a certain period of time in the Inflight Service Department and, once the project had been completed, was meant to move back to the human resources department where he was based. Mr Desai said that, when he raised these questions, Ms Isaacs reprimanded him saying that he was “inciting chaos” and that he should keep quiet. Mr Desai said that Mr Zikhali, one of the respondents, asked the relevance of the restructuring in the light of the team building exercise that had been done pursuant to the audit of Bain and Company. Mr Desai said that Mr Zikhali was instructed by Ms Isaacs to remain silent for the rest of the meeting.

[12]     Mr Desai further stated that Mr Thomas Manganye, one of the respondents, asked what the justification was for the fact that the severance pay for those who agreed to take a voluntary retrenchment package was on a sliding scale depending on when one took it. Mr Desai said that either Mr Kemp or Mr Basson or both answered Mr Mangaye by saying that that was in accordance with the appellant’s standard policy. Mr Desai further testified that Mr Mabunda, also one of the respondents, asked what the status of the crew managers was since they had been declared redundant. He also asked what the crew management’s reporting lines would be and what their authority in terms of management would be. According to Mr Desai, at this stage Ms Isaacs became “considerably annoyed” and said that the crew management should take those questions up with their line managers. The respondents’ line manager was Mr Kemp. The meeting was then adjourned.

[13]     Mr Desai’s evidence about what happened at the meeting of the 22nd May 2000 as set out above was not disputed in any significant way. Mr Kemp simply disputed the evidence that the envelopes or packets marked “retrenchment packs” were given to employees at the commencement of the meeting. His version was that the envelopes or letters were given after the meeting. As I have said above, in my view which version is the true version on this point does not make much difference. The fact of the matter is that, when the meeting began, the envelopes had been prepared already. Mr Desai’s evidence as to the questions which Mr Desai said were asked and what he said were the reactions from Ms Isaacs and Mr Kemp and or Mr Basson was not disputed. On this evidence the appellant treated the crew managers, including the respondents, very badly and, indeed, in a very insensitive manner.

[14]     After the meeting at which Ms Isaacs had made a presentation, a meeting took place between Mr Kemp and the respondents. It is possible that there were other employees at the meeting as well. This meeting took place because Ms Isaacs had told those who had attended her presentation that the employees could direct their questions or queries to their line managers. It would seem that some of the questions that had been asked at Ms Isaac’s presentation and had not been answered were taken up at the meeting between the respondents and Mr Kemp. Mr Kemp’s version about what happened at that meeting differs in certain respects from that of the respondents though their respective versions do converge in respect of certain points.

[15]     Mr Desai testified that Mr Mabunda asked Mr Kemp the same question that he had asked Ms Isaacs. According to Mr Desai, Mr Kemp’s response was to urge the respondents to comply with the process and to tell them that their behaviour in questioning the process was unbecoming. Mr Desai testified that Mr Kemp said that a decision had been taken and that it was irreversible. Mr Desai testified that “there were some back and forth discussion and there it ended with Mr Kemp telling Mr Mabunda that his continued behaviour would cost him dearly when it came to the appointment process to the new structure”.

[16]     Mr Desai testified that, after he and his colleagues had left Mr Kemp’s office, they had a discussion among themselves assessing the situation and they decided that, in the absence of clarity on the issues that they had raised and “the hostility of the senior management towards us, that we should seek legal advice which we subsequently did”. Mr Kemp said that he could not recall whether he had said that the decision was irreversible.

[17]     Mr Kemp subsequently invited the respondents and other employees to another meeting on the 25th May 2000 in which a consultation would also take place. Initially the respondents indicated through their attorneys at the time that they would not be able to attend the meeting owing to short notice. However, after Mr Kemp had written to the attorneys effectively insisting that the respondents should attend the meeting, they attended the meeting. Mr Basson also attended the meeting. Mr Desai testified that the respondents had decided amongst themselves that “it would be perceived that we were not interested in any form of discussions and that we should go ahead and go to the meeting armed with information that we got in terms of the legal advice, the informal opinion”. According to Mr Desai the respondents had elected him to be their spokesperson.

[18]     Mr Desai testified that at the meeting of the 25th May he raised a number of issues with Mr Kemp. He testified that he raised “the issue of the employment contracts in terms of consultation when contemplating restructuring…” He also said that the respondents also raised issues relating to compliance with the Labour Relations Act and consulting the respondents before and not after a decision had been made. Mr Desai testified that Mr Kemp told them, particularly him as the spokesperson of the group, that “our continued insolence and dissent, our inciting behaviour or insolence was being viewed as insolence and dissent and that it was counter productive for the current operations at Inflight Services”. Although Mr Kemp might not have admitted all the evidence given by Mr Desai as to what happened at the meeting of the 25th May 2000, it would seem that, on the whole, Mr Desai’s evidence is probably true. Mr Kemp’s behaviour as testified to by Mr Desai would be consistent not only with how Ms Isaacs had herself treated the respondents when they asked certain questions but with what happened on the 26th May.

[19]     According to Mr Desai, on the 26th May Mr Kemp called the respondents into his office. Once the respondents were in his office, Mr Kemp informed them that they would be put on “administrative leave”. The reason for the administrative leave, continued Mr Desai, was that “in the (indistinct) of the insolence and dissent and that we were inciting colleagues at work and therefore it would be best that we were removed from the work environment and I think it would end on the 15th…” Mr Desai testified that in terms of the policy of the appellant there was nothing called “an administrative leave”.

[20]     Mr Kemp was not convincing when in his evidence he tried to defend his decision to place the respondents on the so-called “administrative leave”. The more he tried to defend his decision, the more, it seemed to me, he gave one the impression that there was more to that decision than he would have been comfortable to admit. It is difficult to read the evidence relating to the placement of the respondents on “administrative leave” without getting a strong feeling that Mr Kemp and senior management were annoyed or irritated at being asked certain questions by the respondents or by the respondents’ conduct in questioning the way in which they were handling the restructuring and that putting them on administrative leave was intended to be punitive.

[21]     On the 29th May 2000 an article appeared in the Business Report of “The Star” dealing with the issue of restructuring in the Inflight Service Department of the appellant. The article also carried photographs of the respondents. The appellant’s senior management appears to have felt very strongly about this article as will be apparent from their conduct on the 15th June which will be dealt with later herein. Two further articles appeared in the same newspaper on the 30th May and 7th June dealing with the restructuring in the Department. On the 29th May 2000 the respondents sent a letter to Mr Kemp. Its contents are important. For that reason I quote them in full. The body of the letter read thus:
“1.       With reference to the letter dated 22nd May 2000 received from Noedine Isaacs, Vice President/In-flight Services, a copy of which is attached hereto for your attention.
2.       We refer to the last paragraph thereof and therefore correspond with yourself.
3.       At this juncture we inform you that we are unable to participate in the recruitment and selection schedule for no later than 12h00 of even date.
4.       The reason for the aforesaid is that it is our opinion that the restructuring and concomitant redundancy referred to in the aforesaid letter is procedurally and substantively unfair and fails to comply with the provisions of the Labour Relations Act.
5.       Accordingly we are unable to partake therein to avoid any potential prejudice to our positions.
         6.       Our rights are hereby reserved.
7.       Nevertheless we would welcome an opportunity for consultation with yourselves regarding this issue”.
         It will be observed that the respondents made it clear that they would not apply for positions in the Inflight Service Department. However, it is also to be observed that in the last paragraph of their letter they took the appellant up on its invitation to them to engage in a consultation with them as contained in the appellant’s letter of the 22nd May 2000.

[22]     Mr Kemp testified that after reading the respondents’ letter of the 29th May 2000 he made a handwritten note thereon to respond to it. The handwritten note was, inter alia, to the effect that the respondents should contact his secretary to make an appointment to have a consultation with him. He also gave his secretary’s telephone number in the note. When Mr Kemp gave his evidence-in-chief and under cross-examination, his evidence was very vague about what happened to the letter after he had made the handwritten note on it. The respondent’s version was that that handwritten note did not reach them or the letter with the handwritten note was not sent to him.

[23]     Mr Kemp’s secretary was not called to give evidence. When Mr Kemp was being cross-examined, it appeared from some other letter addressed to him by the respondents that the letter on which he had made the handwritten note had been delivered to him. In the light of this Mr Kemp became more emphatic that he must have handed the letter back to the person who had delivered it to him after he had made the handwritten note.

[24]     Counsel for the respondents disputed the suggestion that the letter with the handwritten note reached the respondents. He pointed out to Mr Kemp two or three things which, so he contended, did not support Mr Kemp’s version. I do not think it is necessary to deal with those aspects or factors because what transpired during Mr Desai’s cross-examination tipped the balance of probabilities overwhelmingly in favour of Mr Kemp’s version. The article that was published in the Business Report about restructuring in the appellant contained excepts from Mr Kemp’s handwritten note made on the respondent’s letter of the 29th May. Mr Desai was unable to provide any sound explanation as to how the journalist who wrote that article could have had access to the handwritten note if he did not get it from him or the respondents, particularly because the journalist had interviewed Mr Desai. Mr Desai attempted to say that there were other people who had access to the letter from whom the journalist could have got the letter but, really, that was an extremely remote possibility. The probabilities are, as I have said, overwhelming that the journalist got the letter with the handwritten note from Mr Desai or one of the other respondents. For the respondents to deny this was to deny the obvious. The effect of this is that the respondents did become aware of Mr Kemp’s response to their wish to be consulted but, for certain reasons, they elected not to take him up on his invitation to make an appointment through his secretary for a consultation meeting.

[25]     On the 7th June 2000 the appellant wrote to the respondents individually and, inter alia, advised them that, as they had failed or refused to apply for positions in the Inflight Service Department, they had been declared redundant in that department. The respondents were also advised in the letter that they could apply for any vacancies that the appellant could be having outside the Inflight Service Department and, if they got appointed to some vacancies outside that department before the 30th June 2000, the letter would become redundant. That letter also reminded each one of the respondents that they were being invited “to make any further representations you wish to make at any stage in this regard”. The respondents failed to take this latter invitation up as well.

[26]     The 15th June 2000 was meant to be the last day of the “administrative leave” that the appellant had given to the respondents against their will. However, on that day they were served with notices to attend a disciplinary inquiry on the 27th June 2000 to answer certain allegations of misconduct arising from their association with the articles that had been published in the Business Report on the restructuring in the Inflight Service Department. The notices also informed the respondents that they were being suspended from work until the 27th June 2000 and were not to enter the appellant’s premises during the period of suspension except with Mr Kemp’s permission. However, it said that they were “required to daily report telephonically before 09h00”. Precisely why this was necessary is, quite frankly, incomprehensible to me.

[27]     In a letter dated 15 June 2000 Mr Kemp wrote to each one of the respondents advising that in discussions that he had had with Mr Desai on the 13th and 14th June 2000 the latter had indicated that the respondents would not be applying for any vacancies within the appellant. Mr Kemp, accordingly, sought confirmation from each one of the respondents that what Mr Desai had said about him/her was true. He indicated in the letter that, if he received no confirmation by the end of that day, namely, the 15th June 2000, that that was not the position, he would accept that it was the true position. Mr Kemp testified that he received no response to this letter. Indeed, it was common cause that what Mr Desai had told Mr Kemp was a true reflection of the respondents’ attitude. The respondents did not apply for any positions within the appellant pursuant to Mr Kemp’s letter of the 7th June 2000.

[28]     On the 27th June 2000 the respondents were found guilty in a disciplinary hearing or in disciplinary hearings. The sanctions given to them were those of warnings. On the same day the appellant wrote a letter to each one of the respondents and informed them that they would be dismissed on the 30th June 2000 for operational requirements. The letter did not specify what the specific operational requirements were. However, during the evidence at trial both Mr Kemp and Mr Basson said repeatedly that the respondents were dismissed because they did not apply for positions or because they did not take part “in the process”. Indeed, even in the notice of appeal to this Court the appellant stated that the Court a quo should have held that the respondents were dismissed because they refused to apply for positions. On the 30th June 2000 the respondents were dismissed.

[29]     In the letters of dismissal dated 27 June 2000 addressed to each one of the respondents Mr Kemp pointed out that he/she would not be paid any severance pay “as you did not make use of reasonable alternative employment offered to yourself in terms of section 41(4) of the Basic Conditions of Employment Act”. Of course, the appellant misunderstood the legal position in respect of this last point because in terms of section 41 of the Basic Conditions of Employment Act, 1997 (Act 75 of 1997) (“the BCEA”) an employee forfeits his right to severance pay if two conditions prescribed therein are met. The one is that the employer must have made him an “offer of alternative employment”. The second is that the employee must have “unreasonably refused to accept” such offer. In this case the appellant never made the respondents an “offer of alternative employment”. All the appellant did was to offer the respondents an opportunity to be considered for alternative employment if they applied. They were not guaranteed appointment if they applied. They could still have been rejected even if the prospects of that happening were slim. The offer of alternative employment contemplated in section 41(4) of the BCEA is an offer which upon acceptance by the employee would automatically result in a contract of employment. This was not the case in this matter.

[30]     It is necessary at this stage to state that as its response to the respondents’ statement of claim filed in the Labour Court, the appellant filed an affidavit deposed to by Mr Kemp. I do not propose to deal with its contents in any detail. It is sufficient to make certain observations about some of its contents and then refer to some of the annexures to Mr Kemp’s affidavit. Mr Kemp said in his affidavit and in his oral evidence that it was as a result of competition and the need to provide a competitive service that it was felt that the Inflight Service Department needed to be restructured. He specified some of the problems and said it was believed that the new structure would help to address them. In fact he went on to say that the changes that were made did in fact result in better service and cost savings. This evidence was not challenged under cross-examination. Although there was some reference to the Bain and Company report and the break away get-together which was held pursuant to that report, it was never suggested to Mr Kemp under cross-examination that the restructuring that occurred was unjustified or unjustifiable.

[31]     In his affidavit Mr Kemp referred to annexure “SAA1” which represented the new In-Flight Services Revised Operations Structure. When one studies the revised structure, one can see that it had certain posts to which incumbents had already been alloc