Retrenchment and Severance Pay

Labour Law cases decided in the South African Courts (Highlights and updated 6 1997 to 12 2025 [16.13.1])

Dismissals (Retrenchment and Severance pay):

1. Retrenchment

Consultation

Consultation must take place once the possible need is identified and before a final decision is made.

Atlantis diesel Engines

Theft

still showed a preference for using contracting companies.

the deferential approach was no longer part of our law and dismissal for operational requirements had to be a measure of last resort, or at least fair under all the circumstances. A dismissal could only be operationally justifiable on rational grounds if the dismissal was suitably linked to the achievement of the end goal for rational reasons. Dismissals had to be a last resort and if they were not, that rendered them unfair.

(CA22/2012) [2014] ZALAC 78

National Union of Mineworkers and Another v Black Mountain Mining (Pty) Ltd

Non-compliance with section not necessarily resulting in invalidity or nullity of dismissals

s 198A(8)

Because the notices of termination did not comply with the statutory requirements it axiomatically followed that the dismissals were invalid and of no force and effect, was wrong. Non-compliance with s 198A(8) not necessarily resulting in invalidity or nullity of dismissals.

Overrules two previous judgments of the Labour Appeal Court, namely in De Beers Group Services (Pty) Ltd v NUM (2011) 32 ILJ and 1293 Revan Civil Engineering Services (Pty) Ltd v NUM (2012) 33 ILJ 1846.

(JS648/13, JS51/14, JS350/14) [2015] ZALAC 2

Edcon v Steenkamp and Others

Termination of the employment contract at the behest of a third party

Employees were not consulted as contemplated by s 189 of the LRA. The respondent contended that it did not dismiss the employees at the end of December 2009 but their services automatically terminated in terms of specific provisions of their contracts of employment.

The court held that a contractual provision that provided for the automatic termination of the employment contract at the behest of a third party or external circumstances beyond the rights conferred to the employee in our labour laws, undermined an employee's rights to fair labour practices and was disallowed by labour market policies.

(JS 879 / 10) [2015] ZALCJHB 129

SATAWU obo Dube v Fidelity Supercare Cleaning Services Group (Pty) Ltd

Severance pay

Forfeited

DA17/99

Lorentzen v Sanachem

Compensation

Length of service, prospects finding alternative position and financial position of employer are not relevant factors.

J1252/98

Scribantev Avgold

Disclosure of confident information

JA76/99

Langa v Active Packaging

Consultation

Joint-problem solving process; Atlantis Diesel Engines v NUMSA (1994) 15 ILJ 1247 (A)

JA13/00

Alpha Plant and Servicing v Simmonds

Compensation

S194 remove any need for evidence

No compensation awarded

JA13/00

Alpha Plant and Servicing v Simmonds

Consultation

All affected employees should directly or indirectly be given opportunity to influence the employer's decision making process (Johnson & Johnson v CWIU)

J2264/98

SACCAWU v Amalgamated Retailers

Consultation

desire to steamroll the retrenchment process' and irreconcilable with the obligation to engage in a process of meaningful consultation in the form that is required (Kotze v Rebel discount Liquor Group (2000) 21 ILJ 129 (LAC))

J2192/00

Strauss v Plessey

Substantive fairness

posts being renamed; competency of employees;

CA10/00

South African Mutual Life Assurance Society v IBSA

Substantive fairness

Court not to second guess employer but to decide whether the ultimate decision is "operationally and commercially justifiable on rational grounds"; (Carephone v Marcus)

CA4/00

BMD Knitting Mills v SACTWU

Bumping

bumping is situated within the LIFO principle. Longer serving employees have devoted a considerable part of their working lives to the company; is sufficient reason for them to remain and others to be retrenched

bumping should always take place horizontally before vertical bumping is resorted to; domino bumping; minimising the disruption to the employer; geographical limits to bumping ; independence of departments as separate business entities may be relevant

CA3/01

Porter Motor Group v Karachi

Bumping

In a factory where employees perform more or less the same duties LIFO can be applied [between departments]. However, where there are different departments were (sic) persons perform different skills it is not always possible

C04/00

FAWU & Others v Yaldor Sweets Manufacturers SA (Pty) Ltd

Severance pay

It creates a statutory minimum that has to be paid when an employee is dismissed for reasons based on the employers (sic) operational requirements. The only logical interpretation that can be given to the words at least in section 41(2) of the [BCEA] is that it should mean not less than

CA2/01

South African Typographical Union (obo Van As & 6 Others) v Kohler Flexible Packaging (Cape), a Division of Kohler Packaging Ltd

Employer making all employees redundant and then handpicking employees for new positions; was open to the charge of arbitrariness

J869/00

Wolfaardt & Another v The Industrial Development Corporation of South Africa Ltd

Consultation

On the proposition that s189 prevents an employer from consulting with individual employees at any stage where there is a representative union, noted that bypassing a union undermines collective bargaining but held that if deadlock is reached with the union, and if the employer has in fact discharged all its consultation obligations with the union, I can see no reason why the employer should not be permitted to consult thereafter with the affected individuals

JS99/01

SACCAWU & Others v Sun International South Africa (Ltd) (A division of Kersaf Investments Ltd)

Information

Section 189(3) notice: that information in terms of this section must be given to the employee before the decision to dismiss is made in order for the employee to be able to participate meaningfully in the consultation process

the complete failure of the [employer] to provide any of the written information required by the LRA, the only conclusion that can be drawn is that the [employer] failed to follow a fair procedure

C163/00

Hendricks v SAA

Selection criteria

not conducted any interview and had placed far greater reliance on the test than was warranted

had not shown that the selection criteria were fair and that for this reason the dismissal was substantively unfair

C163/00

Hendricks v SAA

not for operational requirements but for an ulterior motive

employee had been placed on suspension for a long period

J6155/00

Mahlati v SABC

Alternative employment

s41(4) of the BCEA

alternative employment may incorporate employment by the same employer in the same position but on terms and conditions of employment that differ either in some or in all respects with the terms and conditions of employment that applied to the employee before or at the time the offer was made. [22] It is the employment that is required to be alternative and not the position; where an employee accepts such new position he either enters into a new contract of employment or amends his existing contract; the employees rejection of that offer was unreasonable

JA12/01

Freshmark (Pty) Ltd v CCMA & Others

Substantive fairness

LC will not ordinarily interfere with decisions taken by employers where that decision was clearly and objectively in the best commercial interests of the business concerned

the first employee ought to have been placed in one of the new positions without an interview and that his dismissal was therefore substantively unfair

JS902/01

Mabaso & Others v Universal Product Network (Pty) Ltd

Procedural fairness

the employer had not only come to a general decision on the need to retrench prior to consulting with the employees, but even identified the specific employees to be dismissed

JS902/01

Mabaso & Others v Universal Product Network (Pty) Ltd

Procedural fairness

retrench prior to consulting

Kotze v Rebel Discount Liquor Group (Pty) Ltd (2000) 21 ILJ 129 (LAC),

JS902/01

Mabaso & Others v Universal Product Network (Pty) Ltd

Voluntary

that in signing the agreement and accepting payment the employee had settled any dispute between himself and the employer

JS554/02

Makiwane v International Healthcare Distributors

Substantive fairness

the respondents accepted that there were justifiable economic reasons for closing the plant; there were objective reasons for the restructuring; which included job losses

CA 13/02

Enterprise Foods (Pty) Ltd v Allen & 10 Others

Procedural unfairness

submitted that the decision taken by the board in June 1999 was not final, but merely a provisional one; was no evidence that the decision of the board was not a final one and that therefore Enterprise Foods fell far short of the standard demanded by s.189 which requires bona fide consultation to precede a final decision to dismiss

CA 13/02

Enterprise Foods (Pty) Ltd v Allen & 10 Others

Substantive fairness

that such dismissals be shown to have been a measure of last resort which could not be avoided

CWIU & Others v Algorax (Pty) Ltd (2003) 11 BLLR 1081(LAC)

C1008/01

Food & Allied Workers Union; Abrahams, Clint & 113 Others v South African Breweries Limited

Procedural fairness

entry-level specification ; that the choice of an invalid assessment tool was unfair

C1008/01

Food & Allied Workers Union; Abrahams, Clint & 113 Others v South African Breweries Limited

Substantive fairness

Frys Metals a distinction was drawn between a dismissal effected in order to compel employees to accept a demand in respect of a matter of mutual interest and a dismissal for operational requirements. Held that this dismissal did not fall under the definition of an automatically unfair dismissal contemplated by s. 187(1)(c)

Frys Metals (Pty) Ltd v NUMSA & Others (2003) 24 ILJ 133(LAC)

JA 52/02

Mazista Tiles (Pty) Ltd v National Union of Mineworkers; Mothloki & 143 Others

that the decision to dismiss must be operationally justifiable on rational grounds BMD Knitting Mills (Pty) Ltd v SA Clothing & Textile Workers Union (2001) 22 ILJ 2264 (LAC)

C170/00

SA Transport & Allied Workers Union v Old Mutual Life Assurance Company SA Ltd

Compensation award

the car allowance, medical and pension benefits for one month for breach of contract under s 77(3) of the BCEA as read with s 195 of the LRA; the value of his share options and accrued profits as at 28 February 2003 ; one month’s pay as notice pay; the balance of his salary for June, July and November 2002 ; his salary for December 2002 and January 2003; two weeks’ severance pay ; the balance of his relocation allowances and his accrued leave pay ; twelve months compensation for unfair retrenchment

C190/04

Parry, Roger v Astral Operations Ltd

Selection criteria

LIFO and skills

this method is open to abuse. General Food Industries Ltd v Food and Allied Workers Union ((2004) ILJ 1655

employers misrepresentations and subsequent failure to disclose fully and timeously the selection criteria and how they were to be applied was in bad faith and unfair. Held further that they had failed to discharge their onus to prove the selection criteria were fair and fairly applied and that the dismissals were substantively fair.

D113/00

CEPPWAWU (o.b.o. Gumede) v Republican Press (Pty) Ltd

Outsourcing

the obligation to consult only arose when the employer contemplated dismissing employees for operational requirements, prior to which there was no such duty. Held that although the employer was inclined towards outsourcing this was not in conflict with s 189 of the Act.

JA39/03

National Education, Health and Allied Workers Union and Others v University of Pretoria

Substantive fairness

that the absence of a proper retrenchment process impacted on the substantive fairness of the dismissal because it excluded a discussion of the selection process.

D202/02

Robinson, N A; Thorn, P L & Carrim, F v Price Waterhouse Coopers

Procedural fairness

After the meeting the three staff members concerned were summoned to individual meetings and given letters setting out the reasons for restructuring and terminating their employment as of 28 September 2001; the letters of dismissal were drafted prior to the meetings.

D202/02

Robinson, N A; Thorn, P L & Carrim, F v Price Waterhouse Coopers

Substantive fairness

Selection criteria

employer was obliged i.t.o. s189(7)(b) to use fair and objective criteria as contemplated in the Act. The company had conceded that the criteria of willingness and the interview were subjective and this portion comprised 20% of the criteria. They argued that 20% was insignificant and ought to be ignored. Held that this was not so and the selection criteria were therefore not fair and the dismissals were substantively unfair

JA31/03

Chemical Workers Industrial Union; Sangiveni & Others v Latex Surgical Products (Pty) Ltd

Different packages to employees

different treatment of employees on retrenchment, without good cause, would result in an unfair dismissal i.t.o. Chapter VIII of the LRA

JS 239/04

Mathews, T v GlaxoSmithKline SA (Pty) Ltd

Substantive fairness

Court a quo favoured a strict test as set out in BMD Knitting Mills (Pty) Ltd v SACTWU ((2001) 7 BLLR 795 (LAC)) and Nehawu & Others v The Agricultural Research Council & Others ((2000) 9 BLLR 1031 (LC); The Court held that the employer had failed to discharge its onus to establish the existence of a commercial rationale behind the retrenchments for operational requirements.

On appeal the Court noted that the employees were not retrenched because either Fauna or Forecourt were running at a loss but because Forecourt had decided to run the business in a different way. Further that an employer has the right to choose the manner in which he runs his business provided he respects the workers contracts of employment and obtains their consent or consults with their representatives in altering such contracts or contemplation of retrenchments for operational requirements. However it was also noted that it was unfair of an employer to choose a solution that entailed job losses if there was another solution which was viable.

JA 52/03

Forecourt Express (Pty) Ltd v SATAWU; Monyelo, A & Others

Affirmative action

Held that this argument was incompatible with the judgment in Dudley v City of Cape Town ((2004) 25 ILJ 305 (LC)) and PSA obo Karriem v SAPS & Another (unreported C435/04) that there was no obligation on an employer, when contemplating retrenchments, to give preference to suitably qualified employees from a designated group. Held further that if the individual employee had no enforceable right under the EEA then no failure by the employer to consider its obligations under the Act could render a dismissal unfair

JS 415/05

Thekiso, J v IBM South Africa (Pty) Ltd

section 189A

Procedurally unfair

The court noted that in terms of sec 189A(13) read with (7)(b)(ii) and (8)(b)(ii)(bb), procedural fairness can only be challenged by way of motion proceedings. Quite plainly, the drafters of sec 189A had mass retrenchments in mind when introducing it into the Act. [They] could not have intended to non-suit individual employees from raising procedural fairness in trial proceedings, even if he or she had referred the aspect in terms of sec 189A of the Act. It would often be impractical to do so. There is no reason why the two aspects could not be heard simultaneously, particularly since the individual may not invoke strike action. See also Numsa & Others v SA Five Engineering [2005] 1 BLLR 53 (LC).

JS326/05

Watts v Fidelity Corporate Services (Pty) Ltd

Consultation

The court confirmed that the consultation process entails a dual participatory role

JS149/05

Greyvenstein v Flaiming Silver Trading 62 (Pty) Ltd t/a Sunglass World

Severance pay

the court found that the applicants decision to reject the offer of alternative employment had been taken precipitously and was unreasonable in all the circumstances. She was therefore not entitled to any severance pay.

JS149/05

Greyvenstein v Flaiming Silver Trading 62 (Pty) Ltd t/a Sunglass World

Consultation

With reference to the decision of the LAC in Nehawu v University of Pretoria (2006) 5 BLLR 437, the court held that an employer may come to the consultation table with a predisposition towards a particular method of solving the problem which has given rise to the possibility of retrenchment.

JS148/02

Satawu obo Chauke & Others v Roadway Logistics (Pty) Ltd

189A(13)

189A(7)(b)(ii)

D73/09

National Union of Metal Workers of South Africa (NUMSA) obo members, second and further applicants v Bell Equipment Company SA (Pty) Ltd

189A(13)

Duties of Facilitator

May not make rulings

JR201/11

National Union of Mineworkers v BHP Billiton Energy Coal SA Ltd and Others

Procedural fairness

Disclose all info, to engage meaningfully

191(12)

one employee and only substantive fairness refer to arbitration

JR1965/05

Rand Water v Bracks N.O. & Others

Substantive fairness

such as the alleged failure by the employer to apply fair selection criteria; its alleged failure to consider properly alternatives to retrenchment and the fairness of the severance package that they had been offered.

Procedural fairness

They are intertwined

J1114/07

Banks & Another v Coca-Cola of SA

CCMA lacks jurisdiction to decide on a dismissal for operational requirements if the process affected more than one person

191(12)

JR106/07

Telesure Investment Holdings (Pty) Ltd v CCMA & Others

who consult

Where an employer consults in terms of a collective agreement with a majority union which requires it to consult with that union in the event of retrenchment, the employer has no obligation in law to consult with any other union nor with any individual employee

JS693/00

Maluleke & Others v Johnson Tiles (Pty) Ltd

Strike dismissal

factual causation enquiry

question whether the dismissal would have taken place but for the strike action

C450/05

NCAWU obo Sethlogelo & Others v CCMA & Others

Strike dismissal

Legal causation

would be established through an objective test of determining whether the strike was the main, dominant, prominent, or proximate likely cause of the dismissal.

C450/05

NCAWU obo Sethlogelo & Others v CCMA & Others

retrench not genuine but a sham

197

JS209/06

NUMSA & others v Glenlux Lighting (Pty) Ltd

Employees failure to apply for positions should not have led to automatic retrenchment Employer obliged to consider suitable alternatives under s 189(3)(b) of LRA

189(3)(b)

C218/06

Airey & Others v GE Security (Africa)

there was an agreement to retrench the employee, such an agreement could not prevent the employee from later challenging the fairness of the dismissal, depending on the facts of the case. However, if a proper agreement was made between the parties, the court would no longer have jurisdiction.

189(3)(b) and s 189(3)(d)

C218/06

Airey & Others v GE Security (Africa)

not only obliged to show the general need to retrench, but also the need to retrench the particular employee.

C218/06

Airey & Others v GE Security (Africa)

It made no sense for an employee to only know about the selection criteria once he stepped into the consultation meeting

C218/06

Airey & Others v GE Security (Africa)

fait accompli. When the employee received his written notice, a specific structure had already been adopted by the employers management committee. The employee was therefore already faced with a decision that his position was redundant.

C218/06

Airey & Others v GE Security (Africa)

Selection criteria/ Bumping

LIFO was the most objective and fair criterion to use; This criterion, however, need not be applied in those cases where its application could result in loss of skills or disrupt the business operations

JS460/0

NUMSA obo members v Timken SA (Pty) Ltd

Retrenchment presented as a fait accompli

JS694/07

Visser v Atronic International Gmbh

Substantive fairness

rather poor performance

JS380/08

SASBO obo Boughey v Nedbank Limited

LIFO

predetermined email

notice 189(1); relevant and sufficient info, placing in position to meaningful consult, even first meeting.

D228/08

Ann Smith v SA Greetings (Pty) Ltd

or misconduct

As long as an employer was able to prove that the dominant purpose of the retrenchment route was the economic viability of the enterprise, the employer might well be entitled to utilize s 189.

C640/07

FAWU obo Kapesi & 31 others v Premier Foods Limited t/a Blue Ribbon Salt River

Misconduct per se could not constitute an economic rationale for a dismissal.

C640/07

FAWU obo Kapesi & 31 others v Premier Foods Limited t/a Blue Ribbon Salt River

Severance

No power to approve

Ultra Vires

J534/08

Gardner & Others v Central University of Technology Free State

Change Conditions of employment

S189

Advise ee consultation was to avoid dismissal, minimize, reduce impact

JS717/06

BEMAWU obo Manley Mohapi v Clear Channel Independent (Pty) Ltd

Extended sick leave

not included in consultation process

D655/06

Dube v Ithala Development Bank Limited

Consult not in writing

JR469/09

Matthee v Kerradam Properties (Pty) Ltd t/a Cabanga Conference Centre

Substantive fairness

Genuine justified, fair reason to dismiss

D655/06

Dube v Ithala Development Bank Ltd

fair

JS286/09

Tetley v Caterplus (Pty) Ltd

Consultation

Employees to participate

JS786/04

Dinat and Others v Edgars Consolidated

Employer intended to transfer employment contracts to labour broker; employees refused; had not provided any evidence in justification of the employees dismissal

P180/05

Chemical, Energy, Paper, Printing, Wood and Allied Workers Union and Others v Print Tech (Pty) Ltd and Others

Placed in pool while vacancies existed

the employer will resort to a dismissal as a measure of last resort. Such an obligation is understandable because dismissals based on operational requirements constitute so-called no-fault dismissals.

PA5/04

Oosthuizen v Telkom (SA) Ltd

Vacancies

Refuse to apply

Failing to offer positions

JA36/05

SAA v Bogopa & Others

Selection criteria

FIFO as a selection criterion could not be held to be fair and objective criterion

JA49/07

Screenex Wire Weaving Manufacturing (Pty) Ltd v Ngema & Others

substantively fair, lost a major contract, dismissed the employees in order to utilize the services of employees provided by labour brokers, procedural fairness, failed to engage with the applicant in a meaningful consensus-seeking process in that the respondent reneged on an agreement and dismissed the employees before the union representative had had an opportunity to consult with the employees. The court granted an order of reinstatement.

JS463/2010

National Union of Mineworkers and Others v DB Contracting North CC

Selection criteria

There was therefore no evidence to prove that there was consultation on the selection criteria; that the employees knew and understood the selection criteria; that the selection criteria were fair and objective; the two respondents were fairly identified for retrenchment; that the two respondents did not apply for positions; and that the employees that were appointed to the respondents positions had more skills or more appropriate skills than the respondents

JA 77/2010

Super Group Supply Chain Partners v Dlamini and Others

Retrenchment/ Misconduct: an employer could pin its colours to the mast of one type of dismissal and try again to dismiss for another ostensible reason when it failed in proving that the first time that the dismissal was fair.

C722/2012

FAWU and Others v Premier Foods Ltd

operational requirements should be governed by law rather than by guidelines which meant that the duty to follow the procedure for operational reasons was higher than in other reasons (misconduct and incapacity). meaningfully engage with the applicant and not simply advise her of the decision that he had made. It was common cause that at the two meetings the parties had held, no financials were looked at, nor were there any meaningful discussions on avoidance measures and not just measures to avoid retrenchment but to save the business entitled to be furnished with the reasons why those had been rejected

JS75/10

Lombard v ABC Resources (Pty) Ltd

Pregnant, there could never have been any consultation meeting. 20 Month's compensation.

JS248/11

Van Pletzen v Danmar Autobody West Rand (Pty) Ltd and Another

Consultation, Had those consultations actually taken place they would have discovered that he was not only a specialist in potable water but also waste water, The dismissal for operational reasons was accordingly also substantively unfair.

JA82/2011

Palace Engineering Services (Pty) Ltd v Phasha

Employee who rejected an employers offer of reasonable employment for no sound reason could not then claim severance pay.

Irvin & Johnson Ltd v CCMA (2006) 27 ILJ 935 (LAC)

(JA 40/2012) [2013] ZALAC 19

Astrapak Manufacturing Holdings (Pty) Ltd v CEPPAWU

Agreement was in full and final settlement.

Agreement was in full and final settlement. He had a duty to enquire into the merits of the contention by the applicant that he had not waived his rights to challenge what he considered a retrenchment that did not accord with the law. There had been no consultation prior to the retrenchment and the applicant had been presented with a fait accompli.

(JR 840/12) [2013] ZALCJHB 295

Hodges v Urban Task Force Investments CC and Others

Selection criteria

LIFO principle. Not only criterion. as it need to retain the best skills given the consolidated position that the respondent needed to fill.

Ignored the obligation to consult on the timing of the dismissal; ways to mitigate the adverse effects of the dismissals; and the severance pay for dismissed employees. Pay 12 months' compensation.

(D924/10) [2014] ZALCD 1

Mawe v Nortech International (Pty) Ltd

Severance pay

Section 84(1) of the BCEA. As his employment after retirement was for less than a year he therefore was not entitled to severance pay in terms of s 41 of the BCEA. Employee not entitled to severance pay.

(C1142/10) [2014] ZALCCT 20

Rogers v Exactocraft (Pty) Ltd

Legality of notice in terms of s 189A(8)(b) read with s 189A(2)(a) of the LRA.

If employer chose not to refer dispute at earliest permissible moment. If agreement was not reached in respect of the retrenchment and the dispute was referred for conciliation, it would have to hold off from issuing notices of termination for the period mentioned in s 64(1)(a).

(J32/2014) [2014] ZALCJHB 174

Food and Allied Workers Union v The COL Chain (Pty) Ltd

Procedure

A substantively fair dismissal could not be transformed into a substantively unfair dismissal nearly by a finding of gross procedural unfairness.

(JS319/13) [2014] ZALCJHB 331

Facrie v Paras Carpets t/a Nicolela Carpets

Retrenchment/ Misconduct: dismissal

Obligation not to dismiss if can be avoided; Measure of last resort

JS560/05

Michael v Compuware Corporation SA

Substantive Fairness

JS 805/04

Khanyile and Others v Air Chefs (Pty) Ltd (JS 805/04) [2015] ZALCJHB 238 (4 August 2015)

NUM and Another v Black Mountain Mining (Pty) Ltd (CA22/2012) [2014] ZALAC 78 (10 December 2014) and at [37]

..An employer must first establish on a balance of probabilities that the dismissal of the employee contributed in a meaningful way to the realisation of that need. In my view, dismissals for operational requirements must be a measure of last resort, or at least fair under all of the circumstances. A dismissal can only be operationally justifiable on rational grounds if the dismissal is suitably linked to the achievement of the end goal for rational reasons. The selection of an employee for retrenchment can only be fair if regard is had to the employees personal circumstances and the effect that the dismissal will have on him or her compared to the benefit to the employer. This takes into account the principles that dismissal for an employee constitutes the proverbial death sentence.

South African Commercial Catering and Allied Workers Union (SACCAWU) and Others v Gallo Africa (JS1495/01) [2005] ZALC 93 (17 October 2005) at para 29.

Nhlamulo Ndhela v Sita Information Networking Computing BV (Incorporated in the Netherlands) CASE NO: JS 960/12

Section 189 of the LRA sits alongside a cluster of statutory rights which give practical meaning to the right not to be unfairly dismissed which is contained in section 185 of the LRA. Although crafted in procedural terms, the object of section 189 is substantive. It is aimed at the retention of jobs and if the jobs cannot be retained, at ensuring that any processes resulting in job losses are fair and the adverse effects of job losses are mitigated. In National Education Health and Allied Workers Union v University of Cape Town & Others, the Constitutional Court stated that the LRA must be interpreted in a manner which respects security of employment as a core value of the Constitution (Citations omitted)

To make profit

JS 805/04

Khanyile and Others v Air Chefs (Pty) Ltd (JS 805/04) [2015] ZALCJHB 238 (4 August 2015)

General Food Industries Ltd v FAWU

.a company is entitled to insist by economic restructuring that a profitable centre becomes even more profitable

Adcock Ingram

Consultation in terms of section 189 of the Act, is a two-way process. No meaningful consultation can take place if one party withdraws from the process. There should also ultimately be finality in the consultation process. It cannot be held in abeyance by a party who insists that the process is not finalised when it is quite clear that the process had been.

reason for the dismissal is a fair reason

JS 805/04

Khanyile and Others v Air Chefs (Pty) Ltd (JS 805/04) [2015] ZALCJHB 238 (4 August 2015)

Carephone (Pty) Ltd v Marcus NO and Others

The word fair introduces a comparator, that is, a reason which must be fair to both parties affected by the decision. The starting point is whether there is a commercial rationale for the decision. But, rather than take such justification at face value, a court is entitled to examine whether the particular decision has been taken in a manner which is also fair to the affected party, namely the employees to be retrenched. To this extent the court is entitled to enquire as to whether a reasonable basis exists on which the decision, including the proposed manner, to dismiss for operational requirements is predicated. Viewed accordingly, the test becomes less deferential and the court is entitled to examine the content of the reasons given by the employer, albeit that the enquiry is not directed to whether the reason offered is the one which would have been chosen by the court. Fairness, not correctness, is the mandated test.

Restructuring same position

JS955/2011, JS54/2011

Ledwaba v BP Southern Africa (Pty) Ltd (JS955/2011, JS54/2011) [2015] ZALCJHB 255 (12 August 2015)

Restructuring employer adopting a new organogram employees invited to apply for new positions employee not appointed and subsequently retrenched new position not materially different from the previous one employee not offered available alternative position dismissal unfair.

South African Airways v Bogopa and Others (JA 36/05) [2007] ZALAC 10 (3 August 2007), at para 60

An employer may not dismiss an employee for operational requirements when such employer has a vacant position the duties of which the employee concerned can perform with or without at least minimal training []. Where the employer has a vacancy and the employee can perform the duties attached to that vacancy, the employer would be acting unfairly in dismissing the employee without offering the employee such a position and the ensuing dismissal would be without a fair reason.

If an employer can show that a good profit is to be made in accordance with sound economic rationale and it follows that fair process to retrench an employee as a result thereof it is entitled to retrench. When judging and evaluating an employers decision to retrench an employee this court must be cautious not to interfere in the legitimate business decisions taken by employers who are entitled to make a profit and who, in so doing, are entitled to restructure their business

Selection criteria

JS 44/12, JS 62/12

National Union of Metalworkers of South Africa and Others v DC Steel Construction (JS 44/12, JS 62/12) [2015] ZALCJHB 342 (6 October 2015)

It would therefore be permissible to retain employees for example, with a skill that is vital to the business of the employer despite their years of service, their production output and work record. This criteria is obviously subject to the proviso that it is fairly and objectively applied.

Van Rooyen & Others v Blue Financial Services (SA) Pty Ltd [2010] 10 BLLR 1119 (LC)

There is no basis to conclude that the selection criteria applied was not fair, objective, and justifiable and based on rational grounds

client refusing them access to its site

JS906/10

MMusi and Another v Vemisani Security Services CC (JS906/10) [2015] ZALCJHB 343 (6 October 2015

unfair for an employer to dismiss an employee simply because a third party demands so

Lebowa Platinum Mines Limited v Hill (1998) 18 ILJ 1112 (LAC)

Nape v INTCS Corporate Solutions (Pty) Limited (2010) 31 ILJ 2120

Sec 198A, Procedural unfairness

JS788/2012

Ndaba and Others v T - Systems (Pty) Ltd and Others (JS788/2012) [2015] ZALCJHB 346 (7 October 2015)

It therefore follows from the above that the claim brought before the Court after the dismissal took place can only be in respect of an alleged substantive unfairness in terms of section 189A(18) and section189(19) of the LRA. The Court therefore lacks jurisdiction in regards to any claim of procedural unfairness in respect of the retrenchments. Furthermore, in line with the principles as set out in Edcon, there is no basis for any conclusion to be reached that the retrenchments were unlawful, invalid and/or of no force and effect.

substantive fairness Test

JS1079/12

South African Commercial & Catering Workers Union obo Bheki and Others v Entabeni Private Game Lodge (Pty) Ltd (JS1079/12) [2015] ZALCJHB 410 (18 November 2015)

Kotze v Rebel Discount Liquor Group (Pty) Ltd (2000) 21 ILJ 129 (LAC) at para 18(h)-(i)

The final decision to retrench must be informed by what transpired during consultation. That is why consultation must precede the final decision. The requirement of consultation is essentially a formal or procedural one, but it also has a substantive purpose. That purpose is to ensure that such a decision is properly and genuinely justifiable by the operational requirements or by a commercial or business rationale. And the function of the court in scrutinising the consultation process is not to second-guess the commercial or business efficacy of the employers ultimate decision but to pass judgment on whether such a decision was genuine and not merely a sham. The courts function is not to decide whether the employer made the best decision under the circumstances, but only whether it was a rational commercial or operational decision, properly taking into account what emerged during the consultation process.

substantive fairness Test

JS49/12

South African Transport and Allied Workers Union and Others v G4S Aviation Secure Solutions (JS49/12) [2016] ZALCJHB 10 (13 January 2016)

in my view falls squarely within the realm of economic reasons contemplated within the meaning of operational requirements. These reasons related to the financial management and competitiveness of the enterprise (within the meaning of similar reasons)

BMD Knitting Mills (Pty) Lt [2001] 7 BLLR 705 (LAC)

The starting point is whether there is a commercial rationale for the decision. But, rather than take such justification at face value, a court is entitled to examine whether the particular decision has been taken in a manner which is also fair to the affected party, namely the employees to be retrenched. To this extent the court is required to enquire as to whether a reasonable basis exists on which the decision, including the proposed manner, to dismiss for operational requirements is predicated. Viewed accordingly, the test becomes less deferential and the court is entitled to examine the content of the reasons given by the employer, albeit that the enquiry is not directed to whether the reason offered is the one which would have been chosen by the court. Fairness, not correctness is the mandated test

Information

JS491/10

South African Transport and Allied Workers Union and Others v Fedex Express Supaswift (Pty) Ltd (JS491/10) [2016] ZALCJHB 164 (12 February 2016)

Test for procedural and substantive fairness in dismissals for operational reasons revisited; Employer required to proactively supply relevant financial data justifying claims of cost saving, huge losses, for profit, where that is a ground for alleged operational requirements; Procedural lapses have substantive implications; Fair procedure serves a substantive purpose. [44]From the outset I think it ought to have been mentioned that the peremptory speak ofs189(3)must be purposefully aimed compelling the employer to proactively supply all information that is relevant to the other parties to consultation. This procedural step serves a substantive purpose. It allows the union to be fully au fair with the issues, so that it can be placed in the speed that will enable it run along with the employer, along the tramlines set in the items(a)to(j)in identifying all matters and details that needs to be identified and dealt with. ...[67] the organogram, as this court has observed, amounted to nothing more that moving chairs to different decks in the same vessel. It proposed reclassification of jobs without changing the job specifications. It was an attempt to derive a consent from employees for a change in their conditions of employment, which amounted to accepting demotions. It did not constitute a fair reason for the dismissal of the second and further applicants.

Moodley v Fidelity Cleaning Services (Pty) Ltd t/a Fidelity Supercare (2005) 26 ILJ 889 (LC) paras 5, 34.

A critical, if not the most central ingredient of the consultation process, is the requirement of written notice and the disclosure of information. Effective consultation requires employees to have an opportunity to prepare for consultation by being given sufficient advance notice, an agenda and adequate information. Without this, the joint consensus-seeking process mandated by the legislature is hardly likely to be meaningful . . . The failure of employers to fulfil this obligation meaningfully, invariably leads to disputes, misconceptions, a breakdown in trust and the delegitimizing of the joint consensus-seeking process mandated by the statute.

This does not entitle the court to decide if the reasons given by an employer are the best reasons available. The Labour Court is constitutionally and statutorily required to supervise the fairness of reasons given by employers where they dismiss employees on operational grounds. This cannot happen in vacuo. Where an employer contends that the operational justification for its decision to dismiss is reduction of operating costs, it must at least put forward evidence showing the actual operating costs which it sought to reduce. This can be done by producing financial information which demonstrates the relevant operating costs. This should not been an onerous task. Any sensible employer wishing to reduce costs must first know what costs are to be reduced. In addition, where an employer wishes to cut operating costs by reducing its headcount, it must at least produce evidence of the costs associated with the headcount and how this will meet the overall target of cost reduction. In the absence of this information, it is not possible for a court to decide if the decision is not arbitrary or capricious. Nor is it possible to decide if the decision is a rational or reasonable one, based on the information which was available to an employer at the time it decided to embark on a restructuring exercise.

General Food Industries Ltd v FAWU 2003) 2 BLLR 140 (LAC) at para [33]

Test

JA 54/14

GEMALTO SOUTH AFRICA (PTY) LTD

In the Labour Court, the appellant sought the review of the award on the basis that the award is defective and that the commissioners decision is not one that a reasonable decision-maker would have made when regard is had to the evidence before him; that the commissioner committed a gross irregularity in the conduct of the proceedings by misapplying the parity principle; he failed to apply his mind to the fact that the appellant only disciplined those employees it could prove had breached their contractual obligations and were therefore guilty of gross misconduct and, that the commissioner failed to apply the correct test which was to consider whether the appellant by distinguishing between the employees acted capriciously, arbitrarily or as a result of improper motive.

The failure of employers to fulfil this obligation meaningfully, invariably leads to disputes, misconceptions, a breakdown in trust and the delegitimizing of the joint consensus-seeking process mandated by the statute.

Ndlhela v Sita Information Networking Computing BV (Incorporated in the Netherlands) [2014] 35 ILJ 2236 (LC)

It does not follow that just because an employer dismisses an employee due to its economical, technological, structural or similar need that the [Section 189A(i)] precondition has been met. An employer must first establish on a balance of probabilities that the dismissal of the employee contributed in a meaningful way to the realisation of that need. In my view, dismissals for operational requirements must be a measure of last resort, or at least fair under all of the circumstances. A dismissal can only be operationally justifiable on rational grounds if the dismissal is suitably linked to the achievement of the end goal for rational reasons. The selection of an employee for retrenchment can only be fair if regard is had to the employees personal circumstances and the effect that the dismissal will have on him or her compared to the benefit to the employer. This takes into account the principles that dismissal for an employee constitutes the proverbial death sentence.

Substantive fairness

J3159/12, JS1177/12

SACCAWU and Others v Woolworths (Pty) Ltd (J3159/12, JS1177/12) [2016] ZALCJHB 126 (5 March 2016)

Dismiss employees for operational requirements in order to eliminate discrimination based on pay inequity: was operationally justifiable, to use equity as one of its grounds for operational requirements. It is incompetent for an employer to seek to protect an individual right not to be unfairly discriminated through an operational requirements process and thereby circumventing its obligation under Chapter III of the EEA.

BMD Knitting Mills (Pty) Ltd v SACTWU [2001] 7 BLLR 705 (LAC) at para 19; see also CWIU and Others v Algrorax (Pty) Ltd [2003] 11 BLLR 1081 (LAC) at paras 69 70.

I have some doubt as to whether this deferential approach which is sourced in the principles of administrative review is equally applicable to a decision by an employer to dismiss employees particularly in the light of the wording of the section of the Act, namely, the reason for dismissal is a fair reason. The word fair introduces a comparator, that is a reason which must be fair to both parties affected by the decision. The starting point is whether there is a commercial rationale for the decision. But, rather than take such justification at face value, a court is entitled to examine whether the particular decision has been taken in a manner which is also fair to the affected party, namely the employees to be retrenched. To this extent the court is entitled to enquire as to whether a reasonable basis exists on which the decision, including the proposed manner, to dismiss for operational requirements is predicated. Viewed accordingly, the test becomes less deferential and the court is entitled to examine the content of the reasons given by the employer, albeit that the enquiry is not directed to whether the reason offered is the one which would have been chosen by the court. Fairness, not correctness is the mandated test.

The test formulated by the legislature in the 2002 amendments harkens back to the principle of proportionality or the rational basis test applied in constitutional and administrative adjudication in other jurisdictions. As such, the test involves a measure of deference to the managerial prerogative about whether the decision to retrench is a legitimate exercise of managerial authority for the purpose of attaining a commercially acceptable objective. Such deference does not amount to an abdication and, as stated in BMD Knitting Mills (Ply) Ltd(supra), the court is entitled to look at the content of the reasons given to ensure that they are neither arbitrary nor capricious and are indeed aimed at a commercially acceptable objective. The second leg of the enquiry is directed at the investigation of the proportionality or rationality of the process by which the commercial objectives are to be achieved. Thus, there should be a rational connection between the employer's scheme and its commercial objective, and through the consideration of alternatives an attempt should be made to find the alternative which least harms the rights of the employees in order to be fair to them. The alternative eventually applied need not be the best means, or the least drastic alternative. Rather it should fall within the range of reasonable options available in the circumstances allowing for the employer's margin of appreciation to the employee in the exercise of its managerial prerogative.

section 189A (13) for hearing simultaneously with any action that the Applicants may institute in relation to the substantive fairness

J332 /16

Association of Mineworkers And Construction Union (AMCU) and Another v Manganese (J332 /16) [2016] ZALCJHB 105 (18 March 2016)

Dispute of fact. Referred for oral evidence.

Banks and another v Coca-Cola SA - A Division of Coca-Cola Africa (Pty) Ltd (2007) 28 ILJ 2748 (LC).

NUM and Another v Black Mountain Mining (Pty) Ltd (CA22/2012) [2014] ZALAC 78 (10 December 2014) at para 37.

Steenkamp and others v Edcon Limited and others Unreported case number CCT 46/15, 22 January 2016.

where an employer already dismissed employees without complying with a fair procedure, the consulting party may apply for an order reinstating the employees until the employer has complied with a fair procedure.

Selection criteria

NUM and others v Anglo American Research Laboratories (Pty) Ltd[2005)2 BLLR 148(LC), Murphy AJ considered an employer's deviation from LIFO and its selection criteria based on key skills retention and continued service delivery to its clients. In that instance, a skills matrix was developed but regard is also had to performance appraisals. The court held that in the circumstances in which the company found itself, the criteria applied within objective as required by s 189 (7)(b). Similarly, in Van Rooyen and others v Blue Financial Services (SA) (Pty) Ltd(2010) 31 ILJ 2735 (LC), the court held that an employer was entitled to have regard to competency , qualifications and experience as selection criteria.

application should ensure that the dismissal does not cross the line between a no-fault dismissal and one based on performance

SATAWU v Old Mutual Life Assurance Company South Africa Ltd and Another [2005] 4 BLLR 378 (LC) at para 85.

Selection criteria: LIFO

JS1117/10

National Union of Metalworkers of South Africa and Others v Beta Engineering (1969) (JS1117/10) [2016] ZALCJHB 144 (31 March 2016)

It is my view that the LIFO principle mandates the employer to take into account the length of continuous employment and not intermittent or cumulative periods of service.

In short, the conclusion to be drawn from the wording of s 189A is that this court appears to have been accorded a proactive and supervisory role in relation to the procedural obligations that attach to operational requirements dismissals. Where the remedy sought requires intervention in the consultation process prior to dismissal, the court ought necessarily to afford a remedy that accounts for the stage that the consultation has reached, the prospect of any joint consensus-seeking engagement being resumed, the attitude of both parties, the nature and extent of the procedural shortcomings that are alleged and the like. If it appears to the court that little or no purpose would be served by intervention in the consultation process in one of the forms contemplated by s 189A(13)(a),(b)and(c), then compensation as provided by para(d)is the more apposite remedy.

alternative available

Duty of employer to find alternative to retrenchment. Always unfair where dismissal occurs when there is an alternative available at the time of the dismissal.

consultation: court's function

J18/2014 LAC

Standard Bank of South Africa Ltd v Letsoalo (J18/2014) [2016] ZALAC 43 (27 July 2016)

ACTWU and Another v Discreto (a Division of Trump & Springbok Holdings) [1998] 12 BLLR 1228 (LAC)

the function of a court in scrutinising the consultation process is not to second-guess the commercial or business efficacy of the employers ultimate decision, but to pass judgment on whether the ultimate decision arrived at was genuine and not merely a sham.

Selection criteria:

JS100/2012B

Runguma v Civicus: World Alliance for Citizen Participation Inc (JS100/2012B) [2016] ZALCJHB 178 (12 May 2016)

Chemical Workers Industrial Union & others v Latex Surgical Products (PTY) (2006) 27 ILJ 292 at 320 A-B

The two types of selection criteria can be referred to as the agreed selection criteria and the fair and objective selection criteria respectively. Obviously the agreed selection criteria are selection criteria that have been agreed upon between the consulting parties. The fair and objective selection criteria must be used where the selection criteria have not been agreed upon between the consulting parties. What s 189(7), therefore, means is that, where the consulting parties have agreed upon the selection criteria, the employer is obliged to use the agreed selection criteria to select the employees to be dismissed. Where there are no agreed selection criteria, the employer is obliged to use only fair and objective selection criteria to select the employees to be dismissed.

The Applicant had not, in any manner objected to the alternative of the selection process based on criteria identified. His concern insofar as the process of selection was concerned was that even though the majority of the management team agreed to it, individual concerns were nevertheless not taken into account. This in my view can hardly lead to a conclusion that the process of selection was not fair or objective, especially if it was agreed upon by the management team he formed part of.

principles of bumping

JS1/2015

Motor Industry Staff Association and Another v Autozone Grahamstown (JS1/2015) [2016] ZALCJHB 204 (3 June 2016)

Porter Motor Group v Karachi [2002] 4 BLLR 357 (LAC).

(1) it should be reiterated once again that fairness is not a one-way street. It must accommodate both employer and employee. Section 189 (2) of the Act requires both parties to attempt to reach consensus on alternative measures to retrenchment, so there is a duty on an employee as well to raise bumping as an alternative. An employer is obliged to consult with an employee about the possibility of bumping.(2) Bumping is situated within the "last in first out" (LIFO) principle which is itself rooted in fairness for well-established reasons. Longer serving employees have devoted a considerable part of their working lives to the company and their experience and expertise is, an invaluable asset. Their long service is an objective tribute to their skills and industry and the avoidance of misconduct. In the absence of other factors, to be numerator during after, their service alone is sufficient reason for them to remain and others to be retrenched. Fairness requires that the loyalty be awarded.(3) The nature of bumping depends on the circumstances of the case. A useful distinction is that of providing bumping into horizontal and vertical displacement. The former assumes similar status, conditions of service and pay and the latter any diminution in them.(4) The first principle is well-established, namely that bumping should always take place horizontally, before vertical displacement is resorted to. The bumping of an individual, in the absence of the other relevant factors, seldom causes problems and the fact of longer service establishes the inherent fairness thereof. Vertical bumping should only be resorted to where no suitable candidate is available for horizontal bumping. Where small numbers are involved the implementation of horizontal or vertical bumping should present few problems.....(7) The pool off possible candidates to be bumped should be established and the circumference thereof will depend on the mobility and status of the employees involved. The managerial prerogative entails moving employees to the best advantage of a company within the parameters of its activities, national or international; fairness requires that the same circumference should define the limits of potential candidates to be bumped. The career path of the employee in the company will often be a useful indication of scale of mobility.....(9) Bumping does not apply to employees in a different grade if the longest serving employee cannot do the work of the employee with shorter service in that grade. This limitation applies most frequently where competence, technical or professional knowledge or experience and specialised skills are involved. Where the necessity arises of retraining those, what transferred, this should be carried out, unless it places an unreasonable burden on the employer.(10) The status of the post into which an employee is bumped is relevant, as the employer's prerogative to choose someone of managerial/supervisory level should be respected.'

This is a case where it would be unfair to the employer in a small set up such as the branch to deplete the existing skills by bumping the debtor's clerk or the merchandiser.

consulting party is party with collective bargaining rights

J2578/15

Association of Mineworkers and Construction Union (AMCU) and Others v Bafokeng Rasimone Management Services (Pty) Ltd and Others (J2578/15) [2016] ZALCJHB 549; (2017) 38 ILJ 931 (LC) (19 December 2016)

[154] The elevation to the status of consulting party as contemplated in section 189(1)(a) of the LRA, is strictly speaking not dependent on the principle of majoritarianism, but rather on such a party acquiring the status of consulting party by way of a collective agreement.[155] It is not envisaged in section 189 retrenchment procedures that the affected employees would be afforded a hearing as contemplated in a dismissal for misconduct or incapacity. The nature of the consultation process and the topics for consultation in a retrenchment process cannot be compared to a hearing as contemplated in cases involving misconduct or incapacity.[156] In my view there is no basis to excise sections 189(1)(a)-(c) from the LRA, alternatively to reinterpret it and to declare that where an employer consults with a trade union that employer is required to consult within terms of a collective agreement, that employer must also consult with any other trade union whose members are likely to be affected by the proposed dismissals.[157] To do so would not only disregard judgments this Court is bound to follow, but would also ignore and probably undermine conscious policy choices made by the legislature when formulating the LRA.

redundancy of position: Substantive fairness

JS 398 / 15

RISMA VILJOEN vs JOHANNESBURG STOCK EXCHANGE LTD

Chemical Workers Industrial Union and Others v Latex Surgical Products (Pty) Ltd (2006) 27 ILJ 292 (LAC) at para 55.

Whether or not there was a fair reason for the dismissal of the individual appellants relates to a general question and a specific question. The general question is whether or not there was a fair reason for the dismissal of any employees. The specific one is whether there was a fair reason for the dismissal of the specific employees who were dismissed, which in this case, happened to be the individual appellants. The question of a fair reason to dismiss the specific employees who were dismissed goes to the question of the basis upon which they were selected for dismissal whereas the other question relates to whether or not there was a reason to dismiss any employees in the first place.

Therefore, there exists a proper business rationale in this instance.

Kotze v Rebel Discount Liquor Group (Pty) Ltd (2000) 21 ILJ 129 (LAC) at para 36.

What we have to do is to decide whether the respondent's decision to retrench was informed and is justified by a proper and valid commercial or business rationale. If it is, then that is the end of the enquiry even if it might not have been the best under the circumstances.

Van Rooyen and Others v Blue Financial Services (SA) (Pty) Ltd (2010) 31 ILJ 2735 (LC) at para 22.

It is clear though that the regional managers would, in the restructured organization, be required to undertake additional responsibilities in relation to the expanded product lines and that the nature of their function would change. On balance, I am satisfied that the respondent has established that the difference in job content between the old and the new profiles of the regional managers' positions was sufficiently significant to justify the requirement that the applicants be assessed for their suitability for appointment to the new positions. Indeed, this appears to be the approach adopted by the applicants themselves in their memorandum addressed to Klopper on 28 December 2007 in which they appear to accept that the new profile developed by the respondent was technically exact and complete, and that the additional responsibilities that regional managers would be required to assume had the consequence of an appreciable difference in job content. In short, I am satisfied that the respondent has established a fair commercial rationale for its decision to restructure its business operations and that the change rendered the applicants redundant, at least in the sense that its decision to assess the applicants' suitability for the restructured posts was fair in the circumstances.

redundancy can result from a reorganization of a business.

Plaaslike Oorgangsraad van Bronkhorstspruit v Senekal (2001) 22 ILJ 602 (SCA) at para 27.

on the evidence their jobs did become redundant; it was their duties that remained and were allocated for performance by other employees within the revised structure.

Broll Property Group (Pty) Ltd v Du Pont and Others (2006) 27 ILJ 269 (LAC) at para 24.

on the evidence their jobs did become redundant; it was their duties that remained and were allocated for performance by other employees within the revised structure. The aforesaid being found to be the case, the Court then concluded:[6] It followed that the three respondents were liable to be dismissed for substantive reasons unless they were appointed to other positions within the revised structure.

alternative position employee required to apply for available alternatives employee refusing to apply thus exposing herself to retrenchment

JS 398 / 15

RISMA VILJOEN vs JOHANNESBURG STOCK EXCHANGE LTD

Forecourt Express (Pty) Ltd v SA Transport and Allied Workers Union and Another (2006) 27 ILJ 2537 (LAC).

alternative positions what constitutes reasonable alternative alternatives available to employee reasonable

procedural fairness - principles considered where employee could avoid her own retrenchment issue of procedural fairness does not arise

JS 398 / 15

RISMA VILJOEN vs JOHANNESBURG STOCK EXCHANGE LTD

Freshmark (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (2003) 24 ILJ 373 (LAC) at para 25.

. an employee who unreasonably refuses an offer of alternative employment is not without fault. He has himself to blame if he subsequently finds himself without employment and, therefore, does not deserve to be treated on the same basis as the employee who finds himself without employment due to no fault on his part . Where the employer offers to continue to employ the employee - whether in the same position but on different terms or on the same terms but in a different position or in the same position and on the same terms but in a different place, that is still alternative employment. It is an offer of an alternative contract of employment.

Latex Surgical

. Accordingly, when an employer's operational requirements dictate that its workforce should work in accordance with certain terms and conditions by which such workforce is not bound, the employer should convey this to the workforce and ask them to agree to work according to such terms and conditions, negotiate with them and warn them that, if they reject such terms and conditions, he will have to terminate their contracts of employment and employ new employees in their place, who will accept such terms and conditions. If the employees reject such proposals and the employer terminates their services, the employees cannot complain that they were not given a chance to avoid their dismissal by accepting the new terms and conditions of employment.

Entertainment Catering Commercial and Allied Workers Union of SA and Others v Shoprite Checkers t/a OK Krugersdorp (2000) 21 ILJ 1347 (LC) at para 28.

where the amendment to terms and conditions of employment is proffered by an employer as an alternative to dismissal during a bona fide retrenchment exercise and it is a reasonable alternative based upon the employer's operational requirements, the employer will be justified in dismissing employees who refuse to accept the alternative on offer.

Mineworkers Union/Solidarity on behalf of MacGregor v SA National Parks (2006) 27 ILJ 818 (LC) at para 39.

If the applicant had followed the instructions of Mr Mogome, he would have just continued in the employ of the respondent, but in the position of manager: environmental management services. His intransigent stance in refusing to change direction caused the respondent to advertise that position internally and to treat all the applicants the same. The applicant was nonetheless encouraged to apply, even belatedly, as the respondent believed he was the best person for the position. However, after the long consultation process, which included meetings and correspondence, the respondent was entitled to decide not to accept an 'under duress' application for the position. The applicant was interviewed though. It was clear that he was not interested in the position. If he was, he would have withdrawn the 'under duress' reservation.

consultation process joint consensus seeking process requires proper participation in the process by both parties employee defeating objectives of process by entering the process with pre-decided agenda

JS 398 / 15

RISMA VILJOEN vs JOHANNESBURG STOCK EXCHANGE LTD

Latex Surgical (supra) at para 18(i). See also SA Clothing and Textile Workers Union and Others v Discreto A Division of Trump and Springbok Holdings (1998) 19 ILJ 1451 (LAC) at para 8.

The function of the court in scrutinizing the consultation process is not to second guess the commercial or business efficacy of the employer's ultimate decision but to pass judgment on whether such a decision was genuine and not merely a sham. The court's function is not to decide whether the employer made the best decision under the circumstances, but only whether it was a rational commercial or operational decision, properly taking into account what emerged during the consultation process.

Van Rooyen and Others v Blue Financial Services (SA) (Pty) Ltd (2010) 31 ILJ 2735 (LC) at para 19.

Fair procedure primarily requires that the parties engage in a meaningful joint consensus-seeking process. This obligation, which has its origins in Johnson & Johnson v Chemical Industrial Workers Union (1999) 20 ILJ 89 (LAC), requires at least that the parties attempt to reach consensus on the issues listed in s 189(2) and (3). More precisely, the employer must invite representations on these issues from the appropriate consulting party, seriously consider and respond to any representations that are made. Both parties are required, in good faith, to seek consensus. This is not a mechanical process - meaningful joint decision-making requires that the parties act with the honest intention of exploring the prospects of agreement. If no joint consensus-seeking process has occurred, the court is obliged to determine which party was responsible for this state of affairs.

SA Society of Bank Officials v Standard Bank of SA[27], where the Court said that Consultation is a two-way street.[103] That being the case, and as held in Johnson and Johnson (Pty) Ltd v Chemical Workers Industrial Union[28]:The achievement of a joint consensus seeking process may be foiled by either one of the consulting parties. In this instance it was the applicant. In Visser v Sanlam[29] the Court held: The process of consultation envisaged in s 189(2) involves a bilateral process in which obligations are imposed upon both parties to consult in good faith in an attempt to achieve the objectives specified in the section. In my view, the respondent fulfilled its obligations in terms of s 189(2). If any conclusion is justified, it is that appellant failed to engage adequately in the consultation process envisaged in the section. Accordingly, it cannot be said that the retrenchment of appellant was procedurally unfair.

Smith and Others v Courier Freight (2008) 29 ILJ 420 (LC) at para 68 69.

I find on a balance of probabilities that the union was responsible for frustrating the restructuring process to the detriment of its members, the employees. In NUMSA & others v Kaefer Thermal Contracting Services (Pty) Ltd [2002] 6 BLLR 570 (LC) the court held that where the consultation process has been frustrated it is not for the party who caused the frustration to complain that there was non-compliance with the consultation process. I am satisfied that the employer made genuine attempts to engage with the union on the retrenchment process. However, it could not allow the union to delay the process of restructuring indefinitely. The union overplayed its hand and must now accept the consequences of its ill-advised decision unnecessarily to delay the consultation process. In the light of the aforesaid, I believe there was substantial compliance with the provision of s 189 of the Act by the employer.

Severance pay entitlement to Section 41(4) of BCEA considered employee unreasonably refused alternative position not entitled to severance pay

JS 398 / 15

RISMA VILJOEN vs JOHANNESBURG STOCK EXCHANGE LTD

Irvin & Johnson Ltd v Commission for Conciliation, Mediation and Arbitration and Others (2006) 27 ILJ 935 (LAC) at paras 44 45

It seems to me that the effect of s 41(4) is that, where the employer has arranged alternative employment for an employee who is facing a (possible) dismissal for operational requirements, either in his employ or in the employ of another employer, three scenarios are possible: The one scenario is that the employee unreasonably refuses such alternative employment in which case s 41(4) applies and the employee forfeits the right to severance pay. The second scenario is where the employee reasonably refuses such alternative employment in which event he is entitled to payment of severance pay. The third scenario is where the employee accepts the alternative employment in which event he also forfeits the right to severance pay. It will be seen from the three scenarios set out above that in no scenario does an employee get both the severance pay and the alternative employment. However, there is a scenario where he gets neither. That is where he has himself to blame because he has acted unreasonably in refusing the offer of alternative employment.

Pretorius v Rustenburg Local Municipality and Others (2008) 29 ILJ 1113 (LAC) at para 67.

the appellant's rejection of the first respondent's offer of alternative employment and his insistence that he be offered the same position or a position at the same or a higher level is, in all the circumstances of this case, quite unreasonable. Accordingly, he forfeited whatever right he might otherwise have had to severance pay. He was going to suffer no reduction of salary. The position he was offered was quite a senior position. The first respondent had to try and accommodate all the employees. He was to report to the municipal manager. The first respondent made it clear that it needed his technical skills.

Business closure

JR1006/15; JR1004/15

CVO School Vivo v Pretorius and Others; CVO School Vivo v Pretorius and Others (JR1006/15; JR1004/15) [2017] ZALCJHB 412 (6 April 2017)

elch v Kulu Motors Kenilworth (Pty) Ltd and Others (2013) 34 ILJ 1804 (LC) at para 39.

To the extent that it was suggested by the respondents that barring a financial miracle the applicant was aware that the closure of the business was obvious and inevitable, this did not serve to relieve KMK of its obligation to consult the applicant. Even if the outcome may have seemed unavoidable to some, the required process of consulting at the earliest opportunity and before closure has everything to do with at least giving those most affected an opportunity to make proposals when they may still have an impact and be implemented.

Substantive fairness

JS159/16

NUMSA obo Kili and Others v Viva Steel FAB Engineering (Pty) Limited t/a Viva Engineering (JS159/16) [2017] ZALCJHB 339 (6 September 2017)

Chemical Workers Industrial Union and Others v Algorax (Pty) Ltd (2003) 11 BLLR 1081 (LAC)

[69] Sometimes it is said that a court should not be critical of the solution that an employer has decided to employ in order to resolve a problem in its business because it normally will not have the business knowledge or expertise which the employer as a businessperson may have to deal with problems in the workplace. This is true. However, it is not absolute and should not be taken too far. When either the Labour Court or this Court is seized with a dispute about the fairness of a dismissal, it has to determine the fairness of the dismissal objectively. The question whether the dismissal was fair or not must be answered by the court. The court must not defer to the employer for the purpose of answering that question. In other words it cannot say that the employer thinks it is fair, and therefore, it is or should be fair.

The Court in paragraph 70 went further to point that the Court should not hesitate to deal with an issue that requires no special expertise, skill or knowledge particularly where logic and common sense prevail.

Practical

JR2615/13

Vusa-Isizwe Secuirity (Pty) Ltd v Rampai N.O. and Others (JR2615/13) [2017] ZALCJHB 149 (4 April 2017)

[28]With reinstatement being excluded on the basis that it is not reasonably practicable, the employees would be entitled to compensation.

Xstrata SA (Pty) Ltd (Lydenburg Alloy Works) v National Union of Mineworkers on behalf of Masha and others(2016) 37 ILJ 2313 (LAC)

selection criteria: skills

JA/29/16

Kenco Engineering CC v National Union of Metal Workers of South Africa (NUMSA) obo Members (JA/29/16) [2017] ZALCJHB 274 (1 August 2017)

JS07/15

Motloutsi and Another v Paballo and Khumo Trading CC (JS07/15) [2017] ZALCJHB 490 (17 November 2017)

The duty rests on an employer to prove that a dismissal of an employee was unavoidable. An employer must disclose all relevant information prior to consultation to ensure meaningful joint consensus-seeking engagement. The dismissal was unfair and the applicants were compensated.

[18] LIFO is generally a fair selection criterion. It simply implies that those employed last may be the first to suffer the consequences of a no fault dismissal.

[19] With regard to procedural fairness, the LRA requires an engagement in a meaningful joint consensus-seeking process aimed at reaching an agreement on appropriate measures, the method of selecting and severance pay. From the evidence before me, such a process was engaged in but parties failed to reach an agreement. Section 189(3) of the LRA obligates an employer to issue a written notice inviting the other party to consultation. Further the employer is obliged to disclose in writing all the relevant information. The notice termed change in operational requirements of business only invites the applicants but does not disclose the relevant information as required by the section.

[20] Accordingly, I come to the conclusion that the dismissal of the first applicant is substantively fair but procedurally unfair. The dismissal of the second applicant is both substantively and procedurally unfair.

3. The respondent is to pay to the first applicant as compensation, an amount equivalent to three months’ salary as at the time of dismissal less statutory deductions. 4. The respondent is to pay to the second applicant as compensation, an amount equivalent to twelve months salary as at the time of dismissal less statutory deductions.

retaining labour brokers

J1687/15, JS620/15

National Union of Mineworkers and Others v WBHO Construction (Pty) Ltd (J1687/15, JS620/15) [2017] ZALCJHB 512 (13 December 2017)

rationale for retrenchment evidence considered proper rationale for retrenchment shown Operational requirements bumping of employees between operating divisions principles pertaining to bumping considered proper cause for differentiating between divisions proper cause for not applying bumping across all divisions approach of employer fair Operational requirements selection criteria retention of TES employees on specific contracts approach justified employer did not act unfairly Operational requirements issue of alternatives to retrenchment considered alternatives properly explored lay off policy considered no suitable alternatives available Operational requirements selection criteria considered fair and objective basis for selecting employees for retrenchment selection of employees not unfair Re-employment alleged failure by employer to re-employ in terms of undertaking constitutes an issue of an unfair labour practice in terms of Section 186(2)(c) of the LRA no such case referred to conciliation cannot be raised now Dismissal operational requirements dismissal substantively fair Operational requirements procedural fairness Section 189A(8) considered no requirement to first refer matter to conciliation before retrenchment absence of referral does not render dismissal procedurally unfair issue is about time limits time limits complied with Operational requirements procedural fairness even if Section 189A(8) not complied with insufficient basis to per se establish procedural unfairness. Operational requirements procedural fairness procedural unfairness can only be challenged in the case where Section 189A applies by way of application in terms of Section 189A(13) procedural challenge thus only be decided on the basis of procedural fairness set out in that application no issue raised that labourers not properly notified of retrenchment or properly consulted cannot be considered Dismissal operational requirements procedural fairness dismissals procedurally fair

[51] The Court in Forecourt Express (Pty) Ltd v SA Transport and Allied Workers Union and Another[7] dealt with the situation where employees were offered alternative positions with a temporary employment service in circumstances where the employer, due to its business methodology, decided to declare those positions internally within the employer itself redundant. This is clearly similar to a situation where an employer wishes to retain TES employees but retrenches permanent employees. The Court firstly held:[8] the appellant was entitled to choose the manner in which it would run its business provided that it did not change the terms and conditions of employment of the employees without their consent, and provided that, if it contemplated the dismissal of the employees, it complied with its obligations provided for in s 189 of the Act. Having established this principle, the Court then said, with specific reference to the operational circumstances of the employer:[9] Du Plessis had testified that, due to peaks and valleys, it made more sense to use labour brokers because the appellant paid only for cars actually moved whereas, if the appellant used permanently employed employees, it would be paying them per hour and not per car moved. In my judgment, even if it can be said that the appellant did not prove 'peaks' and 'valleys', it was entitled to prefer the use of labour brokers and subcontractors to the use of permanently employed workers because the former arrangement gave it certain benefits which the latter arrangement did not offer. Accordingly, whether the peaks and valleys were proved is neither here nor there. The appellant was entitled to choose a way of doing business that was less risky. The way of using labour brokers and subcontractors was less risky than the one of using permanent workers.[52] A similar approach was adopted in National Union of Metalworkers of SA and Others v John Thompson Africa[10] where the Court said, of equal application in casu: Furthermore, the nature of the respondent's business was such that its labour requirements fluctuated in quality and quantity. Labour supplied via a brokerage was therefore more efficient than having a workforce that was fixed. Outsourcing certain work was more effective for the respondent. Mr Petersen's proposition that the respondent would outsource work whilst its own employees stood idle, purely for the purposes of shrinking the business to justify the ultimate retrenchment of the employees is improbable. The respondent existed to make a profit. If outsourcing was not profitable it would have avoided it. The Court in John Thompson then concluded:[11]I find that there was a commercial rationale for the outsourcing of labour. The respondent's use of labour brokers was therefore not unfair.

bumping

Amalgamated Workers Union of SA v Fedics Food Services (1999) 20 ILJ 602 (LC) at paras 3 4.

In other words, should an employee with long service be made redundant in one department he should be transferred to a similar post elsewhere in the establishment, even though it may be occupied by an employee with shorter service. Should there be no such post, the practice is to offer the longer-serving employee a less skilled position occupied by employees with shorter service. This procedure is graphically called ''bumping'. In short, one ''bumps' sideways and down. The restriction of this principle to departments can lead to abuse. Long-serving employees can be transferred to departments where redundancy is expected and thereby retrenched at a later stage. Such a practice would clearly subvert the objective application of the principle.'

General Food Industries Ltd t/a Blue Ribbon Bakeries v Food and Allied Workers Union and Others (2004) 25 ILJ 1655 (LAC) at para 36.

What was also established at the trial in this matter is that through bumping the second and further respondents could have been transferred to other bakeries to take jobs done by employees who had shorter service periods than themselves but performing work that the second and further respondents could perform I can see no justification for an employer to retrench an employee who has served him loyally for, for example 20 years, and retain one who has been employed for only a few months to perform work that the one with a longer service period can also perform. On the contrary allowing that approach in the absence of a really sound reason or explanation could lead to abuse. An employer who wants to get rid of an employee (but lacks legitimate grounds to do so) could transfer such employee to a branch which he knows is likely to embark upon a retrenchment exercise in due course if he thought that such employee would be a likely candidate for retrenchment in that branch on the basis of LIFO which is applied only to the affected branch. In that way the employee could be selected for retrenchment at that branch and be retrenched despite the fact that in his old branch there are employees who have shorter service periods than him who perform work that he can perform.

Porter Motor Group v Karachi (2002) 23 ILJ 348 (LAC) at para 16. See also Mtshali v Bell Equipment [2017] JOL 38221 (LAC) at para 22; Motor Industry Staff Association and Another v Autozone Grahamstown [2016] ZALCJHB 204 (3 June 2016) at para 70.

This does not purport to be an exhaustive list and merely catalogues the rules laid down which are relevant to this case.(1) It should be reiterated once again that fairness is not a one-way street. It must accommodate both employer and employee. Section 189(2) of the Act requires both parties to attempt to reach consensus on alternative measures to retrenchment, so there is a duty on an employee as well to raise bumping as an alternative. An employer is obliged to consult with an employee about the possibility of bumping.(2) Bumping is situated within the 'last in first out' (LIFO) principle which is itself rooted in fairness for well-established reasons. Longer serving employees have devoted a considerable part of their working lives to the company and their experience and expertise are an invaluable asset. Their long service is an objective tribute to their skills and industry and their avoidance of misconduct. In the absence of other factors, to be enumerated hereinafter, their service alone is sufficient reason for them to remain and others to be retrenched. Fairness requires that their loyalty be rewarded.(3) The nature of bumping depends on the circumstances of the case. A useful distinction is that of dividing bumping into horizontal and vertical displacement. The former assumes similar status, conditions of service and pay and the latter any diminution in them.(4) The first principle is well established, namely that bumping should always take place horizontally, before vertical displacement is resorted to. The bumping of an individual, in the absence of the other relevant factors, seldom causes problems and the fact of longer service establishes the inherent fairness thereof. Vertical bumping should only be resorted to where no suitable candidate is available for horizontal bumping. Where small numbers are involved the implementation of horizontal or vertical bumping should present few problems.(5) Where large-scale bumping, sometimes referred to as 'domino bumping', necessitates vast dislocation, inconvenience and disruption, consultation should be directed to achieving fairness to employees while minimizing the disruption to the employer. Examples of disruption include difficulties caused by different pay levels, client or customer reaction to a replacement of employees and staff incompatibility. In evaluating the competing interests of the employer and the affected employees the consulting parties should carry out a balancing exercise. Where minimal benefits accrue to employees, while vast inconvenience is the lot of employers, fairness requires that fewer employees should move.(6) There will always be geographical limitations to bumping in that fairness will require that limits be placed on how far an employee is expected to move to bump another. Although prejudice to the employer in long-distance relocation cannot be excluded, in practice this will be rare. Generally speaking it is the employee who will suffer as a result of being removed from a cultural and social environment he or she has become accustomed to. Second guessing the desires of employees is undesirable; if they are happy to translocate then bumping should take place whatever the distances involved.(7) The pool of possible candidates to be bumped should be established and the circumference thereof will depend on the mobility and status of the employees involved. The managerial prerogative entails moving employees to the best advantage of a company within the parameters of its activities, national or international; fairness requires that the same circumference should define the limits of potential candidates to be bumped. The career path of the employee in the company will often be a useful indication of scale of mobility.(8) The independence of departments as separate business entities may be relevant but the argument that a company's departments are managed separately should be strictly scrutinized. Even if there is no past practice of transferring between branches or departments, the employer must consider interdepartmental bumping unless it is injurious to itself and to other employees.(9) Bumping does not apply to employees in a different grade if the longer serving employee cannot do the work of the employee with shorter service in that grade. This limitation applies most frequently where competence, technical or professional knowledge or experience and specialised skills are involved. Where the necessity arises of retraining those, who are transferred, this should be carried out, unless it places an unreasonable burden on the employer.(10) The status of the post into which an employee is bumped is relevant, as the employer's prerogative to choose someone of managerial/supervisory level should be respected. Management concerns that downgrading an employee will be demoralizing will not justify a decision not to bump downwards where the employee is prepared to accept downgrading. On the other hand the unwillingness of the affected employee to accept a lower wage may justify not bumping.

[74]...As said in Porter Motor Group in the dictum quoted above, it must be a case of an employee that had devoted a considerable part of his or her working life to the employer, which in itself would illustrate the value of such an employee and would establish an objective tribute, in itself, to that employees skills and experience.

189A

J1687/15, JS620/15

National Union of Mineworkers and Others v WBHO Construction (Pty) Ltd (J1687/15, JS620/15) [2017] ZALCJHB 512 (13 December 2017)

[91] Section 189A (18) precludes this Court from adjudicating any dispute about the procedural fairness of a dismissal for operational requirements referred for adjudication in terms of Sections 191(5)(b)(ii)

[29] Section 189A(18) reads: The Labour Court may not adjudicate a dispute about the procedural fairness of a dismissal based on the employer's operational requirements in any dispute referred to it in terms of section 191 (5) (b) (ii). See also Edcon (supra) at paras 157 158.[30] (2004) 25 ILJ 2358 (LC) at 2361I-2362B. See also Chemical Energy Paper Printing Wood and Allied Workers Union on behalf of Hlophe and Others v Bayfibre Central Co-Operative Ltd (2017) 38 ILJ 627 (LC) 20; Perumal and Another v Tiger Brands (2007) 28 ILJ 2302 (LC) at para 19; Thomas v Fidelity Corporate Services (Pty) Ltd (2007) 28 ILJ 424 (LC) at para 8.[31] The Section reads: 'If an employer does not comply with a fair procedure, a consulting party may approach the Labour Court by way of an application for an order (a) compelling the employer to comply with a fair procedure; (b) interdicting or restraining the employer from dismissing an employee H prior to complying with a fair procedure; (c) directing the employer to reinstate an employee until it has complied with a fair procedure; (d) make an award of compensation, if an order in terms of paragraphs (a) to (c) is not appropriate.[32] (2006) 27 ILJ 1026 (LC) at para 9.[33] (2007) 28 ILJ 2748 (LC) at para 18. See also Association of Mineworkers and Construction Union and Others v Shanduka Coal (Pty) Ltd (2013) 34 ILJ 1519 (LC) at para 27; National Union of Metalworkers of SA on behalf of Members v General Motors of SA (Pty) Ltd (2009) 30 ILJ 1861 (LC) at para 35; Zero Appliances (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (2007) 28 ILJ 1836 (LC) at para 23.[34] (2007) 28 ILJ 1836 (LC) at para 23.[35] (2009) 30 ILJ 1861 (LC) at para 47. See also National Union of Metalworkers of SA and Others v Shakespear Shopfitters (Pty) Ltd (2008) 29 ILJ 1960 (LC) at para 9.[36] (supra) at para 13.[37] (2011) 32 ILJ 1236 (LC) at para 29.[38] (supra) at para 162.[39] (supra) at para 14.[40] (2017) 38 ILJ 463 (LC).[41] Id at paras 19 20.[42] Id at paras 29 30.[43] See Betlane v Shelly Court CC 2011 (1) SA 388 (CC) para 29; see also Van der Merwe and Another v Taylor NO and Others [2007] ZACC 16; 2008 (1) SA 1 (CC) para 122; President of the Republic of SA and Others v SA Rugby Football Union and Others [1999] ZACC 11; 2000 (1) SA 1 (CC) para 150; National Council of Societies for the Prevention of Cruelty to Animals v Openshaw [2008] ZASCA 78; 2008 (5) SA 339 (SCA) paras 29-30.[44] See Imprefed (Pty) Ltd v National Transport Commission [1993] 2 All SA 179 (A) at 188-189.[45] [2013] 3 All SA 404 (SCA) at para 35. See also Naidoo v Minister of Police and Others [2015] 4 All SA 609 (SCA) at para 30; Minister of Safety and Security v Slabbert [2010] 2 All SA 474 (SCA) at para 11; Smith v Kit Kat Group (Pty) Ltd (2017) 38 ILJ 483 (LC) at para 67.[46] Section 189A(8) reads: If a facilitator is not appointed- (a) a party may not refer a dispute to a council or the Commission unless a period of 30 days has lapsed from the date on which notice was given in terms of section 189 (3); and (b)once the periods mentioned in section 64 (1) (a) have elapsed- (i) the employer may give notice to terminate the contracts of employment in accordance with section 37 (1) of the Basic Conditions of Employment Act [47] (2015) 36 ILJ 1469 (LAC).[48] (supra) footnote 28.[49] See Revan Civil Engineering Contractors and Others v National Union of Mineworkers and Others (2012) 33 ILJ 1846 (LAC); De Beers Group Services (Pty) Ltd v National Union of Mineworkers (2011) 32 ILJ 1293 (LAC). Both these judgments have now been overturned.[50] (supra) at para 136.[51] Id at para 186.[52] Id at para 135.[53] These are, in terms of Section 189(2): (a) appropriate measures- (i) to avoid the dismissals; (ii) to minimise the number of dismissals; (iii) to change the timing of the dismissals; and (iv) to mitigate the adverse effects of the dismissals; (b) the method for selecting the employees to be dismissed; and (c) the severance pay for dismissed employees.[54] (2017) 38 ILJ 360 (LC) at para 43. See also National Union of Mineworkers v Anglo American Platinum Ltd and Another (2014) 35 ILJ 1024 (LC) at para 25; Retail and Associated Workers Union of SA v Schuurman Metal Pressing (Pty) Ltd (2004) 25 ILJ 2376 (LC) at para 32; Old Mutual (supra) at para 13; Banks (supra) at para 15.

procedural fairness

JA56/2016

Woolworths (Pty) Ltd v SACCAWU and Others (JA56/2016) [2017] ZALAC 54; [2017] 12 BLLR 1217 (LAC); (2018) 39 ILJ 222 (LAC) (19 September 2017)

Held that the distinction between procedural and substantive fairness lies close together.

Insurance & Banking Staff Association and Another v Old Mutual Services & Technology Administration and Another (2006) 27 ILJ 1026 (LC).

The overriding consideration under s 189A is to correct and prevent procedurally unfair retrenchments as soon as procedural flaws are detected, so that job losses can be avoided. Correcting a procedurally flawed mass retrenchment long after the process has been completed is often economically prohibitive and practically impossible.... So, the key elements of s 189A are: early expedited, effective intervention and job retention in mass dismissals.[16]

23] It was probably an issue related to substantive fairness of the dismissal to the extent that the Court a quo took the view that the termination of the affected employees services was a fait accompli and that Woolworths conduct during the s189A phase was consistent with its decision to dismiss the 44 full-timers. This must then be evaluated against the two concessions made: Firstly, the need to restructure the business. Secondly, that the affected employees would work flexi-time. The only substantive issue was whether it was fair to dismiss the full-time employees who would work flexi-time but only at full-time rates save for the concession in the unions final proposal.

[35] The question whether the dismissals of the 44 full-timers were substantively fair must be answered within the parameters set by s189A. It is the general consensus of writers on this subject that the test for the fairness of a retrenchment where s189A applies differs from that applicable to retrenchments to which the section does not apply.

See South African Labour Law, Jutastat e-publications, Clive Thompson and Paul Benjamin at RS 66, 2016 AA1-p518 under The broad section 189A formula where the following is said: Larger-scale retrenchments are governed by both sections, with s 189A representing the extra and commanding layer. Smaller-scale retrenchments are governed by s189 only, with a necessarily arbitrary set of numbers determining which workplaces are to be governed by which bundle of rights and obligations. Different consultation processes with different times limits apply, and the test for fairness varies as well.

substantive fairness

JA56/2016

Woolworths (Pty) Ltd v SACCAWU and Others (JA56/2016) [2017] ZALAC 54; [2017] 12 BLLR 1217 (LAC); (2018) 39 ILJ 222 (LAC) (19 September 2017)

employers economic, technological, structural or similar needs.

Held that the dismissal of a full-time employee who would not work flexi-time would be a dismissal to give effect to a requirement based on the employers economic, technological, structural or similar needs.

NUM and Another v Black Mountain Mining (Pty) Ltd (CA22/2012) [2014] ZALAC 78 (10 December 2014) at para 37.

It does not follow that just because an employer dismisses an employee due to its economical, technological, structural or similar need that the [Section 189A(i)] precondition has been met. An employer must first establish on a balance of probabilities that the dismissal of the employee contributed in a meaningful way to the realisation of that need. In our view, dismissals for operational requirements must be a measure of last resort, or at least fair under all of the circumstances. A dismissal can only be operationally justifiable on rational grounds if the dismissal is suitably linked to the achievement of the end goal for rational reasons. The selection of an employee for retrenchment can only be fair if regard is had to the employees personal circumstances and the effect that the dismissal will have on him or her compared to the benefit to the employer. This takes into account the principles that dismissal for an employee constitutes the proverbial death sentence.

SA Clothing & Textile Workers Union and Others v Discreto - A Division of Trump and Springbok Holdings (1998) 19 ILJ 1451 (LAC).

.It is important to note that when determining the rationality of the employers ultimate decision on retrenchment, it is not the courts function to decide whether it was the best decision under the circumstances, but only whether it was a rational, commercial or operational decision

[40] The question, whether the dismissal was operationally justifiable on rational grounds

A Clothing & Textile Workers Union and Others v Discreto A Division of Trump & Springbok Holdings (1998) 19 ILJ 1451 (LAC) (Discreto)

For the employee fairness is found in the requirement of consultation prior to a final decision on retrenchment. This requirement is essentially a formal or procedural one, but, as is the case in most requirements of this nature, it has a substantive purpose. That purpose is to ensure that the ultimate decision on retrenchment is properly and genuinely justifiable by operational requirements or, put another way, by a commercial or business rationale. The function of a court in scrutinising the consultation process is not to second-guess the commercial or business efficacy of the employers ultimate decision (an issue on which it is, generally, not qualified to pronounce upon), but to pass judgment on whether the ultimate decision arrived at was genuine and not merely a sham (the kind of issue which courts are called upon to do in different settings, every day). The manner in which the court adjudges the latter issue is to enquire whether the legal requirements for a proper consultation process has been followed and, if so, whether the ultimate decision arrived at by the employer is operationally and commercially justifiable on rational grounds, having regard to what emerged from the consultation process. It is important to note that when determining the rationality of the employers ultimate decision on retrenchment, it is not the courts function to decide whether it was the best decision under the circumstances, but only whether it was a rational commercial or operational decision, properly taking into account what emerged during the consultation process.[23]

selection criteria: LIFO

JA100/2015

United National Breweries v Ngqimbana (JA100/2015) [2017] ZALAC 76 (30 November 2017)

The last in, first out (LIFO) rule is an acceptable neutral selection criterion. However, at the same time that the employer is reducing its staff, it must maintain its business and fairness recognises that the employer may depart from LIFO and retain the skills of experienced employees, even though they may have shorter service than other employees.

S189A explained

JA125/2017

Edcon Ltd v Steenkamp and Others (JA125/2017) [2017] ZALAC 81; [2018] 3 BLLR 230 (LAC); (2018) 39 ILJ 531 (LAC) (18 December 2017)

The remedies are designed to be available when an aggrieved applicant brings the application by not later than 30 days after the notification of the possible retrenchment, and thus, 30 days before a dismissal notice may be given. The primary purpose is to get the retrenchment process back onto a track that is fair. Remedies (a) and (b) plainly are appropriate before a dismissal is effected. Remedy (c) is aimed at not only reversing a dismissal, but obligating the employer in future to comply with fairness during an implicitly resumed process, which implies timeous proximity to the dismissals. Remedy (d) is plainly contingent on remedies (a) (b) or (c) being inappropriate in given circumstances; it is thus subordinated to the first three options, and cannot be read disjunctively from the rest. Were it appropriate to separate remedy (d) from the rest, the effect of the section would be to totally contradict section 189A(18). Such an interpretation cannot therefore be sustained, and it is not open to a party to seek primary relief in terms of section 189A(13) (d). The function of section 189A(13)(d) is a residual power, if the given circumstances make the first three remedies inappropriate.[25] In summary, Section189A (13) is a procedure designed to enable the Labour Court to urgently intervene in a large-scale retrenchment to ensure that fair procedure is followed. It is not designed to offer a platform for ex post de facto adjudication of unfair procedure disputes. Although a failure to comply with the 30-day period can be condoned, the merits of any condonation application must be understood within the context of an urgent intervention, that being the critical functional characteristic of an application in terms of section 189A(13).[26] Moreover, the intervention contemplated, by its nature does not contemplate a trial at some future remote time. It exists not to facilitate a post mortem but, rather, to oversee the process of retrenchment while it is taking place or shortly thereafter where precipitate dismissals make intervention before actual dismissal impossible, and to reverse the dismissals.[15] Remedy (d) is a last resort back up to cater only for the inappropriateness of remedies (a) (b) or (c).

Constructive dismissal

JR33/15

Johnson v Rajah NO and Others (JR33/15) [2017] ZALCJHB 25 (26 January 2017)

Test is correctness and not reasonableness

[4]The question in constructive dismissal cases is whether there was a dismissal or not. This has to be determined before an enquiry into the fairness thereof could happen. The question whether a dismissal had taken place, goes to jurisdiction and this Court as well as the Labour Appeal Court confirmed on numerous occasions that the review test as laid down in Sidumo and Another v Rustenburg Platinum Mines Ltd and Others[1]does not find application in reviewing a jurisdictional ruling[2].

[19]I re-iterate: reasonableness has no place in a review such as this one and the grounds for review related to reasonableness cannot be considered. I will consider this application only on the basis whether the arbitrator was correct to find that the Applicant was not constructively dismissed and whether he erroneously found that she should have filed a formal grievance.

General Food Industries Ltd t/a Blue Ribbon Bakeries v Food & Allied Workers Union and Others (2004) 25 ILJ 1655 (LAC) at 1668 para 37.

[37] Another reason which the court a quo gave for its finding that the dismissal was substantively unfair was that the appellant had failed to discharge the onus of proving that in selecting the second and further respondents for dismissal, it had applied selection criteria that are fair and objective as required by s 189(7)(b) of the Act which applies when no agreement has been reached on the selection criteria to be used. The appellant did not lead any evidence at the trial as to the skills which the employees had who had shorter service periods than the second and further respondents but were retained. The appellant bore the onus to prove that the selection criteria that were applied to select the second and further respondents for dismissal were objective and fair. Both during the consultation and at trial the respondents challenged the appellant to say what skills it was relying upon and the appellant's witnesses never explained these. In these circumstances one finds oneself in a position where one looks at the list of employees who were selected for retrenchment, namely, the second and further respondents and looks at the list of those employees in exhibit B who were retained and who had shorter service periods than the second and further respondents and asks the question: what skills did those who were retained and who had shorter service periods than the second and further respondents have which the second and further respondents did not have? The answer is that on the evidence in this case one simply does not know. In the light of this can it be said that the appellant discharged the onus to prove that the selection criteria applied to select the second and further respondents were fair and objective? The answer is, in my judgment, a clear and unequivocal no. In that event was the court a quo's finding that the dismissal was substantively unfair right? In my judgment, without any doubt!

alternative position

CA16/2016, C285/2014

South African Breweries (Pty) Ltd v Louw (CA16/2016, C285/2014) [2017] ZALAC 63; [2018] 1 BLLR 26 (LAC); (2018) 39 ILJ 189 (LAC) (24 October 2017)

[26] To move to the impact of this issue on the substantive fairness contention, the so-called unfair selection criteria issue could have had no bearing at all on the failure to be appointed to the Aliwal North Area Manager post. Louw never applied for that post, despite an invitation to do so. The premise of the judgment a quo is that he should have been given it without competing. That finding is without foundation on the facts or on the law. If Louw applied for the George area manager post, he had no good reason not to apply for the Aliwal North post if he wanted the post. The evidence discloses that he declined the prospect of taking up the Aliwal North post by failing to apply for it. Moreover, as already addressed, a competitive process to seek to avoid retrenchment is not unfair.

Retrenchment/ Misconduct: fiat accompli.

JS1027/15

Van Dyk v Zeda Car Leasing (Pty) Ltd t/a Avis Fleet (JS1027/15) [2018] ZALCJHB 19 (25 January 2018)

Johnson & Johnson v Chemical Industrial Workers Union(1999) 20ILJ89 (LAC) quoted with approval in SASBO supra.

[51] Overall, no meaningful joint consensus-seeking process occurred and Avis is the culprit. Avis failed to sufficiently consult on alternatives to retrenchment and selection criteria; and failed to accommodate Ms Van Dyk in an alternative position. I am persuaded that Ms Van Dyk was indeed presented with a fiat accompli. For these reason, her dismissal was procedurally unfair.

Section 189A(19)

JS548/16

National Union of Metalworkers Union of South Africa and Another v Assmang Machadodorp Chrome Works (Pty) Ltd (JS548/16) [2018] ZALCJHB 93 (6 March 2018)

[10] To conclude then, the applicants dismally failed to make out a case of substantive unfairness in respect of the dismissal of Phakhathi on account of Assmangs operational requirements. Once the dismissal was not challenged on any of the grounds restated in Woolworths, there was no basis in law or fact, for the applicants to approach this court with this claim, and they should have known better.

Woolworths (PTY) Ltd v SACCAWU and Others [2017] 12 BLLR 1217 (LAC); (2018) 39 ILJ 222 (LAC) at para [35]

test for substantive fairness in operational requirements dismissal disputes as follows; It is the general consensus of writers on this subject that the test for the fairness of a retrenchment where s189A applies differs from that applicable to retrenchments to which the section does not apply. We agree with this view. Section 189A(19) which is worded in peremptory terms provided that in any dispute referred to the Labour Court in terms of s191(5)(b)(ii), concerning the dismissal of this category of employees, the Labour Court must find that the employee was dismissed for a fair reason if four grounds are satisfied namely:(a) the dismissal was to give effect to a requirement based on the employers economic, technological, structural or similar needs;(b) the dismissal was operationally justifiable on rational grounds;(c) there was a proper consideration of alternatives; and(d) selection criteria were fair and objective. It is trite that the onus of proving this rests upon the employer

LAC test

JA118/13

Mahlakoane v South African Revenue Service (JA118/13) [2018] ZALAC 1 (25 January 2018)

[24] The test on review is not whether the Commissioner was right or wrong, but whether, as laid down by the Constitutional Court in Sidumo v Rustenburg Platinum Mines Ltd and Another (Sidumo) [3]and by this Court in Gold fields Mining SA (Pty) Ltd v CCMA and Others,[4]the decision made by the Commissioner is one that a reasonable decision-maker could not have made. It is also a trite principle, subsequently restated by this Court and other courts, that if the Commissioner misconstrues the nature of the inquiry and that has an impact on the outcome of the arbitration, it would constitute a reviewable irregularity.

issues relevant

JA118/13

Mahlakoane v South African Revenue Service (JA118/13) [2018] ZALAC 1 (25 January 2018)

CUSA v Tao Ying Metal Industries and Others2009 (2) SA 204 (CC).

Subject to what is stated in the following paragraphs, the role of the reviewing court is limited to deciding issues that are raised in the review proceedings. It may not on its own raise issues which were not raised by the party who seeks to review an arbitral award.

Representative: Majoritarianism in order to facilitate orderly collective bargaining

JA23/2017

Association of Mineworkers and Construction Union (AMCU) and Others v Royal Bafokeng Platinum Limited and Others (JA23/2017) [2018] ZALAC 27; [2018] 11 BLLR 1075 (LAC); (2018) 39 ILJ 2205 (LAC) (26 June 2018)

the Legislature had made a policy choice of Majoritarianism in order to facilitate orderly collective bargaining, minimise union rivalry and to foster democratisation of the workplace by avoiding a multiplicity of consulting parties, a proliferation of unions and industrial discontent- section 189 of the LRA is also a manifestation of the policy choice that the legislature made. This policy choice in favour of majoritarianism is no doubt based on the fact that retrenchments are usually collective in nature. Section 189 recognises that the interests of the employees are best served by the most representative entity at the workplace. The entity shall have obtained its seat at the consultation table based on its statistical dominance at the workplace. Having obtained its statistical dominance and entered into a collective agreement with the employer as the exclusive representative of the employees, consultation is more practical and less cumbersome than a multiplicity of consultations with each and every employee at the workplace.

fait accompli

JA140/17

South African Commercial Catering and Allied Workers Union and Others v JDG Trading (Proprietary) Limited (JA140/17) [2018] ZALAC 38 (17 October 2018)

[29] JDGs conduct belies any description of the process as a fait accompli. The most probable inference to be drawn regarding the resolution is that JDG had merely formed a prima facie view on the likelihood of retrenchments. An employer in such situations invariably will form a prima facie view on the need for retrenchments. Visser v Atronic International Bmgh [2009] ZALC 76.

the final decision, subsequent consultation was a sham and dismissal was a fait accompli

It further refers to the fact that the number of staff, in light of the aforesaid, must be reduced...It concluded that the words must further reduce store staff members in the resolution could be read in the light of the surrounding circumstances as may have to reduce store staff members. The wording of the resolution did not mean that the decision to dismiss was a fait accompli. It, therefore, dismissed the application but made no order as to costs.

Du Toit et al Labour Law Through the Cases LexisNexis, LRA Chapter 8, Commentary on s189(1). October 2017 update.

It would therefore seem that the weight of authority has shifted from a broader to a narrower interpretation of the term contemplates. Having initially accepted that contemplation of dismissal as one of various options was sufficient to trigger the employers duty to consult, the courts now appear to take the view that, for purposes of section 189, contemplates refers to dismissal as the preferred or most likely option from the employers point of view rather than a mere possibility. It follows that the employer is entitled to go through a process of weighing up various alternatives before dismissal can be said to be contemplated. However, the employer may not embark on consultation with a closed mind but must be willing to seriously consider any further alternatives to dismissal that may emerge in the process.

consulting party: minority union

J1968/18

National Union of Metalworkers of South Africa and Others v Anglo Gold Ashanti Limited and Another (J1968/18) [2018] ZALCJHB 437 (28 June 2018)

[32] It is apparent that the current matter is distinguishable from Aunde 2011] 10 BLLR 945 (LAC);(2011) 32 ILJ 2617 (LAC) on facts. In Aunde, the appellant excluded the respondent, NUMSA, from consultations on the basis that NUMSA was no longer a union whose members formed the majority of the employees. As such it contended that it had no obligation to consult NUMSA in relation to the retrenchment exercise.

[37] The fact that the body that AngloGold is consulting with over the current retrenchment includes further nominees and is facilitated by the CCMA is of no consequence. Section 189A(3) provides for the appointment of a CCMA commissioner to facilitate the retrenchment process and although AngloGold is not obligated in law to consult with any other person, it may do so. As such, AngloGold is under no obligation to consult with NUMSA.

189A-substantive fairness, selection criteria

JS 426/11

Gare v T-System South Africa (Pty) Ltd and Another (JS 426/11) [2018] ZALCJHB 381 (3 September 2018)

SA Clothing and Textile Workers Union and Others v Discreto - A Division of Trump and Springbok Holdings SACTWU and Others v Discreto (A Division of Trump and Springbok Holdings) [1998] 12 BLLR 1228 (LAC) at para 8; see also BMD Knitting Mills (Pty) Ltd v SACTWU [2001] 7 BLLR 705 (LAC) at para 19; CWIU and Others v Algrorax (Pty) Ltd [2003] 11 BLLR 1081 (LAC) at paras 69 70.

For the employee fairness is found in the requirement of consultation prior to a final decision on retrenchment. This requirement is essentially a formal or procedural one, but, as is the case in most requirements of this nature, it has a substantive purpose. That purpose is to ensure that the ultimate decision on retrenchment is properly and genuinely justifiable by operational requirements or, put another way, by a commercial or business rationale. The function of a court in scrutinising the consultation process is not to second-guess the commercial or business efficacy of the employers ultimate decision (an issue on which it is, generally, not qualified to pronounce upon), but to pass judgment on whether the ultimate decision arrived at was genuine and not merely a sham (the kind of issue which courts are called upon to do in different settings, every day). The manner in which the court adjudges the latter issue is to enquire whether the legal requirements for a proper consultation process has been followed and, if so, whether the ultimate decision arrived at by the employer is operationally and commercially justifiable on rational grounds, having regard to what emerged from the consultation process. (Emphasis added)

[19] Also, Ms Gare asserts that she had been confronted with a fait accompli, defined as when an employer takes unilateral action which forecloses the prospect of meaningful consultation on one or more of the issues in respect of which it ought to consult.[3] In my view, a fait accompli challenge is unsustainable in the contexts of a section 189A retrenchment. Instead of waiting for the process to conclude and cry foul later, section 189A(13) provides a swift remedy for any procedural indiscretions during the consultation and before the retrenchment is effected.

[20] With regard to the selection criteria, Ms Gare is challenging the objectivity thereof. She testified that LIFO should have been applied and her colleague, Mr Codowell, ought to have been selected as he had less years of service. Mr Wilson, on the other hand, testified that TSSA applied excellent fit criteria which entailed appointing the most suitable candidate for the position.

Substantive fairness: may not dismiss an employee for operational requirements when such employer has a vacant position

JS874/16

Solidarity obo De Klerk v South African State Theatre (JS874/16) [2018] ZALCJHB 296 (20 September 2018)

South African Airways v Bogopa and Others [2008] ZALC 43; (2007) 11 BLLR 1065 (LAC) at para 60.

The question, which arises, is what the obligation of an employer is in relation to the dismissal of employees for operational requirements when it does away with an old structure and adopt a new structure (for operational requirements). An employer has an obligation to try and avoid the dismissal of an employee for operational requirements. This obligation entails that an employer may not dismiss an employee for operational requirements when such employer has a vacant position, the duties of which the employee concerned can perform with or without at least minimal training. Where the employer has a vacancy and the employee can perform the duties attached to that vacancy, the employer would be acting unfairly in dismissing the employee without offering the employee such a position and the employee, having accepted the offer, fails to perform the duties attached to that position satisfactorily, the employer can deal with the case as a case of poor performance. (footnotes omitted)

[56] The Respondent dismally failed to show that a tertiary qualification was a requirement for the position of payroll administrator or payroll clerk and that the fact that the Applicant did not possess such a qualification, was a fair reason to retrench her.

Substantive fairness: selection criteria

JS874/16

Solidarity obo De Klerk v South African State Theatre (JS874/16) [2018] ZALCJHB 296 (20 September 2018)

[67] The LRA places primacy on an agreed method of selection and in Nylin Colin van Staden the Court emphasized that an employer must double its efforts during a consultation process to reach an agreement on the selection criteria and failure to do so, simply means that an employer invites the courts scrutiny on the method it employs.

[67] The LRA places primacy on an agreed method of selection and in Nylin Colin van Staden the Court emphasized that an employer must double its efforts during a consultation process to reach an agreement on the selection criteria and failure to do so, simply means that an employer invites the courts scrutiny on the method it employs.

Nylin Colin van Staden and 13 Others v Telkom SA (SOC) Limited Unreported case number JS 95/15, handed down on 11 May 2018.

distinction between procedural and substantive fairness

JS829/15

Muller v Landelahni (JS829/15) [2018] ZALCJHB 331 (11 October 2018)

[18] In instances where an employer dismisses an employee due to its operational requirements, the provisions of section 188(1) read together with those of section 192(2) of the LRA obliges the employer to prove that the reason for the dismissal was substantively and procedurally fair. It has been held that the distinction between procedural and substantive fairness in dismissals based on operational requirements are close together, as procedural unfairness may result in substantive unfairness

Woolworths (Pty) Ltd v SACCAWU and Others [2017] 12 BLLR 1217 (LAC); (2018) 39 ILJ 222 (LAC) at para [22]; See also Ndlela v SITA Information Networking Computing BV (2014) 35 ILJ 2236 (LC) where it was stated that;

44. Although as a matter or practice, we tend to separate process from substance, there are no bright lines distinguishing process from substance in the area of dismissals for operational requirements. The procedure mandated by section 189 has a substantive purpose. Its purpose is to save jobs. This is done by considering alternative means by which the operational problem identified by the employer can be addressed without resorting to dismissals. In a case such as the present, where the proffered substantive justification is the need to reduce operating costs, the issue to be discussed at the consultations is whether there are no other areas of the employers business where the costs can be reduced without affecting employment security. 45. The purpose behind the need to discuss the selection criterion and to implement a fair selection criterion is also the avoidance of loss of employment. If the job or position cannot be saved, then the focus shifts to other means of mitigating the adverse effects of dismissal.

fait accompli

JS602/13

Banks v UIS Analytical Services (Pty) Ltd (JS602/13) [2018] ZALCJHB 341 (12 October 2018)

SASBO v Standard Bank of SA [2011] JOL 26928 (LC) at para 36

It is trite law that when employees are confronted with a fait accompli any subsequent consultations may be fatally flawed. A fait accompli in the context of retrenchments manifests itself typically when an employer takes unilateral action which forecloses the prospect of meaningful consultation on one or more of the issues in respect of which it ought to consult. Under such conditions a party that is asked to consult where the employer has taken such action may rightly cry "foul". (Emphasis added)

test to evaluate the substantive fairness

JS1052/16

Kgwedi v Bidvest Protea Coin (Pty) Ltd (JS1052/16) [2018] ZALCJHB 425; [2019] 6 BLLR 562 (LC) (18 December 2018)

Haveman v Secequip (Pty) Ltd

A fair reason is one that is bona fide and rationally justified, informed by a proper and valid commercial or business rationale. The enquiry is not whether the reason put up is one which would have been chosen by the court but whether the reason advanced considered objectively is fair.

Substantive fairness and selection criteria

J 1483/17

Sampson v Truvelo Manufacturers (Pty) Ltd (J 1483/17) [2019] ZALCJHB 81 (18 April 2019)

[18] In the present case, the respondent failed to meet the above threshold. It failed to prove that the applicants retrenchment was operationally justifiable on rational grounds. Therefore, the dismissal of the applicant is substantively unfair.

South African Commercial, Catering and Allied Workers Union and Others v Woolworths (Pty) Limited,[(CCT275/17) [2018] ZACC 44 at para 25] the test set out in SA Clothing and Textile Workers Union and Others v Discreto - A Division of Trump and Springbok Holdings[SACTWU and Others v Discreto (A Division of Trump and Springbok Holdings) [1998] 12 BLLR 1228 (LAC) at para 8; see also BMD Knitting Mills (Pty) Ltd v SACTWU [2001] 7 BLLR 705 (LAC) at para 19; CWIU and Others v Algrorax (Pty) Ltd [2003] 11 BLLR 1081 (LAC) at paras 69 70.] was endorsed. In Discreto, the Labour Appeal Court (LAC) held as follows:

issues often proceed in tandem, so that selection criteria might be discussed even though parties have not yet agreed on the need or extent of any retrenchments

JS211/17

National Union of Metalworkers of South Africa and Others v Bravo Span 119 CC (JS211/17) [2019] ZALCJHB 184 (30 July 2019)

Association of Mineworkers and Construction Union (AMCU) and Others v Shanduka Coal (Pty) Ltd [2013] JOL 29787 (LC) at paras 29 to 28.

[27] It is well established that the consultation process envisaged under section 189 is intended to be a joint goal orientated problem solving process. It is one in which the parties ought to try and reach a common understanding on the need for and extent of any retrenchments. In examining the need for retrenchment the parties must, as a matter of logic, and in terms of sections 189(2)(a)(i) and (ii), explore if there are ways of addressing the operational need without shedding jobs, or at least by minimising job losses. If job losses cannot reasonably be avoided there is a need to look at what can be done to ameliorate the position of those who will be affected and how they will be selected for retrenchment. Ideally, the logical progression of discussions would follow the sequence of issues set out in section 189(2). However, discussion on these issues often proceed in tandem, so that selection criteria might be discussed even though parties have not yet agreed on the need or extent of any retrenchments. Nothing prevents this happening but to avoid misunderstandings parties would be well advised at each round of consultations to review what has been agreed, what is still unresolved but requiring further consultation, and what is unresolved but where neither party has anything new to suggest which might break the impasse on an issue.[28] Because it is supposed to be a problem solving process, the process is not advanced if it consists of mechanically running through a checklist of items without any engagement between the parties. Likewise, the process is not advanced if obstacles are constantly placed in the way of consultation on the substantive issues taking place. (Emphasis added)

Section 189A: order

J1754/19

Sasbo-The Finance Union obo Madiba v Nedbank Group Limited (J1754/19) [2019] ZALCJHB 263 (4 October 2019)

Order 1. The requirements of rule 8 of the rules of this Court are hereby dispensed with, and the application is treated as urgent; 2. The respondent acted in a procedurally unfair manner when it proceeded to issue Mr Modibane with the letter dated 26 July 2019, without issuing a written notice in terms of section 189 (3) of the LRA, inviting the applicant to consult on the information recorded therein; 3. The respondent acted in a procedurally unfair manner when it proceeded to issue Mr Modibane with the letter dated 26 July 2019, without issuing a written notice prescribed in the Nedbank Retrenchment Policy; 4. The respondent acted in a procedurally unfair manner by failing to appoint a facilitator as prescribed by the Nedbank Retrenchment policy; 5. The respondent must comply with the prescribed 60 days period, as recorded in the Nedbank Retrenchment Policy; and more particularly, that the 60 day period shall commence on the issue of a section 189 (3) notice to the applicant/ Mr Modibane; alternatively that the Respondent comply with 60 day period as prescribed by section 189A of the LRA; 6. The respondent is ordered to initiate and then continue with a meaningful joint consensus seeking process as envisaged by sections 189 and 189A of the LRA;

Section 189A

J2011/19

SASBO The Finance Union obo Fourie v Nedbank Limited (J2011/19) [2019] ZALCJHB 317; (2020) 41 ILJ 500 (LC) (28 October 2019)

[10] The purpose of s 189A has been referred to in a number of judgments. In short, the introduction of s 189A sought to enhance the effectiveness of consultation in larger scale retrenchments, amongst other things by the introduction of the option of facilitation at an early stage, an option that may be elected by the employer in the s 189(3) notice, or by affected employees or their representatives within 15 days of the date of the s 189 (3) notice. The appointment of a facilitator suspends the employers right to dismiss for a period of 60 days, calculated from the date on which the s 189 (3) notice is issued. If a facilitator is not appointed, the employers right to dismiss is similarly subject to the expiry of specified time periods, calculated from the date of the s 189 (3) notice. If notice of termination is given, employees have the option to exercise the right to strike over the substantive fairness of their dismissals, or to refer a dispute about substantive fairness to arbitration or adjudication (but not both).

This is particularly so in respect of s 189 (3), where so much of what follows is regulated by reference to the baseline set by the date on which the notice is issued. For all of these reasons, the requirement to issue a notice in terms of s 189 (3) is peremptory, the banks failure to issue the notice is procedurally unfair.

1. The respondents failure to issue a notice in terms of s 189 (3) constitutes procedural unfairness. 2. The applicants notice of termination of employment, given on 3 October 2019, is set aside. 3. The respondent is directed, should it wish to proceed with a consultation process in respect of any dismissal for operational requirements in its client support division, to issue a notice in terms of s 189(3) and to comply with the applicable provisions of s 189 and s 189A.

quantum: procedural unfairness: employer to pay a penalty in the form of a solatium

JA53/18

Zeda Car Leasing (Pty) Ltd t/a Avis Fleet v Van Dyk (JA53/18) [2020] ZALAC 4; [2020] 6 BLLR 549 (LAC); (2020) 41 ILJ 1360 (LAC) (11 February 2020)

determination of the quantum of compensation requires the court to apply a discretion taking into account the employees length of service- the anxiety suffered by the employee as a result of the employers action and the extent of the deviation from the procedure.

[50] The requirement that an award of compensation be just and equitable in all the circumstances envisages that the Labour Court will be informed about all the circumstances which may bear upon justice and equity.[6] The starting point should be the injustice and harm suffered by the employee and the conduct of the parties. Equity requires proper consideration of the interests of both parties. When the dismissal is unfair only on account of procedural unfairness, the patrimonial loss of the employee is irrelevant. In such instances, the award of compensation is intended to be a solatium.

The compensation for the wrong in failing to give effect to an employees right to fair procedure is not based on patrimonial or actual loss. It is in the nature of a solatium for the loss of the right, and is punitive to the extent that an employer (who breached the right) must pay a penalty for causing that loss. In the normal course a legal wrong done by one person to another deserves some form of redress.

Alpha Plant and Services (Pty) Ltd v Simmonds and others [2001] 3 BLLR 261 (LAC) paras 107-116 and 128; and Lorentzen v Sanachem (Pty) Ltd [1998] 8 BLLR 814 (LC) para 32.

Herbstein and Van Winsen: The Civil Practice of the High Courts of South Africa (5th Ed) 1255.

[52] Awards of compensation, like awards of damages in civil matters, are by their nature matters of estimation and discretion, and hence appellate courts should hesitate to interfere with such awards which are necessarily somewhat rough and ready.

Road Accident Fund v Guedes 2006 (5) SA 583 (SCA) 586-587.

[52]...An appellate court should not simply substitute its own award for that of the trial court. However, an appellate court will interfere where there has been an irregularity or misdirection such as considering irrelevant facts or ignoring relevant ones; or where the decision was based on totally inadequate facts resulting in there being no sound or reasonable basis for the award. Where there is a substantial variation or a striking disparity between the award made by the trial court and the award that the appeal court considers ought to have been made on its own assessment, the award will be unreasonable and the appeal court is entitled and obliged to interfere.

selection criteria

JA53/18

Zeda Car Leasing (Pty) Ltd t/a Avis Fleet v Van Dyk (JA53/18) [2020] ZALAC 4; [2020] 6 BLLR 549 (LAC); (2020) 41 ILJ 1360 (LAC) (11 February 2020)

[44] Moreover, and most importantly, there was no proper consultation about the method for selecting which employee would take the new position and which would be dismissed. Avis invited the employees to apply for the new post and imposed the deadline of 25 September 2015 without identifying the criteria of selection. The requirement that employees compete for a post is not in itself a method of selecting for dismissal.[5] More is required. The competition for the post must proceed in accordance with identified criteria of selection. A fair selection method must be chosen to decide who is to stay and who is to go. In the present instance, it was not clear which criteria, (such as skills, qualifications, experience, length of service, productivity, seniority, disciplinary record and the like), would be applied and no effort or attempt was made to engage with the employees to identify, agree and rank such criteria.

Before business rescue plan was in place

JA32/2020

South African Airways (SOC) Limited (In Business Rescue) and Others v National Union of Metalworkers of South Africa obo Members and Others (JA32/2020) [2020] ZALAC 34; [2020] 8 BLLR 756 (LAC); (2020) 41 ILJ 2113 (LAC) (9 July 2020)

[32] Section 150 makes it plain that the lawmaker intended that the rescue plan must precede any retrenchment and puts paid to any suggestion that the retrenchment process may commence without the plan.

section 189A (13)

J142/20

National Association of South African Workers (NASA-Workers) and Another v Uniliver South Africa (Pty) Ltd (J142/20) [2020] ZALCJHB 35; (2020) 41 ILJ 1399 (LC) (14 February 2020)

The purpose of section 189A (13) is to ensure judicial management of the process with the sole purpose to ensure job security. Where job security is not threatened, there is no need for a court to judicial manage the process.

section 189A (13)

J149/20

National Union of Metalworkers of South Africa (NUMSA) obo Members and Another v South African Airways (SOC) Ltd and Others (J149/20) [2020] ZALCJHB 43; [2020] 6 BLLR 588 (LC); (2020) 41 ILJ 1402 (LC) (14 February 2020)

a dismissal was not contemplated and the duty to consult did not arise. The procedure contemplated in section 189A (13) of the LRA is unavailable to the applicant. There is no basis to declare any action to be unlawful and to issue an injunction.

section 189A (13)

J203/2020

South African Communication Union and Another v Telkom SA SOC Ltd (J203/2020) [2020] ZALCJHB 56; (2020) 41 ILJ 1425 (LC) (5 March 2020)

[27] The court is being asked to intervene under the provisions of s 189A(13)(a), which states189(13) If an employer does not comply with a fair procedure, a consulting party may approach the Labour Court by way of an application for an order -(a) compelling the employer to comply with a fair procedure;

[28] In Edcon v Steenkamp the Labour Appeal Court characterised the purpose of section 189A(13) thus:[25] In summary, section 189A(13) is a procedure designed to enable the Labour Court to urgently intervene in a large-scale retrenchment to ensure that fair procedure is followed. It is not designed to offer a platform for ex post de facto adjudication of unfair procedure disputes. Although a failure to comply with the 30-day period can be condoned, the merits of any condonation application must be understood within the context of an urgent intervention, that being the critical functional characteristic of an application in terms of section 189A(13).[26] Moreover, the intervention contemplated, by its nature does not contemplate a trial at some future remote time. It exists not to facilitate a post mortem but, rather, to oversee the process of retrenchment while it is taking place or shortly thereafter where precipitate dismissals make intervention before actual dismissal impossible, and to reverse the dismissals.

In National Union of Metalworkers of South Africa (NUMSA) obo Members v Toyota South Africa Motors (Pty) Ltd[(2017) 38 ILJ 1162 (LC)] Cele J held: The section 189A (13) remedy was clearly designed to correct a derailment of consultations in a consensus seeking process prescribed by SectionSACU89 and 189A of the Act.[3]

[30] Lastly, in RAWUSA v Schuurman Metal Pressing (Pty) Ltd[[2005] 1 BLLR 78 (LC)], Murphy AJ, as he then was, held:[32](T)he aim of section 189A(13) (Act 66 of 1995) is to provide a remedy to employees to approach the Labour Court to set their employer on the right track where there is a genuine and clear cut procedural unfairness which goes to the core of the process. The section is aimed at securing the process in the interests of a fair outcome. It follows that not every minor transgression of a procedural nature will invite the benefit of the courts discretionary power to grant a remedy. To hold otherwise would be to open the door to excessive litigation, abuse and unnecessary delay in the process of consultation. Section 189A(13) is aimed at unjustifiable intransigence, it is not available as a tool to thwart a retrenchment process where the process, as in the present case, is otherwise capable of being rescued by genuine efforts to cure such flaws as may exist.

[31] Various dicta of the labour court have also elaborated on the extent and manner in which the court might intervene in procedurally unfair retrenchment processes. In AMCU and others v Sibanye Gold Ltd t/a Sibanye Stillwater and others[[2019] 8 BLLR 802 (LC)] Van Niekerk J stated that there were limits on the extent to which the court should intervene under SACU89A(13):[15] The preamble to section 189A(13) makes clear that the Courts intervention is limited to instances of a refusal or failure by the consulting employer to comply with a fair procedure. What the subsection seeks to accomplish, in the face of a prohibition on the right to strike over any dispute that concerns the procedural fairness of a retrenchment and the limitation on the right to refer a dispute of that nature to this Court for adjudication in terms of section 191, is to extend to this Court a real-time supervisory role over the consultation process, with powers to intervene if and when necessary, and to craft a remedy designed to address any procedural shortcoming that is found to exist. The section is not an invitation to consulting parties to use this Court to micro-manage a consultation process intervention ought to be limited to a substantial failure or refusal to comply with the relevant statutory requirements.

[32] In SASBO v Standard Bank of South Africa[(2011) 32 ILJ 1236 (LC)] this court emphasised the importance of orders made under the section not being cast in wide terms:[29] The introduction of the 189A procedure has a short-term preventative aim of pro-actively fostering proper consultation, as opposed to a long term remedial one of compensating employees, following a belated post-mortem examination on what was wrong with the process, long after workers have been retrenched. For this reason, blanket orders which lack specificity about what the parties ought to do are of little value in my opinion and, as far as possible, orders made under section 189A(13) should be crafted to address the defects in the process.

Section 189A (13) of the LRA application

J435/20

Food and Allied Workers Union (FAWU) v South African Breweries (Pty) Ltd (SAB) and Another (J435/20) [2020] ZALCJHB 92; (2020) 41 ILJ 2652 (LC) (28 May 2020)

where an employer offers to consult in a particular manner and the other consulting party refuses to consult in the proposed manner, completion of the process without the other consulting party does not amount to procedural unfairness. The power of the Labour Court is to judicially manage the process and not to dictate to the consulting parties. In the absence of identifiable procedural unfairness, this Court has no powers to intervene in the consultation process. Held: (1) The application is dismissed.

Section 189A (13) of the LRA application

J 606/20

Engelbrecht v Bachique 705 (Pty) Ltd t/a The New House of Busby (J 606/20) [2020] ZALCJHB 125; (2020) 41 ILJ 2641 (LC) (31 July 2020)

[36] It is common cause that the respondent failed to consult despite the promise to do so. Notably, the respondent was mum about its decision to relocate the Distribution Centre despite having effected the processes the ultimately saw the relocation realised. I have also considered the fact that, if section 189A consultation was revived, with the assistance of the facilitator, it would have taken 60 days for the process to conclude; alternatively, for the respondent to issue a termination letter in terms of section 189A(7). Even without a facilitator, the respondent would have been obliged to engage for at least for a period of 30 days before issuing a termination letter. Thus, in my view, compensation equivalent to three months salary is just and equitable, i.e. R115 555.55 x 3 = 346 666,65

Section 189A: no consultation or facilitator

J 683/2020

South African Transport and Allied Workers Union and Others v Ikapa Coaches ( A division of Cullinan Holdings Ltd) and Others (J 683/2020) [2020] ZALCJHB 148 (2 September 2020)

[30] In the light of the above conclusions, taking into account the conduct of both parties since 12 May 2020 when the notice in terms of section 189(3) of the LRA was issued, and further taking into account the powers vested in this court under the provisions of section 189A(13) of the LRA, it is my view that an appropriate order would be to compel the parties to engage in a joint consensus seeking exercise, but within strict specific time frames.

Selection criteria

JA68/2018

Telkom SA SOC Limited v van Staden and Others (JA68/2018) [2020] ZALAC 52 (1 December 2020)

[35] It follows that the placement of an employee into a post in a restructuring exercise is distinct from but related to the selection of an employee who has not been placed for retrenchment. As was made clear in South African Breweries (Pty) Ltd v Louw,[[2017] ZALAC 63; [2018] 1 BLLR 26 (LAC); (2018) 39 ILJ 189 (LAC).] the criteria for placement and selection criteria for retrenchment are different and the former is not converted into the latter where an employee is not placed.[28] In a competitive placement process the relative strengths and weaknesses of the different candidates are assessed,[29] particularly where more than one applicant seeks placement into a position.[30] Whereas, selection for retrenchment is undertaken through application of selection criteria which are either agreed or are, in terms of section 189(7), to be fair and objective.[31]

[46] It follows for these reasons that the respondents were not shown to have been unfairly selected for retrenchment and that their dismissal on grounds of the employers operational requirements was not shown to be unfair. The appeal must therefore succeed and the finding of the Labour Court replaced with a finding to this effect. Having regard to considerations of law and fairness no costs order is warranted in this matter.

if a vacancy is found

JS 858/16

Blom v Goldfields Logistics (Pty) Ltd (JS 858/16) [2021] ZALCJHB 62 (18 May 2021)

SAA v Bogopa and Others [2007] 11 BLLR 1065 (LAC) at para 60.

[60] The question, which arises, is what the obligation of an employer is in relation to the dismissal of employees for operational requirements when it does away with an old structure and adopts a new structure (for operational requirements). An employer has an obligation to try and avoid the dismissal of an employee for operational requirements. This obligation entails that an employer may not dismiss an employee for operational requirements when such employer has a vacant position, the duties of which the employee concerned can perform with or without at least minimal training Where the employer has a vacancy and the employee can perform the duties attached to that vacancy, the employer would be acting unfairly in dismissing the employee without offering the employee such a position and the ensuing dismissal would be without a fair reason. Where however, the employer offers the employee such a vacant position and the employee, having accepted the offer, fails to perform the duties attached to that position satisfactorily, the employer can deal with the case as a case of poor performance. [My own underlining and emphasis]

Oosthuizen v Telkom SA (2007) 28 ILJ 2531 (LAC).

[19] The fact that the respondent did not place any evidence before the Court to explain why it did not give one of the positions to the appellant and gave positions to other employees means that the respondent has failed to justify the dismissal of the appellant. In other words, the respondent selected employees from the redeployment pool to remain in its employ by virtue of appointing them to certain positions and selected those to be retrenched by not appointing them to any vacant posts. The respondent was obliged to explain the basis of such selection criteria applied and should have complied with the Act. And that means that if such criteria have not been agreed, they should be fair and objective. In the end one is left in the dark as to why the appellant was in effect selected to be among those who did not get any of its available positions and had to be retrenched.

Section 189A: Application: Urgency

J587/2021

NEHAWU v Minister for Trade, Industry and Competition & Another (J587/2021) [2021] ZALCJHB 98 (4 June 2021)

[10] Judicial management or oversight over the whole consultation process would be compromised if the courts role was limited to an ex post facto examination and evaluation of the consultation process. The role of the court is not that of armchair critic circumstances may warrant active intervention during the course of a consultation process. The fact that the court is entitled in terms of section 189A (13) (a) to compel the employer to comply with a fair procedure suggests that intervention in terms of that section is competent at any stage during the window period referred to above.

Section 189A: Disclosure of information

J587/2021

NEHAWU v Minister for Trade, Industry and Competition & Another (J587/2021) [2021] ZALCJHB 98 (4 June 2021)

[13] In any event, to the extent that the applicant was concerned that the second respondent had failed to disclose relevant information, the provisions of section 16 of the LRA contain a self-contained dispute resolution process in terms of which disputes regarding disclosure of information must be resolved. Where, as in the present case, the consultation process is chaired by a facilitator, the Facilitation Regulations, 2002, extend specific powers to the facilitator to order the disclosure of information. Regulation 5 provides that if there is a dispute about the disclosure of information the facilitator may, after hearing representations from the parties, make an order directing an employer to produce documents that are relevant to the facilitation. Should the applicant have been dissatisfied with the terms of any ruling made by the facilitator, it was open to the applicant to seek a review of that ruling, on an urgent basis of necessary.

[17] The question then is whether the second respondent has failed to comply with the process-related requirements of sections 189 and 189A. At the outset, it should be observed that where a facilitator is appointed to chair the facilitation process, the broad powers and duties of a facilitator conferred by both section 189A and Regulation 4 of the Facilitation Regulations, would ordinarily leave little scope for criticism of employer conduct in relation to procedure. The structure of section 189A and the powers and duties conferred on facilitators ought to have the result that facilitators manage the process and ensure that the statutory requirements of procedural fairness are observed. Put another way, one of the primary obligations of a facilitator is to exercise the powers afforded him or her to ensure that the employer complies with a fair procedure.

[20] Section 189A (13) is aimed at securing the process of consultation in the interests of the fair outcome. It is aimed at unjustifiable intransigence, not as a tool to thwart a retrenchment process (see RAWUSA v Schuurman Metal Pressing (Pty) Ltd [2005] 1 BLLR 78 (LC)), and is properly confined to those instances where a substantial failure or refusal to comply with the relevant statutory requirements has occurred (see AMCU v Sibanye Gold Ltd t/a Sibanye Stillwater [2019] 8 BLLR 802 (LC)). In my view, the applicant has failed to establish that at this point in the consultation process, the second respondent has failed to comply with a fair procedure. The application thus stands to be dismissed.

Contemplate

JA 40/2020

De Bruyn v Metorex Proprietary Limited (JA 40/2020) [2021] ZALAC 18; [2021] 10 BLLR 979 (LAC) (21 July 2021)

SACCAWU & others v JDG Trading (Pty) Ltd (2019) 40 ILJ 140 (LAC) para 26- 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).

[49] In terms of section 189(1) of the LRA an employer is to consult with employees (or those representing them) when it contemplates dismissing one or more of its employees for reasons based on its operational requirements. 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 employers point of view rather than the mere possibility; and that it follows that an employer is entitled to engage in a process of weighing up various alternatives before it can be said that dismissal is contemplated[10].

[50] On the probabilities Metorex contemplated the retrenchment of, in particular 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 because of the time when consultations were commenced with him.

section 189A: unfair procedure and urgent application

J2834/16; J2845/16

Association of Mineworkers and Construction Union (AMCU) and Others v Piet Wes Civils CC and Others (J2834/16; J2845/16) [2021] ZALCJHB 331 (1 October 2021)

AMCU and Others v Piet Wes Civils CC and Another [2017] ZALCJHB 7; (2017) 38 ILJ 1128 (LC); [2017] 5 BLLR 501 (LC) at para s21-25.

[21] Section 189A(13) has as its purpose to compel an employer in large scale retrenchments to follow a fair procedure if it has not done so.[22] As the learned authors in Labour Relations Law: A Comprehensive Guide[7] point out, the purpose of providing for application proceedings rather than ordinary referral is presumably to simplify and expedite the resolution of disputes about procedural unfairness. Hence this urgent application.[23] The authors of South African Labour Law[Thompson & Benjamin, South African Labour Law (Service no 66, 2016) at AA1-517.] explain: The procedural dimension of retrenchment has been hived off from the substantive dimension. The idea is that if a union or employee sees a failure in the consultative process, they should not stand on their rights but act at once, and approach the court for appropriate relief. The intent no doubt is to allow for early corrective action so that a process failure will not escalate into a substantive injustice.[24] The Constitutional Court recently gave a comprehensive judgment dealing with the provisions of s 189A. In Steenkamp v Edcon Ltd[(2016) 37 ILJ 564 (CC); 2016 (3) BCLR 311 (CC); [2016] 4 BLLR 335 (CC); 2016 (3) SA 251 (CC) paras 161-164.] Zondo J (for the majority) discussed s 189A(13) in circumstances such as these, where the employees had already been dismissed:[161] If an employer has already dismissed employees without complying with a fair procedure, the consulting party may apply to the Labour Court in terms of subsection (13)(c) for an order reinstating the employees until the employer has complied with a fair procedure. The significance of the remedy of reinstatement in subsection (13)(c) is that it is made available even for a dismissal that is unfair only because of non-compliance with a fair procedure. That is significant because it is a departure from the normal provision that reinstatement may not be granted in a case where the only basis for the finding that the dismissal is unfair is the employers failure to comply with a fair procedure. In such a case the norm is that the Labour Court or an arbitrator may award the employee only compensation.[162] Subsection (13)(d) provides that a consulting party may apply to the Labour Court for an award of compensation if an order in terms of paragraphs (a) to (c) is not appropriate. It seems to me that the phrase if an order in terms of paragraphs (a) to (c) is not appropriate constitutes a condition precedent that must exist before the Court may award compensation. The significance of this condition precedent is that its effect is that the Labour Court is required to regard the orders provided for in subsection (13)(a) to (c) as the preferred remedies in the sense that the Labour Court should only consider the remedy in subsection (13)(d) when it is not appropriate to make any of the orders in subsection (13)(a) to (c).[163] This is a reversal of the legal position that obtains in the case of dismissals for the employers operational requirements governed by only section 189 where dismissal is only procedurally unfair and not substantively unfair as well. In these cases the Labour Court is required not to order reinstatement at all. So, in making the remedy of reinstatement available for a procedurally unfair dismissal and also making it one of the preferred remedies in subsection (13), the Legislature has gone out of its way to give special protection for the rights of employees and to protect the integrity of the procedural requirements of dismissals governed by section 189A.[164] The extensive remedies in subsection (13) provide at least partial compensation for the fact that in respect of disputes concerning the procedural fairness of dismissals the employees have been deprived of the right to adjudication that other employees have. In part the extensive remedies in subsection (13) for non-compliance with procedural fairness have been provided because of the importance of the pre-dismissal process.

selection criteria (other than LIFO)

JS440/14

General Industries Workers Union of South Africa (GIWUSA) and Others v African Explosives Limited (JS440/14) [2021] ZALCJHB 445 (7 November 2021)

[6] LIFO is generally accepted as fair and objective criteria. Where appropriate however, a combination of LIFO with retention of skills, qualifications, merit, conduct, performance, experience, and adaptability will equally be deemed to be fair and objective[NUM & others v Anglo American Research Laboratories (Pty) Ltd [2005] 2 BLLR 148 (LC); Food and Allied Workers Union on behalf of Kapesi and Others v Premier Foods t/a Blue Ribbon Salt River [2012] 33 ILJ 1729 (LAC); National Union of Metalworkers of South Africa and Others v Columbus Stainless (Pty) Ltd (JS529/14) [2016] ZALCJHB 344 (30 March 2016) (per Van Niekerk J) at para 10]. It is also accepted that bumping forms part of LIFO as a method for selection of employees to be retrenched[Mtshali v Bell Equipment (DA16/12) [2014] ZALAC 37 (22 July 2014) at paras 22 -23 and 30]. The overriding consideration however is that the employer must objectively provide valid measures and relevance of any such differentiation. This is so in that the employers subjective preferences, or arbitrary, capricious and inconsistent criteria or even other discriminatory or irrelevant factors, would invariably render selection of employees for retrenchment to be unfair[SA Breweries (Pty) Ltd v Louw (2018) 39 ILJ 189 (LAC); Telkom SA SOC Limited v van Staden and Others (JA68/2018) [2020] ZALAC 52; (2021) 42 ILJ 869 (LAC) at para 34].

[13] In considering whether the selection criteria adopted by the respondent was objective and fair, it is useful to reiterate that even though this Court is entitled to scrutinise the fairness and objectivity of the selection criteria, it is however not for it to impose its preference, or to attach any weight to one selection criterion over another. Thus, the Court must accord some deference to the exercise of the employers discretion in that regard[Telkom SA SOC Limited v van Staden and Others at para 37].

[14] As a starting point, it ought to be reiterated that LIFO to the exclusion of other criteria has not been endorsed as the sole objective and fair criteria[National Union of Metalworkers of South Africa and Others v Columbus Stainless (Pty) Ltd at para 10]. To this end, LIFO combined with other criteria as applied in this case, cannot contrary to GIWUSAs contentions, be said to be unfair. The fairness and objectivity of the selection criteria preferred by the respondent ought to be viewed within the context of the entire restructuring process and its objectives.

[15.9]...Thus, where the legitimacy and justification for restructuring exists was not doubted, and further where there was justification for modernisation of the respondents operations which required a certain level of skills and qualifications to be fit for purpose, there can be nothing inherently unfair in requiring the employees to meet the minimum requirements set by the respondent, as well as the level of skills required, which might in the end, supersede LIFO on its own.

[28] In the end, I am satisfied that the selection criteria adopted by the respondent met the threshold of objectivity and fairness and was consistently applied. The criteria was rationally connected with the operational reasons for the retrenchment, and the ultimate objectives of the exercise.

substantive and procedural unfairness with regards to retrenchments overlap

JA2/20

Mbekela v Airvantage (Pty) Ltd (JA2/20) [2021] ZALAC 47 (26 November 2021)

substantive and procedural unfairness with regards to retrenchments overlap and should not be considered in silos. A failure to consult on ways to avoid retrenchment may lead to substantive unfairness. Order of the court a quo that failure to consult led to procedural unfairness only, set aside and replaced with a finding that the dismissal was substantively and procedurally unfair.

[17] In General Foods Industries Ltd v FAWU,[(2004) 7 BLLR 667 (LAC).] this Court said: After consultations have been exhausted the employer must decide whether to proceed with retrenchment or not. The loss of jobs to retrenchment has such a deleterious impact on the life of workers and their families that it is imperative that, even though reasons to retrench employees may exist, they will only be accepted as valid in the employer can show that all viable alternatives have been considered and taken to prevent the retrenchment or to limit this to a minimum.[6][18] When the employer decides to retrench it becomes the courts duty to determine the fairness of the dismissal objectively. In making that determination, the court must always be mindful of the fact that the resort to dismissal especially a so-called no-fault dismissal, which some regard as a death penalty in the field of labour and employment law, is meant to be a measure of last resort.[Chemical Workers Industrial Union v Algorax (2003) 24 ILJ 1917 (LAC) at para 70.][19] The architectural foundation on which the edifice of our law relating to retrenchments is built is the saving of jobs by taking sufficient steps to avoid dismissals. Where it is clear that no steps were taken in order to avoid a dismissal such dismissal would be without a fair reason. It is difficult to discern how a dismissal which could have been avoided but was not can only impact procedural fairness. Substantive and procedural fairness issues, with regard to retrenchments, may and do often overlap. They are, in most cases, interlinked. Whether a failure to follow a particular procedure would lead to substantive unfairness depends on the facts and circumstances of each case.[20] The court a quo evaluated substantive and procedural in silos. It endeavoured to draw a clear and sharp dividing line between substantive and procedural fairness. This was unhelpful. It did not consider whether the failure to jointly consider ways to avoid the dismissal rendered it substantively unfair, even in circumstances where there is a genuine rationale to retrench.[21] Even if there was a fair rationale to retrench the appellant, no proper attempt was made to allow her to give input about her own destiny in an attempt to avoid her dismissal. She was given the notice after the respondent purportedly consulted with her. When she was unresponsive during the meeting, she was not given information on which to make an informed decision.

alternative position condition not met

JA72/2020

Reeflords Property Development (Pty) Ltd v Almeida (JA72/2020) [2022] ZALAC 8 (16 March 2022)

[15] To be meaningful, a consultation in the context of a contemplated retrenchment must be genuine and engaged in with the purpose of seeking alternatives to avoid dismissal.[SA Clothing and Textile Workers Union and Others v Discreto A Division of Trump and Springbok Holdings (1998) 19 ILJ 1451 (LAC) at para 8; Super Group Trading (Pty) Ltd v Janse van Rensburg [2012] ZALAC 7 (25 April 2012) at para 20.] At the second consultation meeting, the appellant presented an alternative, which was accepted by the respondent on condition that training was provided and that the AA rate for travel was paid. If this position had been offered to the respondent, it would have constituted a reasonable alternative to retrenchment.[16] Inexplicably, when the contract of employment in respect of the alternative position was provided to the respondent, the issue of training and the payment of AA rates were both omitted. This was so despite the known fact that it was on the basis of their inclusion that the alternative position was acceptable to the respondent. No explanation was provided by the appellant why it had backtracked from its offer made at the second consultation meeting. In addition, when the respondent gave the appellant notice in writing, prior to the third consultation meeting, that she was not satisfied with the alternative set out in the contract received by her, the appellant elected not to respond to the letter and provided no satisfactory reason for its failure to do so.

Constitutional Court: selection criteria and seeking information and section 189A(13)

CCT 102/21

Solidarity obo Members v Barloworld Equipment Southern Africa and Others (CCT 102/21) [2022] ZACC 15 (6 May 2022)

[2]...For various reasons that will be explored fully below, the Labour Court held that the applications did not raise compliance issues, but rather general issues relating to procedural fairness and, to a certain extent, substantive fairness and that section 189A(13) should not have been invoked. It dismissed the applications with costs.

[8]...possible termination based on race

[14]... It referred to this Courts decision in Steenkamp II,[Steenkamp v Edcon Limited [2019] ZACC 17; (2019) 40 ILJ 1731 (CC); 2019 (7) BCLR 826 (CC) (Steenkamp II).] and held that the jurisdiction of the Labour Court to adjudicate on procedural fairness of a dismissal based on the employers operational requirements has been ousted.[11] The Labour Court said that there is an incorrect view that its jurisdiction in such matters was restored, pursuant to section 189A(13) of the LRA. The Court held that this view is plainly incorrect because section 189A(13) does not make any reference to procedural fairness but specifically provides that if an employer does not comply with a fair procedure, a consulting party may apply to the Labour Court for an order compelling the employer to comply with a fair procedure. It does not, the Court emphasised, refer to procedural fairness.[12]

[16] The Labour Court held that procedural fairness in a broader sense goes beyond an employer’s statutory obligations alone. A typical example, according to the Court, relates to disclosure of information. It also said that, notwithstanding that disputes over procedural fairness are excluded from the ambit of section 189A(13), the LRA does not leave the consulting parties without a remedy or permit the employer to do whatever it wishes during the consultation process. Rather, it enjoins facilitators to facilitate the process and, where necessary, exercise their wide powers to make rulings. In addition, employees retain their constitutional right to strike over issues arising from procedural fairness throughout the consultation process.[16]

[18]...The Court also held that in its view transformation is not a selection criterion per se, and that Solidarity’s complaint, properly construed, related to substantive fairness. The issue of which selection criteria to apply is one of substance and not procedure, so reasoned the Court. It then stated that Solidarity had a right, in terms of section 189A(7)(b)(ii), to refer the dispute as to whether there was a fair reason for the dismissal to the Court in terms of section 191(11) of the LRA. The Labour Court then concluded that it would be inappropriate if it were to adjudicate a procedural fairness dispute brought as a section 189A(13) application, as its powers were taken away by section 189A(18).[18]

[20] The Court then dealt with the issues presented by NUMSA, which it also held were issues of substance that fell outside the ambit of the Labour Courts powers in terms of section 189A(13).[20] The Court held that NUMSA ought to have dealt with Barloworld’s alleged failure to provide it with certain information through the remedial procedure provided for in section 16 read with section 189(4) of the LRA. It held that this process was specifically designated by the LRA, and could not be bypassed by the Court purporting to exercise jurisdiction in terms of section 189A(13).[21]

[29] Solidarity argues that it has been held that consultation must be exhaustive and not sporadic, superficial or a sham, in order to be considered meaningful. And that the Code of Good Practice on Dismissal based on Operational Requirements[24] codifies this where it states that the employer should in good faith keep an open mind throughout and seriously consider proposals put forward.[25] This, in Solidarity’s view, negates the description that the Labour Court attaches to consultation as being mere engagement. It submits that consultation is seldom deemed sufficient when it is rushed. To be meaningful in terms of section 189(2) of the LRA, the consultation process must allow sufficient time for disclosure, consideration and dialogue. It argues that there was no meaningful consultation on the selection criteria in general and the criterion of transformation in particular.

[32]...whether the employer had complied with its statutory obligation to engage in a fair consultation procedure. Barloworld submits that the Labour Court correctly held that, in proceedings under section 189A(13), the only relevant question was the second one.

[41] Section 189A regulates dismissals for operational requirements by employers with more than 50 employees.[29] Barloworld was such an employer. Section 189A(2) requires that an employer must give notice of termination of employment in accordance with the provisions of the section, that an employee may participate in a strike and an employer in a lock out, and that the consulting parties may agree to vary the time periods for facilitation or consultation.

[43] The concept of a meaningful joint consensus-seeking process that is envisaged in section 189(2) is not defined in the LRA. In Atlantis Diesel Engines,[31] the Appellate Division had the following to say about it:[This] approach requires consultation once the possible need for retrenchment is identified and before a final decision to retrench is reached. It proceeds on the premise that consultation requires more than merely affording an employee an opportunity to comment or express an opinion on a decision already made. It envisages a final decision being taken by management only after there has been consultation in good faith.. . . .However, an employer cannot be expected to disclose information which, (a) is not available to it, (b) is not relevant to the issues under discussion, and (c) could harm the employers business interests for reasons other than its relevance to the consultation process, e.g. trade secrets and other confidential information. Atlantis Diesel Engines (Pty) Ltd v National Union of Metalworkers of South Africa [1994] ZASCA 183; 1995 (3) SA 22 (AD).

[67] The above excerpts read with section 189A(18) remove disputes about procedural fairness, as a distinctive claim or cause of action, that a dismissal on the basis of operational requirements was procedurally unfair, from the adjudicative reach of the Labour Court.

[72] In light of these principles and the jurisprudence canvassed above, it is clear that, other than TAWUSA,[TAWUSA obo Mothibedi v SATAWU, unreported judgment of the Labour Court, Case No J885/20 (17 September 2020).] there is no authority in support of the Labour Courts finding that there is a distinction between compliance with a fair procedure and procedural fairness.

selection criteria

JA49/2020

Regenesys Management (PTY) Ltd t/a Regenesys v Nortje and Others (JA49/2020) [2022] ZALAC 96 (18 July 2022)

[22] The reliance on Louw is misplaced. In that matter, the employee did not apply for a post, despite an invitation to do so, as a result of which he was retrenched. This Court made it clear that a competitive process to seek to avoid retrenchment is not unfair. However, this does not remove the obligation on an employer to ensure that any resultant retrenchment meets the requirements of substantive fairness, with fair and objective selection criteria used to select those employees to be retrenched and alternatives to retrenchment properly canvassed and carefully considered.

selection criteria

JS 1069/2020

SACU obo Danster v Bidvest Facilities Management (Pty) Ltd (JS 1069/2020) [2022] ZALCJHB 251 (9 September 2022)

[16] In National Union of Metalworkers of SA v Columbus Stainless (Pty) Ltd (unreported, JS 529/2014, 30 March 2016) the court said the following: Following the influential article by Prof Alan Rycroft 'Corporate restructuring and 'applying for your own Job' (2002) 23 ILJ 678, the courts have held that criteria need to be clear and transparent and selection criteria and the application should ensure that the dismissal does not cross the line between a no-fault dismissal and one based on performance. John Grogan (see Dismissal at 245) has summarised the position as follows: In summary, criteria for selection can be divided into those that are potentially fair, and those that are unacceptable in principle. Potentially fair criteria include length of service, balanced by the need to maintain history skills. In addition, criteria such as performance (with individual or group performance), conduct, experience, skill, adaptability, attitude, potential and the like - or a matrix or 'mix' of such criteria - are acceptable. When these criteria are adopted, however, the employer is required to ensure that a 'rating' system is used which can be applied fairly, consistently and objectively.

[15] The court went on to observe that in order to remove any element of personal feeling and opinion from the assessments, the respondent had appointed a panel of supervisors, each of whom knew the employee from the relevant work area and was able to assess the employee against the stated requirements. The assessment was moderated by an area manager. As a further measure to avoid employees being prejudiced by any subjective assessment, the score had been discussed with employees who were affected, and any employee dissatisfied with his or her rating was afforded the right of appeal.

[16] What emerges from these cases is that it is legitimate for any employer to apply LIFO subject to special skills, and that a range of factors may be taken into account in determining, on a case-by-case basis, whether the special skills exception trumps length of service. These factors extend, as Grogan observes, to those that border on the subjective and include attitude, adaptability, potential and the like. But what is significant is a requirement that an affected employee be consulted on the specific factors to be applied, and that he or she be given an opportunity to respond to any assessment made by the employer.

by early September 2020, the applicant had already been selected for retrenchment and that by 11 September, she was told why she had been selected, albeit in terms that lacked the specificity reflected in the schedule. In my view, it was incumbent on the respondent, in the circumstances, to afford the applicant and/or her representative the opportunity to challenge the conclusions drawn in the schedule, which unquestionably formed the basis for the applicants selection for retrenchment. That failure to afford the applicant this opportunity renders her dismissal unfair.

1. The respondent is ordered to pay the applicant compensation consequent on an unfair dismissal in a sum equivalent to 6 (six) months remuneration, to be calculated at the rate of remuneration paid to the applicant at the time of her dismissal.

alternatives, selection criteria

JS 130/20

National Union of Food Beverage Wine Spirits and Allied Workers (NUFBWSAW) and Others v Coca Cola Beverages South Africa (PTY) Ltd (JS 130/20) [2022] ZALCJHB 268 (21 September 2022)

[36] Turning to the question of dismissal as a measure of last resort as developed by the Labour Appeal Court in NUMSA v Atlantis Diesel Engines (Pty) Ltd[(1993) 14 ILJ 642 (LC).], the real question is whether there were means available to an employer to avoid a no-fault dismissal. If means are available, it will be substantively unfair to dismiss an employee in the circumstances where his dismissal was avoidable. In casu, it was apparent that CCBSA had available a means to avoid the dismissal of the two applicants that testified before me. As held in Bogopa, and Telkom v Oosthuizen[[2007] 11 BLLR 1013 (LAC).], it remains the duty of an employer to avoid a dismissal. In order to realize that duty, where an employer has vacant positions it must offer those to the affected employees. CCBSA did exactly that.

[39] This Court must hasten to state that where an employee wish to rely on the fact that his or her dismissal would have been avoided because the employer had vacant positions, such an employee, must make that allegation in the statement of case. There may be instances where an employer hides the fact that at the relevant time, there were vacant and available positions that could have avoided the dismissal of an employee. In such instances a Court may reach a conclusion that dismissal was unavoidable because there were no alternative available vacancies. Having said that this Court must add that the obligation to consider whether there are other jobs available rests with the employer[13]. Once searched and found, an employer is obligated to offer those available jobs to an employee in order to avoid his or her dismissal. The unfortunate situation in an instance where jobs are made redundant is that unless an alternative position is found an employee affected by the redundancy will ultimately be dismissed. In the case of Williams v Compair Maxam Ltd[14], Mr Justice Browne-Wilkinson stated that the first principle to adopt in a redundancy is that an employer must seek to give as much warning as possible of impending redundancies so as to enable the union and employees who may be affected to take early steps to inform themselves of the relevant facts, consider possible alternative solutions and if necessary find alternative employment elsewhere in the undertaking or elsewhere.

[41] In terms of section 189 (7) of the LRA, an employer is obliged to select employees using criteria that were agreed and if there is none agreed to, one that are fair and objective. When it comes to selection criteria two issues arise, namely; (a) the selection adopted must be fair and objective; and (b) the criteria must be objectively and fairly applied. In Grieg v Sir Alfred McAlpine and Son (Northern) Ltd[[1979] IRLR 372.] it was held that where an employer has failed to prove that the criteria had been objectively and fairly implemented, the dismissal was unfair. It is important to state that in a situation where all positions are made redundant a selection criterion does not apply because everyone is to be dismissed if alternative positions are not found.

[42] I am in full agreement. Where all employees are to be dismissed in a redundancy situation there can be no assessment to be undertaken as to who stays and who goes. All will go if alternative positions are not found. However, if an employer adopts criterion other than last in first out (LIFO) for the purposes of redundancy selection, that employer must be able to show both that the criteria adopted are fair and objective and that the criteria has been applied rationally and objectively. In a situation involving so many employees, it is not sufficient for a single person who makes the selection to say he has done so on the basis of his management skill and judgment. When so many employees are involved, and a basis of selection is to be used which is open to the possibility of being influenced by over-subjective assessments, or even sheer prejudice, on the part of the person making the choice, it is important that management be able to show that they took sufficient steps to make their decision as objective and unbiased as possible.

selection criteria

JS 994/20

Koprindjiyska v 80 Westcliff (PTY) LTD T/A Four Seasons Hotel (JS 994/20) [2022] ZALCJHB 325 (22 November 2022)

[13] The LRA does not compel the adoption and application of any particular criterion for selection for retrenchment. It requires only that in the absence of agreed criteria, the employer apply criteria that are fair and objective. That is a broad remit, and admits a number of potential criteria, many of which may be justifiable in relation to prevailing circumstances. For example, the court has upheld selection criteria based on performance, verified by objective standards (see NUM & others v Anglo American Research Laboratories (Pty) Ltd [2005] 2 BLLR 148 (LC)). As Prof Rochelle le Roux observes The way in which LIFO is applied can lead to vastly diffident results. Ultimately, the question remains whether it is applied in a fair and objective manner (R le Roux Retrenchment Law in South Africa (Lexis Nexis 2016). Put another way, while an employee has the right to influence the employers decision on the selection criteria to be applied, the employee has no right to insist that any particular criteria applied, provided that those ultimately applied meet the test of fairness and objectivity.

[14] A case to which Prof le Roux refers resonates closely with the present. In SA Commercial Catering & Allied Workers Union & others v Sun International SA Ltd (A Division of Kersaf Investments Ltd (2003) 24 ILJ 594 (LC), a hotel group retrenched employees at several of its hotels on account of declining revenue. The employer applied LIFO by hotel, by department, by job category. The union argued that LIFO ought to have been applied across the board in each hotel. The court held that there was no reason to conclude that the criteria applied by the employer were not fair and objective. At paragraph 22 of the judgment, the court said the following: If it is accepted, as the union accepts, that the respondent was facing serious financial difficulties which required to cut costs by reducing staff numbers, it seems to me that it was not inappropriate or unfair for the respondent to have identified the number of employees in each job category at each unit whose services it could most afford to lose and then to subject on the basis of applying LIFO within such job categories. In my view this was both a fair and objective approach.

[19] In summary: The LRA is not prescriptive on the matter of selection for retrenchment. It requires only that the selection criteria adopted by the employer are fair and objective. The application of LIFO can have vastly different consequences for individual employees potentially affected by a retrenchment. Employees have no right to require that particular criteria, the application of which would be favourable to them, must be adopted. Ultimately, it is for the employer to make a decision that is best consistent with its legitimate business interests. Selection on the basis of LIFO based on length of service with the hotel rather than the department in which the applicant was employed was not inherently unfair; nor was it inherently unfair to apply LIFO in the absence of consideration of skills and experience. The applicants dismissal was thus substantively fair.

bumping

JS 415/17

Bayane and Another v Fischer Tube Technik SA (JS 415/17) [2023] ZALCJHB 12 (3 February 2023)

"[20] In the present case, the consultation process engaged by the parties was genuine and bona fide, geared to minimise the impact of the retrenchment on the individual applicants and in fact gave birth to an agreed retrenchment criteria or alternative solution which in my opinion was fair and objective. It is not in dispute that the alternative positions were offered and accepted only for the salaries condition to be presented at a later stage. The Labour Appeal Court in Mtshali v Bell Equipment[(DA16/12) [2014] ZALAC 37 (22 July 2014).] it was held that:

“Bumping is situated within the “last in-first out” (LIFO) principle which is itself rooted in fairness for well-established reasons. Longer serving employees have devoted a considerable part of their working lives to the company and their experience and expertise is an invaluable asset. Their long service is an objective tribute to their skills and industry and their avoidance of misconduct. In the absence of other factors, to be enumerated hereinafter, their service alone is sufficient reason for them to remain and others to be retrenched. Fairness requires that their loyalty be rewarded”"

"[21] There are two forms of bumping, “horizontal bumping” – where an employee is transferred to a position of similar status, conditions of employment and remuneration and “vertical bumping” – where an employee is transferred to a position with less favourable status, conditions of employment and remuneration. It is trite in law that an employer must first apply horizontal “bumping” before vertical “bumping”. In the case of Porter Motor Group v Karachi[[2002] 4 BLLR 357 (LAC).] the Labour Appeal Court dealt extensively with “bumping” in dismissals for operational requirements. The Court laid down the following principles where “bumping” is to take place:

21.1 that an employer is required to consult over the possibility of “bumping”;

21.2 that the practice uses as its point of departure the LIFO principle;

21.3 that “horizontal” bumping should take place before “vertical bumping” is resorted to;

21.4 that “bumping” should be implemented in a way that creates the minimum possible disruption for the employer;

21.5 that geographical limits may be placed on the unit within which “bumping” is effected;

21.6 that the size of the unit will depend on the mobility and career paths of the employees concerned;

21.7 “bumping” must be effected with due regard for the retention of necessary skills;

21.8 downward “bumping” should take place where the employee is prepared to accept downgrading in work and status"

[22] The principle laid out in Karachi case is simply that the employees may refuse the vertical bumping and if this is imposed on them then the dismissal becomes unfair. If this principle is anything to go by then the dismissal of the Applicants is unfair.

alternative fixed term contract

JS 212/21

Wolmarans v Rio-Carb (Pty) Ltd (JS 212/21) [2023] ZALCJHB 278 (17 October 2023)

Retrenchment – Fixed-term contract offer – Applicant retrenched for operational reasons arising out of effects of Covid-19 pandemic – Genuine reason for retrenchment communicated to applicant – LIFO implemented as fair selection criterion – Applicant has himself to blame for rejecting fixed-term contract offer made to him in uncertain times in which not only the company but the entire country and the globe found itself in – Dismissal of applicant was procedurally and substantively fair.

[52] In my view, the applicant having accepted the rationale for the retrenchment was premised on the impact of the Covid-19 pandemic on the operations of the respondent, having been well aware of the effect that the pandemic and the national lockdown regulations had on the respondent, given the 20% cut in salaries and TERS payments as measures to keep employees in employment, I find that the applicant has himself to blame for rejecting the fixed -term contract of employment offer that was made to him in the uncertain times in which not only the respondent but the entire country and the globe found itself in. The evidence of Mr Maine is that the fixed term employment contract that Mr. van Wyk concluded on 23 June 2020 with the respondent comprised of a portion of the applicant’s previous job and that Mr. van Wyk did not occupy the previous position in which the applicant was employed.

section 189A

J 250/2019

BIFAWU obo Miya and Another v Scorpion Legal Protection (Pty) Ltd (J 250/2019) [2023] ZALCJHB 314 (8 November 2023)

[6] Mr Nhlapo for the Applicant submitted that the LRA distinguishes between small-scale and large-scale retrenchments and that the Respondent had an obligation to indicate to the Applicant which process would be followed. The section 189 notice that was issued by the Respondent was quiet on the issue and at no stage was the Applicant aware that it was indeed a section 189A retrenchment.

"[12] The relationship between sections 189 and 189A of the LRA is symbiotic and this was confirmed by the Labour Appeal Court (LAC) in Gijima AST (Pty) Ltd v Hopley[[2014] ZALAC 9; (2014) 35 ILJ 2115 (LAC) at para 34.] where it was held that:

‘The two sections must be read together since they both apply to dismissals for operational requirements. Further, the overall obligation imposed by the two sections is for consultation on the matters referred to in s 189. It is also significant to note that the s 189A process is initiated by the very same s 189(3) notification issued for retrenchments. The items that form the subject of consultation are only listed in s 189(2) which includes the method for selecting employees to be dismissed. Such a provision is not found in s 189A.’"

"

[13] Section 189A aims for a firm separation between substantive and procedural fairness and in the case of a large-scale retrenchment, procedural fairness can be addressed only via section 189A(13). As such, section 189A provides for a procedure in respect of procedural lapses whereby an applicant may approach the Labour Court by way of an application for relief. It also provides for adjudication of procedural disputes at an early stage, preferably for procedural lapses to be remedied early on and not once the process has run its course.

[14] Section 189A(13) provides as follows:

‘If an employer does not comply with a fair procedure, a consulting party may approach the Labour Court by way of an application for an order —

(a) compelling the employer to comply with a fair procedure;

(b) interdicting or restraining the employer from dismissing an employee prior to complying with a fair procedure;

(c) directing the employer to reinstate an employee until it has complied with a fair procedure;

(d) make an award of compensation, if an order in terms of paragraphs (a)–(c) is not appropriate.’

[15] An application contemplated by section 189A(13) is an application sui generis. There is little point in affording an applicant the remedy of an interdict or an order directing an employer to reinstate an employee until it complies with the fair procedure unless the application is accorded a degree of urgency and is dealt with on that basis.

[16] The purpose of section 189A(13) is to prevent procedural issues from clouding the substantive fairness of the retrenchment, wherefore the relief will usually be sought on an urgent basis and be in the form of a pre-emptive interdict. An application in terms of section 189A(13) should not be delayed as the relief in terms of section 189A(13)(a)-(c) will be granted with the aim of ensuring that the consultation process serves its proper purpose.[3]. "

"[17] In Insurance and Banking Staff Association and another v Old Mutual Services and Technology Administration and another[[2006] 6 BLLR 566 (LC) at para 9.] (Old Mutual), the Court described the aim and purpose of the 2002 amendments to the LRA, with specific reference to section 189A, as follows –

‘…section 189A was aimed at enhancing the effectiveness of consultations in large-scale retrenchments. It allows for a facilitator to be appointed to put back on track at the earliest possible moment a retrenchment process that falls off the rails procedurally. The overriding consideration under section 189A is to correct and prevent procedurally unfair retrenchments as soon as procedural flaws are detected, so that job losses can be avoided. Correcting a procedurally flawed mass retrenchment long after the process has been completed is often economically prohibitive and practically impossible. All too often the changes in an enterprise with the passage of time deters reinstatement as a remedy. So, the key elements of section 189A are: early expedited, effective intervention and job retention in mass dismissals.’"

"[18] In National Union of Mineworkers v Anglo American Platinum Ltd and others[[2013] ZALCJHB 262; [2013] 12 BLLR 1253 (LC) at para 19.] it was held that:

‘Section 189A(13) was introduced in 2002 and was intended, broadly speaking, to provide for the adjudication of disputes about procedural fairness in retrenchments at an earlier stage in the ordinary dispute resolution process, and by providing for their determination, inevitably as a matter of urgency, on application rather than by way of referral. The section empowers employees and their representatives to approach the court to require an employer to apply fair procedure, assuming, of course, that the jurisdictional requirements set out in section 189A are met. The section affords the court a broad range of powers, most of which appear to suggest that where a complaint about procedure is made by a consulting party, the court has a broad discretion to make orders and issue directives, thereby extending to the court an element of what might be termed a degree of judicial management into a contested consultation process.’"

"[20] In Banks and another v Coca-Cola SA - A Division of Coca-Cola Africa (Pty) Ltd,[2007] ZALC 175; (2007) 28 ILJ 2748 (LC) at para 18.] the Court summarized the role of the Court in a section 189A(13) application as follows:

‘In short, the conclusion to be drawn from the wording of s 189A is that this court appears to have been accorded a proactive and supervisory role in relation to the procedural obligations that attach to operational requirements dismissals. Where the remedy sought requires intervention in the consultation process prior to dismissal, the court ought necessarily to afford a remedy that accounts for the stage that the consultation has reached, the prospect of any joint consensus-seeking engagement being resumed, the attitude of both parties, the nature and extent of the procedural shortcomings that are alleged, and the like. If it appears to the court that little or no purpose would be served by intervention in the consultation process in one of the forms contemplated by s 189A(13)(a), (b) and (c), then compensation as provided by para (d) is the more apposite remedy.’"

[22] In Steenkamp and Others v Edcon Limited[[2019] ZACC 17; (2019) 40 ILJ 1731 (CC).] (Steenkamp II), the Constitutional Court dealt with the question of whether claims for relief for procedural unfairness in large-scale retrenchments can be dealt with ex post facto. The Constitutional Court endorsed the finding of the Labour Appeal Court[10] that section 189A(13) does not constitute a self-standing remedy for compensation for procedural unfairness long after the event.

"[25] What are the legal principles that emerged from Steenkamp II? The Constitutional Court, considering the nature, purpose and functioning of section 189A(13) held that:

‘[45] The LRA provides for a consultative framework within which employees facing possible retrenchment may participate in the consultation process in an attempt to either avoid a possible retrenchment or, where retrenchments are unavoidable, to participate in attempts to ameliorate the adverse effects of such a retrenchment.

[46] Where a retrenchment exercise involves a large number of employees, s 189A of the LRA applies. This section not only strives to enhance the effectiveness of the consultation process by providing for the appointment of a facilitator, but also provides for mechanisms to pre-empt and resolve disputes about substantive and procedural unfairness issues as and when they arise during the consultation process.

[47] A distinctive feature of section 189A(13) of the LRA is the separation of disputes about procedural fairness from disputes about substantive fairness. Disputes about substantive fairness may be dealt with by resorting to strike action or by referring a dispute about the substantive fairness of the dismissals to the Labour Court in terms of s 191(11) of the LRA.

[48] Disputes about procedural fairness have been removed from the adjudicative reach of the Labour Court and may no longer be referred to the Labour Court as a distinctive claim or cause of action that a dismissal on the basis of operational requirements was procedurally unfair.’"

[26] The Constitutional Court made it clear that, although a clear policy decision has been made to remove claims of procedural unfairness from the ex post facto jurisdictional competence of the Labour Court, employees are not left without a remedy as they may approach the Labour Court in terms of section 189A(13) of the LRA for an order compelling the employer to comply with a fair procedure. Where employees have already been dismissed, the Labour Court has the additional power in terms of section 189A(13)(c) of the LRA to reinstate such an employee to allow for the consultation process to run its course. Only where these orders are not appropriate, may the Labour Court, where it is appropriate to do so, order compensation in terms of subsection (d).

[33] The facts in casu as submitted by Mr Nhlapo are that the Applicant was unaware that the retrenchment of the individual applicants was governed by section 189A. Even though I have empathy for the individual applicants on this score, this Court cannot assume jurisdiction on that ground.

[39] In summary: The provisions of section 189A(18) remove a claim for procedural unfairness in a large-scale retrenchment from this Court’s jurisdiction, where such a case was not pursued in terms of section 189A(13). Furthermore, none of the remedies provided for in section 189A(13)(a) - (c) are available to the individual applicants, having been dismissed as far back as October 2018 and the only remaining remedy is that of compensation. The position is clear: Disputes about procedural fairness have been removed from the adjudicative reach of the Labour Court and may no longer be referred to the Labour Court as a distinctive claim or cause of action that a dismissal, on the basis of operational requirements, was procedurally unfair. For these reasons, this Court has no jurisdiction to adjudicate the Applicant’s claim for procedural unfairness.

procedurally unfair and compensation

JS316/19

Phaladi v Afri Guard (Pty) Ltd (JS316/19) [2023] ZALCJHB 326 (20 November 2023)

"[28] In Zeda Car Leasing (Pty) Ltd t/a Avis Fleet v Van Dyk [[2020] ZALAC 4; [2020] 6 BLLR 549 (LAC); (2020) 41 ILJ 1360 (LAC).], the LAC reiterated that an employer must follow a fair procedure in dismissing employees for operational requirements, and that the failure to do so exposes the employer to pay a penalty in the form of a solatium. It was further added that the determination of the quantum of compensation requires the court to apply a discretion taking into account a variety of factors, including the extent of the deviation from a fair procedure; the employee’s conduct; the employee’s length of service; and the anxiety and hurt caused to the employee as a consequence of the employer not following a fair procedure. It was however added that to the extent that an award of compensation must be “just and equitable in all the circumstances”, the Court ought to take into account the interests of both parties[11].

[29] In this case, although the Court ought not involve itself in an exercise of conjecture related to the proximity of the appointment of Sibeko in relation to the issuing of the notice in terms of section 189(3) of the LRA, it has been already stated that there was no discernible evidence that the respondent had engaged with the applicant in any meaningful consultation process prior to 7 to her termination on 7 January 2019.

[30] Given the nature of consultation processes and the effects of a retrenchment, the Court cannot simply rely on the evidence of van Loggenberg that any such meaningful consultations were held, especially in view of the absence of any documentary evidence that demonstrates that indeed such consultations were held."

[31] In considering compensation as a result of these procedural lapses, it is taken into account that (i) the applicant would not ordinarily have been entitled to severance pay in view of the provisions of section 41(4) of the BCEA and further based on the contents of the notice of termination to which she had attached her signature; (ii) that she was served with a section 189(3) notice at the time that she was due to take study leave; (iii) that there was no history of poor performance or besmirched disciplinary record; and (iv) that she is as at the time of this hearing still unemployed, had to rent out her property and stay in a back room, and is financially indebted, which invariably causes her anxiety and hurt. In the light of these considerations, and having further taken account of what is in the interests of both parties, it is determined that compensation equal to four months’ salary is deemed to be just and equitable in the circumstances.

bumping forms an integral part of the application of LIFO.

JA100/23

Fischer Tube Technik SA v Bayene and Another (JA100/23) [2024] ZALAC 25; (2024) 45 ILJ 1804 (LAC) (21 May 2024)

"14] In South African law, bumping forms an integral part of the application of LIFO.[7] While there is no absolute obligation on an employer applying LIFO to bump, it is a matter that ought properly to be canvassed during the consultation process when LIFO is agreed. Indeed, it is not open to an employer to contend that employees cannot raise the issue of bumping only because they failed to do so during the consultation process. In General Food Industries Ltd t/a Blue Ribbon Bakeries v Food & Allied Workers Union & others[8], this Court said the following:

‘Counsel’s submission is that, if a union has failed to raise bumping or indeed any alternative measure to retrenchment during consultation, it is precluded from raising it to challenge the fairness of the dismissal at trial… In my judgment, the only conceivable legal basis for such a submission would be an agreement or a waiver. If it were to be found that a union had agreed not to rely on a particular basis, eg bumping, to challenge the fairness of a dismissal or that it had waived its right to rely on a particular basis to challenge the fairness of a dismissal, it certainly would be precluded from raising such a basis at trial. I cannot see any other legal basis in the absence of a statutory provision.’

As Prof Le Roux observes, the ultimate responsibility for fairness remains with the employer.[9]"

[16]...Although, as this Court observed in Karachi, vertical bumping is inevitably accompanied by a diminution in salary, bumping is a concept related to the employer’s organisational structure, and not the effect that placement in an alternative position may have on the salary of any employee who benefits from the application of bumping. To be clear, horizontal bumping is the placement of an employee within the organisational structure at the same or a similar level; vertical bumping is placement (usually) at a lower level. What terms and conditions attach to any form of bumping that is implemented is a separate matter, best dealt with in the consultation process.

[17] What the applicable authorities[10] require is that an employer applying LIFO must raise and discuss the question of bumping with consulting parties during the consultation process. In the absence of any agreement on the issue, the employer must be in a position to justify its decision not to bump, or to bump either horizontally or vertically, within the selection pool that it has defined. Ultimately, any requirement to bump is a matter of fairness, both to the employer (who faces the disruptive consequences of bumping), the employee selected for retrenchment (whose job security is at risk in the absence of bumping) and the displaced employee (whose job security is equally prejudiced on account of the application of bumping).

"...A different approach was later adopted in BMD Knitting Mills (Pty) Ltd v SA Clothing & Textile Workers Union[13] where Davis AJA rejected the test for fairness predicated on the approach to judicial review of administrative action and said the following:[14]

‘The word ‘fair’ introduces a comparator, that is a reason which must be fair to both parties affected by the decision. The starting-point is whether there is a commercial rationale for the decision. But, rather than take such justification at face value, a court is entitled to examine whether the particular decision has been taken in a manner which is also fair to the affected party, namely the employees to be retrenched. To this extent the court is entitled to enquire as to whether a reasonable basis exists on which the decision, including the proposed manner, to dismiss for operational requirements is predicated. Viewed accordingly, the test becomes less deferential and the court is entitled to examine the content of the reasons given by the employer, albeit that the enquiry is not directed to whether the reason offered is the one which would have been chosen by the court. Fairness, not correctness, is the mandated test.’ "

"[40] In SA Transport & Allied Workers Union v Old Mutual Life Insurance Co SA Ltd,[15] the Labour Court said the following:[16]

‘…[A]s stated in BMD Knitting Mills, the court is entitled to look at the content of the reasons given to ensure that they are neither arbitrary nor capricious and are indeed aimed at a commercially acceptable objective. The second leg of the enquiry is directed at the investigation of the proportionality or rationality of the process by which the commercial objectives are to be achieved. Thus, there should be a rational connection between the employer’s scheme and its commercial objective, and through the consideration of alternatives an attempt should be made to find the alternative which least harms the rights of the employees in order to be fair to them. The alternative eventually applied need not be the best means, or the least drastic alternative. Rather it should fall within the range of reasonable options available in the circumstances allowing for the employer’s margin of appreciation to the employer in the exercise of its managerial prerogative. The formulation of the test in this way adds nothing new. It simply synthesises what has already been said in Disreto and BMD Knitting Mills.’

"

substance

JA 130/22

National Union of Food Beverage Wine Spirits and Allied Workers v Coca Cola Beverages South Africa (Pty) Ltd (JA 130/22) [2024] ZALAC 26 (27 May 2024)

[21...There was thus a commercial rationale for the retrenchments. The Labour Court considered that it was not for the Court to determine whether the decisions made by CCBSA were correct – the test to be applied was whether the solution adopted by CCBSA was fair and commercially rational. To the extent that the union had argued that CCBSA erred in restructuring only the positions of merchandisers and pre-sellers, the Court held that for it to second-guess CCBSA’s decision in these circumstances would be to apply a test of correctness....

[39] In the case of a dismissal based on an employer’s operational requirements, there must necessarily be some objective link between the dismissals and some economic, technological or similar need on the part of the employer. This Court has held that while employers have the prerogative to restructure their operations to maximise profits and operational efficiency, the courts do not have to accept the employer’s proffered rationale at face value, nor do the courts defer to employers. Earlier decisions by this Court limited intervention to those instances where the employer was unable to demonstrate that the ultimate decision arrived at by the employer was not genuine, or was merely a sham, or put in a positive sense, that the dismissal was operationally and commercially justifiable on rational grounds. On this approach, the Court’s function is not to decide whether the employer’s decision was the best decision in the circumstances; rather, the Court’s enquiry is limited to whether it was a rational commercial or operational decision, properly taking into account what emerged during the consultation process.[12]

"...A different approach was later adopted in BMD Knitting Mills (Pty) Ltd v SA Clothing & Textile Workers Union[(2001) 22 ILJ 2264 (LAC) (BDM). For a discussion on the jurisprudential evolution of the test for substantive fairness, see R le Roux ‘Retrenchment Law in South Africa’, LexisNexis at pp 191-198.] where Davis AJA rejected the test for fairness predicated on the approach to judicial review of administrative action and said the following:[14]

‘The word ‘fair’ introduces a comparator, that is a reason which must be fair to both parties affected by the decision. The starting-point is whether there is a commercial rationale for the decision. But, rather than take such justification at face value, a court is entitled to examine whether the particular decision has been taken in a manner which is also fair to the affected party, namely the employees to be retrenched. To this extent the court is entitled to enquire as to whether a reasonable basis exists on which the decision, including the proposed manner, to dismiss for operational requirements is predicated. Viewed accordingly, the test becomes less deferential and the court is entitled to examine the content of the reasons given by the employer, albeit that the enquiry is not directed to whether the reason offered is the one which would have been chosen by the court. Fairness, not correctness, is the mandated test.’ "

"[40] In SA Transport & Allied Workers Union v Old Mutual Life Insurance Co SA Ltd,[[2005] ZALC 50; (2005) 26 ILJ 293 (LC).] the Labour Court said the following:[16]

‘…[A]s stated in BMD Knitting Mills, the court is entitled to look at the content of the reasons given to ensure that they are neither arbitrary nor capricious and are indeed aimed at a commercially acceptable objective. The second leg of the enquiry is directed at the investigation of the proportionality or rationality of the process by which the commercial objectives are to be achieved. Thus, there should be a rational connection between the employer’s scheme and its commercial objective, and through the consideration of alternatives an attempt should be made to find the alternative which least harms the rights of the employees in order to be fair to them. The alternative eventually applied need not be the best means, or the least drastic alternative. Rather it should fall within the range of reasonable options available in the circumstances allowing for the employer’s margin of appreciation to the employer in the exercise of its managerial prerogative. The formulation of the test in this way adds nothing new. It simply synthesises what has already been said in Disreto and BMD Knitting Mills.’

"

all posts affected- no selection criteria applicable

JA 130/22

National Union of Food Beverage Wine Spirits and Allied Workers v Coca Cola Beverages South Africa (Pty) Ltd (JA 130/22) [2024] ZALAC 26 (27 May 2024)

22] In respect of the selection criteria adopted by CCBSA, the Labour Court considered that, since all of the merchandisers’ posts were no longer part of the new organisational structure, all of the merchandisers would be selected for retrenchment and the question of fair and objective selection criteria thus did not arise.

[46] This is not one of those case where an employer restructures its business and then invites existing employees in a competitive process to apply for positions in the new structure, and where non-placement becomes the criterion for retrenchment.[18] In those cases, this Court has held that the placement process and in particular, decisions on placement, must meet the objective standard of fairness. In respect of the redundant pre-sellers this is a case, no more and no less, where alternative employment in the form of opportunities within the organisation were drawn to the attention of employees already selected for retrenchment on the basis of agreed criteria, and where they were free to seek appointment to those positions. An employee seeking to claim an unfair retrenchment in these circumstances must at least plead the fact of the exclusion and the grounds on which the employee asserts that the exclusion was unfair.

s 187 (1) (c)

JA 130/22

National Union of Food Beverage Wine Spirits and Allied Workers v Coca Cola Beverages South Africa (Pty) Ltd (JA 130/22) [2024] ZALAC 26 (27 May 2024)

National Union of Metalworkers of SA & others v Aveng Trident Steel (A division of Aveng Africa (Pty) Ltd) & another[2020] ZACC 23; (2021) 42 ILJ 67 (CC) (Aveng Trident).[2020] ZACC 23; (2021) 42 ILJ 67 (CC) (Aveng Trident).

[67] A careful analysis of the wording of the section, alongside the explanatory memorandum, demonstrates that the interpretation contended for by NUMSA is incongruous with the section. What that contention boils down to is that an employer considering operational requirements may never resort to retrenchments without contravening the section. This, in my view, would undermine an employer’s right to fair labour practices as entrenched in s 23 (1) of the Constitution, since it would take away its right to resort to retrenchments where operational requirements render them necessary.

[30] Put another way, it is not an automatically unfair dismissal for an employer to dismiss an employee who refuses to accept an offer of alternative employment made in the context of a retrenchment process, where the reason for dismissal is the employer’s operational requirements. As the Constitutional Court observed,[8] it does not necessarily follow that, simply because a proposed change to terms and conditions of employment is refused by an employee and a dismissal ensues thereafter, the reason for dismissal is the refusal to accept the proposed change.

[31] The sole enquiry under s 187 (1) (c) therefore is into the reason for dismissal and specifically, whether the reason for dismissal was a refusal by the employee to accept a demand made by the employer concerning terms and conditions of employment. On the approach endorsed in the first judgment in the Constitutional Court, the factual and legal causes of the dismissal ought to be determined by asking first whether the dismissal would have occurred had the employees not refused the demand (a ‘but for’ test), and secondly, whether the refusal was the main, dominant or proximate cause of the dismissal.[9]

"[32] The application of these principles assumes that a proper factual foundation for the application of s 187 (1) (c) has been laid. An employee claiming to have been dismissed for a reason that is automatically unfair is required to adduce some evidence to establish at least on a prima facie basis that a reason for dismissal that is automatically unfair is the main for dismissal. In Kroukam v SA Airlink (Pty) Ltd[ [2005] ZALAC 5; [2005] 12 BLLR 1172 (LAC) at para 28.] Davis AJA said:

‘In my view, s 187 imposes an evidential burden upon the employee to produce evidence which is sufficient to raise a credible possibility that an automatically unfair dismissal has taken place. It then behoves the employer to prove to the contrary, that is to produce evidence to show that the reason for the dismissal did not fall within the circumstance envisaged in s 187 for constituting an automatically unfair dismissal.’"

189A application

J 52/2024

Solidarity obo Putter v Anglo Black(Pty) Ltd and Another (J 52/2024) [2024] ZALCJHB 107; (2024) 45 ILJ 1084 (LC); (2024) 45 ILJ 1108 (LC) (4 March 2024)

[13] The Applicant approached this Court in terms of the provisions of section 189A(13), challenging the procedural fairness of Mr Putter’s dismissal. The relief sought is inter alia an order to declare that the Respondent has acted in a procedurally unfair manner when it dismissed Mr Putter for operational reasons, that the Respondent be ordered to reinstate Mr Putter and to initiate and continue with a meaningful joint consensus-seeking process as envisaged by section 189 of the LRA, alternatively that Mr Putter be compensated for his procedurally unfair dismissal.

"21] The Constitutional Court held that the LRA specifically provides for a dispute-resolution mechanism designed to deal with procedural flaws that arise during or immediately after the consultation process and to allow the Labour Court, acting as the guardian of the process, to set the consultation process back on track. The legal principles that emerged from Steenkamp II are clear and apply to all retrenchments in terms of section 189A of the LRA.

"

[25] The primary purpose of section 189A(13) is to allow for early corrective action “to get the retrenchment process back onto a track that is fair”. Paragraphs (a)-(d) establish a hierarchy of appropriate relief and only where it is not appropriate to grant an order in terms of paragraphs (a)-(c) may an order for compensation be granted in terms of paragraph (d).

[75] In the circumstances, this Court has no jurisdiction to lift the moratorium in accordance with section 133(1)(b) and effectively grant the Applicant leave to litigate against the Respondent or BRP during the business rescue proceedings. However, to the extent that this court has jurisdiction to deal with Mr Putter’s claim in terms of section 189A(13) of the LRA, the application stands to be struck off the roll and could only be re-enrolled with the leave granted in terms of section 133(1)(a) or (b), alternatively after the conclusion of the business rescue process.

Business rescue

J 52/2024

Solidarity obo Putter v Anglo Black(Pty) Ltd and Another (J 52/2024) [2024] ZALCJHB 107; (2024) 45 ILJ 1084 (LC); (2024) 45 ILJ 1108 (LC) (4 March 2024)

"

[34] Once business rescue proceedings commence, there is an automatic and general moratorium on legal proceedings or executions against the company.[9]"

[37] The Companies Act does not define the phrase “legal proceedings” as provided for in section 133, however, academics have expressed the view that the clear intention of the provision is to “cast the net as wide as possible in order to include any conceivable type of action against the company…”[10]

42] Section 210 of the LRA provides that, if any conflict arises relating to matters dealt with in the LRA and the provisions of any other law, save for the Constitution, the provisions of the LRA will prevail.

"[47] Shortly after Burba was decided, the Labour Court in National Union of Metal Workers of South Africa obo Members v Motheo Steel Engineering[ [2014] ZALCJHB 315 (7 February 2014) at para 1.] (Motheo Steel) was again approached to determine whether an application brought against a company in business rescue was stayed in accordance with section 133. The Court (per Lagrange J) held that:

‘In terms of s 210 of the Labour Relations Act, 66 of 1995 a matter dealt with in that Act prevails over the provisions of any other law save the Constitution or any Act expressly amending it. I am satisfied that s 133(1) of the Companies Act 71 of 2008 does not expressly amend the provisions of the LRA, and insofar as it might otherwise prevent legal proceedings without the leave of a court or the relevant business rescue partner, it does not prevent the applicant bringing this application.’

[48] In effect, in Motheo Steel the Court accepted that the provisions of section 133 did not prevent the applicant from approaching the Labour Court on application."

[56] In NUMSA and another v South African Airways SOC Ltd and others[[2021] ZALCJHB 6 (LC); 2021 (4) SA 575 (LC) at paras 16 – 17.] (SAA), the Labour Court per Van Niekerk J (as he was then) considered the effect of the section 133 moratorium on legal proceedings. In SAA, the BRPs had not been approached for consent to uplift the moratorium, the High Court had not been approached to grant leave to that effect and the notice of motion in the proceedings did not seek an order uplifting the moratorium.

[57] In summary: The position accepted by this Court is that there is no conflict between the Companies Act and the LRA that would bring section 210 of the LRA into play. Chapter 6 of the Companies Act does not oust the jurisdiction of the Labour Court where this Court has jurisdiction in respect of claims arising under the LRA as it does no more than impose a general moratorium on legal proceedings against a company in business rescue. Employees remain at liberty to institute proceedings in the Labour Court against an employer that has been placed in business rescue and in respect of which this Court has jurisdiction, but they must do so subject to section 133 of the Companies Act.

[60]...The current issue does not relate to any unpaid amount of remuneration or reimbursement for expenses or any other amount owed relating to employment that becomes due and payable during a business rescue process. It relates to procedural unfairness and this Court’s jurisdiction to ensure compliance with the general scheme of the LRA.

[69] Chapter 6 of the Companies Act does not oust the jurisdiction of the Labour Court where this Court has jurisdiction in respect of claims arising under the LRA as it does no more than impose a general moratorium on legal proceedings against a company in business rescue. Employees remain at liberty to institute proceedings in the Labour Court against an employer that has been placed in business rescue and in respect of which this Court has jurisdiction, but they must do so subject to section 133 of the Companies Act.

[75] In the circumstances, this Court has no jurisdiction to lift the moratorium in accordance with section 133(1)(b) and effectively grant the Applicant leave to litigate against the Respondent or BRP during the business rescue proceedings. However, to the extent that this court has jurisdiction to deal with Mr Putter’s claim in terms of section 189A(13) of the LRA, the application stands to be struck off the roll and could only be re-enrolled with the leave granted in terms of section 133(1)(a) or (b), alternatively after the conclusion of the business rescue process.

placement of employees as alternatives, whether the employees ought properly to have automatically filled these vacancies.

JA111/2023

South African Commercial Catering and Allied Workers Union obo Thage and Others v Connect Financial Services (Pty) Ltd (JA111/2023) [2024] ZALAC 36; [2024] 11 BLLR 1130 (LAC); (2024) 45 ILJ 2536 (LAC) (5 August 2024)

[13] The Labour Court found that the respondent had participated in the facilitated consultation meetings in good faith and complied with the agreement reached in the consultation meeting of 6 August 2020, that a distinction would be drawn between the 50 vacancies in the credit division which arose in the course of restructuring, and vacancies in other divisions in respect of which employees were required to apply. The Court found that employees were invited to apply for vacancies in the call centre, but that they did not do so given that it was not in dispute that the positions were at a much lower level and salary than those in the credit division “and that [SACCAWU’s] members were not interested in applying for them”. As a result, the Court found that the vacancies were not an alternative to avoid retrenchment. The Court found that in any event, the issue was res judicata as it had been determined as a procedural one by Mahosi J in the section 189A(13) application.

17] The central question raised by the appellants for determination in this appeal is whether the retrenchment of the employees was substantively unfair given that, prior to the dismissal of the employees, the respondent was aware of and later advertised 25 vacancies in its call centre, which vacancies were not considered as an alternative to the retrenchment.

25] In finding the dismissal of the employees substantively fair, the Labour Court did not err. The appeal cannot therefore succeed and, having regard to considerations of law and fairness, no costs order is warranted.

distinction between procedural and substantive fairness

JA111/2023

South African Commercial Catering and Allied Workers Union obo Thage and Others v Connect Financial Services (Pty) Ltd (JA111/2023) [2024] ZALAC 36; [2024] 11 BLLR 1130 (LAC); (2024) 45 ILJ 2536 (LAC) (5 August 2024)

[21] As a legal doctrine, res judicata bars continued litigation on the same case, on the same issues, between the same parties.[4] The underlying rationale of the doctrine is to give effect to the finality of judgments, limit needless litigation and ensure certainty on matters already decided by the courts.[5] Mahosi J was called upon by the appellants to adjudicate only the claim of procedural unfairness. Thereafter, the appellants challenged the substantive fairness of the retrenchments in the Labour Court. While a neat distinction between procedural and substantive fairness is not always without difficulty given that the two enquiries are often integrally connected, there can be little doubt that the application before Mahosi related to issues of procedural fairness, whereas the Labour Court judgment on appeal to this Court was concerned with the substantive fairness of the dismissals. This constituted a different cause of action, even if some of the same facts placed before Mahosi J were relied upon and the doctrine of res judicata therefore does not apply.

Focused on inherently subjective considerations absent agreement – No on-the-job evaluation performed – Nature of questions bore no real correlation to objectives – Unfair to employees – Problematic formulation of questions – Failed to prove employees were selected based on fair and objective selection criteria

PA3/23

Umicore Catalyst South Africa (Pty) Ltd v National Union of Metalworkers of South Africa and Others (PA3/23) [2024] ZALAC 37; [2024] 11 BLLR 1138 (LAC); (2024) 45 ILJ 2545 (LAC) (29 August 2024)

[14]...Umicore submitted, in essence, that the selection criteria implemented, which involved a combination of LIFO and skills, were fair and objective, both at the level of form and at the level of formulation and application of selection criteria.

[18] Put differently, an employer who does not use agreed selection criteria to select the employees to be dismissed may not depart from ‘fair and objective’ selection criteria.[5] To do so would render the dismissals substantively unfair.[6]

19] The onus is on the employer to prove that there was a fair reason to dismiss the selected employees.[7] This raises the issue of the basis for selection. Selection criteria that are generally accepted to be fair include length of service, skills and qualifications. While the use of LIFO generally satisfies the test, there are instances where the LIFO principle, or other criteria, require adaptation.[8] The Code makes mention of ‘the retention of employees based on criteria mentioned above which are fundamental to the successful operation of the business’ as an example, adding that such exceptions should be treated with caution.[9]

"[20]...The key question remains whether Umicore has discharged the onus of proving that the behavioural assessment was a fair and objective component of the process to select employees for retrenchment.

"

"[24] Firstly, by using the questionnaire as the basis for the selection, Umicore decided to focus on the employees’ personality characteristics, including initiative, enthusiasm and determination, instead.[14] These are inherently subjective considerations and, absent agreement, ought not to have been included in the circumstances.[15]

"

Mdleleni and Others v Faurecia Emission Control Technologies (Pty) Ltd Unreported Labour Court decision (Cape Town) (Case Nos C790/19 and C1099/18).

The method of assessment encouraged multi-skilling instead of evaluating the competency of an artisan in the specific field for which they were qualified. The rating process was akin to a performance appraisal. It was completed by department managers or team leaders without any input from employees, who were restricted to querying the assessment after the fact.

[34] As explained, the evidence before the Labour Court in the current matter was of a vastly different texture. Umicore has failed to prove that the employees were selected based on fair and objective selection criteria so that the appeal against the order of the Labour Court must be refused.

General Food Industries Ltd t/a Blue Ribbon Bakeries v FAWU & others [2004] 9 BLLR 849 (LAC); (2004) 25 ILJ 1655 (LAC) at para 36.

"‘I can see no justification for an employer to retrench an employee who has served him loyally for, for example 20 years, and retain one who has been employed for only a few months to perform work that the one with a longer service period can also perform. Certainly in this case nothing that was said by the appellant or its witnesses seems to me to justify such conduct. On the contrary, allowing that approach in the absence of a really sound reason or explanation could lead to abuse. An employer who wants to get rid of an employee (but lacks legitimate grounds to do so) could transfer such employee to a branch which he knows is likely to embark upon a retrenchment exercise in due course if he thought that such employee would be a likely candidate for retrenchment in that branch on the basis of LIFO which is applied only the affected branch. In that way the employee could be selected for retrenchment at that branch and be retrenched despite the fact that in his old branch there are employees who have shorter service periods that him who perform work that he can perform. Obviously, if it was to be shown that the employer transferred the employee in order to get such employee retrenched and not because of any genuine reason, the dismissal would be unfair. However, in my view there would be cases in which the employer could give a reason that appears to be genuine. That is the case that gives me grave concerns …’

"

Union did not refer matter to conciliation before referring it to Labour Court – Proper interpretation of section is that, notwithstanding facilitation process, referral to conciliation is mandatory – Labour Relations Act 66 of 1995, s 189A(7)(b)(ii).

JA109/23

National Union of Metalworkers of South African obo Members v SAA Technical SOC Ltd (JA109/23) [2024] ZALAC 41; (2024) 45 ILJ 2524 (LAC) (10 September 2024)

[50] In short: facilitation and conciliation are two different processes. Facilitation happens pre-dismissal, as part of the consultation process with a view to avoid retrenchment and to ensure compliance with the provisions of section 189(3) of the LRA. When the facilitation process happens, there exists no dispute, but rather a contemplation of dismissal based on the employer’s operational requirements.

managerial prerogative

JS475/2022

Ndaba v South African Mint (Rf) (Pty) Ltd (JS475/2022) [2024] ZALCJHB 445 (4 November 2024)

"

[58] In SA Transport & Allied Workers Union v Old Mutual Life Assurance CO SA Ltd[18], this Court (per Murphy AJ, as he then was) recognised that the notion of proportionality ought to form part of the assessment of the substantive fairness of a dismissal for operational requirements:[[2005] ZALC 50; (2005) 26 ILJ 293 (LC) para 85]

‘The test formulated by the legislature in the 2002 amendments [to s 189 of the LRA] harkens back to the principle of proportionality or the rational basis test applied in constitutional and administrative adjudication in other jurisdictions. As such, the test involves a measure of deference to the managerial prerogative about whether the decision to retrench is a legitimate exercise of managerial authority for the purpose of attaining a commercially acceptable objective. Such deference does not amount to an abdication, and as stated in BMD Knitting Mills (Pty) Ltd, the court is entitled to look at the content of the reasons given to ensure that they are neither arbitrary nor capricious and are indeed aimed at a commercially acceptable objective. The second leg of the enquiry is directed at the investigation of the proportionality or rationality of the process by which the commercial objectives are to be achieved. Thus, there should be a rational connection between the employer's scheme and its commercial objective, and through the consideration of alternatives an attempt should be made to find the alternative which least harms the rights of the employees in order to be fair to them. The alternative eventually applied need not be the best means, or the least drastic alternative. Rather it should fall within the range of reasonable options available in the circumstances allowing for the employer's margin of appreciation to the employer in the exercise of its managerial prerogative. The formulation of the test in this way adds nothing new. It simply synthesises what has already been said in Discreto and BMD Knitting Mills. The two decisions are not entirely at odds with one another. They are simply elucidations of the governing principle that the decision to dismiss must be operationally justifiable on rational grounds, which permits some flexibility in the standard of judicial scrutiny, depending on the context.’ (Own emphasis.)"

dismissal for operational reasons was serious corruption allegations

JS895/19

Lekalake v Eoh Mthombo (Pty) Ltd (JS895/19) [2025] ZALCJHB 62 (21 February 2025)

Resulted in respondent losing government contracts and closure of a division – Retrenchment would not have occurred but for allegations – Reasons provided were not genuine operational requirements – Dismissal substantively unfair – Retrospective reinstatement granted

“An employer, who senses that it might have to retrench employees in order to meet operational objectives, must consult with employees likely to be affected (or their representatives) at the earliest opportunity in order to advise them of the possibility of retrenchment and the reasons for it. The employees or their representatives must then be invited to suggest ways of avoiding terminations of employment, and should be placed in a position in which they are able to participate meaningfully in such discussions. The employer should in all good faith keep an open mind throughout and seriously consider proposals put forward. The final decision will, however, remain with the employer.”[National Union of Metalworkers of SA v Atlantis Diesel Engines (Pty) Ltd (1993) 14 ILJ 642 (LAC) at 649J-650C.]

[40] Dismissal for operational requirements as contemplated in section 189 of the LRA provides a safeguard to employers to engage in retrenchments of employees in instances of economic downturn, structural and technical reasons or any other reason prescribed in the LRA. In essence, section 189 of the LRA serves as a statutory provision that sets out commercial circumstances that warrant the dismissal of employees solely for operational requirements.

"[41] However, in the implementation of section 189 retrenchments, fairness to both the employers and employees is paramount as per the exposition of the Labour Appeal (LAC) Court decision in SACTWU and Others v Discreto (A Division of Trump and Springbok Holdings)[3] where is was held:

“As far as retrenchment is concerned, fairness to the employer is expressed by the recognition of the employer’s ultimate competence to make a final decision on whether to retrench or not…For the employee fairness is found in the requirement of consultation prior to a final decision on retrenchment. This requirement is essentially a formal or procedural one, but, as is the case in most requirements of this nature, it has a substantive purpose. That purpose is to ensure that the ultimate decision on retrenchment is properly and genuinely justifiable by operational requirements or, put another way, by a commercial or business rationale… It is important to note that when determining the rationality of the employer’s ultimate decision on retrenchment, it is not the court’s function to decide whether it was the best decision under the circumstances, but only whether it was a rational commercial or operational decision, properly taking into account what emerged during the consultation process.”"

[53] If serious corruption allegations led to the downfall of the Public Sector Division of EOH which culminated in the retrenchment of Mr Lekalake, then did EOH have any justifiable reason in law or in the LRA to justify the dismissal of Mr Lekalake for operational requirements? A stern no is the answer to that question. As stated in Telkom[6], the moment the employer fails to prove and justify that it instituted the section 189 process for a fair reason, then re-instatement becomes the prime remedy in the circumstances. In the conspectus of the facts of this matter, it is apt to find that the re-instatement of Mr Lekalake becomes unavoidable like the air we breathe.

selection criteria

JS863/21

LEWUSA obo Maesela and Others v RGM Cranes (Pty) Ltd (JS863/21) [2025] ZALCJHB 173 (29 April 2025)

[89] Given all of the above, especially taking into consideration that other employees were performing the duties of the applicants, that no fair and objective selection criteria was followed by the respondent, the failure by the respondent to consider alternatives to retrenchment and the respondent simply not informing the applicants about alternatives at RGM Rustenburg. Adding to this, the fact that when the new structure was drafted in August 2020, the applicants were already not part of the new structure despite the fact that the retrenchment process was considered at the end of October 2020, the fact that the applicants were already last at work 30 June 2020 and 26 May 2020 respectively, failure by the respondent to disclose to the trade union and the applicants why the measures previously implemented were not working ( it was not enough for the respondent to mentioned the previous measures taken). All this illustrates that there was no genuine and justifiable reason to dismiss the applicants based on operational requirements. The respondent had no intention to participate in a meaningful joint consensus-seeking process in an attempt to avoid or minimise the retrenchment.

1. The dismissal of the applicants was substantively and procedurally unfair.

what 'bumping' is

JS195/21

De Weijer v Babcock Africa Services (Pty) Ltd (JS195/21) [2025] ZALCJHB 193 (19 May 2025)

"[77] In Amalgamated Workers Union of SA v Fedics Food Services[25], the Court considered bumping and held that:

‘[3] This brings me to the question of precisely what 'bumping' is. M H Cheadle 'Retrenchment: The New Guide-lines ' (1985) 6 ILJ 127 at 137, says the following:

“The LIFO principle is to retain long-serving employees at the expense of those with shorter service in like or less skilled categories of work. Accordingly, LIFO would not apply to employees in a different grade if the longer-serving employee could not do the work of the employee with shorter service in that grade. The principle, if not qualified by agreement, should apply throughout the establishment or the collective bargaining unit provided that it falls within like or lesser categories of work. In other words, should an employee with long service be made redundant in one department he should be transferred to a similar post elsewhere in the establishment, even though it may be occupied by an employee with shorter service. Should there be no such post, the practice is to offer the longer-serving employee a less skilled position occupied by employees with shorter service. This procedure is graphically called ""bumping"". In short, one ""bumps"" sideways and down. The restriction of this principle to departments can lead to abuse. Long-serving employees can be transferred to departments where redundancy is expected and thereby retrenched at a later stage. Such a practice would clearly subvert the objective application of the principle.”

[4] 'Bumping' as a practice has been accepted in the Labour Appeal Court. See Reckitt &Colman (SA) (Pty) Ltd v Bales (1994) 15 ILJ 782 (LAC); [1994] 8 BLLR 32 (LAC), where the following is said, at 46G-H:

“Whilst every case must be considered on its merits, there is no immutable rule that in applying the LIFO principle, an employee should not be downgraded. Indeed as appears from the article by Cheadle ""Retrenchment: The New Guide-lines"" (1985) 6 ILJ 127 at 137-8, in reallocating of posts, as between employees on the LIFO principle, there may be a process of ""bumping"" both sideways and down. This is sometimes also referred to as horizontal and vertical ""bumping"". See Contemporary Labour Law vol 2 no 1 (August 1992) at 8-10 and vol 2 no 8 (March 1993) at 1991.”’"

"[78] In respect of bumping, the LAC found in Porter Motor Group v Karachi[26] (Karachi) that:

‘[15] The Code of Good Practice on dismissal in schedule 8 to the Act deals with selection criteria and lists length of service, skills and qualifications as generally accepted considerations. Selection criteria laid down by case law, in addition to the three factors mentioned, for determining which employees are to be retrenched, would include the employee's competence and merit; technical knowledge or experience; conduct; service record; age; and gender.

[16] Early mention of bumping in South African labour law comes from Professor H Cheadle's article 'Retrenchment: The New Guide-lines' (1985) 6 ILJ 127 at 137, and this article has been considered in a number of decisions and has received some academic attention. See inter alia Reckitt & Colman (SA) (Pty) Ltd v Bales (1994) 15 ILJ 782(LAC), Amalgamated Workers Union of SA v Fedics Food Services (1999) 20 ILJ 602 (LC), SACCAWU & others v Wimpy Aquarium [1998] 9 BLLR 965 (LC) at 969E-F, Unilever SA (Pty) Ltd v Salence [1996] 5 BLLR 547 (LAC) at 557, Shangase & others v BKB Ltd (1999) 20 ILJ 2475 (CCMA), Fisher v Sylko Paper Co (1998) 8 Arb 5.2.2, Nyathi & others v Queensburgh Equipment Rental NHN 11/2/3939 (1992) (IC), Professor Alan Rycroft's article 'Bumping as an Alternative to Retrenchment' (1999) 20 ILJ 1489 and Le Roux & Van Niekerk The SA Law of Unfair Dismissal . In determining a fair selection of employees for retrenchment bumping has often been implemented and the following principles have developed in relation thereto. This does not purport to be an exhaustive list and merely catalogues the rules laid down which are relevant to this case.

(1) It should be reiterated once again that fairness is not a one-way street. It must accommodate both employer and employee. Section 189(2) of the Act requires both parties to attempt to reach consensus on alternative measures to retrenchment, so there is a duty on an employee as well to raise bumping as an alternative. An employer is obliged to consult with an employee about the possibility of bumping.

(2) Bumping is situated within the 'last in first out' (LIFO) principle which is itself rooted in fairness for well-established reasons. Longer serving employees have devoted a considerable part of their working lives to the company and their experience and expertise are an invaluable asset. Their long service is an objective tribute to their skills and industry and their avoidance of misconduct. In the absence of other factors, to be enumerated hereinafter, their service alone is sufficient reason for them to remain and others to be retrenched. Fairness requires that their loyalty be rewarded.

(3) The nature of bumping depends on the circumstances of the case. A useful distinction is that of dividing bumping into horizontal and vertical displacement. The former assumes similar status, conditions of service and pay and the latter any diminution in them.

(4) The first principle is well established, namely that bumping should always take place horizontally, before vertical displacement is resorted to. The bumping of an individual, in the absence of the other relevant factors, seldom causes problems and the fact of longer service establishes the inherent fairness thereof. Vertical bumping should only be resorted to where no suitable candidate is available for horizontal bumping. Where small numbers are involved the implementation of horizontal or vertical bumping should present few problems.

(5) Where large-scale bumping, sometimes referred to as 'domino bumping', necessitates vast dislocation, inconvenience and disruption, consultation should be directed to achieving fairness to employees while minimizing the disruption to the employer. Examples of disruption include difficulties caused by different pay levels, client or customer reaction to a replacement of employees and staff incompatibility. In evaluating the competing interests of the employer and the affected employees the consulting parties should carry out a balancing exercise. Where minimal benefits accrue to employees, while vast inconvenience is the lot of employers, fairness requires that fewer employees should move.

(6) There will always be geographical limitations to bumping in that fairness will require that limits be placed on how far an employee is expected to move to bump another. Although prejudice to the employer in long-distance relocation cannot be excluded, in practice this will be rare. Generally speaking it is the employee who will suffer as a result of being removed from a cultural and social environment he or she has become accustomed to. Second guessing the desires of employees is undesirable; if they are happy to translocate then bumping should take place whatever the distances involved.

(7) The pool of possible candidates to be bumped should be established and the circumference thereof will depend on the mobility and status of the employees involved. The managerial prerogative entails moving employees to the best advantage of a company within the parameters of its activities, national or international; fairness requires that the same circumference should define the limits of potential candidates to be bumped. The career path of the employee in the company will often be a useful indication of scale of mobility.

(8) The independence of departments as separate business entities may be relevant but the argument that a company's departments are managed separately should be strictly scrutinized. Even if there is no past practice of transferring between branches or departments, the employer must consider interdepartmental bumping unless it is injurious to itself and to other employees.

(9) Bumping does not apply to employees in a different grade if the longer serving employee cannot do the work of the employee with shorter service in that grade. This limitation applies most frequently where competence, technical or professional knowledge or experience and specialised skills are involved. Where the necessity arises of retraining those, who are transferred, this should be carried out, unless it places an unreasonable burden on the employer.

(10) The status of the post into which an employee is bumped is relevant, as the employer's prerogative to choose someone of managerial/supervisory level should be respected. Management concerns that downgrading an employee will be demoralizing will not justify a decision not to bump downwards where the employee is prepared to accept downgrading. On the other hand the unwillingness of the affected employee to accept a lower wage may justify not bumping.’

"

[79] In Mtshali v Bell Equipment[27] (Mtshali), the LAC held that LIFO (last in, first out) as a method of selection entails that employees are selected for retrenchment according to the period they have been with the employer. It simply means that employees who have served for a shorter period would be higher on the list of those likely to be retrenched. Although it has its own difficulties, LIFO is still regarded as the most objective and fair method of selecting employees. The LAC confirmed that bumping is situated within the LIFO principle.

80] This means that whenever LIFO is the agreed criterion, bumping must be applied as a selection criterion.

"[87] In Karachi, the LAC confirmed that bumping does not apply to employees in a different grade if the longer serving employee cannot do the work of the employee with shorter service in that grade. This limitation applies most frequently where competence, technical or professional knowledge or experience and specialised skills are involved.

[88] In my view, the same principle applies in casu."

[145] The LAC in Karachi and Mtshali confirmed that an employer is obliged to consult with an employee about the possibility of bumping and that it is incumbent on an employer to consult on its application to determine whether its application would have been appropriate. It is not for an employer to decide unilaterally that it would not be appropriate to apply bumping.

procedural fairness

JS195/21

De Weijer v Babcock Africa Services (Pty) Ltd (JS195/21) [2025] ZALCJHB 193 (19 May 2025)

[95] In my view, the pleaded challenge to procedural fairness is twofold – one is that there was no genuine consultation process and that he was presented with a fait accompli, and the second relates to the sharing of information, which deprived the Plaintiff of an opportunity to consult on certain aspects. I will deal with them in turn.

[101] In the third consultation meeting of 28 September 2020, Mr Vaughan referred to the Plaintiff’s request for financial information, which was not given to him and said that ‘so the process has carried on and it is nearly, I think nearly at the end now. So the company feels that to show you all the financial information at this point is kind of irrelevant’.

[103] Notwithstanding the efforts by the Defendant to paint a picture that the reason for retrenchment was not only for economic and financial reasons, but that it was also a restructuring exercise which had little to do with its financial position, I am of the view that the reason for retrenchment was indeed the poor economic environment and the financial challenges Babcock faced as a result thereof.

[111] In casu, the Plaintiff did not refer a dispute to the CCMA in respect of the information he sought.

[112] What seems clear is that, in terms of section 16, it is for a commissioner of the CCMA, and not for this Court, to determine disputes about what information is required to be disclosed in terms of section 16. Does this imply that it is not the function of this Court to determine whether the information concerned should have been disclosed and that, if the applicant was aggrieved in this regard, he was confined to his remedies as provided for in section 16 of the LRA?

"[113] In Robbertze v Marsh SA[30], the Court held that:

‘[50] Section 189(3) casts a positive obligation on an employer contemplating a dismissal for reasons based on its operational requirements to disclose all relevant information. It is clear that compliance with the requirements of s 189 is highly material to, if not determinative of, the question as to whether a dismissal based on the employer's operational requirements is fair. (See eg Johnson & Johnson (Pty) Ltd v CWIU (1999) 20 ILJ 89 (LAC); [1998] 12 BLLR 1209 (LAC) at paras 26-31; Alpha Plant & Services (Pty) Ltd v Simmonds & others (2001) 22 ILJ 359 (LAC); [2001] 3 BLLR 261 (LAC) at paras 7-10.) It is the duty of this court to adjudicate disputes concerning the fairness of a dismissal based on the employer's operational requirements. If this court should find that relevant information required to be disclosed in terms of s 189(3) was not disclosed, it is in my view required to consider and determine whether such non-disclosure rendered the dismissal unfair, for example, on the basis that it prevented fair and adequate consultation. The fact that it was open to the employee to invoke the procedures contemplated in ss 16(6)-16(14) does not, in my view, deprive this court of the right, and indeed the obligation, to determine whether the non-disclosure of the information rendered the dismissal unfair.’"

[115] If this Court finds that relevant information required to be disclosed in terms of section 189(3) was not disclosed, it is required to consider and determine whether such non-disclosure rendered the dismissal unfair, for example, on the basis that it prevented fair and adequate consultation. This Court must determine whether the non-disclosure of the information rendered the Plaintiff’s dismissal unfair.

[119] The Defendant’s failure to make the detailed financial information available to the Plaintiff, in addition to what was provided to him for purposes of consultation, was not inconsistent with its obligations in terms of s 189(3) of the LRA. The Plaintiff was unable to show that the financial information that was provided to him was insufficient to allow a proper opportunity to consult. He requested more detailed information for other purposes.

meaningful consultation

JS195/21

De Weijer v Babcock Africa Services (Pty) Ltd (JS195/21) [2025] ZALCJHB 193 (19 May 2025)

[120] The Plaintiff challenges the procedural fairness of his dismissal and claims that the consultation process was not a genuine process, as his retrenchment was a fait accompli. He testified that although there were four consultation meetings held, there was no genuine consultation, there was no meeting of the minds or consensus.

[127] Section 189 of the LRA imposes a number of obligations in peremptory terms, for instance, the employer ‘must consult’, ‘must issue a written notice’ and that the employer and the other consulting parties ‘must’ engage in a meaningful joint consensus-seeking process.

alternatives

JS195/21

De Weijer v Babcock Africa Services (Pty) Ltd (JS195/21) [2025] ZALCJHB 193 (19 May 2025)

"[135] The Plaintiff also took issue with the fact that he was not properly consulted in respect of alternatives. His case is that he was told that he would be retrenched, all his proposals were shot down, and the alternatives he proposed were not considered.

[136] I already alluded to the fact that the alternatives referred to the available vacant positions and bumping."

[145] The LAC in Karachi and Mtshali confirmed that an employer is obliged to consult with an employee about the possibility of bumping and that it is incumbent on an employer to consult on its application to determine whether its application would have been appropriate. It is not for an employer to decide unilaterally that it would not be appropriate to apply bumping.

fait accompli

JS195/21

De Weijer v Babcock Africa Services (Pty) Ltd (JS195/21) [2025] ZALCJHB 193 (19 May 2025)

[149] I am also not convinced that the Plaintiff was met with a fait accompli and that the consultations that were held were superfluous. There was no convincing evidence placed before this Court to show that the Defendant approached the process with a predetermined outcome or that a decision was already taken, and that the Plaintiff was faced with a fait accompli. The mere fact that his name was included on a list of positions which may be affected and be made redundant is not sufficient to establish a fait accompli, nor is the fact that the Plaintiff was unable to come up with sufficiently persuasive arguments for the employer to change.

"...In National Education Health and Allied Workers Union and others v University of Pretoria,[36] the LAC considered a matter where the employees challenged the fairness of their dismissals inter alia on the ground that their union was faced with a fait accompli by the time the consultation in terms of section 189 of the LRA commenced. were held that:

‘[51] Section 189 of the Act does envisage that the employer may come to the first consultation table with a proposal that can be said to be not only his preferred proposal but, indeed, one that he strongly views as the solution to the problem. The obligation placed upon the employer to consult only arises in terms of s 189(1) of the Act when a situation has been reached where he “contemplates dismissing one or more employees” for operational requirements. In other words, before he reaches such stage, he is under no obligation to consult and is within his rights to try and deal with the problem on his own with such assistance and advice as he may in his discretion feel he needs which need not be that of the consulting parties envisaged in s 189(1). This is because the employer is entitled to deal with the problems of his business without consulting the parties envisaged in s 189(1) as long as he is not contemplating the dismissal of any employees for operational requirements. It would be natural for him to form a view or even a strong view about one or other possible solution to the problem out of all those that he might have applied his mind to while trying to solve the problem before contemplating the dismissal. Section 189(1)(b), (c),(3)(c) and (g) refer to “employees likely to be affected.” The frequent reference in those provisions to “employees likely to be affected” is an indication that it is permissible for the employer to have already grappled with the problem to the extent that he has in mind “employees likely to be affected by the proposed dismissal.”

[52] Section 189(3) requires the employer to disclose the reason for the proposed dismissals, the alternatives that he considered before proposing the dismissals and the reasons for rejecting each one of those alternatives, the number of employees likely to be affected and the categories in which they are employed, the time when or the period during which the dismissals are likely to take effect. The content of what s 189(3) requires the employer to disclose suggests quite clearly that the employer is allowed to initiate the consultation process after he has done a lot of work to try and resolve the problem on his own. He is permitted to have done so much work that –

a) he is in a position to propose dismissal because in his view there are no other acceptable alternatives that can address the problem satisfactorily without dismissals.

b) he has reasons for proposing dismissals as opposed to other alternatives.

c) before proposing the dismissal, he has considered other alternatives and has rejected them.

d) he has reasons for rejecting other alternatives and is ready to articulate them.

Section 189 contemplates that, when the employer initiates the s 189 consultation process, he contemplates the dismissal of one or more of his employees for operational requirements; that is why already in paragraph (b), (c) and (d) of sec 189(1) there are references to “proposed dismissals”. So what s 189(1) contemplates is that the employer is already proposing a dismissal or dismissals when he initiates the s 189 consultation process.

[53] The fact that s 189(3)(b) contemplates that, when the employer initiates the consultation process in terms of s 189(1) of the Act, he has already considered alternatives to dismissals which he has rejected for certain reasons and requires him to disclose the reasons why he rejected such alternatives does not mean that such alternatives cannot be revisited in the consultation process. Of course, they can be because the other consulting party or parties may view them as potentially viable solutions. Obviously, the employer may have strong views on such alternatives because he will have had an opportunity to consider them already and will have already rejected them before. For the employer to pretend as if he has no views on such alternatives would be dishonest because he will already have formed some or other view on them. However, what will be required is that the employer should consider honestly and properly whatever the other consulting party may have to say on such alternatives and change its mind or view on them if the other consulting party comes up with sufficiently persuasive arguments for the employer to change. Before considering such alternatives, the employer may have found it necessary to launch some or other research or investigation into the viability of such alternatives and may, therefore, seem to have strong views on them because it has considered them properly and thoroughly.’

"

"[150] The LAC concluded that[37]:

‘In the light of the above I conclude that there is nothing wrong with an employer coming to the consultation table with a predisposition towards a particular method of solving the problem which has given rise to the contemplation of dismissal of employees for operational requirements. What is critical is that the employer should nevertheless be open to change its mind if persuasive argument is presented to it that that method is wrong or is not the best or that there is or may be another one that can address the problem either equally well or even in a better way. He should engage in a joint problem-solving exercise with the other consulting party or parties.’"

(complete)

2. severance pay

(incomplete)