REPUBLIC OF SOUTH AFRICA
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Reportable
Case no: JS 949/2021
In the matter between:
SOUTH AFRICAN COMMERCIAL CATERING
AND ALLIED WORKERS UNION obo
TSHOKODO AND 210 OTHERS Plaintiff
and
MASS DISCOUNTERS (PTY) LTD T/A
GAME AND DION WIRED STORES Defendant
Heard: 11 and 12 May 2026
Final heads of argument filed on 26 May 2026
Delivered: 29 May 2026
This judgment was handed down electronically by consent of the parties’
representatives by circulation to them via email. The date for hand- down is deemed
to be 29 May 2026.
JUDGMENT
PRINSLOO, J
Introduction
[1] It is common cause that following a retrenchment process, a number of
employees were dismissed by the Defendant (Game) between June and July
2021.
2
[2] The Plaintiff (SACCAWU or the union), acting on behalf of its members, filed a
statement of claim on behalf of 210 individual employees (the employees),
challenging the fair ness of their dismissal. The procedural fairness of the
employees’ dismissal has been challenged and disposed of by way of a
section 189A(13) application. The only issue before this Court is the
substantive fairness of the employees’ retrenchment.
[3] At the commencement of the trial, the Defendant challenged the number of
employees before Court as well as the number of claimants for severance pay.
It was placed on record that certain employees ought to be excluded, for
several reasons inter alia that some of them have settled their claims with the
Defendant, some were pursuing their claims in other pending matters , and
others were indeed paid their severance pay.
[4] The Defendant prepared a list of names to identify the employees who should
be excluded from this matter and/or the severance pay claim, and to indicate
which employees’ claims remain before the Court. After consideration of the
name list, the Plaintiff ’s attorneys confirmed that the name list was indeed
accurate. The unfair dismissal claim is pursued in respect of 154 individuals ,
and the severance pay claim is pursued for only 19 individuals. They will be
referred to as the employees.
[5] The claim for severance pay in respect of the other individual plaintiffs who are
pursuing an unfair dismissal case under a different case number is to be
decided by the Court adjudicating the other pending matter.
[6] The Defendant called two witnesses and at the closing of the Defendant’s
case, the Plaintiffs’ case was closed without any evidence adduced.
The pleadings and pre-trial minute
[7] Before I deal with the merits of the case and the evidence adduced, it is
necessary to say something about the pleadings filed. It is trite law that th e
court and the parties are bound by the pleadings , the pre- trial agreement
1,
court and the parties are bound by the pleadings , the pre- trial agreement
1,
1 Chemical, Energy, Paper, Printing, Wood & Allied Workers Union and Others v CTP Ltd and Another
[2013] 4 BLLR 378 (LC).
3
and the issues they agreed to in the pre -trial minute.2 This Court cannot and
should not go beyond the issues it is required to determine, with reference
only to the pleadings and the pre-trial minute.
[8] Jacob and Goldrein3 aptly capture the position as follows:
‘As the parties are adversaries, it is left to each of them to formulate his case
in his own way, subject to the basic rules of pleadings… For the sake of
certainty and finality, each party is bound by his own pleading and cannot be
allowed to raise a different or fresh case without due amendment properly
made. Each party thus knows the case he has to meet and cannot be taken
by surprise at the trial.
The Court itself is as much bound by the pleadings of the parties as they are
themselves. It is not part of the duty or function of the Court to enter upon any
enquiry into the case before it other than to adjudicate upon the specific
matters in dispute which the parties themselves have raised by their
pleadings. Indeed, the Court would be acting contrary to its own character and
nature if it were to pronounce upon any claim or defence not made by the
parties…
The Court does not provide its own terms of reference or conduct its own
enquiry into the merits of the case but accepts and acts upon the terms of
reference which the parties have chosen and specified in their pleadings. In
the adversary system of litigation, therefore, it is the parties themselves who
set the agenda for the trial by their pleadings and neither party can complain if
the agenda is strictly adhered to.’
[9] In SA Breweries (Pty) Ltd v Louw 4 (Louw), the Labour Appeal Court (LAC)
was required to, inter alia , determine a complaint by the appellant that the
court a quo decided the case on factual issues not properly put before it on the
pleadings, nor as refined in the pre- trial conference minute. The LAC held
that:5
‘[4] To state the obvious, litigation is complex. Among the duties of legal
that:5
‘[4] To state the obvious, litigation is complex. Among the duties of legal
practitioners is to conduct cases in a manner that is coherent, free
from ambiguity and free from prolixity. True enough, the holy grail of
translating what is complex into simplicity is not always attainable, but
the ground rules are irrefrangible: say what you mean, mean what you
say and never hide a part of the case by a resort to linguistic
obscurities. The norm of a fair trial means each side being given
unambiguous warning of the case they are to meet. Moreover, these
requirements are not mere civilities as between adversaries; the court
too, is dependent upon the fruits of clarity and certainty to know what
question is to be decided and to be presented only with admissible
evidence that is relevant to that question. Making up one’s case as you
go along is an anathema to orderly litigation and cannot be tolerated
2 Professional Transport & Allied Workers Union on behalf of Khoza and Others v New Kleinfontein
Gold Mine (Pty) Ltd (2016) 37 ILJ 1728 (LC); National Union of Metalworkers of SA and Others v
Driveline Technologies (Pty) Ltd and Another (2000) 21 ILJ 142 (LAC).
3 JHI Jacob, IS Goldrein, ‘Pleading: Principles and Practice’, Sweet & Maxwell, at pp 8 - 9.
4 (2018) 39 ILJ 189 (LAC).
5 Ibid at paras 4 – 5.
4
by a court. Counsel’s duty of diligence demands an approach to
litigation which best assists a court to decide questions and no
compromise is appropriate.
[5] The critical complaint in this matter is that the court a quo decided the
case on factual issues not properly put before it on the pleadings, nor
as refined in the pretrial conference minute. The complaint had been
raised during the hearing and in argument at the conclusion of the trial,
considered by the court a quo and dismissed. In our view, the
complaint is justified and the court a quo was in error.’
[10] The LAC further held that:6
‘The relationship between the pleadings and the pretrial conference minute
has been the subject of several judicial pronouncements 7. In short, a minute
of this sort is an agreement from which one cannot unilaterally resile. Also, a
pleading binds the pleader, subject only to the allowing of an amendment,
either by agreement with the adversary, or with the leave of the court. The
case pleaded cannot be changed or expanded by the terms of a minute; if it
does, it is necessary that that change go hand in hand with a necessary
amendment. The chief objective of the pretrial conference is to agree on
limiting the issues that go to trial. Properly applied, a typical minute – cum –
agreement will shrink the scope of the issues to be advanced by the litigants.
This means, axiomatically, that a litigant cannot fall back on the broader terms
of the pleadings to evade the narrowing effect of the terms of a minute. A
minute, quite properly, may contradict the pleadings, by, for example, the
giving of an admission which replaces an earlier denial. When, such as in the
typical retrenchment case, there are a potential plethora of facts, issues and
sub-issues, by the time the pretrial conference is convened, counsel for the
respective litigants have to make choices about the ground upon which they
want to contest the case. There is no room for any sleight of hand, or clever
want to contest the case. There is no room for any sleight of hand, or clever
nuanced or contorted interpretations of the terms of the minute or of the
pleadings to sneak back in what has been excluded by the terms of a minute.
The trimmed down issues alone may be legitimately advanced. Necessarily,
therefore, the strategic choices made in a pretrial conference need to be
carefully thought through, seriously made, and scrupulously adhered to. It is
not open to a court to undo the laces of the straitjacket into which the litigants
have confined themselves.’
[11] In summary, a statement of claim must inform the defendant of the material
facts and the legal issues arising from those facts upon which the plaintiff will
rely to succeed in its claims. Those must be sufficiently detailed to enable the
defendant to respond and to be informed of the nature or essence of the
dispute. Each side must be given an unambiguous warning of the case they
are to meet.
[12] The issues raised by the Plaintiff must be considered against the backdrop
that the pleadings provide the architecture and the evidence at trial provides
the detail and texture. However, it is not for this Court to decide a case on
6 Ibid at para 8.
7 See: Price NO v Allied - JBS Building Society 1980 (3) SA 874 (A) at 882D - E; Zondo and others v
St Martin’s School (2015) 36 ILJ 1386 (LC) at paras 10 – 11.
5
factual issues not properly pleaded or refined in the pre- trial minute. This
principle was confirmed by the Supreme Court of Appeal (SCA) in MEC for
Health and Social Development of Gauteng Provincial Government v
Slabbert
8, where it was held that:
A party has a duty to allege in the pleadings the material facts upon which it
relies. It is impermissible for a plaintiff to plead a particular case
and seek to establish a different case at the trial. It is equally not permissible
for the trial court to have recourse to issues falling outside the pleadings when
deciding a case.
The pleaded case
[13] The Plaintiff’s pleaded case, as recorded in the statement of claim, is that the
employees’ dismissal was substantively unfair and not ‘operationally justifiable
on rational grounds.’ It is evident from the statement of claim that the fairness
of the employees’ retrenchment is challenged on three main grounds – the
commercial rationale, the failure to consider alternatives and selection criteria.
[14] The Plaintiff attacked the commercial rationale and pleaded that the
implementation of a new store model, upon which the retrenchments were
premised, was not an ‘economic, technological, structural or similar need’ of
the Defendant and that the implementation thereof was not reasonable. In the
alternative, it was pleaded that the retrenchment of the employees did not
contribute in a meaningful way to the realisation of an economical,
technological, structural or similar need of the Defendant.
[15] It is evident from the statement of claim and the pre- trial minute that the
Plaintiff challenged the need to retrench. The Defendant’s pleaded case is,
inter alia, that it was challenged by a decline in financial performance,
technological inefficiencies, and stronger competitors in the market, and, as a
result, it had to undertake a complete business turnaround strategy. This
required the implementation of a new store model that was driven by a
required the implementation of a new store model that was driven by a
genuine economic, technological, structural, or similar need, specifically that it
would reduce operational costs, improve profitability , and ensure long- term
sustainability.
[16] The Plaintiff further pleaded that the Defendant failed to consider alternatives
to retrenchment, including natural attrition and making reasonable offers of
8 [2010] 2 All SA 474 (SCA).
6
employment to the employees within the Massmart Group, as it had
undertaken to do. This is confirmed as a disputed issue in the pre- trial minute.
At the commencement of the trial, Mr Boda, for the Plaintiff, confirmed that
they were not pursuing a case that natural attrition was an alternative to
retrenchment, and that the issue was therefore limited to the alternative of a
reasonable offer of alternative employment.
[17] The Defendant’s pleaded case is that the employees were all mapped into
available positions and they rejected the offers without a valid or justifiable
reason.
[18] The last issue challenged is the selection criteria. The Plaintiff’s pleaded case
is that the Defendant presented new contracts of employment to the
employees that contained an unreasonable reduction in working hours and/or
salary, as well as amendments to terms and conditions of employment,
including amendments to their dates of commencement as employees to
dates much later than their actual commencement dates. The employees
objected to the terms of the new contracts and the Defendant refused to
amend the new contracts and to offer them reasonable offers of employment
within the Massmart Group. Instead, the SACCAWU members were selected
for retrenchment and the selection was purely based on their refusal to accept
the new contracts and it was neither objective nor fair.
[19] In summary, the Plaintiff’s pleaded case is that the employees’ dismissal was
substantively unfair and the challenge to substantive fairness is directed at the
existence of a commercial rationale, the failure to consider alternatives , and
the selection criteria. I will deal with these aspects in turn infra.
[20] During the course of the trial and in the propositions put to the Defendant’s
witnesses in cross -examination, the Plaintiff sought to introduce a case that
was materially different from the case that was foreshadowed in the statement
of claim. The Plaintiff adduced no evidence, but to the extent that the Plaintiff
of claim. The Plaintiff adduced no evidence, but to the extent that the Plaintiff
sought to introduce a case in conflict with the pleaded case, it cannot be
considered for purposes of this judgment , as this Court cannot decide a case
on factual issues that were not properly pleaded or refined in the pre- trial
minute.
7
[21] In terms of section 192(2) of the Labour Relations Act 9 (LRA), the onus of
proving that the employees’ dismissals were substantively fair rests on the
Defendant. In casu the Defendant has to prove, on a balance of probabilities ,
the existence of a valid commercial rationale, that it considered alternatives
and that the selection criteria w ere fair, in order to establish the substantive
fairness of the dismissal.
The commercial rationale
[22] In relation to the commercial rationale, the Plaintiff pleaded that:
10. The implementation of the new store model, upon which the retrenchments
were premised, was not an economic, technological, structural or similar need
of the respondent.
11. The implementation of the new store model was furthermore not reasonable,
regarding being had to (sic) the economic, technological, structural or similar
needs of the respondent.
12. Alternatively to 9 and 10 above, the dismissal of the SACCAWU members did
not contribute in a meaningful way to the realisation of an economical,
technological, structural or similar need of the respondent.
[23] The test to be applied in evaluating substantive fairness was described by the
Labour Appeal Court (LAC) in National Union of Food Beverage Wine Spirits
and Allied Workers v Coca Cola Beverages South Africa (Pty) Ltd 10 (Coca
Cola) as:
[41] To the extent that the appellants pursue the submission that there was no
general need to retrench and that the retrenchment was substantively unfair
for that reason, this is not a submission that can be sustained by reference to
the evidence. The economic case for restructuring and the consequent
redundancies in particular occupational posts was made in the s 189(3) notice
and elaborated on in detail in the evidence given by Leonhardt, Rajbally and
Phetha. Although certain of the English authorities to which the Labour Court
referred in its judgment may reflect an overly deferential approach, the Labour
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.
[24] In HeroTel (Pty) Ltd v Moses and Others 11 the LAC confirmed the applicable
test for substantive fairness in operational requirements dismissals - a
9 Act 66 of 1995, as amended.
10 (2024) 45 ILJ 1813 (LAC), [2024] 9 BLLR 948 (LAC).
11 (CA05/2024) [2025] ZALAC 42; [2025] 10 BLLR 1026 (LAC); (2025) 46 ILJ 2850 (LAC).
8
decision to retrench will be substantively fair if it is a rational and reasonable
response to the operational requirements predicament faced by an employer.
The LAC affirmed that whilst employers have the prerogative to restructure
their operations to maximise profits and operational efficiency, the courts do
not accept the employer’s proffered rationale at face value. Rather, adopting
the test in BMD Knitting Mills (Pty) Ltd v SA Clothing & Textile Workers
Union
12, a court is entitled to examine whether the particular decision has
been taken in a manner which is also fair to the affected employees, and to
enquire as to whether a reasonable basis exists on which the decision to
dismiss for operational requirements is predicated. Fairness, not correctness,
is the mandated test. The LAC further endorsed the principle that there must
be a rational connection between the employer’s scheme and its commercial
objective, and that through consideration of alternatives an attempt must be
made to find the option which least harms the rights of the employees.
[25] In Edge Line Engineering (Pty) Ltd v Association of Mineworkers and
Construction Union and others
13 the LAC confirmed that in scrutinising the
grounds advanced for a retrenchment, a court does not second -guess the
commercial or business efficacy of the employer’s ultimate decision but rather
determines whether the decision was genuine and not a sham. It is not the
court’s function to decide whether the decision was the best decision under
the circumstances, but only whether it was a rational commercial or
operational decision. The LAC further held, applying BMD Knitting Mills , that a
higher standard of substantive review is required: a court is entitled to examine
whether the particular decision is also fair to the affected employees and to
enquire as to whether a reasonable basis exists for the decision.
Retrenchment must be preceded by a genuine consultation process and must
Retrenchment must be preceded by a genuine consultation process and must
be properly and genuinely justifiable by operational requirements or business
rationale. A retrenchment used as a ruse to rid the employer of certain
employees for whatever reason will not survive scrutiny under this standard.
[26] In argument, Mr Boda accepted the formulation of the test, as formulated in
Coca Cola, but he submitted that it does not assist the Defendant because the
rationality inquiry is not a license to dispense with evidence – it presupposes a
12 [2001] 7 BLLR 705 (LAC); (2001) 22 ILJ 2264 (LAC).
13 [2026] 4 BLLR 327 (LAC).
9
factual foundation against which the rationality of the decision could be
measured. Mr Boda submitted that the Defendant led no evidence in support
of its pleaded case that the new store model would reduce operational cost
and improve profitability.
[27] The starting point when scrutinising the commercial rationale or the reason for
retrenchment is to establish the presence of a bona fide operational
requirement. An operational requirement is defined as ‘requirements based on
the economic, technological, structural or similar needs of an employer’. This
is followed by an inquiry into whether the decision to retrench was , in fact ,
based on that operational requirement
14.
[28] Where an employer contends that there is operational justification for its
decision to retrench, it must put forward evidence to show that the operational
reason is real and that the dismissal was a fair consequence of its existence.
This calls for a consideration of the evidence adduced.
[29] Mr Duval van Rhyn testified that during 2019 /2020 he was employed as the
Defendant’s Vice President for Game Operations. On 6 July 2020 the
Defendant issued a notice in terms of section 189(3) of the LRA (the notice). It
was recorded that Massdiscounters had performed poorly and, as of
December 2019, had incurred a financial loss of R 675 million, of which R 572
million was attributable to Game, with the remainder attributable to Dion
Wired. As a result of the loss and continued poor performance, the Defendant
engaged in an assessment of how it could improve profitability and long- term
sustainability to remain commercially viable and competitive in a very
challenging market.
[30] Mr van Rhyn explained that a decision was taken to close down Dion Wired as
Game had a better chance of recovery. In March 2020, operations under the
Dion Wired brand ceased, but the intervention was in sufficient to address the
Defendant’s decline in financial performance. The Game brand had been
Defendant’s decline in financial performance. The Game brand had been
challenged by decreasing financial performance, technological inefficiencies
and stronger competition in the market and it was unable to align its store
operating model with the progressive technological innovations. The reality
14 Retrenchment Law in South Africa, Rochelle le Roux, LexisNexis 2016 at p 187 - 191.
10
was that the Game model was outdated in a changed market and the
Defendant could not compete in the new retail market with its old store model.
[31] The Covid -19 pandemic also negatively impacted the Defendant. In 2019,
prior to COVID, Game was already battling financially, and in March 2020,
when the hard lockdown was announced, the impact was significant. At the
time, Game sold mainly appliances. The sale of non- essential items was
prohibited, and as a result, Game could not sell its non-essential items due to
the Covid-19 restrictions announced by the President of South Africa.
[32] The retail landscape changed drastically because customer access to stores
was affected by the lockdown measures – customers were either not permitted
to go to stores, or they were too scared to visit a store due to the pandemic.
Suddenly, customers wanted to buy goods online, and Game was not geared
to serve that market need. Mr van Rhyn explained that online buying had a
lasting effect on retail and it changed the market and the face of retail
significantly. More competitive e- commerce players entered the market and
the Game store operating model was not geared to deal with the shift in the
retail market. The Defendant needed to change how it operated to survive in
the new market.
[33] In the notice, the employees were informed that the Defendant had secured
additional facilities to pay salaries and to meet its payment obligations to
suppliers. Mr van Rhyn explained that Game ran out of cash flow due to
financial pressure and had to reach out to its US shareholder to assist with the
payment of salaries and suppliers, which enabled them to keep the doors
open. To ensure the future of the stores, Game needed a complete business
turnaround strategy.
[34] The employees were notified of the proposed new store model, which
envisaged sustainability and an enhanced customer experience. Attached to
the notice was a list of the affected roles in the current store structure. The list
the notice was a list of the affected roles in the current store structure. The list
indicated the number of current roles that would either become redundant,
reduced, or repurposed into new roles in the proposed new store model.
[35] Mr van Rhyn presented the proposed restructuring of Game store operations
to employees, explaining that a new operating model was intended to improve
11
operational efficiency and cost-effectiveness. The current store model ( as
applied at the time) and job roles required refinement to reflect new , more
effective ways of work ing. There was a definite shift in customer behaviour,
including, inter alia, online shopping, and as a result, Game had to change
how its stores operated and find a way to address this shift in behaviour. In the
new store model, the focus was on the customer, whereas in the old model it
was more on administration. In the new store model, certain administrative
functions were consolidated or reduced and new functions were introduced.
The focus centered on driving sales and attracting customers in a changing
retail landscape.
[36] Mr van Rhyn explained that the new store model was not taken lightly by the
Defendant. It was thought through carefully, and it was aimed at redesigning a
model that was 50 years old and which was crafted historically, at a time when
shops closed on weekends, and online shopping did not exist. It no longer
served the new retail market. The new model was aimed at changing
customer behavior, and it created new opportunities for employees. The aim
was to introduce new and effective ways to respond to the changing face of
retail, and it was not designed to create job losses.
[37] In cross -examination, Mr van Rhyn’s evidence about the business or
commercial rationale for restructuring was not challenged.
[38] The Plaintiff did not dispute the substantial evidence proffered by the
Defendant regarding the reasons or business rationale that it advanced for
retrenchment. In my view, the Defendant’s evidence established that its
constrained financial circumstances and the changing retail landscape
necessitated a transition to a more efficient and responsive operational
structure and store model. Measured against the applicable standards, it
cannot be said that the employees’ retrenchment was irrational or
disconnected from Game’s commercial objectives and operational
disconnected from Game’s commercial objectives and operational
requirements, nor that it was an unreasonable option in the circumstances.
[39] The new store model was designed to incorporate e- commerce positions in
order to meet evolving market demands. The onset of COVID -19 accelerated
the need to adopt the new model, as the existing model could not adapt to the
rapidly changing commercial environment . The existing store model was 50
12
years old - its store classifications had become unfit for purpose and
operationally inefficient, as evidenced by the fact that the Defendant was
operating at a loss. In order to remain competitive, it was important that Game
modernise its operational practices to keep pace with the market and to
remain relevant in the retail space.
[40] In fact, considering the evidence, i t was rational and entirely reasonable in the
context. SACCAWU’s pleaded challenge relating to the commercial rationale
is without merit. The Defendant indeed discharged its onus to establish an
operational rationale, which was justifiable and reasonable.
The pleaded vs the argued case
[41] The Plaintiff filed lengthy heads of argument (103 pages ) with the central
thesis that Game failed to discharge the onus of proving that the retrenchment
was substantively fair within the meaning of section 189 of the LRA and that
the dismissals were not genuinely required by its operational requirements.
[42] I have dealt with the onus supra and will further do so infra, when considering
the other aspects of the Plaintiff’s challenge to the fairness of the employees’
retrenchment.
[43] A material part of the Plaintiff’s argument has been dedicated to advancing an
argument that the employee’s retrenchment was not genuinely required by
Game’s operational requirements. The argument is that the Defendant could
achieve every operational objective it identified without requiring the
employees to sign new contracts.
[44] The category of employees who were already employed on a 40- hour
contract, were already on flexible contracts, and the scheduling and multi -
skilling flexibility the Defendant claimed to require, was already conferred by
their existing contracts. As there were no material changes to the terms, no
new contract was necessary, and the employees’ refusal to sign new contracts
was not a refusal of anything of substance. They were already on 40- hour
was not a refusal of anything of substance. They were already on 40- hour
contracts before the new store model was introduced, and there was no need
to sign new contracts to transition to a 40-hour contract.
13
[45] Mr Boda further submitted that the Defendant’s case was that it needed the
employees to move from 45 to 40- hour contracts, whilst the employees would
not suffer financial prejudice as their remuneration would be maintained,
shows that there was no operational purpose in compelling a new contract at
all, because the financial outcome was identical and there was no labour cost
saving generated for this category of employees. Furthermore, the changes
the Defendant sought to implement in respect of the 45- hour permanent
contracts were not fundamental; they fell squarely within the ambit of
managerial prerogative and none of what the Defendant sought to achieve
required a new contract, as everything could have been implemented under
the existing contract as a matter of managerial prerogative.
[46] Mr Boda argued that the Defendant could lawfully and unilaterally schedule
the employees for 40 hours, with no reduction in their contractual salary, as
this would have been within managerial prerogative and would have required
no consent or a new contract. As the employees’ remuneration was
maintained, there were no labour cost savings resulting from the contractual
change; therefore, the purpose of re- signing was merely an administrative
exercise and not a valid operational requirement.
[47] In short, the Plaintiff’s argument is that retrenchment for declining to sign new
contracts was not necessitated by a genuine operational requirement – at best
it was a ‘re-papering exercise’ and ‘administrative convenience’ which are not
operational requirements within section 189 of the LRA.
[48] The thesis introduced in argument depends on this Court accepting that
nothing of substance changed between the old and the new store model, and
that the existing contracts were sufficient to achieve everything Game needed
when the new store model was introduced.
[49] The difficulty with the aforesaid argument advanced on behalf of the Plaintiff is
[49] The difficulty with the aforesaid argument advanced on behalf of the Plaintiff is
that it was never part of the Plaintiff’s pleaded case. Furthermore, the
Defendant was not afforded a fair opportunity to answer to the unpleaded case
being pursued in argument, and no evidence was led on the specific issues
raised in argument. The Defendant has to prove on a balance of probabilities
that the employees’ dismissal was fair , and the content of what must be
proved is delineated by the issues raised by the pleadings and in the pre- trial
14
minute – it cannot be determined by whatever propositions are advanced for
the first time in cross -examination or in argument. The very purpose of
pleadings is to define the issues for the other party and for the Court. The
Court is called upon to adjudicate the disputes that arise from the pleadings
and the pre-trial minute, and those disputes alone.
[50] The proposition or argument that the employees’ existing contracts of
employment already conferred on Game sufficient scheduling and multi -
skilling flexibility, rendering the new contracts legally unnecessary, that the
retrenchment w as a mere ‘ re-papering exercise’ or for ‘administrative
convenience’, that the existing contracts already conferred sufficient flexibility ,
and that no new contracts were necessary , was not pleaded. If SACCAWU
intended to pursue the case it now argues, it was obliged to plead the factual
basis on which it contends that the Defendant’s operational objectives were
achievable without retrenchment and that the existing contracts were sufficient
to achieve the operational needs. Instead, the pleaded case was that the new
store model was not an economic, technological, structural or similar need of
the Defendant.
[51] The argument presented regarding the contracts is also misconceived, given
the evidence adduced. The evidence establishes that the retrenchment
process was not intended to facilitate wage bill savings. It had a far broader
purpose, including creating efficiencies by transitioning to a new store model,
creating and modifying positions to drive growth, and aligning the workforce
with changes in consumer behaviour. Game created new roles with different
job descriptions, operating hours, and overtime arrangements, and these
changes constituted a fundamental alteration to the nature of the job and
would amount to a unilateral change to the terms and conditions of
employment – it was not merely a ‘re- papering’ exercise or the routine
exercise of managerial prerogative.
exercise of managerial prerogative.
[52] The issues argued, which were not pleaded by the Plaintiff, fall outside the
scope of the issues this Court has to decide.
Alternatives to retrenchment
[53] In relation to alternatives, the Plaintiff’s pleaded case is as follows:
15
The respondent failed to consider alternatives to retrenchment including, but not
limited to natural attrition, and offering to the SACCAWU members, reasonable offers
of employment within the Massmart Group, as it had undertaken to do.
[54] The issue of natural attrition is not pursued, and the only remaining contention
is that the employees were not made reasonable employment offers within the
Massmart Group.
[55] In the section 189 notice the employees were informed that in the event that
they were deployed to other or similar positions within the Massmart Group,
the principle to be applied was that ‘if the affected employees’ current salary is
lower than the receiving company minimum for the vacant role – we propose
to maintain the affected employee’s current salary in the new role and
increase salary over time in terms of the applicable bargaining unit wage
agreement.’ Mr van Rhyn emphasized that the Defendant would not , in the
process, change an employee’s salary and the focus was to make Game
‘future fit’, not to change working hours or salaries.
[56] Ms Vague, who was the Defendant’s management representative and senior
people partner at the time of the retrenchment, testified that a facilitation
process was followed at the CCMA. However, SACCAWU requested to
engage with Game’s management directly and differently , and as a result, a
steering committee ( Steerco) was formed. Steerco consisted of employer and
employee representatives, and SACCAWU, as the majority union, represented
employees. Steerco dealt with the mapping and placement of employees and
the parties reached an agreement as to the manner in which the affected
employees would be either mapped into the new Game store model or
deployed to comparable vacancies within the Massmart Group (the mapping
agreement).
[57] Ms Vague explained that during November and December 2020, Game would
conduct a desktop mapping exercise to map as many of the affected
conduct a desktop mapping exercise to map as many of the affected
employees into the new Game store model. ‘Mapping’ is an exercise where
they had the information of the affected employees relating to inter alia
position occupied, years of service, functions performed, skills, qualifications
and experience, which was compared with the list of available vacancies and
individuals were match ed with positions. The Defendant completed the
aforesaid exercise and presented it to the union in January 2021. It was
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agreed that the actual placement of affected employees into roles within the
new Game structure would take effect in January 2021, after the Steerco had
signed off on the mapping process. Any affected employee who was not
mapped into Game, would be considered for deployment into similar or
comparable vacancies within the Massmart Group. It was agreed that the
Defendant and the union would re- engage on potential retrenchment and/or
accommodation of any employee not mapped and placed and/or who rejected
an alternate offer of employment.
[58] A ‘mapping guideline’ was developed to provide the employees, the union and
management with clear guidelines on how to conduct the mapping exercise.
Ms Vague testified that prior to the commencement of the mapping exercise, it
was explained to store managers and shop stewards , and no objection was
raised. It became a daily exercise as they had to check daily for new
vacancies into which suitable employees could be mapped.
[59] The first step in the mapping exercise was conducted on a ‘store- by-store’
basis, meaning they considered the current store and the new roles, mapping
employees into those roles to avoid an employee having to relocate to a
different store or region. Employees were requested to complete a career
profile form, which would indicate their preferred location, experience, and
qualifications for purposes of the mapping exercise.
[60] If an employee could not be mapped to their existing store, the y could be
mapped to another Game store within a 50 km radius of their place of
residence. If that was not possible, the employee could be mapped across the
Massmart Group into any other banner (eg Makro or Builders Warehouse)
within a 50 km radius.
[61] Ms Vague explained that a new Builders Warehouse store was opening in
Midrand in March 2021. The Defendant needed employees to open the store
and it was agreed that they would consider the affected employees first to be
and it was agreed that they would consider the affected employees first to be
employed at the new store before the vacancies would be advertised
externally. The employees who could not be mapped within the 50 km radius,
alluded to supra, became first in line to be considered at the new Builders
Warehouse store.
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[62] On 15 February 2021 the Steerco met and the Defendant presented the
outcome of the mapping exercise. The union failed to get a mandate and
undertook to provide a substantive response by 22 February 2021, which
would also afford an opportunity to consult with employees regarding the
Builders Warehouse in Midrand.
[63] A Steerco meeting was held on 22 February 2021, and it was made clear that
consensus was needed on mapping employees in ‘like-for-like’ roles. The next
Steerco meeting was scheduled for 3 March 2021. On 24 February 2021 the
Defendant addressed an email to SACCAWU wherein it was recorded that ‘we
should aim to finalise a process where we can start placing employees from
Game in to the Game new structure – it has been 9 months since they have
received section 189 letter and it will be welcomed to give some sense of
comfort that we are working together as the Union and Company to ensure
deployment and minimal job losses. Additionally we considered your two
requests: (1) to maintain the salary of transferring employees into like for like /
comparable roles and (2) to consider transport allowances and confirm as
follows:
1. With regard to into like for like / comparable positions across the
Group (inclusive of Builders Midrand and all other group deployment
placements) – we agree that we will maintain employees’ current
pay – no employee will be prejudiced from a salary perspective…
2. We will consider any additional transport costs to employees on an
individual basis who have been placed outside of the 50 km radius.’
[64] Ms Vague explained that there were three types of contracts offered to
employees – a 45-hour supervisory roll contract, a 40- hour permanent, non-
flexible contract, and a 40- hour flexible contract. On 15 April 2021 the union
addressed a letter to the Defendant, recording inter alia that “While we do not
dispute the draft employment contract copies have been provided to the Union
dispute the draft employment contract copies have been provided to the Union
Steerco members before, and this should not be construed to mean that the
contents thereof have been agreed to and accepted by the parties.
Accordingly, the only body that has powers to ratify the employment contract
as agreed and acceptable, is the broader National Forum that established the
Steerco as its sub- committee to deal with the modalities of implementation of
the mapping process.” Ms Vague testified that the union influenced employees
not to sign the contracts. She sat with 13 regional people partners on a daily
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basis, and they looked at the offers accepted and refused, the number of
employees who were placed and could still be placed. Offers in the regions
were rejected because the employees stated that the union instructed them
not to sign or that they were waiting for the union. She authorised travel to the
stores to discuss the offers with employees in person because Game wanted
to save jobs.
[65] Ms Vague testified that for a period of 12 months, positions across the
Massmart Group were frozen for the mapping process and no position was
filled externally, as vacancies were reserved for the affected employees.
[66] On 3 June 2021 Game addressed a letter to Steerco members regarding a
final opportunity for employees to be mapped to positions in terms of the new
Game store model. The section 189 consultation process has been ongoing
since 6 July 2020, and by June 2021, 6 177 employees have been mapped
into Game in accordance with the agreed mapping principles. As of 3 June
2021, 5 533 employees had successfully secured positions in Game through
the mapping process. The employees (335 employees , including the
individuals before the Court) who were offered positions but refused to accept
the positions or sign the contracts were requested to provide reasons for their
refusal or rejection of the alternative offers. Where valid and justifiable reasons
were provided, the employees were placed back into the pool of ‘unmapped’
employees or they were further engaged.
[67] Game made it clear that the section 189 process was extensive and that it had
to be finalised. The 335 employees who refused alternative offers were given
a final opportunity to either accept the reasonable offer of alternate
employment or to elect for a VSP package and they had to do so by 9 June
2021. If an employee rejected a reasonable offer of alternate employment
without a valid reason or elected not to accept a VSP, Game would have
exhausted all avenues and they would be retrenched with effect from 11 June
exhausted all avenues and they would be retrenched with effect from 11 June
2021, without severance pay. The mapping process and alternative offers
would continue in respect of the employees who remained in the pool of
unmapped employees. If an employee rejected an alternative offer for a valid
reason, they were retrenched with severance pay. This was communicated
directly to the 335 employees who refused to accept alternative offers in a
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letter dated 4 June 2021. It was recorded that many employees indicated that
they would not accept the positions offered to them ‘on advice of the union.’
[68] Ms Vague testified that the aforesaid process was followed to save jobs. The
Defendant considered not only mapping into positions at Game but also
comparable vacancies at other banners within the Massmart Group. The
intention was to limit job losses. The overwhelming majority of employees
(approximately 95%) accepted their placement offers, and only a small
percentage (5%) refused the new contracts and the positions they were
mapped into under the new store model.
[69] SACCAWU responded to Game on 9 June 2021 regarding the final
opportunity extended to employees , stating that the issue of ‘the 40- hour
contract’ was never agreed upon and was a key area of dispute. Ms Vague
testified that the 40- hour contract was presented to the union and it was not
disputed and that it was not something new, as it was already part of the
previous store model. Game indicated from the onset which roles would be 40-
hour contract positions. It was unreasonable of the union to raise this as a
dispute almost one year after the section 189 process had commenced.
[70] By 11 June 2021, the Defendant knew which employees had accepted
alternative positions, who still refused, and which employees remained in the
mapping pool. On 11 June 2021, it was communicated to store managers that
retrenchment letters should be issued to the individuals who still refused to
accept alternative offers, but they could still sign new contracts or take a VSP.
If not, the retrenchment would take effect on 11 June 2021.
[71] Ms Vague explained that the mapping process was finalised without the sign-
off from Steerco because SACCAWU disengaged from the process. The
Defendant had to continue the mapping process because the union became
uncooperative and failed to fulfill its responsibilities, and the process could not
continue indefinitely.
continue indefinitely.
[72] After the section 189 process came to an end and in December 2021, Game
engaged in a section 150 agreement relating to the ‘reinstatement of
retrenched employees’. Game had a number of vacancies and retrenched
employees were reinstated on a like - for- like basis, in terms of the applicable
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mapping principles and if an employee accepted a position, such an employee
would be reinstated. If the employee was not paid severance pay during the
section 189 process, he or she would be reinstated with retention of service; if
they were paid severance pay, they w ould be reinstated without retention of
prior service. If an employee could not be mapped, they would move to phase
2 and receive severance pay if they had not previously received it. If an
employee refused a reasonable alternative offer, they were removed from the
section 150 reinstatement process and placed on a reemployment list for 12
months. These employees were not paid severance pay as they declined a
reasonable offer without a valid reason. There are 19 of them, all of them
plaintiffs in this matter, claiming severance pay. Ms Vague testified that the
said process was another attempt to save jobs.
[73] In cross -examination, it was put to Ms Vague that the real reason for
retrenchment was the fact that the employees refused to sign the new
contracts and that the 40-hour contracts were at the heart of Game’s business
rationale. Ms Vague disputed this and explained that the 40- hour contract was
nothing new, it existed in the old store model. The Defendant needed a new
store model and more flexibility in working hours, not fewer hours or salary
cost savings.
[74] Mr Boda argued that the Defendant, in the mapping agreement, bound itself to
a three- stage protocol – mapping, group- wide search, and a final re-
engagement on accommodation – before it could lawfully dismiss any
employee, and that it proceeded to retrench without completing the final stage.
The Steerco never signed off on the placements , and without that sign-off, the
process was frozen, the dedicated re- engagement on accommodation never
took place, and the dismissals were accordingly effected in breach of a binding
agreement that Game never canceled. On that basis alone, the retrenchments
were substantively unfair.
were substantively unfair.
[75] The difficulty with the argument advanced is that SACCAWU’s statement of
claim does not plead any breach of the mapping agreement as a basis for a
finding of substantive unfairness. The pleaded case is confined to the content
of paragraphs 9 - 18 of the statement of claim. The contention that Game
breached a binding three- stage mapping agreement by failing to complete
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stage three was advanced for the first time in the cross -examination of Ms
Vague.
[76] In my view, i t is impermissible for SACCAWU to advance in argument a case
that was never pleaded, never foreshadowed, not defined in the pre- trial
minute, and which Game was never called upon to answer. It therefore does
not constitute an issue for determination by this Court.
[77] The contention that the Defendant failed to consider alternatives to
retrenchment and to make reasonable offers of employment within Massmart
has no merit. The evidence shows that the Defendant embarked on a lengthy
process to identify affected employees, their skills, positions etcetera and to
map them into existing or newly created roles within Game or the broader
Massmart Group.
[78] The evidence is that the employees who were retrenched rejected reasonable
offers of employment, as all employees were mapped into alternative positions
or roles. The pleaded contention that Game failed to consider alternatives in
the form of making reasonable offers of alternative employment in the
Massmart Group, is unsustainable and not supported by any evidence.
Selection criteria
[79] In relation to selection criteria, the Plaintiff pleaded that:
14. The respondent presented new contracts of employment to the SACCAWU
members that contained an unreasonable reduction in working hours and/or in
salary, as well as amendments to their to their terms and conditions of
employment, including amendments to their dates of commencement as
employees of the respondent to dates much later then (sic) their actual
commencement dates (“the new contracts”).
15. One or more, or all of the SACCAWU members objected to the terms of the
new contracts, and did not sign the new contracts on the basis that they were
unfair, alternatively were not reasonable, further alternatively contained terms
and conditions that were different to what the respondent had advised the
applicant and employees that it would offer.”
applicant and employees that it would offer.”
[80] In the pre-trial minute the Plaintiff recorded that the selection of the employees
was based on their refusal to accept the new contracts and that their selection
was neither objective nor fair. In argument , Mr Boda submitted that the
Defendant was obliged to apply LIFO – this was not the pleaded case.
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[81] Ms Vague testified that no selection criteria (such as LIFO or bumping) was
proposed by the union during the retrenchment process. Instead, they agreed
to the mapping process by which employees were identified and placed in
suitable positions. Ms Vague testified that the application of LIFO or other
conventional selection criteria in circumstances where employees remain on
operationally deficient contracts would perpetuate the very problem the
restructuring was designed to address.
[82] The factual averments, as pleaded, are not consistent with the evidence
before this Court and are not supported by evidence - none of the employees
testified to substantiate the allegations.
[83] In cross -examination, Mr van Rhyn confirmed that Game was prepared to
retain the employees at their same salaries but in different roles. He confirmed
that the type of contracts the employees had under the old model was not the
reason for termination, but that the Defendant had to change the store model
and intended to map employees into different roles.
[84] Ms Vague testified that the Defendant used the agreed upon mapping
principles to map the affected employees and to offer them employment in
alternative roles or suitable vacant positions. She emphasized that the
employees were not retrenched because they refused to sign 40- hour
contracts, but because they refused to accept reasonable alternative offers of
employment, and in some instances, they were rejected for no valid reason.
She testified that even employees who were employed on a 40- hour contract
refused to accept a new 40- hour contract because they believed that the
‘union was still ‘negotiating’ and they ultimately refused offers of alternative
employment, which resulted in their retrenchment.
[85] There was no evidence to support the Plaintiff’s case that the employees were
presented with new contracts of employment that contained an unreasonable
reduction in working hours and/or in salary, or that they contained
reduction in working hours and/or in salary, or that they contained
amendments to their terms and conditions of employment, including
amendments to their dates of commencement as employees. No evidence
was adduced to the effect that one or more or all of the SACCAWU members
objected to the terms of the new contracts and that they did not sign the new
contracts on the basis that they were unfair, unreasonable or because they
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contained terms and conditions that were different from what the Defendant
had advised the union and employees that it would offer.
[86] On the contrary, the evidence showed that Game was prepared to retain the
employees at their same salaries. Mr van Rhyn explained that the employees’
basic salaries would remain the same and that they would not be in a worse
position for accepting a new contract. He further explained that an employee’s
length of service would be retained for the entire period of employment.
However, the contract included a commencement date that refer enced only
the employee's start date in the new role, while the length- of-service period
remained for the entire period of employment.
[87] Conventional criteria are designed for situations where the employer must
choose between employees performing the same or similar work. That was
not the position here. The restructuring process and the introduction of the
new store model eliminated old contract types and created new roles requiring
different terms of employment. It displaced the employees from their erstwhile
positions. The identification of employees occupying abolished positions who
declined the alternative positions offered to them for r etrenchment does not
constitute selection based on refusal. Rather, it is a selection based on the
redundancy of existing roles in their current form and is in line with what was
agreed between the parties in the mapping agreement.
[88] The Plaintiff’s case relating to the selection criteria is without merit.
[89] In conclusion, the Defendant has discharged the onus to prove that the
retrenchment of the employees was substantively fair.
The Severance Pay Claim
[90] The pleaded case seeks an order that the Plaintiff’s dismissal was unfair and
that they be reinstated retrospectively, alternatively and only in the event that
the Court finds that their dismissal was fair and reinstatement not appropriate,
they seek an order that the Defendant must pay severance pay to the
they seek an order that the Defendant must pay severance pay to the
SACCAWU members in terms of section 41(2) of the BCEA.
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[91] As this Court found no merit in the claim for substantive unfairness, it follows
that the employees’ retrenchment was fair, and the claim for severance pay is
to be considered.
[92] After the Defendant's list was accepted as correct, the only remaining issue for
consideration is the severance pay claim pursued on behalf of 19 e mployees
who were not paid severance pay.
[93] Section 41(4) of the BCEA provides as follows: “An employee who
unreasonably refuses to accept the employer’s offer of alternative employment
with that employer or any other employer , is not entitled to severance pay in
terms of subsection (2).”
[94] With reference to the 19 e mployees who are pursuing a claim for severance
pay, Ms Vague’s evidence was that they were ‘mapped’ to available vacancies
and had rejected the alternative positions offered to them prior to
retrenchment, without advancing any good reasons. She testified that other
employees with valid reasons were paid severance pay, and that only those
who refused without a proper reason were not paid severance pay. Ms Vague
testified that the 19 e mployees had also rejected additional offers of
employment in the section 150 process and that they had once again failed to
provide good reasons for their refusal.
[95] The 19 employees elected not to attend Court and testify, and no evidence
was adduced as to the reasons for their refusal to accept alternative offers.
There is no evidentiary basis for finding that their refusal was reasonable or
that the alternative offers made to them were unreasonable.
[96] The claim for severance pay cannot succeed, considering the applicable
legislative provisions and the evidence adduced.
Costs
[97] Costs should be considered against the provisions of section 162 of the LRA
and according to the requirements of the law and fairness. This Court has a
wide discretion in awarding costs.
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[98] Mr Itzkin, for the Defendant, submitted that the referral ought to be dismissed
with costs. He did not submit any reasons as to why a cost order should be
made. Mr Boda made no submissions on the issue of costs.
[99] In Zungu v Premier of Kwa Zulu -Natal and Others 15 the Constitutional Court
confirmed that the rule that costs follow the result does not apply in labour
matters. The Court should seek to strike a fair balance between unduly
discouraging parties from approaching the Labour Court to have their disputes
dealt with and, on the other hand allowing those parties to bring to this Court
(or oppose) cases that should not have been brought to Court (or opposed) in
the first place.
[100] In my view this is a case where the interest of justice will be best served by
making no cost order.
[101] In the premises, I make the following order:
Order
1. The Plaintiff’s case is dismissed;
2. There is no order as to costs.
_____________________
Connie Prinsloo
Judge of the Labour Court of South Africa
15 (2018) 39 ILJ 523 (CC) at para 24.
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Appearances:
For the Plaintiff: Advocate F A Boda SC
Instructed by: Dockrat Attorneys
For the Defendant: Advocate Riaz Itzkin
Instructed by: ENS Attorneys