Automated Summary
Key Facts
The case involves WBHO Construction Proprietary Limited (applicant) challenging the fairness of Masangwandile Mdayi's (third respondent) dismissal. The employee was retrenched in 2020 via a mutual separation agreement that the court found to be a disguised retrenchment document. The employer failed to follow section 189 of the LRA's retrenchment procedures, leading to a finding of substantively and procedurally unfair dismissal. The Labour Court dismissed the review application and ordered the employer to pay the employee's costs.
Issues
- Whether the first respondent's finding that there was no procedure followed for the third respondent's retrenchment was reasonable under the Labour Relations Act (LRA).
- Whether an employer can circumvent the retrenchment procedure in section 189 of the LRA by signing a retrenchment document disguised as a mutual separation agreement.
- Whether the first respondent's decision that the third respondent was unfairly retrenched was irregular, given the existence of a mutual separation agreement.
Holdings
- The application to review and set aside the first respondent's arbitration award dated 28 May 2021 is dismissed. The court concluded that the applicant failed to establish any competent grounds for review and that the arbitration award's findings were reasonable.
- The applicant is ordered to pay the third respondent's costs, including reasonable disbursements incurred after the withdrawal of his attorneys. The court found the applicant's conduct in circumventing retrenchment procedures unjustifiable and awarded costs to promote fairness.
Remedies
- The application to review and set aside the first respondent's arbitration award dated 28 May 2021 is dismissed.
- The applicant is ordered to pay the third respondent's costs, including any reasonable disbursements incurred by the third respondent following the withdrawal of the third respondent's erstwhile attorneys.
Legal Principles
- The court exercised discretion to award costs against the applicant due to their conduct in circumventing retrenchment procedures. Fairness and the constitutional right to a fair hearing underpinned the costs order, favoring the third respondent despite the general rule that costs do not follow the result in labour matters.
- The court emphasized that the substance of the mutual separation agreement, which contained retrenchment terms, must prevail over its formal label. The agreement was found to be a retrenchment document disguised as mutual separation, requiring compliance with section 189 of the LRA.
Precedent Name
- Long v South African Breweries (Pty) Ltd and Others
- Bester v Small Enterprise Finance Agency SOC Ltd and Others
- Universal Church of the Kingdom of God v Myeni and Others
Cited Statute
- Constitution of the Republic of South Africa
- Labour Relations Act 66 of 1995
Judge Name
S.S Tebeile
Passage Text
- This document (signed by both parties) is titled mutual separation agreement however, its contents are all about retrenchment and the benefits of a retrenchment package. Even at the last page of the document, it is confirmed that the Applicant was retrenched.
- In my view, the applicant cannot use a mutual separation agreement to circumvent the procedure set out in section 189 of the LRA, and therefore, the first respondent's decision that the procedure for retrenchment was not followed and that the dismissal was procedurally and substantively unfair, is one that a reasonable decision maker would have arrived at.
- In the absence of compliance with a procedure set out in section 189 of the LRA, the first respondent correctly found that the applicant was pushed or dismissed. The first respondent's decision is that which a reasonable commissioner would have come to.