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[2026] ZALCCT 27
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Independent Commercial, Hospitality and Allied Workers Union (ICHAWU) and Others v Distri George (Pty) Ltd ta Distriliq (2025/246180) [2026] ZALCCT 27 (9 February 2026)
THE
LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
Case
No:
2025-246180
(1)
Reportable: NO
(2)
Of interest to other Judges: Yes
09
February 2026
In
the matter between:
INDEPENDENT
COMMERCIAL, HOSPITALITY
AND
ALLIED WORKERS UNION (ICHAWU)
EMPLOYEES
LISTED IN ANNEXURE “A”
First
Applicant
Second
and Further Applicants
And
DISTRI
GEORGE (PTY) lTD t/a DISTRILIQ
GEORGE
First
Respondent
Heard
:
23 January 2026
Delivered
:
09 February 2026
Summary:
(s 189A(13) – return day –
Facilitation process – union should deal
with dislosure disputes timeously under the facilitator –
Requests for significant
disclosure at a late stage of the 60 day
process, cannot justify prolonging the consultation – Company
selecting employees
on a basis not discussed in the consultation
process, procedurally unfair - limited extension of
consultation process owing
to rule
nisi
extension of employment without
simultaneously requiring consultation.
JUDGMENT
LAGRANGE, J
Introduction
[1]
On 23 December 2025, a
rule nisi
was issued on an urgent basis
in the following terms:
‘
ORDER
1.
Non
compliance with the
forms and service and time periods provided for in the Rules of
Court, is dispensed with, and the application
is heard as an urgent
application as contemplated in Rule 35 read with Rule 38 of the Rules
of the Labour Court is condoned.
2. A rule nisi is issued
calling upon the Respondent to show cause on 23 January 2026 at 10h00
why the following orders should not
be made:
2.1 Declaring that the
Respondent has not complied with a fair procedure contemplated in
section 189 of the Labour Relations Act
66 of 1995 (‘the LRA’).
2.2 Declaring that the
facilitation process conducted under CCMA case number (WEGE 2762/25
was prematurely terminated and did not
constitute meaningful
consultation as required by sections 189 and 189A of the LRA.
2.3 Declaring that the
Respondent failed to comply with s189(3) by failing to identify the
affected employees by name until the
date of the termination of their
contracts of employment thereby denying meaningful consultation on
the selection criteria and
their application to specific individuals
.
2.4 Interdicting and/or
restraining the Respondent, in terms of section 189A(13)(b)of the
LRA, from dismissing an employee prior
to complying with a fair
procedure; c) of the LRA that all 42 employees identified in Annexure
“A” be reinstated in
their employment with the Respondent
on the same terms and conditions applicable immediately prior to the
purported retrenchments,
pending compliance with a fair procedure.
2.5 Directing the
Respondent, in terms of section 16 read with 189(4)(a) and (b) read
with section 189A(16) of the LRA to disclose
to the Applicant’s
auditors the following information within 14 (fourteen) days of the
date of this order:
2.5.1 Complete bank
statements for the 12-month period preceding the date of this order;
2.5.2
Cash
flow forecasts and
projections for the next 24 months;
2.5.3 Supplier
schedules and ageing analysis;
2.5.4 Complete sales
ledger and debtor ageing reports;
2.5.5 VAT, PAYE,
and UIF returns for the past 24 months
2.5.6 Management and
director headcount, remuneration, and any salary adjustments since
January 2024 (information promised “asap”
on 26 November
2025 but never provided);
2.5.7 Complete details of
all payments to Silver Dawn Investments 200 CC and any other related
parties, including the dates and
timing of such payments;
2.5.8 Board and
management meeting minutes relating to the decision to retrench;
2.5.9 Complete details of
the labour broker (Workforce) arrangement, including monthly costs,
worker numbers since January 2025,
and the rate charged per category
of worker (driver and assistants);
2.5.10 Any bonus,
dividend, or other distributions to directors or shareholders in the
past 24 months.
2.6 Directing the
parties, in terms of section 189A(13) of the LRA, alternatively
189A(13)(b) or (c) to engage in meaningful
consultation for a
period of not less than 30 (thirty) days from the date of provision
of the information set out in prayer 2.5
above, such consultation to
take place under the auspices of the CCMA or as otherwise directed by
this Court..
2.7 Interdicting and
restraining the Respondent from proceeding with any retrenchments
until such time as a fair procedure has been
followed.
2.8 Directing the
Respondent to pay the costs of this application on the scale as
between attorney and client, alternatively on
the party and party
scale.
3. Pending the return
date, the Respondent is interdicted from implementing the
terminations of the employees listed in Annexure
“A”;
alternatively the employees listed in Annexure “A” are
reinstated pending the return date and the
Respondent is directed to
permit the employees to continue working and to pay their
remuneration pending the return date.
4. Respondent may
anticipate the return date on 48 hours' notice.’
(
sic
)
[2]
It should be noted that the relief sought and granted did not require
any consultations or disclosure of information to
occur during the
currency of the interim order. Any order rebooting the consultation
process that might take place would only take
effect when the final
order was made. Accordingly, the interim order did nothing to advance
the consultation process but merely
served to preserve the employment
of the applicants pending the possible recommencement of the process.
[3]
The hearing on the return day was conducted on MS Teams and judgment
was reserved after hearing argument from both parties.
Neither party
filed any supplementary affidavits.
Brief chronology
[4]
The second and further applicants (‘the employees’) are
employed by the respondent (‘Distri George’
or ‘the
company’) which conducts a beverage distribution business.
[5]
In December 2024, the first applicant (‘ICHAWU’ or ‘the
union’) settled a wage dispute which resulted
in significant
increases of approximately 68%, 62%, 25% and 54% being awarded to
general workers, telesales staff and supervisors
respectively. The
settlement agreement was only concluded after the union’s
members had embarked on strike action. While
the union alleges that
the increases reflected the company ‘catching up’ on
statutory obligations, it maintains that
it had always been compliant
and the increases were extraordinary.
[6]
The company denied it only started raising the question of the
unaffordability of the increase in May 2025 when it engaged
an
employers’ organisation (‘UEO’) as advisers.
[7]
In any event, on 18 Aug 2025, the company sent an email attaching an
incomplete s 189(3) notice template requesting
a meeting with
the union. This was followed by a completed s 189(3) notice dated 27
Sep 2025 and sent by UEO on behalf of the company.
Although the union
initially claimed the notice was only receive on 2 October 2025 as an
attachment to the company’s CCMA
Form 7.20 (a request for
s 189A Facilitation), it subsequently agreed that it had been
received on 27 September.
[8]
Despite not having received a complete s 189(3) notice on 18 August
2025, on that date the union requested the company’s
Annual
Financial Statements for 2023 to 2025, the number of employees
affected, and various details about the UEO.
[9]
Amongst other things, the s 189(3) notice of 27 September stated that
the company could no longer sustain the salary bill
on the current
rates of pay which equated to R 3,28 million extra per year. It
claimed not to have replaced staff who had left
and had engaged
suppliers in an effort to reduce costs, but nevertheless proposed a
35% reduction in wages as an alternative to
retrenchment. It
estimated about 40 employees could be affected.
[10]
Facilitation meetings under the auspices of the CCMA were held on 20
October and 14 and 20 November 2025.
Facilitation Meeting of
20 October 2025
[11]
At the first facilitation meeting held on 20 October 2025, the
Respondent explained its operational rationale for the
proposed
retrenchment process. It stated that the December 2024 wage
settlement had significantly increased its payroll costs and
had
created financial strain which, in its view, necessitated
consideration of retrenchments. The Respondent presented these
concerns
as genuine operational requirements and indicated that,
although retrenchment was contemplated, it regarded salary reductions
as
the primary alternative. However, it argued that the reductions it
sought would not amount to completely retracting the 2024 increases
previously awarded as a result of the collective agreement. It
claimed the proposed reductions would mean that employees would
effectively still receive a ‘reasonable increase’.
[12]
The union disputed the legitimacy of the company’s proposal,
stating that the wage increases had been voluntarily
agreed to by the
employer and could not credibly serve as the basis for a sudden
retrenchment exercise less than a year later.
In the founding
affidavit, the union also highlighted that a company representative
apparently expressly disavowed the notion that
the company was
pleading poverty.
[13]
The union requested a list of names of employees who might be
affected and company financial information in general terms,
apart
from specifically asking the company to provide audited financial
statements. It also asked for the increases given to other
categories
of staff and the cost of staff provided by labour brokers. The
company agreed to provide audited financial statements
and the
categories and number of affected employees.
[14]
The main focus of the first meeting concerned the rationale for the
proposed retrenchments and dealt with some aspects
of disclosure of
information. The Union insisted on receiving the outstanding
documents before further meaningful consultation
could continue.
Provision of financial
statements
[15]
On 31 October 2025, the company’s accountants forwarded what
seem to have been the provisional financial statements
of the company
for the financial year ending 28 February 2025. On 4 November, after
he had reviewed the financial statements, the
union’s auditor
advised the union of extensive additional financial information that
was needed to determine the real state
of the company’s
finances. Despite receiving this detailed brief from the auditor, at
that stage, the union did not request
the company to provide any of
the additional information he had identified.
Facilitation
Meeting of 14 November 2025
[16]
The second facilitation meeting took place on 14 November 2025. The
union indicated to the employer that its auditor
had raised certain
‘red flags’ after reviewing the financial statements and
that further clarification and information
was needed in order to
consult meaningfully. The company acknowledged that the union raised
several issues concerning the financial
disclosures during the
meeting, to which it responded it had already made the ‘
audited
financials’
available. Both parties’ accounts are
vague about the specific financial issues raised. It appears
the union reiterated
its request for the identification of affected
employees.
[17]
It seems that once again the primary focus of the discussion between
the parties concerned the rationale for the proposed
retrenchments.
The union makes much of the fact that the operations manager
commented to the effect that it was not the aim
of the company to
retrench but to reach an agreement on a salary reduction. It also
noted that the company mentioned the fact that
employees provided by
a labour broker were working at significantly lower rates and
highlighted that management disclosed it had
in fact replaced
permanent workers who had left with staff provided by a labour
broker.
[18]
The Respondent continued to advance the salary reduction
proposal as the preferred alternative to retrenchment and
urged
employees to consider the significant wage cuts as the only viable
means to avoid dismissals. The Union rejected this position,
stating
that the magnitude of the proposed salary reductions—ranging
between 27% and 35%—was impossible to evaluate
without a
complete financial picture and that the proposal appeared aimed at
undoing a collectively bargained agreement rather
than addressing
demonstrable operational hardship.
Facilitation
Meeting of 20 November 2025
[19]
The final
facilitation meeting was convened on 20 November 2025. On the morning
of this meeting, a few hours prior to the meeting,
the Union
delivered a detailed position paper containing
eleven
specific categories of information requests
,
formally setting out the documents required to complete the
consultation process, namely:
19.1
bank statements for all operating and related party accounts for the
preceding 6 to 12
months;
19.2
cash flow forecasts for the next 12 to 18 months;
19.3
records of related party transactions, including loan
agreements, lease agreements,
and proof of payments;
19.4
payroll journals, payslips, and EFT payment confirmations;
19.5
supplier payment run schedules and proofs of payments;
19.6
VAT, PAYE, and UIF returns with supporting proof of submissions and
payments;
19.7
management salary and bonus information for the preceding 12 to 24
months;
19.8
debtor ageing schedules and sales ledgers;
19.9
documentation relating to cost saving measures considered or
implemented;
19.10 board
or management minutes related to financial decisions, and
19.11
schedules explaining the timing of rent payments and intra group
financial flows.
[20]
The union also made a ‘without prejudice’ proposal that
it was willing to consider reasonable alternative
cost saving
measures to be applied fairly across the organisation including
management, but excluding any reduction in members’
remuneration or conditions which were less favourable. It is
difficult to interpret the full import of this suggestion, but
judging
from other comments in the document, it seems to reflect that
the higher earners and management accounted for a large proportion
of
the salary bill and savings could be made there.
[21]
During the meeting, the Respondent declined to provide most of the
documents listed in the eleven point request,
asserting that
many of them were irrelevant to the consultation process or that the
audited financial statements already disclosed
constituted sufficient
information. The Respondent stated that it would not “respond
to each and everything” contained
in the Union’s position
paper and expressly refused to disclose key items such as bank
statements, supplier payment records,
detailed payroll records,
tax compliance documentation, related party agreements,
cash flow forecasts, and management
remuneration data.
Nevertheless, the company indicated that it would, in the “interest
of meaningful consultation,”
attempt to provide aggregated
information regarding management level remuneration as soon as
possible.
[22]
During the course of the meeting, the company did reveal that the
costs of staff provided by labour brokers was significantly
lower
than the employment costs of permanent staff.
[23]
The Union objected strenuously to the Respondent’s refusal to
disclose the requested information, stating that
without these
documents it could not meaningfully evaluate whether the Respondent
was in financial distress, nor could it assess
the necessity of the
salary cut proposal or formulate alternatives aimed at
preventing retrenchment. The Union further indicated
that
consultation had not been exhausted and that additional facilitation
sessions were required.
[24]
The company was unreceptive to the extension of the facilitation
adopting the position that consultation had run its
course and that
no progress could be made. Despite the Union’s objections, the
facilitator recorded the facilitation process
as concluded on 20
November 2025. He advised the union to approach the Labour Court if
it wished to take matters further.
[25]
Consequently, the facilitation process ended with the Union having
outstanding information requests, a lack of consensus
on the
justification for retrenchments, and no consensus on the
identification of affected employees or the application of selection
criteria.
Post facilitation
developments
[26]
The company issued individual salary reduction letters to 42
employees on 21 November 2025, requiring them by 26 November
to
accept or decline the proposed salary reduction ‘
as a
reasonable alternative to retrenchment’
. The salary
reductions proposed varied between 27% and 35 %. During the course of
consultations it had modified its proposal to
reduce the remuneration
of drivers, warehouse and general workers from 35 % to 27 %. This was
the first time it revealed the employees
it had identified for
retrenchment.
[27]
On 26 November the company did respond to the union’s position
paper, even though it had not been willing to extend
the facilitation
process beyond 20 November. It stated that it viewed the consultation
process as having ended on the latter date.
It responded only to
information requests which directly impacted on the s 189A process.
[28]
In the response, the company detailed a number of other cost saving
measures it had implemented. It did undertake to
provide the number
of managerial posts and the aggregate cost of management remuneration
for the seven month loss making period.
It provided some
information concerning related party outflows and payment timing and
confirmed the payroll journals requested
by the union would not show
any arrears in remuneration payments. It stated that supplier
payments are a priority and not a factor
the union could influence.
It disputed the need for cash-flow forecasts because it had currently
experienced a seven month loss
of R 2.58 million and reliable forward
looking forecasts were simply not possible given cost uncertainties
and market underperformance.
It was willing to provide its
accountant’s confirmation that it was tax compliant but not to
provide the returns themselves.
The company disputed the relevance of
the sales ledger and debtor ageing to the question of finding
alternatives. It refused to
provide board meeting minutes, which it
regarded as privileged and argued that the board’s decisions
were reflected in the
audited statements and management accounts
provided.
[29]
On 27 November 2025, the company issued termination letters with the
effective termination date set for 24 December 2025.
[30]
The union made two requests on 27 and 28 December 2025 for an
extension of the facilitation process by 60 days.
[31]
On 3 Dec 2025, the facilitating commissioner advised the parties that
the CCMA could not extend the consultation period
without their
agreement and advised the union that it could approach the Labour
Court, which prompted this urgent application.
Merits of s 189A(13)
application
[32]
Section
189A(13) offers a way for employees to ensure that problems with the
retrenchment consultations in large scale retrenchments
can be
rectified before the process runs its course. Rather than conducting
a post mortem on defects in the consultation many months’
hence
in a trial, the consultation process can be set on the right track so
proper consultation takes place at the time it is supposed
to
[1]
.
For the sake of convenience, the full text of the provision and
related ones are set out below:
‘
(13)
If an employer does not comply with a fair procedure, a consulting
party may approach the Labour Court by way of an application
for an
order-
(a)
compelling the employer to comply with a fair procedure;
(b)
interdicting or restraining the employer from dismissing an employee
prior to complying with a fair procedure;
(c)
directing the employer to reinstate an employee until it has complied
with a fair procedure;
(d)
make an award of compensation, if an order in terms of paragraphs (a)
to (c) is not appropriate.
(14) Subject to this
section, the Labour Court may make any appropriate order referred to
in section 158 (1) (a).
(15) An award of
compensation made to an employee in terms of subsection (14) must
comply with section 194.
(16) The Labour Court may
not make an order in respect of any matter concerning the disclosure
of information in terms of section
189 (4) that has been the subject
of an arbitration award in terms of section 16.
(17) (a) An application
in terms of subsection (13) must be brought not later than 30 days
after the employer has given notice to
terminate the employee's
services or, if notice is not given, the date on which the employees
are dismissed.
(b) The Labour Court may,
on good cause shown condone a failure to comply with the time limit
mentioned in paragraph (a).
(18) 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)’
[33]
The alleged defects in the consultation
process identified by the union are the following:
33.1
The retrenchment process was a sham to
compel employees to accept salary cuts.
33.2
The company had failed to provide
information. More particularly, on 26 November it had refused nine of
the eleven requests made
by the union on 20 November, and it had not
provided the management salary information, which it had agreed on 26
November to provide
as soon as possible.
33.3
The facilitation was prematurely terminated
on 20 November but on 26 November the company still responded to the
union’s requests,
which it made on 20 November, demonstrating
that the facilitation should have continued.
33.4
The company unreasonably refused to extend
the facilitation process.
33.5
The five-day period provided for employees
to accept the salary reduction the company had decided to implement
as an alternative
to retrenchment was unreasonably short.
33.6
The company had avoided consulting on
severance pay in circumstances where the unreasonable refusal to
accept the drastically reduced
salaries did not amount to alternative
employment within the meaning of s 41(4) of the Basic Conditions of
Employment Act, 75 of
1997 (the BCEA’). Accordingly, it was
obliged to consult over severance pay.
33.7
The company did not identify the employees
likely to be affected by retrenchment in its s 189(3) notice.
[34]
As will emerge from the discussion below,
not all of these complaints point to a failure in the consultation
process
The allegedly sham nature
of the retrenchment process
[35]
In essence, this contention appears to be related to the union’s
contention that the company embarked on the retrenchment
exercise not
because of serious financial difficulties it was facing, but because
it wanted to claw back the salary increases it
had agreed to in
2024. This allegation attacks the bona fide rationale of the
employer for contemplating retrenchment and
is really a claim that
there is no genuine economic pressure the employer is facing. It is
simply using a retrenchment exercise
to circumvent the outcome of
collective bargaining. As such, it goes to the heart of the question
whether retrenchment is needed.
Accordingly, it is an issue relating
to the substantive justification for retrenchments and cannot be
resolved by trying to get
the consultation process back on track.
The failure to consult
over severance pay
[36]
Because of the manner in which the company proceeded it pre-empted
consultation over severance pay, by simply proceeding
with the
retrenchments. This action gives rise to another dispute about
whether it was unreasonable of employees to refuse
to accept the
large wage reductions proposed by the employer as an alternative to
being retrenched under s 41(4) of the BCEA and
must be resolved in
terms of that Act. That said, it does not detract from the fact that
the company and union did not engage in
any consultations on
severance pay by the time the company implemented the retrenchments,
and aside from what it stated in it s
189(3) notice, in which it
proposed the statutory payment of one week’s pay for each
completed year of service. Accordingly,
this is a procedural defect
in the consultations.
The early termination of
the facilitation and consultation process
[37]
At the time the process was concluded on 20 November, it is apparent
that a number of issues had not been discussed.
The parties do
not appear to have got beyond arguing over the rationale
for the retrenchment and whether there were
other alternatives to
avoid any retrenchment. The union believed that consultations could
not proceed on either of these
issues without further disclosure of
information. It argues that the fact the employer only
responded on 26 November to its
request for information made on 20
November demonstrates there were still matters they could have
engaged with after the termination
of the facilitation.
[38]
It is noteworthy that the detailed set of information required by the
union which it submitted on 20 November, was known
to it since 4
November, and the sixty day period since the s 189(3) notice was
served on it was due to expire in 7 days. In terms
of s 189A(7) of
the LRA, the expiry of the 60 day period gives the employer the right
to issue notice of contracts to employees
(s 189A(7)(a)), and the
union or employees acquires the right to strike or refer a dispute
over the substantive fairness of the
dismissal the CCMA or relevant
bargaining council (s 189A(7)(b)). In other words it did not
articulate its demand for a significant
amount of information until
the sixty period was nearing expiration, despite being advised more
than two weeks earlier to request
this information.
[39]
Had the
union sent a written request to the company more promptly after
receiving their auditor’s opinion on what was required
it could
have asked for a response before the second facilitation meeting even
took place on 14 November. Assuming the response
would have been the
same or similar to what the company provided on 26 November, the
union could have declared a dispute over the
failure to disclose
information by the second facilitation meeting and asked the
facilitator to direct the company to provide the
relevant documents
exercising his power under Regulation 5(1) of the Regulations for the
Conduct of Facilitations in terms of Section
189A
[2]
.
[40]
In terms of Regulation 6(3) any meetings convened for the purposes of
the facilitator arbitrating a dispute over the
disclosure of
information are not considered to be one of up to four facilitation
meetings the facilitator is supposed to conduct
under Regulation
6(1).
[41]
I mention these Regulations, only because they demonstrate that a
party that is unhappy about the disclosure of information
by the
other party, has available to it a dispute mechanism, which is built
into the facilitation process and which obviates the
need to refer a
discreet dispute over non-disclosure under s 16 of the LRA. As the
union only raised an extensive list of items
it wanted disclosed at
the eleventh hour, it only has itself to blame that its request
overran the 60 day period. In my view, it
is disingenuous of the
union to raise a complaint that the company prematurely ended
consultations, when the principal issue it
argues should have been
dealt with was its belated request for disclosure of a considerable
range of information.
[42]
It must be
noted in this regard that the facilitator does not have the power to
suspend the operation of the 60 day period, even
though the CCMA
director after consulting the facilitator, may increase the number of
meetings the facilitator must conduct with
the parties
[3]
.
Any extension of the 60 day period requires the consent of both
consulting parties.
The company’s
failure to agree to extend the consultation process
[43]
This point is intrinsically linked to the issue above and is
susceptible to the same criticism, namely that the ostensible
need
for an extended consultation process which is generated by a delayed
engagement by the union is one that is self-generated.
The
responsibility for there being insufficient time is not attributable
to the company in this instance, and for that reason cannot
be
employed as a justification for extending the consultation process.
[44]
However, one consequence of the termination of consultations on 20
November was that the company never consulted over
the selection
criteria it actually applied and gave effect to
after
ending
the consultation process. This is bound up with the period it gave to
employees to consider whether to accept the salary
reductions and the
related issue of the selection method it ultimately adopted.
Five day period for
employees to consider whether to accept the salary reduction proposal
as an alternative to retrenchment.
[45]
In part this complaint echoes some of the union’s argument
about premature termination of consultation when disclosure
of
information was still outstanding. In the absence of such disclosure,
the employees could not make an informed choice between
accepting a
wage cut or accepting retrenchment. In any event the union
argued that the five day period was objectively too
short for them to
weigh up the long term consequences of accepting or rejecting the
proposal.
[46]
The company’s argument was that the justification for the five
day notice period, was linked to its substantive
reason for embarking
on the retrenchment when it did and accordingly the timing of the
retrenchment was not a procedural question.
This seems correct.
[47]
Nonetheless, it does not detract from the fact that the company never
revealed its actual method of selection before
notifying the
employees individually that they would be retrenched if they failed
to agree to the proposed wage reduction.
The company’s
failure to name employees likely to be affected by retrenchment
[48]
In its s 189(3) notice the company stated that about 40 employees may
be affected, ‘
depending on the ability of the parties to
reach consensus, which would drastically reduce the number’.
The company argues that s 189(3)(c ) did not require it to do
more than that. Insofar as the notice is concerned that is correct,
but it also proposed that LIFO subject to the retention of key
skilled people would be applied in selecting retrenchees. At no
stage
prior to issuing the letters to individual employees did it discuss
the actual selection it arrived at and how it came to
identify those
employees.
[49]
Section 189 (7) of the LRA reads as follows:
‘
The employer must
select the employees to be dismissed according to selection criteria
-
(a) That have been
agreed to by the consulting parties;
(b) If no criteria
have been agreed, criteria that are fair and objective.’
Section
189(2)(b) expressly provides that selection criteria is one of the
items parties are supposed to consult on with a view
to reaching
consensus, for which there is no evidence this took place. However,
whether the selection criteria actually applied
by the company when
it was issuing the letters to individuals even complied with the
selection criteria it had proposed in the
s 189(3) notice and whether
the criteria it actually applied were objective and fair are matters
pertaining to the substantive
fairness of the retrenchments and do
not fall to be considered here.
[50]
No
consensus was reached on the selection criteria, and that the company
did not apply LIFO subject to skill retention, but rather
a
completely different method, namely whether the employee accepted the
proposed wage reduction or not. There is no evidence this
was the
subject matter of consultation and would tend to support a finding
that the failure to consult over selection criteria,
particularly if
the criteria implemented differed from those proposed, made the
selection process procedurally unfair
[4]
.
Although the union caste its complaint as a failure to identify those
ultimately selected for retrenchment, it is obvious this
presented an
obstacle to consulting over the real criteria before they were
adopted, and goes against the obligation to try and
reach consensus
on the issue. Thus, in this respect, the company acted procedurally
unfairly.
[51]
Had the parties consulted over the selection method the company
actually adopted, it is not implausible to believe that
they might
have reached a compromise solution, but the curtailment of the
consultations prevented this possibility being explored.
[52]
In the result, I find that the company acted
procedurally unfairly in failing to identify the employees it had
selected for retrenchment
and did not consult over the criteria it
ultimately adopted or over severance pay. In respect of the union’s
concern about
failing to provide sufficient information to permit
consultation, the union should have raised its more detailed requests
for information
before 20 November 2025 and utilised the facilitation
dispute process for disclosure disputes, which the arbitrator could
have
dealt with. It cannot expect the court to come to its assistance
on that matter in such circumstances.
Relief
[53]
The applicants have not applied for compensation
as an alternative remedy for extended consultation, so the only
question is whether
the consultation process should be extended to
deal with the selection issue. I am mindful that the unusual nature
of the order
which simply extended the individual applicants’
employment without requiring the parties to engage with each other
during
that period means that an opportunity for additional
consultation might have been wasted.
[54]
Given the time that elapsed before the return day,
during which nothing happened except that the individual applicants’
employment
was extended, I am reluctant to require an extensive
period for further consultation and believe that a period of two
weeks should
be more than enough to debate and try and reach
consensus on retrenchment criteria, even if the parties are unable to
agree on
whether retrenchment is justified. Because of the interests
informing that discussion do seem to relate to the principal reason
the company wants to retrench, I believe it will give the parties and
opportunity to resolve the underlying dispute and thereby
avoid
protracted litigation some time in the distant future over the
substantive fairness of the retrenchments.
Order
1.
The
Respondent failure to properly consult over the selection criteria it
imposed and to consult over severance pay was procedurally
unfair.
2.
The
rule
nisi
handed
down on 23 December 2025 is discharged.
3.
The Respondent must continue to employ the
employees appearing in Annexure “A” to the founding
affidavit until 23 February
2025.
4.
The Applicant and the Respondent must
consult with each other with a view to reaching consensus on
selection criteria and severance
pay in the event retrenchment does
occur between the date of this judgment and 23 February 2026, during
which time they must meet
to consult on at least two occasions.
5.
No
order is made as to costs.
R
Lagrange
Judge
of the Labour Court of South Africa
Appearances:
For the
Applicant:
--- C De Kock
Instructed
by:
--- Bagraims Attorneys
For the
Respondent: --- N
Wagemaker
Instructed
by:
--- LG Du Plooy and Associates
[1]
See
Regenesys
Management (Pty) Ltd t/a Regenesys v ILunga and others
[2024] 8 BLLR 777
(CC) at paragraph 99. See also paragraph 78 of the
judgment concerning when the various orders contemplated in s
189A(13)(a)
to (d) are appropriate.
[2]
GN R1445, G. 25515 (dd10/10/ 2003). Regulation 5 reads:
‘
5.
Power to order disclosure of information
(1)
If there is a dispute about the disclosure of information the
facilitator may, after
hearing representations from the parties,
make an order directing an employer to produce documents that are
relevant to the facilitation.
(2)
Sections 189(4)(b) and 16(5) and (10) to (14) of the Act, read with
the changes
required by the context, apply to any dispute concerning
the disclosure of information in terms of subregulation (1).’
[3]
Regulation
6(2).
[4]
See e.g.,
Johnson
& Johnson (Pty) Ltd v Chemical Workers Industrial Union
(1999) 20 ILJ 89 (LAC) at paragraph 48.