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VIC & DUP/JOHANNESBURG/LKS

IN THE LABOUR COURT OF SOUTH AFRICA

HELD AT JOHANNESBURG

CASE NO. J259/98

In the matter between:

NATIONAL UNION OF MINEWORKERS	Applicant
and
FREEGOLD CONSOLIDATED GOLD MINES (OPERATIONS) LIMITED (PRESIDENT STEYN MINE)	Respondent
and in the matter between
NATIONAL UNION OF MINEWORKERS	Applicant
and
FREEGOLD CONSOLIDATED GOLD MINES (OPERATIONS) LIMITED (WESTERN HOLDINGS)	Respondent

CASE NO. J285/98

J U D G M E N T

ZONDO J:

Introduction:

[1] Initially these two matters were argued simultaneously before me on 19 and 20 February 1998 when I reserved judgment. I subsequently gave judgment on the point which had been taken by the respondents in both matters that the deponents to the founding affidavits in the applications had no authority to bring these applications in the name of the National Union of

Mineworkers. The parties to this dispute will recall that in my judgment I upheld that point and struck the two matters off the roll on the suggestion of Counsel for the respondents. Subsequent to my judgment the NUM filed a resolution showing that it had authorised the two applications and the respondents accepted that that resolution proved the required authority.

[2] At the instance of the NUM, the two matters were again re-enrolled for hearing before me on Friday 27 February 1998 on which occasion I was informed by the attorneys for both parties that neither party sought to present any oral argument on that day as each party felt that it had presented all the argument it wished to present when the matter was heard on 19 and 20 February 1998. Accordingly both parties asked me to consider the argument that had been presented on those two days and give my judgment. In this regard I mention that I had informed the parties' attorneys that I had taken extensive notes of the argument that had been presented on 19 and 20 February 1998. The parties' attorneys indicated, in response to an enquiry from me, that it would be acceptable if judgment was delivered before the end of this week. This then is my judgment.

Background:

[3] On 23 January 1998 the Chief Operating Officer of Freegold issued a brief addressed to all employees of

Freegold wherein he announced that prior to 31 March 1998 the following shafts and plants will be closed:

Western Holdings 1, 4/5 and 7;

President Steyn 5, 6 and 7;

Freddies 7;

Welkom Gold Plant and Freegold Three Gold Plant.

[4]That announcement was made pursuant to a decision which had been taken by the Board of Directors of Freegold to the effect that those shafts and plants be closed prior to the end of March 1998. As the National Union of Mineworkers was unhappy with this it brought two applications to this Court as urgent applications to challenge the implementation of that decision and the retrenchment of workers pursuant to the decision to close those plants and shafts. It also sought an interdict restraining the respondents from implementing that decision and from retrenching the workers affected thereby. As can be seen from the heading of this judgment, the one application relates to the President Steyn Mine while the other relates to Western Holdings.

[5] The argument that I heard related for about 95% to the application relating to the President Steyn Mine and for only about 5% to the Western Holdings application. I was informed by both Mr Maserumule, who appeared for the applicant in both matters, and Mr Loxton, who, with Mr Franklin, appeared for the respondents in both matters, that the argument they presented in the President Steyn matter applied to the Western Holdings application as well. The result was that with regard to the Western Holdings papers my attention was only drawn to specific areas of the papers and of the

minutes of meetings in that matter in support of the same arguments presented in the President Steyn matter which particularly related to the Western Holdings matter. In the light of this I have also approached the parties' argument on the same basis.

Urgency:

[6] The two applications were brought as urgent applications. Each respondent disputed in its answering affidavit in the matter relating to it that there were sufficient grounds of urgency. Although during argument Mr Maserumule specifically addressed the issue of urgency as he understood that the respondents were going to pursue that aspect of the matter, Mr Loxton did not pursue the issue of urgency when he presented his argument. I am satisfied that there were sufficient grounds for these two applications to be brought as urgent applications. This is so because, prior to the respondents' board of directors taking the decision to close the shafts and plants, the applicant could not approach the Court because to do so would have been premature and such applications would have been based on speculation as to what the board of directors would decide.

[7] The decision to close was made by the board of directors on or about 23 January 1998 and between then and around the 4th or so of February, the parties were engaged in attempts to resolve the matter or to reach agreement which would have made it unnecessary for the applicant to approach the Court. After those

endeavours had failed, the applicant launched the two applications on 12 February 1998 - which was within more or less 10 days after the parties failed to reach agreement to avoid this application. I consider that, when the magnitude of this matter (there are between 10 000 and 15 000 workers affected by these two applications) is taken into account, the applicant acted diligently in the preparation of the two applications and in bringing the two applications at the time that it did.

The Issues:

[8] In presenting his argument Mr Maserumule challenged the decision to close the shafts and the plants on two grounds. The one ground was that the respondents should not have made the decision at the time it was made because there were alternative measures which had been agreed between the parties which the respondent had not as yet implemented and, if those were implemented, it could well be that there would be no need to close the plants and the shafts. For that reason, submitted Mr Maserumule, the respondents were not entitled to make the decision they made until those alternative measures had been tried. The second argument was that the respondents had not held consultations with the applicant on the timing of the dismissals flowing from the decision to close the plants and the shafts and the respondents were not entitled to implement the decision to retrench until they had discharged their obligation to consult with

the applicant on, among others, the timing of the dismissals.

[9] There was no argument between the parties that the respondents were obliged to consult with the applicant on the timing of the dismissals nor was there any argument whether the respondents would be obliged not to close the plants and shafts and not to implement the retrenchment if there were viable alternatives which had been agreed between the parties which would make it unnecessary for the respondents to close the plants and shafts and to implement the retrenchment. The argument between the parties was on whether any agreement had been reached between the parties on measures which would have made it unnecessary to close the plants and shafts and to implement the retrenchment and whether the respondents had discharged their obligations with regard to consulting the applicant on the timing of the dismissals. I think whether or not the submissions made by the applicant and the reply thereto by the respondents are justified and correct will depend upon a consideration of the various discussions, consultations and correspondence between the parties over a long period which preceded the decision to close and the launching of these applications. That has entailed that I read the minutes of the numerous meetings which were held between the parties over some time. I have done so and I have sought to summarise what transpired in each of those meetings in so far as they may be relevant to this matter. Accordingly I

turn to those minutes with a view to examining them to see whether they justify the making by this court of the finding that the applicant needs in order to succeed.

Consideration of the Evidence:

[10] Annexure "SJL4", an annexure to the answering affidavit of the respondents, shows that on 24 July 1997 there was a discussion on the implementation of overlapping shifts at Western Holdings. It was said that would involve the night shift and day shift period being 14 hours. Annexure "SJL5" relates to a meeting which was held by the Mine Joint Forum at which it transpired, when the future of the President Steyn Mine was discussed, that productivity needed to be addressed because, according to the management, the costs which were involved in producing gold were more than the costs or the price at which it was sold. In relation to shaft No. 5, it was indicated at that meeting, that its viability, did not look good and a loss of some R30 million was projected for 1997. In respect of shaft No. 6 the management said that that shaft was projecting a loss of R12 million and that the management was looking at alternatives. Not much was said in relation to shaft No. 7 at that meeting.

[11] Annexure "SJL6" relates to a meeting of the MJF which was held on 21 August 1997. Again the future of the President Steyn Mine was on the agenda of this meeting and shaft Nos. 5, 6 and 7 were discussed. With regard to shaft 5, the management had informed the meeting in July 1997 that shaft 5 had made a loss of R1,5 million and that the shaft had made a profit only two times in 1997 up to that point. The management indicated that calculations made for 1998 showed losses in respect of this shaft; a possibility of a reduction of labour by plus-minus 1 200 employees was also mentioned. The management indicated that its plan at that stage was not final and alternatives were being investigated. With regard to shaft No. 6, the management indicated that huge losses were projected for 1998 and that it was necessary to take measures to reduce costs. With regard to shaft No. 7, it was said that that shaft could make a profit for 1998 if necessary agreements could be reached in that regard. The unions were given an opportunity to ask questions. The management emphasised that the challenge was to cut costs and "to produce more with the same".

[12] Annexure "SJL 7" relates to a meeting which took place on 28 August 1997. That was a meeting of the MJF again. Again at this meeting the future of the President Steyn Mine was discussed and shafts No. 5, 6 and 7 were specifically addressed. With regard to shaft No. 5, the management reported that the only plan that could give a positive return on the 1998 results would be a cost at labour figure of 1 670 employees which would mean a labour reduction of 1 600 to 1 500. The plan would entail the closure of all the levels above 57 and the focusing of the rest of the operations

on levels below level 57. It was also said that the cyclic mining approach could also give good results in a scenario such as that of shaft No. 5. Lastly it was stated that bilateral negotiations were scheduled to take place early the following week. With regard to shaft No. 6, the management stated that if no productivity gains could be made, shaft No. 6 faced closure. The management said that their current plan was to restructure the shaft and this would affect 500 employees. It was said that details about the specific categories would be shared in bilateral discussions.

[13] On shaft No. 7, the management said restructuring was

needed in order to improve the loss making situation on the three shafts. It also said agreements were needed in respect of improving productivity. It also said if no agreement was reached on shaft No. 1, a further 1 000 employees would be losing their jobs and that in 1998 shafts which were not restructured but which still could not make a profit would be closed. Paragraph 2 of the discussion under shaft No. 7 in the minutes ends with an emphasis on the urgency of discussions on these matters. It was also stated that as at 21 August 1997 the mine had about 11 476 employees but once all the restructuring had been done, including shafts 2, 5, 6 and 7, only a total of 6 100 employees would be left on the President Steyn Mine. Again the management indicated that full details would be discussed at bilateral meetings which were scheduled for the following week.

[14] The minutes of the meeting of the Joint Freegold Forum which took place on 1 September 1997 (Annexure "SJL8") reveal that the only item on the agenda was one termed Freegold strategic planning feedback. A presentation made by the management at that meeting was inter alia to the effect that shaft No. 5 was among the shafts which were loss makers, whereas shaft Nos. 6 and 7 were among those listed as marginal shafts. Two options were presented by the management. The one was the closure of the loss makers, which is the shafts which were making a loss (and, according to the management that option would ensure a better future for Freegold employees) and the other one was to continue with the loss makers and stop the development of Freegold 4 which, according to the management, would simply delay the inevitable. The second option would, according to the management adversely affect the future of Freegold and that of its employees.

[15] It was also mentioned by the management that, as there were certain potential buyers who were showing interest in buying the shafts, they had been given until the end of September 1997 to say whether they were definitely interested in buying the shafts. The NUM criticised the management's decision to sell the shafts. The basis of the criticism was that the parties were still involved in trying to find solutions to the problems. MWU, NETU, SAEWA and OASA supported the management's decision to sell the shafts. In the seventh paragraph on page 2 of the minutes of this meeting Mr Hodgson of the management is reported as having said:

"Productivity improvements were important in order to counter the wage increases that were agreed to this year". In the next paragraph he continued and said: "If there were no productivity improvements then not only the loss making shafts would be affected but the other shafts as well."

[16] On the 9th September 1997 another meeting of the MJM was held. Its minutes are contained in Annexure "SJL9". With regard to the future of the President Steyn Mine, the management announced that it had arranged a road show for shafts numbers 5, 6 and 7 to share labour reduction plans. In a discussion relating to shaft No. 1, the NUM said it was not opposed to working overlap shifts but would not be able to discuss the issue of overlap shifts at the mine level as it was linked to the productivity agreement that was yet to be signed. It emphasised that the working of overlap shifts had been discussed at the joint Freegold Forum where the NUM's attitude was that, although it had no objection to the concept of overlap shifts, the wage increment had to be implemented first.

[17] At this meeting the management inter alia assured the Forum that "there will be no job losses with the implementation of overlap shifts or the cyclic mining system". Later in the passage the following appears: "The NUM said that they are not aware of the

employees supporting the system, i.e. the cyclic mining system and that they will not stop anybody volunteering to assist in other jobs but employees should not be forced to assist with other jobs as required by the multi-skilling system". At page 288 the management is again reflected as having emphasised that there would be no labour reduction with the new overlap shifts system. Then the minutes read:- "The NUM stated that the overlap shifts/cyclic mining is linked to the wage increment and therefore will hold back employees willing to embark on this system".

[18] On the 11th September 1997 a meeting of the special joint forum was held. It appears from the minutes that the only item on the agenda was the survival of shaft No. 1 at President Steyn Mine. The minutes of that meeting are Annexure "SJL10". The management emphasised the need to introduce overlap shifts which would restore the night shift and emphasised that the conditions of employment of employees would not be affected in any way. Again the minutes reflect that the management assured the forum that there would be no job losses as a result of the implementation of overlap shifts. At page 3 of the minutes of that meeting, the management emphasised that, if no agreement was reached to implement the overlap shifts/cyclic mining, 989 employees would lose their jobs as the shaft would be closed or sold.

[19] The NUM's reaction to this was that they were not

against overlap shifts but would like to wait for the

outcome of the wage negotiations before they could address issues relating to the overlap shift system. At this stage the management explained to the NUM that the other unions/associations who were willing to embark on the overlap shift system were waiting for the NUM to get on board so that the system could be implemented. On the same day, i.e. 11 September 1997, the parties signed a productivity agreement which, as will be seen later, was, from time to time, the subject of various debates in meetings between the NUM and the management.

[20] On 25 September 1997 a meeting was held between the management and the NUM. Annexure "SJL11" contains minutes of that meeting. Nothing was discussed at this meeting because the NUM representatives indicated that they were not ready to discuss the way forward with regard to the implementation of the productivity agreement as they still needed to consult those who had signed the agreement on behalf of the NUM. On the 26th September 1997 there was some discussion ("SJL12") between the management and the NUM on how overlap shifts would work practically. That meeting ended inconclusively.

[21] On 30 September 1997 another meeting (i.e. Annexure "SJL13") between the NUM and management was held. The management opened this meeting by saying that it was at that time busy consulting with other unions regarding the working arrangements for additional shifts. During meeting there was some discussion on, inter alia, the

overlap shift system as well as the cyclic mining system. The following excerpts from the minutes of that meeting (starting from p311 of the indexed papers) reveal the attitude of both parties:-

"(21.1) Management: Ascertained if the NUM stance is that management undertake up front that specialised labour will do only the tasks allocated to them.

NUM: Confirmed that and said that should not be multi-tasking in disguise where employees are required to do additional task. Further said that restructuring of jobs goes hand in hand with job creating which is still an issue under discussion at national level. Stated that they are disputing the allegation that the intention of signing the agreement was to reduce labour. Anticipate no problems to introduce the overlap shifts, only if it means sharing of 4 hours between the two shifts.

(21.2) Management: Asked if the drillers and winch drivers in the proposed cyclic mining system where blasting would be done on the third day should not be paid for the days that they are not working.

NUM: Said that cyclic mining system that was proposed in the past was based on reducing labour, hence a team visited Western Holdings where the system was in use to get more understanding and it was rejected because of its implications, i.e. reduction in labour. Said that they do not know if the cyclic mining referred to replaces overlap shifts or are coupled together and if management wished to restructure jobs it should be discussed and agreed upon to avoid unnecessary problems.

(21.3) Management: Confirmed that overlap shifts could mean restructuring and labour cuts but cyclic mining is changing the work practices only, i.e. working smarter, not harder. Indicated with cyclic mining overlap shifts will be more effective and that there will be no need to revisit the blasted area behind the barricades. Further asked if the NUM did not understand the implications of the overlap shifts when they signed the agreement?

(21.4) NUM: Said that job losses was never raised in the discussions while signing the agreement and that to their understanding the implications would be proper communication/hand over between the two shifts. Said that if management is prepared to stop retrenchments, the NUM would compromise to implement some

plans to save the jobs of their members. They have rejected anything attached to overlap shifts at Freegold level and they knew that multi-tasking would not be brought about by working the overlap shifts. Further said would not agree on the implementation of the cyclic mining at mine level and unfortunately will not accept the system due to different interpretations.

(21.5) Management: Asked if the NUM knew the implications thereof why did they not reject it at Freegold level?

NUM: That the system is not defined the same as it was discussed at Freegold level."

[22] It is clear from these excerpts the union was opposed to multi-tasking and job reduction and that it was opposed to the implementation of the overlap shift system as there was disagreement on the interpretation of those concepts. Again another meeting was held between the management and the NUM on 9 October 1997. The minutes of that meeting are Annexure "SJL14". The presentation made by Mr D Steyn of the management at this meeting was to the effect, inter alia, that if cyclic mining/restructuring could not be implemented, losses would grow with the result that the mine could be closed. He then informed the NUM that the mine manager was to present the 1998 plan to the Chief Operating Officer on 28 October 1997 and that, if a viable plan indicating an improvement in productivity could not be presented, then "the mine will face closure by December 1997".

[23] Mr Steyn stressed the need to reach agreement and have a commitment to turn the shafts around and save ± 7 000 jobs. The ingredients of the plan indicating an improvement in productivity which the mine manager intended to present to the Chief Operating Officer were revealed to the union as including: Overlap shifts, cyclic mining, restructuring (which, when applied, none of the shafts would be closed and only 3 100 would be affected) and 12 additional production shifts as contained in the productivity agreement. Cyclic mining was explained by the management as not involving any change to work practices. It was said it meant the training of employees to become more effective. In the second paragraph at page 2 of the minutes (page 314 of the indexed papers) the NUM is reported to have indicated that they were prepared to move forward but would like to know the way forward.

[24] At the end of page 2 of the minutes the NUM recorded its agreement to work 12 additional shifts, 11 of which, according to the NUM, had already been given to the management, and the last of which would be agreed upon in due course. Thereafter, again, the NUM said its major concern was how to move forward. Then, although the bottom right hand corner of that page

indicates that the minutes had page 3, there are no further pages of the minutes in the court papers. For that reason the Court does not know what was discussed thereafter at this meeting.

[25] However, between what the union said in the second paragraph of page 2 of the minutes and what it said at the end of that page, there was some discussion between the management and the NUM regarding, among others, the effect, if any, which the conclusion of the productivity agreement was expected to have on job losses. In this regard the NUM indicated that it had signed the productivity agreement on the understanding that it would prevent job losses. To this the management's response was that labour reduction was necessitated by the less available working areas. The management said the unions had agreed to bring in their experts but none had been brought.

[26] Furthermore the management said that the stakeholders had not proposed any additional initiatives and, according to the management, this indicated that the management's plans which included labour reduction were to be followed. There was also some discussion on inviting volunteers for retrenchment.

[27] At a meeting held on the 10th October 1997 ("SJL15") the management and the NUM continued their discussion on the down scaling of the President Steyn Mine. The NUM sought confirmation at the commencement of this meeting that an agreement had been reached between

itself and the management on the "initial labour reduction", the supply to the NUM by the management of figures of affected categories of workers as well as the start of the new retrenchment exercise "after establishing the balances of the required figures taking into account voluntary retrenchment applications."

[28] The management indicated that volunteers would be invited across the mine the following week and that a LIFO print out would be used to determine the balance outstanding to arrive at the total reduction figure. The NUM proposed that the workers who had already applied for voluntary retrenchment in shaft Nos. 5, 6 and 7 be dealt with before further voluntary applications were invited. In response to a question asked by the NUM, the management clarified the process that was going to be followed in shaft Nos. 5 and 7 to get volunteers. The management explained this in regard to shaft No. 6 as well.

[29] The management also informed the NUM that the projected loss for the mine for October 1997 was R6,9 million.

From just about the beginning of the last third of the third page of these minutes (page 367 of the indexed papers) the parties revisited the discussion on the overlap shift system. A reading of the minutes under that topic from page 3 of the minutes right up to just before the next topic on the following page, reveals that, despite the management's plea that the overlap

shift system be introduced for the benefit of the shafts and despite the management making it clear that indications were that only 60 jobs would be lost if the system was introduced and 2 000 jobs would be saved, the union was not prepared at that meeting to agree to the introduction of the overlap shifts system. In this regard it would not be inappropriate to refer to the relevant part of the minutes which appear at page 367 of the papers under the topic of overlap shifts (which is page 3 of the minutes):

"(29.1) Management: Said the introduction of the overlapping system is the last resort to save jobs. It will not be introduced at 5 shaft due to faces available, only cyclic mining can be introduced at No. 5 shaft. Said that overlap shift system has been discussed and agreed upon at regional level and what is left is the implementation of the system.

NUM: Said that it was stated clearly by management that overlap shift system will result into job losses and therefore would like to know if management is now having a different interpretation that overlap shifts do not necessitate job losses.

(29.2) Management: Said that overlap shift system would save jobs at No. 1 shaft and possibly bring about labour

rationalisation at other shafts. Implementation of the system at 7 shaft will give assurance to the Chief Operating Officer that the shaft can continue with mining operations.

NUM: Said that the overlap shift system is part of the productivity agreement signed and that is not intended to reduce jobs, therefore management should commit themselves that no jobs will be lost as a result of the introduction of overlap shift system. Employees will not do additional tasks.

(29.3) Management: Said there is no change regarding work practices and there are no resources to be mined economically with day shift only. Explained the overlap shift system, that it refers to overlapping the traditional night and day shift crews. There is a split of day shift crew over a 13 hour cycling with no night shift ... in place. There is a 4 hour overlap required to optimise productivity benefits (minimum 4 hours cleaning prior to breaking crew arrival). Indicated that only 60 jobs will be affected at 7 shaft in order to save 2 000 jobs. Appealed to introduce the overlap shift system for benefit of the shaft.

(29.4) NUM: Said that employees are working hard to improve times as agreed upon and enquired if the crew is split how would it improve efficiency? Said that for one person to lose job means a great loss to the NUM and therefore 60 employees is a great loss.

(29.5) Management: Said that the intention of the overlap shift system is to make employees more effective and that the bonus is also being increased as a result of the higher work output.

NUM: Said that a workshop has been scheduled to take place at Western Holdings to clear some misunderstanding regarding the overlap shift system. Dates are not yet known. Long off and long on was also discussed but would not be introduced as it will not save President Steyn Mine."

[30] With regard to the proposal of 12 additional shifts to be worked, the NUM requested that discussions on this be held in abeyance pending the workshop referred to in the above excerpt. Because of that it had agreed that the retrenchment process should continue as discussed; certain days would be worked as additional shifts; that it would like to keep back the retrenchment; that it had committed itself to the overlap shift system "but due to some misunderstanding the issue be referred to the workshop at regional level for further discussion".

[31] Then there is the meeting ("SJL16") held between the management and the NUM on 27 October 1997. In a discussion relating to the future of shafts 1 and 2 the management informed the NUM (i.e. page 3 of the minutes, page 372 of the indexed papers) that "the downsizing of other areas was an attempt to improve productivity. The minutes reflect that it continued and said:- "It is for stakeholders to encourage employees to be more productive. The importance of introducing overlap shifts would be to improve productivity. If 5, 6 and 7 shafts do not improve productivity they will also close down". In response to, inter alia, this, the NUM said: "It is clear that NUM never opposed the implementation of overlap shifts, it disagreed on labour costs which would result from implementing the system". The NUM is itself reported at the bottom of page 3 of those minutes to have said: "If Freegold cannot absorb President Steyn employees, the proposal is to ask for volunteers from 5, 6 and 7 shafts".

[32] In a letter dated 29 October 1997, the mine management complained to the union that, despite undertakings by the union to advise as to when clause 6.2 of the 1997 wage agreement would be workshopped, the management had not as yet heard from the union and asked the union to give the matter the urgency and seriousness it deserved. In reply the union sent a letter dated 6

November 1997 to the management and extended an invitation to the management to discuss what it referred to as "the prevailing atmosphere including your letter".

[33] On the 1st December 1997 the parties held another meeting (see "SJL19). Part of the discussion at this meeting related to the management emphasising the need for a good relationship between itself and the unions in general and with the NUM in particular in order to solve severe problems facing the mine, and gave productivity, as an example. The management emphasised the need to implement measures to improve productivity. It was estimated that the losses for December 1997 in respect of shaft Nos. 5, 6 and 7 would, respectively, be R4 773 000, R2 158 000 and R1 566,000. Again the management emphasised that failure to improve productivity would end in the closure of the mine as a whole.

[34] At a meeting held on the 11th December 1997 ("SJL20") the management made a presentation of the budget proposed for 1998 and said there was only one month left for parties to influence the future of Freegold. In the budget it was said that the current situation was putting a serious question mark over the continued future of, among others, shaft Nos. 5, 6 and 7 at President Steyn Mine. Also it was said in the budget presentation: "In January we are obliged to tell the shareholders through the Board what our plan is for 1998". There was also a timetable showing by when such proposals as could come from the NUM would be considered before the formalisation of an appropriate strategy. There can be no doubt that the NUM knew the timetable of what had to be done and by when.

[35] At a subsequent meeting held on the 15th December 1996 the agenda for the meeting was production improvements. After some discussion about the NUM's attitude to joint sessions with other unions and/or associations, the NUM remarked that, although a productivity agreement had been signed at the Chamber level and had been discussed at Freegold level, such agreement had not as yet been implemented.

[36] The NUM then made certain proposals at this meeting. It indicated that its members were prepared to work one additional Saturday at 5,5% or to work continuously for 21 shifts and get one shift off a month and that Sundays should be paid at a premium of 10%. If Saturdays were not enough, it said it would "consider the 1996 Chamber agreement which calls for FULCO but it should exclude public holidays". The NUM even proposed that three fulltime shaft stewards be appointed on C1/2 level to monitor the process of the productivity improvements jointly with the management. After some discussion on joint sessions between the management on the one hand and the NUM and other unions on the other during which the management was urging the NUM to change its attitude towards joint sessions with other unions and the NUM continued to show reluctance

to have joint sessions with other unions and maintained that it was the management's responsibility to persuade the other unions to accept proposals, even if they were not made in joint sessions if such proposals were good, the management stated that the NUM had not allowed the management to implement overlap shifts and cyclic mining.

[37] After this the NUM is recorded as having said that it "may consider implementation of overlap shifts only if it does not comprise of composite crews, self-directed teams, multi-tasking and retrenchments".

Following immediately after what I have just referred to, the NUM had a caucus and, on their return, they said that if "the overlap shifts (sic) does not include composite crews or self-directed work crews, NUM has no objection to the implementation of overlap shifts". After the parties had tried to deal with questions aimed at revealing whether they shared the same understanding on the concepts they were using in the discussion, e.g. overlap shifts, cyclic mining etc, the NUM made its stand clear just before the closure of the meeting by saying: "If cyclic mining has elements of multi-tasking, self-directed teams and composite crews, NUM is rejecting it".

[38] At a meeting held on the 19th December 1997 between the management and the NUM ("TM12") the parties once again focused on production improvements. The management informed the NUM that it had had deliberations with other unions/associations and that they had agreed in principle to the implementation of overlap shifts and

they had highlighted that "if the mediation role played by management cannot be stopped, it will take a long time before implementation". Responding to the NUM's proposal to work continuous shifts at 10% premium for Sundays, the management said "double checks showed that continuous shifts with 5,5% and 10% premium for Saturday and Sunday respectively is not a feasible solution".

[39] With regard to the NUM's request that the management should address the NUM's concern "over multi-skilling,

composite crews, self-directed team and cyclic mining phenomena attached to overlap shifts", the management replied by stating quite clearly that overlap shifts entailed multi-skilling. Asked by the NUM to give its interpretation of overlap shifts at this meeting, the management defined overlap shifts as "an operation where the first group of employees starts the shift four hours earlier, merge with the second group for four hours and leaves the second group behind for four hours".

[40] After a caucus, the NUM said it agreed to the implementation of cyclic mining at shaft No. 5 and overlap shifts at shafts Nos. 6 and 7 provided, again, that they did not include self-directed teams, multi-tasking and composite crews. The NUM added that it would canvass the concept with the employees but, if employees objected to it, the management could "do whatever they want to do with the shafts". Soon after the NUM had said this, the chairperson stated that, if

the NUM had agreed to the implementation of overlap shifts and cyclic mining six months earlier, shafts Nos. 1 and 2 could have been saved.

[41] The parties held another meeting on 31 December 1997 ("TM13"). The initial discussion at this meeting was on whether or not the NUM was agreeable to letting other unions/associations join the meeting as they were available. The NUM indicated its reluctance to agree to such a joint discussion. The management then inter alia said, and I quote the minutes: "it had nothing to demonstrate that they will save shafts because of the reluctance of the NUM in doing things jointly with other unions/associations and that management cannot play the mediation role between NUM and other unions/associations." The NUM accused the management of objecting to the implementation of the productivity agreement and stated that it would "legally challenge any retrenchment as a result of failure to implement the signed agreement as well as the announcement of the anticipated closure of the mine in March 1998 by the mine manager, Mr P L van Vuuren".

[42] The management stated that the productivity agreement made provision for a monitoring period of three months which period had according to the management lapsed probably counting from the date of the conclusion of the productivity agreement namely 11 September 1997.

The management asked the NUM to table proposed dates

for additional shifts in 1998 and indicated that the start and the end times of overlap shifts would be

determined by all role players. The management said other issues which were still to be investigated were, "shaft schedules, training of employees and the phasing in of the system".

[43] Of importance in this meeting is also the fact that the management is reported as having indicated to the NUM that overlap shifts would bring about losses of other jobs and that it had no guarantee to improve production if there was no dedication and willingness to improve productivity. The acting assistant manager also stated that there were eight days left to train employees and implement the system. After this the minutes reflect that the NUM said, although both parties had agreed in principle to the cyclic mining concept, the NUM had realised that cyclic mining was not contained in the productivity agreement and, for that reason, the NUM would not canvass cyclic mining with its members.

[44] That stance on the part of the NUM seems to be confusing when viewed against the last sentence of the seventh paragraph at page 2 of these minutes. That sentence is to the effect that the NUM was not opposed to cyclic mining but wanted to canvass it with its regional leadership first. The minutes then reflect the following at page 2 of the minutes (page 127 of the indexed papers): "The NUM remarked to the fact that management reiterated that management is not sure that overlap shifts will save shafts, confirms that shafts will be closed in March 1998 and NUM will not take that lightly. Management explained that cyclic mining does

not change mining practice but it means working smarter. Management said that the mine manager did not announce the closure of the mine in March but quoted from the brief which was sent out to employees that if management cannot come forth with a plan that will demonstrate improvement there will be no option but to close the shafts. Management pointed out that 13 January 1998 is the date for EXCO to demonstrate to RAMCO its commitment and appeal to NUM to bring the information (proposed dates for additional shifts) as soon as possible to enable management to consult with other unions/associations. The NUM indicated that this issue was brought to NUM late and they could not respond on time due to the Christmas holidays but promised to respond on Monday, 5 January 1998, provided management gave NUM leadership a day, (Friday, 2 January 1998), to meet and work on the issue. Furthermore, NUM promised to bring an expert on cyclic mining the following week to investigate the concept. The NUM suggested to continue with overlap shifts only and cyclic mining to be dealt with later after the implementation of overlap shifts. Management replied that an appeal was made in the meeting held on 25 April 1997 to make viable action plans to improve the situation and save the mine".

[45] With regard to the above, it is noteworthy that the NUM is reported as having said, and I quote from the

minutes: "The fact that management reiterated that management is not sure that overlap shifts will save

shafts confirmed that shafts would be closed in March 1998 and the NUM would not take that lightly". It is also significant that the management emphasised that, although as at that stage the mine manager had not announced the closure of the mine in March 1998 if management could not come forth with a plan that would demonstrate improvements, there would be no option but to close the shafts. The union proposed to bring dates for additional shifts the following week. In the second paragraph from the bottom of the second page of the minutes of that meeting, the NUM is recorded as having suggested that overlap shifts be continued with and that cyclic mining be dealt with later.

[46] Yet another meeting ("TM14") was held on 7 January 1998 between the management and the NUM. The item on the

agenda of this meeting was the "implementation of productivity agreement". After indicating that cyclic mining would not be entertained because it was not part of the productivity agreement, the NUM stated that cyclic mining was not being completely rejected but had to be discussed at regional level first. Thereafter the NUM presented its proposals. On overlap shifts, its stance was that its members had endorsed it but not if it included multi-tasking. The NUM said overlap shifts on that basis would be implemented with immediate effect if full-time shaft stewards were appointed to monitor the process.

[47] The union also proposed the placing of a moratorium on retrenchments to enable the implementation of overlap

shifts. On additional shifts, the NUM proposed dates and proposed that such shifts should start one hour earlier. Under "additional shifts" at page 2 of those minutes (i.e. p.130 of the indexed papers), the following appears. "The NUM said that 5,5% to be paid to employees should be on top of the daily rate and based on the wages of the individuals. The NUM does not expect any discrepancies in payment of the shifts. The NUM presented its proposed additional shifts as follows" and the dates are then given there.

[48] With regard to start and end shifts the following appears in the minutes: "Early shift (night shift) to start from 00:00 to 08:00; late shift (day shift) to start from 04:00 to 12:00. Further, NUM propose that shifts start one hour earlier on days preceding days off. The NUM said that they will not expect team leaders to lose jobs at the expense of miners and propose that every crew shall be supervised by a team leader. A miner should remain as supervisor to the team leader, not take the team leader's role."

At this stage the management asked the NUM to give its own definition of multi-tasking in writing to avoid misinterpretation. The NUM, in response, said and I quote from the minutes: "When someone is developed or a career is paved for him, this is multi-skilling whereas multi-tasking refers to the opposite because it means that somebody is given lots of work or is trained to perform many other jobs".

[49] On 8 January 1998 a regional meeting ("TM15") was held between Freegold management and the NUM. According to the management representatives at the meeting, the purpose of the meeting was partly to discuss the lack of progress on improving productivity. The regional management complained that no progress on this issue had been made at the President Steyn mine and at Western Holdings. They complained further that, within four months of the signing of the productivity agreement, additional shifts were required to have been implemented and yet this had not happened. The NUM stated that they had made proposals to the management about overlap shifts and extra shifts and they were awaiting the management to respond. The management responded by saying: "Let's hope your proposal will be sufficient to convince the Anglo Board later this month".

[50] The NUM made a short presentation at the meeting in which it again said overlapping which was accompanied by multi-tasking was not acceptable, and that the overlap of four hours was too long. While the parties were trying to focus on who was responsible for the parties not having been able to make real progress on productivity, the NUM delegation said: "If we want to be honest, neither of us have done much about the overlap shifts, but now we want to come up with a strategy to implement. We should avoid a chicken or egg situation".

[51] At a subsequent meeting held on the 13th January 1998 between the management and the NUM ("TM16") the management responded to the NUM's proposals on productivity. Although it started by again asking the NUM to provide it with its own definition of multi-tasking and multi-skilling, something that it had already asked for and had been given, at least in part, if not in whole - though not necessarily in writing, the management indicated to the NUM (with regard to the latter's proposals) that:

(51.1) as the NUM had asked that the overlap shifts be implemented if possible together with a monitoring mechanism, the implementation of the latter could not be entertained at that stage and the management said it would wait for regional negotiations;

(51.2) with regard to the NUM's call for a moratorium on all retrenchments while its proposals were implemented in order to see what improvements the implementation of such proposals would bring about, the management said it could not agree to this but said it would be prepared to recall retrenched workers if the need arose;

(51.3) the management was not agreeable to the NUM's proposal for the retention of Team Leaders to supervise all gangs per shift because, according to the management, to do so would be against fundamental principles of labour utilisation in a situation where efforts were being made to improve productivity;

(51.4) as the NUM's proposal at some stage on overlap shifts had been that overlap shifts be continued with but that cyclic mining still needed further consideration, the management said it was not prepared to consider overlap shifts without cyclic mining because it believed that the two could not be "divorced from each other".

(51.5) with regard to the NUM's proposals on starting times for overlap shifts as well as the proposal of going down one hour earlier on days preceding days off, the management said that it was still awaiting feedback from the other unions/associations. The NUM's response to what the management had said as well as the discussion which followed until the end of that meeting are to be found from the top of the second page of Annexure "TM16" of the founding affidavit up to the end of the first third of the third page of those minutes.

[52] Without going into details about what followed in that discussion, it suffices to say each party stuck to its position. The management said the implementation of overlap shifts without cyclic mining would not bring about any improvements and the NUM insisted that it was not agreeable to cyclic mining - at least at that stage as cyclic mining was not part of the productivity agreement between the parties. As to their definition of multi-skilling and multi-tasking, the NUM said it

had given its definition of these concepts in the previous meeting and such definition would be reflected in the relevant minutes.

[53] The management said, if the NUM could not agree to cyclic mining, that meant that the management had no agreed plan because the management's plan included cyclic mining. Towards the end of that meeting the NUM said that "overlap shifts have been agreed by NUM in the signed agreement to be implemented but if somebody who has not signed the agreement is saying it cannot be implemented, NUM will frustrate the closure of the mine and take management to court". Once again, another meeting and another failure to reach agreement.

[54] Then another meeting ("TM17") was held between the parties on 19 January 1998, between the management and the NUM. At this meeting the management informed the NUM that the total labour budget for 1998 was 5 040. It also indicated that it had been agreed with the NUM that labour reduction should start with voluntary retrenchments before there could be compulsory retrenchments. The management pointed out that all President Steyn mine shafts would continue until March 1998 and that this had been put forward to the NUM to come up with proposals. At the top of the second page of these minutes of that meeeting ("TM17") the management is again reported to have said that the three shafts (and this must be a reference I think to shaft No. 5, 6 and 7) would be closed at the end of March 1998. The management emphasised that the closure

of the three shafts at the end of March would form part of their recommendations to the Board of Directors and that, ultimately, the decision to close or not to close lay with the Board and not with the management.

[55] In paragraph 4 of the second page of those minutes, the NUM is reported to have asked the management to come out clearly about the closure of the mine because, said the NUM, the management had previously indicated that they would be closing the mine in March but they later denied having said that and then at this meeting the management was making the same statement again to the effect that the mine would be closed at the end of March 1998. The management explained this by saying that what they had said before was a plan which was not yet approved by the shareholders and emphasised that the Board of Directors would take a decision whether to close or not to close the mine.

[56] In response to this the NUM asked whether the management had anything from the other unions/ associations which could stop the closure of the shafts. I pause here to say that one cannot but feel on coming to this stage of the meeting that at this stage it seems that it finally dawned on the NUM that chances were very good that the shafts would be closed at the end of March - hence their enquiry whether the management had received anything from the other unions or associations that could stop the closure of the mine.

[57] The NUM then stated that the productivity agreement had been aimed at saving jobs if productivity was increased but since the productivity agreement was signed, it had not been implemented. The NUM complained that it had been proposing the implementation of the productivity agreement to no avail. The management's response to this was that they had not received anything from the other unions or associations which could save the shafts because plans which were put forward were not implemented. The management is then reported, according to the minutes, as having said: "The productivity agreement was concluded to give people yearly increases not to save the sinking shafts".

[58] I have already indicated that, subsequent to those meetings, a decision was taken on or about 23 January 1998 by the Board of Directors of the respondents to close the shafts which are the subject of these two applications. Subsequent to the announcement of the closures, a meeting was held ("SJL21") between the management and the union on 27 January 1998. The item on the agenda at this meeting is reflected in the minutes as having been the closure of President Steyn Mine. The chairperson of the meeting, (there is no indication as to who he or she was, but judging by the statements attributed to the chairperson in the minutes, it must have been someone from the side of the mine management) indicated that the previous two months had been a busy time as several meetings had been held where stakeholders had been given an opportunity to influence the budget before it could be taken to the

mine's board of directors. He also said that constructive proposals had come from the President Steyn Mine, some of which would be implemented to the long life shafts.

[59] After the chairperson of the meeting had indicated that it was unfortunate that a decision had been taken to close some shafts prior to the end of March 1998, the NUM said they had heard the announcement by Mr A G Smith on 23 January 1998 on the closure of the shafts but they wanted to know why the mine was being closed down. The NUM then complained that, pursuant to the purpose of the productivity agreement (which they understood to be to save shafts by prolonging their lives), they (i.e. the NUM) had proposed the working of overlap shifts and 12 additional shifts (which 12 additional shifts they had started working as from 24 January 1998) but the management had not reverted to them to say if the shifts were making improvements.

[60] The NUM indicated that there were many options like long offs and overlap shifts to be considered if the additional production shifts did not achieve the required targets. In response the management confirmed that the productivity agreement was signed not to save shafts but, said the management, in order to enable the mine to give 10% wage increment. The management also confirmed that it had been agreed between the stakeholders that the productivity agreement would be implemented. According to the management that meant that the increase was conditional upon the

implementation of the productivity agreement, and yet by December 1997 little progress had been made towards the implementation of that agreement. At this stage the management emphasised that, despite Messrs Steyn and Briedenham pointing out the benefits which would flow from the implementation of the productivity agreement, the NUM had not agreed to the implementation of that agreement.

[61] The NUM urged that the decision to close the mine should be reversed. It said it had been ready and prepared to implement the productivity agreement but the management could not implement the agreement because of sweetheart unions, which, according to the NUM, were affiliated to the management. Also the NUM said it had been ready to implement overlap shifts but the management had frustrated the process by introducing multi-tasking which was not in the agreement. Talking under the topic of shaft No. 7, the NUM inter alia said the following at page 3 of the minutes of this meeting which appear at page 339 of the indexed papers and I quote from the minutes: "... many jobs are also to be lost and that is having a negative impact to the people of the country of South Africa and the entire Southern African region". In the paragraph following the one containing the above quotation, the NUM said and I quote from the minutes: "Therefore NUM's proposal is that management should reverse the decision and negotiate with NUM measures to save the mine for the betterment of the Welkom community, the entire nation and the country's economy".

[62] After a caucus, the NUM stated that the only way to extend the life of the President Steyn mine was to implement the overlap shifts with immediate effect. It said cyclic mining and long offs would be considered provided the options contained in the productivity agreement were not delivering the goods. The NUM said if the management was saying no to the implementation of the productivity agreement aimed at saving the mine and jobs, the NUM would seek legal advice.

[63] To all this the management's reaction was that, if the NUM gave a guarantee to carry the losses, the management would consider the NUM's proposal to reverse the closure of the mine. In this regard the management pointed out that losses were becoming bigger and bigger and that the loss for the President Steyn Mine in December had been R11 million in total. To a question from the NUM whether the management was not prepared to implement the productivity agreement, the management replied by pointing out that the decision had been made and that the discussion of the meeting should have been on the closure process. That was followed by the NUM informing the management that the two parties were then in dispute about "the issue at hand". To this the management responded by saying it would have to be advised formally about the dispute "so that the dispute can take its course, and that the process to close will also take its course". Lastly, the NUM told the management that it would inform the management if there would "be a need for NUM to be involved in the closure process".

[64] Finally, on 28 January 1998 the mine manager addressed a letter ("TM19") to the branch chairperson of the NUM advising him that, although at the meeting of 27 January 1998 between the management and the NUM, the latter had declared a dispute, the process of retrenchment and closure of the mine would continue. The last paragraph of that letter was to the effect that the management remained committed to the process of consultation with the branch committee but, in the event of the branch committee not being able to meet with the management due to the dispute it had declared, the management would keep the chairperson informed in writing of all progress made.

[65] In my view the various discussions and consultations which were the subject of the meetings I have referred to above, as well as the correspondence between the applicant and the respondent establish quite clearly that over months of discussions the applicant knew there was a risk that the shafts could be closed in 1998 unless the parties were able to implement measures which would turn the situation of those shafts around. From about 11 December at the latest the applicant knew that in just over a month's time the respondent's board of directors would meet to take a decision on the future of the mine and that it was entitled to influence such decision as might be taken by the board by presenting proposals. Mr Maserumule argued that a period of one month was not sufficient for such a

purpose. While in another matter I might have been inclined to agree with Mr Maserumule, I am unable to agree with him in the context of this case and in the light of the various meetings and discussions that I have referred to above.

[66] Over the period from before December 1997 to 19 January 1997 the parties were engaged in lengthy consultations relating to measures aimed at the improvement of productivity as well as saving the shafts from closure but no agreement was reached. The applicant's contention that there were measures which were agreed between the NUM and the management as measures that would or could save the mine is simply not supported by the documentary evidence. In this regard it must also be borne in mind that as the applicant is seeking final relief, the decision of the Court must be based on the respondents' version of what happened if there is a dispute of fact between the versions of the two parties unless the respondent's version is so untenable that the Court would be justified in rejecting it on the papers. (See in this regard the Plascon-Evans case).

[67] In this matter I am not persuaded that all blame for the failure of the parties' endeavours to save the shafts can be laid at the door of any one party. It seems to me that for a long time neither party moved on all relevant matters with the urgency and diligence with which all parties ought to have moved. An example of this is that it would appear that the management did not pursue the matter of seeking the agreement of all

parties with the seriousness and urgency which one would have thought was called for by the situation and in this regard it found it convenient, it seems to me, to lay blame on the NUM's unpreparedness to participate in joint sessions with other unions. A reading of all the minutes of meetings that I have referred to above leaves one with the impression that, in part at least, the management at some stage dealt with the consultations in a manner which would enable it, afterwards when the board had taken the decision to close the shafts, to lay the blame for all of that on the NUM's reluctance to agree to joint sessions with other unions/associations. On the other hand one cannot read all the minutes of all the meetings without gaining the impression that, for a long time, the NUM sought to delay the matter unduly and failed to agree on matters which one would have thought ought to have presented the NUM and its members with no problem at all if to agree to them meant that there was a chance of saving the loss of so many jobs.

[68] In all the circumstances I am of the opinion that the respondents had no agreed viable alternative measures which could justify the continued operation of the shafts in the circumstances where the huge losses the respondent was suffering were bound to continue at least for some time. With regard to the applicant's arguments that there was no consultation on the timing of the dismissals, I am of the opinion that such argument has no merit. I say this because, for quite

some time, the NUM knew that closure was estimated to be in March 1998. After the decision to close the shafts had been taken on 23 January 1998, the NUM was consulted by the management on 27 January 1998 on the closure process which is when they could have had another chance to influence the timing of the dismissals but they elected not to continue participating in that process after they declared a dispute. The letter of the management dated 28 January 1998 addressed to the chairperson of the branch committee shows this in clear terms.

[69] I therefore conclude that the applicant's application in the President Steyn Mine falls to be dismissed. With regard to the application relating to Western Holdings, I am also satisfied that that application, too, must suffer the same fate as the President Steyn Mine matter and for the same reasons as advanced above but, obviously, based on the evidence set out in the affidavits and minutes of meetings between the parties in that matter. This judgment is already too long and I do not propose to refer to the minutes and evidence in that matter in support of my finding that the applicant's contentions in that matter are not supported by the evidence in the Western Holdings matter. However should anyone of the parties request the Court to, the court will happily supply a supplement to this judgment dealing with such evidence in the Western Holdings matter as, in the court's view, supports itsy finding in this regard.

[70] With regard to costs, I am of the opinion that Mr Maserumule was correct when he indicated that this was not a matter in which it would be appropriate to grant costs. Indeed he indicated that, even if the NUM had won, the attitude of the NUM was that this was not an appropriate matter for a costs order.

[71] In the result the applications in the two matters are dismissed and no order as to costs is made.

R M M ZONDO

JUDGE OF THE LABOUR COURT

OF SOUTH AFRICA

6 MARCH 1998

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