DE BRUYN v METOREX (PTY) LTD

[2021] 10 BLLR 979 (LAC) 979

A
De Bruyn v Metorex (Pty) Ltd
Labour Appeal Court, Johannesburg

Judgment date: 21/07/2021 Case No: JA 40/2020 B

Before: B Waglay Judge President, P Coppin Judge of Appeal and DS Molefe

Acting Judge of Appeal

C
Appeal in terms of section 166 of the LRA
Dismissal – Automatically unfair – Nationality – Senior manager retrenched
after employer decided to employ only Chinese nationals or Chinese speaking
persons in terms of restructuring plan – Dismissal not automatically unfair.
D
Dismissal for operational requirements – Consultation – Employer selecting
COO for retrenchment after forming conclusion that his position was redundant –
Dismissal procedurally fair.
Dismissal for operational requirements – Substantive fairness – Senior manager
retrenched after employer decided to employ only Chinese nationals or Chinese E
speaking persons in terms of restructuring plan – Re-organisation operationally
justified and dismissal fair.
Severance pay – Employer paying low-paid retrenched employees higher
multiples of wages as severance pay in excess of that provided for by BCEA
than executive employees – Difference not unfair. F

Sections of the LRA considered

Section 187(1)(f)
Section 187(2)(a)
G
Section 189(1)

Editor’s Summary
The appellant was retrenched from his position as COO of the respondent H
company (“Metorex”) after its Chinese holding company decided to replace
senior managers with Chinese nationals in terms of a plan which gave greater
autonomy to the various mines owned by Metorex. This reduced the oversight
role played by the Johannesburg-based head office at which the appellant was
based. Metorex issued retrenchment notices to its head office staff, including the
I
appellant, who disputed the need to retrench him. After consultations, the
appellant was retrenched and paid severance pay of a week per year of service.
He referred a dispute to the Labour Court, claiming that his dismissal was
automatically unfair because he had been selected on the basis of nationality
and/or language, alternatively, that it was not for a fair reason, maximum com-
pensation provided for by the LRA, severance pay of a month per year of J
 DE BRUYN v METOREX (PTY) LTD
980 [2021] 10 BLLR 979 (LAC)

A service and damages for losses under various heads. The Labour Court dis-
missed the claims, finding that the appellant had been fairly dismissed because
his position had become redundant.
The Court affirmed that an employee claiming an automatically unfair dis-
missal must produce evidence sufficient to raise a credible possibility that the
B dismissal was for a reason proscribed by the LRA and that fairness inquiry
coincides in most respects with whether the requirement falls within the excep-
tion created by section 187(2)(a) of the LRA. This entails a proportionality test – a
mere commercial rationale will not amount to a defence. However, the reason
for the termination must be inked to a genuine operational requirement. Beyond
that, the employer must show that it is impossible to accommodate the dis-
C
missed employee. Metorex had conceded that the reason for the dismissal was
based on language, but relied on the claim that the discrimination was justified.
The appellant had not rebutted the company’s claim that there was a legitimate
business rationale for appointing Chinese mine managers and retaining head
office personnel who could communicate effectively with them. The purpose
D was not to “bump out” the appellant or to replace him. In the final analysis, the
appellant was retrenched because his post as COO had become redundant. His
claim that he could have been appointed CEO overlooked the fact that the CEO
also had to be able to communicate with mine managers. The appellant’s con-
tention that his dismissal was substantively unfair failed for the same reasons.
E Turning to the appellant’s claim that his dismissal was procedurally unfair,
the Court noted that the requirement that an employee must consult when
“contemplating” retrenchment refers to a view that dismissal is a likely option.
Employers are entitled to engage in a process of weighing up various alterna-
tives before dismissal can be said to be contemplated. This had occurred, and
F the appellant had proved no prejudice from the timing of his consultations. The
dismissal was, accordingly, procedurally fair.
With regard to the appellant’s claim for severance pay of four weeks per year
of service, the Court noted that the company had admitted paying junior em-
ployees severance pay calculated on that basis, but had explained that this was
G because they were earning much less than senior managers and was aimed at
alleviating the hardship they would suffer as a result of being retrenched. This
had been explained to the appellant. The court also found the appellant’s claims
for payment of a share scheme and a performance bonus without merit.
The appeal was dismissed with costs.
H

Judgment
Coppin JA:
I [1] This is an appeal against the whole judgment of the Labour Court (Tlhot-
lhalemaje J), with the leave of that court, and in terms of which it dis-
missed the appellant’s claim that his dismissal by the respondent was
automatically unfair, declared that the dismissal, for the purposes of the
respondent’s operational requirements, was procedurally and substantive-
J ly fair, and dismissed the appellant’s other claims for a cell phone
 DE BRUYN v METOREX (PTY) LTD
COPPIN JA [2021] 10 BLLR 979 (LAC) 981

allowance, and for short-term and long-term incentive bonuses (referred A

to respectively as “STIB” and “LTIB”).

Common factual history

[2] The respondent (“Metorex”), a mining company based in Johannesburg,
has a controlling interest in the Kinsenda and Ruashi mines in the Demo- B
cratic Republic of the Congo (DRC) and in the Chilumba mine in Zambia
(collectively referred to as “the mines”).
[3] The appellant commenced employment with Metorex on 1 July 2003, in
the capacity of chief operations officer (“COO”). At the time of his part-
C
ing from Metorex, his remuneration package was approximately
R3.5 million per annum. Clause 7 of his contract of employment stipulat-
ed that he was to become eligible to participate in Metorex’s incentive
bonus schemes.
[4] Shortly before the resignation of Metorex’s former executive officer, D
Mr Ferreira, in about April 2015, he authorised a retrospective salary in-
crease for the appellant, apparently as an incentive to dissuade the appel-
lant from attending a job interview at another mining company.
[5] It is common cause that at the time the mines were unprofitable, Metorex
was experiencing financial challenges and that after Mr Ferriera’s resig- E
nation in April 2015, the majority shareholder of Metorex’s holding com-
pany, Jinchuan Group International Resources Co. Ltd (“Jinchuan”),
resolved to take over the day to day business management of Metorex.
[6] Mr Dexin Chen (“Chen”), a Chinese national, replaced Mr Ferriera as
CEO of Metorex, albeit in an acting capacity. Mr Fugui Qiao (“Qiao”), F
who is also a Chinese national, was appointed to the newly created posi-
tion of “Acting Deputy CEO” of Metorex on 23 April 2015.
[7] Jinchuan took a decision to replace the general managers at its mines in
the DRC and Zambia with Chinese speaking nationals, and during June
2015, through the agency of Chen and Qiao, that decision was put into ef- G
fect. This was part of the implementation of the silo or “Jinchuan model”
in terms of which greater autonomy was to be given to the general man-
agers at those mines, and changing the role of staff at Metorex’s head of-
fice from a day to day management role of those mines to more of a
supervisory role. H
[8] The appellant had been informed that his role was to change under the
new structure and that he was not responsible for the daily operations of
the mines. The newly appointed general managers reported directly to
Mr Qiao or Mr Chen on a daily basis.
I
[9] During July 2015 the appellant had sent an email to Chen in which he
raised concerns that he had never been consulted or engaged concerning
the appointment of the general managers, even though they were sup-
posed to have reported to him, and that it appeared as if his position had
been made redundant without any input at all from him. Chen did not re-
ply to this email. J
 DE BRUYN v METOREX (PTY) LTD
982 [2021] 10 BLLR 979 (LAC) COPPIN JA

A [10] During the period 31 July 2015 to 5 August 2015 various organisational
changes within Metorex were announced. By September/October 2015 it
had become apparent, inter alia, to Metorex’s human capital executive,
Ms Carolyn Hutton (“Hutton”) that the position of the appellant had pos-
sibly become redundant since the general managers were working com-
fortably with Qiao, who was appointed as deputy CEO on 11 November
B 2015.
[11] On 25 November 2015 Metorex issued a section 189(3) letter to all its
head office staff, including the appellant. Consultation with the appellant
commenced shortly thereafter.
C [12] The appellant had disputed the need for his retrenchment, contended that
Qiao had usurped his duties and responsibilities as COO and that his posi-
tion had not become redundant. He proposed, inter alia, that instead of re-
trenching him, that he be “bumped” into Qiao’s position as deputy CEO
because (according to him) he was a better candidate and had longer ser-
vice with Metorex than Qiao.
D
[13] By letter dated 14 January 2016 Qiao informed the appellant that Metorex
had carefully considered alternative positions equal to or higher than that
of the appellant, but that none had become available.
[14] On 25 February 2016 the appellant was issued with a retrenchment notice
E and was dismissed with effect from 31 May 2016. At his request, the ap-
pellant was not required to work the three-month notice period. He was
paid one week’s severance pay for each year of completed service with
Metorex. He was not paid a short-term incentive bonus (“STIB”) for the
period 1 January 2016 to 31 May 2016. (The appellant raised the issue of
his (alleged) entitlement to a LTIB for the first time in the Labour Court).
F
[15] The appellant referred an unfair dismissal dispute to the Commission for
Conciliation Mediation and Arbitration (“CCMA”). The dispute was not
resolved at conciliation and a certificate of outcome to that effect was is-
sued. The dispute was then referred to the Labour Court for adjudication
as contemplated in section 191(5)(b) of the LRA.1 The appellant alleged,
G inter alia, that his dismissal by Metorex was automatically unfair, alterna-
tively, was substantively and procedurally unfair. He sought monetary
compensation under various claim headings, but did not seek reinstate-
ment. A central plank of his case for automatic unfairness was that he was
discriminated against because he was not a Chinese national or a Chinese
H speaking person.
[16] In his final amended statement of claim the appellant sought the following
relief: (a) an order declaring his dismissal by Metorex to have been an au-
tomatically unfair dismissal, alternatively, a substantively and procedural-
ly unfair dismissal; (b) “maximum compensation” for the automatic
I unfair dismissal, alternatively for the substantively and procedurally un-
fair dismissal; (c) the difference between the severance pay of one week
for every year of service paid to him by Metorex and what he alleged he
________________________

1 Labour Relations Act 66 of 1995.

J
 DE BRUYN v METOREX (PTY) LTD
COPPIN JA [2021] 10 BLLR 979 (LAC) 983

was entitled to in respect of severance pay, namely, the equivalent of one A

month’s pay for every year of service. This difference amounted to
R678 744; (d) payment of a STIB for the period 1 January 2016 to
31 May 2016, amounting to R437 500; (e) payment of a cell phone allow-
ance for March, April and May 2016, totalling an amount of R4 500; (f)
payment of damages in respect of a LTIB in the amount of
R5 370 270,62; and (g) costs. B

[17] At the hearing in the Labour Court Metorex relied on the evidence of
Hutton and Chen, while the appellant gave evidence in support of his
claim.
C
[18] In its judgment, the Labour Court made short shrift of both the appellant’s
claim for automatic unfair dismissal and his alternative claim based on
procedural and substantive unfairness. The Labour Court found that the
appellant’s dismissal was not automatically unfair; and that “on the totali-
ty of the evidence, the implementation of the new operating model in the
respondent had resulted in redundancies, including the position of COO”. D
The Labour Court held that the “position was phased out” and that it did
not understand the appellant’s case to be that the position still exists. The
Labour Court held that “there was therefore no logic in having the [appel-
lant] in a position that did not exist’’.
E
[19] The Labour Court held that:
“Accordingly, the main/dominant/approximate or more likely cause of the
[appellant’s] dismissal was that his position was declared redundant, and not
on any discriminatory grounds as he had alleged. His selection for retrench-
ment and non-appointment in the position of acting Deputy CEO, in the light
of the explanation proffered by Chen, cannot solely be reduced to his being F
non-Chinese. These conclusions also therefore dispose of any allegations of
substantive unfairness.”

[20] In respect of the alternative claim of procedural unfairness, the Labour

Court essentially held that the claim was not well founded and ultimately G
concluded in that regard as follows:
“even if it can be said that there were procedural flaws to the extent that Chen
had formed a prima facie view that the [appellant] and other employees were
going to be retrenched, or anything [that] could be read in [Hutton’s] and Qi-
ao’s correspondence before the consultation process was completed, on the
whole there is no basis for any conclusion to be reached that the process was H
completely flawed for the purposes of the objectives of section 189(2) of the
LRA.”

[21] The Labour Court essentially found in respect of the claim for severance
pay that the amount paid to the appellant was justified and fair. The provi-
I
sions of section 41(2) of the Basic Conditions of Employment Act 75 of
1997 (“BCEA”) were strictly applied to the appellant, who was a senior
employee and earned more than the junior employees who had received
the ‘higher’ severance package in order to alleviate the financial hardship
which they were likely to suffer due to their retrenchment. Given their
shorter periods of employment with Metorex the “higher” severance was J
 DE BRUYN v METOREX (PTY) LTD
984 [2021] 10 BLLR 979 (LAC) COPPIN JA

A reasonable. The Labour Court criticised the appellant’s reliance on the

decision in Imperial Cold Storage and Supply Co Ltd v Field,2 to the ef-
fect that an employer acts unfairly if it pays its senior employees a higher
severance package than its junior employees. The Labour Court held that
the decision was not authority for the opposite situation and that the ap-
pellant’s reliance on it was misplaced.
B
[22] The appellant’s claim for a cell phone allowance was also dismissed, but
since the appellant did not pursue that aspect on appeal nothing more
needs to be said about it. The Labour Court also found that the STIB
claim had no merit because no targets had been set for the period claimed
by the appellant and he had not asked for them to be set; his contention
C that the conditions for the STIB had been fictionally fulfilled were with-
out merit because he had not worked for a six-month period in 2016 and
had asked to be released from his obligations to work the notice period of
three months. The Labour Court also found that the appellant inappositely
tried to equate his situation regarding the STIB claim with that of one Le
D Roux.
[23] Lastly in respect of the LTIB claim, the Labour Court, in essence, found
that no decision had been taken to implement the scheme because of a
drop in share price. It further found that this claim was an afterthought
and had not been raised by the appellant before he instituted the claim in
E court. It found that, in any event, this claim was not sustainable in light of
the provisions of the King III report.
[24] On appeal, the appellant, in essence, contended that the Labour Court had
erred in dismissing his claims (ie with the exception of the cell phone al-
lowance claim, which he abandoned). On the other hand, the respondent,
F in essence, supported the judgment of the Labour Court. The claims the
appellant is persisting with will be discussed in turn.

Discussion/Evaluation

G Automatic unfair dismissal

[25] In terms of section 187(1)(f) of the LRA a dismissal is automatically
unfair (inter alia) if the reason for the dismissal is that the employer un-
fairly discriminated against an employee, directly or indirectly, on any ar-
bitrary ground, including, but not limited to (inter alia) race, ethnic and
H social origin, culture or language. However, section 187(2)(a) provides
that a dismissal may be fair if the reason for the dismissal is based on an
inherent requirement of the particular job.
[26] In TFD Network3 this Court held that section 187 “imposes an evidential
burden on the employee to produce evidence which is sufficient to raise a
credible possibility that an automatically unfair dismissal has taken place.
I
________________________

2 (1993) 14 ILJ 1221 (LAC).

3 TFD Network Africa (Pty) Ltd v Faris (2019) 40 ILJ 326 (LAC) [also reported at [2019] 2
BLLR 127 (LAC) – Ed].
J
 DE BRUYN v METOREX (PTY) LTD
COPPIN JA [2021] 10 BLLR 979 (LAC) 985

It then behoves the employer to prove the contrary by producing evidence A

to show that the reason for the dismissal did not fall within the circum-
stances envisaged in section 187 for constituting an automatically unfair
dismissal.”4
[27] Regarding the issue of fairness, this Court held there that “in the context
of the LRA, the fairness enquiry coincides in most respects with the de- B
termination whether the discriminatory job requirement falls within the
exemption in section 187(2)(a) of the LRA. Relevant considerations in
regard to fairness and the inherent requirements of the job include the po-
sition of the victim of the discrimination in society, the purpose sought to
be achieved by the discrimination, the extent to which rights and interests
of the victim of the discrimination have been affected, whether the dis- C
crimination has impaired the human dignity of the victim and whether
less restrictive means are available to achieve the purpose of the discrimi-
nation.”5
[28] In TFD Network this Court referred with approval6 to the decision of the
Supreme Court of Appeal in Department of Correctional Services and D
another v Police and Prisons Civil Rights Union and others,7 in particular
where it stated: “an inherent requirement of the job has been interpreted to
mean a permanent attribute or quality forming . . . an essential element
. . . and an indispensable attribute which must relate in an inescapable
way to the performing of the job.” E
[29] This Court then held that the test whether a requirement was inherent or
inescapable in the performance of the job is essentially a proportionality
enquiry; because of the exceptional nature of the defence, the requirement
must be strictly construed and a mere legitimate commercial rationale will
not be enough; and that the requirement must be rationally connected to F
the performance of the job, in the sense that the requirement should have
been adopted with a “genuine and good faith belief that it was necessary
for the fulfilment of a legitimate work-related purpose and must be rea-
sonably necessary for the accomplishment of that purpose.”8
[30] However, this Court also held in TFD Network that even if that was G
shown that would not be the end of the enquiry. In addition, the employer
would have to show that it was “impossible to accommodate the individu-
al employee without imposing undue hardship or unsurmountable diffi-
culty.” In that regard this Court referred with approval to what the Labour
Court had held in South African Clothing & Textile Workers Union and H
others v Berg River Textiles – A Division of the Seardel Group Trading
(Pty) Ltd,9 namely that “ultimately the principle of proportionality must
be applied.”
________________________

I
4 Para [27].
5 Para [35].
6 Para [36].
7 (2013) 34 ILJ 1375 (SCA) para [23] [also reported at [2013] 7 BLLR 639 (SCA) – Ed].
8 TFD Network (above) para [37].
9 (2012) 33 ILJ 972 (LC).
J
 DE BRUYN v METOREX (PTY) LTD
986 [2021] 10 BLLR 979 (LAC) COPPIN JA

A [31] Turning to the facts of this case – counsel for Metorex, in essence, con-
ceded that the substantial reason for Qiao’s appointment related to lan-
guage and culture and that a prime facie case of discrimination had been
made out. However, Metorex relied on the proportionality defence. The
argument basically, was that it had found itself in dire financial circum-
stances and something had to be done to save the company. If the Jin-
B chuan model had not been implemented, and if Qiao had not been
appointed, but the appellant had been appointed in his stead, the financial
problem Metorex found itself in would merely have been perpetuated.
Hence it was contended that even though there was discrimination it was
not unfair and was reasonably justified. The argument advanced on behalf
C of the appellant was that the discrimination was unfair and based on race,
ethnic and social origin, culture or language, and that, as a consequence,
the dismissal was automatically unfair.
[32] In substantiation of this claim, the appellant had essentially testified that
Metorex had appointed Qiao as the acting deputy CEO in order to dis-
D place him and replace him with a Chinese national. Much was made of a
concession made by Chen in his evidence that the appellant would not
have been retrenched if he was Chinese speaking. The concession has to
be understood in the context of all the evidence that Chen and Hutton
gave. The legitimacy of the business rationale for appointing Chinese
E speaking mine managers and a Chinese speaking CEO could not really be
rebutted.
[33] Efficient communication between the general managers, the CEO, and the
Chinese banks and other shareholders in Hong Kong, was clearly an im-
perative, given the seriously adverse financial situation Metorex found it-
F self in. Chen explained in detail why Qiao was a more suitable candidate
for the acting CEO position. It did not begin and end with the fact that
Qiao was Chinese speaking. Qiao and Chen also had experience and
knowledge of mining in accordance with the Jinchuan model. Qiao did
not only act as deputy CEO, but effectively had to do the work of CEO
after Chen had left South Africa. On the probabilities, his appointment
G
(instead of the appellant) was genuine and in the belief, held in good faith,
that it was necessary for the financial recovery of Metorex, which is a le-
gitimate purpose, and that his appointment (in the context of the imple-
mentation of the Jinchuan model) was necessary for the accomplishment
of that purpose.
H
[34] Qiao’s appointment as acting deputy CEO and subsequently as deputy
CEO was genuine and its aim and purpose was not to “bump-out” the ap-
pellant or to displace him. The redundancy of the appellant’s position ap-
pears to have been a consequence, although not the purpose, of the
implementation of the Jinchuan model and the appointment of the Chi-
I nese general managers at the mines. Qiao as deputy CEO may have taken
over certain of the duties and responsibilities of the COO, but that was in
addition to those, effectively, of the CEO.
[35] Chen had explained the need for a Chinese speaking CEO, not only to
facilitate communication with the general managers, but more vitally, to
J facilitate the raising of finance with the Chinese shareholders, banks and
 DE BRUYN v METOREX (PTY) LTD
COPPIN JA [2021] 10 BLLR 979 (LAC) 987

financial institutions. The South African banks, which had been financing A
Metorex were threatening to call in their loans and Metorex was obliged
to seek additional/alternative financing from its Chinese shareholders and
from Chinese financial institutions.
[36] Chen and Hutton, inter alia, testified to the effect that the implementation
of the Jinchuan model was rational and justified and that was not contest- B
ed by the appellant. Chen, a Chinese national, replaced Ferreira, the pre-
vious CEO of Metorex. The appointment of the Chinese nationals as
general managers at the mines in the DRC and Zambia followed as part of
the implementation of the model. Appellant did not suggest that those ap-
pointments were not justified, nor does the appellant seem to suggest that
their direct communication with him (ie COO) would have been in the C
best interest of Metorex, given the fact that he was not Chinese speaking.
He also did not suggest that his direct communication with the Chinese
shareholders and Chinese financial institutions would have been in the
best interest of Metorex.
[37] On a conspectus of all the evidence the appellant’s employment with D
Metorex was terminated because his position, ie as COO, had become re-
dundant because of structural changes affected for operational and finan-
cial reasons. The appellant ironically did not contest the fact that his
position as COO had become redundant, but he claimed that he ought to
have been appointed to the position to which Qiao had been appointed, E
namely, that of acting deputy CEO, and that he had not been appointed to
that position because he was not Chinese speaking. This clearly ignored
the fact that in the scheme of things Qiao was a more suitable candidate
for that position.
[38] The evidence of Chen and Hutton, was uncontested, that Metorex retained F
numerous employees who are not Chinese nationals or Chinese speaking
at executive, office and operational level; that the implementation of the
new model resulted in about 22 retrenchments at its head office and also
in retrenchments at the mines. The appellant was not the only casualty of
the implementation of the model. In respect of the position he was con- G
tending for, namely acting deputy CEO, the ability to speak Chinese had
essentially become an inherent requirement of the job in order to facilitate
direct communications with the general managers of the mines, Chinese
shareholders, and with Chinese financial institutions. On the probabilities,
it is hard to contend that the retention of the appellant (merely to accom-
modate him), and retrenching Qiao, would not have imposed undue hard- H
ship and insurmountable difficulties on Metorex. The retention of
Mr Peter Albert, an Englishman, as CEO of Jinchuan in Hong Kong, can-
not serve to undermine those difficulties, because, unlike the appellant, he
was CEO of Jinchuan, and Chinese speaking as well.
[39] The Labour Court cannot be faulted in its conclusions in respect of this I
claim.

Substantive fairness
[40] The appellant’s claim under this heading was essentially based on his
allegations that his retrenchment was due to the fact that Qiao had taken J
 DE BRUYN v METOREX (PTY) LTD
988 [2021] 10 BLLR 979 (LAC) COPPIN JA

A over his responsibilities as COO, alternatively, because he, and not Qiao,
ought to have been appointed to the position of deputy CEO.
[41] Much of what was said in dealing with the issue of his alleged automatic
unfair dismissal is also applicable to the issue of the alleged substantive
fairness of the appellant’s dismissal. As pointed out earlier, the imple-
B mentation of the Jinchuan model had fundamentally changed the way
Metorex’s mines and its head office operated, communicated and were
required to communicate. According to Hutton, retrenchments at
Metorex’s head office could not have been considered until the model had
been successfully implemented. The model was initially implemented in
the mines in 2015. Conceivably, retrenchments at head office could only
C be considered once the model had been fully implemented.
[42] It was not shown that the implementation of the model and the appoint-
ment of Chen had been illegitimate and unwarranted. It is also not disput-
ed that Metorex was in a dire financial situation and that a remedy for that
situation could legitimately have required operational and structural
D
changes in order to, inter-alia, raise finances and reduce operating costs.
[43] It became clear after the implementation of the model that the position of
the COO had become redundant. There was also a general need to re-
trench all those at the mines and at head office whose positions were simi-
E larly affected.
[44] It is noteworthy that the appellant’s main gripe with the process, was not
so much about the fact that his position as COO had become redundant,
but that he was not the one appointed as the acting deputy CEO. He did
not seriously dispute the commercial rationale for consolidating the COO
F position with that of the deputy CEO (or CEO). He considered himself a
more suitable candidate for the position to which Qiao had been appoint-
ed. So effectively, in the appellant’s estimation, it was Qiao and not him
who ought to have been retrenched, thereby implicitly acknowledging the
general need to retrench in respect of the COO position.
G [45] Metorex would have had to consider, essentially, whether to retrench
Qiao and promote the appellant, who held the position of COO, to the
higher position of deputy CEO. This consideration would conceivably
have involved an assessment to determine who the better candidate was
for the position of deputy CEO within the Jinchuan model. The appointee
was not only required to do what the COO did previously, but was re-
H quired to deputise for Chen and act as CEO in Chen’s absence. In addi-
tion, this person was supposed to be able to communicate effectively with
the general managers of the mines, the Chinese shareholders and the fi-
nancial institutions in order to raise the necessary financing.
[46] Chen testified that Qiao was the better candidate and this was not only
I because he was Chinese speaking or a Chinese national, but essentially
because of his experience and knowledge, including of the newly imple-
mented model. The incumbent’s ability to communicate directly with the
general managers of the mines as well as with the Chinese shareholders
and Chinese financial institutions, was another important factor. The ap-
J pellant also fell short in that regard.
 DE BRUYN v METOREX (PTY) LTD
COPPIN JA [2021] 10 BLLR 979 (LAC) 989

[47] The appellant’s aspiration to be “bumped into” a higher position, simply A

because he had longer service with Metorex and because his duties as
COO had been assimilated into that position, was misplaced. The appel-
lant did not claim to have had experience as deputy CEO or CEO, let
alone that he had more experience than Qiao in such positions, or in re-
spect of the Jinchuan model.
B
Procedural fairness
[48] The appellant contended that his retrenchment was a fait accompli, and
had been decided upon before commencement of the consultation process
with him. According to him, Metorex merely “went through the motions”
in respect of the consultations. He alleges that his position as COO had C
become redundant in June or July 2015 and that he should have been con-
sulted at that stage already. Metorex denies that his position became re-
dundant as he alleges and according to both, Chen and Hutton, this only
occurred after the successful implementation of the Jinchuan model in
November 2015. The Labour Court held that Metorex only contemplated D
the retrenchment of the appellant after the successful implementation of
the changes at the mines.
[49] In terms of section 189(1) of the LRA an employer is to consult with
employees (or those representing them) when it “contemplates” dismiss-
ing one or more of its employees for reasons based on its operational re- E
quirements. This Court accepted that the prevailing legal position is that,
for purposes of section 189, the word “contemplates” refers to dismissal
as the preferred and most likely option from the employer’s point of view
rather than the mere possibility; and that it follows that an employer is en-
titled to engage in a process of weighing up various alternatives before it
can be said that dismissal is contemplated10. F
[50] On the probabilities Metorex contemplated the retrenchment of, in partic-
ular the appellant, as the preferred or most likely option after successful
implementation of the Jinchuan model at its mines and at its head office,
i.e. sometime in November 2015. In any event as submitted on behalf of
Metorex, no prejudice was shown to have been suffered by the appellant G
because of the time when consultations were commenced with him.
[51] The appellant tried to extract some mileage from documentation that had
suggested that he had been retrenched before the consultation process, but
Hutton’s explanation that the documentation had been erroneous and how
that occurred was reasonable and not discredited. Taking into account all H
of the evidence the appellant’s retrenchment was procedurally fair.
The LTIB claim
[52] The appellant alleges in his final statement of claim that the parties agreed
that he would participate in a LTIB scheme which took the form of a I
________________________

10 SACCAWU and others v JDG Trading (Pty) Ltd (2019) 40 ILJ 140 (LAC) para [26] [also
reported at [2019] 2 BLLR 117 (LAC) – Ed] quoting with approval from Du Toit et al Labour
Law Through the Cases (Lexisnexis October 2017 Update) LRA Chapter 8, Commentary on
s 189(1).
J
 DE BRUYN v METOREX (PTY) LTD
990 [2021] 10 BLLR 979 (LAC) COPPIN JA

A share option scheme; and that “there was a contractual obligation on

[Metorex] to timeously approve and to implement the [LTIB] scheme and
afford [him] share options in terms thereof”; and further, that Metorex
“breached the contract by failing to timeously approve and to implement,
alternatively extend” the LTIB scheme to him. He then goes on to deal
with the modalities of the scheme. He alleges inter alia, that in terms of
B the scheme he was to receive share options equivalent to 50% of his guar-
anteed annual package on 1 January of each year. Later in the statement
of claim he alleges the number of share options he was to receive and
dates upon which he was to receive them. His claim is for damages alleg-
edly flowing from the said alleged breach of contract, and is in the
C amount of R5 370 270,62. At this stage one should point out that in the
statement of claim neither the date of the alleged breach is specified, nor
is there an allegation specifying whether the agreement was oral or in
writing.
[53] From the appellant’s evidence it was clear that he was not relying upon or
D referring, ie in respect of the LTIB claim, to the incentive benefits clause
(clause 7) in the offer of employment made to him by Metorex, which be-
came a term of his employment contract, but was relying upon an alleged
oral agreement. According to his evidence, the scheme and his participa-
tion in it was (orally) discussed with him by Hutton and Ferreira, and it
E relates to share options in the parent company of Metorex, namely Jin-
chuan. He testified that the board of directors of Jinchuan approved a
share incentive scheme at an annual general meeting (ie of Jinchuan) on
2 June 2015. His calculation of the options that were allegedly due to him
pertained to shares in Jinchuan.
F [54] The case the appellant purported to make out in his evidence was clearly
different to the one that had been pleaded. Metorex, as a subsidiary of
Jinchuan, could not control the shares of the latter. The appellant’s em-
ployment was with Metorex and not with Jinchuan. In any event, he did
not testify when and how Metorex breached the contract which he re-
ferred to in his statement of claim. He also did not give evidence to the ef-
G
fect that he had notified Metorex of the alleged breach and what
Metorex’s response was.
[55] Besides those fundamental difficulties, it is hard to fathom how the
appellant had to be allocated Jinchuan shares if he was not its employee,
let alone shares in it for 2014 and 2015 if the Jinchuan board only adopted
H
and approved the share incentive scheme on 2 July 2015, as he alleges.
[56] In any event, the appellant never demanded this allocation before. He
claimed it for the first time in his statement of claim in court. He could
not explain why he had not done so at any earlier stage. Hutton and Chen
denied the alleged agreements relied upon by the appellant and denied
I that any such schemes have been implemented at Metorex or at Jinchuan,
and it appears to have been common cause that no other employee at
Metorex had received the LTIB benefits contended for by the appellant.
The appellant’s claim in this regard was not only contradictory, but was
based on what Jinchuan allegedly did and not on what Metorex did. One
J would expect his claim to have been against the former and not the latter.
 DE BRUYN v METOREX (PTY) LTD
COPPIN JA [2021] 10 BLLR 979 (LAC) 991

[57] The Labour Court’s conclusion that this claim was an afterthought, had A
not been proved, and lacked merit, also taking into account the King III
report, in terms of which bonuses are to be contractual and not discretion-
ary, is unassailable.

The STIB claim

B
[58] The appellant alleges in his statement of claim, in essence, that in light of
his employment with Metorex he qualified for participation in its STIB
scheme, which is based on his performance and individual performance as
per the performance management system. He then selectively quotes from
clause 15 of Metorex’s Group Reward and Recognition Policy (“the bo- C
nus policy”). He alleges, inter alia, that in terms of the bonus policy a
minimum of three months’ service during the measurement period is re-
quired in order to qualify for the STI, which will be pro-rated for periods
of less than six months and that the STI equated to 30% of his guaranteed
package. His claim is for a STIB for the period 1 January 2016 to 31 May
2016 in an amount of R437 500. D
[59] It is notable that the appellant did not refer to the fact that a six-month
bonus period was applicable; that the bonus policy required an employee
to be at work (or on leave) during the six-month period; and that any per-
son who left the employment of Metorex, through dismissal or resigna-
tion, “during the bonus period will not qualify for any incentive E
payment.” A person must be in service and not be serving a notice period
at the date on which the incentive period concludes in order for that per-
son to qualify for such an incentive (clause 15.2).
[60] The appellant also did not refer to the fact that the bonus policy required F
targets to be set in respect of a participating employee. According to
clause 15.8 of the bonus policy, “targets shall be set at the beginning of
each bonus period based on the staff member’s key performance areas”;
and the “targets shall clearly state what level of performance is required
for each employee.”
G
[61] It is common cause the appellant did not request targets to be set for 2016
and that no targets were set; he did not work for the required six-month
period, he was on notice from March to May 2016, but at his request, he
did not work during this notice period. He was not at work when the six-
month period, commencing in January 2016, would have concluded. In
terms of the very policy he purported to rely upon, he did not qualify for H
the bonus he claimed.
[62] Metorex did not act unreasonably, inconsistently, or unfairly by paying a
STIB to Le Roux, and not to the appellant. Their circumstances in respect
of the bonus differed substantially. In the case of Le Roux, the required
I
targets had indeed been set; he worked for the six-month bonus or incen-
tive period, and had achieved the targets. In any event, in terms of the
King III report the remuneration policies and practices applicable to a
company’s executives has to be linked to the executive’s contribution to
the company’s performance. On his own version, the appellant made no
contribution to the performance of Metorex in 2016. J
 DE BRUYN v METOREX (PTY) LTD
992 [2021] 10 BLLR 979 (LAC) COPPIN JA

A [63] Counsel for the appellant submitted that it should have been found that
the conditions for the payment of the bonus to the appellant had been fic-
tionally fulfilled because they had not been fulfilled due to Metorex’s
conduct in unfairly dismissing him. Even though this argument stands to
be dismissed merely because his retrenchment was correctly found not to
have been unfair, there was, in any event, no duty on Metorex to keep the
B employment contract of the appellant alive in order to enable him to earn
the bonus. Further, without targets having been set, which not even the
appellant requested or insisted on, how could his performance be judged.
It would have been incumbent for the appellant to show what targets
would have been set and that he would have met them. Hutton did not
C concede at all that the appellant had met any of the targets that would
have qualified him for the STIB he claimed. In conclusion, in view of all
of the difficulties, the Labour Court correctly dismissed the STIB claim of
the appellant.

D The severance pay claim

[64] The Labour Court’s criticism of the appellant’s reliance on Imperial
Storage is justified. It is a decision that applies to a situation contrary to
that of the appellant and is not authority for the position of the appellant
in respect of severance pay. It is not disputed that junior employees re-
E trenched with the appellant were paid a severance of four weeks’ remu-
neration for each completed year of service, while the appellant was paid
one week’s remuneration for each completed year of service. Hutton ex-
plained the rationale for this distinction. Junior employees had shorter pe-
riods of service and were earning much lower salaries than the appellant
F at the time of their retrenchment, and the payment to them was to alleviate
the hardship that they were to experience as a result of being retrenched.
The appellant, on the other hand, was high earner that did not face such
hardship relative to those junior employees. Another factor was that the
appellant had been given three months’ notice, whereas those junior em-
ployees (who, generally, had shorter periods of service) had only been
G given one month’s notice.
[65] The minutes of a consultation meeting held by representatives of
Metorex, which included Hutton and Ms Hunter, with the appellant on
25 February 2016 show that the disparity in the severance pay was dis-
cussed with the appellant and that the rationale for the payment was ex-
H plained to him. It was pointed out to him, in essence, that he was
effectively to receive close to 4 months’ salary as severance and not one
month and one week as the junior employees and that the cost of his sev-
erance pay “makes up for approximately 60% of the total severance figure
of all affected corporate employees.” Further, it is recorded that the pay-
I ment made to him was far more than what junior staff were receiving, and
also noteworthy, that he was invited to make other proposals on the mat-
ter, which he refused to take up. The Labour Court’s conclusion, effec-
tively, that this claim was without merit, cannot be assailed.
[66] In the circumstances the appeal stands to be dismissed. The Labour Court
J made no costs order and there was no cross-appeal against that order.
 DE BRUYN v METOREX (PTY) LTD
COPPIN JA [2021] 10 BLLR 979 (LAC) 993

However, in respect of the actual appeal there is no reason why the costs A
of this appeal should not follow the result. However, the use of two coun-
sels by the respondent was not justified.
[67] In the result:
67.1 The appeal is dismissed;
67.2 The appellant is to pay the costs of the appeal. B
(Waglay JP and Molefe AJA concurred in the judgment of Coppin JA.)

For the appellants:

R Itzkin instructed by Edward Nathan Sonnenbergs Incorporated

For the respondent:

A Redding SC and MJ Van As instructed by Solomon Holmes Attorneys

The following cases were referred to in the above judgment:

Department of Correctional Services and another v
Police and Prisons Civil Rights Union and others [2013] 7 BLLR 639
((2013) 34 ILJ 1375) (SCA) ...................................................................... 985
Imperial Cold Storage and Supply Co Ltd v Field
(1993) 14 ILJ 1221 (LAC) ........................................................................ 984
SACCAWU and others v JDG Trading (Pty) Ltd [2019] 2 BLLR 117
(2019) 40 ILJ 140 (LAC) .......................................................................... 989
South African Clothing & Textile Workers Union and others v
Berg River Textiles – A Division of the Seardel Group Trading (Pty) Ltd
(2012) 33 ILJ 972 (LC) ............................................................................. 985
TFD Network Africa (Pty) Ltd v Faris [2019] 2 BLLR 127
((2019) 40 ILJ 326) (LAC) ........................................................................ 984