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FLYNOTES: LABOUR – Dismissal – Operational requirements – University staff requirements – Master’s degree as minimum requirement – Policy stipulated that staff would be encouraged to upgrade their qualifications – Applicant accepted rationale for requirement – Registered for master’s but deregistered without finishing studies – Sat idle and did not pursue master’s over the years – Applicant was retrenched for substantively fair reasons – Application fails.

IN THE LABOUR COURT OF SOUTH AFRICA, DURBAN

 

Not Reportable

Case No: D698/21

 

FATIMA BEGUM SAYED ALLY KHAN	Applicant
and
DURBAN UNIVERSITY OF TECHNOLOGY	Respondent

Heard:          14 December 2023

Delivered:    16 October 2024

 

JUDGMENT

 

MSIZI, AJ

 

[1]  The applicant is a former employee of the respondent who was retrenched by the respondent. She now seeks reinstatement with retrospective payment of her salary from the date of her retrenchment to the date of her reinstatement. She also seeks the payment of the costs of this litigation.

 

[2]  The action is defended by the respondent on the basis that the retrenchment of the applicant was a result of the operational requirements of the business of the respondent.

 

[3]  Given that the dismissal of the applicant was common cause, in terms of section 192 of the Labour Relations Act[1] (LRA), the respondent bore the onus to satisfy this court that the retrenchment was substantially fair.

 

The background facts

 

[4]  The respondent is a product of the amalgamation of the then ML Sultan and Natal Technikons converting them into a university. According to the respondent, the establishment of the university required the respondent to enhance its stature and standing to be on par with both national and international universities. In its quest to achieve this, it had to attract the best in staff and students. It also had to upgrade the qualifications of its academic staff. Also, it had to generate income to ensure its survival. Regarding its academic staff, it imposed a requirement that its staff should have a master’s degree as a minimum requirement. It had recognised that this was the standard nationally at all the universities with some even raising the bar to a minimum requirement of a doctorate. In seeking a master’s degree, this would also result in an increase in the research capacity of its staff. In this regard, the staff would be able to produce academic articles which would find their way into renowned academic journals thus generating income for the respondent. In this way, with highly regarded academic staff, it would be able to attract a high calibre of staff; receive recognition as a formidable university as well as increase its attraction to students. This way it would ensure its continuity, competitiveness and attractability.

 

[5]  This culminated in the respondent developing a policy on its Strategic Directions, which spelt out this amongst others, and stipulating a deadline by which this requirement would have to be achieved by its academic staff. It then populated this policy by communicating it widely throughout the institution and cascading it down within the institution as a compulsory requirement in all its faculties. The faculties in turn had to populate it internally to ensure the achievement of this goal. The policy stipulated that staff would be encouraged to upgrade their qualifications and to register at the university of their choice for post-graduate studies and encouraged them to target niche research areas. To facilitate this, the respondent created a special incentive programme for the staff through the creation of scholarships and bursaries for the study of master’s and doctorates. It also decreased the workload for the staff and increased leave days so that those studying would get adequate time.

 

[6]  The Strategic Directions with this requirement were revised from time to time. The first was for the period of 2002 to 2012; 2009 to 2018 then in 2015 to 2019. The policy gained impetus from 2009 onwards. However, initially it was not stringently applied and gained momentum as the years went by.

 

[7]  In support of its case, the respondent invited the testimony of Messrs Kharwa and Msomi. Mr Kharwa was employed by the respondent in the Department of Financial Accounting as a lecturer in 1996 prior to the establishment of the university. When the applicant was appointed in 2009, Mr Kharwa was the Deputy Dean of the Faculty of Accounting and Informatics, the faculty to which the applicant was appointed. He remained in the department until he was appointed its executive dean for the entire period of 2014. After his retirement, he remained in its service as a consultant.

 

[8]  In his testimony, Mr Kharwa confirmed the adoption of the Strategic Directions by the respondent which were fervently driven by the then Vice Chancellor of the university, Professor Roy du Pre. He also confirmed that the Strategic Directions of the respondent were published widely and were a regular item in faculty meetings which were attended compulsorily by all staff including the applicant. He testified further that the Faculty developed its own Strategic Plan which dovetailed with the university’s. The plan reiterated the requirement of a master’s. This requirement was also repeated in the faculty board meetings which he also emphasised after he took over from the then Dean of the Faculty, Professor Nepal. These board meetings were also compulsory for the members of staff. The discussion of the strategic directions at board faculties had also been emphasised by the respondent’s Senate.

 

[9]  In his evidence, he further referred to the criteria for accreditation of academic programmes which had been issued by the Council for Higher Education (CHE). He pointed out that according to the criteria published in about 2012, undergraduate programs must be provided by staff with relevant academic qualifications which must be higher than the exit level of the program programme being taught. He explained that he was accredited for CHE and served as one of its assessors. To comply with this requirement, the qualification of the lecturing staff needed to be considered. So, for example, if the program programme offered was on the NQF 7 platform, the lecturer should be in level 8 qualification at least. He explained further that according to these criteria an Honours obtained prior to these stipulations placed the lecturer at level 7 and those obtained after the criteria would be placed at level 8. He clarified that the applicant was at level 7, meaning that she qualified to lecture at level 6 at least and below. He explained further that because of the CHE stipulations, the applicant could not lecture the entire course she was employed to teach.

 

[10]  Mr Kharwa then testified about the specific situation of the applicant. The applicant was employed on 1 August 2009 as a lecturer in the Faculty of Accounting and Informatics, in the Department of Auditing and Tax of the respondent. Prior to her appointment, the respondent advertised the position at least three times without yielding any good results. One of the requirements stipulated in the advertisement was that the candidate must have a master’s Degree and should be a member of the South African Institute of Chartered Accountants (SAICA). After these failed attempts, the respondent resorted to head-hunting which yielded the appointment of the applicant who was appointed even though she did not have the requisite master’s degree.

 

[11]  Owing to the fact that the faculty had struggled to find someone who had the requisite master’s for the position the applicant was appointed into, it was thus resolved to settle for the applicant. This was not because the strategic requirement of a master’s was not applicable or abandoned. The message was clear that she had to have a master’s. At the time of the employment of the applicant, the respondent was in a transition. He was part of the interviewing panel that considered the applicant and testified that this was made clear to her. At the end of the interview of the applicant, minutes of the interview were produced and he co-signed them. In the last paragraph of the minutes, it was recorded: “Ms Sayed Ally produced a very informative presentation and displayed a wealth of knowledge in the field of auditing. It must be noted that even though Ms Ally does not possess a master’s and is not yet a member of SAICA (requirements for the position), the committee found her to be suitably qualified and recommended that she be appointed as a lecturer and not a specialist instructor”.

 

[12]  Mr Kharwa was also a member of the Employer Assistance Programme Board which offered employees funding for the study of a master’s. From 2012 a lot of lecturers had undertaken their master’s studies and went on to qualify. He further referred to the respondent’s Academic Staff Promotion Policy which as far back as 2013 stipulated that master’s was a minimum requirement.

 

[13]  In 2011, the applicant, duly assisted financially by the respondent, registered to study for a master’s at the University of Rhodes. However, she later deregistered the same year without finishing her studies and reimbursed the respondent the monies it had paid. According to him, the registration of the master’s by the applicant was in compliance with the repeated messages for a master’s required to enhance the lecturers’ teaching ability and signalled acceptance of this requirement by her.

 

[14]  He expressed being perplexed that the applicant had sat idle and did not pursue the master’s over the years and considered her irresponsible given that she was acutely aware of this requirement. He dismissed the applicant’s reliance on the Department of Education’s National List of Occupations’ high demand as justification that she did not need a master’s. He testified that the applicant could not rely on these as these do not trump the respondent’s requirements for a master’s. The only obligation the respondent had was that it could not reduce its academic requirements below that of the Department of Education’s but nothing precluded it from exceeding the requirements of the Department of Education. Therefore, the applicant was bound to adhere to the imperatives of the respondent. He further dismissed the applicant’s insistence that she was to be exempted from the requirement because as a chartered accountant, she had a scarce skill and this professional qualification was an equivalent of a master’s. He pointed out that even after her retrenchment the respondent got candidates with a master’s including in the applicant’s former faculty.

 

[15]  He also dealt with the outcome of a benchmarking exercise on other universities which had been undertaken by the respondent. This confirmed the universal requirement of a master’s as a minimum qualification for a lecturer and pointed out that with other universities the demand is a doctorate for a lecturer. This was presented in the consultation at the Commission for Conciliation, Mediation and Arbitration (CCMA) at the time of the consultations regarding the retrenchment and had been accepted as true and correct by the CCMA, and the trade unions representing the affected staff members did not furnish any counter to this.

 

[16]  During his cross-examination, it was put to him that when the applicant was employed, this requirement was not part of the terms and conditions of her employment. He admitted this but explained that it was now a requirement which she, as with all the other employees, had to comply with as it had become part of the operational requirements that the applicant was informed of as soon as she joined the employ of the respondent. He reiterated that even at the point of her employment and in her interview, it was. When she registered for a master’s at Rhodes, financed through the respondent’s special finance support programme, she was complying with that requirement.

 

[17]  Mr Kharwa also dealt with the applicant’s case that she cancelled her master’s registration at Rhodes University after she was advised by Mr Bhagwan that she could get a conferment of a master's upon her. He explained that sometime in 2017, the respondent received a whistleblower’s report that some staff members had a conferment of a master’s without having studied for the qualification, and then they proceeded to study for a doctorate. Mr Bhagwan of the applicant’s faculty was one of those. This was not a policy of the respondent, as a result, the practice was stopped in 2018.

 

[18]  Mr Msomi, the Acting Senior Director of Human Capital of the respondent, corroborated the testimony of Mr Kharwa regarding the development of the Strategic Directions and strategy of the respondent; the popularisation of the requirement to obtain the master’s as a minimum requirement for lecturers and the setting up of the support for those who undertook these studies. He also referred to a communiqué of 2017 from the then Vice Chancellor of the respondent in which he stated: “many people should have smelt the coffee and woken up as the message of obtaining a master’s degree” which had been reiterated a long time. He also confirmed that a number of employees commenced and obtained the master’s. At this point, the respondent was forcefully pursuing the staff to undertake their master’s.

 

[19]  His further evidence related to the developments prior to the deadline of 31 December 2021 for the achievement of the master’s. On 12 August 2020, the Dean of the Faculty, Dr Olugaro, wrote a letter to staff regarding the respondent’s requirement for a master’s qualification. This letter read: “Please take note that in terms of its DHET minimum academic qualification requirements, you are required to pursue a master’s qualification within your discipline. We are aware that this condition was not part of your contract when you were employed at DUT, however, the DUT is required to upskill all their academic lecturers with at least a minimum of a master’s qualification. You are required to comply”. This letter was followed by an email on his behalf inviting all the members of the faculty to attend a meeting on 30 August 2020 to discuss the minimum qualifications requirement. On 2 September 2020, following this meeting, the applicant wrote a response to the query from Dr Olugaro’s secretary in which she indicated her willingness to pursue a master’s, confirmed that at that point she had not registered and also indicated the support she would require from the faculty.

 

[20]  On 9 October 2020, Dr Mthemba, the respondent’s Senior Director of HR, sent letters to 56 lecturers of the respondent who included the applicant demanding each of them to submit proof that each would meet the deadline of 31 December 2021 by which to obtain the master’s qualification. This letter began with reference to the respondent’s strategic objectives that had been published in 2008 which prescribed the timeline for the completion of the master’s. The letter finished with an alert that the letter is to be regarded as a formal notice in terms of their contract of employment.

 

[21]  Responding to this letter, on 27 October 2020, the applicant wrote a letter which began with a statement confirming that she is responding to the letter of 9 October 2020 in accordance with the stipulations imposed by the letter. She then recorded that she was reiterating her commitment to complete her master’s for which she would need support and that she was making the means towards obtaining her master’s and at that point she was working towards obtaining admission to pursue the qualification. She then proceeded to address herself to the steps she had taken in that regard. She then requested that the letter of 9 October must be withdrawn against her because: (i) she had never been specifically approached as a chartered accountant to discuss her studies by the HR; (ii) she was suitably qualified to lecture in auditing and taxation.

 

[22]  Mr Msomi submitted that the applicant’s commitment which she recorded in her letter above was an adequate signal that she accepted the imperative imposed by the respondent which put paid to her insistence that this requirement was not a term of her contract. Further, it was an indication that she considered herself bound. Subsequent to this letter she approached the head of her faculty regarding her registration for a master’s. He then testified that some of the employees who had received Dr Mthembu’s letter had responded with proof that they would meet this deadline. As a result, they were removed from the list of those who did not have a master’s qualification or would not have such by 31 December 2021.

 

[23]  The rest of the testimony of Mr Msomi was on the retrenchment process. He pointed out that 57 employees were targeted for the retrenchment. However, only 31 were eventually retrenched, including the applicant. Some who escaped the retrenchment because they provided proof that they would complete their master’s by the 31 December 2021 deadline; others opted for retirement which they were eligible for and two were exempted from retirement because they could not register for a master’s as none was offered at the local universities due to the specialist courses they taught.

 

[24]  Consultations in terms of section 189(1) of the LRA were held with the trade unions that represented the employees which included the National Tertiary Employees Union (NTEU) to which the applicant belonged. The process was facilitated by the CCMA. This process ran over an extensive period of six days.

 

[25]  The unions presented certain alternatives to the retrenchments which were all rejected by the respondent. These were namely, that the affected employees should be given an extension of time to 2023; or be given severance packages and ex gratia payments which entailed a payment of the portion of their medical aid contributions by the respondent until their retirement. The applicant was one of those who did not fall into these listed categories. Eventually, she was retrenched.

 

[26]  On 11 August 2021, Mr Msomi wrote to the applicant. In the letter, he referred to section 189(A) of the LRA consultation facilitated by the CCMA which process was finalised by 30 July 2021. He advised her, inter alia, that after considering all the proposals made in that process, the letter serves to place her on notice, she will not be required to serve notice in terms of her contract of employment and will not be expected to report for duty after Friday, 13 August 2021. On the same day, Dr Mthethwa wrote a similar letter to her. On 13 August 2021, Dr Mthethwa wrote her a formal letter of termination of her services.

 

[27]  On learning about the outcome of the retrenchment, the applicant wrote to the respondent seeking an extension of time for her to complete her master’s which she was pursuing. The respondent rejected this on the basis this proposal had been tabled and rejected at the CCMA.

 

[28]  It was also put to Mr Msomi that the applicant could be considered for the Gap program. He rejected this. He pointed out that this proposal was new and was never placed before the CCMA, besides, the applicant was not eligible for admission into this program as she did not satisfy its requirements. He said the same regarding another proposal for the applicant to be placed in management. He explained further that she did not qualify for such a placement. Also, he rejected that she could be made a junior lecturer as that also required a master’s. He also rejected another suggestion that the applicant could be redeployed as a technician. Not only was this a new proposal but the applicant did not have the requisite qualifications for that position.

 

[29]  I now deal with the case of the applicant. In her testimony, in challenging her retrenchment the applicant insisted that she should not have been retrenched because it was not a term of her employment contract that she should have a master’s and referred to her contract of employment in this regard. This was consistently raised also during the cross-examination of the witnesses of the respondent and repeated in her evidence. Regarding her registration for the master’s at Rhodes, she insisted that she had registered for the course then, after her registration, she was advised by Mr Bhagwan, the Head of her Department: Audit and Taxation that it was not necessary for her to study for a master’s that she should rather seek conferment of the master's. In this regard, she was referred to the evidence of Mr Kharwa who had testified that the respondent had never offered such a dispensation. It was pointed out that such conferment would only be offered to those candidates who were seeking to pursue a doctorate instead of a master's. It was further pointed out that she never sought to pursue such a doctorate. Her response was that she never had the desire to.

 

[30]  She further insisted that she only became aware after the communication of October 2020 that she had an obligation to obtain a master’s.

 

Evaluation of the case

 

[31]  The issue for this court’s determination is the substantive fairness of the retrenchment of the applicant. In this regard, the pertinent issues were set out in the Pre-Trial Minutes held by the parties where the following is stated:

‘Whether

8.1     Applicant’s retrenchment for operational requirements was fair and reasonable…;

8.2     the Applicant is entitled to reinstatement to the position of Lecturer with benefits retrospective to the date of her dismissal;

8.3     whether the respondent be ordered to pay the costs of this matter.’

 

[32]  Given that it is common cause that the applicant was dismissed by virtue of retrenchment, it follows that I should consider whether the respondent has discharged its onus of satisfying the court that the retrenchment was substantively fair.

 

[33]  In support of its case, the respondent has relied on the development of its Practice Directions adopted in 2008, predating the employment of the applicant in 2009. In terms of these Strategic Directions, the respondent had embarked on a strategic trajectory aimed at procuring that all its lecturers should obtain a master’s degree as a “minimum”. Though this objective was not driven hard as from its adoption in 2008, it gained momentum along the way and certainly had gained momentum by 2020. None of this was gainsaid by the applicant.

 

[34]  The uncontroverted evidence of the respondent was that this imperative is an operational requirement as defined in section 213 of the LRA. The section defines “operational requirement” as “requirements based on the economic, technological, structural or similar needs of the employer”. The respondent’s case was that it had to be competitive, attractive and financially sustainable and the demand for the master’s degree was inextricably linked to this objective.

 

[35]  In South African Transport and Allied Workers Union and Others v G4S Aviation Secure Solutions[2], the court concluded that competitiveness falls within economic reasons and it related to the financial management and competitiveness of the enterprise (within the meaning of “similar reasons”), and the LRA allows an employer to restructure an enterprise in order to ensure its competitiveness and survival, let alone maximise its profits as espoused in General Food Industries Ltd v FAWU[3].

 

[36]  Further, in Mineworkers Union Solidarity on behalf of McGregor v SA National Parks[4], the court emphasised that an employer, subject to acting fairly, has a right to decide how it wants to run its business and position it so as to optimise its effectiveness and market appeal. At paragraph 26, the court held: “the employee’s permission and blessing to make a policy shift to accommodate its operational requirements for financial survival is not needed by an employer. The employee may have been correct in his view and perhaps the employer was steering the department on a collision course but it is not for the employee to decide the employer’s fate”.

 

[37]  The respondent’s evidence given by Messrs Msomi and Kharwa explained the developmental reasons for the adoption of the requirement, that its lecturing staff should have a minimum of a master’s degree. At various stages of her evidence, the applicant accepted the need for the improvement of the academic qualifications of the respondent’s teaching staff. Notably, in the faculty meeting of October 2020 and the letter written afterwards where this requirement was spelt out, the applicant never protested that it did not apply to her. In fact, she had registered for the master’s at Rhodes in 2012 but deregistered. It will be noted that for the deregistration of her master's at Rhodes, she gave conflicting answers. It is further worth noting that included in the list of those who required masters’ degrees were those lecturers who did not have this, as a term of employment as the applicant. They regarded themselves bound. Even the trade unions never challenged this accepting that this requirement was part of the employment contract of all the lecturers employed by the respondent.

 

[38]  Applicant displayed incoherence in her evidence. She sought also to rely on the fact that as a chartered accountant, she was exempted from obtaining the master’s as this professional qualification was equivalent to a master’s. Again, this point was raised for the first time at this hearing. This shows that the applicant was making desperate attempts to escape from this requirement.

 

[39]  If the applicant believed and insisted that she was not bound by the requirement for a master’s, then she has failed to demonstrate a behaviour that is consistent with that understanding at all. This must count against her and support the case of the respondent.

 

[40]  I therefore agree with the respondent that the applicant’s reliance on the fact that the requirement of a master’s was not a term and condition of her contract of employment is a red herring. It is also telling that the further reasons advanced by the applicant regarding why she should not be bound by the requirement of a master’s are clearly afterthoughts that were never even advanced at the CCMA. Anyway, even if they were, as I have already indicated they would not have assisted the applicant as the respondent had made out its case for retrenchment and all the trade unions had accepted the reason as legitimate and valid, hence none challenged the retrenchment after the CCMA process was finalised.

 

[41]  The applicant also accepted the rationale for the requirement of a master’s degree. In a letter from Mr Msomi, referred to in evidence, the applicant wrote: “…. I fully support that all staff members should obtain a master’s qualification, in my personal circumstances, believe that this will create more value to my professional qualification as a (CA)SA”. In her evidence, the applicant contended that she should have been afforded more time to complete her master’s to comply with the requirement. Accepting that the applicant had been aware of this requirement since 2009 according to Mr Kharwa, it means that the respondent afforded her 11 years to complete her master’s which opportunity she did utilise.

 

[42]  Even if the court would be minded to consider the alternative to the retrenchment suggested by the applicant, albeit late, this will not salvage the situation of the applicant. The evidence of the respondent was that the applicant fell below the level required for the courses she wishes to teach. This aggravated her position.

 

[43]  I must refer to SA Transport & Allied Workers Union v Old Mutual Insurance Co. SA Ltd.[5], where the court described the function of a court considering the substantial fairness or otherwise of retrenchment. It described it as follows:

‘The function of a court scrutinising the consultation process is not to second guess the commercial or business efficacy of the employer’s ultimate decision (an issue on whether the ultimate decision arrived at was genuine and not merely a sham) (the kind of issue which courts are called upon to do, in different settings every day). The manner in which the court adjudges the latter issue is to enquire whether the legal requirements for a proper consultation process had been followed and, if so, whether the ultimate decision arrived at by the employer is operationally and commercially justifiable on rational grounds, having regard to what emerged from the consultation process. It is important to note that when determining the rationality of the employer’s ultimate decision on retrenchment, it is not the court’s function to decide whether it was the best decision under the circumstances, but only whether it was a rational, commercial or operational decision, properly taking into account what emerged during the consultation process.’ [Own emphasis]

 

[44]  Given the aforegoing, I cannot accept the argument by Mr Hollis SC on the applicant’s behalf that this case must be considered on the basis of the terms and conditions of the applicant’s contract of employment. The further argument advanced on her behalf that she was exempted from obtaining a master’s, by the end of 2011, must equally fail as it is simply unfounded.

 

[45]  In his heads of argument, Mr Hollis SC also attacked the retrenchment on the basis that the respondent had not complied with the procedural steps contemplated in section 189(7) of the LRA. Such a case is not alleged in the Particulars of Claim. Even if it was, it would not be sustained. This court previously dealt with the procedural fairness or otherwise of the retrenchment process following an urgent application that the trade unions brought challenging the procedural fairness of the process. That issue cannot raise its head again in the current matter.

 

[46]  On the weight of the evidence before this court, I am satisfied that the respondent has discharged its onus in satisfying the court that the applicant was retrenched for substantively fair reasons.

 

[47]  I shall not make an order of costs as I do not deem it would be in the interest of justice to have either party pay the legal costs.

 

[48]  Accordingly, I make an order in the following terms:

 

Order

 

1.  The application of the applicant fails.

 

N Msizi

Acting Judge of the Labour Court of South Africa

 

Appearances:

For the Applicant:	Adv N Hollis SC
Instructed by:	Sayed & Company
For the Respondent:	Mr I Lawrence of Edward Nathan Sonnenbergs Incorporated

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