- All three employees had already received or applied for jobs at CBRE before the retrenchment process began, with no involvement from their employer.
- The court finds the commissioner asked the wrong question, focusing on whether employees accepted jobs rather than who actually caused them to get those jobs.
- The arbitration award was overturned, and all three employees were granted severance pay with interest.
The Labour Court has ruled that three retrenched employees are entitled to severance pay, after finding that they secured their new jobs entirely on their own and not through any effort by their employer.
The case was brought by trade union Solidarity on behalf of three former Tsebo Facilities Solutions employees, De Villiers B, Samuels W, and Theunissen E, after an arbitrator ruled that they had forfeited their severance pay under section 41(4) of the Basic Conditions of Employment Act.
Tsebo had provided services to Sanlam for around 20 years before losing the contract to CBRE, which stepped in as the new service provider from 1 June 2020. As the handover approached, Tsebo issued a retrenchment notice to affected employees on 1 May 2020, followed by termination notices on 27 May 2020. Those notices stated that any employee who had secured alternative employment would not be entitled to severance pay.
The employees took the dispute to the CCMA, arguing that they had found their jobs at CBRE independently and were therefore entitled to severance pay. The commissioner disagreed, finding that Tsebo had played an instrumental role in securing that employment, and ruled that the employees had forfeited their severance pay.
The court on causation
The Labour Court held that the case came down to one central question: did the employees land jobs at CBRE because of Tsebo’s efforts, or did they do it on their own?
Acting Judge C de Kock stated, “The decisive question under section 41(4) of the BCEA is whether the employer has arranged alternative employment for the employee.”
The court found that the commissioner misdirected the enquiry by treating the acceptance of employment as decisive instead of determining whether Tsebo caused that employment to come about. It stated, “This is a misconception of the nature of the inquiry under section 41(4).”
Evidence on how the jobs were obtained
The court looked closely at the timeline of events. De Villiers B and Samuels W had already received job offers from CBRE on 28 February 2020, months before any retrenchment process had even started. Theunissen E applied for a position on 22 April 2020 and was interviewed a week later, through a recruitment process that Tsebo knew nothing about.
The court found that this recruitment process operated entirely independently of Tsebo and that an employer cannot take credit for arranging employment through a process it was never aware of. As the court put it, “An employer who does not know a recruitment process exists cannot be the cause of an appointment made through it.”
The court also noted that the Alternative Employment Agreement between Tsebo and CBRE was only agreed in principle on 29 April 2020 and formally signed on 3 May 2020, after the key recruitment steps had already taken place.
Findings on the arbitration award
The court found that the commissioner’s conclusion that Tsebo played an instrumental role was simply not supported by the facts. It also criticised the commissioner for failing to properly grapple with evidence that 27 other employees had been retrenched despite the same framework being in place, which demonstrated that CBRE, not Tsebo, was making the hiring decisions.
The court also rejected the commissioner’s view that the employees should have resigned rather than accepted the new positions, finding that this reasoning had no bearing on section 41(4). As the court stated, “Section 41(4) contains no motive-based exception to the entitlement to severance pay.”
Outcome
The Labour Court found that the arbitration award was unreasonable and could not stand. It set aside the award and replaced it with an order granting severance pay to all three employees.
De Villiers B received R274,521.93, Samuels W received R81,235.82, and Theunissen E received R21,312.18, with all amounts attracting interest from 1 June 2020. No costs order was made.
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