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Banks & Another v Coca-Cola SA

Retrenchment: procedural fairness in retrenchment

Mon, 05 Nov 2007 15:52

Subject Dismissals based on operational requirements / procedural fairness in Retrenchment

Issue:

An application to interdict the employer from implementing a dismissal based on operational requirements on the grounds of procedural fairness. There was a delay in the launch of the proceedings and disagreement on what the appropriate remedies were.

There was also a material dispute of fact. The matter was referred to trial for the hearing of oral evidence.

Summary of facts:

The two applicants, both senior executives were dismissed due to operational requirements after the process of consultation had broken down. Two and a half months later they approached the Labour Court for relief in terms of Section 189A(13) and sought compensation in the event that the court found that their dismissal had been procedurally unfair.

The allegations of the process being a “shambles” was denied by the Respondent Company and the disputes were therefore factual and material to the issue.

The notice of termination was due to take place on the 30 June 2007 and therefore the urgency of the matter being heard to interdict the employer from dismissing the applicants and directing the respondent to commence the consultation process afresh as required by Section 189 of the Act.

The facts as alleged by the applicants on the consultation process used by the Respondent were very comprehensive and the basis of the claim was that the respondent failed to engage in any meaningful individual consultations about a structure that could save their jobs and that the consultation process was “nothing less than a shambles, that vague and subjective selection criteria were applied, that the respondent made a decision on restructuring and sought to consult thereafter and that it failed to make a proper severance proposal”.

The respondent alleged that the applicants’ referral was opportunistic and that the applicants are seeking to do no more than secure themselves reinstatement for the purposes of negotiating a more generous severance package.

Summary of Judgment:

Three considerations were apparent.

The first was a material dispute of fact, the second was the time passed since the breakdown of consultations and the launching of the application and the third is the acrimonious relationship between the parties, best described as a hostile stand-off, in so far as is relevant to the remedy sought by the applicants.

It was held that no purpose would be served by requiring the respondent and applicant sto go back to square one in the process and it was held that Section 189A would not serve its purpose if the court would grant an interdict against dismissal and issue directions on how the parties should conduct themselves in a resurrected consultation process.

The court did not make a finding on the papers before court as to whether either party had discharged their obligations in terms of Section 189 and held that the inevitability of a future referral to the court on the substantive fairness of the dismissal, that the procedural and substantive aspects of the dispute are dealt with simultaneously in a trial action.

The order granted by the court was therefore:

1. The application in terms of section 189A(13) was referred to the trial roll for hearing of oral evidence.

2. The application in terms of section 189A(13) to be enrolled simultaneously with any action that the applicants may institute in relation to the substantive fairness of the dismissal. Should the applicants not institute this action then the application made in terms of section 189A(13) should be enrolled on the trial role.

3. Costs reserved