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Plaaslike Oorgangsraad van Bronkhorstspruit v Senekal (389/98) [2000] ZASCA 52; 2001 (3) SA 9 (SCA) (29 September 2000)

IN THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

REPORTABLE
Case number: 389/98

In the matter between:


LOCAL TRANSITIONAL COUNCIL
OF BRONKHORSTSPRUIT Appellant


and


H B SENEKAL Respondent



CORAM: HEFER ADCJ, F H GROSSKOPF, HOWIE,
OLIVIER JJA and MELUNSKY AJA

HEARD: 29 AUGUST 2000

DELIVERED: 29 SEPTEMBER 2000

__________________________________________________________________

JUDGMENT

______________________________________________

MELUNSKY AJA:
[1] I have had the opportunity of reading the judgment of my Brother Olivier but regret that I am unable to agree with his conclusion on the merits of the appeal. The issue is whether the respondent’s services were terminated (to use a neutral expression) under the circumstances referred to in s 34(1) or under those specified in s 34(2) of the Rules of the Municipal Employees Gratuity Fund. The relevant provisions appear in par [6] of my Brother’s judgment.
[2] I agree, for the reasons given by my Brother, that the submission by counsel for the appellant - that there was a consensual termination of the respondent’s employment - cannot be reconciled with the factual findings of the learned judge a quo, Van der Walt DJP. For this reason counsel’s submission cannot be entertained. I have considerable difficulty, however, in appreciating why the learned judge a quo held that the respondent was not directly dismissed (“nie direk afgedank is nie”) by the appellant or, indeed, in understanding precisely what that expression means.
[3] The learned judge found that the appellant had resolved to terminate the respondent’s employment in order to replace him on or before 30 June 1996

“by means of affirmative action with an official who will be acceptable and representative of the majority of the employees, the communities and all the stakeholders concerned”.

The respondent regarded resolution R127/96 as a notice of termination of his contract of service and he left the appellant’s employment in terms thereof on 30 June 1996. The aforesaid termination was undoubtedly a dismissal. The fact that the respondent was to be replaced with another official does not alter this conclusion.
[4] Having regard to the factual findings of Van der Walt DJP there is no room for the conclusion that the dismissal was “indirect”. Moreover, in my view, this conclusion is not a factual finding: it is a conclusion of law based on the facts set out in par [3] above. However that may be, it seems to be beyond question that the respondent was dismissed by the appellant, whether indirectly or otherwise.
[5] There are two crucial aspect of s 34(1) and (2) that require emphasis. The first is that both sub-sections contemplate dismissal of the employee concerned (although s 34(1) applies also to an employee’s resignation). The second is that the reasons for the dismissal determine whether the dismissal falls within s 34(1) or (2). This is clear from the following words in s 34(1):

“... or is dismissed by the local authority for reasons other than those provided for in Section 34(2)”.

From this it follows that s 34(2) applies to a dismissal as a result of a declaration of redundancy or retrenchment and s 34(1) to a dismissal for all other reasons. This construction not only accords with the language of the section but it is, in my respectful judgment, the only logical interpretation. The passage quoted by my Brother (par [24] of his judgment) from “The New Labour Law” (footnote 1 on p 279), which was written by Halton Cheadle, underscores that

“retrenchment means dismissal because the employee is redundant”.

[6] If the section is construed as I suggest it should be, it would follow that there is no room for the view expressed by Van der Walt DJP that s 34(1) applies to dismissals due to the fault or misconduct of the employee and s 34(2) to the termination of employment where the employee is blameless. With due deference, this is not what the section says. S 34(2) applies only to termination of employment following retrenchment or a declaration of redundancy. Indeed, counsel for the respondent, who adopted the view of the learned judge a quo, was obliged to submit that an unlawful dismissal would be covered by s 34(2). In fact an unlawful dismissal would clearly fall under s 34(1). Although in this event the benefit paid to the employee would be less than the benefit payable on retrenchment, the employee would be entitled to compensation from the municipality concerned - and not from the Gratuity Fund - for the unlawful dismissal.
[7] I turn to consider what is meant by the expression “having been declared redundant or having been retrenched”. I am unable to agree that the words “redundant” or “retrenched” should be given a wide or extensive interpretation. The context requires that they should be given their ordinary dictionary meaning. That is how the words have been construed in this Court. In West Rand Bantu Affairs Administration Board v Jaques 1976 (4) SA 903 (A), Van Winsen AJA said the following at 911 D-E:

“There is no reason to suppose, regard being had to the context in which the word is used in the Act, that the Legislature intended to use the word ‘redundant’, translated in the Afrikaans text - which is the signed one - by the word ‘oortollig’, in any meaning other than its ordinary dictionary meaning. In English ‘redundant’ is defined in the Shorter Oxford English Dictionary as ‘superabundant, superfluous, excessive’ and ‘oortollig’ is assigned the meaning in HAT. Verklarende Handwoordeboek van die Afrikaanse Taal, of ‘meer as wat nodig is, wat gemis kan word’.”

In Consolidated Frame Cotton Corporation Ltd v President of The Industrial Court and Others 1986 (3) SA 786 (A) it was said at 797J-798A:

“To retrench in the present context means to cut down, to reduce, the numbers of the work force because of redundancy - a superfluity of employees in relation to the work to be performed. Retrenchment does not necessarily involve the abolition of ‘posts’: the employer may merely lay off a number of his employees.”

[8] Redundancy and retrenchment are sometimes used interchangeably. They both involve the dismissal of an employee because of a reduction in the employer’s work force, whether because of the abolition of a post or because the employees are superfluous for the employer’s requirements. In South African Labour Glossary (Barker and Holzhausen), the following definitions are given:

“redundancy (oortolligheid) Reduction in the labour force of a firm for reasons for which the employees are not responsible, eg the closure or transfer of the place of work, the introduction of new technology or a reduction in the demand for certain categories of employees. There is thus a surplus of labour to be made redundant. This is normally referred to as dismissal for reasons based on the employer’s operational requirements. Sometimes distinguished from retrenchment.”

“retrenchment (personeelaflegging, personeelbesnoeiing) The dismissal of employees for reasons connected with economic, technological, structural or similar requirements (see operational requirements). Often used interchangeably with redundancy, but in some countries, eg the USA, retrenchment refers to the adoption of a smaller scale of operations in an organization, which may result in lay-off as part of the effort to reduce the workforce.”

According to OED (vol XIII) “redundant” means “superabundant, superfluous, excessive” (p 429) and “retrench” (p 792) means “to cut down, reduce, diminish in extent, amount or number”. The dictionary meanings coincide with the manner in which this Court has interpreted the words and with the way in which the expressions would ordinarily be understood, ie a reduction in the labour force.
[9] What was the reason for the respondent’s dismissal? He was not dismissed because his post had been abolished or because the appellant had decided to reduce its labour force. He was dismissed because he was not sufficiently acceptable to certain interest groups. He was not superfluous to the needs of the appellant: he was merely unsuitable or incompatible for the post. The appellant, therefore, was not retrenched, nor was he made redundant. The reasons for his dismissal were quite unrelated to what is ordinarily meant by redundancy or retrenchment. This matter may be compared with the decision of this Court in Baudach v United Tobacco Company Ltd [2000] 3 All SA 153. In that case it was represented to the appellant that his position had become redundant and that he was to be retrenched. As a result he left the respondent’s employment and accepted an amount in settlement. In fact his position was given to another person who was regarded by the employer as more suitable for the post. This Court had no difficulty in holding that the purported retrenchment was in fact an unfair dismissal. I do not suggest that the respondent in this appeal was unfairly dismissed: the question does not arise in the case before us and there is no need to express any view on the matter. What can be said, in accordance with the decision in Baudach, is that incompatibility or unsuitability is not the equivalent of redundancy or retrenchment.
[10] The only remaining question relates to the re-organization or restructuring, including reduction of personnel, which the appellant undertook after the respondent’s dismissal. It may be noted that after the respondent’s services were terminated he was immediately replaced by a temporary town clerk who held that position for approximately a year until 1 July 1997 when Mr Seitisho was permanently appointed to that post. The court a quo held that the dismissal of the respondent was the first step in the restructuring process which the council later implemented. This fact does not alter the conclusion at which I have arrived. The question is not whether the respondent was dismissed as part of a restructuring program that was later put into effect. It is whether he left the appellant’s employment as a result of redundancy or retrenchment. In my view he did not and I would therefore allow the appeal. I agree, however, with paragraphs 2 and 3 of the order relating to costs made by Olivier JA. I concur, too, in his reasons for making the said costs orders.

...................................

L S MELUNSKY

ACTING JUDGE OF APPEAL