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THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Not Reportable

Case no: JS363/12

In the matter between:

ADAM NORD                                                                                                              Applicant

and

CIVICUS WORLD ALLIANCE FOR

CITIZEN PARTICIPATION INC                                                                              Respondent

Heard:           9 March 2015

Delivered:     21 April 2016

Summary:    premature termination of a fixed term contract- principles restated. Further thereto, applicant’s dismissal not automatically unfair in accordance with section 187(c) as the dismissal was not conditional – the retrenchment was substantively fair, but procedurally unfaircompensation awarded.

JUDGMENT

AH SHENE, AJ

Introduction

[1] The applicant, Adam Nord was dismissed, for operational requirements, by the respondent on 1 January 2012. The applicant was employed on a fixed term contract, which commenced 14 September 2011 and expiring on 15 September 2013.

[2] The respondent is CIVICUS: World Alliance for Citizen Participation Incorporated, an international NGO, registered and operating within the Republic of South Africa.

[3] The applicant contends that his dismissal is substantively and procedurally unfair, alternatively, that it is automatically unfair in terms of s 187 (1) (c) of the Labour Relations Act 66 of 1995 (“LRA”). In addition, the applicant contends that the respondent had no right to prematurely terminate his contract even if for operational requirements.

Background

[4] The following facts as contained in the pre-trial minute are common cause:

[5] The applicant and respondent entered into a two-year fixed term contract in terms of which the applicant’s employment with the respondent would commence on 14 September 2009 and end 15 September 2011.

[6] The applicant was employed in the respondent’s head office in Johannesburg as the Civil Society Watch Program Officer. At all material times, the applicant was employed by the respondent to provide services in South Africa. The contract between the parties was concluded within South Africa. Similarly, the contract of employment was terminated by the respondent in South Africa.

[7] An organisational restructuring took place at the respondent which culminated in an internal recruitment process for newly-created positions.

[8] During his initial fixed-term contract as Civil Society Watch Program Officer, the applicant was successful in applying for the position of Lobbying and Engagement Manager. The applicant was appointed into his new role effective from 1 October 2010.

[9] The respondent’s employment contracts are renewable after twenty four (24) months. At the end of the initial 24 month period, the applicant’s employment contract (in the role of Lobbying and Engagement Manager) was renewed for a further two year period. The new (or renewed) contract of employment was effective from 1 September 2011.

[10] On 14 November 2011, the applicant received a letter from the respondent notifying him of his required attendance at a meeting on 15 November 2011 to discuss the operational changes at the respondent, as it may affect him.

[11] On 15 November 2011, the applicant attended the aforementioned meeting with the respondent. Thereafter on 15 November 2011, less than three months after the renewal of his fixed-term contract, the applicant received a letter stating that the respondent planned to retrench the applicant with effect from 1 January 2012.

[12] On 14 December 2011, the applicant received a letter from the respondent confirming his retrenchment which would take effect on 1 January 2012.

[13] At the time of his dismissal, the applicant earned remuneration of $5,500 (five thousand five hundred and fifty dollars) or R42,069 (forty two thousand and sixty none thousand rand) per month.

It was further agreed as per the pre- trial minute that the following procedure was followed: 

[14] On 5 October 2011, the respondent conducted a Management Team meeting. The applicant was present at this meeting.

[15] During this meeting, budgetary issues and financial constraints were raised.

[16] On 14 October 2011, the Senior Management Team conducted a closed-door meeting relating to retrenchments.

[17] On 18 October 2011, the Senior Management Team conducted a second closed-door meeting relating to retrenchments.

[18] On 21 October 2011, the respondent conducted a Management Team meeting.

[19] The parties agreed that the minutes of the meetings of 5 October 2011 and 21 October 2011 are a true reflection of what transpired in those meetings.

[20] On 26 October 2011, communication was sent to the Management Team from the Senior Management Team, providing further details relating to the retrenchment presentation of 21 October 2011. The memorandum required the Management Team’s input on alternatives to the planned retrenchments, by 31 October 2011. Moreover, the memorandum indicates three “options” for the way in which the Senior Management Team would decide on the retrenchments.

[21] On 28 October 2011, communication was sent to the CIVICUS Board of Directors by the Senior Management Team informing and seeking guidance on the Senior Management Team’s decision to retrench staff due to the merger of certain managerial positions.

[22] On or before 31 October 2011, the applicant submitted a proposal to the Senior Management Team relating to the reduction of CIVICUS’ human resources costs with the view of minimising retrenchment. This proposal included the applicant’s proposal for merging his position with the vacant Communications Manager position and the Policy Manager position with the soon-to-be vacant Research Manager position.

[23] On 14 November 2011, the applicant received a letter from the respondent notifying him of his required attendance at a meeting on 15 November 2011 to discuss the operational changes at the respondent.

[24] On 15 November 2011, less than three months after the commencement of the extended fixed-term contract, the respondent notified the applicant by way of a letter that it planned to retrench the applicant with effect from 1 January 2012.

[25] On 24 November 2011, the respondent conducted a presentation during a Staff Meeting regarding retrenchments.

[26] On 28 November 2011, the applicant received a letter from the respondent.

[27] On 29 November 2011, the applicant sent a letter to the respondent in response to the respondent’s letters of 15 November 2011 and 28 November 2011. The applicant addressed this letter to the respondent in an attempt to reach consensus on alternative employment. The applicant highlighted that he was unable to meaningfully consider the alternative position of Permanent Representative to the United Nations in New York (“New York Position”) without sufficient details of the position.

[28] On 14 December 2011, the respondent sent a letter to the applicant confirming that his retrenchment, would take effect from 1 January 2012.

[29] The applicant referred the matter to the Commission for Conciliation, Mediation and Arbitration (“CCMA”) on 1 February 2012.

[30] On 28 February 2012, the CCMA issued a certificate of outcome indicating that the matter remained unresolved and that the dispute could be referred to the Labour Court.  

Disputed facts: The evidence before court

[31] The respondent called one witness, Mrs van Straaten. Apart from the common cause facts, the witness, testified that she was a Charted Accountant and was employed on 26 October 2011 as a Financial Officer to take care of the financial management. She testified that in terms of the applicant’s contract of employment, he was bound by the respondent’s retrenchment policies. The retrenchment procedure defined retrenchment as:

‘No fault termination of an employee’s employment due to one or more of the following reasons:

·         The restructuring of a project, office or activity that results in the elimination of a position or a reduction of the work force;

·         The ending of a project, office or activity that results in the elimination of a position;

·         The withdrawal of CIVICUS from South Africa for any reason^[1]

·         Any other operational requirement.’

[32] The witness testified that the Human Resource costs for 2012 exceeded 60% of the 2012 budget and that CIVICUS had secured funding for 2012 at $1.15 million and secured and high prospect funding at $1.77 million. Elements of her testimony amounted to hearsay evidence as the witness had no first-hand knowledge of the information due to the fact that she only started with the organisation in October 2011 and was not privy to all the discussions.

[33] Evidence was led that the Deputy Secretary General, Mr Katsuji could not come and testify, as he was out of the country in Japan and that the organisation had no funds to bring him to South Africa.

[34] The witness also testified, that she was asked to verify the financial figures, after she commenced employment and that there was a deficit in the budget. As a result, Management was informed that the training budget should be frozen. Various Management Meetings were held with regard to re-structuring. She had not participated in these meetings but was asked to do a cost exercise with regard to severance pay and a decision was made to offer two months severance pay

[35] The witness testified that she was present during the meeting dated 15 November 2011, with the applicant, Henri and Estelle. Discussions relating to the “New York position” ensued and it was resolved that a consultation letter would have been given to the applicant.

[36] The position was a United Nations representative position, four days a week.

[37] For the year ending December 2011, the aggregated income was R3 365 368 million, whereas the aggregated expenses amounted to 3 396 049 million. At the end of 2012, the income was 3 034 868 million and the expenses were 3 064 071 million and a deficit of R29 203. A with-out prejudice offer of settlement was made to the applicant which was equivalent to three months salary. This was further only possible in if her salary and that of the Superintendant General’s were defrayed for three months.

[38] Under cross-examination, the witness disagreed that it was affordable to remain in the current structure and that the unrestricted funds were ring fenced at 2011. The respondent only had one month’s operating expenses in reserve, when in fact it should have had reserves for three months operating expenses.

[39] She conceded that in 2012, CIVICUS advertised positions. The witness also testified that the consultation process, even though not completely in line with s 189 (3), took place and the applicant participated in presenting alternatives.

[40] The Applicant, Adam Nord testified, that he was the Lobbying and Engagement Manager contracted for the period September 2011 to September 2013. At the time of his dismissal on 1 January 2012, there was 20 ½ months remaining in terms of his contract. He earned $5550 per month. He testified that the organisation would never have 100% of the income. In reducing ITR costs, the organisation proposed to merge the six units, to form three, namely, Organisational Co-ordination Manager and Planning and Learning, Policy and Lobby and Engagement and Convening and Communications. He provided the respondent with alternatives. In doing so, he looked at redundancy principles including the best interest of the employees, a difficult job market and the organisational structure, which would have the effect of optimising salary costs. The proposal entailed merging the communications unit with the convening unit.

[41] The alternatives presented by the applicant would have resulted in a savings of $49 283 and $51 994 respectively. 

[42] On 29 November 2011, the proposal was rejected by the respondent. The reason advanced was contained in the correspondence dated 29 November 2011, wherein the following was stated:

‘With regard to your proposal to combine the current Lobbying and Engagement role with the Communications Manager position, this is not under consideration by the Senior Management Team, as it does not see this combination to be optimal to the organisational structure (presented to CIVICUS staff).’

[43] With regard to the consultation on 15 November 2011, he was called into Bettie’s office. Present at the consultation meeting was Bettie, Estelle and Henri who presented the “New York” alternative. The applicant understood the alternative as a “take it or leave it” situation, wherein he would be made redundant.^[2]

[44] Mandeep Tiwane was appointed to the merged position. In the letter that he received on 15 November 2011, the applicant was identified for retrenchment and the following is apparent from the letter:

‘[4]       The retrenchment will be effective from 1 January 2012.

[5]        CIVICUS is proposing two months’ severance pay and 1 week for every year of employment. You will be paid the equivalent of vacation leave due to you at the time of your retrenchment.

[6]        CIVICUS commits supporting you through this very challenging time by making available its resources which will assist you in finding alternative employment if necessary.

[7]        CIVICUS will continue to pursue its vigorous fundraising activities during 2012 and undertake to consult you should the need arise to employ additional staff in the near future.

As an alternative to the retrenchment process CIVICUS would like to propose the following:

·         Offer you the United Nations New York representation role on consultancy basis;

·         You will be hosted by a partner organisation in New York.’

[45] The alternative presented meant that he would work four days a week at the same salary. The applicant was of the view that this was unreasonable at the current salary. He was able to have a higher standard of living in South Africa on that salary than in New York.

[46] Under cross examination, the applicant conceded that he worked soon after the retrenchment but at a far lesser salary and that the respondent was experiencing a budget deficit. Furthermore, he was invited to make proposals but they were rejected. With regard to the alternative presented, he stated that the position in New York was $18 000 less than the position in South Africa and he was not aware of additional benefits as it was not submitted in writing, the offer was vague, there was no mention of relocation costs and the costs of living in New York was far higher than in South Africa. He, however, conceded that the respondent had a budgetary deficiency but that his dismissal was unwarranted.

Hearsay

[47] The general rule is that hearsay is inadmissible.

[48] Section 3(4) of the Law of Evidence Amendment Act 45 of 1988 defines hearsay as:

‘Evidence, whether oral or in writing, the probative value of which depends upon the credibility of any person other than the person giving such evidence.’

[49] The evidence of Mrs Van Straaten was hearsay in relation to Senior Management meetings. None of the Senior Managers were able to testify to the truth of the contents of the minutes of these meetings. These meetings were held to discuss the operational need for retrenchment and the consultations procedures. The applicant also testified in regard to some issues. The parties in the pre-trial minutes also conceded the documents are what they purport to be.

[50] The reason tendered for the non-availability of witnesses, could in essence be summarised that they were no longer working for CIVICUS, no longer in South Africa, but based abroad in various countries. The organisation could not afford to bring them to South Africa to testify and therefore the application in terms of s 3 of the General Law Amendment Act.

[51] The nature of the hearsay sought to be admitted is the oral evidence of Mrs Van Straaten in relation to the Senior Management meetings. It is not disputed that there were Senior Management meetings which took place. What is disputed is the reason for the dismissal, in that there was no valid rational reason for the retrenchment and that a proper procedure was not followed.

[52] In this case, the reason why the evidence was not given by the persons upon whose credibility the probative value of the evidence depends, was that these persons could not come to South Africa, in that the respondent could not afford to bring them into the country. They had direct knowledge of discussions in Senior Management meetings from September 2011 onwards.

[53] S 3(1) (c) of the Law of Evidence Amendment Act 45 of 1988 states:

‘Subject to the provisions of any other law, hearsay evidence shall not be admitted as evidence at criminal or civil proceedings, unless:-

(a)          ....

(b)          ....

(c)          the court, having regard to-

(i)            the nature of the proceedings;

(ii)           the nature of the evidence;

(iii)          the purpose for which the evidence is tendered;

(iv)          the probative value of the evidence;

(v)           the reason why the evidence is not given by the person upon whose credibility the probative value of such evidence depends;

(vi)          any prejudice to a party which the admission of such evidence might entail; and

(vii)         any factor which should in the opinion of the court be taken into account. is of the opinion that such evidence should be admitted in the interests of justice.”

[54] Both parties tendered bundles of documents on the basis that they were what they purported to be but that the truth is that their contents were not admitted and had to be proved in the ordinary course.

[55] Documents in the bundles included minutes of management meetings, relating to the “consultation” process and the reasons for retrenchment. In the pre-trial minute, the parties agreed that the meetings of 5 October 2011 and 21 October 2011 were a true reflection of what transpired during those meetings.

[56] Prejudice, which is always present when hearsay is admitted against a party, will not outweigh the interests of justice. Safeguards must be applied to ensure a fair trial when hearsay is tendered. In this instance, both the applicant and respondent are legally represented. The witnesses who should have testified, were no longer employed by the respondent, they were not based in South Africa and the respondent testified that they could not afford to fly these individuals to South Africa.

[57] Given the nature of the dispute, the evidence led, and the factors as contained in section 3 above, all of which I have considered, I am of the view that the hearsay evidence has to be admitted, as it would be in the interest of justice to do so.

Contractual dispute

[58] The applicant alleges that the respondent is not entitled to dismiss an employee who is employed in terms of a fixed term contract for operational requirements. As a result, the employer is barred from prematurely terminating a fixed term employment contract. Therefore, that the retrenchment of such an employee, is unfair.

[59] In Buthelezi v Municipal Demarcation Board,^[3] the Labour Appeal court found on the question as to whether a fixed term contract can be terminated before the end date:

‘The first question that arises in the present matter is whether the respondent was entitled to terminate the employment contract between it and the appellant when it cancelled it. There is no doubt that at common law a party to a fixed – term contract has no right to terminate such contract in the absence of a repudiation or a material breach of the contract by the other party. In other words there is no right to terminate such contract even on notice unless its terms provide for such termination.’

[60] Cheadle AJ in the case of Lottering v Stellenbosh Municipality^0[4] confirmed the principle as follows:

‘If the contract is for a fixed term, the contract may only be terminated on notice if there is a specific provision permitting termination on notice during the contractual period – it is not an inherent feature of this kind of contract and accordingly requires specific stipulation.’

[61] In its submission, the applicant argues that the employer is prohibited form relying on a vague cause dealing with the termination of the agreement to the extent that it was the author of its own misfortune in failing to express its clear intentions. Further thereto, it was contended that the respondent cannot now, ex post facto depend on various piecemeal clauses contained in different documents in an attempt to establish a right in this regard.

[62] In Nkopane and Others v Independent Electoral Commission,^[5] it was unclear whether the employer could terminate based on operational requirements based on conflicting provisions in various documents relating to the employees contracts of employment. The court proffered the following reasoning-

‘To the extent that the provisions of the documents, including the form, are equally capable of different interpretations, it must be borne in mind that the respondent was the author of the relevant documents. It could easily have worded the form and the related documents to make it clear that the employment would terminate” at the latest” on the date specified and was subject to earlier termination for operational reasons. To the extent that it failed to make its intentions clear, the interpretation which favours the employee must, in accordance with the contra proferentem rule be preferred.’

[63] Having considered the various clauses relied on by the respondent, it is evident that the contract of employment specifically made provision for termination of the contract based on “criminal conduct, fraud, misconduct”. It was furthermore a term of the agreement that the duration of the contract was subject to unrestricted funding. These clauses are clear. In other words, the contract could be terminated should there be no unrestricted funding. In line with the above authorities, premature termination of a fixed term contract is permissible, where an express provision is made for such an event. Clause 2 of the contract of employment specifically states – ‘in light of the sometimes uncertain future of grant based funding, the duration of this contract is subject to the availability of dedicated and/or restricted funds that can be used to cover the costs of this position’.

[64] The definition of “operational requirements” as per the Labour Relations Act is defined as:

‘Requirements based on the economic, technological, structural or similar needs of an employer.’

[65] Given this definition, then surely a proviso, which stipulates that the position is “funds” based would then fall within the definition of operational requirements and accordingly the respondent would be able to retrench its staff, even though employed in terms of a fixed term contract. I am of the view that the respondent could retrench the applicant. Having said that, I now turn to the issue of automatically unfair dismissal and the retrenchment of the applicant.

Section 187 (1) (c)

[66] The applicant alleges that the offer of alternative appointment was presented so as to compel him to accept the change.

[67] Prior to the LRA, amendments, Section 187(1) of the Act provided the following:

‘(1)       A dismissal is automatically unfair if the employer, in dismissing the employee, acts contrary to section 5 or, if the reason for the dismissal is –

(c)        to compel the employee to accept a demand in respect of any matter of mutual interest between the employer and employee.’

[68] A dismissal would fall within the ambit of section 187 (1)(c) if the ‘… employer would take the attitude that, if the employees do not agree to the proposed changes, he would dismiss them for operational requirements – but to compel them to agree to the change…. When the employees agree to the change, the dismissal ceases because it has served its purpose’.^[6]”

[69] To determine whether the dismissal falls within this category, a factual enquiry into the purpose of the dismissal should be established. It was alleged by the applicant that the purpose of his dismissal and the alternative presented was to establish a greater presence for the respondent in the United States of America and the United Nations.

[70] The respondent in its evidence testified that it, however, presented an alternative to retrenchment in accordance with section 189 of the LRA. In Fry’s Metals (Pty) Ltd v NUMSA and Others,^[7] the Labour Appeal Court held that a ‘dismissal which is final and irrevocable is by definition not intended to compel an employee to accept the employer’s demand’. This ruling was endorsed by the Supreme Court of Appeal in NUMSA and Others v Fry’s Metal (Pty) Ltd.^[8]

[71] In BMD Knitting Mills (Pty) Ltd v SACTWU,^[9] Davis AJA referred to the approaches adopted by the courts assessing the fairness of an employer’s decision to dismiss for operational reasons as follows:

‘The starting point is whether there was a commercial rationale for the decision. But rather than take such justification at face value, the court is entitled to examine whether a particular decision has been taken in a manner which was also fair to the affected party, namely the employees to be retrenched. To this extent the court is entitled to enquire as to whether a reasonable basis exists on which the decision, including the proposed manner, to dismiss for operational reasons was predicated. Viewed accordingly, the test becomes less deferential and the court is entitled to examine the content of the reasons given by the employer, albeit that the enquiry is not directed to whether the reason offered is one which would have been chosen by the court. Fairness, not correctness is the mandated test.’

[72] The entire structure of section 189 of the LRA is geared towards seeking alternatives before embarking on retrenchments. The question thus arises what is the factual cause for the decision to dismiss. Ms Van Straaten testified that the respondent relied on “funding” to secure its income. This was derived from donor funding outside of South Africa, multilateral government agencies, private foundations, namely, the Gates and Ford Foundations. There are certain funding restrictions levied against the funds received from the donors, in other words, the donor would stipulate if the monies should be utilised for core or project purposes. The applicant has failed to demonstrate on a balance of probabilities that the respondent was threatening him with dismissal in order to get him to accept a new term of employment. The dismissal was not conditional and as a result I am of the view that the dismissal was not automatically unfair. I now turn to the substantive and procedural fairness of the retrenchment.

[73] The court is required to determine the substantive fairness of the applicant’s dismissal. Section 188 of the Labour Relations Act 66 of 1995 (“the LRA”) requires an employer that dismissed an employee for reasons relating to operational requirements to establish a fair reason for the dismissal.

[74] In Mamabolo and others v Manchu Consulting CC,^[10] Van Niekerk AJ, made the following remarks:

‘The approach adopted by this court is to require the employer to provide substantive proof of a need to retrench, in the form of a commercially rational and sustainable reason, but not to question the commercial imperatives that underly the decision, unless some ulterior motive is established. In other words, it is not the function of the court to second guess the employer’s decision to retrench. It is not appropriate to intervene only because the decision taken by the employer was not one to which the court would have come in the same circumstances.’

[75] At the end of 2011, the respondent only had one month’s operating costs in its reserves when in fact, it should have been three months. She testified that the operational costs of CIVICUS was approximately $200 000 per month and at the end of 2011, they were short just under $400 000. The applicant’s representative makes the averment in its heads of argument, that the only valid reason for the termination would be the absence of restricted funds to cover the costs of the position. It was Ms Van Straaten’s evidence that the unrestricted funds were ring-fenced and already at December 2011, there was a short fall of just under $400 000.

[76] The secured revenue for 2012 was only 1.42 million USD. The bottom line was that the respondent operating as an NGO, did not have sufficient funding for 2012. It sought to streamline its operations so as to ensure the survival of the respondent’s operations.

[77] The evidence presented by the applicant, there was a suggestion that the only reason for his dismissal was to force him to accept the alternative proposal so as to strengthen their ties at the United Nations and have a stronger presence in the United States of America. The respondent in their heads of argument stated that the reason that the applicant was offered the alternative position in the USA, was that he was a US citizen and it made economic sense to offer him the alternative in New York.

[78] As noted, it is not for this court to determine whether the respondent made the right choice, the decision was not commercially irrational given the fact that the organisation is dependant on funding to sustain its operations.

[79] Given the above, it is apparent from the evidence that the retrenchment was not conditional and that the true reason for the retrenchment was that there was a lack of funding for 2012. I am of the view that the dismissal was substantively fair. The only outstanding issue is that of procedural fairness.

Procedural unfairness

[80] Section 189 of the LRA provides that when an employer contemplates dismissing an employee for operational reasons, the employer is required to consult with them or their representatives over a range of issues. A failure to comply with this section will almost invariably result in the dismissal being unfair on procedural grounds.^[11]

[81] Section 189 (2) of the LRA stipulates that –

‘The employer and the other consulting parties must in consultation envisage by subsection(1) and (3) engage in a meaningful joint consensus seeking process- and attempt to reach consensus on –

(a)          appropriate measures

(i)            to avoid dismissals;

(ii)        to minimise the number of dismissals;

(iii)       to change the timing of the dismissals;

(iv)       to mitigate the adverse effects of the dismissals;

(b)         the method for selecting the employees to be dismissed;

(c)         severance pay for the dismissed employees.’

[82] In Singh and Others v Mondi Paper,^[12] it was pointed out that there is ‘equal responsibility on both parties to attempt to reach consensus on the issues outlined in section 189(2)’.

[83] In SACWU and Others v Afrox Ltd,^[13] the Labour Appeal Court held that is was ‘implicit in section 189(2) that an employer, apart from taking part in formal consultations on aspects set out in the section, should take substantive steps on his or her own initiative to avoid the dismissals, to minimise the number of dismissals; to change the timing of the dismissals; to mitigate the adverse effects of the dismissals; to select a fair and objective method for the dismissals and to provide appropriate severance pay for the dismissed employees’.

[84] The respondent, in its pre-trial minute, conceded that there was no section 189(3) notice issued to the applicant but the letter dated 15 November 2011, essentially, complied with section 189(3). This letter was presented to the applicant after a “consultation” meeting already occurred. The letter was lacking in a number of respects, it did not contain details of the number of employees likely to be affected, the method for selection, the number of employees employed by the employer and the number of employees that the employer has dismissed for reasons based on its operational requirements in the preceding 12 months.

[85] The applicant contended that the consultation process was neither meaningful nor consensus seeking. On 24 November 2011, the respondent’s made presentations to staff. The presentation contained proposals that made the applicant’s position redundant. This was achieved by merging the Lobbying and Engagement Manager position with that of the Policy Manager. Together, the positions would be termed Policy and Advocacy Manager, effective 1 January 2012. Even though the respondent and the applicant met for one on one consultation, as of 15 November 2011, no selection criteria had been discussed. The applicant made a proposal that his position be merged with a vacant position of communications Manager to form a new position Advocacy Manager. On 29 November 2011, no specific details had been given to the applicant about the alternative position offered. In addition, he had not received any feedback with regard to his proposal. It was only after he forwarded the aforementioned letter that he was advised that his proposal to combine the Lobbying and Engagement role with the communications Manager position that he was advised that the combination was not optimal to the organisational structure. The reason given by the employer for disagreeing with representations by the other consulting party may be an important indicator of whether it consulted in good faith. It must be shown that it dealt with the matter in issue as ‘one of substance rather than form’.^[14] Seemingly, the respondent was to embark on a recruitment drive, yet the applicant was not offered any of the “positions” it intended filling. The selection criteria, for retrenchment were not agreed upon nor was it objective, in any event as of 14 November 2011, Mandeep Tiwana was identified as the manager to fulfil the combined role. This is clearly in contravention of the LRA, in particular section 189 (7). The documentation, which purports to set out on what basis the selection was considered, was of no value as it was not in compliance with section 189(7).

[86] In CWIU and Others v Latex Surgical Products (Pty) Ltd,^[15] the Labour Appeal Court noted that, if agreement is reached as to the selection criteria, the fairness of such criteria will not be an issue. In the absence of an agreement, however, the employer must prove that the selection criteria is ‘fair and objective’. There was no discussion about severance and the retrenchment letter dated 14 December 2011, simply, set out the proposed severance package. This was confirmed by Ms Van Straaten who testified that she was asked to do a costing exercise and was of the view that two months’ salary was sufficient notice.

[87] Given the evidence and in view of the authorities, it is evident that there was no clear objective and fair selection criteria, the respondent merely paid lip service to the concept of joint consensus seeking process. Accordingly, I find that the dismissal was procedurally unfair.

Relief

[88] In Johnson and Johnson (Pty) Ltd v Chemical Workers Industrial Union,^[16] the Labour Appeal Court held as follows about the nature of compensation for procedural fairness:

‘The compensation for the wrong in failing to give effect to an employee’s right to a fair procedure is not based on patrimonial or actual loss. It is in the nature of solatium for the loss of the right, and is punitive to the extent that an employer (who breached the right) must pay a fixed penalty for causing the loss. In the normal course of legal wrong done by one person to another deserves some form of redress. The party who committed the wrong is usually not allowed to benefit from external factors which might have ameliorated the wrong in some way or another.’

[89] In this case, compensation should be awarded. Regarding the quantum thereof, it seems to me that the respondent’s departure from the procedure is a factor that has to be taken into consideration. The fact that the applicant found some work after the retrenchment is not really an important factor for consideration as compensation for procedural unfairness is a solatium.

[90] In all the circumstances, I am of the view that an award of five months’ compensation for the applicant’s procedurally unfair retrenchment is just and equitable.

Costs

[91] I now turn to the issue of costs, I have taken cognisance the fact that the respondent made an offer to resolve the dispute and had in fact offered the applicant three months’ salary. Similarly the applicant pointed out various issues to the respondent, early in 2011. The applicant was, however, entitled to approach this court for relief. I find no reason why costs should not follow the result.

Order:

[92] In the premises, the following order is made:

1.            The applicant’s dismissal was procedurally unfair

2.            The respondent is ordered to pay the applicant six months compensation.

3.            The respondent is ordered to pay the applicant’s costs.

_________________

Ah Shene, AJ

Acting Judge of the Labour Court

Appearances:

For the applicants:                  Mr Kirstein

Instructed by:                          Johannette Rheeder Incorporated

For the respondents:             Ms Salt of Cliffe Dekker Hofmeryer

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