South Africa: Labour Court

South African Typographic Union v Press of Corporations South African Limited (J1541/98) [1998] ZALC 46 (7 July 1998)

acceptance. Annexure “A” to the Notice of Motion, the alternative letter, was retracting

the voluntary retrenchment letter dated June 1998 and also giving an undertaking that the

Respondent would consult with the Applicant in respect of employees employed by the

businesses as listed as nos 1-6 at pp 1-2 of the said letter in terms of s189 of the Labour

Relations Act and with the employees of subsidiaries of Perskor & CTP Caxton

(Pty) Ltd and to whom Annexure MD1 was handed or sent.

[2] This dispute has arisen as a result of the proposed retrenchment of staff which has become

necessary because of the merger which took place on 30 June 1998 between the

Respondent and CTP Caxton (Pty) Ltd (“Caxton”).

BACKGROUND :

[3] The Applicant is S.A. Typographical Union, a registered trade union which represents

the majority of the newspaper, printing and packaging sector of the market and which

enjoys majority representation in the companies which form part of the Respondent’s

group of companies. The Applicant’s principal place of business within the jurisdiction

of the Above Honourable Court is SATU HOUSE, PRETORIA. The Applicant is the

majority Union at the Respondents Group of Companies.

[4] The Respondent is the PRESS CORPORATION OF SA LTD, with its principal

place of business within the jurisdiction of the Above Honourable Court at

DOORNFONTEIN, JOHANNESBURG. The Respondent, as a holding company, has,

at all times, acted on behalf of its group of companies and has acted as their representative

when conducting discussions with the Applicant. The Respondent was also authorised

to act on behalf of its subsidiaries with regard to the application.

[5] On or about 13 February 1998 the Applicant and the Management of the Respondent had

a discussion regarding the possible merger between the Respondent and Caxton. On or

about 24 February 1998 further discussions between the parties were held regarding the

possibility of retrenchments within the Perskor Group.

[6] On 25 March 1998 the Respondent addressed a letter to Mr Martin Deysel, the Organiser

and General Secretary of the Applicant in terms of which he confirmed that the possible

retrenchment which the Managing Director had initiated in their discussion of 24

February 1998 had become a reality at, one of the subsidiaries of the Respondent,

Republic Press(Pty) Ltd. In this letter the Applicant was being advised that the

Respondent wished to enter into consultations with them in terms of “Section 189 of the

Labour Relations Act to reach a consensus” on, the issues referred to in section

189(2)(a), (b) and (c) of the Act. The Respondent also confirmed that it wished “To

comply with Section 16 of the Labour Relations Act regarding the disclosure of

information.” Furthermore it was indicated in the said letter that the number of

employees to be affected by the retrenchments was unknown, at that stage. Dates for a

possible meeting were also suggested.

[7] On 14 April 1998 a memorandum setting out the framework for the information to

be disclosed in terms of Section 189 (3) of the Act to the affected employees was sent by

Messrs C van Heerden (Personnel Manager) and H Cornelius (Assistant Personnel

Manager) to Mr W Eitler (General Manager of Republic Press) disclosing, inter alia,

reasons for proposed dismissals, alternatives considered, number of employees likely to

be affected by the retrenchments and their job categories, method of selection of

employees to be retrenched, time or period during which retrenchments are likely,

severance pay proposed, assistance to be given to retrenched employees and future re-

employment. The reason for the proposed retrenchments was set out as the loss of market

share by the Respondent at Republic Press. This information was submitted in

preparation for the meeting on 29 April 1998.

[8] On 29 April 1998 a meeting was held in Durban. Those present were the executive

management of the REPUBLIC PRESS, namely, Mr D Cochius, Mr W Eitler, Mr C van

Heerden and Mr H Cornelius, three executive members of the Applicant and Mr Deysel,

representatives of Paper Printing Wood and Allied Workers Union (PPWAWU), Media

Workers Association of South Africa (MWASA), Mr R Wilson and Mr P Lafferty, both

who represented non-unionised employees. Mr Cochius chaired the meeting. On 26 May

1998 Applicant sent a letter to Mr Cochius in which, inter alia, concern was raised about

the meaning of retrenchment and redundancy which the Applicant stated that it needed

to be clarified at the next meeting. On 4 June 1998 a follow up letter was sent to the

Respondent by the Applicant requesting a reply to its letter of 26 May 1996.

[9] On 12 June 1996 the Respondent sent a letter to the Applicant in which they referred to

the Caxton merger, which had been discussed between them on 13th February 1998. The

Respondent also indicated that the merger, which was to be finalised on 30th June 1998,

could lead to retrenchments and invited the Applicant to consultations regarding all

relevant issues at its Doornfontein premises on 17th June 1998. The issues to be

discussed which were set out in this letter were more or less the same as those contained

in the Respondents letter of 25 March 1998 above, namely :-

“ appropriate measures to avoid dismissals;

to minimise the number of dismissals;

change the timing of the dismissals; and

to mitigate the adverse effects of the dismissals;

the method for selecting the employees which could possibly be dismissed;

as well as the severance pay which would be payable to such affected

employees.”

[10] Pursuant upon the above-mentioned letter on 17th June 1998 the representatives of the

Applicant and the Respondent had a meeting at Respondent’s Doornfontein premises.

The meeting was attended by Messrs D Cochius (General Manager of Human Resources

of Respondent), D.O Pretorius (Attorney for Caxton), D.S. Wes (Attorney for Caxton),

B.J. van Wyk (Secretary), M.Deysel (General Secretary for the Applicant), K.F.

Sebothoma (SATU Doornfontein), P.C. Manzini (SATU Doornfontein) and A. Vorster

(Secretary SATU Doornfontein). The proposed merger between Caxton and the

Respondent and retrenchments were discussed. (Further details on this meeting would

be discussed later in this judgement).

[11] On 19th June 1998 Mr Deysel, on behalf of the Applicant, sent a letter to the Managing

Director of the Respondent raising his concerns about the reasons for the retrenchments

and also placed on record that the information at his disposal is that the company is

targeting a monthly saving of R1m through these retrenchments. Furthermore Mr Deysel

was of the view that the retrenchments were not necessary and made a number of

suggestions to improve the financial position of the company, including, “An immediate

stop to the use of casual labour, restricting overtime work to the minimum,

implementing proper control measures, engaging SATU in the management of the

Company for a specified period of time, engaging an external auditor to investigate

all these allegations.”

[12] Following upon the agreement which was reached at the meeting of 17th June 1998

between the Respondent and the Applicant, on 18th June 1998 Mr Cochius addressed the

workforce at the Respondent’s Doornfontein Plant.

[13] On 23rd June 1998 the Respondent sent a letter to the Applicant in which the

Respondent’s rationale for the restructuring of the Respondent was contained. In this

letter the Applicant was also invited to a meeting of 2nd July 1998. The Applicant

requested the Respondent to put this memorandum on the notice boards of all the affected

subsidiary companies and branches. The said memorandum, contrary to the Applicant’s

suggestion, was put on the notice board of the Respondent’s Doornfontein plant only.

[14] On 25th and 26th June 1998 “the voluntary retrenchment offer” letter was included in the

Respondent’s employees pay envelopes, including, Applicant’s members. On 25th June

1998 the Applicant wrote to the Managing Director complaining about the above-

mentioned voluntary retrenchment offer as an agreement had not been reached on the

package, also demanding the withdrawal of the letters and Management to advise

employees that the package was a unilateral offer by Management. It was also demanded

that the company comply with Section 189 of the Act.

Subsequent to that, Management put up a notice on all notice boards to the effect that this

was a unilateral offer by Management and that none of the Unions had been consulted

on this issue.

[15] On 26th June 1998 the Applicant sent another letter to the Respondent’s Managing

Director complaining about their actions regarding the offer and also their failure to put

the memorandum with the rationale for the restructuring following the merger at all the

other affected companies as the Applicant had requested.

[16] On the same day, Attorneys Fluxman Robinowitz Raphaely - Weiner replied to

Applicant’s letter dated 25th June 1998 and refused to withdraw the voluntary

retrenchment offer letter. They also contended that, in their view they don’t have to

consult with the Union on the voluntary package and that it was indicated at the meeting

of 17th June 1998 that a retrenchment package would be reflected in the letter to be

included in the individual employees pay packet. They also advised that Section 189

would be followed in future negotiations relating to retrenchments which are likely to

follow.

[17] On 25th June 1998 Applicant wrote a circular which was put on all notice boards,

explaining its position and suggesting to its members not to accept the package before

they give them the advice to do so. In the interim various newspapers in the country

carried articles regarding the retrenchments at the Respondent’s businesses. Some of the

press reports were speculating that 3 000 employees would lose their jobs as a result of

the merger.

[18] On the 30th June 1998, the Applicant sent two letters to the Respondent relating to the

proposed application to the Labour Court. On the 1st July 1998 the Respondent’s

Attorney of record replied to the Applicant’s letters of the 30th June 1998 disputing the

urgency of this matter, amongst other things. On 2nd July 1998 an official notice in

terms of the Johannesburg Stock Exchange Rules appeared in the Citizen regarding the

merger.

URGENCY :

[19] The Applicant brought this matter before Court on an urgent basis because it was of

the view that the letter which was enclosed in the individual employees pay packets

created panic and confusion amongst its members. This was caused by the fact that the

letter had a deadline within which the package should be accepted failing which their

members would not benefit from same. It also created an impression that those

employees who did not accept would be retrenched on less favourable terms. Mr

Sutherland, on behalf of the Respondent, argued that the matter was not urgent and the

said letter was not meant to create confusion as alleged.

[20] The relevant paragraph in the said letter read “the voluntary package needs to be

applied for by the 7th July 1998. This is a once off offer, and will not be repeated.”

[21] I have read the letter and considered the context and the manner in which the letter was

sent and I do accept that it may have caused confusion to the employees. The letter may

create the impression that if you don’t accept the offer there is a possibility that you may

be retrenched on different terms. Those terms may not necessarily be favourable.

[22] The Respondent Attorneys in their letter to the Applicant of 1st July 1998 also raised the

issue of the Urgency of the Application as they had already indicated that the offer

would not be withdrawn. This was conveyed to the Applicant on 26th June 1998.

The application papers were signed on 1st July 1998 and issued and served on 2nd July

1998. In my view there wasn’t any lengthy delay so as to affect the urgency of the

application. The Applicant acted diligently. The application was moved four (4) court

days later after the Respondent had confirmed that they would not be withdrawing the

offer letter and there was an intervening week-end in between.

[23] Furthermore if I consider the above-mentioned submissions together with the number of

employees involved, and the possible consequences of the retrenchments upon them,

the matter is serious enough for me to exercise my discretion in favour of hearing this

matter.

APPLICATION :

[24] The parties (and especially Ms Jansen on behalf of the Applicant) agreed that, even

though the relief sought was couched as set out above, the Applicant was, in fact, seeking

a final interdict against the Respondent. It is trite that the three (3) requirements which

need to be satisfied for final interdicts to be granted are, namely, : a clear right; a

reasonable apprehension of harm; and the absence of a satisfactory alternative remedy.

Accordingly that will have to be satisfied in this matter. These requirements have been

enunciated by the Appellate Division and later accepted by this Court. See Setlogelo v

Setlogelo 1914 AD 221 at 227, Malandah v SABC (1997) 5 BLLR 555 at 557 and

FAWU v Premier Food Industries Ltd (Epic Food Division) (1997) 5 BLLR 753 at

756.

[25] It is apparent that the Respondent started consulting with the Applicant and other Unions

regarding restructuring during February 1998. The said consultations were originally

confined to the proposed retrenchments at Republic Press but they were later extended

to the other companies within the Respondents group of companies as set out in the

Respondent’s letter of 12th June 1998, namely; Vendiko Ink Factory, a division of

Republican Press (Pty) Ltd, situated at Doornfontein and Durban; Aurora Newspaper

Printers, a division of Promedia (Pty) Ltd, situated at Pretoria; Perskor Printers - the

commercial, newspaper and book printing, sheetfed and Web Divisions, situated in

Doornfontein, Johannesburg; Republican Press in Durban; Commercial and Newspaper

Printing in Pietersburg, Kroonstad, Klerksdorp and Middelburg.

[26] The main issue which needs to be decided relates to the status of the Voluntary

Retrenchment offer letter which was enclosed in the employees pay packets on 25th and

26th June 1998 i.e. Should the Voluntary Retrenchment Offer comply with the

provisions of Section 189 of the Act and whether the Respondent contravened the

provisions of the Act so as to warrant the granting of an interdict against it.

VOLUNTARY RETRENCHMENT OFFER

[27] It was common cause that the offer was “a unilateral offer” by the company and none of

the Unions had been consulted on this issue. Mr Sutherland submitted that a company

doesn’t have to consult with the union or employees and doesn’t have to comply with

section 189 when making a voluntary retrenchment offer to its employees. Ms Jansen

disputed this.

[28] Section 189 of the Act provides that

“(I) When an employer contemplates dismissing one or more employees for reasons based on employer’s operational requirements, the employer must consult -

(a) any person whom the employer is required to consult in terms of a collective agreement;

(b)

(c) if there is no workplace forum in the workplace in which the employees likely to be affected by the proposed dismissals are employed, any registered trade union whose members are likely to be affected by the proposed

dismissals;

(d) ......

(2) The consulting parties must attempt to reach consensus on-

(a) appropriate measures -

(I) to avoid the dismissals;

(ii) to minimise the number of dismissals

(iii) to change the timing of the dismissals; and

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

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

(c) the severance pay for the dismissed employees.

(3) The employer must disclose in writing to the other consulting party all relevant information, including, but not limited to -

(a) the reasons for the proposed dismissals;

(b) the alternatives that the employer considered before proposing the dismissals, and the reasons for rejecting each of those alternatives;

(c) .........

(d) .........

(e) .........

(f) the severance pay proposed

(g) .........

(h) .........

(4) ...........

(5) The employer must allow the other consulting party an opportunity during consultation to make representations about any matter on which they are consulting.

(6) The employer must consider and respond to the representations made by the other consulting party and, if the employer does not agree with them, the employer must state the reasons for disagreeing.

(7) ...........”

[29] Section 189 (1) states that “when an employer contemplates dismissing one or more

employees for reasons based on the employers operational requirements, the

employer must consult” with the parties referred to therein. Section 186 of the Act

defines the various notions of dismissals. Voluntary retrenchments, are not referred to

within that definition. Retrenchments are also not defined in section 213 of the Act.

[30] In National Union of Mineworkers and others v Free State Gold Mines (Operations)

(Pty) Ltd (1994) 15 ILJ 1161 at 1165 G - 1166 J a definition of retrenchments (the

verb) as extracted from the Oxford Dictionary is given as meaning “cut down, reduce

an amount (especially expenses), economise, reduce expenses.” Voluntary

Retrenchments can, as suggested by the Respondents counsel, be regarded as a mutual

agreement between the employer and employee to terminate a contract of employment

for operational requirements. If one were to regard voluntary retrenchments as a

dismissal it would be categorised as a dismissal with mutual understanding or agreement

between the employer and the retrenched employees. Therefore there would be no basis

on which to challenge the dismissal. However, it is the reason for the termination of the

contract of employment (whether mutual or not) which brings it within the ambit of the

provisions of section 189 of the Act.

[31] Section 213 of the Act defines operational requirements as meaning “ requirements

based on the economic, technological, structural or similar needs of an employer.”

In this matter at the time when the voluntary packages were discussed by the Respondent

with the Applicant, the Respondent was already considering dismissals for operational

reasons. The merger referred to earlier was based on both an economical and

structural need of the employer, that is, to improve the Respondents profitability and to

deal with the ailing printing production facilities of the Respondent. This is apparent

from the Respondent memorandum on the merger. Section 189 states that the employer

needs to consult when he contemplates dismissing for operational reasons, as indeed was

the case with the Respondent.

[32] It follows then, that the consultation stage anticipated in section 189, is preceded by a

recognition by the employer that, he needs to take certain steps to improve his financial

position and then retrenchments become one of, if not, the only solution to the problem.

It is apparent in this matter that when the Respondent offered voluntary retrenchments

to the employees on 25th June 1998 he had contemplated or thought about dismissing

employees for operational reasons, but then chose to offer voluntary retrenchments, as

an alternative to dismissals or to avoid dismissals. It is that contemplation or thought

which triggers off the provisions of section 189 of the Act.

[33] In this matter the Voluntary Retrenchment offer, it is clear, was made after

the retrenchment need had crystallised and was voiced out by Mr Cochius on behalf of

the Respondent, firstly, in the letter of 12th June 1998 wherein he stated that “we

envisage that should the merger become a reality on 30th June 1998, that certain of our

businesses might be affected thereby which could possibly lead to retrenchments having

to be considered.” (This statement was also contained in the Voluntary Retrenchment

Letter of 25th June 1998.) Secondly, this was also conveyed at the meeting of 17th June

1998. Obviously, once the thought or contemplation of retrenchments had crystallised,

the Respondent was bound to consult in terms of section 189 before proceeding with the

voluntary retrenchments. The provisions of Section 189 are pre-emptory once an

employer contemplates retrenchments [see CWIU v Johnson and Johnson (Pty) Ltd

(1997) 9 BLLR 1186 at 1202 A-C]. The consultations have got to be done in good faith

and they should be meaningful, that is, with the intention of resolving the issues before

the parties.

[34] Mr Sutherland, on behalf of the Respondent, also submitted that this offer was an

invitation by the Respondent to employees to consider voluntary retrenchments and not

a final offer. The employees were to put their names forward, if they wanted to be

considered and thereafter they would be considered for same. Thus it can never be

regarded as improper if the Respondents had not consulted the Unions on the offer. Mr

Sutherland also submitted that the offer was a fresh start by the Respondent and was not

part of the original consultation process. It might be of assistance at this stage to refer

to the relevant passages of the letter :

“ PERSKOR

June 1998

Dear Employee

MERGER OF PERSKOR AND CTP

You might have noticed an advertisement in the newspapers regarding the terms of a merger of

Perskor’s Publishing and Printing Businesses with those of CTP.

After having carefully considered our position within our industry, the company has come to the conclusion that in order to maintain its viability and competitiveness and to continue adding value, that the proposed merger would ensure that it achieves all the aforesaid goals. The merged

business would be in a far better position to compete within the industry and according to our operational requirements, the merger is viewed as in the interest not only to shareholders but also of employees of the company.

We envisage that should the merger become a reality as at 30 June 1998, that certain of our businesses might be affected thereby which could possibly lead to retrenchments having to be considered.

The merger would unfortunately necessitate some reduction in the number of employees

as well as the streamlining of operations and in some instances even the closure of certain

operations. To this end, consultation has commenced, with affected employees and their representatives (i.e. recognised trade unions), during which employees will be given a full an proper opportunity of consulting on all the relevant issues. We have written to the relevant trade unions informing them about the merger and invited them to consultations with us.

It seems to us that once the merger has taken place, that the following businesses might be affected thereby and that these businesses retrenchments might have to occur. The businesses are:.............

As a result of the merger, and once same has been implemented, it might be that the aforesaid businesses would become superfluous in the larger organisation which would come into existence. This could lead to the probable closure and or right sizing of some of some of these businesses with the consequent redundancy of employees.

Once the merged business has become fully operational, it might also be that other parts of the business may be affected, and we have to address that situation as and when it occurs. The businesses which we believe would be affected immediately are those set out above.

In anticipation of the above we have accordingly decided to first offer employees the option of taking a voluntary retrenchment package on the clear understanding that management reserves the right to decline any application due to operational requirements and skills retention.

The package offered is as follows :

Monthly paid staff Weeklyy paid staff

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

The voluntary package needs to be applied for by the 7th July 1998.

This is a once off offer, and will not be repeated.

Employees will be kept informed of developments .....

Yours sincerely

P G GREYLING

GROUP MANAGING DIRECTOR (own emphasis)

[35] It is apparent from the last three paragraphs of the above-mentioned letter that this was

a final offer and not an open invitation as the Respondents submitted. If it was an open

invitation there wouldn’t have been a deadline with the threat it would not be repeated.

Another veiled threat regarding the deadline was also contained in the Attorneys of

Records letter of 26th June 1998 in which it was said :

“ we to advise that should the time limit for acceptance thereof expire, and

should your members have allowed such time limit to expire as a result of

your advice to them, we will consider our client’s obligation to find

alternatives to minimise the number of retrenchments as having been

satisfied in respect of the option of voluntary retrenchment.”

[36] I will now deal with the other submission of the Respondent that the Voluntary

Retrenchment letter was initiating a fresh process and was not part of the original

retrenchment process. Firstly, the seventh and eighth paragraphs (i.e. before the package

which was offered) clearly show that the offer was being made “in anticipation” of the

restructuring and retrenchments which might occur as a result of the merger.

Accordingly this was being done as a result of operational requirements as defined in

section 213 of the Act. Secondly, I would like to refer to the context in which this offer

was made. The Respondent in its letter of 25th March 1998, invited the Applicant to

consult with it regarding the proposed retrenchment (then at the Republic Press) in terms

of “the requirements of Sec 189 of the Act to reach consensus on,” inter alia, the issues

referred to in section 189 (2) (a) to (c) of the Act. The same issues were referred to in the

Respondent’s letter of 12th June 1998 when the retrenchments were to be discussed in

respect of the rest of the Respondents group of companies. In the letter of 12th June

1998 the Respondent invited the Applicant to take part in consultations during which he

would be given “a full and proper opportunity of consulting on all relevant issues.”

[37] The Respondent and the Applicant had only the two meetings at which the retrenchments

were discussed, namely, on 29th April 1998 in Durban and 17th June 1998 in

Johannesburg. According to Mr Cochius (in paragraph 8 of his affidavit) he and the other

Union Representatives regarded the Durban meeting as a first meeting in the consultation

process in terms of section 189 of the Act. The Applicant regarded the consultation

process as on going.

[38] According to the transcript of the meeting of the 29th April 1998 there was certain

information which was outstanding and which was to be furnished by the company before

the consultation process could be taken forward. That information was to be given by the

Respondent to the Union and thereafter consensus was to be reached on the retrenchment

package. Mr Cochius was also of the same view, at the meeting. At page 46 of the

papers being the transcript of the said meeting Mr Deysel said :

“ We need a consultation process with a view to reaching agreement. I

cannot go into consultation with you properly unless I have got all the

information that we require to make decisions at our disposal.”

In response to that Mr Cochius agreed to furnish the information.

And later at pages 52 - 53 of the transcript it was stated :

“D Cochius: Ya, voluntary retrenchment and things like that. You give a guy package and say to him, listen, this is what we are offering, voluntary retrenchees.....And those things are options we need to talk about. But you see we could not sit down and do all this because then you accuse us of deciding unilaterally. We want to consult with you and say to you lets look at it now. Lets try now work out a modis operandi here, I don’t think we can make much more progress, until you have got this information.

M Deysel : This information is crucial.

D Cochius : What I am saying is that we can then possibly adjourn this

meeting, ...... ” (own emphasis).

[39] No decisions were reached at this meeting even on the package suggested in the

memorandum 14th April 1998. The issue of the voluntary retrenchment packages was

one of the issues which needed to be considered by the Respondent and thereafter to

revert to the Unions. It is obvious from the above, even though the meeting related to

Republic Press, that Mr Cochius appreciated the need for the sharing of information, to

agree on the option of voluntary retrenchments and the need to agree on the package after

consultation with the Union when they adjourned for the day. In the premises I

agree with Ms.Jansen’s submissions that, it is clear from the above quoted passage that

the Respondent knew that there was a need to consult with the Union even in respect of

voluntary retrenchment packages. As to what changed Mr Cochius’ view; later, and to

decided on the package unilaterally, is not clear to this Court.

[40] I now turn to deal with the meeting of 17th June 1998. At the meeting, Mr Cochius

advised the people present of the branches or subsidiaries which would be affected by the

proposed retrenchment exercise. The rationale / reasons for the retrenchment were

discussed and when Mr Deysel inquired about the time scales for the process, Mr

Cochius’ response (at page 129- 130 of the Court papers) was that he would come to the

time scales and later said :

“Now in time to come we would like to have this whole thing implemented

by 31 July 1998, but as I say that is negotiable, depending on the progress

that we can make.

The strategy that we are going to recommend and we would like your views

on this is, we want to immediately work out a moratoria retrenchment

package and offer that to every single individual, depending on operational

requirements and retention of certain skill. So management reserves the

right not to accept an application if that skill is critical to the success of the

company.

In addition to voluntary retrenchments, we are obviously going to look at the

time and early retirement and offer people that option and we are very hopeful

that this may bring quite a few applications........ It depends on how many people

accept the voluntary retrenchment package and apply for early retirement etc.etc. Only once that exercise has taken place, we will get an idea.”

[41] At page 160-162 of the Applicant Replying Affidavit which contained the pages of the

transcript of the meeting of 17th June 1998 which were omitted from the Respondents

Answering Affidavit Mr D Pretorius (of the Respondent’s Attorneys of record) confirmed

that the meeting was called in terms of the Labour Relations Act to try and discuss with

the Unions those areas which CTP and Caxton had identified as needing to be addressed

sooner. Subsequent to the aforementioned discussion, they went on to discuss the

voluntary package letter which the Respondent wanted to include in the workers pay

packets that Friday. The intention of the Respondent to offer retrenchment packages on

the following Thursday was also disclosed for the first time.

[42] Clearly it was within the parties’ understanding that this consultation process was

in terms of the Act and that even the deadlines were subject to negotiations between the

parties. It is apparent that the retrenchment packages were discussed in the context of

terminating jobs for operational requirements. What the Respondent envisaged was

offering the package, and thereafter proceeding with compulsory retrenchments and all

of this for operational requirements. The voluntary retrenchment offer could never have

been a fresh start as was argued by the Respondent. It was part of the on going

consultations or at least the one which was initiated in terms of the letter dated 12th June

1998.

[43] In light of the afore going, I also agree with Mr Deysel’s view that the consultation

process was on going, because there was no evidence to indicate that, at the time of the

offer, the consultations regarding retrenchments had been finalised for the voluntary

retrenchments offer to be regarded as not having to be part of the consultation process,

so as to justify the making of the offer unilaterally by the Respondent. Accordingly, I

cannot accept Mr Sutherland’s argument that the letter offer was initiating a fresh process,

extending an invitation by the Respondent to the employees, which should not be

governed by the provisions of Section 189.

[44] Mr Sutherland submitted that the Voluntary Retrenchment offer should be regarded as

the Respondents alternative to retrenchments. Accordingly there is nothing improper for

the alternatives to be initiated by the employer in our law. I do agree with this

submission. However, if the voluntary retrenchment offer is one of the alternatives

to dismissals, obviously, it is one of the issues on which the Respondent needs to consult

with the Applicant in terms of section 189(2)(a)(I) and (ii). This then means the parties

have to comply with the section. The parties have to consult about the offer and all the

elements of the proposal on alternatives, including the amount, which didn’t happen in

this case.

[45] It is common cause that the Respondent unilaterally decided on the Voluntary

Retrenchment Package. The contents of the letter were never discussed. What I have

found to be very disturbing about the letter, which borders on bad faith consultation or

negotiation, is that, firstly, at the meeting which was held to discuss the retrenchments

the question of the Actual amount of the Package was never discussed with the Union.

Secondly, “Kagiso Publishers” was not included as an affected Division in the letter of

12th June 1998. However, in the Voluntary Package letter Kagiso was included. The one

question which this Court had was whether this development, that Kagiso Publishers

employees would be affected by the merger as well, was brought to the attention of the

Unions prior to the 25th June 1998.

[46] The amount of the Voluntary Package, like the issue of wages or their increase, is an issue

of conflicting economic interests between the employer and employees. It is also an issue

to be negotiated between the employer and employee like the wages. This was obviously

another breach of section 189 by the Respondent. Section 189(2) clearly states that the

consulting parties must attempt to reach consensus on, amongst others, the very severance

pay for dismissed employees. The package which was included in the letter was not

discussed with the Union and accordingly the Union’s rights to negotiate on behalf of its

employees as a representative Union were violated. Consultation as anticipated in the

Act, does not necessarily mean that the consulting parties must agree. However there

must be a serious attempt on both sides to reach consensus. The very fact which was

acknowledged by the Respondent in his letters to the Applicant.

[47] The need to consult with the Union or employees by the employer as soon as he has

contemplated retrenchments has been the integral part of our law even prior to the

enactment of the 1995 Act. The legislature has incorporated most of the guidelines

emanating from the judgements decided before 1995 in section 189 of the Act. In

Atlantis Diesel (Pty) Ltd v National Union of Metalworkers of S.A. (1994) 15 ILJ

1247at 1252 D-E the Appellate Division (as it was known) said :

“ The latter approach requires consultation once the possible 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 an opinion on

a decision already made. It envisages a final decision being taken by

management only after there has been consultation in good faith.”

And at E and G the Court also stated :

“ 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..... Consultation provides an opportunity, inter alia, to explain

the reasons for the proposed retrenchment, to hear representations on

possible ways and means of avoiding retrenchment (or softening its effect)

and to discuss and consider alternative measures.”

[48] A similar view has been expressed by this Court when it was called upon to interpret and

apply the provisions of section 189 of the Act. In Ellias v Germiston Uitgewers (Pty)

Ltd (1998) 19 ILJ 314 and National Union of Metalworkers of SA and others v

Comark Holdings (Pty) Ltd (1997) 18 ILJ 516, the cases to which I was referred by Ms

Jansen, the Court embarked on a similar exercise. I agree with the views enunciated in

these judgements.

[49] The only party, who normally benefits from retrenchments which are implemented on the

basis of the commercial rationale, is the employer. In this case the Respondent as the

employer stands to gain from retrenchments, whether voluntary or compulsory, there is

every reason for a consultation with the Union at all stages of the process. Accordingly

it would be inconceivable for any employer to be in a position to finalise a retrenchment

package having not discussed the amount of same with the representative Union or the

employees. Fairness dictates that there must be consultation in this regard.

[50] Another matter which the Court wishes to address concerns the consultation between the

parties in respect of the rest of the issues referred to in section 189 of the Act.

[51] Consultations in Labour Relations have the object of avoiding or minimising industrial

conflict. See Halton Cheadle : The New Labour Law at 291. This is the same purpose

/ object which the Labour Relations Act of 1995 seeks to achieve. See The Explanatory

Memorandum to the Labour Relations Bill and Section 1 (d) (iv) of the Act.

[52] In National Union of Metalworkers of SA and others v Comark Holdings (Pty) Ltd

at 524D - Mlambo J said that “the nature of consultation as required by section 189 is an

exhaustive joint problem solving or consensus seeking process between the employer

and consulted parties. It is a process which is not sporadic or superficial. Furthermore,

because the employer is always privy to all necessary and relevant information it should

not only disclose information which it deems relevant. It should disclose all information

requested by the consulted party subject to the limitations already enunciated.”

[53] At the meeting of the 17th June 1998 when the Respondent advised the meeting

that a letter was to be included in the pay packets of the employees that Thursday, the

Applicant objected to this. Mr Deysel felt there was a need to call meetings with the

affected employees. To this suggestion Mr Cochius responded by saying that it was a

good suggestion and it would be followed up. Mr Cochius later undertook to talk to the

staff before Thursday, that is, before they get the letters. He went on to state “we will call

everybody together and we will have a half an hour meeting where we explain what is

happening here at Doornfontein” and later stated “yes we will have to do it at Vendiko

in Durban and here at Aurora in Pretoria and also Kroonstad and Klerksdorp and I don’t

think there will be any problems in Pietersburg.”

[54] It is clear, from the above, that the Respondent undertook to call the meetings at the

various branches. There was undisputed evidence that, notwithstanding the undertaking

or agreement, the meetings to address the workforce were not called at all branches or

subsidiaries as it was agreed. Instead the offer letter was sent off. In making that

undertaking, reasonable expectations were created by the Respondent to the Applicant.

[55] The Respondent’s counsel argued that there was no hint at the meeting of 17th June 1998

that Mr Deysel thought that the letter of 25th June 1998 would be unacceptable. I disagree

with Mr Sutherland’s submission in this regard, as Mr Deysel clearly indicated his

unhappiness with the letter being sent out without prior consultation with employees.

Obviously,when the company made the undertaking there was no reason for him to be

concerned any further.

[56] Even if I was to be persuaded by the Respondent’s argument that the provisions of section

189 don’t apply to voluntary retrenchment packages, which I am not, I have two other

problems with the manner in which the offer was put to the employees by the

Respondent. Firstly it seeks to undermine the Unions Collective Bargaining role in the

Respondent’s group of companies. The role of representative unions in companies, with

regard to collective bargaining, is recognised in chapters two and three of the Act. This

can’t be encouraged as it is contrary to the objectives of the Act which are to try and

achieve industrial peace. Such action may lead to unnecessary industrial action.

Secondly the Respondents failure to honour its undertaking to address the employees

before giving them the voluntary retrenchment letters. It is in the nature of good labour

relations that agreements between the parties be upheld. The Respondent did not give

a plausible explanation for such an omission.

[57] The Applicant also challenged the very need for retrenchments at the Republic Press, in

terms of its letter of 19th June 1998. The representations which the Applicant made with

regard to the necessity of retrenchments, were ignored by the Respondent.

Notwithstanding that challenge, the company went ahead to announce voluntary

retrenchments, which were to affect all employees including the Republic Press

employees, when it had not consulted with the Applicant in this regard, let alone to

respond to the proposals the Applicant had put forward in terms of letter dated 19th June

1998 making proposals on how the retrenchments could be avoided. This letter was

clearly in accordance with section 189 (2)(a)(I) read together with section 189 (5). The

Respondent’s failure was clearly in contravention of section 189(6) which directs the

employer to consider and respond to representations made by the other consulting party.

Furthermore if the employer disagrees the employer is expected to state his reasons. One

of the tests to ascertain the fairness of retrenchments, is the bona fides of the decision or

the real need to retrench employees.

[58] This failure by the Respondent to respond makes the Respondent’s argument that it did

not consult in respect of the offer because it was not made in terms of section 189

seriously flawed because,even proposals made to it by the Respondent in terms of section

189 (2)(a)(I) and section 189 (5) did not lead to any consultations. It actually does lead

one to the belief that it was never the Respondent’s intention to consult in a meaningful

and serious manner with the Applicant. The need to give the employees an opportunity

to persuade the employer about the necessity of retrenchments cannot be underplayed.

See the judgement of Myburgh J (as he then was) in Mahomedy’s v Commercial

Catering and Allied Workers Union of S.A.(1992) 13 ILJ 1174 at 1179 A-C (LAC).

[59] In the circumstances the Respondent’s failure to consult with Applicant regarding the

severance pay, alternatives to retrenchments and to follow the suggestion which had been

made at the meetings regarding consultations with staff, made the entire consultation

process in terms of section 189 of the Act to be fatally flawed.

CONCLUSION :

[60] I am convinced that the Applicant has shown a clear right for the purpose of obtaining

a final interdict. The Applicant’s right to be consulted, as set out in section 189 of the

Act, is the one right which was violated.

[61] Mr Sutherland also argued that the Applicants should not be granted the order they sought

because they had another remedy in dealing with the Voluntary Retrenchment letter. The

remedies he referred to were going to the Commissioner for Conciliation, Mediation and

Arbitration (“the CCMA”) for conciliation or asking its members not to accept

the offer. I have considered these two points raised by Mr Sutherland and come

to the conclusion that they are not “adequate remedies” as anticipated in Setlogelo v

Setlogelo above. The CCMA cannot grant an interdict. Whatever remedy which might

have been obtained would have been after the event and the damage might have been

done by the deadline of Tuesday 7th July 1998. On the other hand advising its members

not to accept the offer is also inadequate because there is no guarantee that, once they had

declined the offer, they could be reconsidered if after the consultations with the

Respondent it transpired to the Applicant, after considering all the relevant information

which may be put before it, that the package was in fact fair.

[62] Lastly, the two suggested remedies would not have ensured that the Respondent consults

with the Applicant in terms of section 189 on all the relevant issues as set out in the Act.

The issue of compliance with section 189 is a matter for this Court. See also FAWU v

Premier Food Industries Ltd (Epic Food Division) above at pages 757 I - 758 B. It

might even turn out after the consultations that the retrenchments are not necessary. The

Applicant can’t know that because the Respondent did not respond to its correspondence

in this regard. The question then is what would happen to those who have accepted

without proper consultation ? Accordingly a bona fide consultative process even if it

does not lead to a job retention, would be the best security which could be provided by

any union to its members. The second part of the order, in any event, sought to ensure

that there is a consultative process.

[63] Furthermore whenever an employer consider retrenchment of employees that is likely to

create tension as employees are likely to be overcome by the fear of losing their jobs. In

their letter dated 26th June 1998 the Respondent’s Attorneys of record in the paragraph

quoted above, in which they stated that their clients obligation to minimise retrenchments,

whether the Applicant’s members accepted the voluntary retrenchment offer or not,

would be regarded as having been satisfied.

[64] The said statement by the Respondent’s Attorneys of Record also did not assist the

situation. In my view this statement confirmed that there was a reasonable apprehension

of irreparable harm on the members of the Applicant. Accordingly there was a need to

deal with the matter on an urgent basis as well.

[65] Accordingly, I find that the Applicant has satisfied the three requirements for the order

to be granted in its favour.

[66] For reasons set out above I am also persuaded that the application should be granted.

COSTS :

[67] Both parties sought an order of costs in this matter. Section 162 of the Act directs that

this Court may make an order for payment of costs according to the requirements of law

and fairness. I am of the view that this is one case in which costs should follow the result.

Accordingly the application succeeds and the Respondent is ordered to pay the costs of

this application.

JALI A.J.

DATE OF HEARING : 3rd JULY 1998

DATE OF JUDGEMENT : 7th JULY 1998

APPLICANT’S : COUNSEL : ADV. M.M. JANSEN SC

INSTRUCTED BY : COUZEN, HERTZOG & HORAK

RESPONDENT’S COUNSEL : ADV. R. SUTHERLAND SC

INSTRUCTED BY : FLUXMAN, RABINOWITZ-

RAPHAELY WEINER

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