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[2019] ZALAC 36
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National Union of Metal Metalworkers of South Africa and Another v Aveng Trident Steel (A Division of Aveng Africa Proprietary Limited) and Others (JA25/18) [2019] ZALAC 36; (2019) 40 ILJ 2024 (LAC); [2019] 9 BLLR 899 (LAC) (13 June 2019)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case
no: JA25/18
NATIONAL
UNION OF METAL METALWORKERS
OF
SOUTH AFRICA
First
Appellant
THE
INDIVIDUALS LISTED IN ANNEXURE “A” Second
to further Appellants
And
AVENG
TRIDENT STEEL (A DIVISION OF AVENG
AFRICA
PROPRIETARY LIMITED) First
Respondent
IMPERIAL
DEDICATED CONTRACTS
(A
DIVISION OF IMPERIAL GROUP LTD) Second
Respondent
Heard:
07 May 2019
Delivered:
13 June 2019
Summary:
Claim for automatically unfair dismissal on the basis that the reason
for the dismissal was the refusal by the employees
to accept
employer’s demands in respect of change of conditions of
employment in terms of section 187(1)(c) of the LRA –
employer
embarking on a restructuring in order to increase profitability –
in the process of consultation parties agreeing
regrading positions
in order to save costs pending finalization on the structure –
such consideration necessitating change
of condition of employment –
employees refused amendment of their terms and condition of
employment and were dismissed –
union contending that such
dismissal automatically unfair – court reasoning that the
question for determination is when operational
requirements may
justify the dismissal of employees who reject employer demands to
amend terms and conditions of employment –
judgment in
Fry’s
Metal
considered and distinguished –
Held
that while employees cannot be dismissed for refusing to accept a
demand, they can be dismissed if that refusal results in
a more
dominant or proximate operational necessity. This legislative scheme
of collective bargaining is in line with the constitutional
right of
trade unions and employers to engage in collective bargaining in that
any limitation of the power play is reasonable and
justifiable in the
balance struck between the strike weapon and the employer’s
power of implementation at impasse.
Further
that The court must determine factual causation by asking whether the
dismissal would have occurred if the employees had
not refused the
demand. If the answer is yes, then the dismissal is not automatically
unfair. If the answer is no, as in this case,
that does not
immediately render the dismissal automatically unfair; the next issue
is one of legal causation, namely whether such
refusal was the main,
dominant, proximate or most likely cause of the dismissal… The
failure of the employees to accept
the proposals engendered an
insurmountable operational requirements problem that constituted a
fair reason for dismissal. Labour
Court’s judgment upheld and
appeal dismissed with costs.
Coram:
Coppin JA, Murphy and Savage AJJA
JUDGMENT
MURPHY
AJA
[1]
This is an appeal against a judgment of the Labour Court (Moshoana J)
dismissing the
appellants’ claim that the dismissal of the
second and further appellants (“the employees”) by the
first respondent
(“Aveng”) in April 2015 was
automatically unfair.
[2]
The appellants, the National Union of Metalworkers of South Africa
(NUMSA) and the
employees contend that the dismissal was in
contravention of section 187(1)(c) of the Labour Relations Act
[1]
(“the LRA”) as amended by the Labour Relations Amendment
Act of 2014
[2]
(“the
LRAA”). Section 187(1)(c) provides that a dismissal is
automatically unfair if the reason for the dismissal is
“a
refusal by employees to accept a demand in respect of any matter of
mutual interest between them and their employer”.
[3]
The Labour Court also found that it would not be reasonably
practicable to reinstate
the employees into the employ of the second
respondent (“Imperial Dedicated Contracts”) which was
joined as a respondent
owing to the fact that it was the recipient of
part of Aveng’s business pursuant to a transfer in terms of
section 197 of
the LRA subsequent to the dismissal. The appellants
also challenge this finding.
The
facts
[4]
Aveng is a large steel manufacturer comprised of a number of
facilities with branches
throughout the country. Its two biggest
facilities are in Roodekop, Germiston and Alrode, where most of the
employees were employed.
The steel industry has been in decline since
2010. Aveng’s sales volumes fell by 20% and its costs structure
could not be
sustained by its income. In 2014, there was a 60 000
tonne decrease in sales in a six-month period, which equated to a 20%
decline overall. Before that, the market had become fragmented and
steel merchants were competing for volume. Turnover is largely
driven
by government spending and there has been a reduction in investment
in infrastructure projects by government. As a consequence,
trading
margins have dropped significantly.
[5]
With the fall in its sales volumes and profitability, Aveng had to
reduce costs to
maintain its profit margins. In order to survive or
remain viable, it needed to restructure and thus contemplated the
possibility
of retrenchments. It initiated a consultation process in
terms of section 189A of the LRA by way of a notice dated 15 May
2014.
The notice explained that the challenging economic environment
had resulted in continuous low levels of activity in the market with
an adverse effect on Aveng’s performance. The situation
required “realignment of the business to ensure
sustainability”.
Aveng proposed to implement the following: i)
a review of organisation structures; ii) redefinition of some of the
job descriptions;
iii) mothball under-utilised equipment; iv) the
review of limited duration contract positions (“LDCs”);
and v) a review
of the employee transportation benefit at Roodekop
and Alrode. The notice set out proposals regarding selection
criteria, severance
pay and possible assistance to selected employees
and stated that Aveng’s initial analysis indicated that around
400 jobs
could be affected. As at 31 March 2014, Aveng employed 1784
permanent employees.
[6]
Aveng recognised that a reduction of staff would not be sufficient to
resolve its
operational problems. It needed to achieve an improvement
in productivity as well,
inter alia
by reviewing job
descriptions to allow for the combining of certain functions. The
historical situation at Aveng had introduced
a rigid and costly
division of labour in some areas, which could be modified to effect
cost-savings. Moreover, the job positions
and job content actually
performed at Aveng were not aligned with those in the applicable
sectoral collective agreement (“the
Main Agreement”) of
the Metal and Engineering Industries Bargaining Council (“MEIBC”).
[7]
Aveng accordingly performed an exercise in which it clustered jobs
along lines
similar to the provisions of the collective agreement. In
a written proposal given to NUMSA on 16 August 2014, Aveng set out
the
current job titles at Aveng and grouped them for optimization
into new titles. Thus, for example, the current Grade H jobs of
general
worker, labourer, conductor, truck assistant, packer and
sling man were grouped under the title “General Handler”.
Likewise, the current Grade F jobs of crane operator and forklift
driver were grouped under the title of “Lifting Equipment
Operators”. Similar groupings were proposed across the entire
spectrum of job titles. By combining functions previously performed
separately into a single job, Aveng would achieve significant cost
savings - a packer, for instance, could be deployed to perform
the
functions of a general worker and so on.
[8]
During the consultation process, Aveng offered voluntary severance
packages
to all permanent employees in an endeavour to mitigate the
impact of the restructuring process on affected employees. Aveng
received
an excess number of applications for voluntary severance and
the number of employees potentially affected by the restructuring was
less than the number of applications for voluntary severance.
Ultimately, 249 employees opted for voluntary severance and four
were
retrenched. Those who opted for voluntary severance were given notice
of termination on 10 October 2014, and those who were
retrenched
received notice of termination on 7 November 2014.
[9]
Part of Aveng’s proposal was to review all limited duration
contract positions
- the LDCs. The LDCs were of different durations
but typically were for three, six or 12 months and in some isolated
incidents,
for more than a year. Employees on LDCs occupied positions
across the board, from general workers to skilled positions. As at 31
March 2015, there were 257 wage-earning LDCs. During the
consultation, process it was agreed to lay off the LDCs.
[10]
After the voluntary severances and the retrenchment of the LDCs,
there was no immediate need
to retrench more employees. However,
consultations continued in relation to the job descriptions.
[11]
At a meeting on 11 September 2014, NUMSA proposed, as an alternative
to Aveng’s job description
proposal, that a 5-grade structure
be introduced. The Main Agreement has a 13-grade structure. However,
it also gives parties the
option to convert to a 5-grade structure.
NUMSA’s proposal entailed the clustering of positions and the
collapsing of 13
existing grades into 5. NUMSA’s proposal
confirmed that it accepted the principle of job restructuring. Its
motivation for
a 5-grade structure was that it would allow
multi-tasking, mobility between grades, and opportunities for worker
training.
[12]
Aveng maintains that NUMSA’s 5-grade structure proposal was
motivated also by the false
belief that a 5-grade structure would
result in higher wages for its members. NUMSA appeared not to
appreciate that over time,
the gap between remuneration paid to
employees in the various grades at Aveng had narrowed with the
consequence that the employees
would not be better off under the
5-grade structure were it to be adopted.
[13]
On 17 October 2014, the parties concluded a so-called “interim
agreement” in terms
of which consultation about job
descriptions would continue while an interim structure with
redesigned job descriptions would be
implemented, pending
consideration of the long-term viability of the proposed 5-grade job
structure. It was envisaged that the
consultations regarding the
redesigned job descriptions would conclude by the end of February
2015. In the interim period, employees
performing additional
functions (previously performed by the employees whose employment had
been terminated) would be paid an additional
amount of 60 cents per
hour.
[14]
In early
November
2014, the parties commenced negotiations in relation to the transport
benefit referred to in the notice of 15 May 2014.
The issue only
affected employees employed at the Alrode and Roodekop branches. This
consultation culminated in February 2015 with
a collective agreement
in which the parties agreed to phase out the bus and taxi transport
provided by the company to its Alrode
and Roodekop employees and
instead to pay a transport allowance of R650 per month to these
employees.
[15]
There were no consultations regarding the redesigned job descriptions
and NUMSA’s proposal
for converting to a 5-grade system between
October 2014 and February 2015. On 13 February 2015, NUMSA addressed
an e-mail to Aveng
in which it declared that its members were no
longer willing to perform the additional duties as agreed in the
interim agreement.
The e-mail read:
‘
With
reference to the above-mentioned matter, we hereby give notice that
as of Monday the 16
th
February 2015 our members will no longer perform duties outside their
contract of employment; and will also not perform any duties
as per
the arrangement we entered into in October 2014.
We
further draw your attention to the conditions that were attached to
that arrangement that says this 60c arrangement would run
for a
period of 3 months starting from November 2014 up to the end of
February 2015. The parties were to negotiate the issue of
a 5 grade
structure and that the 5 grade structure would be implemented at the
beginning of March 2015. This has not been adhered
to by yourselves.’
[16]
Aveng was surprised by NUMSA’s decision to terminate the
interim agreement two weeks before
it was due to expire. The
consultations between October 2014 and February 2015 had focused on
the transport issue. By 13 February
2015, the LDC workers and those
accepting voluntary severance (approximately 500 workers) had left
Aveng’s employ and the
employees had been working in the
redesigned job descriptions since October performing the duties
previously carried out by those
workers. Premature termination of the
interim agreement meant that from 16 February 2015 Aveng had no one
to do the work which
the 500 retrenched workers had hitherto
performed.
[17]
Aveng saw the termination of the interim agreement prematurely on
short notice as a deliberate
tactic to extract higher wages in the
midst of restructuring consultations in which it was seeking to
effect savings so as to be
able to survive.
[18]
The parties met to discuss the issue on 23 February 2015. At this
meeting,
Aveng
informed NUMSA that it had conducted a feasibility analysis in
relation to the introduction of a 5-grade structure and sought
an
extension of time within which to present this and committed to
tabling a proposal by 10 March 2015 for possible implementation
by 1
April 2015. NUMSA responded by making a demand for the increase of
the 60c per hour provided in the interim agreement to R5.00
per hour.
[19]
In a letter addressed to NUMSA dated 27 February 2015, Aveng pointed
out that it had constantly
engaged NUMSA on other issues arising from
the restructuring undertaken since June 2014 and disputed that it was
in breach of the
interim agreement in any way. It added that the
process of finalising the grade structure could only be concluded by
way of further
consultations.
[20]
At a meeting on 3 March 2015, Aveng duly made a presentation on the
5-grade structure proposal
setting out
inter
alia
a
“grade comparison” comparing the minimum wage rates
payable under the Main Agreement in respect of the existing 13-grade
structure with the minimum wage rate payable in respect of the
equivalent positions in the 5-grade structure. The comparison
revealed
that the adoption of the 5-grade structure would not result
in higher remuneration for the employees. NUMSA then demanded that
Aveng provide it with a list of the pay rates of all its employees so
it could work on averages and revert to Aveng on the issue.
[21]
On 5 March 2015, it was agreed that employees would continue to
perform their services in terms
of the redesigned job descriptions
and that those performing additional functions would be paid an
additional R3.00 per hour. Aveng
maintained that NUMSA and the
employees acted in bad faith by holding Aveng to ransom in seeking a
substantial wage increase during
the consultation process aimed at
restructuring the business.
[22]
In a meeting held on 17 March 2015, NUMSA proposed that the minima in
the 5-grade structure be,
not as per the minimum wage contained in
the Main Agreement, but the average between the actual minimum and
maximum rates in a
particular grade. Aveng rejected the proposal
because increasing costs further was not an option in attempting to
achieve the efficiencies
and cost reductions aimed for at the outset
of the restructuring consultation.
[23]
On 30 March 2015, Aveng addressed a letter to NUMSA informing it that
the consultation process
in terms of section 189 of the LRA, which
commenced in March 2014, had now been exhausted and gave notice that
Aveng would implement
the new structure as per the redesigned job
descriptions with effect from 10 April 2015. Paragraphs 9-14 of this
letter encapsulate
Aveng’s position clearly. They read:
‘
9.
We have carefully considered your proposal and regret to advise that
we are not in a position to accommodate you further, given
the
adverse economic conditions coupled with the continued inefficiencies
experienced. Increasing our costs further is not an option
which
would result in us achieving the efficiencies and cost reductions
required and aimed for at the outset of the restructuring
consultation. Furthermore, it is evident you are now attempting to
deal with issues regulated by the main agreement in contravention
of
section 37 thereof.
10.
We, despite the facilitator having long exhausted the facilitated
process, continued to engage you in the hope of avoiding
retrenchments. This now no longer seems possible. In the
circumstances we regret to advise that we have now exhausted
consultation
with you in terms of section 189 on the proposed
restructuring (i.e. the implementation of the new proposed
structure).
11.
In the circumstances, we now therefore give you notice that we shall
implement the new structure as per the job descriptions
previously
communicated with effect from 10 April 2015.
12.
The jobs as they existed prior to engaging you in consultation (in
which jobs your members were engaged) are now redundant.
Accordingly,
your members face retrenchment, as these positions will no longer
exist in the new structure.
13.
Given that your members and other employees have performed the duties
as per the new job descriptions in terms of the interim
arrangement
agreed to between the parties, we shall afford them the opportunity
to be engaged in the new positions at the rate
prescribed by the main
agreement of the MEIBC for performing work in such positions. This
reasonable offer of alternative employment
is a further
bona fide
effort on our part to avoid the contemplated retrenchments.
14
Should they reject it, they will unfortunately be retrenched. It is
our view that the rejection of the alternative employment
offered
will result in retrenchees being disqualified for severance pay
through the application of
section 41
of the
Basic Conditions of
Employment Act 75 of 1997
, as such rejection would be unreasonable in
all the circumstances.’
[24]
The letter added that the additional R3.00 per hour would no longer
be applicable as from 11
April 2015 and requested the employees to
indicate whether they wished to accept the reasonable offer of
alternative employment
by no later than 10 April 2015. Aveng also
indicated that it was available for further consultation on 31 March
2015. The letter
concluded by stating that notice of termination of
employment of those not accepting the offer of alternative employment
would
be given on 13 April 2015.
[25]
On 31 March 2015, the parties met again. Aveng refused to withdraw
the letter of 30 March 2015.
It, however, invited NUMSA to make a
further proposal on the 5-grade structure, taking into account the
question of costs, and
indicated that it would be prepared to
participate in a further consultation session on the 5-grade
structure in those circumstances.
[26]
The parties held another meeting on 16 April 2015. At this meeting,
NUMSA expressed confusion
about the correspondence sent by Aveng and
alleged that it was made to believe that there would be no forced
retrenchments and
that the process initiated by the May 2014 notice
in terms of
section 189(3)
of the LRA was finalised because certain
employees had accepted voluntary severance packages. NUMSA also
stated that further confusion
was caused by a notice that was issued
on 1 April 2015 under
section 189
of the LRA.
Other proposals were
then made by NUMSA regarding the 5-grade structure.
[27]
On 17 April 2015, Aveng addressed a further letter to NUMSA informing
it that it would implement
the redefined job descriptions with effect
from 28 April 2015. The subtext of the letter confirmed Aveng’s
position that
it remained seized with the
section 189
consultation
process in relation to its operational requirements. The employees
would in terms of the new arrangement be paid the
rate they were paid
before the interim agreement was concluded on 17 October 2014. The
employees were required to indicate whether
they accepted the new job
descriptions or not, by no later than 21 April 2015. If the employees
refused, they would be dismissed
on 24 April 2015.
However, an offer of
alternative employment was made in the following terms:
‘
Given
that your members and other employees have performed the duties as
per the new job descriptions in terms of the interim arrangement
agreed to between the parties; we shall afford them to the
opportunity, to be engaged in the new positions at the rate
prescribed
by the Main Agreement of the MEIBC for performing work in
such positions. This reasonable offer of alternative employment
is a further
bona
fide
effort on our part to avoid the contemplated retrenchments. Should
they reject it, they will unfortunately be retrenched.
It is
our view that the rejection of the alternative employment offered,
will result in retrenchees being disqualified for severance
pay
through the application of
Section 41
of the
Basic Conditions of
Employment Act 75 of 1997
, as such rejection would be unreasonable in
all the circumstances.”
[28]
All the employees were presented with contracts of permanent
employment together with redesigned
job descriptions and asked to
indicate whether they accepted or rejected the offers.
[29]
The offers of alternative employment provided expressly that the
employees would be paid in accordance
with their actual rates of pay
as at 1 February 2015. Accordingly, none of the employees would have
been financially prejudiced
by accepting the offer, all could have
continued working for Aveng and no retrenchments would have been
necessary. However, all
the employees refused to accept the new terms
and conditions of employment. On 24 April 2015, they were dismissed.
The
decision of the Labour Court
[30]
NUMSA contended before the Labour Court that the reason for the
dismissal was the refusal by
the employees to accept Aveng’s
demands in respect of the altered job descriptions and grade
structure, matters of mutual
interest, and thus the dismissal was
automatically unfair in terms of
section 187(1)(c)
of the LRA. Aveng
denied that the dismissal was automatically unfair and maintained
that the reason for dismissal was a fair reason
based on its
operational requirements.
[3]
It
relied on various judicial pronouncements prior to the amendment of
section 187(1)(c)
of the LRA in support of its contention that
despite the prohibition employers are permitted to dismiss employees
and to employ
in their place others who are prepared to work in
accordance with terms and conditions of employment that are
operationally required.
[31]
The Labour Court concluded that the employees were dismissed not for
refusing to accept any demand
but for operational requirements
reasons after rejecting the alternative to dismissal proposed by the
employer during retrenchment
consultations. The Labour Court held
that the proposal to alter the job descriptions was an appropriate
measure aimed at avoiding
or minimising the number of dismissals and
thus the dismissal was for a fair reason. Aveng was faced with
operational difficulties
and the only viable answer to its conundrum
was to restructure and redesign the jobs. The court was satisfied
that Aveng had done
everything reasonably possible to save the jobs
and had the employees continued working in line with the new job
descriptions they
would have remained in employment and suffered no
adverse financial consequence. The learned judge relied on the
following
dicta
of
this court in
Mazista
Tiles (Pty) Ltd v NUM and others:
[4]
‘
The
appellant could still decide that its business required that the
employees’ terms and conditions of service be changed
in order
to be more profitable and more competitive. If the employees rejected
its proposal on changing the terms and conditions….
then the
appellant would be entitled to dismiss them for operational reasons.’
[32]
While acknowledging that the issue had become academic in light of
its finding that the dismissal
was fair, the Labour Court held
further that it would not have been reasonably practical for Imperial
Dedicated Contracts to reinstate
some of the employees had the
dismissal been unfair.
The
submissions of the parties in the appeal
[33]
NUMSA submits that the Labour Court erred on the facts - most
importantly, in finding that NUMSA
demonstrated bad faith in seeking
wage increases for its members in the context of the negotiations in
relation to the interim
agreement, the 5-grade structure and new job
descriptions; as well as in prematurely terminating the interim
agreement. Nothing
turns on these issues or any of the other alleged
factual errors.
[34]
The decisive appeal ground is the submission that the Labour Court
erred in its interpretation
of
section 187(1)(c)
of the LRA (as
amended). NUMSA contends that the Labour Court’s interpretation
is inconsistent with the scheme of Chapter
VIII of the LRA, the plain
meaning of the words used in
section 187(1)(c)
of the LRA (as
amended), a purposive interpretation of the provision and the spirit,
purport and objects of the Bill of Rights.
[5]
[35]
NUMSA submits that
the wording of
section 187(1)(c)
of the LRA (as amended) makes it
clear that the intention is to render automatically unfair
any
dismissal where the reason for the dismissal is the employees’
refusal to accept a demand in relation to a matter of mutual
interest; and there are no qualifications or exceptions in this
regard. The amended prohibition envisages only three elements:
a
demand, a refusal and a dismissal. This implies that
section
187(1)(c)
(as amended) applies also in circumstances where the demand
was motivated by the genuine operational requirements of the employer
to change terms and conditions of employment. There is no provision
akin to
section 67(5)
of the LRA, which applies to the dismissal of
protected strikers for operational reasons, and there is no basis for
reading into
section 187(1)(c)
of the LRA an entitlement to dismiss
employees rejecting an employer’s demands.
[36]
Hence, NUMSA submits further that the judgments which gave meaning to
section 187(1)(c)
of the LRA prior to its amendment
[6]
are no longer relevant and applicable to the interpretation of the
amended
section 187(1)(c)
; and, thus, the Labour Court erred in
relying on them to conclude that the impugned operational
requirements dismissal did not
fall foul of the prohibition.
[37]
This interpretation, NUMSA maintains, better promotes the “spirit,
purport and objects”
of the Bill of Rights.
Dismissing employees
for rejecting a demand in relation to a matter of mutual interest
limits their rights to collective bargaining
and to strike.
Interpreting
section
187(1)(c)
of the LRA (as amended) to not apply in circumstances where
the employer’s demand is motivated by or arises from its
operational
requirements is in effect the reading in of an implicit
limitation on the fundamental rights to collective bargaining and to
strike.
[38]
Applying this interpretation to the facts, NUMSA avers that Aveng
made a demand relating to a
matter of mutual interest when it
informed the employees that it intended to implement the new
structure as per the redefined job
descriptions; secondly that the
employees refused to accept the demand; and thirdly the employees
were dismissed because they refused
to accept the demand, as evident
from the letters of 30 March 2015 and 17 April 2015 in which it was
stated that if the employees
did not accept the demand (by 10 April
2015 and 21 April 2015 respectively) they would be dismissed.
Moreover, 71 employees who
accepted the demand were not dismissed.
NUMSA, therefore, submits that the employees were dismissed because
they refused to accept
Aveng’s demand and the Labour Court
erred when it found that the dismissal was not automatically unfair
under
section 187(1)(c)
of the LRA (as amended).
[39]
Aveng submits that the definitive enquiry is for the court to
establish whether the actual reason
for the dismissal was either the
prohibited reason contemplated in
section 187(1)(c)
of the LRA or the
legitimate operational requirements of the employer. It argues that
the wording of
section 187(1)(c)
of the LRA does not suggest that
because a proposed change to terms and conditions is refused and a
dismissal thereafter ensues,
the reason for the dismissal is
necessarily the refusal to accept the proposed change. The employer’s
operational requirements
can be impacted upon by the refusal and
hence the court is obliged to determine the true reason for
dismissal.
[40]
NUMSA’s position, Aveng argued further, ignores the fact that
collective bargaining can
only yield changes to terms and conditions
of employment if it culminates in an agreement. If no such agreement
is reached, the
employer would be left without any means of
addressing its operational requirements and may never resort to
retrenchment. This
would lead to an impasse which, if it endured
indefinitely, could jeopardise an employer’s continued
survival. The interpretation,
if accepted, would undermine the
employer’s right to fair labour practices in section 23(1) of
the Constitution by excluding
recourse to retrenchments where
legitimate operational requirements are in play.
[41]
Moreover, Aveng points out that NUMSA’s construction would
create an anomaly. Employers
engaging in section 189 consultations
would be wary of proposing any changes to terms and conditions of
employment which may address
their operational requirements and –
if accepted - save jobs, for fear of facing an automatically unfair
dismissal claim
if the changes are rejected and retrenchments ensue.
This would undermine a fundamental purpose of section 189, which is
to encourage
meaningful engagement regarding all potentially viable
alternatives to retrenchment. There inevitably will be scenarios
where such
alternatives include changes to terms and conditions of
employment, and it is imperative that parties are able, in the
section
189 context, to consult regarding these matters where
consultation thereon may (if consensus is reached) have a
retrenchment-avoidance
effect.
[42]
As regards NUMSA’s claim that the reason for the dismissal of
the employees was their refusal
to accede to a demand by Aveng that
they sign new contracts of employment and was not based on Aveng’s
operational requirements,
Aveng asserts that no demand was in fact
made. Instead, an alternative to retrenchment was offered by Aveng to
the employees, which
they had a choice to accept or not.
In sum, Aveng submits that the
employees’ dismissals fell “within the zone occupied by
permissible dismissals for operational
requirements”, and did
not fall foul of section 187(1)(c) and thus the Labour Court did not
err.
The
history of the amendment to section 187(1)(c) of the LRA
[43]
In order to appreciate the scope of the amendment to section
187(1)(c) of the LRA, it is necessary
to canvass in some detail the
history of the enactment and amendment of section 187(1)(c) of the
LRA.
[44]
The prohibition in section 187(1)(c) of the LRA was incorporated into
our law for the first time
with the enactment of the LRA in 1995. It
forms part of the scheme of the LRA regulating lock-outs and must be
understood and interpreted
in that context. A lock-out is a
legitimate form of economic pressure which is deployed by an employer
with the object of compelling
its employees to comply with its
demands.
[45]
Prior to the enactment of the LRA, the previous legislation, the
Labour Relations Act 28 of 1956
(“the LRA of 1956”),
permitted both termination and exclusion lock-outs. A termination
lock-out involved the termination
of the employees’ contracts
of employment to compel or induce compliance with the employer’s
demand, while an exclusion
lock-out merely excluded employees from
the premises for that purpose.
[46]
Under the LRA of 1956, a termination lock-out invariably resulted in
the dismissal of the affected
employees.
[7]
The fairness of such dismissals at that time could not be determined
by the Industrial Court since the definition of an “unfair
labour practice” in the LRA of 1956 expressly excluded a
lock-out. However, that did not mean that the employer was entirely
without obligation. The employer would be obliged, while the lock-out
prevailed, to accept back ex-employees who tendered their
services on
the basis of acceptance of the employer’s demand or change. The
obligation to re-employ (rather than to reinstate)
resulted from the
acceptance of a new offer of employment which endured for the
duration of the lock-out.
[8]
The
offer was thus akin to an option for re-employment on the different
terms.
The
offer could remain open for a specific time or
a
reasonable time. However, if a collective dismissal was not to compel
or induce employees to comply with or accept a demand, or
if the
dismissal was effected on operational grounds after the lock-out had
ended, such dismissals were not lock-out dismissals
and could be
challenged on the grounds of fairness under the unfair labour
practice jurisdiction of the Industrial Court.
[9]
[47]
The law of lock-outs in South Africa was fundamentally altered with
the enactment of the LRA
in 1995. Section 64 of the LRA confers on
every employee the right to strike while every employer has recourse
to a lock-out.
[10]
A lock-out
is defined in section 213 of the LRA as the exclusion by an employer
of employees from the workplace for the purpose
of compelling the
employees to accept a demand in respect of any matter of mutual
interest between employer and employee, whether
or not the employer
breaches the employees’ contracts of employment in the course
of or for the purpose of the exclusion.
The definition greatly
narrows the ambit of a lock-out as previously defined in the LRA of
1956. It specifies only one form of
employer conduct, namely
exclusion from the workplace (with or without a breach of
contract).
[11]
Unlike the
definition of a lock-out in the LRA of 1956, the current definition
of lock-out does not include the termination lock-out.
A dismissal
cannot therefore by definition constitute a lock-out, and
vice
versa
.
[12]
[48]
Two other provisions of the LRA constrain the employer’s
recourse to lock-out. Firstly,
in terms of section 76 of the LRA, the
employer may not replace any employee whom it has locked out unless
the lock-out is in response
to a strike. Secondly, section 187(1)(c)
of the LRA in its original form prohibited the dismissal of employees
if the reason for
the dismissal was to compel the employees to accept
a demand in respect of any matter of mutual interest between the
employer and
the employee.
[49]
The scheme regulating lock-outs in the LRA, unlike the provisions
governing strikes, does not
explicitly address the question of when
operational requirements may justify the dismissal of employees who
reject employer demands
to amend terms and conditions of employment.
Section 67(4) of the LRA provides that an employer may not dismiss an
employee for
participating in a protected strike. The prohibition is
bolstered by sections 187(1)(a) of the LRA which provides that a
dismissal
is automatically unfair if the reason for the dismissal is
that the employee participated in a protected strike. However,
section
67(5) of the LRA enacts exceptions. It provides that section
67(4) of the LRA does not preclude an employer from fairly dismissing
an employee for reasons related to the employee’s conduct
during the strike, or for a reason based on the employer’s
operational requirements. Thus, a dismissal for striking is
automatically unfair, but an operational requirements dismissal of
strikers may not be.
[50]
It was this lack of symmetry in the LRA’s treatment of strike
and lock-out dismissals that
prompted Prof. Clive Thompson to
observe:
‘
An
employer may not dismiss to compel an employee to accept a demand
relating to ‘a matter of mutual interest’ (s 187(1)(c)
…). An employer may, however, dismiss for a fair reason based
on operational requirements (s 188(1)(a)(ii)). How can these
two
propositions be reconciled? Not easily, as the world of work and
business defies sharp categorization and the statute appears
to
pursue competing policy objectives in successive breaths.’
[13]
[51]
The issue of demarcating the scope of the prohibition in section
187(1)(c) of the LRA came before
the courts soon enough. In
ECCAWUSA
and Others v Shoprite Checkers t/a OK Bazaars Krugersdorp
,
[14]
the Labour Court held that where amendments to terms and conditions
of employment are proffered by an employer as an alternative
to
dismissal during a
bona
fide
retrenchment exercise and it is a reasonable alternative based on the
employer’s operational requirements, the employer will
be
justified in dismissing employees who refuse to accept the
alternative on offer.
[15]
The
Labour Court in
NUMSA
and Others v Fry’s Metal (Pty) Ltd
[16]
took a different tack in a collective bargaining situation. This case
involved an alteration of shift arrangements and the removal
of a
transport subsidy. The employer threatened to dismiss the employees
if they did not agree to the new arrangements. The union
sought and
was granted an interdict prohibiting the employer from dismissing the
employees. The court rejected the contention that
the threat of
dismissal was operationally justified, holding that dismissal is “not
a legitimate instrument of coercion in
the collective bargaining
process” because the definition of lock-out meant that tactical
dismissals were precluded and section
187(1)(c) of the LRA rendered
any dismissal to compel acceptance automatically unfair.
[52]
On appeal in
Fry’s
Metals (Pty) Ltd v NUMSA and Others,
[17]
the LAC held that a dismissal could not be a lock-out if it was not
performed for one of the specified purposes, and thus where
a
dismissal was intended to be final and irrevocable and not intended
to compel compliance with a demand it was not a lock-out.
A dismissal
falls within the scope of section 187(1)(c), according to this
interpretation, only if it is conditional in the
sense that the
employer retains an intention to accept the employees back into its
employ if they accede to the changes in relation
to which there is an
impasse. The target of section 187(1)(c) of the LRA was not final
dismissals but temporary or strategic dismissals.
[18]
The LAC’s decision was confirmed on appeal by the SCA
[19]
[53]
Accordingly, in terms of the law prior to the amendment of section
187(1)(c) of the LRA by the
LRAA, an employer who wished to implement
changes to terms and conditions of employment (including
remuneration) could, if its
proposals were refused, embark on a
section 189 exercise with a view to retrenching those who were not
prepared to work to its
“operational requirements”
provided the retrenchment was final and irrevocable, and the
requirements of section 189
were met.
[20]
[54]
The decision in
Fry’s
Metal
met with criticism.
[21]
As
Grogan neatly put it:
‘
The
ironical result… is that an employer perpetrates an
automatically unfair dismissal by offering to reinstate or re-employ
workers who refuse to accept a demand, but does not do so by simply
dismissing workers for the same reason.’
[22]
[55]
It was never the intention of the legislature that temporary or
conditional dismissals deployed
strategically to compel or induce
compliance with an employer’s demand (such in effect being no
different to a suspensive
exclusionary lock-out) would be
automatically unfair. Rather, the target of section 187(1)(c) of the
LRA was the termination lock-out.
Thompson lucidly captures what is
wrong with
Fry’s Metals
as follows:
‘
In
the event, the superior courts have now decided that s 187(1)(c)
exonerates the crime of yesteryear even as it condemns what
used to
be legitimate. And so we are left with a quite anomalous result…A
contingent dismissal is not a particularly pernicious
form of
employer conduct…It is not particularly odious precisely
because of its transient intent and effect – it is
within the
contemplation of all that the employment relationship will be
re-asserted. .A permanent (final) dismissal to press home
partisan
economic advantage is self-evidently far more damaging and clearly
what the drafters had in mind. But after
Fry’s
Metals
we have a situation where a temporary dismissal to compel acceptance
with a mutual interest demand must be branded as automatically
unfair
and countered with the strongest possible remedies available at law
while a permanent dismissal for the same reason but
without
justification …is treated as a lesser industrial offence with
lesser remedies.’
[23]
[56]
The finding in
Fry’s
Metals
that section 187(1)(c) of the LRA does not prevent employers from
dismissing on operational grounds employees who do not accept
proposals to amend terms and conditions of employment is however on
safer ground. Although, section 187(1)(c) of the LRA, prior
to its
amendment, offered little on how best to reconcile the often
incompatible imperatives of collective bargaining and business
productivity, the courts before and after
Fry’s
Metals
developed the law to permit dismissal along similar lines to the
dismissal of protected strikers as sanctioned by section 67(5)
of the
LRA.
[24]
Prof du Toit
accurately described the legal position at the time of the amendment
as follows:
‘
Where
collective bargaining has ended in deadlock, nothing prevents an
employer from initiating consultation about dismissals based
on
operational requirements due to its stated need to implement the
changes it desires, in which those changes may be on the table
as an
alternative to dismissal.’
[25]
[57]
The essential question for determination in this appeal is whether
the amendment to section 187(1)(c)
of the LRA by the LRAA has altered
the law in that respect.
[58]
The LRAA of 2014 amended section 187(1)(c) of the LRA with effect
from 1 January 2015 with the
aim of clarifying the situation and
removing what was perceived as the anomaly flowing from
Fry’s
Metals
. Section 187(1)(c) of the LRA (as amended) now provides as
follows:
‘
A
dismissal is automatically unfair…if the reason for the
dismissal is:
(c)
a refusal by employees to accept a demand in respect of any matter of
mutual interest.’
[59]
The only difference between the previous definition and the current
definition is that the old
section’s wording “to compel
the employee to accept a demand” has been replaced by the words
“is a refusal
by employees to accept a demand”. The
explanatory memorandum to section 187(1)(c) of the LRA (as amended)
describes the purpose
of the amendment as follows:
‘
[S]eek
to amend section 187 of the Act to remove an anomaly arising from the
interpretation of section 187(1)(c). In the case of
National
Union of Metalworkers of SA v Fry’s Metals (Pty) Limited
(2005) 26 ILJ 689 (SCA), the Court held that the clause had been
intended to remedy the so-called ‘lock-out’ dismissal
which was a feature of pre-1995 labour relations practice. The effect
of this decision when read with the decision of
Chemical
Workers Union and Others v Algorex (Pty) Ltd
(2003) 24 ILJ 1917 (LAC) is to discourage employers from offering
reemployment to employees who have been retrenched after refusing
to
accept changes to working conditions.
The
proposed amendment seeks to give effect to the intention of the
provision as enacted in 1995, which is to preclude the dismissal
of
employees where the reason for the dismissal is their refusal to
accept a demand by the Employer over a matter of mutual interest.
This is intended to protect the integrity of the process of
collective bargaining under the Act and is consistent with the
purposes
of the Act.”
[60]
The anomaly referred to was that after
Fry’s Metals,
employers were wary of offering any form of re-employment to workers
retrenched in the context of restructuring, even if there
was a valid
operational requirement for the retrenchment because such might be
construed as indicating that the true reason for
the retrenchment was
one proscribed by section 187(1)(c) of the LRA. This had the
result that dismissed employees were often
deprived of offers of
re-employment.
Evaluation
[61]
The amendment of section 187(1)(c) of the LRA had a restricted
purpose and limited reach. It
shifted the focus from the employer’s
intention in effecting the dismissal to the refusal of the employees
to accede. It
no longer matters what the employer’s intention
or purpose might be. It is hence now irrelevant whether or not the
dismissal
was intended to induce the employees to comply with a
demand. The upshot is that the distinction between final or
conditional dismissals
as a basis for the application of section
187(1)(c) of the LRA has fallen away since it no longer has utility.
[62]
The amendment is less clear about the more challenging question of
when it may be permissible
in terms of sections 188 and 189 of the
LRA to dismiss on operational grounds employees who refuse to accede
to the employer’s
demands for changes to their terms and
conditions of employment. The LRA defines operational requirements
generally to mean requirements
based on the economic, technological,
structural or similar needs of an employer.
[26]
The definition does not specifically include a need to change terms
and conditions of employment. However, as discussed, our prevailing
jurisprudence has interpreted the LRA to permit dismissal on such
grounds, being structural or similar needs – the upshot
being
that the right to retrench is implicit in section 187(1)(c) of the
LRA. It is doubtful, for the reasons following, that the
purpose of
the amendment was to change the law in this respect.
[63]
If it is no longer permitted in terms of the amendment to section
187(1)(c) of the LRA to dismiss
recalcitrant employees and to employ
in their place others who are prepared to work in accordance with the
new terms and conditions
of employment that are operationally
required, as NUMSA suggests, the only way to satisfy the employer’s
operational requirements
would be through collective bargaining and
ultimately the power play
.
If
no collective agreement can be reached on a proposed restructuring,
the employer’s only means of addressing its operational
requirements would be an offensive exclusion lock-out or unilateral
implementation in breach of contract. There will often be practical
obstacles in the way of such action, especially when an employer is
confronted with economic or structural challenges. An offensive
lock-out, in which the employer will be denied the right to employ
replacement labour, or a breach of contract leading to litigation,
usually will be self-defeating, adding to the economic pressure on an
employer struggling financially and needing to restructure
for that
reason.
[64]
NUMSA’s interpretation of the amendment is not sustainable for
a few reasons. Section 187(1)(c)
of the LRA must be read in the
context of LRA’s scheme for the protection against unfair
dismissal. The prohibition in section
187(1)(c) of the LRA is one of
a number of the automatically unfair dismissals outlawed by section
187. It must be read with section
188 of the LRA which provides that
a dismissal that is not automatically unfair is unfair if the
employer fails to prove a fair
reason such as one based on
operational requirements under section 189 of the LRA. It follows
that even where there is evidence
suggesting a credible possibility
that dismissal occurred because the employees refused to accept a
demand, the employer can still
show that the dismissal was for a
different more proximate fair reason.
[27]
[65]
The fact that a proposed change is refused and a dismissal thereafter
ensues does not mean that
the reason for the dismissal is necessarily
the refusal to accept the proposed change. The question whether
section 187(1)(c) of
the LRA is contravened does not depend on
whether the dismissal is conditional or final, but rather on what the
true reason for
the dismissal of the employees is. The proven
existence of the refusal of a demand merely prompts a causation
enquiry. The actual
reason for the dismissal needs to be determined
and there is no basis in principle for excluding an employer’s
operational
requirements from consideration as a possible reason for
dismissal.
[66]
There is furthermore merit in Aveng’s submission that NUMSA’s
construction would
lead perversely to employers being wary of
proposing any changes to terms and conditions of employment in
section 189 consultations.
That would undermine the fundamental
purpose of section 189 to encourage engagements on all potentially
viable alternatives to
retrenchment.
[67]
Moreover, if it is permissible in terms of section 67(5) of the LRA
to dismiss protected strikers
where the employer is able to
demonstrate (on all the facts and circumstances of a particular case)
a legitimate and substantial
business necessity,
[28]
the underlying policy rationale applies equally to the dismissal of
employees resisting employer demands or proposals. Striking
workers
may not be dismissed for striking but can be retrenched where a
genuine substantial operational necessity arises. By the
same token,
while employees cannot be dismissed for refusing to accept a demand,
they can be dismissed if that refusal results
in a more dominant or
proximate operational necessity. This legislative scheme of
collective bargaining is in line with the constitutional
right of
trade unions and employers to engage in collective bargaining in that
any limitation of the power play is reasonable and
justifiable in the
balance struck between the strike weapon and the employer’s
power of implementation at impasse.
[29]
[68]
Hence, the essential inquiry under section 187(1)(c) of the LRA is
whether
the
reason for the dismissal is the refusal to accept the proposed
changes to employment. The test for determining the true reason
is
that laid down in
SA
Chemical Workers Union v Afrox Ltd
.
[30]
The court must determine factual causation by asking whether the
dismissal would have occurred if the employees had not refused
the
demand. If the answer is yes, then the dismissal is not automatically
unfair. If the answer is no, as in this case, that does
not
immediately render the dismissal automatically unfair; the next issue
is one of legal causation, namely whether such refusal
was the main,
dominant, proximate or most likely cause of the dismissal.
[69]
As in all operational requirements dismissals, the merits of the
employer’s decision in
such circumstances are open to scrutiny,
but a stricter scrutiny in light of the need for judicial sensitivity
to the dynamics
of a legitimate power play - the driver of collective
bargaining. As discussed earlier, the LAC and the SCA in
Fry’s
Metal
, in considering the merits of the dismissal in that case,
accepted that the LRA does not distinguish between dismissals for
operational
reasons intended to save a business from failure and
those intended simply to increase profitability. In this regard Zondo
JP said:
‘
This
is because all the Act refers to, and recognises, in this regard is
an employer’s right to dismiss for a reason based
on
operational requirements without making any distinction between
operational requirements in the context of a business the survival
of
which is under threat and a business which is making profit and wants
to make more profit.’
[31]
[70]
However, employers do not have
carte blanche
. As Prof du Toit
put it:
‘…
though
the notion of employers being free to dismiss workers “merely
to increase profit” may seem to open the floodgates
to
dismissal virtually at will, the causal nexus between a dismissal and
the employer’s operational needs must still pass
the test of
fairness. The real question remains: will it be fair in the given
circumstances to dismiss employees in order to increase
profit or
efficiency?’
[32]
[71]
NUMSA’s contention that the reason for the dismissal of the
employees was solely their
refusal to accede to the demand by Aveng
that they sign new contracts of employment is not sustainable on the
facts.
[72]
Firstly, as the Labour Court held, there was strictly speaking no
employer “demand”.
The relevant correspondence shows that
the proposals of Aveng in relation to the 5-grade structure and job
descriptions were made
in terms of section 189(2) and (3) of the LRA
and intended to avoid or mitigate dismissals or were alternatives to
dismissal in
the context of consultations over retrenchments. The
process embarked on in May 2014 was not only seeking agreement to
changes
to terms and conditions of employment but was intended to
avoid dismissals. The distinction between a demand and a proposal is
admittedly a fine one, but nonetheless goes beyond semantics.
Collective bargaining demands are made ordinarily in negotiations
over wages. Although both wage negotiations and restructuring
proposals may impact similarly on the bottom line, and restructuring
proposals can feature regularly in wage negotiations, the
retrenchment risk arises when the operational requirements for the
viability
of the employer are compelling, overriding and the dominant
objective of the proposal.
[73]
The proposals regarding the 5-grade structure and job descriptions
were put forward as part of
a continuing consultation process aimed
at improved profitability and viability; and were necessary, if not
essential, for Aveng’s
sustainability in the constricted
circumstances in which it found itself. The grouping of the job
functions was a sensible way
of introducing efficiencies and cost
savings, and had proved effective under the interim agreement. The
proposals were the only
reasonable and sensible means of avoiding
dismissals and entailed no adverse financial consequences for the
employees.
[74]
As Aveng’s viability was at stake, proceeding with a bargaining
power play, either an offensive
lock-out without replacement labour
or unilateral implementation of the changes, was not a realistic
option in the circumstances.
The primary purpose of Aveng in making
the proposal was not to grasp an advantage in the wage bargain, it
was rather to restructure
for operational reasons to ensure Aveng’s
long term survival. The proposal was not made at the expense of
existing wage levels.
NUMSA, the facts indisputably demonstrate,
sought to convert the proposal to a bargaining opportunity for
increased wages. The
bargaining pressure thus brought to bear
exacerbated the operational requirements problem. The proposal having
been negotiated
to impasse, the imperative or dynamic to dismiss for
operational reasons transcended tactical positioning to become a fair
reason.
The failure of the employees to accept the proposals
engendered an insurmountable operational requirements problem that
constituted
a fair reason for dismissal.
[75]
The dominant reason or proximate cause for the dismissal of the
employees, therefore, was Aveng’s
operational requirements,
which underpinned the entire process throughout 2014 and 2105 and
informed all the consultations regarding
the changes to the terms and
conditions of employment. The employees’ dismissals accordingly
fell within the zone of permissible
dismissals for operational
requirements and did not fall foul of section 187(1)(c) of the LRA.
In the result, the Labour Court
did not err in its conclusion.
[76]
There is consequently no need to determine the second appeal ground
concerning the practicality
of reinstating the employees in the
employment of the second respondent.
[77]
The appeal is accordingly dismissed with costs, such costs to include
the costs of two counsel.
________________
JR
Murphy
Acting
Judge of Appeal
I
agree
________________
P
Coppin
Judge
of Appeal
I
agree
______________
K
Savage
Acting
Judge of Appeal
APPEARANCES:
FOR
THE APPELLANT: H
van der Riet SC and N T Lewis
Instructed
by Ruth Edmond Attorneys
FOR
THE FIRST RESPONDENT: A
Franklin SC and R Itzkin
Instructed
by Edward Nathan Sonnenbergs Inc
FOR
THE SECOND RESPONDENT: A Redding SC and GA
Fourie
Instructed
by Cliffe Decker Hofmeyer Inc
[1]
Labour Relations Act No. 66 of 1995
.
[2]
Labour
Relations Amendment Act 6 of 2014.
[3]
As contemplated in section 188(1)(b) of the LRA.
[4]
[2005] 3 BLLR 219
(LAC) para 57
[5]
As required by section 39(2) of the Constitution
[6]
Fry’s
Metal (Pty) Ltd v National Union of Metalworkers of SA and Others
(2003)
24 ILJ 133 (LAC);
Chemical
Workers Industrial Union and Others v Algorax (Pty) Ltd
(2003) 24 ILJ 1917 (LAC); and
National
Union of Metalworkers of SA and Others v Fry’s Metals (Pty)
Ltd
2005 (5) SA 433 (SCA).
[7]
Trollip: “Lock-outs in South African Law” in
Strikes,
Lock-outs and Arbitrations in South African Labour Law,
83 et seq (Juta) 1989
[8]
There was however protection against unfair selective re-employment
of locked out workers under the unfair labour practice jurisdiction
-
NAAWU
v Borg-Warner SA (Pty) Ltd
(1994) 15 ILJ 509 (A). Similar protection exists in terms of section
186(1)(d) of the LRA which includes selective re-employment
under
the definition of a dismissal and thus subject to the unfair
dismissal jurisdiction.
[9]
CCAWUSA
and Others v Game Discount World Ltd (
1990)
11 ILJ 162 (IC); and
CWIU
and Others v Indian Ocean Fertiliser
(1991)
12 ILJ 822 (IC).
[10]
Lock-outs
must comply with the requirements of sections 64 and 65 of the LRA
in order to be legal.
[11]
Any exclusion from the workplace is likely to constitute a breach of
contract at common law if wages are not paid to locked-out
employees
tendering their services.
[12]
Grogan;
Workplace
Law
10
th
Ed (Juta 2009) 421.
[13]
Bargaining,
Business Restructuring and Operational Requirements Dismissal
,
(1999) 20 ILJ 755.
[14]
(2000) 21 ILJ 1347 (LC). See also
MWASA
and Oothers v Independent Newspapers (Pty) Ltd
(2002) 23 ILJ 918 (LC).
[15]
This line of thinking has been endorsed by this court in similar
cases. See
Mazista
Tiles (Pty) Ltd v NUM and Others
(2004)
25 ILJ 2156 (LAC).
[16]
(2001) 22 ILJ 701 (LC).
[17]
(2003) 24 ILJ 133 (LAC) (
Fry’s
Metals)
.
[18]
The
LAC conceded that its interpretation of the meaning of a “dismissal”
in section 187(1)(c) of the LRA did not fit
with the definition in
section 213 read with section 186 of the LRA which defines a
dismissal to mean “an employer has
terminated employment with
or without notice.” The LAC held that the word “dismissal”
in section 186 does not
refer to a dismissal that is not final.
Though it did not say as much, the LAC clearly accepted that it was
permissible in terms
of section 213 of the LRA to depart from the
ordinary definition of “dismissal” since “the
context otherwise
indicates”.
[19]
National
Union of Metalworkers of SA & others v Fry’s Metals
(Pty) Ltd
2005 (5) SA 433
(SCA).
[20]
See
General
Food Industries Ltd v FAWU
[2004] 7 BLLR 667
(LAC); and
NUM
and Others v Mazista Tiles
(Pty) Ltd (2006) 27
ILJ
471 (SCA).
[21]
C
Thompson:
“
Bargaining
Over Business Imperatives: The Music of the Spheres After Fry’s
Metals
2006 ILJ 704; J Grogan “
Chicken
or Egg”
2003
ELJ 4.
[22]
Grogan:
Workplace
Law
10
th
Ed (Juta 2009) 188.
[23]
C Thompson:
Bargaining
over Business Imperatives: The Music of the Spheres after Fry’s
Metals
(2006) 27 ILJ 704 at 727 -728.
[24]
General
Food Industries Ltd v FAWU
[2004] 7 BLLR 667
(LAC); and
NUM
and Others v Mazista Tiles
(Pty) Ltd (2006) 27
ILJ
471 (SCA).
[25]
Darcy du Toit
The
right to equality versus employer ‘control’ and employee
‘subordination’: Are some more equal than
others?’
2016 (37) ILJ 1 at 21.
[26]
Section 213 of the LRA
[27]
See
R
le Roux:
Retrenchment
Law in South Africa
(Lexis Nexis 2016) pg 48-49.
[28]
NUM v
Black Mountain Mineral Development Co (Pty) Ltd
[1997] 4 BLLR 355
(A) – the determination necessarily involves
strict scrutiny of the employer’s justification and ultimately
a judicial
value judgment.
[29]
Section
23(5) and section 36(1) of the Constitution. In
SACTWU
v Discreto
[1998] 12 BLLR 1228
(LAC) par 8-9 this court accepted that 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.
[30]
(
1999)
ILJ 1718 (LAC)
[31]
At para 33. See also
General
Food Industries v FAWU
(2004)
ILJ 1260 (LAC) at para 52 and Newaj K and van Eck S:
Automatically
Unfair and Operational Requirement Dismissals: Making sense of the
2014 Amendments
-
PER/PELJ
2016 (19).
[32]
D
du Toit: “
Business
Restructuring and Operational Requirements Dismissals: Algorax and
Beyond”
2005
ILJ 595 at 606. Thompson initially argued that the sanctity of the
collective bargaining process is only protected by permitting
retrenchments in cases where the intended changes have ramifications
for the survival of the employer’s business and not
merely for
its profitability -
Bargaining,
Business Restructuring and Operational Requirements Dismissal
,
(1999) 20 ILJ 755
.
More recently, in light of the developments in our jurisprudence, he
has conceded that an employer may dismiss on “a convincing
case of fairness” and that economic imperatives and society’s
interest in continuing economic progress in a competitive
world may
often deliver that case - C Thompson:
Bargaining
over Business Imperatives: The Music of the Spheres after Fry’s
Metals
(2006) 27 ILJ 704 at 706.