IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
      CASE NO. J1231/98

In the matter between

MSIMANGO DUMISANI AND OTHERS                                            Applicant

and

MINTROAD SAWMILLS (PTY)LTD                                                   Respondent

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JUDGMENT
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JAMMY,AJ

1.    The respondent in this matter, a company of more than 40 years standing, operates in
       the timber industry as a processor of raw wood principally for the wholesale timber 
       trade.

2.   In 1996 and 1997 it conducted its business activities from two sites, a stand in Alrode 
      where all production was carried out and where all its machinery, vehicles and most of its
      staff were located, and a second stand in Robertsham, from which it conducted a minimal
      retail business, comprising the sale of limited products to nurseries.  At all times material
       to this dispute, its staff complement, as testified to by its managing director, Mr. Roy Smith,
      was approximately 120 employees at Alrode and a maximum of six at Robertsham.

3.   It is common cause that, at that time, the National Entitled Workers Union (“the Union”)
      enjoyed majority representation of the respondent’s workforce, that as such, it was their
      collective bargaining agent recognised by the respondent and that the two applicants in
      these proceedings were members of the Union.

4.    It is also common cause that, in early September 1997, the Union orchestrated a protected
        strike in the company, as a result of an unresolved wage dispute and that, after a prolonged
       period of some five weeks, the issue was resolved through the intervention of the
       Commission for Conciliation, Mediation and Arbitration.  That strike, Mr. Smith
       testified, “brought us to our knees”.  The respondent, already under severe financial 
       pressure, was now in “dire straits” and the Directors accordingly consulted the company’s
        accountant, Mr. Joseph Pollack, in order to “weigh up its options”.  Its reserves, principally
        as a consequence of the strike, were depleted, its overdraft was unacceptably high and it was 
       desperately in need of working capital if it was to survive.

5.    Various options were considered, said Mr. Smith, and it was ultimately decided that the
        only practical of action was to sell the Robertsham stand, which was “not productive
        anyway”.  That was negotiated, at a price considerably in excess of its market value, and

       the entire proceeds of the sale, R550000, were to be injected into the respondent.

6.    The sale of the property obviously necessitated the closure of the Robertsham branch, 
       Mr. Smith testified.  Its entire staff would be assimilated into the employee complement
       at Alrode, but although the cash injection would initially relieve some pressure, the
       respondent’s financial position was still precarious and it became apparent that the 
       production of certain products would have to cease, with the result that approximately
       eight of its employees would become redundant.

7.    A letter was accordingly addressed to the Union on 10 November 1997 in the following
       terms:

                 re: OPERATIONAL STREAMLINING AND CLOSURE OF BRANCH

                 In accordance with the LRA 1995, section 189 (3) we hereby inform you that our
                 branch in Robertsham will cease to operate as of 19 December 1997, to coincide
                 with our annual shut-down, and furthermore it is our intention to stop production
                 on a number of our products, necessitating an overall dismiss of approximately 8 
                 persons.  It is indeed unfortunate but a number of contributing factors have led to 
                 this decision, namely non-profit, drastic reduction in turnover, and an exhorbitant                      increase in raw materials and overheads.
                 The employees affected are labourers, we would look to the length of service of the
                employees and to retainment of skills before deciding on who to dismiss, but                              would, more or less work on the lines of, last in first out.  We propose a severance
                 package of 1 weeks pay in lieu of each completed year worked, and off course all
                 leave due to them.  The chances of the branch being re-opened are nil, we have 
                 already made arrangements for the sale of the stand, but if there is an improvement
                 in sales and it becomes necessary to employ more staff within 3 months of us
                 re-opening here in Alrode, then the people who were retrenched will be approached 
                 and given the first opportunity for employment, should they wish.

                 Your assistance and input in making this move as smooth as possible would
                  be appreciated.  Kindly bear in mind that this decision, in light of the fact that our
                  business was started over 50 years ago and was built up over the years with hard
                  work, was certainly not an easy one to make, in fact, the contributing factors have
                  more or less forced this on us.

                 We await your reply as to when we may meet, which has to be sooner rather than
                 later, as time is now running out.

                 ROY SMITH
                 MANAGING DIRECTOR
                 November 10, 1997

8.    An exchange of at times confrontational correspondence then followed, with the detailed        substance of which I do not consider it necessary, for reasons which will become apparent, 
     to burden this judgment.  In essence, the Union’s stance was that closure of the Robertsham 
     branch had already been decided upon “before disclosure of information and before 
     consultation”.  It was not prepared to enter into substantive discussions with the respondent        unless and until the comprehensive financial information for which it repeatedly called,    
     was furnished.  It is common cause that information that the respondent considered to be 
     relevant to and adequate for the consultation process was tendered by it on a basis of 
       inspection and examination which, having regard to the substance and volume of the material 
     in question, it considered reasonable, but that those tenders were rejected by the Union as 
     being unacceptable and inadequate for the purpose for which it was required.

9.  The issues for determination by this court are defined in the minute of a pre-trial conference
      between the parties as:

           “Whether the respondent complied with the provisions of section 189 of the Act and 
              whether it disclosed a reason for the retrenchment of the applicants”.

10.  The minute also records that the basis for the allegation by the applicants of substantive
       fairness is that “no commercial rationale was shown by the respondent” to justify their
       retrenchment.  It emerged pertinently from the submissions made that that allegation was
       sourced directly in the applicants’ contention that the respondent had failed or refused to
       make financial disclosure to the Union on a basis which would substantiate such rationale.

11.  A considerable portion of the two court days of this hearing was devoted to that issue.  
       Evidence from an expert witness called by the respondent, -a qualified member of its
       Auditing firm, who testified and was cross-examined at length regarding the nature and
       adequacy of the financial information tendered by the respondent, and further testimony
       presented by Mr. Smith on that subject, was the subject of exhaustive examination by
       Mr. D. Maluleke, representing the applicants.  The challenge by the applicants regarding 
       alleged non-compliance by the respondent with the requirements of section 189 of the Act,
       was the basis moreover of his comprehensive closing submissions to me.

12.  It was only at that stage of the proceedings however, that a new factor was introduced by 
       Mr. G.  Higgins, for the respondent, ostensibly as a point in limine.  That, however, is a 
       misconception of the legal characterisation of his intervention.  A point in limine is one
       taken by a party at the onset of the matter and which might bear upon the subsequent 
       conduct of the proceedings.  It is not one raised at the conclusion stage when issues in and
       aspects of the dispute which might otherwise have been obviated, have already been
       canvassed.

13.  That said however, if the point, at whatever stage it is raised, has legal validity in the
        in the context that it might possibly have material relevance to the determination of the
        matter, then, subject to issues of costs which might arise from its irregular presentation,
        it is incumbent upon the court to hear and consider it.

14.  The whole question of the adequacy of the tender and substance of financial disclosure by

       the respondent, and of its general compliance with section 189, Mr. Higgins submitted, was
       res judicata.  It had been exhaustively dealt with and disposed of in the context of an
       urgent application brought by the Union and other applicants, including those in the 
       present matter, against the respondent in December 1997 for an order interdicting the 
       respondent from proceeding with its proposed retrenchment of those  applicants.

15.  In papers filed in that application, precisely the same allegations regarding purported
       financial non-disclosure were made as those now before this court.  In the result, the
       application was dismissed and in the written reasons for that order, Grogan A.J., at 
       page 10 of the judgment, having comprehensively examined the same documentation now         tabled in this matter, came to the following conclusion:

                “I am satisfied that by 24 November 1997 the respondent had disclosed all relevant
                 information regarding the matters expressly specified in section 189 (3) -namely,                       the reasons for the proposed dismissals; alternatives considered before proposing 
                 the dismissals and the reasons for their rejection; the number and job categories of
                 employees likely to be affected; the proposed methods of selection of employees
                 affected; the timing of the dismissals; severance pay and assistance proposed; and
                 the possibility of re-employment.  By then, the only information outstanding was
                 that related to the respondent’s financial circumstances and other matters first 
                 demanded by the first applicant on 25 November 1997.  It is by allegedly denying
                   this information (and particularly, as I understand the case from the bar, the financial 
                 details) that the applicants claim the respondent has breached its duty to consult.
                 The respondent, for its part, contends that it did not deny the first applicant access
                 to the information, but on the contrary took reasonable steps to ensure that its 
                 officials could have sight of it if they so wished.

                 The first applicant cannot and does not deny that it could have availed itself of the
                  three express offers by the respondent to peruse its financial documents.  What it 
                  did, instead, was to insist, first, that the respondent deliver over the documents and, 
                  second, that it abandon its decision to proceed with the retrenchments when finally,
                 on 4 December 1997, it agreed to inspect the documents at the respondent’s 
                 premises.  By that stage, it had already had more than a week to avail itself of the 
                 respondent’s offer to inspect the documents with the assistance of the respondent’s
                auditor.  By that stage, it also knew that the persons selected for retrenchment on
                18 December 1997 had been advised thereof.

                At page 15, the judge continued:

                “Given the first applicant’s repeated failure to attend meetings and to accept 
                  invitations to inspect books, the respondent can be forgiven for concluding by 
                  9 December that the first applicant was engaging in delaying tactics.

                  On the papers, therefore, I cannot conclude, as the applicants contend that I should,
                  that the respondent breached section 189 by refusing to disclose information or by
                    frustrating the duty to consult.  This is not the case, like NUMSA v Comark Holdings
                  (Pty) Ltd [1997] 5 BLLR, upon which the applicants sought to rely, where the 

                  employer had, after inviting the union to consult on possible staff reductions, 
                 unilaterally taken the decision to reduce its workforce while the union was still
                 consulting with its members under the impression that a further meeting was to take
                 place.  It is also distinguishable from FAWU v Simba (Pty) Ltd [1997] 4 BLLR 408 
                  (IC), in which the employer was restrained from closing a factory and terminating the                   services of the employees concerned for a period laid down by a collective 
                 agreement which bound the employer not to retrench for a period of six weeks after                   notice thereof was given, and in which such notice was not given.  In this case,
                 it was the first applicant that chose not to consult, first, because in its view the 
                 respondent had already made up its mind, then because the respondent declined to
                 deliver documents it had requested and, finally, because the respondent refused 
                 expressly to undertake to halt the retrenchments indefinitely while the first applicant
                 made good the delays that had been caused by its own deliberate decision not to
                 engage in consultation.”

16.   In the present matter, no evidence other than the documentation submitted by agreement
        between the parties, was presented by or on behalf of the applicants, Mr. Maluleke’s
        expressed position being that they relied solely on those documents and the evidence in 
        chief and under cross-examination of the respondent’s witnesses, to substantiate their
        claims.

17.   That documentation in its entirety was precisely that upon which Grogan, AJ based his
        findings in the application proceedings referred to, and there is nothing, in my view, in
        the testimony which I have heard in this matter, which would justify any different
        conclusion on my part with regard to what are in essence the same contentions and 
        allegations now made by inter alia, the same  applicants, in these proceedings.

18.   The concept of the exceptio res judicata in the context of interdict and trial proceedings
        was analysed, also by Grogan,AJ in the as yet unreported Labour Court matter of

                  National Union of Mineworkers v Elandsfontein Colliery (Pty) Ltd
                  Case No. J801/98

19.   Following a comprehensive review of relevant case authority, the judge said this:

                  “ It follows in my view, that in the civil law the plea of res judicata can 
                     in principle be raised as an exception in trial proceedings when the original
                     judgment upon which the excipient relies was given for purposes of an 
                     interdict application.  If this principle is applied in the context of the Labour
                     Relations Act, it follows that again in principle, a judgment handed down in
                     an application brought in terms of section 158(1), (i) or (iv) can be relied upon
                     for purposes of a plea of res judicata in respect of a referral in terms of section 
                     191.

                     I have emphasised the words “in principle” advisedly.  Whether the 

                      requirements of plea of res judicata will be satisfied in any particular case 
                      must depend on various considerations including, in particular, the likelihood
                      that issues or evidence not dealt with in the prior judgment might emerge 
                      were the matter to go to trial: Ward v Cape Peninsula Ice Skating Club 1998 
                      (2) SA 487 © at 501-2; Kommissaris van Binnelandse Inkomste v ABSA Bank 
                      Bpk 1995 (1) SA 653 (A) at 669F-1.

20.   I am in full agreement with that analysis.  I have already stated that, in my view, no issues          or evidence have emerged in this matter which were not fully canvassed in the earlier
         application proceedings between the parties.  In these circumstances, the respondent’s plea 
        of res judicata is valid and the applicants’ claims must fail.

21.   In view of the fact however, that, as I have stated, that plea was raised virtually at the 
        conclusion, rather than properly at the inception of the matter, it does not seem to me that
        the applicants should be burdened with costs that might possibly have been avoided or              significantly curtailed had normal procedures been followed in that regard.

22.   I accordingly make the following order:

                (a)   The application is dismissed.

                (b)   There is no order as to costs.

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B.M. JAMMY
ACTING JUDGE OF THE LABOUR COURT

Dates of hearing:                           10 and 11 February 1999

Date of judgment:                          22 February 1999

For the applicants:                         MR. D. MALULEKE

For the respondent:                        MR. G. HIGGINS