IN THE
LABOUR COURT OF LESOTHO

LC/8/05

HELD AT
MASERU

IN THE
MATTER BETWEEN

MOEKETSI
RALIENGOANE APPLICANT

AND

ATTORNEY GENERAL 1^ST
RESPONDENT

PRINCIPAL SECRETARY (MINISTRY

OF AGRICULTURE AND FOOD

SECURITY) 2^ND
RESPONDENT

THE MINISTRY OF AGRICULTURE

AND FOOD SECURITY 3^RD
RESPONDENT

JUDGMENT

Dates
of hearing : 05/10/06, 10/10/06

Retrenchment
– Employee must be consulted about the pending retrenchment –
Notice – Employee must be given reasonable notice
of the
retrenchment – Retrenchment procedurally unfair – Substantive
fairness – Decision to retrench is a managerial prerogative
– The
function of the court is to oversee the fairness of the process and
not to second guess the economic rationale of the decision
–
Termination substantively fair.

1. 
   INTRODUCTION

   
   

1. 
   The applicant filed this application following failure
   of the Directorate of Disputes Prevention and Resolution (DDPR) to
   reconcile
   the parties. The applicant was issued with a certificate
   referring the dispute for adjudication by this court in terms of

   section 227(5) of the Labour Code (Amendment) Act 2000 (the Act) on
   the 12^th January
   2005. On the 15^th
   February 2005 applicant filed this application claiming that:

   
   

1. 
   his purported dismissal be set aside as it is contrary
   to the provisions of the Code;

   
   

2. 
   he be paid salary from date of purported dismissal to
   the date of judgment.

   
   

2. 
   STATEMENT OF CASE

   
   

1. 
   It is common cause that the applicant was employed by
   the third respondent as a temporary month to month employee on the
   17/08/90.
   It is also common cause that applicant’s employment
   was terminated on the 1^st
   February 2004.

   
   

2. 
   It is again common cause that the letter terminating
   the applicant’s services was dated 22/01/04, but it was only
   served and
   received by the applicant on the 4^th
   February 2004. This means that applicant’s employment
   effectively terminated on the 4^th
   February when he received his letter of termination.

   
   

3. 
   The letter of termination which is annexed to the
   Originating Application as “MR2” read in part as follows:

   
   

“The
Government of Lesotho has decided to terminate appointments of all
public servants who are employed on temporary month to month
terms
and are over Fifty-five years (55) of age. You will consequently be
affected by this decision as you fall within the criteria
here above
specified as you will be Fifty-five (55) on the 02/02/04.”

4. 
   Following receipt of this letter, the applicant lodged
   a complaint with his union which took up the issue with the 2^nd
   respondent specifically demanding that he be reinstated. The 2^nd
   respondent’s response was that the applicant had been terminated
   in accordance with Ministry of Public Service Circular Savingram,

   the spirit of which was and still was, to implement Cabinet
   decision of terminating the service of all Government employees
   who
   have attained the age of fifty-five years. She went further to
   state that on that basis applicant would not be reinstated
   as the
   union had requested.

   
   

5. 
   On the 23^rd
   March 2004 the applicant referred the dispute to the DDPR. On the
   19^th May 2004,
   the DDPR per Arbitrator Malebanye referred the dispute to this
   court without stating why she was of the opinion that
   the dispute
   could not be determined by arbitration if conciliation had failed.

   
   

6. 
   On the 3^rd
   June 2004, applicant filed an Originating Application in this
   court, under Case No. LC30/04. On the 9^th
   November 2004, this court referred the matter back to the DDPR so
   that the reasons for its referral to this court could be
   clarified.
   On the 12^th
   January 2005 Arbitrator Malebanye furnished brief reasons for
   referral of the dispute for adjudication. In her reasons she

   stated that the reason for applicant’s termination was stated by
   the respondents as “restructuring of government ministries.”

   This means that the termination of applicant’s contract is for
   operational reasons.

   
   

7. 
   On the 15^th
   February 2005 the applicant reissued the Originating Application
   under a different case number even though the grounds for
   relief
   remained exactly the same.

   
   

3. 
   APPLICANT’S CASE

   
   

1. 
   The applicant is seeking relief on the ground that the
   termination of his contract is both substantively and procedurally
   unfair.

   
   

2. 
   Substantively applicant averred that the termination
   of his contract was unfair because as a temporary month to month
   employee
   he was not subject to the 55 years compulsory retirement
   age.

   
   

3. 
   He testified further that at the time that he was
   employed he was told that as a non-pensionable employee he had no
   official
   retirement age and that he would remain in employment
   until such time that his condition of health would no longer permit
   him
   to continue to work.

   
   

4. 
   Applicant referred to paragraph 8 of his contract of
   employment (Annexure “MR1” to the Originating Application)
   which provides
   that:

   
   

“in
other respects you will be governed by Employment Act 1967 (now
Labour Code Order 1992) and other regulations in force from time
to
time.”

5. 
   Procedurally; the applicant contended that the
   respondents did not follow the established procedures for
   retrenchment. In particular
   he averred that he was not consulted
   about the pending retrenchment.

   
   

6. 
   Applicant averred further that the respondent failed
   to give him proper notice of termination in terms of the law and
   the contract
   between the parties namely; “MR1”.

   
   

4. 
   PROCEDURAL FAIRNESS

   
   

1. 
   Brassey et al, The New Labour Law at p.292 avers that
   “the principle that consultation must take place prior to the
   decision
   to retrench is fundamental.” See also Labour
   Commissioner .v. CGM Industrial (Pty) Ltd LC70/04 (unreported).

   
   

2. 
   In the case of Refiloe Mokhisa and 7 others .v.
   Lesotho College of Education LC59/05 (unreported) Khabo DP had this
   to say at
   p.9 of the typed judgment:

   
   

“The
virtue of consultation cannot be over emphasized. Consultation gives
the affected employees an opportunity to understand fully
the
rationale behind their likely dismissals and to express views prior
to the final decision to retrench being taken by management.
Its
main objective is to avoid retrenchment altogether and where it
appears inevitable as in respondent’s case, mitigate or
minimize
its consequences, what is often referred to as soft-landing.”

3. 
   In other respects consultation has been said to fulfil
   the sacred principle of audi alteram partem
   in as much as it enables those who are to be affected the
   opportunity to be heard on the proposed retrenchment. (See NUMSA

   .v. Atlantis Diesel Engines Ltd. (1993) ILJ 642 (LAC) and Mathapelo
   Tlahali & Another .v. Mochachos Chicken Villages LC15/02

   (unreported).

   
   

4. 
   With regard to notice Article 7 of the Termination of
   Employment Recommendation No. 119 of 1982, the Convention for which
   Lesotho
   has ratified provides that:

   
   

“A
worker whose employment is to be terminated should be entitled to a
reasonable period of notice or compensation in lieu thereof.”

5. 
   Article 5 of applicant’s contract of employment
   (“MR1”) provides that the contract may be terminated “…. By
   one month’s
   notice on either side….” Section 63 of the Code
   provides that in the case of contracts without reference to limit
   of time,
   which applicant’s contract was, such contracts may be
   terminated on one month’s notice or payment of a month’s salary

   in lieu thereof. Viz. sec. 64 of the Code.

   
   

6. 
   There can be no argument that the termination of
   applicant’s contract failed to comply with the above standards.
   The notice
   of termination came two days after the intended last day
   of employment and it was with immediate effect. No consultation
   with
   the applicant was made to warn and prepare him for the
   impending exercise i.e. retrenchment on account of old age.

   
   

7. 
   Counsel for the respondents conceded that there were
   procedural improprieties as outlined above. Counsel however picked
   up
   the point which arose under cross examination where the
   applicant conceded that he had known since 2001, when the circular

   in terms of which he was terminated was issued that employees who
   have attained 55 years of age have to stop working.

   
   

8. 
   Granted applicant made such a concession. However,
   applicant made it clear that as far as he was concerned that
   circular was
   not to apply to the likes of him namely;
   non-pensionable employees. He believed that as people who are
   governed by the Labour
   Code which prescribes no retirement age they
   would not be retired in terms of the said circular. This shows
   that the Ministry
   had even more onerous task to consult with the
   employees in order to clear misconceptions such as those held by
   the applicant.

   
   

5. 
   SUBSTANTIVE FAIRNESS

   
   

1. 
   We have already shown that the applicant laboured
   under misconceptions, inter alia, that because he was subject to
   the regime
   of the Employment Act he could work until such time that
   he himself felt that his health could no longer allow him to work.

   
   

2. 
   Retrenchment is a managerial prerogative. The
   decision whether to retrench is made by the employer upon
   consideration of economic
   or structural requirements of the
   organisation. As a general rule the courts would not
   “second-guess” the commercial and
   business efficacy of the
   employer’s decision to retrench. The function of the courts is
   to oversee the process that it has
   been carried out fairly in
   accordance with the law and the guidelines governing retrenchments.
   (See Mamabolo & Others
   .v. Manchu Consulting cc (1999) 20 ILJ
   1826, Kotze .v. Rebel Discount Liquor Group (Pty) Ltd (2000) 21 ILJ
   129, Tseliso Shelane
   .v. Mohale Dam Contractors LC25/03
   (unreported)).

   
   

3. 
   The decision to retrench having been made and
   requirements of fairness and legality having been observed, that
   would normally
   be the end of the story; unless it can be shown that
   the decision to retrench was not genuine and that it was merely a
   sham.
   As John Grogan puts it in his book Workplace Law 2003, Juta
   & Co. p.199

   
   

“A
decision to retrench could be exposed as a sham if, for example, the
dismissed employee is immediately replaced with another in
the same
position.”

4. 
   In hoc casu the applicant was asked several times in
   chief as well as under cross-examination whether new people were
   engaged
   after his retirement. He answered in the affirmative.
   When he was asked the age of those people in relation to his own,
   he
   honestly replied that they were young people.

   
   

5. 
   It seems to this court therefore that the second
   respondent’s decision to retrench the applicant for the reason
   connected
   with his age cannot be faulted. That was their
   organizational structural requirement the merits of which no court
   is qualified
   to delve into. Accordingly the substantive fairness
   of applicant’s termination cannot be brought into question.

   
   

6. 
   AWARD

   
   

1. 
   As pointed out in paragraph 4.7 above, counsel for the
   respondents correctly conceded that there were procedural
   improprieties
   in implementing the restructuring which necessitated
   that the applicant be retired. Again counsel for the respondents
   correctly
   disputed that there was any substantive unfairness in the
   termination of the applicant’s contract.

   
   

2. 
   As we observed the impropriety arose as a result of
   lack of consultation and failure to give the applicant necessary
   notice
   of the termination of his contract. Such notice is
   mandatory in terms of the law, the Code, applicant’s own contract
   (“MR1”)
   to the Originating Application) and the established
   guidelines that are to be followed in order for a retrenchment to
   be adjudged
   fair.

   
   

3. 
   For these reasons the applicant is awarded
   compensation for the procedural unfairness as follows.

   
   

1. 
   Five months salary for failure to consult applicant
   and prepare him for the impending retrenchment. (Soft landing).

   
   

2. 
   One month’s salary in lieu of notice.

   
   

4. 
   The respondents are thus ordered to pay applicant
   compensation of six months salary calculated at the rate of his
   emoluments
   at the time of his termination.

   
   

5. 
   There is no order as to costs.

   
   

THUS
DONE AT MASERU THIS 2ND DAY OF NOVEMBER 2006

L.
A. LETHOBANE

PRESIDENT

M.
THAKALEKOALA I CONCUR

MEMBER

M.
MOTHEPU I CONCUR

MEMBER

FOR
APPLICANT: MS TAU-THABANE

FOR
RESPONDENT: MS MOKITIMI assisted by

MS LETHUNYA