Buti and Others v Lesotho Precious Garments (Pty) Ltd (LC/REV 27 of 9) [2011] LSLC 2 (15 July 2011)

IN THE LABOUR COURT OF LESOTHO LC/REV/27/09 HELD AT MASERU IN THE MATTER BETWEEN SERAME BUTI MASIA TSOEU NTSUKUNYANE CHABELI THABO MARITI PARAMENTE MOELETSI LEBOHANG MAILE AND LESOTHO PRECIOUS GARMENTS (PTY) LTD 1ST APPLICANT 2ND APPLICANT 3RD APPLICANT 4TH APPLICANT 5TH APPLICANT 6TH APPLICANT RESPONDENT JUDGMENT Dates:10/03/10, 15/07/10, 26/08/10, 20/10/10, 05/04/2011. Retrenchment–Consultation–There is no mandatory requirement for prior notice of meeting with agenda proposals–Neither is there requirement for preliminary consultations prior to actual consultations–When to consult–Consultation must be undertaken once possible need for retrenchment is identified but before final decision to retrench is reached–Selective reemployment– Employer having reemployed formerly retrenched employees is not guilty of selective reemployment– Application dismissed. INTRODUCTION 1. 2. 3. The six applicants are former security personnel of the respondent. They had been employed at different times, but were all terminated on the 22nd March 2009 for operational reasons. They were duly paid their terminal benefits in the form of severance pay, accrued leave and one month’s salary in lieu of notice. It is common cause that subsequent to their dismissal they filed a complaint with the Labour Department in which the expressed dissatisfaction with their retrenchment. In particular they were not convinced that there were justifiable reasons for their termination. There is no record of what the officers of the Labour Department did. However, PW1 Serame Buti testified that they were advised at the Labour Department that their retrenchment had not followed fair procedure in that they were not consulted and that no alternatives to retrenchment were considered. The applicants then referred a dispute of unfair retrenchment to the Directorate of Disputes Prevention and Resolution (DDPR). Arbitrator Molapo-Mphofe conciliated the dispute, but failed to secure a settlement. She accordingly issued a certificate referring the dispute to this court for adjudication on the 23rd June 2009. Applicants however, only referred the dispute to this court on the 21st September 2009. No attempt was made by the applicants to explain why they had to delay another three months before filing the case with this court following the issuing of the certificate by the arbitrator. The respondents have not said anything about this situation either. We therefore take it no further. STATEMENT OF CASE 4. In their Originating application the applicants averred that they were served with letter of termination which terminated their services with immediate effect on the 22nd March 2009. They averred that the letter of termination referred to the meeting of the 16th March 2009. While not disputing that they attended 5. 6. 7. such a meeting they complained that they were not given prior notice of such a meeting. They averred further that they attended the meeting at different times depending on their shifts. They stated that at that meeting they were just told that their contracts as security personnel were going to be terminated with effect from the end of April. They averred that they sought to suggest alternatives to the termination, but were told that nothing could be done to change the decision already taken. In a bizarre turn of events, applicants pleaded in direct contradiction of what they just said that their input was never sought nor was it considered. They averred that they were told that “those with blemishes would undoubtedly be terminated, while those who were clean the company would see what to do about them.” (see para 4.11 of Originating Application). They averred that following their retrenchment it turned out that three of their colleagues continued to work for the company. In yet another seemingly contradictory statement applicants averred that they were never consulted prior to their retrenchment. We say seemingly contradictory in the light of applicants’ earlier averrements that they were invited to the meeting of 16th March 2009, where they were told that their contracts as security personnel were going to be affected. Applicants contended further that their union was never notified of the meeting of the 16th March nor were they ever invited to a meeting that considered the issue of the retrenchment of the security staff. Applicants prayed that their dismissal be declared procedurally and substantively unfair. They sought reinstatement or payment of 12 months’ salary and severance pay if reinstatement is not ordered. 4 EVIDENCE 8. 9. Evidence on behalf of the applicants was given by the 1st applicant, Serame Buti who testified that on the 16th March 2009 they were called to an emergency meeting where they were told that they would be last at work on the 31st March 2009. He averred that they enquired why they were being terminated and they were told that it was up to those persons who had bad record, the Manager was making his decision and he needed no one’s opinion/views. Asked who was making these remarks he said it was Mr. Monyane The Group Regional Manager. Asked if any other reason was given for their termination he said that was the only reason given. PW1 must have been doing night shift because he said he attended the meeting at 6.00 pm. He averred that he knew of the meeting at around the same time that he had to attend the meeting. Asked if he was a member of a trade union, he said he used to be member of Lentsoe La Sechaba but later changed to NUTEX. He stated that he informed the management of his change of membership from Lentsoe La Sechaba to NUTEX. 10. Asked if his union ever introduced itself to the management of the respondent he said he did not know. This immediately begs the question what the point of telling management about his membership of NUTEX was, if that union was not known to management? Clearly he could only inform the management about membership of a union that was known to management and which had some form of working relationship with it. 11. His evidence about membership of NUTEX is further clouded by his negative response to the question whether he had ever met with NUTEX prior to the 16th March. It appears from his response to the questions from his representative that this witness only came into contact with NUTEX and purported to join it after his retrenchment. 5 12. He was asked if the meeting of the 16th March discussed the criteria, he said it did not. This however, is again a contradiction given that the witness said Mr. Monyane said those people with blemishes were in hot soup and that those with no bad records would be reemployed. He was asked how many of them were retrenched he said all of them had to leave instantly as the new company that was going to take over the security function was already around. It was only when he was asked a follow up question whether they all left that day that he said one Monkhe remained. Asked who else remained, he said Masokela, Lefela and one Ramokhethi remained. 13. PW1 was asked how long the meeting of the 16th lasted. He said it could have lasted only five minutes as they were given instructions. Asked what then happened after the 22nd March, he said they enquired about salary and they were told they would be paid all what was due to them; including notice and severance pay. He testified that they pointed out that they do not accept to be paid severance pay because they intended to sue the company. He stated further that Mr. Monyane told them that accepting severance pay did not preclude them from suing the company and urged them to accept it. 14. Under cross-examination PW1 confirmed that all applicants attended the meeting of the 16th march 2009. Asked who Mr. Monyane was with, he said he was with the Personnel Manager Mr. Tsepe. It was put to him that contrary to what he says, that at the meeting they were told what was management’s decision; Mr. Monyane told them that the company faced financial difficulties concerning payment of their wages. As a result it was decided to engage a private security company which would be cheaper to pay than to pay monthly wages. He said they learned that information for the first time when they received their letters of termination. 15. It was further put to him that after they learned that they were going to be affected, he among others, enquired about alternative work and he was asked to put forth the skills he had in order that he could be considered for alternative placement. He denied that any such thing happened. It was further put to 6 16. 17. him that the employer had no alternative suitable position for him at the time. He again denied, but failed to point out what alternative post existed which could have been allocated to him or any of his co-applicants. It was put to him that it is not correct that the employer relied on records to retrench. He insisted individual records must have been relied upon because others were reemployed while they were not. He however did not say what bad record he or any of his co-applicants had which could have influenced the employer to pick on them. It was suggested to him that even those people that he says are still working for the respondent were retrenched and were only reemployed afterwards. He denied and said their employment was never interrupted. It was put to PW1 that if indeed the employer said individual records would be relied upon in selecting persons that would be retrenched it means that criteria was discussed at the meeting of the 16th March. He initially sought to deny but ultimately conceded that criteria was discussed. This was however after a long debate which clearly showed that he only agreed because he was cornered. He admitted technical defeat, otherwise he was adamant that no criteria was discussed. In this regard he is clearly in agreement with respondent who says there was no need to discuss criteria because all security personnel were going to be affected. 18. PW1 was asked if he knew Mrs. Mabaeti Sefali. He said he knew her and that she was a shop steward. He was asked if she was present at the meeting of the 16th March. He said she was not present at the meeting he attended on the 16th March because she had already knocked off. She also could not attend the day shift meeting because it was on Sunday and she was off. It was put to him that Sefali will come and testify that she attended both meetings on behalf of Workers’ committee. He immediately changed his story and said, he could not deny in relation to a meeting he was not at and yet his initial position had been to deny in respect of both meetings. 7 19. In an attempt to put his testimony in a clear path, Mr. Koto for the applicants asked PW1 a few questions in reexamination starting with how the question of individual records arose. PW1 said Mr. Monyane was furious at them and said those with records already knew themselves. He asked him further who he was with at the meeting that he attended. He said he was with 3rd and 5th applicants. As for the others he said he did not know when they attended the meeting. Now not only is this a contradiction of his earlier evidence when he sought to say the other meeting was held on a Sunday it is also a clear indication that PW1 is not qualified to testify on behalf of the other three applicants who did not attend the meeting with him on the evening of the 16th March 2009. 20. Evidence on behalf of the respondent was given first by the Group Regional Manager Mr. Nkopane Monyane. He testified that applicants were retrenched due to the global economic meltdown which in turn affected the financial standing of the company. He averred that the negative trend started end of 2004 beginning 2005 when the company lost some of its orders, thereby affecting the company’s profitability. Since then they considered several alternatives. In the end it was decided to reorganize the security department in a manner that would reduce costs. 21. He averred that he called meetings of the security staff at which he briefed them about the economic situation of the company. He testified that he also invited a representative of the factory workers’ committee which they refer to as the Industrial Relations Council. He stated that the council is made up of representatives’ nominees from the two unions operating in the respondent firm and employees from non-unionized labour. The unions that are presently operating in the firm by virtue of having members are Lesotho Clothing and Allied Workers Union (LECAWU) and Factory Workers Union (FAWU). The function of the committee is to keep healthy relations between workers and Management. 8 22. He testified that he told the security staff that due to the financial situation of the company they were forced to restructure security department and this meant that they were going to loose their jobs as security personnel. The security function was going to be taken over by an independent company. He testified further that they discussed at length and considered various alternatives including the possibility of them applying for absorption by the independent security company that was going to be engaged. He stated further that he told them that anyone with skills the company could use would be reabsorbed. He concluded by telling them that he would let them know the effective date of their termination and they would all be affected. 23. He testified that most of the questions from the staff related to how they could be reabsorbed. They suggested that they must declare the skills they had for consideration. One Ramokhethi who had prior to joining security been in sewing reminded them that he had previously been a sewing machine operator. One Ramakau indicated that he had a driver’s licence. Mr. Ramokhethi was reemployed as sewing machine operator after his retrenchment as part of security personnel. Asked if he relied on people’s records to decide who was to be retrenched he said he never even talked about records. 24. He testified that all security staff was retrenched. However, apart from Ramokhethi, three others were reemployed to escort trucks to the harbor as they discovered that the new company was not yet ready to fulfill that part of the contract due to their personnel who did not have passports. He denied that he ever knew that PW1 belonged to NUTEX and said he could only know if there was a stop order facility which never existed in the case of PW1. He averred that NUTEX was not one of the unions known to them. The two unions registered with them were LECAWU and FAWU. 9 25. He admitted under cross-examination that when they met the security staff on the 16th March they had already made the decision to restructure that department. Asked how long the meeting lasted he said it took about two hours. It was put to him that evidence led on behalf of the applicants was that the meeting lasted for about 10 minutes. He denied and said issues he had to raise with the staff could not take 10 minutes, the minimum could be one hour instead. 26. DW1 was asked how the four people were reemployed i.e. Ramokhethi, Lefela, Monkhe and Mpenyane. He answered that apart from Ramokhethi who was transferred from sewing the other three turned up to make applications. He stated further that 3rd applicant had also showed up several times to enquire if there is a vacancy. He stated further that apart from escorting exports the four persons also did internal surveillance in order to ensure that the private company were doing their work as they should. 27. He was asked if he approached applicants when positions in internal surveillance emerged to apply. He said he did not because people had been told that those who had interest in other areas of operation of the company should show themselves up. He averred that those who had interest did and were taken. The applicants, with the exception of 3rd applicant never showed themselves. It was suggested to him that he infact rehired the four persons selectively. He denied and said they employed people who showed interest and that was done on the first come first served basis. He testified that those who were taken happened to be the ones with the longest service. The 3rd applicant who showed up several times fell far behind all of them in terms of service. 28. In reexamination DW1 stated that the escort job as well as the internal surveillance were totally new jobs which did not exist at the time that applicants were retrenched. They only became aware fo the need for both these functions after the retrenchment exercise was completed. 10 29. DW2 was the Human Resources Manager Mr. Lengana Tsepe. He testified that even though DW1 did not mention his name he was present at the consultation meetings of the 16th March 2009. He confirmed DW1’s testimony regarding the purpose of the meeting and what was deliberated thereat. In particular he testified that the meeting did explore alternatives with the security staff and some even suggested that the company should suspend payment of certain allowances for certain trips. 30. He testified that he is the one who is responsible for employment of staff and that he reemployed the three former security staff personnel because they came to apply for vacancies. He averred that he never saw any of the applicants since they were terminated. Asked about Chabeli, the 3rd applicant who is said to have come several times, he said he never knew about his efforts as DW1 never told him about him. He stated that all the applicants knew that they had to reapply. 31. Asked about PW1’s membership of NUTEX he said he was not aware that he was a member of such a union. Furthermore, he stated that NUTEX as a union did not exist at the respondent at the time. He stressed that he attended the meeting of the 16th March and said DW1 was mistaken if he suggested that he was not there. 32. DW3 Mrs. Mabaeti Sefali confirmed that she is a member of the Workers’ Committee and said she is a representative of LECAWU in that committee. She testified that only LECAWU and FAWU are represented in the workers committee and said other unions fail to meet the required membership threshold. Even then she said, the only such union that she knows of is UNITE. 33. She confirmed that she was invited to a meeting with security personnel and the management on the 16th March 2009. She said she attended with one Malerotholi from FAWU. She testified that the management reminded them of previous warnings about the drop in orders and that the situation has continued. As a result the company was considering disbanding security department and other workers might have 11 to work short time. She averred that they were told that people with skills could apply to the department they think their skill is relevant to. That was when Ramokhethi indicated that he could operate sewing machine and he was advised to approach sewing department for possible reabsorption. Ramakau said he had a driver’s licence and he was advised to meet transport department. 34. She testified that they were given chance to ask questions. Asked when the private security company was going to take over she said it was not clear at the time. Asked if there was ever a talk about individual records she said that was never discussed. She was asked who of the applicants attended the meeting she was at, she was of the view that they must have all been there, but she remembered vividly that Chabeli, the 3rd applicant was there. Asked about PW1 she said she did not remember if he was there. If PW1’s own evidence is to be believed he must have been there because he too said he was certain that he was with Chabeli at the meeting that he attended. CONCLUSIONS 35. Counsel for the applicants sought to make an issue out of the procedure that respondents followed to convene what were considered by the respondents to constitute consultations. He contended that it was not fair procedure for the respondent to have called applicants to the meeting of the 16th March without prior notice and without informing them in advance of the agenda of the meeting. He contended further that the respondent acted unfairly in that they failed to consult with the affected employees prior to the meeting of the 16th March 2009. 36. Counsel furnished no authority in support of the proportions he made in the foregoing paragraph. I am unaware of the requirement that employees ought to be given advance notice of a meeting for consultations with an agenda included. There is certainly nothing wrong with an employer giving such advance notice and informing employees of the issue for discussion. However, there is no mandatory requirement to that 12 effect, in the absence of a rule/regulation imposing same or a clause of a recognition/collective agreement. 37. Equally novel is the contention that the employer ought to have had other meetings prior to that of the 16th. Respondents have agreed that there had been no formal meeting with security department about their possible retrenchment prior to the 16th March. The reason for this is clear and it is that no decision had been made at that time to reorganize security department. Evidence of DW1 and DW3 was however, that management had been aware of the declining financial performance as early as 2004/2005 and staff had been updated from time to time about the situation. 38. Advocate Koto for the applicants contended that the respondent failed to consult with the applicants before deciding on retrenchment. He contended that the decision to retrench the applicants was made long before consultation with the applicants was entered into. This much DW1 conceded that when they came to consult with applicants they had already made the decision to reorganize the department. 39. Respondent’s approach cannot in our view be faulted. They did exactly what is contemplated by the Appellate Decision of Smalberger J. A in Attlantis Diesel Engines (Pty) Ltd .v. National Union of Metal Workers of SA (1994) 15 ILJ 1247 at 1252 A-G. For a clearer view of what should happen it is in my view apposite to quote the relevant portions of Smalberger J. A’s judgment in extensor. This is what his Lordship said in part: “The unfair labour practice definition casts upon an employer a duty of prior consultation with its employees (or their representative union or unions) before termination of their employment on non-disciplinary grounds. This raises issues of broader principle: When does such duty arise; what is the extend thereof; and what is the properprocedureto be followed by employers, and theconcomitant rights of employees in relation to the issue of retrenchment. That a lack of accord exists in relation to these matters in the decisions of the Industrial 13 and Labour Appeal Courts appears from the judgment of Thring J in Chemical Workers Industrial Union & Ors .v. Sopelog cc (1994) 15 ILJ 90 (LAC) at 1011-103C. No useful purpose would be served in stating and analyzing the different points of view expressed in these decisions. They reflectbroadly speaking two approaches. The first finds general recognition and acceptance in theIC judgment at 407-409 B; it tends to negate the need to consult as a necessary prerequisite to a decision at managerial level to retrench. The second finds expression in the LAC judgment at 649C-650C. The latter approach requires consultation once thepossible need for retrenchment is identified and before a final decision to retrench is reached. It proceeds on the premise that consultation requires more than merely affording an employee an opportunity to comment or express opinion on a decision already made. It envisages a final decision being taken by management only after there has been consultation in good faith. I agree with what I have referred to as the second approach. It seems to me that the duty to consult arises, as a general rule, both in logic and in law, when an employer, having foreseen the need for it, contemplates retrenchment. This stage would normally be preceded by a perception or recognition by management that its business enterprise is ailing, or failing, a consideration of thecausesand possible remedies, an appreciation of the need to takeremedial steps; and the identification of retrenchment as a possible remedial measure. Once that stage has been reached consultation with employees or their union representatives becomes an integral part of the process leading to the final decision on whether or not retrenchment is unavoidable.” This in our view is exactly what respondent did. Rather than wake up the following day after identifying retrenchment as a possible remedial measure, and order all security personnel to leave; he called them to a meeting for consultation and joint exploration of alternatives. It was only after they failed to find 14 suitable alternatives that he undertook the retrenchment of the applicants a week after the consultations. 40. Counsel for the applicants suggested that at the time the applicants were informed for the very first time that their employment was going to be affected the “replacement security company was ready to take over…” He argued therefore that the applicants were confronted with a fait accompli. We do not agree with him on one ground namely; that there is no evidence to this effect. Whilst PW1 testified that when they were “unceremoniously marched out” to use his words; on the 22nd March, the new company was already there to take over, he never suggested that on the 16th March the new company was ready to take over. After all they did not even know at the time which company would win the tender. 41. Mr. Koto for the applicants contended further that the respondent acted unfairly towards the applicants because it had perceived the likelihood of a retrenchment as far back as 2004/2005 and yet the applicants were only informed about it at the meeting of the 16th March 2009. Once again this submission is not negated by evidence adduced on behalf of the respondent. DW1 made it clear that the company’s downward trend started to manifest itself end of 2004 beginning 2005. He said they considered various options short of retrenchment. It was only when all those options had proved a failure that restructuring of some departments was considered. Once the retrenchment of the staff of security department was seen as a possible solution to the ongoing financial difficulties of the company, the staff of that department was called to a meeting on the 16th March to be informed and invited to suggest possible workable alternatives. This is what the law requires of an employer in the situation of the respondent and they (the respondent) substantially complied with that requirement. 42. Mr. Koto contended further that even if the process of retrenchment may have been fair it was tainted by the subsequent selective reemployment of some of the former security personnel to the exclusion of the applicants. He relied for this proposition on the passage quoted from Van Juarsveld 15 & Van Eck, Principles of Labour Law page 309 para 531 which says: “There is an obligation on the employer when the situation in his undertaking improves to such anextentthathe requires additional personnel, to grant his dismissed employees preference to apply. They should furthermore, ifthey are suitably qualified for specificpositionsbe appointed in preference to others, and not be selectively excluded from being reemployed.” (emphasis added). This court is in full agreement with the views expressed by the learned authors. 43. All three witnesses of the respondent testified to the fact that the workers who were going to be retrenched were advised to declare the skills they had which could be applied in other departments of the company. Only two people did so and these were Ramokhethi and Ramakau. They were both referred to sewing and transport respectively which are the departments they had said they possessed skills in. There is no evidence of what skill any of the six applicants said they had apart from security work. Clearly therefore, the employer sought to comply with the dictates of fair procedure in respect of reemployment of those of the retrenched employees who had proven usable skills. 44. It is common cause that Ramokhethi was later moved back to security where he joined three other former security employees of the respondent. Respondent testified that after retrenchment of the security personnel, it soon discovered that the new company’s personnel did not have passports to enable them to escort merchandise to the harbor. This led them to reemploy three of the former security staff on a first come first served basis. 45. Once again this employer has not gone out to seek new recruits. It has reemployed some of its retrenched employees, former colleagues of the applicants. What else do we want from this employer, if we are not to make ourselves guilty of 16 46. 47. making onerous demands on it? It has in line with the recommendation of Van Jarsveld given preference to its former employees to apply and has employed those who came forward and applied. It seems to us that that applicants’ complaint arises out of the fact that they have not themselves been reemployed. That once again is an onerous demand on the employer given that the existing vacancies could not accommodate everybody. Both DW1 and DW2 said those who were reemployed presented themselves and were taken because they came to apply. DW2 went so far as to say none of the six applicants ever showed up at his office since their retrenchment to find out if there is a vacancy. Even Chabeli who DW1 said came to him did not end up at DW2’s office which is the one that would know if there were any vacancies. In his testimony PW1 sought to paint a picture that they were retrenched and possibly not reemployed because they were supposed to have had bad records. He is the only one who spoke about Mr. Monyane allegedly saying those with bad records are going to go. All other witnesses deny that there was ever a mention of individual records. Generally PW1 did not come out as a truthful witness. His evidence was largely a fabrication. It is hard to imagine an employer calling employees to tell them about the predicament the company is facing, only to be angry at them and tell them that those with blemishes know themselves. That was a clear fabrication on PW2’s part. 48. Equally untenable is the suggestion that he did not tell them the reason why their employment was going to terminate. There would have been no reason to call the meeting. He could have waited for the last day and just given them a boot without any prior meetings. We are of the view that the applicants were consulted at the meeting of the 16th March and were given the reason for the envisaged termination of their employment. This was the evidence of witnesses who testified for the respondent which evidence we are prepared to accept. 17 49. There was the last contention that the applicants had abandoned their right to claim by accepting payment of their terminal benefits. Reliance was sought to be placed on the decision of this court in Tseliso Moiloa .v. Total Print House (Pty) Ltd LC/REV/524/06. We are in full agreement with Mr. Koto that the present case is distinguishable from the Moiloa case supra as there was no mutual settlement of the dispute by payment of severance pay. It follows that applicants accepted payment of severance which was offered by respondent, without prejudice. They were thus entitled to bring this application challenging the fairness of the retrenchment. However the application itself is without merit as shown hereinbefore. It is accordingly dismissed. There is no order as to costs. THUS DONE AT MASERU THIS 15TH DAY OF JULY 2011 L. A. LETHOBANE PRESIDENT M. MOSEHLE MEMBER L. MOFELEHETSI MEMBER FOR APPLICANTS: FOR RESPONDENT: I CONCUR I CONCUR MR. KOTO MR. NTAOTE 17