THE LABOUR APPEAL COURT OF SOUTH AFRICA, CAPE TOWN
Not Reportable
Case no: CA05/2024
In the matter between:
HEROTEL (PTY) LTD Appellant
and
GHIEM MOSES AND 10 OTHERS First Respondent
FUSION WIRELESS (PTY) LTD t/a SONIC TELECOMS Second Respondent
JL KRYNAUW N.O Third Respondent
CC MIENIE N.O Fourth Respondent
HERO TELECOMES (PTY) LTD Fifth Respondent
Heard: 15 May 2025
Delivered: 10 July 2025
Coram: Savage JA, Waglay et Musi AJJA
JUDGMENT
2
WAGLAY, AJA
Introduction
[1] This appeal, with leave of the court a quo, concerns the fairness of the
dismissal of the respondent s (Affected Employees) on the grounds of operational
requirements.
Condonation
[2] There are two applications for condonation in this appeal: one in respect of
the late filing of the record of appeal, and another with respect to the late filing of the
Affected Employees’ heads of argument. I will deal with both in turn.
[3] The appellant has sought condonation for the late filing of the record of
appeal, which is some nine months late. The application is unopposed. In explaining
the delay in the filing of the record, the appellant points to the delay in locating the
entirety of the appeal record as the greater part of the cause of the delay in its filing.
Although the delay is excessive, the explanation is sufficient and detailed. The
appellant continually sought to update the record until it was finally complete. I am
satisfied that there was neither a deliberate delay nor any negligence in the late filing
of parts of the record. In the circumstances, I am satisfied that condonation for the
late filing of the record should be granted and the appeal reinstated.
[4] The Affected Employees have also sought condonation for the late filing of
their heads of argument. Heads of arguments are not pleadings but serve as an aid
to the Court, a chairperson or a commissioner. While rules may require heads to be
filed at a particular time or heads or full argument may be requested by the person(s)
presiding to be filed by a particular date, failure to do so within the time limit or at all
does not prejudice the merits of the case of the party who has failed to comply. The
presiding officer has a discretion with regard to the further conduct of the
proceedings because of the failure to file heads of argument timeously.
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[5] In the exercise of its discretion, t his Court will receive the heads and
additional heads late; the respondent was given an opportunity to respond to the
additional heads if they so wished within five days after argument was concluded in
the matter.
Background to the dispute
[6] During 2020, HeroTel Group announced that four of its entities, including its
subsidiary, Fusion Wireless, trading as Sonic Telecoms (hereafter “Fusion”), would
be undergoing a retrenchment exercise. The Affected Employees were employed by
Fusion.
[7] On 1 September 2020, Fusion issued its employees, including the Affected
Employees, with a s 189(3) notice in terms of which retrenchment within the entity
was contemplated.
[8] In terms of the notice, the rationale for retrenchment was described as being
financially driven. In particular, the notice detailed the financial position of the Fusion,
namely that it was experiencing a worrying trend over a nine- month period within the
Western Cape metropolitan area. This trend is illustrated by inter alia a downturn in
sales, an increase in churn (increase in the number of clients who ceased doing
business with Fusion), and an increase in the number of customers who were
choosing fibre over wireless, wireless being the service provided by Fusion. Adding
to this, the national lockdown, due to the COVID -19 pandemic, had impacted the
business and its customers’ ability to make payments on time. According to the
notice, the business was not in as sound a financial position as it had been in the
past, and it was unable to continue operating as it had.
[9] In setting out the selection criteria to be used, the s 189(3) notice indicated
that the selection criteria for each department would be dealt with during the
consultation process, that Fusion proposed that ‘skills’ be used as the predominate
selection criteria and that the employees may also be selected based on LIFO,
according to the operational requirements of the said department.
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[10] The consultation process was facilitated by a CCMA commissioner.
[11] The first consultation was held on 22 September 2020, whereat the business
reiterated that the rationale for the contemplated retrenchments was due to financial
reasons as contained in the notice.
[12] During the consultation, the Affected Employees contested the rationale
presented for possible retrenchments, submitting that the reason for retrenchments
was due to a series of intercompany transactions between Fusion and the other
entities within the HeroTel Group which resulted in the selling off of key revenue
streams to the appellant, negatively impacting the finances of the Fusion.
[13] Between the first and second consultation meetings, the Affected Employees
sought the disclosure of certain financial information, including Fusion’s audited
income statements, its management accounts and various other financial information
in order to support its contention that Fusion had entered into intracompany
transactions in a bid to move its key revenue streams. This request was refused
during the second consultation meeting held on 28 September 2020.
[14] Between 2 and 6 October 2020, there was correspondence between the
Affected Employees and Fusions in a bid to secure the disclosure of the financial
information requested. While these discussions were taking place, on 8 October
2020, the Fusion wrote to some of its individual employees, notifying them that
consensus had been reached on the selection criteria to be applied, that being one
based on performance. The Affected Employees disputed that any such consensus
had been reached on the selection criteria.
[15] The refusal to provide the requested documentation prompted the Affected
Employees to approach the CCMA in terms of s 16 of the Labour Relations Act
1
(LRA) for the disclosure of and access to the requested information. The application
was successful, and on 19 October 2020, the CCMA ruled that Fusion’s financial
was successful, and on 19 October 2020, the CCMA ruled that Fusion’s financial
information be disclosed including the preceding four years of audited financial
1 Act 66 of 1995, as amended.
5
statements; management accounts for the period ending in September 2020; and
inter-group financial transactions and management account transaction between
Fusion and HeroTel subsidiary companies if reflected in the requested management
accounts.
[16] Despite the terms of the ruling requiring the disclosure of the audited financial
statements for the year 2020, those were not forthcoming. Instead, a draft, unaudited
statement was provided. In that respect, the reason proffered to the Affected
Employees was that the 2020 audited financials were not yet ready and had not yet
been audited. It was the position of the Affected Employees that without these
audited financials, they were unable to engage meaningfully in the consultation
process particularly as, had they been provided with the requested information, the
Affected Employees would have been able to demonstrate that the rationale for
retrenchment was unjustified, pre- determined or substantively unfair or to propose
alternatives to retrenchment.
[17] The Affected Employees were ultimately dismissed in and during October and
November 2020.
[18] The Affected Employees referred an unfair dismissal dispute to the CCMA for
conciliation and then for adjudication to the Labour Court.
[19] On 20 May 2022, what was left of Fusion was placed in voluntary liquidation.
However, prior to the hearing of the dispute in the Labour Court, the (I suspect
provisionally) liquidated business, Fusion’s business, and the contracts of
employment of its employees were transferred in terms of s 197 of the LRA to the
appellant.
In the Labour Court
[20] The Labour Court took the view that , with regard being had to the
Constitutional Court judgment of Solidarity on behalf of members v Barloworld
6
Equipment Southern Africa and Others 2, which held that the Labour Court may not
adjudicate a dispute about the procedural fairness of a dismissal for operational
requirements referred to it in terms of s 191(5)(b)(ii) of the Act, it did not have
jurisdiction to consider the procedural fairness of a retrenchment conducted in terms
of s 189A of the LRA.
[21] Turning to the substantive fairness of the dismissal, the court found that the
redirection of company money to the holding company in the manner as done
between Fusion and appellant, leading to the gradual transfer of the business and its
eventual voluntary liquidation and thereafter the s 197 transfer, supported the
contention that the retrenchments were a fait accompli. Further, the court found that
no evidence had been led to support the statement that a fair and objective selection
criteria had been used, or that any consideration of the alternatives to retrenchment
had been made. On that basis, the court found that the dismissals were
substantively unfair. The court a quo ordered the retrospective reinstatement of the
Affected Employees.
On appeal
[22] The appellant now seeks an appeal against the whole of the judgment of the
court a quo. The appellant advanced six points in support of its case, namely:
22.1. The court a quo made findings on issues that were not properly before
it, more particularly in respect to the selection criteria and the alternatives to
retrenchment. Alternatively, the court erred in finding that no evidence had
been led to establish substantive fairness in respect of the selection criteria
and the alternatives to retrenchment;
22.2. The evidence led at trial did not support the finding that the
retrenchment of the Affected Employees constituted a fair accompli,
particularly as the court was not empowered to consider issues of procedural
fairness;
22.3. The court erred in finding that the test for the fairness of the underlying
fairness;
22.3. The court erred in finding that the test for the fairness of the underlying
rationale was something other than whether the rationale was operationally
2 (2022) 43 ILJ 1757 (CC).
7
justifiable on rational grounds; particularly, that the Court was not entitled to
second-guess the employer’s rationale on how it had decided to conduct its
business;
22.4. The court failed to make a finding on the fairness of the underlying
rationale, i.e. the financial rationale for retrenchments. Alternatively, if the
court made such a finding by implication, it erred in finding that the rationale
was unfair;
22.5. The court erred in finding that the retrenchment of the Affected
Employees was substantively unfair; and
22.6. The court erred in finding that reinstatement was appropriate.
[23] The appellant argued that it was not the Affected Employees’ pleaded case
that their retrenchment was in some way substantively unfair due to the selection
criteria used or that alternatives to retrenchment existed, nor were these issues
included by the first respondent in the main portion of the second pre- trial minute
concluded between the parties as issues in dispute.
[24] As the contention went, the first respondent had only raised the issue of
selection criteria in the additional section of the pre- trial minute dealing with the
Judge President’s directives relating to retrenchment disputes, which was objected
to as selection criteria had not been pleaded.
[25] The appellant further stated that the Affected Employees had not raised that
any alternatives to retrenchment had existed; instead, the Affected Employees had
pleaded that, as they had not been provided with the relevant information and
financial documents, they were unable to participate meaningfully in the
retrenchment process.
[26] On the finding that the retrenchment of the Affected Employees was a fait
accompli, the appellant submits that it is unclear whether the court a quo had found
that the retrenchments were indeed a fait accompli , as the court had merely
remarked that the Affected Employees’ proposition in this regard had been
remarked that the Affected Employees’ proposition in this regard had been
strengthened. Nevertheless, the appellant submits that the findings that the
retrenchments were a foregone conclusion are wrong on the basis that ( i) the
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Affected Employees sought to challenge the procedural fairness of their dismissals
based on the allegation that their retrenchments were presented as a fait accompli ,
with no allegation of substantive unfairness linked to this allegation; and ( ii) the
allegation of a dismissal being a fait accompli speaks to procedural fairness and that,
as the court had found that it did not have the necessary jurisdiction to determine
allegations of procedural fairness, the allegation that the retrenchment was a fait
accompli should not have been decided by the court.
[27] On the test used to determine the fairness of the rationale advanced, the
appellant impugned the court a quo’s finding that the test was something other than
whether the rationale was operationally justifiable on rational grounds and took issue
with the court’s intimation that a rational decision cannot be a fair decision because a
fair decision is one that balances the interests of both the employer and employee.
[28] In the Affected Employees’ statement of case, the issues for determination
included whether Fusion had taken steps to inter alia slow down steps and whether
Fusion’s decision to conduct retrenchment processes was premised on a fair
rationale, and that was a challenge to the substantive fairness of the retrenchments.
However, the court a quo, in discussing these issues, held that this strengthened the
proposition that the retrenchments were a fait accompli, a procedural fairness issue.
Thus, so the argument goes, the court a quo did not make a finding as to the
fairness of the rationale, which argument is bolstered by the court a quo’s rejection of
the appellant’s evidence relating to the rationale. Thus, the appellant submitted that
the court erred in not making a definitive finding as to the fairness of the rationale.
[29] Finally, the appellant submitted that the record of evidence was sufficient to
establish that it met the test that the rationale for retrenchment was operationally
establish that it met the test that the rationale for retrenchment was operationally
justifiable on rational grounds and that, in coming to a contrary decision, the court a
quo erred in finding that the Affected Employees should be reinstated.
[30] The Affected Employees, on the other hand, contended that, despite what
was contained in the s 189(3) notice regarding the reasons for the proposed
retrenchments, the true reason for the retrenchments related to the move/transfer of
various business units of Fusion to the appellant. In its evidence, the Affected
9
Employees submitted that Fusion’s finances, contrary to what was contained in the s
189(3) notice, actually showed an increase in revenue and profits (after tax) in the
year ending 31 March 2020.
[31] Contrary to the s 189(3) notice and the appellant’s submissions, the Affected
Employees' submissions paint a picture of a fairly complex accounting exercise
intended to transfer/move the business of Fusion to the appellant without the
knowledge of the Affected Employees, including actions taken before, during and
after the retrenchment process. These actions included: (i) the unilateral decision to
discontinue providing services in terms of Fusion’s reseller agreements which had
generated revenue for the business in excess of R19 million during the period April
to September 2020; (ii) the transfer of the clients of Fusion to the appellant some
months before the issuing of the s 189(3) notice; (iii) the unilateral levying of a
‘administration and management ’ fee of R12 million as demonstrated in the
2020/2021 annual financial statements where no such fee had been imposed in the
preceding year and where no evidence existed that any actual expenses had been
incurred between the group entities; and (iv) a sharp increase (in excess of R10
million) in 2021 of the ‘lease rentals on operating lease’ costs.
[32] The Affected Employees argued that Fusion had manufactured the very
financial crisis and increase in client turnover that it sought to rely on in terms of its s
189(3) notice to justify its decision to engage in a retrenchment process and that
such decisions, particularly with respect to the movements of business units and
transfer of clients from Fusion to the holding company , were taken without any
explanation, discussion or consultation with the Affected Employees, though it
should have been obvious that these decisions would impact the employees. It
further submitted that the financial downturn experienced by Fusion amounted to
further submitted that the financial downturn experienced by Fusion amounted to
accounting entries which, on proper consultation with the Affected Employees, could
have been easily reversed. Thus, they argue that their dismissal was substantively
unfair.
[33] In their submissions, the Affected Employees have also revisited the issue of
procedural fairness following the handing down of the Constitutional Court judgment
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of Regenesys Management (Pty) Ltd v Ilunga and Others 3 (Regenesys), delivered
on 21 May 2024, particularly with respect to the non- disclosure of the 2020 audited
financial statement. As the submission went, the audited financial statements had
been requested on the basis that the documentation would show that the s 189(3)
notice was misleading with regards to the reasons for retrenchment and that the
failure to disclose the requested information rendered the dismissal procedurally
unfair.
Procedural fairness
[34] I deal first with the issue of procedural fairness for the purposes of disposing
of the first respondent’s submission that the Labour Court had jurisdiction to decide
the issue of procedural fairness in light of the findings of Regenesys.
[35] The Constitutional Court in Regenesys clarified the position relating to the
adjudication of procedural unfairness complaints by the Labour Court in accordance
with s 189A(18). Section 189A(18) provides that:
‘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).’
[36] The Constitutional Court held that, although s 189A(18) ousted the Labour
Court’s jurisdiction to procedural fairness complaints in large- scale retrenchments
under s 191, the same could not be said for cases where a referral was made in
terms of s 189A(13). As such, the court a quo was correct in finding that, without a s
189A(13) application before it, it did not have jurisdiction to decide the procedural
fairness complaint.
Selection criteria
3 (2024) 45 ILJ 1723 (CC).
11
[37] The appellant submits that the issue of selection criteria and alternatives to
retrenchment had not been properly before the court a quo, and as such, the court
could not have made a finding in respect of these two issues.
[38] In their statement of case, the Affected Employees alleged that, despite
Fusion’s correspondence indicating that the parties had reached consensus on the
selection criteria, the Affected Employees had not agreed to the selection criteria as
they were still engaged in discussing the rationale of the retrenchment. Similarly, in
the second practice note references are made with respect to the Affected
Employees impugn of the selection criteria applied, namely under the section
headed ‘facts which are common cause’ , where the Affected Employees raised that
they had not agreed to the selection criteria imposed; under the section headed
‘facts in dispute’, where the court a quo was called to decide, among other things,
‘whether the Affected Employees had agreed/consented to the applied selection
criteria of “performance” ’; and under the section headed ‘ was the selection criteria
fair?’, the Affected Employees answered that ‘ [Affected Employees] contend that no
fair selection criteria were applied’ and ‘the [first respondent’s] did not aver in their
statement of case that the selection criteria was unfair and cannot now effectively
plead this issue in the pre- trial minute’ . Finally, and more generally, the second
practice note indicates that the court a quo was called to determine whether their
dismissal was substantively and procedurally unfair.
[39] The court a quo found that, as the Affected Employees had generally pleaded
that their dismissals were substantively unfair, it was incumbent upon the court to
consider the fairness of the selection criteria applied, despite same not being
expressly pleaded.
[40] The Affected Employees’ pleaded case is that the selection criteria were not
[40] The Affected Employees’ pleaded case is that the selection criteria were not
agreed upon between the parties, despite Fusion’s correspondence to the contrary.
They did not, in their statement of case, plead that, in addition to the selection criteria
not being agreed to, such criteria were neither fair nor objective.
[41] Similarly, the issue of alternatives to retrenchments was not pleaded by the
Affected Employees; this was clearly due to the non- disclosure of the financial
12
documents the Affected Employees needed to support their claim that the true
rationale for the retrenchments was not as what was reflected in the s 189(3) notice.
The appellant is correct in stating that no alternatives had been proffered (given the
lack of disclosure), and as such, the court a quo was incorrect in finding that the
appellant had failed to lead evidence of its consideration of alternatives to
retrenchment by the employees as no such alternatives had been presented during
the consultation.
Dismissal as a fait accompli and rationale
[42] The appellant contends that the finding that the retrenchment of the Affected
Employees was a fait accompli is erroneous on the basis that the allegation that a
dismissal is a foregone conclusion is an allegation that speaks to procedural fairness
and not the substantive fairness of the dismissal, particularly as the unfairness arises
due to a pre-determination which hampers the consultation process.
[43] It has been accepted by the Labour Court
4 that the line between procedural
unfairness and substantive unfairness can be difficult to detect in dismissals for
operational requirements. This is demonstrated in the second judgment of Unitrans
Zululand (Pty) Ltd v Cebekhulu.
5, wherein it was held that ‘ there may be
circumstances in which the procedural fairness and the substantive fairness of a
dismissal are so inextricably linked that the dismissal cannot be fair in the absence of
a fair procedure. There may also be circumstances in which it will be impossible after
the event to determine that the dismissal was fair despite the failure to follow a fair
procedure’.
6
[44] Zondo JP (as he then was), writing for the majority and in carving out a
distinction between procedural and substantive fairness, stated as follows:
‘… In relation to a dismissal, procedural fairness relates to the procedure
followed in dismissing an employee. Substantive fairness relates to the
followed in dismissing an employee. Substantive fairness relates to the
existence of a fair reason to dismiss. In relation to substantive fairness the
4 See: Watts v Fidelity Corporate Services (Pty) Ltd [2007] 6 BLLR 579 (LC).
5 [2003] 7 BLLR 688 (LAC) at para 25.
6 Ibid at para 48.
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question is whether or not, on the evidence before the court, and not on the
evidence produced during the consultation process, a fair reason to dismiss
existed. With regard to procedural fairness, the question is not whether a fair
procedure was followed in court. The question is whether, prior to the
dismissal, the employer followed a fair procedure. The result hereof is,
therefore, that, if the evidence placed before the court establishes a fair
reason to dismiss which was present at the time of the dismissal, the
dismissal is substantively fair. It does not matter, for purposes of determining
the substantive fairness of the dismissal, that such reason was not the subject
of discussion during the consultation process.’
[45] However, this distinction is not always clear cut, as held in Banks & another v
Coca-Cola SA (A Division of Coca-Cola Africa (Pty) Ltd)
7, where it was stated that:
‘The bifurcation in procedure established by section 189A is more easily
established in legislation than it is applied in practice. There are a number of
reasons why disputes about dismissals for reasons based on employer’s
operational requirements do not always lend themselves to the convenient
compartmentalisation contemplated by the LRA, chief amongst them being
the extent to which, in the real world of work, substantive and procedural
issues are intertwined.’
[46] In this case, the reason for the dismissal, as expounded by the s 189(3) notice
(and as proffered in evidence before the court a quo), was, in the view of the
Affected Employees, at odds with the true reason for the contemplated
retrenchments. As such, and in a bid to strengthen their argument that the notice had
attempted to mislead them as to the true reason for the dismissals, the Affected
Employees sought the disclosure of Fusion’s financial records. It is clear that the
substantive fairness element (the reason for dismissal) is so closely linked with the
substantive fairness element (the reason for dismissal) is so closely linked with the
procedural fairness element (disclosure of information during consultation) that a
clear severing of the elements of substantive fairness from those of procedural
fairness, as proposed by the appellant, is not possible on the facts of this case,
7 [2007] 10 BLLR 929 (LC) at para 11.
14
particularly with respect to the question that the dismissals of the employees were a
foregone conclusion – a fait accompli.
[47] On the basis of the above, it is necessary to consider whether the court erred
in its application of the test for determining the substantive fairness of the dismissals.
[48] This Court in National Union of Food Beverage Wine Spirits & Allied Workers
v Coca Cola Beverages SA (Pty) Ltd
8 summarised the development of the test for
determining substantive fairness as follows:
‘[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. A different approach was later adopted in BMD Knitting Mills (Pty)
Ltd v SA Clothing & Textile Workers Union where Davis AJA rejected the test
for fairness predicated on the approach to judicial review of administrative
action and said the following:
“The word “fair” introduces a comparator, that is a reason which must be fair
“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
8 (2024) 45 ILJ 1813 (LAC).
15
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 Assurance
Co SA Ltd, the Labour Court said the following:
“[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
Discreto and BMD Knitting Mills”.
[41] … Although certain of the English authorities to which the Labour
Court referred in its judgment may reflect an overly deferential approach, the
Court referred in its judgment may reflect an overly deferential approach, the
Labour Court acknowledged that fairness, rather than correctness, was the
applicable benchmark and that the court was obliged to determine the
rationality between the retrenchment and CCBSA’s commercial objectives
and in particular, whether the decision to retrench was a reasonable option in
all the circumstances. This approach cannot be faulted.’
16
[49] Thus, a decision to retrench will be substantively fair if it is a rational and
reasonable response to the operational requirements predicament faced by an
employer.9
[50] In this dispute, the evidence presented to the court a quo showed that in the
time before the s 189(3) notice was issued, Fusion had either slowly moved over its
business to the appellant, as demonstrated through the transfer of its clients and
profit making units or had otherwise cancelled revenue generating contracts for
reason unexplained and paid higher -than-usual rentals and management fees to the
holding company during the 2020 financial year. These actions were at odds with the
reasons proffered to its employees, including the Affected Employees, who were told
that the reasons for the contemplated retrenchments were due to inter alia financial
downturns and client churn when the reality showed that it was the decisions of the
Fusion that had led, at least in part, to the financial difficulties that it had found itself
in. I do not dispute that the reasons set out in the s 189(3) notice were not true; they
simply did not outline the entirety of Fusion’s financial position, particularly where it
related to the decisions taken by Fusion, which directly impacted its finances.
[51] On this basis, the rationale set out in the s 189(3) notice was not a true
reflection of the reason for the contemplated dismissals; rather, it was the movement
of various business units of Fusion to the holding company and the appellant which
prompted the retrenchment of the affected employees.
[52] The movement and transfer of the business of Fusion is not a transgression
and the appellant did not proffer a business rationale for moving Fusion’s business
but rather tried to justify its reason for embarking on the retrenchment process as
Fusion’s financial downturn, which was clearly not the case; this was a self -created
financial crisis. Had the appellant explained that the reason for the retrenchment
financial crisis. Had the appellant explained that the reason for the retrenchment
exercise was that it wished to restructure its business, which they only really raised
at the appeal, that might perhaps have justified its actions. As it stands, the business
of Fusion is disconnected from the economic or financial reasons put forward by
9 See: Shushu & others v Distell Ltd (2025) 46 ILJ 1000 (LC).
17
Fusion, and on that basis, the retrenchments of the Affected Employees were
substantively unfair.
[53] On this basis, the appeal stands to be dismissed.
Costs
[54] It is trite that the principle, costs follow the result, does not apply within the
context of labour disputes , and rather, it is a matter of law and fairness in terms of
which the issue of costs is decided. Having considered the facts, I believe that this is
a matter where no order as to costs should be made.
Order
1. Condonation for the late filing of the record is granted, and the appeal
is reinstated.
2. The appeal is dismissed.
3. There is no order as to costs.
B Waglay
Savage JA and Musi AJA concur.
APPEARANCES:
FOR THE APPELLANT: Adv. Redding SC
Instructed by Solomon Holmes Attorneys
FOR THE FIRST RESPONDENT: Adv. Oosthuizen SC
Instructed by Mcaciso Stansfield Inc