CASE NO. P86/98
IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT PORT ELIZABETH
DATE  14.6.1999

In the matter between:
B. Louw							Applicant
and
Micor Shipping						Respondent
                                                          
J U D G M E N T
                                                           MLAMBO, J:
[1]	The applicant was given notice of her dismissal on
18 September 1997 effective from 30September 1997. In 	papers before this court	she challenges the fairness of 	her dismissal on substantive and procedural grounds. At 	the commencement of the trial the respondent argued 	a point in limine objecting to the jurisdiction of this 	court to adjudicate this dispute. After hearing argument the court dismissed the point in limine. The
court's reasons are set out in the following paragraphs.

[2]	The nature of the point in limine as articulated in the
heads of argument provided by Dr van Zyl, appearing for
the respondent, was briefly that this Court lacked 	jurisdiction to adjudicate the dismissal dispute as
a result of the non-compliance by the Commission for
Conciliation, Mediation and Arbitration,(the 	Commission)with section 135(2) and section 135(5)of the Labour Relations Act No. 66 of 1995 (“the Act”). Dr Van Zyl submitted that these sections are peremptory and that the Commission must comply with them. The point made was that the Commission lacked jurisdiction to unilaterally extend the 30 day time period within which it could hold a conciliation meeting, and to conciliate the dispute. He argued further that the Commission could not issue avalid certificate in terms of Section 135(5)after holding a conciliation meeting after the thirty day period provided for in Section 135(2).

[3]	Section 135(2) reads as follows:
"The appointed commissioner must attempt to
resolve the dispute through conciliation
within 30 days of the date the Commission
received the referral. However, the parties
may agree to extend the 30 day period.”

[4]	Section 135(5) reads as follows:
"When conciliation has failed or at the end
of the 30 day period or any further period
agreed between the parties -
(a)	the commissioner must issue a certificate 			stating whether or not the dispute has been resolved."

[5]	In this case there is no dispute that the referral by
the applicant was received by the Commission on 16 	October 	1997. There is also no dispute that no conciliation meeting took place within the thirty
day time period specified in section 135(2). It is also      	common cause that no certificate as envisaged in 	
section 135(5) was issued when the thirty day time period expired.

[6]	The Commission convened a conciliation 	meeting on 
2 March 1998 which was attended only by the applicant. After this meeting (on the same date), a certificate envisaged in section 135(5) was issued, confirming that the dispute remained unresolved.

[7]	Having considered those provisions the court agreed 	that section 135(2)is peremptory as regards the convening of a conciliation meeting within the thirty day period from the date of receipt of the referral. That	this provision is peremptory is confirmed by the requirement of the consent of the parties concerned to extend that period. The court agreed that the Commission could not unilaterally extend the thirty day period set out in section 135(2). Where there is no consent the Commission's hands are tied and it cannot extend that period. In the court’s view therefore, the conciliation meeting held on 2 March 1998, was	a nullity.

[8]  Section 135(5) is also peremptory. If no resolution of 	a dispute is achieved within the thirty day period, a certificate must be issued. For purposes of this case the court was prepared to find that it is after the thirty days had expired that the section 135(5) certificate should be issued. Having looked at that provision again, it is also clear that no time period is provided within what period is the certificate to be issued. The only notable factor in this provision is that the certificate must be issued after the thirty day time period has expired. In line with the reasoning that a section 135(5) certificate can be issued at any time after the thirty day time period, it was the court’s view that the certificate issued on 2 March 1998 confirmed the situation that existed at the end of the thirty day period i.e. that the dispute remained unresolved. The Commission was empowered to issue the certificate at any time after thirty days.

[9]	In my view the fact that the Commission held a 
conciliation meeting on 2 March 1998 which it was not empowered to hold, has	nothing to do with the jurisdiction of this Court. The court derives its jurisdiction in disputes of this nature only from certain factors and those factors are the referral of a dispute timeously i.e. within thirty days and the issuing of a certificate of non-resolution after the second thirty day period has elapsed. This Court does not derive its jurisdiction from the fact that a conciliation meeting was or was not held. Only those jurisdictional factors that the court has mentioned are necessary to found jurisdiction for this court to adjudicate disputes that come to it for adjudication.

[10]	It is clear that the applicant desired to see progress     	in the resolution of her dispute which she had referred
to the Commission. This appears from the correspondence
her legal representative, at the time, sent to the 	Commission. In the court’s view, therefore the fact that 	the	Commission held a conciliation meeting in March 1998 which it was not legally empowered to do, had nothing to do with the jurisdiction of this Court. Any conceivable challenge that could have been lodged or launched by the respondent, could only be launched at the Commission's holding of a conciliation meeting, not at the issuing of the certificate. This is so because the certificate could have	been issued even before the conciliation meeting of 2 March 1998. As already stated, the issuing of the certificate in March 1998 confirmed the situation that already existed even before that conciliation meeting was held. The only conceivable consequence of the delay in the issuing of the certificate can only affect any compensatory award that the applicant might be awarded if she was	successful in her unfair dismissal claim. In this regard the provisions of Section 194(1) are relevant.

[11]	For the aforegoing reasons the point in limine was 	dismissed with no order as to costs.

Background circumstances:

[12]	The applicant was employed on 9 November 1995 as a
sales executive. At the time of employment she was
responsible for both East London and Port Elizabeth.
According to her she was told and was aware that the
East London branch, in particular, was in financial dire
straits. At some stage she was removed from servicing
the Port Elizabeth branch and only concentrated on	East London. On 10 June 1997 a meeting took place at 	the East London branch attended by Garth Edwards, Lionel Kritchmann, Darren Nicholls, as well as the applicant. There is a dispute as to who called this meeting but that is neither here	nor there. What is common cause about that meeting is that the performance of the East London branch and the applicant’s performance in general was discussed. It was apparently mentioned that the deterioration of the financial situation of the branch continued unabated and the possibility of closure of that branch was mentioned. It is common cause that retrenchment was not mentioned by anyone at that meeting.

[13]	There is no dispute that until then, the applicant as 	sales executive had met her targets.  On 11 September 1997, i.e three months after the June meeting, Lionel Kritchmann, who it is common cause was the most senior employee at the East London branch, was flown to Johannesburg by the Respondent’s senior management. Apparently the purpose of flying Mr Kritchmann to Johannesburg was to discuss the overall performance of the East London branch. At these proceedings no-one who was at that meeting testified about what was discussed. Marianna	Coetzee, the Human  Resources Director, who was also not present at that meeting testified that after that meeting it was decided that nothing much could be done to reverse the downward trend in East London and the possibility of retrenchment had to be considered. The Court must approach her evidence as regards that meeting with caution in view of the fact that she was not present	and she relied on hearsay as to what happened. It is 	common cause, however, that
Lionel Kritchmann came back from the said meeting and said nothing to the East London employees, including the applicant.

[14]	On 17 September 1997 Marianna Coetzee and Garth Edwards
flew to the East London branch and it is common cause
that a meeting was convened in the afternoon at about
three or three-thirty. It is common cause, that none of 	the East London employees, including the applicant had been	given any warning that this meeting was going to take	place. All the applicant knew about the coming down of Coetzee was that she was coming for some staff training. That meeting was attended by the applicant, and the driver, and Coetzee as well as Garth Edwards. The applicant and the driver were given a letter and it is proper to cite the contents of this letter in full. The letter dated 17 September 1997 states:
"General Notice of Possible Retrenchment. 
Regrettably the company has to announce its
intention to retrench approximately two 
employees in Micor Shipping, East London. The
company intends implementing the retrenchments on 		or about 30 September 1997 at which date it will take effect. The substantive reasons for the retrenchment are as follows:
1.	There has been a distinctive change in
market the (sic) over the last 18 months
which in turn has had a severe impact
on revenue, resulting in the company
incurring substantial losses.
2.	The above has necessitated a complete
change in the business strategy of the
company whereby we will only maintain
a presence in the region.
To counter the above:
(a)	vacancies within the Group have been
closely monitored to see whether any
suitable positions arise. The company
has already looked towards various ways
of avoiding or minimising retrenchment
and in this regard will be consulting
with yourselves during the course of
this week to discuss the underlying
reasons why the following alternatives
are unsuitable:
   .	limitations on hiring new employees;
   .	control of overtime work (where
it exists);
        .	the transfer of employees to
any vacancies within the establishment;
   .	the implementation of an early
retirement scheme;
   .	the reduction of the workforce
by natural attrition;
   .	the training or retraining of
employees;
   .	granting extended unpaid leave
or temporary lay-off.

We will be advising you at the consultations 	during the course of the week which
job categories/employees stand to be
affected by the retrenchment. We will
also be discussing the timetable of the
retrenchment programme and proposed further 			consultations with the employees
affected and will inter alia further 
consider:
.	preferential re-employment;
    .	severance pay;
  	.	assistance with unemployment
insurance.
The purpose of these consultations is of
the utmost importance in that the company
would like to hear representations from
individuals in this regard. Should an 				individual not avail themselves of the
opportunity to attend consultations the
retrenchment programme will continue not-
withstanding.

Furthermore the objective of the consultations is to consider reasonable selection criteria for the employee who stands to be retrenched. The principle of last-in-first-out (LIFO) will not apply exclusively and it is the company's intention that the criteria should be reasonable enough to meet the demands of its operational requirements. The company accepts the duty to assist its employees and will consider inter alia	the following:
.	time off to search for alternative
employment; and
    .	preferential re-employment in the
future; and
    .	unemployment insurance assistance;
and
    .	certificates of services; and
    .	severance benefits.

In terms of the retrenchment programme it
is the company's intention to confirm 
retrenchment with the employee that stands
to be retrenched by letter by no later
than 22 September 1997. Thereafter the
individual employee may avail him/herself
of the opportunity to approach the company's 			Human Resources Manager at Head
Office for an individual consultation
and to raise difficulties which he/she
might have which require assistance. The
retrenchee may not be required to work
until the end of his/her notice period.
It must be stressed that during the
period 19 September 1997 to 30 September
1997 the company is not closing the door
on the retrenchee and it remains open to
him/her to avail him/herself of our offer
to consult with our Human Resources
Manager at Head Office in the event of
his/her requiring assistance of whatever
kind."

[15]	It is common cause that the applicant and the driver
were requested at the conclusion of that meeting to
think and come up with any suggestions during the next 	morning. It is also common cause that the applicant did not dispute or challenge anything during the meeting on 17 September 1997 and that she never requested a
postponement or an opportunity to seek legal advice.
Her statement that she could not say much at that
meeting because she was shocked is also unchallenged. 	It is also common cause that the discussions at the meeting of 17 September 1997 revolved around the letter with each particular item being discussed in detail by Marianna Coetzee.

[16]	The next day, 18 September 1997, a meeting took place 	between the applicant, Marianna Coetzee and Garth Edwards at nine o' clock in the morning. They went through the letter again and no suggestions were forthcoming from the applicant. The only issue she raised was a query regarding the details of the severance package she would receive if she was dismissed. The details about her severance package were telefaxed from head office and a printout was given to her. At the conclusion of that meeting the applicant was given notification of her dismissal which reads as follows:
"Subject: Advance of Termination of Employment as 		a Result of Retrenchment. 

Previous communications to you and discussions in the abovementioned respect refer. It has become necessary for the
company, due to reorganisation of the business, to 		consider retrenchment as a consequence. The company has attempted to avoid the situation but unfortunately, no other alternatives exist. This
decision was, as you know, also arrived at after 		an extremely thorough investigation and after all possibilities to avoid it had been explored. 

You are hereby notified that your employment	will be terminated on 30 September 1997. You may discuss your situation with the undersigned, who will endeavour to accommodate you as far as practically possible regarding any requests or 
advice that you may seek. 

You will not be required to be at your work station after 18 September 1997. You will be
given the necessary time off to search for alternative employment and to attend to your personal affairs. It must be repeated that the above decision has not been lightly taken.

Should re-employment opportunities arise within the next six months you will be given first option of tendering your services with the company.	 You can be assured that the selection criteria adopted in choosing you were pursuant to a thorough consideration by the company of all applicable
criteria in your favour.

May we take this opportunity of thanking you for
the services you have rendered to the company and 		wish you the best of luck for the future."

[17]	It is correct that on the same day, that is 18 September 	1997, the applicant sought legal counsel and went to attorneys Marshall & Kaplan in East London. A letter on her behalf was addressed to the respondent, challenging the fairness of her dismissal. Correspondence was thereafter exchanged between the applicant's attorneys as well as the respondent's attorneys. A dominant feature of the correspondence from the applicant's attorneys contained a settlement proposal of six months.

[18]	On the suggestion of the applicant’s attorneys a 
settlement meeting was arranged for the 2 March 1997 at the Respondent’s premises. It was agreed that no lawyers were to be present at that	meeting. The applicant testified that in her mind she was attending a settlement meeting whereas the Respondent’s view was that it was a further consultation meeting. At that meeting the applicant secretly recorded the entire meeting, a fact unknown to the other people in attendance. The retrenchment of the applicant was again discussed and the applicant made a number of concessions about her understanding of the situation that necessitated her retrenchment. It is common cause that at the end of the meeting the applicant had agreed to revert to the respondent regarding how the matter was to be taken further. The applicant in her evidence states that she reverted to the respondent who denies this. What is clear, however, is that no agreement could be reached in terms of which the matter could be settled. The applicant then	referred the dispute to the Commission for conciliation and when there was no resolution in that forum she referred it to this Court for adjudication.

[19]	The respondent's case is that it complied with section 	189 of the Act and that the applicant's dismissal was fair, substantively and procedurally. The applicant's case is that her dismissal was procedurally unfair. Although she challenged the substantive fairness of her dismissal in her pleadings she subsequently abandoned this stance during the proceedings. I am therefore satisfied that I only have to look at the procedural fairness of her dismissal.

[20] Section 189 in context provides for a three stage 	process. The first stage is that notice must be given by the employer of the possibility of retrenchment and the reasons thereof.  The second stage is that there should be a discussion which takes	place between the employer and those likely to be affected and their representatives. Thereafter a decision must be taken taking into account the discussions that took place and the 	input from those likely to be affected.

[21]	It is common cause that the respondent gave the 
applicant no notice whatsoever of her pending retrenchment. The respondent simply convened a meeting without informing the applicant what the purpose of the meeting was. It is common cause that it was only at that meeting that she was told for the first time that her job was on the line. It is also correct that the respondent has not provided this Court with any reason
why it had to adopt that approach. Marianna Coetzee 	testified that she thought it was humane that she inform the people face to face without either 	telephoning them or giving them prior notice by way of a letter. It is correct that the applicant did not ask for a postponement to seek advice or request an opportunity to	consider further suggestions. In my view her failure cannot cure what the respondent should itself have done. Section 189 does not envisage a process where the employer is absolved if the employee consulted fails to point out the employer’s omissions.

[22]	A dismissal based on operational requirements is a 
no-fault dismissal in the sense that it does not come about as a result of anything committed by the employee. Therefore the courts have emphasised in many decisions that the decision to dismiss must be taken with utmost care in that it must be fair in all respects. As the decision originates from the employer who runs and has the prerogative to manage the enterprise the employer therefore has an obligation to provide appropriate and proper information to the employee and must follow the elaborate steps set out in Section 189. There is a good reason for this. It is to ensure that unnecessary 	dismissals are prevented. A dismissal has elsewhere been likened to a sentence of death. This is as a result of the disastrous consequences to the individual and his immediate family as well as the serious impact on the economy of the country. Dismissals also create a further burden on unemployment insurance funds. Dismissals always, if they are disputed, give rise to unfair dismissal claims which have to be	adjudicated in courts involving time and expense. All the above can be avoided if the decision to dismiss, especially if it is as a result of no fault on the part of the employee are not lightly taken.

[23]	In my view, the failure to give timeous notice to 	enable the applicant time to ponder her situation and to come up with suggestions on alternatives, was a fatal one. The whole structure of section 189 is that there should be a notification period which enables those to be consulted to prepare and be ready to meaningfully	take part in the discussions envisaged in that section. The section envisages meaningful participation. There can only be meaningful participation if those consulted have had enough time to ponder on the reasons provided as well as to prepare themselves to ask for information and to make informed suggestions. An employee who does not get the benefit of a notification period is in no position to meaningfully take part in a proper consultation process as he or she is given no notice and he attends that meeting unprepared. In my view, therefore, the dismissal of the applicant was procedurally unfair.

[24]	In terms of the judgment in JOHNSON AND JOHNSON v
CHEMICAL WORKERS INDUSTRIAL UNION AND OTHERS (1998) 12 	BLLR 1209 (LAC), this court is empowered to consider whether it should award the applicant compensation. Dr van Zyl urged the court that should it find the dismissal procedurally unfair it should award the applicant no compensation. The reasons set out in the JOHNSON AND JOHNSON	case are very clear and they, in a sense, can be ascribed to something or some conduct on the part of the employee. In that case the court found that the employees had prevented or taken steps that prevented the respondent from complying with section 189 or from remedying its failure to comply with section 189. 

[25]	In this case, the failure to afford the applicant
a proper and enough opportunity to prepare herself and
to ponder possible suggestions cannot be ascribed to
anything done by her. It cannot also be argued that 	the respondent was lulled into a false sense of security by the responses of the applicant in
stating that she understood why she had to be retrenched 	and in not challenging anything. If at all, the applicant's unchallenged evidence that she was
shocked should be taken seriously. If a person was
shocked, as she says she was, which this Court accepts,
then it is conceivable that she was in no position to
say anything. In my view, the applicant has made out a
case for her to be awarded compensation. This Court, 	however, will not award her compensation for the period from the expiry of the thirty day period that the Commission had to resolve her dispute to the time when she referred the dispute to this Court.

[26]	The order of the court is therefore:
1.	The dismissal of the applicant was procedurally unfair.
2.	The Respondent is ordered to pay the applicant compensation amounting to 14 months salary calculated at the applicant’s rate of pay at the time of her dismissal.
3.	The Respondent is ordered to pay the applicant’s legal costs.

MLAMBO J

Date of judgment: 05 August1999.

For the applicant:	Mr R.K Jardine of Mathie Meyer & Granett Attorneys, East London.
For the respondent:	Dr Van Zyl instructed by Van Zyl’s Incorporated.