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Following further written questions raised by the applicant, Nkuna answered in writing on 9 December 2014, and explained why the respondent believed psychometric tests to be appropriate as part of the selection process. Nkuna however specifically said that should any of these tests reveal deficiencies, this would not be used as a basis for disqualification of any employee, but further training and skilling of employees will be provided, to avoid any retrenchment. In short, what the respondent meant was that if it should ever be considered that there were deficiencies on the part of the applicant with regard to any of these two new positions she may apply for, this would not be used to disqualify her for the position applied for, but rather be used as basis to further skill and train her.
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The next consultation convened on 10 December 2014. Again, the applicant attended script in hand. Nkuna opened by explaining exactly why the respondent believed the psychometric test would be appropriate, so as to fully inform the applicant as to this purpose when she would apply for a position, going forward. Nkuna explained the psychometric test was part of the ‘development plan’ relating to employees, going forward, as well. Nkuna then asked the applicant pertinently whether she is refusing to apply for the positions.
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The applicant once again did not engage the respondent in actual consultation. She once again simply read her script. The script read more like a legal argument as to why the process was unfair, and had little to do with consulting with the respondent with the view to reach consensus. It serves little purpose to repeat all these submissions, which are mostly incompatible with the nature of a process of consultation. The applicant maintained her view and argument that the brand manager position is a demotion, and that she simply remain in her position of marketing manager to be amended by agreement with her. The applicant even goes so far as to quote case law as to why she would be entitled to severance pay.
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But then, and of importance, the applicant makes it clear that she will not apply for the brand manager position as she considers it to be a demotion. The applicant also makes it clear that she will not apply for the marketing manager position because she contends it is not fundamentally different from her existing position, no one else met the requirements for the position, and she was willing to ‘amend’ her existing position. The applicant finally made it clear that she would not apply for any other positions. The applicant then said she was willing to engage on a voluntary exit package. This was the same position the applicant adopted form the start of the process.
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Nkuna answered by explaining why the brand manager position was not a demotion and in fact a position on the same grade. But what Nkuna further tried to explain to the applicant was that no one was forcing her to apply for brand manager position, and she could apply for any one of the two positions as she wished, or even both. Nkuna made it clear that the applicant however had to apply. Ledwaba explained that if the applicant applied for the brand manager position, her grade, salary and benefits would be the same as she currently enjoyed. Both Ledwaba and Nkuna then again sought to explain in detail why it was important and necessary to a fair process that the applicant must apply for the marketing manager position if she wanted it. The applicant remained firm that she would not apply for any of the two positions, for the reasons she had given, and in particular with regard to the marketing manager position, because she believed she did not have to apply. Despite fairly lengthy discussion to and fro on these issues on 10 December 2014, an impasse arose.
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The entire situation then came to the attention of the respondent’s managing director, Nicky Newton-King (‘Newton-King’). Despite having no involvement in the process, Newton-King called the applicant to a meeting on 11 December 2014 to discuss the situation, as there was no intention on the part of the respondent to have to retrench the applicant. Newton-King tried to assure the applicant that there was no risk to the applicant to just participate in the process and apply for the position she wanted. Newton-King also assured the applicant that there was no reason to believe that her application would have any other outcome than a positive outcome, as the applicant was a valuable employee the respondent would like to retain. The applicant conceded in evidence that she believed this approach from Newton-King was genuine, and she left the meeting to think about what she had been told.
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Inexplicably, and on 12 December 2014, the applicant sent an e-mail to Newton-King, simply falling back on her earlier position. The applicant raised the same arguments she raised from the outset. She was not willing to give an inch, throughout. The applicant copied the human resources director, Njabulo Mashigo (‘Mashigo’) on the e-mail.
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Mashigo answered the applicant on 12 December 2014. He expressed his concern that the applicant was not consulting in a bona fide manner but rather presenting legal argument drafted by a legal representative. Mashigo confirmed that it had been explained in detail to the applicant why the two new positions were different from her former position, which was redundant. Mashigo further confirmed that it had been explained in detail to the applicant why she needed to participate in the process by applying for a position. Mashigo stated that the applicant was capable of fulfilling both the marketing manager and branding manager positions, and the interview process was there to determine which she was most suited to and what was needed to develop her (if needed). But of importance is that Mashigo then made a concession to try and resolve the matter with the applicant, considering the impasse that had been reached as referred to above. Whilst Mashigo reiterated the respondent’s view that the applicant needed to apply and be interviewed, Mashigo nonetheless stated that the applicant would be placed, without application or interview, in the brand manager position.
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Significantly, it was explained why the applicant was being placed in the brand manager position. The fact is that in the last two years, the applicant devoted most of her time and effort to the brand discipline and she excelled at it. She had a very current and proven track record in this regard. Ledwaba testified that from his interaction with the applicant over the last year, he was convinced that brand manager was most suited to the applicant. In simple terms, the respondent considered placement of the applicant in the brand manager position as the most viable, where it came to unilateral placement. Mashigo assured the applicant that brand manager was not a demotion. The applicant was given time to consider her position until January 2015, when she would then be placed in the brand manager position. But even in these circumstances, Mashigo still made it clear to the applicant that if she wanted the marketing manager role, all she needed to do was apply, and be interviewed. The applicant was asked to convey her intentions.
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The applicant responded on 19 December 2014. Needless to say, nothing changed. She adopted the same position, and raised the same arguments as before. However, and this correspondence, the applicant intimated that by placing the applicant in the brand manager position, the respondent was ‘driving’ at a specific outcome. The applicant proceeded to try and discredit the scope of the envisaged band manager position. But, and worse still, despite the respondent making it clear that placing her in the brand manager position without application or interview was a concession aimed at resolving the impasse, the applicant then accuses it of inconsistency in its own process. The applicant concluded her correspondence by refusing to accept the brand manager position, refusing to apply for the marketing manager position, and leaving it up to the respondent to advise on the ‘next steps’.
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Despite the applicant’s adopted position, Mashigo tried to give it one last chance, and wrote to the applicant again on 20 December 2014. Mashigo explained that what he was concerned about is that it would seem in the consultations that the applicant understood what was being conveyed to her, but would then return with correspondence that displayed a mind closed to debate, discussion or persuasion. Mashigo pointed out that the applicant adopted a fixed position from the outset not open to any persuasion or change. Mashigo confirmed the applicant’s former position was redundant, and she could apply for, and be interviewed, for either of the two new roles, but refused.
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Mashigo made it clear that placing the applicant in the brand manager position was what the respondent considered most suitable, as a compromise, and to resolve the impasse. Mashigo confirmed the brand manager would not be a demotion and the applicant would have the same salary, benefits, grade and status as before. Mashigo confirmed that if the applicant wanted the marketing manager position, she needed to apply and be interviewed. Mashigo then drew the line in the sand so to speak. He said that when the applicant came back from leave on 9 January 2015, she had one of two options. She could either start work as brand manager, or she could apply for marketing manager. If the applicant did not accept one of these two options, she would face retrenchment without severance.
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In line with this correspondence from Mashigo, the final consultation with the applicant then convened on 9 January 2015. This was the one and only consultation the applicant came to without a script. The respondent recapped the process to date. It was confirmed by the applicant that she still refused to accept the brand manager position, and refused to apply for the marketing manager position. The applicant was then presented with a letter of termination of employment, dated 9 January 2015, which was discussed with her. It was discussed with her why her employment was being terminated and what payments she would receive on termination of employment. It was explained to her why she would not be paid severance pay. The applicant’s effective date of termination of employment was 28 February 2015.
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The applicant was not required to work out her notice, and was paid in lieu of notice. The applicant was not paid severance pay. The applicant referred an unfair dismissal dispute to the CCMA on 6 February 2015. An entitlement to severance pay dispute followed on 2 March 2015. Conciliation failed (respectively on 27 February and 7 April 2015), and both these disputes were then referred to the Labour Court, by the applicant, as aforesaid.
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In her Labour Court statement of case, the applicant challenged the fairness of her dismissal as being both substantively and procedurally unfair and demanded reinstatement as marketing manager alternatively maximum compensation. She also demanded the payment of severance pay. I will now deal with each of these elements of the applicant’s case, next.
Was the dismissal substantively unfair?
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The issue of whether a dismissal for operational requirements is substantively fair is decided by way of answering what is called a general question and a specific question. As said in Chemical Workers Industrial Union and Others v Latex Surgical Products (Pty) Ltd1:
‘Whether or not there was a fair reason for the dismissal of the individual appellants relates to a general question and a specific question. The general question is whether or not there was a fair reason for the dismissal of any employees. The specific one is whether there was a fair reason for the dismissal of the specific employees who were dismissed, which in this case, happened to be the individual appellants. The question of a fair reason to dismiss the specific employees who were dismissed goes to the question of the basis upon which they were selected for dismissal whereas the other question relates to whether or not there was a reason to dismiss any employees in the first place.’
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In answering the general question first, it was apparent from the evidence of both parties in Court that the applicant never took issue with what can be said to be the rationale of the restructuring. It was accepted that the respondent was entitled to restructure in pursuit of the objectives as set out above, and that the splitting of the position of marketing manager, which position encapsulated both marketing and branding, into separate marketing manager and branding manager positions, made business sense and was operationally justified. The applicant confirmed in the consultations what she supported this new structure, and the objectives the respondent sought to achieve in terms thereof. Therefore, there exists a proper business rationale in this instance. As said Kotze v Rebel Discount Liquor Group (Pty) Ltd2:
‘…What we have to do is to decide whether the respondent's decision to retrench was informed and is justified by a proper and valid commercial or business rationale. If it is, then that is the end of the enquiry even if it might not have been the best under the circumstances. …’
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Hindsight confirms the veracity in the respondent’s restructuring. It managed, in the new structure, to secure some 25 000 new customers against a target of 35 000 for the first year. The position of brand manager expanded to include a further assistant to the one originally envisaged. Both positions operate at proper efficiency. There would therefore be little scope for interference in what the respondent thus sought to do, and achieve. The fact is that the general question must be answered in favour of the respondent.
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This then leaves the specific question, being whether there was a proper reason to retrench the applicant, specifically. The crux of the case of the applicant, where it came to substantive fairness, was that her position of marketing manager had not become redundant. The applicant’s case was that the new marketing manager position was substantially the same position she had been occupying, and therefore there was no obligation on her to apply for what was not a new position. According to the applicant, all the respondent needed to do was keep her in her existing position, and if the respondent wanted to make changes to that position, it should negotiate with her with the view of reaching agreement on this. As to the brand manager position, the applicant’s case is that this position would be a demotion for her and thus should not feature in assessing whether her dismissal was fair.
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The respondent case, in simple terms, was that the position of marketing manager the applicant had occupied ceased to exist, and was thus redundant. What was formerly one position was now two distinct and separate new positions that did not exist before. The respondent accepted that the applicant would be competent to fill either of these positions, which positions were of the same grade, status, salary and benefits. There were just now two different disciplines associated with each position. According to the respondent, when the applicant consistently refused to either apply for or accept any of these two positions, which would have avoided her retrenchment, she in effect selected herself for retrenchment.
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I will commence deciding these cases by the parties by way of answering the core question – was the applicant’s existing position of marketing manager rendered redundant in the new structure? In other words, was the new marketing manager position substantially the same as the old marketing manager position? In the light of the reasons to follow, I have little hesitation in concluding that the applicant’s existing marketing manager position was indeed redundant in the new structure.
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Firstly, and even on the applicant’s own version, her position of marketing manager as it existed consisted of, so to speak, 75% marketing and 25% brand in 2013. And in 2014, it was 55% brand and 45% marketing. I accept that the additional brand duties in 2014 coincided with the new brand roll out, but considering what the respondent had in mind where it came to brand, going forward, brand would be a significant component of marketing in general as a standalone function. I believe that if the respondent did not split the position of marketing and branding, and then implemented the new business strategy, the applicant would have spent close on equal time in her position attending to the respective disciplines of marketing and branding. As I have touched on above, hindsight confirms this to be more or less the case.
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In any event, if at least 25% of a position and its responsibilities are stripped out and moved to another position, it simply cannot be said that what remains is the same position. In short, a marketing manager position attending to marketing and branding is not the same as a marketing manager position doing only marketing, especially considering that branding is a justified discipline on its own. Logic and common sense dictates this kind of conclusion. The fact that the applicant could not appreciate this, despite extensive discussion and explanation, is disturbing. It in fact shows how closed her mind was to any scenario that was not in line with her own subjective views. It has to follow that the new marketing manager position, on this basis alone, is just not the same as the applicant’s existing marketing manager’s position.
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What the applicant did in the course of the consultation process was to take the position profile of the new marketing manager position she was provided with by the respondent, and compare it to what she was doing in her existing position. Based on this comparison, she then sought to argue that the new position profile contained virtually exactly the same functions as her current position. The problem with this comparison is that it completely misses the point, as Ledwaba was at pains to try and explain to the applicant.
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In fact, a simple example can be found in the increase in the budget. Ledwaba explained that to manage a budget of R600 000 is not the same as managing a budget of R6 million, which is what the new position came with. I tend to agree. Clearly there would be more responsibility in managing such a drastically increased budget, as well an increased scope in spending which must be managed. This is different to what it was before. In simple terms, by way of comparison, it can hardly be said that managing a corner shop is the same as managing a massive retail supermarket.
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I accept that at the level of basic description, for want of better terminology, the functions of the applicant’s existing position and the new marketing manager position may be quite comparable. But yet again, such an approach misses the point. Take for example what Ledwaba referred to as retail marketing. According to Ledwaba, the manner in which retail marketing took place under the applicant’s existing position was by way of events and education. Now the emphasis would be on direct retail marketing, channel marketing and mass advertising, with the objective of directly leading to the procurement of new customers.
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Although, in general terms, both these instances can broadly be described as retail marketing, it is not the same. This same kind of situation would also apply to the other marketing functions in the new marketing manager position. In the end, and considering that which Ledwaba fully explained, where it came to new strategy and objectives of the respondent where it came to marketing, it is in my view common sense that the ‘job’ the applicant did and the ‘job’ associated with the new position are different to the extent of making it a different position.
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Ledwaba testified as to how the new marketing manager and the existing marketing manager positions differed, in particular in focus, scope, strategy and deliverables. This evidence was not really challenged, and fully corresponded with the documentary evidence and what was sought to be conveyed to the applicant in the consultations. The applicant’s adopted position where it came to comparing the two positions was simply out of touch with reality, and basically her own personal and subjective opinions.
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Accordingly, and based on the removal of the brand discipline from the existing marketing manager position, as coupled with the addition of duties and the change in focus, scope, strategy and deliverables to the new marketing manager position, I have little hesitation in accepting that the new marketing manager position was not the same position as that occupied by the applicant before the restructuring. As touched on above, the applicant actually agreed with the new business strategy of the respondent and the changes to its organizational structure as a result, and in particular, the splitting of the position.
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I am satisfied that the applicant’s position she occupied was de facto redundant. One can do little better than to draw a comparison with the following dictum from the judgment in Van Rooyen and Others v Blue Financial Services (SA) (Pty) Ltd3 where it was held as follows:
‘… It is clear though that the regional managers would, in the restructured organization, be required to undertake additional responsibilities in relation to the expanded product lines and that the nature of their function would change. On balance, I am satisfied that the respondent has established that the difference in job content between the old and the new profiles of the regional managers' positions was sufficiently significant to justify the requirement that the applicants be assessed for their suitability for appointment to the new positions. Indeed, this appears to be the approach adopted by the applicants themselves in their memorandum addressed to Klopper on 28 December 2007 in which they appear to accept that the new profile developed by the respondent was technically exact and complete, and that the additional responsibilities that regional managers would be required to assume had the consequence of an appreciable difference in job content. … In short, I am satisfied that the respondent has established a fair commercial rationale for its decision to restructure its business operations and that the change rendered the applicants redundant, at least in the sense that its decision to assess the applicants' suitability for the restructured posts was fair in the circumstances.’
The comparisons to the matter in casu are apparent.
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In Plaaslike Oorgangsraad van Bronkhorstspruit v Senekal4 the Court accepted that redundancy can result from a reorganization of a business. Similarly, and in Broll Property Group (Pty) Ltd v Du Pont and Others5 the Court held that redundancy of job included the following:
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