CHEMICAL WORKERS INDUSTRIAL UNION & OTHERS v ALGORAX (PTY)

LTD

FORUM: LABOUR APPEAL COURT

JUDGE : ZONDO JP

CASE NO : PA4/01

DATE : 5 SEPTEMBER 2003 The second and further appellants were employees of the respondent who had been dismissed when they refused to accept a proposal to change from working a Mon-Fri shift to a rotational shift which would entail some night shifts and alternate weekends. The LC found that the dismissal was not automatically unfair, was substantively fair but procedurally unfair and ordered 10 months compensation but no reinstatement. The employees appealled against the dismissal not being automatically unfair. The Judge upheld the decision - the respondent had continuously tried to bargain with and accommodate the applicants and when scheduled meetings had not taken place, it had been the fault of the employees. The respondent had proved that the shift changes were necessary and the resulting dismissals were based on operational requirements. Application dismissed.

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JUDGEMENT

Judgement:

Zondo JP:

Introduction

I have had the opportunity of reading the judgment prepared by my colleague, Hlophe AJA, in this matter. Regrettably I am unable to agree with the conclusion of the judgment. Indeed, I have reached the opposite conclusion. The reasons for my conclusion are set out below.

This is an appeal from a decision of the Labour Court in a dispute

between the appellants and the respondent about whether the respondent's dismissal of the second and further appellants on 9 January 1998 was unfair and, if so, what relief was appropriate. The Labour Court found that the dismissal was not automatically unfair, was substantively fair but procedurally unfair. It refused to order the reinstatement of the second and further appellants but ordered the respondent to pay them compensation equal to remuneration that they would have received over a period of ten months. No order of costs was made. With the leave of the court a quo the appellant now appeals to this court against the decision of the court a quo that the dismissal was not automatically unfair, was substantively fair and its refusal to order the reinstatement of the second and further appellants. There is no cross-appeal by the respondent against the decision ordering it to pay the individual appellants compensation.

Accordingly the finding by the court a quo that the dismissal was procedurally unfair is not challenged.

The facts

As the procedural fairness of the dismissal is not an issue in this appeal, those facts which are only relevant to procedural fairness will be left out in the summary of the facts of this case. The respondent used to be partly owned by a German company called Degussa but apparently that company subsequently merged with a company called Huls to form a company called Degussa-Huls. It has two plants in Port Elizabeth.

The one plant - referred to as the catalyst plant - coats automotive catalysts. Catalysts are used to improve exhaust emissions in a motor vehicle. The other plant - called the carbon black plant - produces carbon black which a witness of the respondent described as a structural form of carbon. Carbon black is used as a reinforcing filler in tyres. It is used as an essential ingredient in the manufacture of tyres. Carbon black is produced from crude oil. At some stage in the process which the respondent undertakes in the course of its operations, carbon black gets stored in storage silos. The respondent's business is a 24-hour operation and goes on seven days a week.

The first appellant is a registered trade union. The second and further appellants (the individual appellants) are members of the union. The individual appellants were employed by the respondent in its packaging department until 9 January 1998 when they were dismissed. Their dismissal followed a refusal by them to accept a proposal made by the respondent that they and other employees in the packaging department agree to change from working a straight-day shift which was from Monday to Friday to a rotating shift which entailed that some times they would work in the night, sometimes

during the day and on Saturday and Sunday every alternate weekend. The events that culminated in the dismissal are set out below.

Prior to 1995 the packaging department operated on the basis of a single-day shift. Overtime was worked as and when the need arose. Overtime work became excessive and its costs unacceptable. It was concluded that there was a need for a second shift. A separate night shift was established by a Mr Hewertson, the then logistics manager, in 1995. The employees on the night shift, which was also called the afternoon shift, worked from 16:30 to 24:00 on Mondays to Wednesdays. Thursdays and Friday were their days off. They worked during the day on Saturdays and Sundays. That shift was initially staffed by contract workers some of whom later became permanent employees on the night shift. There was also movement by employees on the night shift to positions on the day shift elsewhere within the company.

As time went on the bulk sales department was restructured and the cleaning department closed down. The respondent had a policy to the effect that retrenchments had to be avoided if at all possible. In accordance with that policy none of the employees from the two departments was retrenched but, instead, they were transferred to, among others, the packaging department where they worked on the day shift. In due course it was recognized that the day shift was over-staffed and the night shift under-staffed. The day shift had 20 permanent employees, the night shift, eleven. Furthermore, there were quite a number of employees on the night shift who were contract labourers working in vacant permanent positions because it was difficult to get permanent employees who were prepared to work on the night shift. The result was that the respondent had an excess of permanent employees on the day shift. The contract labourers were not employees of the respondent but were supplied by a labour broker.

Mr Bowden, the respondent's logistics manager, under whom the packaging department fell, testified that, soon after he had become the logistics manager, an employee on the night shift complained to him that employees on the night shift were always 'stuck on' the night shift. This caused Mr Bowden some concern. In due course he started toying with the idea that there would be benefit to the company if the two shifts in the packaging department were combined into one rotating shift. This meant that every employee would work during the day sometimes, during the night sometimes and on Saturday and Sunday every alternate weekend.

Mr Bowden persuaded the management that his proposal of a rotating shift should be pursued. Mr Bowden testified that there were other problems which he thought such a change would resolve. He testified that the existence of the night shift as it was operated at the time

meant that there was very little contact between the senior management and the employees on the night shift because, whenever the night shift employees were at work, the senior management was not at work. For this reason, said Mr Bowden, it was very difficult to train and develop the employees on the night shift. Also, said Mr Bowden, it was difficult for the management to know which of the employees on the night shift were good performers and which ones were poor performers. Mr Lones-Field, who was employed as a senior human resources officer, also testified to the same effect in relation to problems that were experienced by the management in regard to the night shift. Mr Bowden also stated that there were problems of lack of discipline and absenteeism on the night shift. Mr Bowden testified that for him personally the fact that night shift employees were 'stuck' on night shift became a major driving force for the introduction of the rotating shift.

Arrangements were then made for a meeting between the management and the shop stewards at which the management would introduce the proposal of a rotating shift. The first meeting was held on 2 May 1997. It was attended by Messrs Bowden and Mr Lones-Field, both of whom represented the management, and Messrs W Magxwalisa, M Antoni and M Manziya, all of whom were shop stewards and represented employees in the packaging department. Mr Bowden had anticipated that the major difficulty that the employees would raise about the proposal of a rotating shift was that there would not be any transport available to take them home at the hours when they would knock off. In preparation for the meeting he had prepared a map showing where the employees lived. He then worked out how employees who lived in the same area would be put into the same shift to facilitate the provision of transport.

Mr Bowden testified that at the meeting he explained that, due to operational requirements, the respondent was considering changing the two shifts in the packaging area into a rotating shift and not continue to have employees working only day shift or night shift. He testified that the focus at the meeting was to introduce the proposal of a rotating shift and find out where the respondent should be going from there. He also testified that he placed a degree of emphasis on the effect that the then existing shift system was having on those employees who were permanently 'stuck on' the night shift who, he emphasized, were also union members. He said that those employees were complaining about working night shift on a permanent basis. He said that this needed to be dealt with. He testified that he told the shop stewards that the respondent would look after things like transport.

The shop stewards raised certain problems about the rotating shift proposal. These were that some of the employees in the packaging

department were of such an advanced age that it would not be right to require them to work in the night. The shop stewards also raised transport problems. They also made the point that the employees on the night shift had been employed to work on the night shift as the day-shift employees had not been prepared to work at night and during weekends. Mr Bowden said under coss-examination that he explained at this meeting that the same shifts that existed would be worked but now by everybody every alternate week. It was agreed at the end of the meeting that another meeting would be held. The shop stewards requested to have a report-back meeting with the union members on 6 May to discuss the proposal.

On 28 May 1997 Mr Lones-Field sent a facsimile to the union which read as follows: 'Discussions were held with shop stewards on 2 May 1997 with regard to the possible operational requirement in the packaging area. In order to try and ensure continuing employment for Algorax employees and to avoid unnecessary costs the company is considering that the employees work a rotational shift system in this area. We will continue investigating the viability of this possible change and continue with the consultation process.'

The union never responded to this facsimile.

Mr Bowden said that in June 1997 a new managing director, a Mr Kunzman, was appointed and that he came with the news that the respondent was going to be under increased pressure from international trade, particularly from countries in the Far East like Singapore, Thailand and India and the respondent would have to be competitive, especially as import duties were going to be lowered in line with the agreement at the World Trade Organization. Mr Bowden testified that Mr Kunzman said that, in order for the respondent to remain competitive, it had to cut down on costs which included cutting down on employees. He said that a comparison between the respondent's sister company in Europe and the respondent revealed that the European company had about 122 or so employees producing carbon black whereas the respondent had about 170 employees doing the same. Mr Bowden said that the practical effect of the lowering of import duties was an increase in competition. He also said that one of the respondent's

major customers started purchasing carbon black from India. Mr Bowden said that because of competition the respondent had to ensure that it stayed competitive.

Mr Bowden was asked during his evidence in chief whether these factors played a role in the decision to propose the rotating shift system and he answered in the affirmative. He added that Mr Kunzman made the decision that he needed to get his head count

down but did not want to have any retrenchment over the course of the next few years since he believed that he could bring costs down by moving people around and restructuring. Mr Bowden testified that Mr Kunzman believed hat he would be able to accomplish his plan with minimal heartache as regards the staff. Mr Bowden went on to say that Mr Kunzman 'established a rule in August or July that he did not want to see contractors while the staff members were so high and it got to a point that any person using contract labour had to get his personal approval before he used contract labour, so contract labour basically became a swear word at Algorax'.

Mr Bowden also testified that about mid-year in 1997 the respondent assigned a company or entity known as Dynamic Business Solutions to do a time and motion study of the packaging area. That meant simply observing what each person did and for how long so as to determine whether there were people who had nothing or little to do and maybe others who had too much to do. Mr Bowden testified that Dynamic Business Solutions found that on the day shift there were people who were not working very hard and that the night shift, which had fewer people, did an equivalent amount of work as the day shift which had more people. He testified that as a solution Dynamic Business Solution recommended that the respondent balance out the two shifts to two equally sized shifts of 15 people per shift with one supervisor on each shift

Mr Kunzman set up systems to check that the use of contract labour was stopped wherever possible. This raised some difficulty in the packaging department because the night shift was manned largely by contract workers. On 15 September 1997 a meeting was held between the management and one shop steward. Messrs Lane, Bowden and Lones-Field represented the company. Mr Magxwalisa was the only one representing the employees. Mr Lane explained that the change in the working shift pattern was necessary due to operational requirements and in order to try and provide continuing employment to employees in the packaging department. He also said that this wouldresult in a considerable reduction in costs as contractors would no longer be necessary in the packaging area. Mr Magxwalisa was asked by Mr Lane to explain this to the union members.

Mr Bowden testified that, when Mr Lane said at the meeting that the rotating shift was necessary in order to provide continuing employment for employees in the packaging department, he meant that contract labour had to be done away with and permanent employees had to move into those positions. He said that, if contract labour was not done away with, and permanent employees did not move into those positions, there would have to be a retrenchment of permanent employees. That was something that the respondent did not want to

do.

Mr Lane held a meeting with the employees of the packaging department on 15 September. He told the employees much the same as he had told the shop steward at the meeting of that day. Mr Lane also referred to continuing competition as being one of the reasons for the respondent seeking to cut down on costs. Mr Bowden explained how the proposed shift pattern would work. The workers objected to working on Sundays. In his evidence Mr Bowden said that the objection to working on Sunday was

on the basis that employees had sport or church commitments on Sundays and that Sundays were family days. Mr Bowden said that the respondent was prepared to be flexible with regard to the starting and finishing times if that would help ensure that the employees agreed to work the rotating shift. It was agreed that further meetings would be held on 16 September 1997. According to Mr Bowden, Mr Lane and Mr Kunzman were at that time 'doing a bit of roadshow' going to every department and explaining the need to decrease costs and that costs were a major issue and they needed to be reduced.

On 17 September 1997 a meeting was held between Messrs Lane, Bowden and Lones-Field, on the one hand, and Mr Magxwalisa, on the other. Mr Magxwalisa made a report at the meeting that the workers were prepared to work shifts but not on Saturdays and Sundays. He said that the workers had church commitments on Sundays and considered weekends as personal time. Mr Bowden told Mr Magxwalisa that Saturdays and Sundays had to be worked because otherwise silos would fill up which would necessitate a product change which in turn was costly. He also mentioned that not many employees seemed to have had a problem with working on Sundays when that was on the basis of overtime.

The management stated that it was possible to be flexible to a certain extent in regard to hours on Saturdays and Sundays. Mr Lane also said that the shift allowance would be paid. Mr Magxwalisa asked about transport and old people and was told that transport would be available at normal cost to employees and the respondent would bear the extra cost. He was told to speak to Mr Lones-Field about old people. A report back meeting for the employees was agreed for 13:00 on the same day and another meeting between the parties on 18 September. On 18 September 1997 a further meeting was held between the management and Mr Magxwalisa. The stance of the employees as had been conveyed by Mr Magxwalisa in the previous meeting with management remained the same.

On 19 September 1997 the new shift patterns were set out in a memorandum signed by Mr Lane. In that memorandum the reasons

for the proposed rotating shift were given as being:

(1) to ensure that the packaging department employees still had jobs for the foreseeable future;

(2) to no longer have to use contractors in the packaging area; to work on Saturday and Sunday to ensure that the silos did not get full because, if they filled up and there had to be a product change that was not planned, the costs would be about R20 000 each time.

At this stage it is important to make the observation that the reasons given by Mr Lane in the memorandum of 19 September for the introduction of the rotating shift system did not include some of the additional reasons that both Mr Bowden and Mr Lones-Field testified to that have been referred to above.

Another meeting was held on 29 September between Messrs Lane and Lones-Field and Magxwalisa. The parties' respective positions remained the same. Mr Lane expressed disappointment that the employees' position remained the same but said that the respondent would continue with the process. The respondent then declared a dispute. On the same day the respondent sent a facsimile to the union confirming the existence of a dispute between itself and the unionabout the rotating shift system. It also sent the union a copy of the memorandum dated 19 September.

On 20 October 1997 Messrs Kunzman and Lane met with the employees of the packaging department to urge them to agree to the new shift pattern. They addressed the employees on the effects of globalization, budgets and the rotating shift system. Mr Lane asked for input from the employees and emphasized that all options would be considered and that the respondent would accommodate employees' suggestions 'if operationally possible'.

On 21 October 1997 the union wrote to the respondent. It pointed out among other things that changes to the contracts of employment had to be negotiated. It further asked to be provided with the full motivation for the proposed change. The respondent replied on 21 October 1997 and said that the reasons for the proposed change were set out in the document relating to shift patterns, which is the memorandum dated 19 September 1997 that has been referred to above.

On 22 October 1997 a meeting was held between Messrs Lane and Lones-Field representing the respondent and Mr Vena and the shop stewards representing the employees. The parties stated their positions and no agreement was reached. On 24 October 1997 the respondent referred the dispute to the Commission for Conciliation, Mediation & Arbitration (CCMA) for conciliation. The outcome it sought

was that 'the parties reach agreement on the proposed revised shift systems'. The union did not attend the conciliation meeting at the CCMA. On 21 November 1997 the management of the respondent met with the shop stewards to tell them that they would meet again if the CCMA told them to do so, otherwise a certificate of outcome would be issued and there would be no option but to 'implement new shift system as per operational requirements'. On 24 November 1997 the respondent stated that it had 'exhausted all avenues to resolve the dispute' and contended that it was then able to institute a lock-out, or embark upon a retrenchment or maintain the status quo.

On 26 November the respondent wrote to the union and, among other things, proposed that the dispute be referred to advisory arbitration. On 28 November 1997 the respondent wrote to the branch secretary of the union indicating that, if the union did not agree to advisory arbitration, the respondent would commence a retrenchment exercise.

In that letter the respondent also called for a meeting in December 1997 and indicated that it wanted to resolve the dispute. The respondent also advised the union 'together with employees who continue to refuse to agree to work the revised shift system' that 'we invoke the provisions of the recognition agreement relating to retrenchment'. It also wrote to employees individually and advised them that it was commencing the retrenchment process in terms of the recognition agreement. The heading of the letter to the employees was: 'Notification of commencement of the potential termination of your employment for operational reasons.'

On 5 December 1997 the union challenged the threatened dismissal as being illegal on the basis that there was a dispute of interest but no operational requirements justifying it. On 9 December 1997 Mr Lones-Field met individually with each of the affected employees to try to persuade them to agree to the new shift system. On the whole the employees refused. On 10 December 1997 a meeting was held between Messrs Lane and Lones-Field, for the respondent and Messrs Magxwalisa and Manziya, for the employees. At that meeting the shop stewards stated that there was still room for movement, and asked for further meetings. The management indicated that there would be no further internal meetings. It said that the options were advisory arbitration or retrenchment.

On 17 December 1997 Mr Kunzman met with the employees of the packaging department. He told them that during past meetings the shop stewards and employees had been told that the declining profitability of the company required a change to ensure more cost-effective operations. To achieve this, he said, the management had identified areas of material cost savings which included a significant

reduction in contract labour.

Mr Kunzman told the employees that contract labour had been targeted 'as a cost saving exercise to safeguard workplaces for Algorax employees'. He said that the management did not consider the retrenchment of the respondent's employees as a necessity at the point of time. He said that he had made this point clear in all meetings.

He also told the employees that 'in order to achieve the overall goal of the company, the management planned and proposed a two-shift operation in the packaging area to allow for a reduction in contracted labour'. He also told them that the new shift system would be put into operation as from 29 December 1997. He pointed out that the employees were ill-advised to reject the proposal but emphasized that they had a choice either to agree to work the rotating shift and keep their jobs or reject the rotating shift proposal and be dismissed.

On 18 December 1997 Mr Lones-Field met with each of the affected employees individually. He asked each one to sign a document to the effect that they would work the new shift system. Mr Lones-Field told the employees that, if they did not accept the changed shift system, they would be dismissed. By and large the employees refused to sign. On 19 December 1997 Mr Vena wrote to the respondent and said that he would not meet with the respondent until 15 January 1998. On 22 December 1997 the respondent wrote a letter to the union stating that the dismissals would become effective on 12 January 1998, and that it was a matter of choice for the employees concerned, ie to accept the change or be dismissed. On 5 January 1998 Mr Lones-Field again met with employees individually and gave them a letter setting out that they had a choice, and extended the deadline on 9 January 1998 for them to make up their minds whether they accepted the rotating shift proposal or not. The letter was dated 5 January 1998. Its author was Mr Lane. The first paragraph of the letter read thus:

'In a further effort to try to resolve the dispute regarding working hours in the packaging area, you are given an extension until Friday, 9 January 1998 at 18:00 to sign your acceptance of the change in working conditions. Should you not sign your acceptance of the change in working hours, then this serves as notification of your termination of services and your final pay. Your last working day will be Friday 9 January 1998.' The rest of the letter dealt with severance pay and other financial aspects of the dismissal.

On 9 January 1998 the employees were again spoken to individually and given until 15:00 to sign an agreement to work the new shift pattern failing which they would be dismissed. The second and further appellants did not sign the agreement. They were then

dismissed. On 12 January 1998 some of the individual appellants turned up for work, but refused to work the new shift system. They were told that they had been dismissed. However, they were told that, if they changed their minds and agreed to work the rotating shift, they would be reinstated. They then engaged in what they referred to as a strike. The respondent wrote letters to the union dated 11 February and 13 February 1998, repeating its offer to reinstate the employees if they agreed to work the new shift. The employees rejected the offer of reinstatement insofar as it was conditional upon their agreeing to work the new shift. They stated that they wanted to be reinstated on terms and conditions of employment which governed their employment before they were dismissed.

On 15 April 1998 the respondent restated its position that it would maintain the new shift pattern, but offered reinstatement without backpay or benefits, and subject to agreement to work the new shift system. It sought final acceptance or rejection of the offer by midday on 30 April 1998. The union rejected the offer. On 13 May 1998 the appellants delivered their statement of claim instituting legal proceedings in the Labour Court to challenge the fairness of their dismissal and to seek reinstatement and backpay. On 18 June 1998 the respondent delivered its statement of defence. In the statement of defence, the respondent once again offered to reinstate the individual appellants on condition that they agreed to work according to the rotating shift system and subject to financial adjustment in regard to payments received and periods not worked. The individual appellants once again rejected this offer and maintained that they were not prepared to work Saturdays and Sundays. During the subsequent trial of the dismissal dispute in the court a quo in the year 2000 the respondent stated that its offer to reinstate the individual appellants (but not pay them for the intervening period since dismissal) if they agreed to work the rotating shift still stood.

The appeal On appeal counsel for the appellants submitted that the dismissal of the individual appellants was automatically unfair as contemplated by s 187(1)(c) of the Labour Relations Act (the Act). Section 187(1)(c) provides that a dismissal is automatically unfair 'if the reason for the dismissal ... is to compel the employee to accept a demand in respect of any matter of mutual interest between the employer and employee'. Counsel for the appellants also submitted, correctly in my view, that the issue of whether the individual appellants should agree to work the rotating shift proposed by the respondent was 'a matter of mutual interest between employer and employee' as contemplated by s 187(1)(c) . The demand was, of course, made by the respondent.

Counsel for the respondent submitted that, where an employer has

valid operational requirements to address, a dismissal cannot be one effected for the purpose of compelling the employees to accept a demand in respect of a matter of mutual interest. I do not agree. Where, for example, an employer seeks to reduce costs in his business and demands that his employees agree to work short-time, that employer has genuine operational requirements justifying the working of short-time but, without the employees' consent, he is not entitled to require them to work short-time. He can demand that they work short-time but they are not under any obligation to comply with his demand. If they are not prepared to work short-time and they refuse to do so, a dispute may then arise between the parties on whether the employees should work overtime. That dispute is a matter of mutual interest.

Such an employer may then dismiss the employees for operational requirements in order to get rid of them permanently and employ a new workforce that will be prepared to work in accordance with the needs of his business. In such a case the employer will be dismissing the old workforce because the contracts of employment he has with them can no longer properly serve his operational requirements. That was the nature of the dismissal that the employer effected in TAWU & others v Natal Co-operative (Pty) Ltd (1992) 13 ILJ 1154 (D) as well as in Fry's Metals (Pty) Ltd v NUMSA & others (2003) 24 ILJ 133 (LAC). However, in a case which requires the working of short-time, such as has been referred to above, the employer could take the attitude that for certain reasons such as their experience and skills he does not want to get rid of his workforce permanently but wishes to retain them and for that reason dismiss them not for the purpose of employing others in their positions permanently but for the purpose of compelling them to agree to work short-time. If he did that, he would be hoping that the implications and consequences of dismissal would be such that the employees would feel that they should rather agree to the employer's demand and escape the consequences of dismissal rather than not agree to the demand and face such consequences. Under the repealed Labour Relations Act 28 of 1956 (the old Act) such a dismissal was permitted. Under the current Act it is not permitted and it is automatically unfair. From this it must be abundantly clear that the existence of valid operational requirements does not prevent a dismissal being effected for the purpose contemplated by s 187(1)(c) . What is most important is to determine what the purpose of the dismissal is.

In the Fry's Metals case this court held that a dismissal such as is contemplated by s 187(1)(c) is one which is effected for the purpose of compelling the employee or employees to accept a demand by an employer in respect of a matter of mutual interest. It held further that such a dismissal cannot be final. Accordingly such a dismissal is

subject to withdrawal upon the employee accepting the employer's demand. A dismissal that falls within the ambit of s 187(1)(c), held this court in the Fry's Metals case, is not one where the employer's purpose in effecting the dismissal is to get rid of the employees permanently so that they make way for another workforce in their positions.

I think that an examination of the evidence in this matter reveals that, while, on the one hand, there are indications that the purpose of the dismissal was to compel the employees to agree to the employer's demand, on the other hand, there are also indications that the purpose of the dismissal was to get rid of the employees permanently. Nevertheless, I have come to the conclusion that on balance the appellants' contention that the purpose of the dismissal was to compel the individual appellants to agree to the respondent's demand must prevail. I shall refer hereunder to a number of areas in the evidence which, in my view, support this finding. The respondent's representatives said that part of the respondent's objective in seeking to introduce a rotating shift was to ensure the continued provision of employment to the respondent's employees in the packaging department for the foreseeable future. In other words the respondent wanted to avoid the retrenchment of the employees in the packaging department and that is why it sought to introduce the rotating shift. The question that immediately arises is: Why then did the respondent pursue the rotating shift proposal up to the point of retrenching the very people it was so concerned to protect from retrenchment? One's sense is that there is something wrong with the logic which the respondent's stance dictates we should accept. That logic says: the respondent was so determined to protect the individual appellants from retrenchment that it retrenched them. That stance can only make sense if the dismissal was not intended to be a final one but was used as a way of putting pressure on the employees to accept the proposal of a rotating shift. In other words, one would say that the respondent wanted to 'pressurize' the individual appellants into accepting the proposal and, thereby, ensure that they were not retrenched. The evidence reveals that the respondent's commitment to protecting the employees from retrenchment was made out to appear very strong. Its representatives repeatedly stated that the respondent would not retrench employees. At some stage Mr Bowden said that the respondent would not retrench 'at all costs'.

Prior to the dismissal of the individual appellants, the respondent's stance was that, if the employees did not agree to work the rotating shift, they would be dismissed. This meant that, if the employees agreed to work on Saturdays and Sundays, they would not be dismissed. Prior to the dismissal, the respondent made it clear that once the employees had been dismissed, the dismissal would

effectively bewithdrawn and they would be reinstated if they subsequently agreed to work the rotating shift. After the employees had been dismissed, the respondent told them effectively that it would withdraw the dismissal if they agreed to work the rotating shift but would not pay them for the intervening period. That is clearly supportive of the contention that the dismissal was designed to get the employees to agree to the respondent's demand. That would easily fit into the provisions of s 187(1)(c) of the Act.

The most compelling evidence in support of the conclusion that the dismissal of the individual appellants was effected for the purpose of compelling them to accept the respondent's demand for the rotating shift - and thereby abandon their own stance on the issue - came from the respondent's own witnesses and not from the appellants' witnesses. Counsel for the respondent asked Mr Lones-Field in re-examination whether the problem would have disappeared if the employee had agreed to work the rotating shift system and Mr Lones-Field answered in the affirmative. Counsel then asked Mr Lones-Field what the objects were of the process that the respondent was engaged in and Mr Lones-Field replied: 'Well the object was either that the employees accepted the shift or if they did not, then the retrenchment would be achieved.' Counsel was apparently not too happy with this answer and put the following question to Mr Lones Field: 'I am asking the question as to what [was] the object of the retrenchment process?' At this stage Mr Lones-Field put the issue to rest with the following answer:

'Well to resolve the issue.' The issue, of course, whether or not the employees should work the rotating shift. If the respondent retrenched the employees for the purpose of resolving that issue, that, it seems to me, on the probabilities, was to compel them to agree to the demand made by the respondent. To retrench employees in order to achieve that purpose falls within the ambit of the provision of s 187(1)(c) of the Act and renders the dismissal automatically unfair.

Mr Lones-Field's above evidence does not stand alone. Mr Bowden also testified that the respondent never really wanted to dismiss the individual appellants. He did not say that initially the respondent did not want to dismiss the employees but later it wanted to when it had realized that the employees were not prepared to change their minds. Within the context of this case Mr Bowden's statement in this regard is more consistent with an employer who effected the dismissal not to get rid of the employees but who was using the dismissal as a means to secure their agreement on an issue. Under cross-examination the following was put to Mr Bowden: 'So am I correct, the company never really wanted to dismiss any of them?' Mr Bowden answered: 'That is correct.' It was then suggested to him that the respondent 'merely

wanted them to agree to this new shift pattern' and Mr Bowden answered: 'Yes, that is correct.'

Mr Lones-Field testified that the respondent's attitude prior to the dismissal was that of hope that the employees would accept the new shift system. At this stage it was put to Mr Lones-Field during cross-examination that in fact the respondent's attitude was that, even after the dismissal if the employees accepted the rotating shift system, it would take them back and Mr Lones-Field answered that this was true. Mr Lones-Field conceded under cross-examination that the respondent did not want to dismiss the employees but that it wanted them to change their minds. This part of Mr Lones-Field's evidence accords with Mr Bowden's evidence - already referred to above - that the respondent never really wanted to dismiss the employees. The employees' position was that they were not prepared to work on Saturdays and Sundays. Mr Lones-Field's evidence that the respondent did not want to dismiss the employees but only wanted them to change their minds must mean that the dismissal was being used as a tactic to put pressure on the employees to change their minds and agree to work the rotating shift. If the dismissal was effected for that purpose, as this part of Mr Lones-Field's evidence suggests, then the dismissal fell within the ambit of s 187(1)(c) and was automatically unfair. It was put to Mr Lones-Field under cross-examination that the respondent was not geared towards retrenching and he answered in the affirmative. It was also put to him that the respondent was geared towards securing an agreement from the employees on the rotating shift proposal and he answered in the affirmative. Mr Bowden testified that he never believed that any one would eventually give up his job on the stance adopted by the employees. In one of his meetings with the employees, Mr Kunzman, the managing director, made it clear that he did not wish to dismiss them. Indeed, Mr Bowden's evidence that Mr Kunzman had said that he did not want any retrenchments over the next few years because he believed that he could accomplish his restructuring plan by moving employees around has been referred to above.

Under cross-examination Mr Lones-Field was asked whether the employees were told that the reason why they would be dismissed - this was before the actual dismissal was that 'they refused to sign' and Mr Lones-Field answered: 'That is correct.' It was also suggested to Mr Lones-Field during cross-examination that the respondent did not regard the rotating shift proposal as an alternative to retrenchment for the permanent employees on the day shift, and he answered in the affirmative. In my judgment this is important because, if the respondent intended to retrench the individual appellants in the sense of getting rid of them permanently and this was for operational requirements and was not done for the purpose contained in s

187(1)(c), one would have expected that its approach would have been that the rotating shift proposal was an alternative to retrenchment. That the respondent did not regard it as an alternative to retrenchment seems to me to point in the direction that the respondent really did not intend to get rid of them permanently but was using dismissal as a pressure tactic to get the individual appellants to agree to its demand. In the meeting which Mr Kunzman held with employees of the packaging department on 17 December 1997, he told the employees that the respondent did not consider the retrenchment of the respondent'semployees as a necessity at that point in time. He told the employees that he had made this point clear in all meetings. By that date the respondent had already told the employees that they would be retrenched or dismissed if they did not agree to work the rotating shift system. This had been done as long before that date as about two weeks when in its letter to the union dated 28 November 1997 the respondent wrote in the third paragraph: 'your union, together with employees who continued to refuse to agree to work the revised shift system, which the company needs to implement for reasons fully canvassed with all concerned, are hereby advised that we invoke the provision of the recognition agreement relating to retrenchment ' (emphasis added).

In para 3 of its letter to each affected employee dated 28 November 1997 the respondent wrote: 'In the circumstances and we regret, you are advised that Algorax has advised CWIU and the shop stewards as your collective representatives, that for operational reasons, we are commencing the retrenchment process in terms of the recognition agreement.' (Emphasis added.) Why, then, had the respondent initiated the retrenchment consultation process already by its letters of 28 November to the union and to the employees if, as Mr Kunzman said as late as two weeks after those letters,

the respondent did not regard retrenchment as a necessity? After all s 189(1) of the Act requires an employer to initiate consultation when it contemplates a dismissal for operational requirements. Once again, it seems to me that the letters of 28 November were written in order to put pressure on the employees to change their minds on the proposal of a rotating shift.

Mr Lones-Field's evidence under cross-examination seems to support the proposition that in writing the letters of 28 November 1997 to the union and to the affected employees the respondent was trying to put pressure on the employees to change their minds and agree to the demand to work the rotating shift. At some stage during Mr Lones-Field's cross-examination the following exchange occurred between him and counsel for the appellants: 'Mr Lones-Field: At that stage it says to further the process, that would be the process of

(indistinct) termination of employment.

Counsel: So you were only prepared to meet to further the process of termination in the sense of proceeding now with your dismissal, is that what you are saying? Mr Lones-Field: I cannot say exactly if that was the only reason that (intervention).

Counsel: Surely you wanted them to change their minds? You did not want to dismiss these people.

Mr Lones-Field: No, we did not. Counsel: And you wanted them to change their minds, is that not so?

Mr Lones-Field: Yes.

Counsel: So surely your discussions would have involved not only the process and what severance is going to be and that sort of thing, it would have involved detail and we are insistent on this, surely you are going to change your minds, we do not want people to lose jobs?

Mr Lones-Field: That is true, we did not want to lose people, to lose jobs.'

I must refer to two further exchanges between counsel for the appellants and Mr Bowden which, in my view, support the conclusion I have reached. The one ran thus

'Counsel: So am I correct, the company never really wanted to dismiss any of them ...

Mr Bowden: That is correct. Counsel: Merely wanted them to agree to this new shift pattern.

Mr Bowden: ... yes, that is correct.'

The other one is the following:

'Counsel: Yes and if they agreed to work the rotating shift they would not be dismissed. Mr Bowden: That is correct.

Counsel: And after they were dismissed if they were still willing to change their minds and agree to the rotating shift then they could come back to work.

Mr Bowden: That is correct yes.' Lastly, if one has regard to the exchange between counsel for the appellants and Mr Lones-Field quoted above, there is no doubt that its upshot is that Mr Lones-Field was saying that in seeking to dismiss the individual appellants, the respondent did not really want to dismiss them, did not want them to lose their jobs but only wanted them to change their minds and agree

to work the rotating shift. Hence this exchange between Counsel for the appellant and Mr Lones-Field:

'Counsel: Surely you wanted them to change their minds? You did not want to dismiss these people[?] Mr Lones-Field: No, we did not.

Counsel: And you wanted them to change their minds, is that not so?

Mr Lones-Field: Yes.'

At the time of the trial in the year 2000 the respondent's stance was still that, if the individual appellants accepted the demand to work the rotating shift system including weekends, the respondent would effectively withdraw the dismissal and reinstate the individual appellants but would not pay them for the intervening period. That is to be found in the following exchange between counsel for the respondent and Mr Dikana, one of the two witnesses who testified for the appellants:

'Counsel: Do you know that even today there is an offer in place to take the employees back on condition that they work the new shift system? Mr Dikana: Yes.'

This was after two years from the date when the individual appellants were dismissed. It is extraordinary that for over two years after the dismissal of the individual appellants the respondent kept its offer to reinstate the individual appellants if they acceded to its demand open. That is an extraordinarily long time. Indeed, it is possible that that offer still stands today. In my judgment this strange feature of this matter points very strongly to the respondent having effected the dismissal not in order to get rid of the individual appellants permanently so that it could employ new employees in their positions who were prepared to work the rotating shift but in order to compel them to agree to the demand that they work the rotating shift. This must mean that in the interim the respondent employed either temporary employees or contract labour on the understanding that they would be dismissed if the individual appellants decided to agree to work the rotating shift and their dismissal was withdrawn and they were reinstated or if they were reinstated by an order of court.

In these circumstances I conclude that the dismissal was effected for the purpose of compelling the individual appellants to agree to the respondent's demand that they work the rotating shift and, accordingly, fell within the ambit of s 187(1)(c) and was automatically unfair. This conclusion is sufficient to dispose of this appeal. Accordingly it is, strictly speaking, not necessary for me to deal with the question whether, if the dismissal was not automatically unfair, it

nevertheless was unfair for lack of a fair reason to dismiss. I have, however, decided to deal with that issue in any event because it may well be that, even if the dismissal was not automatically unfair, it was, nevertheless, unfair for lack of a fair reason. Was the dismissal unfair for lack of a fair reason to dismiss?

The appellants contended that, even if the dismissal was not effected for the purpose of compelling the individual appellants to agree to the respondent's demand on the issue of a rotating shift and was, therefore, not automatically unfair, it nevertheless was unfair in that there was no fair reason for it. The respondent contended that there was a fair reason. I now turn to consider this part of the case.

Section 188(1)(a) (ii) of the Act provides that a dismissal that is not automatically unfair is unfair if the employer fails to prove that the reason for dismissal is a fair reason based on the employer's operational requirements. The term 'operational requirements' is defined in s 213 of the Act as meaning 'requirements based on the economic, technical, structural or similar needs of an employer'.In determining whether there was a fair reason for the dismissal of the individual appellants, the starting-point is the determination of the reasons for the dismissal. The individual appellants were dismissed because they were not prepared to work the rotating shift which the respondent sought to introduce. That is separate from the purpose of the dismissal. The latter question has been dealt with above. The next question that arises is that of why the introduction of the rotating shift was so important that employees had to be dismissed when they refused to work according to it. This question makes it necessary to establish what the problem was or what theroblems were that the respondent was facing which it sought to address by introducing a rotating shift.

Four officials of the respondent's management feature in this matter. They are Mr Kunzman, the managing director, Mr Lane, Mr Bowden, the logistics manager who was in charge of the packaging department, and Mr Lones-Field, the human resources officer. The first two are obviously the most senior of the four. The last two are the only ones who testified for the respondent.

In determining the reasons why the respondent sought to introduce the rotating shift, reference must be made to the memorandum dated 19 September 1997 signed by Mr Lane which was given to the affected employees as well as the union. That memorandum has been referred to above. In that memorandum Mr Lane wrote that there were three reasons why the respondent sought to introduce the rotating shift. Those have been given above and need not be repeated. Those are the reasons that Mr Kunzman also gave to the employees in the meetings that he held with them. Mr Kunzman also mentioned that,

because the respondent was facing increased competition, it had to remain competitive. Mr Kunzman also emphasized the need to cut down on costs and to do away with contract labour. Those reasons are also the same reasons that Mr Lane gave in the meetings which he held with employees. Messrs Bowden and Lones-Field confirmed those three reasons in their evidence but added other reasons. Their additional reasons have been given above. It is not necessary to repeat them. The question arises as to which reasons must then be taken to have been the respondent's reasons for seeking to introduce the rotating shift.

What the respondent gave in its memorandum of 19 September as reasons for its proposal to introduce the rotating shift is actually a combination of its reasons and its objectives. However, nothing really turns on this. A proper analysis of those 'reasons' and the statements made by the respondent's managing director and Mr Lane either in writing or orally in meetings with the respondent's employees or their representatives reveals simply that the respondent was unhappy with the costs at which it was conducting its operations and wanted to bring those costs down. As the managing director said to the employees, the management identified contract labour as particularly costly and wanted to do away with it. However, it wanted to make sure that, in reducing costs by doing away with contract labour, it did not do away with weekend work and, as far as possible, also did not end up with the retrenchment of its employees if it could avoid it. It did not want to find itself without people working over weekends because that would lead to the silos filling upon which would create huge costs. The reduction of costs was necessary in order to ensure that the respondent remained competitive in the market.

In my judgment the respondent's official and true reasons for seeking to introduce the rotating shift must be those that were contained in the memorandum dated 19 September. They were articulated by the most senior members of the management, they are the reasons that the respondent took the trouble to put down in writing, and the respondent communicated those reasons to the union and the affected employees. The other reasons which Messrs Bowden and Lones-Field sought also to put up as some of the reasons were never articulated by the two most senior officials [but] by lower management. When the respondent decided to put its reasons in writing, it did not include those reasons. There is no reason why a member of the respondent's management as senior as Mr Lane would have left those reasons out when giving the respondent's reasons in writing for seeking to introduce the rotating shift if they were also official reasons of the respondent. Neither Mr Bowden nor Mr Lones-Field could explain in their evidence why these reasons would have been omitted in the memorandum of 19 September if they were some of the

respondent's reasons. In this regard it must be borne in mind that Mr Lane had been quite involved in this matter. These reasons must have been mentioned to him at one stage or another by either Mr Bowden or Mr Lones-Field or both. If Mr Lane was told those reasons by either Mr Bowden or Mr Lones-Field or both, his decision not to include them in the memorandum of 19 September must mean that he did not go along with them as some of the respondent's reasons for the rotating shift proposal. If neither Mr Bowden nor Mr Lones-Field ever mentioned those reasons to Mr Lane, then the inference must be that during the consultation process those reasons were not perceived even by Messrs Bowden and Lones-Field as sufficiently significant to warrant that they be conveyed to Mr Lane. In either case the effect is that those reasons were either not some of the respondent's reasons for the introduction of the rotating shift or if they were, they were so insignificant that the court would be justified in leaving them out of account in its consideration of the matter.

Lastly on this point, it needs to be mentioned that in his evidence Mr Bowden at some stage said that the fact that the employees on the night shift were unhappy because they were always 'stuck' on the night shift became, for him 'personally', the major driving force for the introduction of the rotating shift. With this statement Mr Bowden seems to have been making a distinction between himself and the respondent or between himself as an individual and his seniors. That evidence seems to support the view that the other reasons testified by Messrs Bowden and Lones-Field which were not included in the official reasons in the memorandum of 19 September were simply personal reasons of those two officials and not really the respondent's official reasons.

There is also no reason why the managing director would not at some stage or another have articulated these reasons in the meetings he had with employees. There are minutes and notes of meetings which were held which included the managing director and nowhere does it appear that he ever articulated such reasons. In the memorandum of 28 May 1997 to the union, Mr Lane also did not include those reasons. There he said that the idea was to provide continuing employment for the respondent's employees and to avoid unnecessary costs. All of that is covered by Mr Lane's memorandum of 19 September. In these circumstances the fairness or otherwise of the dismissal of the individual appellants must, in my judgment, be determined on the basis that the problems which the respondent sought to address by way of the rotating shift or the reasons for the respondent seeking to introduce the rotating shift are those reasons contained in Mr Lane's memorandum of 19 September.

The shift system that the respondent operated prior to the dismissal

of the individual appellants did ensure that the silos did not fill up. Accordingly under that shift system the respondent could have had no problems of costs arising out of silos filling up. However, the respondent used a lot of contract labour at the time, especially on the night shift and there were more employees on the day shift than were really necessary. The utilization of contract labour was costly and the respondent had to address that problem. Mr Bowden and Mr Lones-Field made it clear in their evidence that getting rid of contract labour became the major driving force on the respondent's part for the introduction of the rotating shift. Mr Bowden even said that contract labour became a 'swear word in Algorax' because Mr Kunzman did not want the employment of contract labour and at some stage everyone who wanted to employ contract labour had to obtain his personal approval.

The most obvious thing for the respondent to do if it wanted to get rid of contract labour was to get rid of contract labour. Who would work in the positions left by the contract labour? It would be some of the permanent employees from the overstaffed day shift if they were happy to do that rather than face a retrenchment on the basis that they were excess on the day shift or if they rejected that offer, it would be permanent employees that the respondent would employ specifically to work on the night shift to do work previously done by contract labour. In other words the most obvious solution was for the respondent to stop employing contract labour and have permanent employees in their stead. The permanent employees would be those found to be excess on the day shift if they were willing or it would be people from outside the company who wanted employment. If the respondent had addressed its problem this way, the number of employees from the day shift whom the respondent would have had to dismiss if they rejected the offer of employment on the night shift would have been a much smaller number than the number of employees that the respondent ultimately dismissed. In fact it may well be that those few would have accepted the offer to work on the night shift rather than face retrenchment and join the ever-growing queue of unemployment. In this way the respondent would have addressed its concerns of costs and either totally avoided the retrenchment of any of its employees or limited the number of employees to be retrenched to a few. Counsel for the appellants put the said methods of addressing the respondent's problems to the respondent's witnesses during cross-examination and asked them why the respondent did not deal with the problems in that way. Their answer was that the respondent's management did not consider that way of addressing the problem.

As to whether that solution would have solved the problem, the respondent's witnesses either said it could have worked but it was not considered or they said that it would not have addressed the

unhappiness of the night shift employees about being 'stuck' on the night shift all the time or that it would not have addressed the problem of insufficient interaction between the senior management and the night-shift employees. As already stated earlier, those concerns were not the respondent's official or real problems for which the respondent sought to introduce the rotating shift. They were personal concerns of Messrs Bowden and Lones-Field. Under cross-examination the respondent's witnesses never said that that solution would not have addressed the three problems mentioned in the respondent's memorandum of 19 September. However, in re-examination they were asked whether it would have been practicable. Naturally they answered that it would not have been practicable. They gave no reasons for saying that that solution would not have been practicable. I do not think much weight needs to be given to this part of their evidence when they gave no reasons to support it, especially in the light of their evidence under cross-examination in this regard. In my judgment it is abundantly clear that that approach would have addressed all of the respondent's true problems and reasons for seeking to introduce the rotating shift.

The way of addressing the respondent's problem discussed above is the most obvious, natural and logical way in which the respondent should have addressed the problems. It is rather strange that the respondent's management did not consider that solution when it presents itself as such an obvious and natural solution to the problems that the respondent sought to address.

Sometimes it is said that a court should not be critical of the solution that an employer has decided to employ in order to resolve a problem in its business because it normally will not have the business knowledge or expertise which the employer as a businessperson may have to deal with problems in the workplace. This is true. However, it is not absolute and should not be taken too far. When either the Labour Court or this court is seized with a dispute about the fairness of a dismissal, it has to determine the fairness of the dismissal objectively. The question whether the dismissal was fair or not must be answered by the court. The court must not defer to the employer for the purpose of answering that question. In other words it cannot say that the employer thinks it is fair, and therefore, it is or should be fair.

Furthermore, the court should not hesitate to deal with an issue which requires no special expertise, skills or knowledge that it does not have but simply requires common sense or logic, especially where the employer has had an opportunity of commenting on such an issue and has not said anything that indicates that any special knowledge or expertise is required. This is such a case. The respondent's problem required simple common sense and did not involve any complicated

business transaction or decision. Accordingly, where, as in this case, the employer has chosen a solution that results in a dismissal or in dismissals of a number of employees when there is an obvious and clear way in which it could have addressed the problems without any employees losing their jobs or with fewer job losses, and the court is satisfied, after hearing the employer on such a solution, that it can work, the court should not hesitate to deal with the matter on the basis of the employer using that solution which preserves jobs rather than one which causes job losses. This is especially so because resort to dismissal, especially a so-called no-fault dismissal, which some regard as the death penalty in the field of labour and employment law, is meant to be a measure of last resort. NUM v Free State Consolidated Gold Mines Ltd 1996 (1) SA 422 (A) at 448H-I; (1995) 16 ILJ 1371 (A) at 1377E-F; W G Davey (Pty) Ltd v NUMSA (1999) 20 ILJ 2017 (SCA) at 2024E-F. After all, s 189(2)(a) (i) and (ii) read with subsection (3)(a) and (b) implies that the employer has an obligation, if at all possible, to avoid dismissals of employees for operational requirements altogether or to 'minimize the number of dismissals', if possible, and to consider other alternatives of addressing its problems without dismissing the employees and to disclose in writing what those alternatives are that it considered and to give reasons 'for rejecting each of those alternatives'. It seems to me that the reason for the lawmaker to require all of these things from the employer was to place an obligation on the employer only to resort to dismissing employees for operational requirements as a measure of last resort. If that is correct, the court is entitled to intervene where it is clear that certain measures could have been taken to address the problems without dismissals for operational reasons or where it is clear that dismissal was not resorted as a measure of last resort. The evidence in this case was that the company did not consider the measure referred to above.

It seems to me, therefore, that the individual appellants' dismissal was not warranted because the problems that the respondent sought to address when it demanded that the individual appellants agree to work the rotating shift could have been adequately addressed without the implementation of the rotating shift system and without harming the respondent's business in any manner or in any significant manner. If the dismissal was unwarranted, it was without a fair reason and was, therefore, unfair.Relief and the extent thereof

The dismissal has been found to have been automatically unfair and at any rate to have been unwarranted because the respondent's problem could have been resolved without dismissing the individual appellants or at least most of them. The primary remedy is reinstatement. For that reason the issue of relief must be approached on the basis that reinstatement should be granted unless there are sound reasons why it should not be granted. Counsel for the

respondent submitted that it would be inappropriate to order the reinstatement of the individual appellants on the terms and conditions which governed their employment immediately prior to their dismissal because the rotating shift was proposed for good reasons and it had been worked since the dismissal of the individual appellants. The suggestion was that it would be impracticable to reinstate the individual appellants when, upon their reinstatement, the respondent would still want them to work the rotating shift and they would still refuse to do so. The other suggestion was also that it would be too disruptive to the respondent's operation.

It is obvious that the workforce that the respondent employed after the dismissal of the individual appellants was employed on the basis that they would have to leave if the individual appellants were reinstated either by an order of court or by agreement between the parties. That is why at trial - which was after a period of over two years from the date of the dismissal of the individual appellants - the respondent's offer to reinstate the individual appellants if they agreed to work the rotating shift still stood. Accordingly, that the current workforce may have to be dismissed if the individual appellants are reinstated is not something that was outside the respondent's and the current workforce's contemplation. As a court of appeal, this court is, generally speaking, required to confirm, vary or set aside the decision of the court a quo or to give such decision as, in its opinion, should have been given by the court a quo on the evidence that was before that court. Generally speaking, this court should not grant any order that the court a quo could not have granted at the time of its judgment.

I do not think that any significant weight really needs to be attached to the fact that the rotating shift has been worked for the years that it has been worked because changing from a system of two shifts, namely, the night shift and the day shift to the rotating shift did not present any difficulty. The change from the two shifts to the rotating shift occurred when the two shifts had also been in operation for a number of years. Accordingly changing from the rotating shift back to the two shifts after a few years of the rotating shift being in operation should also not present any difficulty.

I have held that the concerns relating to there having been inadequate contact between senior managers and employees on the night shift, difficulties about training and development of the employees on the night shift, concerns about lack of discipline on the night shift and the unhappiness of the night-shift employees about always being 'stuck' on the night shift were not the respondent's true or official reasons for proposing the rotating shift but that these may have been personal reasons of Mr Bowden's and Lones-Field's for wanting the rotating shift. None of the respondent's witnesses

explained why the presence of a supervisor on the night shift was not enough to ensure that proper disciplinary steps were taken against any employees who allegedly breached discipline on the night shift. I do not think that the alleged inadequate contact would have been anything significant. The unhappiness of the employees on the night shift was dealt with by the shop stewards in the consultation meetings when they said that the employees on the night shift were employed on the basis that they would work on the night shift. Evidence in court did not contradict this. On the contrary it seems to support it. Anybody who had contracted to work on the night shift but later wanted to change to day shift but could not be accommodated but was still not prepared to work on the night shift in accordance with his contract of employment would have been risking dismissal. It seems unfair that everyone's conditions of employment had to be changed and everyone had to now work all kinds of ungodly hours and work week-ends when people who had contracted to work such a shift decided that they no longer liked working that shift. Without any doubt, for every employee on the night shift who no longer wanted to work that shift, there were probably about more than ten jobseekers who would only be too happy to take his position.

Insofar as the respondent may feel that it needs there to be more contact between the employees on the night shift and senior managers, it must be borne in mind that it is not as if there was no contact at all between senior managers and the employees on the night shift. There was. But the respondent wanted there to be more such contact. The evidence was that, after the dismissal of the individual appellants and the introduction of the rotating shift system, all employees have much contact with senior managers because during the week when an employee is working during the day, there is a senior manager at work. The alleged concern of inadequate contact between the senior managers and the night shift employees can easily be addressed by ensuring either that a supervisor or manager is appointed for the night shift or no new manager is appointed but the manager or managers who are in the respondent's employ who work during the day when the day shift is working work with the night shift employees on some days and during the day on other days. This need not necessarily involve a week by week rotation. Working in the night could be less frequent than working during the day. In that way contact between senior managers and employees on the night shift would be enhanced. There ought to be no difficulty with this. Why is it that whenever inconvenient changes have to occur in the workplace, only employees must suffer the inconvenience and senior management must not take their own share of the inconvenience? At the time of the proposal for a rotating shift, no less than 11 employees were working on the night shift. Is it asking too much that one senior manager must sometimes work the night shift with them? I don't think so!

It, therefore, seems to me that, if the individual appellants are reinstated, the respondent can address the concerns relating to getting rid of contract labour, creating a balance between the day shift and the night shift and still avoid the retrenchment of either all permanent employees or at least most of them. After all the recommendation made by Dynamic Business Solutions was that the respondent should balance out the then existing two shifts equally and have one supervisor for each shift. No evidence was led as to why the appellant did not follow this recommendation. I am therefore of the view that reinstatement would not be impracticable in these circumstances. There is also the question of the time that has lapsed from the date of dismissal. I do not think that the time that has lapsed should, in the circumstances of this case, be any weighty factor against the ordering of reinstatement. It is trite that the lapse of time between the date of dismissal and the end of litigation is no bar to an order of reinstatement. The fact that on the probabilities the respondent's current workforce is employed on the understanding that they may have to make way for the individual appellants if the latter are reinstated facilitates the making of order of reinstatement. I am of the view that there are no sound reasons which warrant denying the individual appellants the affective relief of reinstatement.

What is the extent of the order of reinstatement that should be made? The court a quo has already ordered the respondent to pay the individual appellants compensation equal to ten months' remuneration. They were also paid notice pay and severance pay at the time of their dismissal. In his heads of argument counsel for the appellants asked that the order of the Labour Court be varied to include an order for the reinstatement of the individual appellants on terms and conditions no less favourable to them than those that governed their employment immediately prior to their dismissal. Although he, obviously, submits that the court a quo should have ordered reinstatement, he has not submitted that, if the court a quo had granted a reinstatement order, such order should have been retrospective at the time. In my view there would not have been a sufficient basis for the court a quo to have made such an order retrospective if it had granted reinstatement. This is so because, as counsel for the respondent correctly submitted, the appellants were responsible for the fact that the trial in this matter was not heard and finalized in November 1998. Two times the appellants failed to appear in court when the matter had been set down for pre-trial conference. In fact the Labour Court had to award costs against them on two occasions for such failure one of which was on an attorney and client basis. Accordingly, such reinstatement order as they were entitled to would have had to run from the date of the judgment of the court a quo and not earlier.

The judgment of the court a quo is dated 5 October 2000. If this

court were to amend the order of the court a quo by adding an order of reinstatement that is with effect from the date of that judgment, this will mean that for the period from 9 January 1998 to October 2000 which is a period of about 33 months or so, the only pay that the individual appellants will get is the compensation equal to ten months' remuneration that was ordered by the court a quo. This would mean that out of the 33 months, 22 of the months - which is nearly two years - will not be paid for. That is, in my view, appropriate in order to compensate for the delay that the appellants caused in prosecuting their claim in the court a quo which counsel for the respondent urged us to take into account.

With regard to costs, the court a quo made no order as to costs on the basis that there was a continuing employment relationship between the parties. Neither party appealed against that order. On appeal both sides argued the matter on the basis that costs should follow the result. I intend giving effect to that approach

In the result I make the following order:

1 The appeal is upheld with costs.

2 The order of the court a quo is hereby set aside and replaced by the following order:

'(a) The respondent's dismissal of the second and further applicants constituted an automatically unfair dismissal, was without a fair reason and was procedurally unfair.

(b) The respondent is ordered to reinstate the second and further applicants in its employ on terms and conditions no less favourable to them than those that governed their employment immediately prior to their dismissal.

(c) The date of the order of reinstatement is the date of this order (ie the order of the Labour Court).

(d) The respondent is ordered to pay each one of the second and further applicants compensation equal to ten months' remuneration within ten court days from the date of delivery of this judgment.

(e) In effecting payment in terms of this order the respondent may deduct the amount of severance pay which was paid to each of the second and further applicants at the time of their dismissal unless other appropriate arrangements are agreed upon between the respondent and either a particular applicant or his or her representative in regard to such severance pay.

(f) There is to be no order as to costs.'

Nicholson JA concurred.

Hlophe AJA:

Introduction

This is an appeal against the judgment of Lallie AJ sitting in the Labour Court, Port Elizabeth. The appeal raises he following questions:

(a) Does an employer have a right to dismiss employees who are not prepared to agree to certain changes being effected to their terms and conditions of employment when such changes are necessary for the viability of the employer's business or to improve efficiency in the business?

(b) If an employer has such a right, is it implicit in s 187(1)(c) of the Labour Relations Act 66 of 1995?

(c) Does the exercise of such right by the employer not constitute unfair dismissal? Mr Pillemer SC appeared for the appellants. The respondent was represented in court by Mr Acker SC, who was assisted by Mr Wade .

The facts The first appellant is a trade union which represented its members who were employed by the respondent. The union was recognized as their bargaining representative. The further appellants were former employees of the respondent in its packaging department.

The respondent is a factory that manufactured a substance known as carbon black, which was used in the motor vehicle tyre industry. The manufacturing process was continuous. The carbon black was stored in silos. These silos had to be emptied regularly as part of the continuous production process. The packaging department, which features in this case, was one of the departments responsible for removing the product from the silos. The factory operated 24 hours a day, seven days a week. Of the staff that was employed on a permanent basis 20 worked on day shift and 11 worked on night shift. The first appellant alleged that in 1987 it concluded an agreement with the respondent. This agreement was described as 'retrenchment and/or redundancy policy and procedure'. At the same time a collective agreement was concluded. This was renegotiated and substituted by the collective agreement which was in operation at the time the dispute between the parties arose. That was concluded in 1993.

The agreement recognized the first appellant as the sole collective bargaining representative of the respondent's weekly paid employees

who were its (first appellant) members. The agreement also provided specifically for a negotiating procedure regarding substantive conditions of employment. Clause 9.1 of the agreement provided that: 'The parties agree that a negotiating committee which shall consist of not more than five representatives of each of the parties shall be the forum of all negotiations between the parties regarding substantive conditions of employment. For the purposes of this clause the term ''representative" shall mean any person appointed or nominated by either party to represent it, provided that the union representatives shall be three shop stewards and up to two union officials unless otherwise agreed by the parties.'

Prior to 1995 the packaging department operated as a single day shift. Overtime was worked when there was a need. The cost of overtime was such that a need for a second shift was felt during 1995. Mr Hewetson, the then logistics manager, established a second shift in 1995. It operated from Monday to Wednesday, from 04:00 to 01:00 and during the day on Saturday and Sunday. A separate night shift was established in 1995. One member of the day shift was promoted to the position of supervisor in the night shift. That shift was initially staffed by contract workers, some of whom later became permanent employees on the night shift. There was also movement by employees on the night shift to positions on the day shift elsewhere in the workplace. A problem then developed with staffing levels on the two shifts. The bulk sales department was restructured and the cleaning department was closed. The respondent's philosophy was that retrenchment was to be avoided at all costs and therefore employees which were excess to the respondent's needs were accommodated. In January 1997 Mr Bowden, the newly appointed logistics manager, developed the idea that there would be benefit to the company if the shifts in the packaging department were combined into rotating shifts. Management sought to meet with the shop stewards to address the issue. The meeting took place on 2 May 1997 and the first appellant was not involved. It was not invited to the meeting and was not given notice thereof. From the records of the meeting it appeared that Mr Bowden had explained that due to operational requirements the respondent was considering changing the packaging area to becoming a rotating shift. A report-back meeting was supposed to take place on 6 May 1997. No such meeting took place.

On 28 May 1997 Mr Lones-Field, the respondent's senior human resources officer, sent a facsimile to the first appellant, which read as follows: 'Discussions were held with shop stewards on 2 May 1997 with regard to the possible operational requirement in the packaging area. In order to try and ensure continuing employment for Algorax employees and to void unnecessary costs the company is considering that the employees work a rotational shift system in this area. We will

continue investigating the viability of this possible change and continue with the consultation process.'

The respondent did not indicate whether it expected a response to the facsimile, and it did not receive any. From that time until September 1997, the matter was shelved and not taken further. During this period, Mr Kunzmann, the new managing director, made it clear that contract labour had to be stopped wherever possible. He set up systems to check that this was being done. This raised some difficulty in the packaging department because the night shift was manned largely by contract workers. The rotating shift idea was resuscitated. The manager who was responsible for that was Mr Lane, and he handled the process. However, he did not testify in the court a quo. Mr Lones-Field, who did testify, told the court that he had very little decision-making power and that he carried out Mr Lane's instructions. Mr Lones-Field was present at a number of meetings. He made notes thereof and prepared a record as well. Mr Lones-Field could not independently recollect what was actually said in the meetings as the record was simply a summary.

On 15 September 1997 a meeting was held with one of the shop stewards. The note of the meeting referred to the earlier meeting held on 2 May 1997, as well as the facsimile sent to the first appellant. The note recorded that it was explained that the change in the working shift pattern was necessary because it would result in considerable reduction in cost as contractors would no longer be necessary in the packaging area. It further recorded that the shop steward was asked to explain to members and that Mr Lane would be available the following day to give a further explanation. However, evidence showed that Mr Lane pre-empted the shop steward and met with employees in the packaging department where he told them much the same as was recorded in the note of his meeting with the shop steward. Furthermore, the meeting commenced in the absence of union representatives and shop stewards, and that a shop steward was called in at the request of the workers. At the meeting the proposed shift pattern was explained. The workers raised objections and it was agreed that further meetings would be held on 16 September 1997. There is no indication that a meeting took place on 16 September 1997. On 17 September 1997, however, a meeting was held and a note as prepared by Mr Lones-Field. The first appellant was not present, and only one shop steward as present. He made a report at the meeting that the workers objected to the proposed change. He also raised a number of issues and expressly raised the fact that change involved a change to the contracts of employment. He was told that this could be achieved by agreement.

On 18 September 1997 a further meeting was held with the shop

steward. He was told that a written response was required on or before 29 September 1997. He mentioned at the meeting that the first appellant had no knowledge of the meeting as it had not been contacted. Mr Lane alleged that Mr Lones-Field had spoken to the organizer of first appellant and had sent a facsimile in May 1997 and a copy in September 1997. Mr Lane wanted the matter settled without involvement of first appellant. On 19 September 1997 the new shift patterns were set out in a letter giving an explanation for the reasons for the change. The respondents cited the reasons as: 1 to ensure that the packaging department employees still had jobs for the foreseeable future;

2 to no longer have to use contractors in the packaging area;

3 for workers to work on Saturday and Sunday to ensure the silos did not get full. Appellants contended that in the court a quo the respondent alleged that the reasons for the change were:

1 lack of supervision over night shift;

2 need to reduce overtime and size of day shift; and

3 that it was unfair to those who worked the night shift.

At that meeting the shop steward had allegedly reported that the employees were prepared to work shifts, but not on Saturdays and Sundays. Mr Lane was disappointed with the decision but the respondent would continue with the process. The respondent declared a dispute.

On 29 September 1997 the respondent sent a facsimile to the first appellant, referring to 'numerous consultations and discussions with shop stewards and employees'. The first appellant was now brought in because a dispute had been declared. The facsimile sought to set up a meeting with the first appellant's organizer in October 1997. On 1 October 1997 the first appellant suggested that a meeting be held on 9 October 1997, and the respondent agreed.

On 9 October 1997 the meeting took place. Mr Vera, the first appellant's organizer, was present. He complained that he had no information and little insight into the matter. Appellants contended that Mr Vena was given a copy of the letter setting out the new shift patterns at the meeting, and that he was only seeing it for the first time. It was then agreed that the parties would meet again on 22 October 1997.

On 9 October 1997 the respondent wrote to the first appellant

confirming the meeting to be held on 22 October 1997 and recording that it believed that the first appellant was fully informed of the respondent's proposals.

On 20 October 1997 Kunzmann and Lane met with the workers in the absence of the first appellant to press for the new shift patterns. On 21 October 1997 the first appellant wrote to the respondent objecting to the insistence that it had insight into the proposal. It pointed out that changes to the contract of employment had to be negotiated. It further asked to be provided with the full motivation for the change. The respondent replied on 21 October 1997 and said that the reasons were set out in the document relating to shift patterns. The respondent also recorded that that was a consultation and not a negotiation issue.

On 22 October 1997 a meeting was held. The parties stated their positions and no agreement was reached. They agreed to refer the matter to the Commission for Conciliation, Mediation & Arbitration (CCMA) after 10 November 1997. On 24 October 1997 the dispute was referred to CCMA by respondent. The outcome it sought was that 'the parties reach agreement on the proposed revised shift systems'. After the meeting on 22 October 1997, but before the matter could be heard by the CCMA in November, another dispute arose with regard to shop steward's leave. That dispute was referred to the CCMA by the first appellant. The respondent relied formalistically upon the terms of the recognition agreement to insist that the procedure set out in that agreement be followed. The respondent refused to attend the CCMA hearing and sent a letter setting out its position. Mr Vena then had reference to the recognition agreement, saw its provisions and decided that what was good for the goose was good for the gander. From then on he insisted that the matter proceed under that procedure. On 15 November 1997 Mr Vena wrote a letter to the respondent informing it that the first appellant would not be attending the CCMA hearing and that it wanted a further meeting with the respondent. The respondent refused to have such further meeting.

Both wrote to the CCMA setting out their respective positions. On 21 November 1997 management of the respondent met with the shop stewards to tell them that they would meet again if the CCMA told them to do so, otherwise a certificate of outcome would be issued and there would be no option but to 'implement new shift system as per operational requirements'. On 21 November 1997 the CCMA indicated that it would issue a certificate of outcome stating the dispute to be unresolved. On 24 November 1997 the respondent set out that it had 'exhausted all avenues to resolve the dispute' and contended that it was able to lock out, retrench or maintain the status quo. It wrote to the first appellant requesting that it agree to advisory arbitration. On 24

November 1997 the first appellant complained about the CCMA to senior officials thereof. The first appellant further asked for a meeting to be held on 2 November 1997. The respondent was given a copy of the letter written to senior staff of The CCMA.

On 25 November the respondent wrote to the first appellant refusing to meet with worker representatives. It suggested advisory arbitration. On 28 November 1997 the respondent wrote to the branch secretary of the first appellant indicating that if the first appellant did not agree to advisory arbitration the respondent would commence a retrenchment exercise. In that letter the respondent also called for a meeting in December 1997 and indicated that it wanted to resolve the dispute. On the same day (28 November 1997) the respondent wrote to all the employees indicating that they would be retrenched if they did not agree to a changed shift pattern.

On 3 December 1997 the first appellant sent a facsimile contending that the in-house agreement had not been exhausted - hence worker representatives did not attend the meeting. It asked for a meeting with its members on 9 December 1997 and agreed to meet with the respondent on 10 December 1997. On 4 December 1997 the CCMA issued the certificate that it had mentioned on 21 November 1997. On 5 December 1997 the first appellant challenged the threatened dismissal as being illegal inasmuch as there was a dispute of interest and it did not arise out of the respondent's operational requirements. On 9 December 1997 Mr Vena experienced problems meeting with the members of first appellant. Appellants allege that the respondent was unwilling to allow him to meet during the employees' working hours, and he was not available at another time. He consequently did not meet with them. On the same day, ie 9 December 1997, Mr Lones-Field met individually with each of the affected employees to try and persuade them to agree to the new shift system. On 10 December 1997 a meeting was held with the shop stewards. Mr Vena accordingly did not attend the meeting on 10 December 1997. At that meeting the shop stewards stated that there was still room for movement, and asked for further meetings. The respondent did not agree and indicated that the option was advisory arbitration or retrenchment. However, it agreed to allow Mr Vena to meet with first appellant's members during working hours. On 17 December 1997 the respondent was supposed to hold a meeting, but Mr Vena was not available and therefore the meeting did not take place. Mr Vena indicated that the first appellant was still in disagreement with the manner in which the matter was being dealt with. He further indicated that notice was given of strike action should an occurrence take place that would disadvantage its membership. He then indicated a willingness to meet on 23 December 1997. The respondent wrote to the first appellant on 17 December 1997 recording displeasure that a

meeting was not held on that day and that 23 December 1997 was too late. The respondent had decided that the retrenchments would be effected on 24 December 1997. Also on 17 December 1997,

Mr Kunzmann met with the employees of the packaging department and told them that the new shift system would start on 29 December 1997. He pointed out that the employees were ill advised to reject the proposal.

On 18 December 1997 Mr Lones-Field met with each of the affected employees individually. He asked them to sign a document which indicated that they would work the new shift system. Mr Lones-Field told the employees that if they did not accept the changed shift system they would be dismissed, and that refusal to agree to the new system would be the reason for the dismissal. One of the employees, Mr Dikana, testified that he was told that if he did not agree to the change he would lose his job, his medical aid, housing subsidy - that he would lose everything. On 19 December 1997 Mr Vena wrote to the respondent alleging that the employees had been intimidated during the individual meetings. He contended that in those circumstances he would not meet with the respondent until his return from his annual leave. He indicated that he would not be available until 15 January 1998.

On 22 December 1977 the respondent wrote a letter to the first appellant indicating that the dismissals would become effective on 12 January 1998, and that it was a matter of choice for the employees concerned, ie to accept the change or be dismissed. On 5 January 1998 Mr Lones-Field met with the employees individually and gave them a letter setting out that they had a choice, and extended the deadline to 9 January 1998. On 9 January 1998 the employees were again spoken to individually and given until 15:00 to sign the agreement to work the new shift pattern, failing which they would be dismissed. They were told to leave early on 9 January 1998, but did not do so. On 12 January 1998 some employees turned up for work, but refused to work the new shift system. They were told that they were formally dismissed. They were again told that if they changed their minds they would be reinstated. They then went on a work stoppage.

During January 1998 the respondent served papers seeking an interdict against workers who participated in the work stoppage. The first appellant then called the strike off. The respondent wrote further letters, dated 11 February and 13 February 1998, repeating its offer to reinstate employees who were willing to accept the new shift pattern. The employees insisted on reinstatement on the old shift system. They rejected the new shift system. On 15 April 1998 the respondent restated its position that it would maintain the new shift pattern, but

offered reinstatement without back-pay or benefits, and subject to agreement on the new system. It sought final acceptance or rejection of the offer by midday on 30 April 1998. On 13 May 1998 the appellants (then applicants) delivered their statement of the case. On 18 June 1998 the respondent delivered a statement of defence in which it offered to reinstate the employees on condition that they agreed to work according to the rotating shift system. Another condition was that they should agree to perform weekend work subject to financial adjustment in regard to payments received and periods not worked.

The appellants maintained in the court a quo that they were prepared to work on weekends on condition that they were adequately remunerated. The respondent's offer of reinstatement would not have afforded the applicants substantially the same kind of redress that they were seeking. The appellants were accordingly awarded compensation. The court a quo ruled in part in favour of the appellants. Furthermore the court a quo ordered that:

1 The termination of the employment of four of the individual applicants was procedurally unfair.

2 The respondent was ordered to pay the individual applicants other than the four compensation equal to remuneration they would have earned over a period of ten months, calculated at the rate of each individual applicant's rate of remuneration on the date of their dismissal. 3 The respondent was further ordered to pay the amounts referred to in para 2 within ten days after the handing down of the order.

As the parties had an ongoing relationship no order was made as to costs.

The appellants then applied for leave to appeal against the judgment of the court a quo which was handed down on 5 October 2000. The application was directed at the part of the judgment which dismissed their claim that the dismissals were automatically unfair, and which dismissed the claim for reinstatement. Leave to appeal was granted.

Issues on appeal

In essence the appellants challenged the dismissals of the individual employees on three grounds, namely that the dismissals were automatically unfair; that they were substantively unfair and that they were procedurally unfair.Automatically unfair

Appellants contended that the dismissals were automatically unfair in terms of s 187(1)(c) of the Labour Relations Act 66 of 1995 (the

Act), alleging that the reason for the dismissals was to compel the employees to accept a demand in respect of a matter of mutual interest between the employer and the employees. The matter of mutual interest related to the terms of employment and in particular the proposed change in their working pattern (change in shift system) and to compel them on every second week to work from 16:00 until midnight on Wednesdays and during the day on Saturdays and Sundays. Appellants alleged that the dismissals were automatically unfair because the respondent offered to reinstate them if they agreed to work the new shift system. Respondent maintained that the reason for the dismissals was not to compel the employees to agree to the changed shift system. The respondent contended that it clearly established the necessary operational requirements which resulted in the dismissals, and that the appellants at no stage contested the need for such change.

Substantively unfair

Appellants contended that, in the alternative, if the dismissals were not automatically unfair, they were substantively unfair because although they were purportedly effected on the grounds of the respondent's operational requirements, in truth there were no valid operational requirements justifying the dismissals. Appellants further contended that the respondent had not discharged the onus of proving that the

dismissals were fair.

Procedurally unfair

The court a quo had found that the dismissals were not automatically unfair and not substantively unfair, but nonetheless found that they were procedurally unfair. Hence the court awarded compensation. Appellants however sought reinstatement.

Since reinstatement is not available as a remedy for procedural unfairness the main issue on appeal was therefore whether or not the dismissals were automatically unfair. The other issue was whether or not the dismissals were substantively unfair, as appellants alleged that respondents had not proved a valid operational requirement which justified the dismissals.

The issues raised in casu are similar to those that were raised before the Labour Appeal Court in Fry's Metal (Pty) Ltd v National Union of Metalworkers of SA & others (2003) 24 ILJ 133 (LAC). In the Fry's Metal (Pty) Ltd case, the appellant was involved in the business of smelting and refining lead from secondary materials. Appellant had then contracted a firm of consultants to review its operations and to make recommendations on how to increase productivity. The reason

for contracting the firm of consultants was that the appellant was trying to avoid closing down. After the consultants had submitted the report, the appellant consulted with its employees' union to discuss the report At the meeting the appellant, through its representatives, informed the shop stewards that the purpose of the meeting was:

(a) to give the shop stewards an overview of the status of the appellant;

(b) to present a proposed collective agreement to the shop stewards which sought to address the human resources element of the problems.

It appeared from the minutes of the meeting that the appellant informed the shop stewards 'of the various investigations and/or proposals to address the future of the appellant to make the company viable and also ensuring employment for its employees'. In terms of the proposals the appellant sought to replace the eight-hour three-shift system with a 12-hour two-shift system. The appellant also wanted to withdraw the transport subsidy that it had been giving its employees. It said that this was going to be the consequence of the two-shift system. The shop stewards were given an opportunity to go and study the proposed collective agreement and to respond at the next scheduled meeting. At the next meeting the shop steward pointed out in their responsethat they accepted some of the proposals and rejected others. Appellant alleged in its answering affidavit that the shop stewards rejected the proposed two-shift system 'emphatically and in an inflammatory language' and made no alternative proposals. Two further meetings were held by the parties, and the shop stewards still rejected some of the proposals and accepted others. It appeared that the attitude of the shop stewards was that the appellant's purpose was to force the employees to accept the proposals, that the appellant's intention was to divide the workers and that it was intimidation on the part of the appellant. After the second meeting the management held a caucus meeting, after which the appellant's managing director explained to the shop steward the need to effect the changes in order for the appellant to be efficient. He also emphasized the appellant's commitment to continue operating and creating employment for its employees. Appellant notified the shop stewards in a letter that it had made certain proposals to the union aimed at effecting some changes, including changes to the terms and conditions of employment and that the union had rejected these proposals. Appellant also stated that the effect of the proposed changes was to introduce continuous shifts in the operations of some of the departments. Appellant attached to that letter a document containing all the proposals. It said that about 55 employees would be effected by the proposed changes. It stated further that in the light of this it was proposing that the affected

employees who were prepared to accept the changes be retained in their positions and that those who did not accept the changes 'may be retrenched'. Appellant further stated, inter alia, that in the event of retrenchments, since it was its view that an acceptance by the affected employees of the required changes was a reasonable alternative to retrenchment, it was not expected that the employees who got retrenched would be paid a retrenchment package.

Appellant invited the affected employees and their trade union(s) to convey their views and representations on any issues referred to in its letter as soon as possible, thereby scheduling a further meeting between itself and the employees' representatives. At that meeting the shop stewards asked the appellant's management whether it was their intention to retrench employees. The management confirmed that to be the case. The shop stewards accused the management of using retrenchment as a threat against the workers, and the management responded by saying that they were also feeling threatened by the workforce 'not wanting to change to make the company more viable'. The meeting ended with the shop stewards declaring a dispute.

The union then addressed a letter to the appellant asking whether it was contemplating a new shift system or embarking upon retrenchments. The appellant's letter of response stated, inter alia, that 'because the consultation process has not produced any other viable alternatives to retrenchment and employees have indicated their rejection of the alternative working arrangement, the appellant has been left with no choice but to contemplate retrenchment'.

The appellant then distributed notices of retrenchment to workers. The workers rejected the notices and six days later, workers forcibly removed two members of management from appellant's premises to 'convey a sense to the managers of what it was like to be dismissed'. The workers even defied an order of the Labour Court to let them return to the premises.

A meeting between the appellant's management and its attorneys on the one hand, and the workers was held. No agreement was reached at that meeting. Eight days later the appellant gave the affected workers letters of dismissal. The respondent then launched an urgent application in the Labour Court for an order, inter alia, interdicting the appellant from dismissing the further respondents for their failure to accede to the appellant's demands with regard to the implementation of a two-shift system and the withdrawal of a transport subsidy in the context of proposed changes to terms and conditions of employment; and interdicting the appellant from implementing the proposed changes. The respondents were successful before the Labour Court. The appeal to the Labour Appeal Court was upheld with costs.

Section 187(1)(c) of the Labour Relations Act reads: 'A dismissal is automatically unfair if the reason for the dismissal is

(c) to compel the employee to accept a demand in respect of any matter of mutual interest between the employer and employee.'

In the Fry's Metal case the Labour Appeal Court held that the respondents failed to substantiate the submission that the dismissals constituted 'a step to compel a demand, and, if unimplemented, such dismissals would be automatically unfair in terms of s 187(1)(c) . Furthermore the court held, an employer is impliedly precluded by s 187(1)(c) from dismissing an employee or a group of employees if the 'reason' for doing so is to compel him or her or them to accept a demand by the employer in respect of any matter of mutual interest between the employer and the employee. The question which arises is when it can be said that, in dismissing an employee or a group of employees, the employer is exercising his right to dismiss for operational requirements as opposed to an employer dismissing employees in order to compel them to agree to a demand on a matter of mutual interest which is contrary to the provisions of s 187(1)(c) .

The Labour Appeal Court further said that the historical context to s 187(1)(c) is that the now repealed Labour Relations Act 28 of 1956 included in its definition of a lock-out the - 'termination by the employer of the contracts of employment of any body or number of persons in his employ if the purpose of that termination is to induce or compel any persons who are or have been in his employ or in the employment of other persons - (1) to agree to or comply with any demands or proposals concerning terms or conditions of employment'.

When one has regard to the wording of s 187(1)(c) and that of the relevant portions of the definition of lock-out in s 1 of the 1956 Act, the court said, one is left in no doubt that s 187(1)(c) is based on the definition of 'lock-out' in the 1956 Act. The court held further that the purpose of a dismissal for operational requirements in a case like Fry's Metal is to get rid of employees who do not meet the business requirements of the employer so that new employees who will meet the business requirements of the employer can be employed. See also TAWU & others v Natal Co-operative Timber (Pty) Ltd (1992) 13 ILJ 1154 (D). The court held that there were a number of areas in the affidavits as well as in the correspondence exchanged between the parties prior to the litigation that supported the appellant's contention that the dismissals were not sought to be effected in order to compel the respondents to accept the proposed changes but were sought to be effected because the respondents' contracts of employment were no longer suitable for the appellant's operational requirements, or because the respondents were not prepared to accept the proposed

changes. The court pointed out that in one of the letters by the appellant to the respondents, the former said that employees who did not accept the proposed changes 'may be retrenched', it did not say that in dismissing the employees the appellant would be seeking to compel them to accept the changes. The court also referred to another letter in which the appellant explained to the workers that it had been told by the union that the employees were not prepared to accept the proposed changes. In that letter the appellant specifically stated that 'your employment with the appellant is to be terminated for reason of its operational requirements' and told them they would be given time off to attend job interviews when necessary. The appellant also informed the workers of the date on which they had to submit acceptance of the proposed changes, adding that 'after that date, even if you accept to work in terms of the required working hours, the appellant does not guarantee that you will be reinstated'. In the notice that the appellant wrote to the workers, it stated that 'because you have rejected the new two-shift system operationally required by the appellant, you have been given notice of your retrenchment and your employment will terminate on 20 October 2000'. The notice stated further: 'If you have decided not to accept the shift system, then we confirm that your services will no loner be required.' This, the court said, was a final dismissal and it could not be interpreted as a dismissal which sought to compel employees to accept the proposed changes, as contemplated in s 187(1)(c) of the Labour Relations Act. The court therefore upheld the appeal and the respondents were ordered to pay the costs.

Applicable law In the present case, the law to be applied is as laid down by the Labour Appeal Court in the Fry's Metal case. Applying the law to the facts of the present case, does an employer have a right to dismiss employees who are not prepared to agree to certain changes being effected to their terms and conditions of employment when such changes are necessary for the viability of the employer's business or to improve efficiency in the business; if an employer has such a right, is it implicit in s 187(1)(c) of the Labour Relations Act 66 of 1995; does the exercise of such right by the employer not constitute unfair dismissal?

Section 189 of the Labour Relations Act sets out the procedure to be followed by an employer before dismissing an employee(s) for reasons based on operational requirements. Section 189 reads:

'(1) When an employer contemplates dismissing one or more employees for reasons based on the employer's operational requirements, the employer must consult -

(a) any person whom the employer is required to consult in terms of a collective agreement;

(b) if there is no collective agreement that requires consultation, a workplace forum, if the employees likely to be affected by the proposed dismissals are employed in a workplace in respect of which there is a workplace forum;

(c) if there is no workplace forum in the workplace in which the employees likely to be affected by the proposed dismissals are employed, any registered trade union whose members are likely to be affected by the proposed dismissals;

(d) if there is no trade union, the employees likely to be affected by the proposed dismissals or their representatives nominated for that purpose.'

It follows therefore that if an employer has satisfied the provisions of s 189(1) and the dispute is still not resolved, then he has a right to dismiss the affected employees as he is left with no alternative. The necessity to effect changes in order for a business to be more viable or to improve efficiency therein falls within the ambit of operational requirements. It is evident in case that the respondent complied with the provisions of s 189(1). Furthermore, the respondent succeeded in proving that the reason for the dismissal of its individual employees was based on its operational requirements, as required by s 188(1)(a) (ii). Section 188(1)(a) (ii) states that: 'A dismissal that is not automatically unfair, is unfair if the employer fails to prove that the reason for the dismissal is a fair reason based on the employer's operational requirements.' The right of the employer referred to above is therefore implicit in s 187(1)(c) of the Labour Relations Act, since in terms of s 188 such dismissal is not automatically unfair. If the employer proves that the reasons for dismissing its employees are for operational requirements as required by s 188(1)(a) (ii), then the third question should be answered in the affirmative, ie the exercise of such right does not constitute unfair dismissal.

Findings

In the light of the above, the dismissals of the individual employees by the respondent were not automatically unfair. The appellants have failed to prove to the court that the dismissals were automatically unfair. The respondent continuously attempted to bargain with the appellants, and in all instances where meetings scheduled for this purpose did not take place, it was because of the appellants' or their representatives' failure to attend. The respondent has accordingly succeeded in proving to the court that the reason for the dismissals was based on its operational requirements, as required by the Labour Relations Act 66 of 1995.

In the premises I would dismiss the appeal with costs.

Appellants' Attorneys: Chennels Albertyn & Tanner .

Respondent's Attorneys: Kaplan Blumberg .