IN
THE APPEAL COURT OF SWAZILAND
HELD
AT MBABANE
CIV.
APPEAL NO. 2/96
In
the matter between:
SWAZILAND
MANUFACTURING AND ALLIED WORKERS Appellant
UNION.
and
NATEX
SWAZILAND LIMITED Respondent
CORAM:
Kotze'
P.
Steyn
J.A.
Tebbutt
J.A.
Judgment
( /4/96)
TEBBUTT
J.A.
What
is involved in this appeal is a consideration as to which of two
Regulations contained in the Regulation of Wages (Manufacturing and
Processing Industry) Order 1994, promulgated in Legal Notice No. 60
of 1994 under the provisions of the Wages Act No. 16 of 1964, viz
Regulations 13 and 17, apply to certain circumstances that arose
between the respondent company and its employees during 1995.
Those
circumstances are these:
2
On
27 July 1995 the respondent circulated a memorandum headed
"Short-Time Working" to all its employees informing them
that respondent's major market place, South Africa, had been flooded
with cheap imports and that, as a result, respondent's fabric order
book had fallen away by at least 30%. In consequence respondent had
decided to cut all overtime, except that prescribed by negotiation or
vital for operational purposes ,to cut all casual labour and to cut
all new employment. Certain paragraphs of the memorandum are
particularly germane. One of them reads as follows:
"These
actions alone will not cover the shortfall between our monthly costs
of operation and anticipated lower revenues, and as we are able to
produce the necessary fabric to accommodate our reduced order book by
cutting out all weekend production in the weaving and finishing
divisions, working a 120 hours week in these areas will assist in
minimising the shortfall."
The
memorandum then went on to say that the production shifts in the
weaving and finishing divisions would not work on Saturdays or
Sundays from the weekend starting on Saturday 12 August to that
ending on Sunday 24 September 1995. The last paragraph of the
memorandum then reads:
"Management
regrets having to institute these unwelcome decisions and undertakes
to lift short-time working as soon as it is possible to do so"
(my emphasis).
In
terms of a Collective Agreement between the respondent and the
appellant the latter is the collective employee representative of
those of respondent's employees who are members of appellant union.
On 25 August 1995 in a memorandum to respondent headed "Short-time
Issue" appellant states that -
"Since
management has embarked on a short-time working programme that
involves some of our hourly paid members" -
it
put certain points forward viz that those of its members who were "on
short-time" were willing to work over weekends,
3
particularly
if management should change its mind "over the short-time
issue". Appellant added that -
"Management
should know that we will claim the wage losses incurred during the
short time period."
Respondent
responded to this by stating in a memorandum, headed now "Lay-off
Situation", that appellant was not willing to recognise that the
lack of fabric orders had "necessitated a lay-off situation
having to be implemented whether you like it or not." (my
emphasis). It said that any claims for alleged shortages in wage
packets would be rejected.
It
will be observed that in its initial memorandum which it headed
"Short-time Working" respondent undertook to lift
"short-time working" as soon as possible, but in response
to appellant's memorandum in which appellant referred throughout to
the "short-time" issue, respondent on 29 August 1995
referred to a "lay-off situation".
Appellant's
reaction to the latter was to apply on 20 September 1995 on notice of
motion in "the High Court for an order -
"That
the applicant's members are entitled to payment of their wages for
the period during which the respondent has placed them on a
short-time working programme later labelled by the respondent as
lay-off times;
"Ordering
the respondent to pay to the applicant's members affected by the
aforesaid short-time working programme their wages and other
benefits in accordance with their conditions of service".
It
also claimed interest on the wages claimed and costs.
The
issue before the High Court (Sapire A.J. as he then was) was whether
what respondent had done fell within the ambit of Regulation 13 or
Regulation 17 of the Regulations mentioned at the start of this
judgment. In other words were its employees placed on "short-time"
as provided for in Regulation 13 or were they "laid off" in
terms of Regulation 17.
4
It
is accordingly convenient now to set out the provisions of
Regulations 13 and 17.
Regulation
13 reads thus: "Short time.
13.
If an employer finds it necessary for reasons beyond his control to
employ an employee on short time, he may do so subject to the Labour
Commissioner consenting in writing to such an arrangement, and on
the understanding that the employer intends resuming full time
working within three weeks.
Where
an employee has been placed on short time under sub-regulation (1)
he shall be paid not less than fifty percent of his weekly wages
were he is employed for periods which, in aggregate, are equivalent
to or less than fifty percent of his normal weekly hours of work.
No
reduction shall be made in an employee's earnings where the employee
has been placed on short time,and works in aggregate, more than
fifty percent of his normal weekly hours of work during any week he
has been placed on short time."
Regulation
17, in turn, reads as follows: "Lay-off.
17.
Due to circumstances beyond his control an employer may lay-off
employees for up to fourteen working days, without pay provided that
at the end of this period he shall either re-employ the employees in
their original jobs, or give them notice of termination of service
in accordance with the provisions of the Employment Act, 1980.
(2)
During
the period of any lay-off, the employer shall not engage other
employees to replace the employees he has laid off.
(3)
The
employer shall give:-
5
a
permanent employee fourteen days' notice before the lay-off.
a
seasonal employee twenty-four hours notice before the lay-off.
(4)
An employer may apply for a temporary exemption for a specified
period according to the circumstances of the enterprise, from the
application of regulation 17(3)(a), after consultation with the
employees organisation, for a reduction of the period of notice to be
given to employees, before lay-off."
Appellant's
application was dismissed, with costs, in the High Court, the learned
Judge holding that the respondent's actions constituted a lay-off
within the provisions of Regulation 17. Its employees were therefore
not entitled to pay during such periods as they did not work. It is
against that finding that the appellant now comes on appeal to this
Court.
With
the utmost respect to the learned Judge a quo, I do not think that
his finding is correct.
In
enacting Regulations 13 and 17 the Legislature obviously had in mind
that when a situation arose over which an employer had no control two
scenarios presented themselves both of which were for the employer's
benefit to enable it to cope with the situation.
Mr.
Shabangu, who appeared for the appellant invited this Court, at some
length, to find that the respondent's difficulties in filling its
order book did not constitute "reasons" "or"
circumstances beyond its control". Although he had raised the
point in his heads of argument, it was not a ground of appeal by
appellant and respondent directed no argument to it either in its
heads of argument or in argument before this Court. In the
circumstances it would be inappropriate to accept Mr. Shabangu's
invitation.
Nor,
for the purposes of this judgment is it necessary to do so. I shall
assume, without coming to a decision thereanent, that it did
constitute a circumstance beyond its control as contemplated in
Regulations 13 and 17.
6
The
two scenarios are these. The employer can lay-off all or some of his
employees and does not have to pay them while they are so laid-off.
He must, in the case of permanent employees, give them fourteen days
notice or give seasonal workers 24 hours notice, before he does so.
He then has fourteen days within which to assess the situation.
Regulation 17 lays down that at the end of that period the employer
must either "re-employ" the employees affected in their
original jobs or give them notice of termination of service. It is,
in my view, clear from the use by the Legislature of the word
"re-employ" that it considered a lay-off in terms of this
Regulation to be tantamount to a provisional dismissal or a temporary
discharge. The employer, after no more than fourteen days, then has
to make up his mind either to re-instate ("re-employ") the
employees in their original jobs or to make the provisional dismissal
final by giving the employees notice of termination of service. As
this has to be in accordance with the provisions of the Employment
Act of 1980, benefits such as severance pay, notice pay and other
terminal benefits will accrue to the employees. The relief afforded
to an employer by this Regulation enabling him to cease paying the
employees affected during the period of fourteen days allowed to him
to assess the situation, is a drastic measure insofar as the
employees are concerned for they not only lose pay but have the
threat of dismissal hanging over their heads.
The
second scenario is less drastic. It enables an employer in terms of
Regulation 13, when faced with a situation beyond his control and in
order to assess that situation, to call on his employees for a period
of not more than three weeks to work for a lesser number of working
hours than their normal working hours per week, with a consequent
reduction in wages as provided for in sub-paragraphs (2) and (3) of
Regulation 13. The employer who wants to invoke this provision must,
however, obtain the written consent of the Labour Commissioner before
he does so and he must intend resuming full-time working within three
weeks.
Mr.
Kuny, who appeared for the respondent, argued that respondent had
chosen to make use of the first of the two scenarios - and that this
was also what the learned trial Judge had found - by instructing the
7
production
shift employees not to work on seven consecutive Saturdays and
Sundays.
In
order to argue that what respondent had done fell within the ambit of
Regulation 17, Mr. Kuny was obliged to submit that the fourteen
working days set out in Regulation 13 did not have to be consecutive
working days. I am not persuaded that the argument is correct. In my
view several factors militate against such a conclusion. In the first
place the Legislature itself, in giving an employer fourteen days to
assess his situation, has set out that "at the end of this
period" he must either re-employ or terminate the services of
the employees. Its reference to "this period", in my
opinion, in itself means a continuous period of fourteen days. It
could, moreover, not have been in contemplation of the Legislature
that there could be a provisional or temporary dismissal of an
employee for a day or two here or there over a period of weeks or
months. The fact that the Legislature laid down that after such
temporary dismissal the employer has, as one of his options, to
"re-employ" the employee is a strong presumption that he
cannot temporarily dismiss an employee for one or two days over weeks
or months even though the total of those days does not exceed
fourteen. The Legislature could also, in my view not have
contemplated an employee having the threat of eventual dismissal
hanging over his head for weeks or months. Nor could it have intended
that the less drastic relief of a reduction in wages had to continue
for no longer than three weeks whereas the more drastic relief for
the employer could continue, if the employees were laid off
periodically, for more than fourteen days or even months.
I
am satisfied that the period of fourteen days must be a continuous
one.
This
is one of the reasons why I do not think that Regulation 17 applied
to respondent's actions.
More
important is the fact that it is clear from what respondent set out
in its memorandum of 27 July 1995, that it did not have in
contemplation that it would be temporarily or provisionally
dismissing
8
the
production shift employees and would, at the end of September 1995,
have to decide whether to re-employ them or to terminate their
services.
Apart
from the fact that the memorandum is headed "short time Working"
and that respondent said that it undertook to lift "short time
working" as soon as possible, both being factors that are highly
significant as respondent, by the use of those terms, clearly knew of
the provisions of Regulation 13, the whole tenor of the memorandum
reflects an intention to curtail the employee's working hours. The
Collective Agreement provided in respect of production shift
employees for a normal working week of 208 hours. I have already
cited the passage from the memorandum of 27 July 1995 in which
respondent stated that, as it could produce the necessary fabric to
accommodate its reduced order book by cutting out all weekend
production in the weaving and finishing divisions -
"working
a 120 hours week in these areas will assist in minimising the
shortfall".
This
is, in my view, a clear intention on respondent's part to do no more
than reduce weekly hours of work, as is contemplated in Regulation
13.
An
employer who wishes to place employees on short time must, however as
pointed out above, obtain the written consent of the Labour
Commissioner in order to do so. It is undisputed that respondent
never obtained such consent nor made any effort to do so. Its placing
its employees on short-time without such consent accordingly did not
comply with the provisions of Regulation 13 and was invalid. The
appellant was therefore entitled to the orders which it claimed in
its notice of motion on behalf of its members.
9
It
follows that the appeal succeeds, with costs. An order is made in
terms of Prayers (a)(b)(c) and (d) of the Notice of Motion dated 20th
September 1995.
(Signed)
TEBBUTT
J.A.
(Signed)
KOTZE'
P.: I
agree
(Signed)
STEYN
J.A I
agree
