IN THE INDUSTRIAL COURT
OF SWAZILAND
HELD AT MBABANE
CASE NO. 166/2002
In the matter between:
THABO
SIMELANE......................................................APPLICANT
and
JD
GROUP (SWAZILAND) (PTY) LIMITED..............RESPONDENT
CORAM
N. NKONYANE:ACTING
JUDGE
E. HLOPHE :MEMBER
D. MANGO: MEMBER
FOR APPLICANT :MR. P.R.
DUNSEITH
FOR RESPONDENT:MR. Z.D.
JELE
JUDGEMENT
- 24.06.05
The applicant in this matter
is Thabo Simelane a former employee of the respondent.
The respondent is a company
that is involved in the furniture business.
The applicant brought an application for
the determination of an unresolved dispute in terms of Section 85 of
the Industrial Relations Act No.l of 2000. In his application the
applicant claims that he was unlawfully terminated by the respondent
under the guise of redundancy.
The respondent in its papers
points out that the applicant was lawfully terminated on grounds of
redundancy following the closure of the respondent's furniture
shops in Swaziland, being
Score and Price v N Pride branches.
It is not in dispute that the
applicant was employed in one of the respondent's furniture outlets
trading as Score Furnishers. The applicant was employed on 16.02.1999
as a salesman. He was in continuous employment until 22.05.2001 when
all the branches of the respondent trading as Score Furnishers and
Price 'N Pride in the country closed down.
It is also not in dispute
that the applicant was a top salesperson at Score Furnishers. He was
earning E4,109.00 per month plus commission.
What is in dispute is whether
or not the applicant did get a letter of notification that he had
been retrenched. It is also in dispute as to how was the applicant
paid his retrenchment package. The applicant said he was paid through
the bank, but RW1, Robin Murray said he personally handed the cheque
to the applicant.
The applicant's evidence
before the court was that on 15.05.2001 during a staff meeting of
Score branch No.627, the employees were told that there was going to
be a retrenchment. The meeting was being chaired by the Manager, Eric
Dlamini. He said Dlamini did not tell them the reasons for the
intended retrenchment. He said on 22.05.2001 he got a letter
informing him about the retrenchment. The letter appears on page 4 of
Exhibit "A" and is dated 22 May 2001.
The applicant said he
understood that letter to mean that the employer was going to look
for alternatives before closing down the branch. He said he would
have been prepared to accept a transfer to another furniture shop. He
said he was never given a final letter of retrenchment. He also said
he was not consulted about the retrenchment. He said he was still in
the dark and could not go to work because the shop closed down.
The applicant said he was
married and has four children. He said the news of the retrenchment
affected him drastically and was embarrassed in the eyes of his wife
who did not believe him when he told her that he was not given any
package.
He asked for re-instatement
or alternatively maximum compensation and also payment of his
terminal benefits.
At this point the court will
point out that the applicant was finally paid his provident fund
contributions when the matter was already before the court. The
evidence also showed that he was paid all his terminal benefits. His
only query on the terminal benefits was that the calculations were
not correct. It seems therefore that the only prayer now remaining is
that of re-instatement or payment of maximum compensation as an
alternative.
The respondent's evidence was
that the employees, the union (SCAWU) and the Labour Commissioner
were notified about the retrenchment exercise. The respondent's
witnesses said the retrenchment was necessitated by poor financial
performance of the respondent's branches in Swaziland. The witnesses
said the financial statements were furnished to the Labour
Commissioner and the union. RW1, Robin Murray said he consulted with
the applicant on the package and that he did serve the letter of
termination on the applicant.
RW2, Renier Krige told the
court that the retrenchment process was undertaken together with the
union. He said the company closed down because of financial problems.
He also said the union never disputed the computation of the terminal
benefits.
RW2, presented the financial
statements of the branches that were to be closed. He also presented
the minutes of the consultative meetings that management held with
the union. From the financial statements it was clear that the
branches were not performing well, and were in fact making huge
losses.
The court is satisfied from
the evidence of RW2 that the reasons for the closing down were
genuine. The question that follows is whether the retrenchment
exercise was carried out in terms of the dictates of the law.
From the evidence before the
court about one hundred workers were affected by the closing down of
the shops. It is clear therefore that the applicable law was Section
40 of the Employment Act No.5 of 1980. Section 40(2) reads as
follows:-
"Where an employer
contemplates terminating the contracts of employment of five or more
of his employees for reasons of redundancy, he shall give not less
than one month's notice thereof in writing to the Labour Commissioner
and to the organization (if any) with which he is a party to a
collective agreement and such notice shall include the following
information -
(a) the number of employees likely to
become redundant;
(b) the occupations and remunerations of
the employees affected;
(c) the reasons for the redundancies;
and
(d) the date when the redundancies are
likely to take effect;
(e) the latest financial statements and
audited accounts of the undertaking;
(f) what other opinions have been looked
into to avert or minimize the redundancy."
The evidence before the court
revealed that there was in existence a trade union, namely the
Swaziland Commercial and Allied Workers Union (SCAWU) which the
respondent's management negotiated with. There was also evidence that
the Labour Commissioner was notified of the respondent's intention to
retrench.
The court is satisfied that
the respondent did serve those notices in order to comply with the
requirements of Section 40(2) of the Employment Act. That section
however is couched in general terms. There are issues that will
necessarily require consultation with the individual employee, which
if not done, the employee will be prejudiced.
There was evidence in this
case that there were few vacancies where other employees could be
placed. Clearly that required consultations with the individual
employees to find out if they could qualify to be placed.
RW2 told the court that he
did consult with the individual employees. He said he did serve all
the employees with letters of retrenchment. He said during that
exercise he was in the company of a certain John Zulu, the Regional
Manager. RW1 "C" was handed to court as proof of service to
some of the employees.
The applicant denied that he
was consulted about the package and given the letter of retrenchment.
RW2 failed to produce proof that he did serve the applicant with the
final letter of retrenchment. John Zulu was not called to corroborate
RW2's evidence that he did serve the applicant with the final letter.
It is hard for the court to believe that a company as big as the
respondent does not keep records. The court will come to the
conclusion that RW2 failed to produce the copy of the letter because
the copy is not there and that the applicant was never consulted.
RW1 produce a document RW1
"D" as proof that he did consult the applicant about the
package. The applicant denied that it was him who signed that
document. Although no handwriting expert was called to testify, the
signature on that document was patently dissimilar to the applicant's
signature that appears on page 4 of Exhibit "A"
It was also submitted on
behalf of the applicant that he was not given any notice of the
retrenchment as he was given the notice by JD Trading (Proprietary)
Ltd, which was not the employer of the applicant.
This argument was based on
pages 1-3 of exhibit "A" where an application was made to
the Registrar of companies to change the name of Winna Furnishers
(Swaziland) (Pty) Ltd to JD Group (Swaziland) (Pty) Ltd.
The evidence before court
however as seen on exhibit "A" page 4, showed that the
applicant was served with the notice of retrenchment written on the
letter heads of Score/Price 'N Pride. There was no evidence that the
applicant was unsure as to where that letter came from.
RW1 said he gave the
applicant his package on 04.09.2001. He said he gave the applicant a
cheque. There was evidence that the applicant's cheque went through
the bank system on that same date in First National Bank in the
Republic of South Africa. It was a mystery how the cheque could have
been cleared on the same day.
It became clear to the court
that RW1 was not a trustworthy witness. He seemed prepared to say
anything in court as long it suited the respondent's interests.
From the evidence presented
in court, the substantive justification for retrenchment for
operational reasons has been proved by the respondent.
The respondent however failed
to consult with the applicant on his personal circumstances. RW2 told
the court that there were a few vacancies in which some of the
employees could be placed. The evidence showed that two employees
were thereafter employed by Bradlows, Mbabane. There was a dispute
whether they were placed or they applied for the jobs.
Whether the two employees
were placed or not, the importance of that evidence was that the
applicant was prejudiced by the non-consultation as he did not get a
chance to compete for the few available positions.
The termination of the
applicant's employment in the manner and in the circumstance in which
it was effected was unfair.
The court will therefore come
to the conclusion that the applicant's termination was procedurally
unfair for lack of consultation.
The court must now consider
the remedies available.
In terms of Section 16(4) of
the Industrial Relations Act No.l of 2000, if the termination is
unfair only because the employer did not follow a fair procedure,
compensation payable may be varied, as the court deems just and
equitable.
The applicant in its papers
prayed for re-instatement. The evidence showed that furniture shop
was closed down. There is clearly no way that the court can make an
order for re-instatement.
The only available remedy is
compensation. In making a fair and reasonable award the court will
take into account that the applicant was a top performer. He has
failed to get another employment. He is married and has four
children. The evidence showed that he did go to work on 30.06.2001
only to find the place closed. He said he was embarrassed in the eyes
of his wife who did not believe him that he was not given any exit
package at work.
Taking into account all these
factors the court will make an order that the respondent pays the
applicant as compensation a sum of money equivalent to five months
salary calculated at the applicant's rate on the date of termination,
being E4,109:00x5 =E20,545:00.
No order for costs is made.
The members agree.
N.
NKONYANE
ACTING
JUDGE - INDUSTRIAL COURT
