CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 178/19
In the matter between:
NATIONAL UNION OF METAL WORKERS OF
SOUTH AFRICA First Applicant
MEMBERS LISTED IN ANNEXURE A OF THE
APPLICANTS’ STATEMENT OF CASE Second to further Applicants
and
AVENG TRIDENT STEEL (A DIVISION OF
AVENG AFRICA (PTY) LIMITED) First Respondent
IMPERIAL LOGISTICS DEDICATED CONTRACTS
(A DIVISION OF IMPERIAL GROUP LIMITED) Second Respondent
Neutral citation: National Union of Metal Workers of South Africa and Others v
Aveng Trident Steel (a division of Aveng Africa (Pty) Ltd ) and
Another 2020 ZACC 23
Coram: Mogoeng CJ, Jafta J, Khampepe J, Madlanga J, Majiedt J,
Mathopo AJ, Mhlantla J, Theron J, Tshiqi J and Victor AJ
Judgments: Mathopo AJ: [1] to [105]
Majiedt J: [106] to [136]
Jafta J: [137] to [155]
Heard on: 5 March 2020
Decided on: 27 October 2020
2
Summary: Section 187(1)(c) of the Labour Relations Act 66 of 1995 —
demand — automatically unfair dismissals — operational
requirements — consultations — negotiations — causation test
ORDER
On appeal from the Labour Appeal Court (hearing an appeal from the Labour Court):
1. The application for leave to appeal is granted.
2. The appeal is dismissed.
3. There is no order as to costs.
JUDGMENT
MATHOPO AJ (Mogoeng CJ, Khampepe J, Madlanga J and Theron J concurring):
Introduction
This case concerns the plight of 733 employees who were dismissed for what the
employer described as operational requirements. The issues surface in this application
for leave to appeal by the National Union of Metal Workers of South Africa (NUMSA)
on behalf of its members, the second to fur ther applicants, against the judgment and
order of the Labour Appeal Court.1 That Court confirmed the decision of the Labour
Court which held that the dismissal of the second to further applicants – as employees
1 National Union of Metalworkers of SA v Aveng Trident Steel (A Division of Aveng Africa) (Pty) Ltd [2019]
ZALAC 36; (2019) 40 ILJ 2024 (LAC) (Labour Appeal Court judgment) at para 75.
MATHOPO AJ
3
– was not automatically unfair in terms of section 187(1)(c) of the Labour Relations
Act2 (LRA).3 Section 187(1)(c) provides:
“(1) A dismissal is automatically unfair if the employer, in dismissing the
employee, acts contrary to section 5, or if the reason for the dismissal is—
. . .
(c) a refusal by employees to accept a demand in respect of any matter of
mutual interest between them and their employer”.4
The core issues at the Labour Court, the Labour Appeal Court and this Court
remain unchanged. The crux of the matter is whether the dismissa l of the second to
further applicants was automatically unfair in terms of section 187(1)(c) of the LRA, or
whether it was based on the first respondent’s operational requirements per sections 188
and 189 of the LRA, which dismissals are not automatically unfair. Key to this enquiry
is whether the second to further applicants were dismissed for refusing to accept a
demand in respect of a matter of mutual interest between them and the first respondent.
The matter brings to the fore the proper interpretation of section 187(1)(c) of the LRA.
Parties
The first applicant is NUMSA, a trade union registered in terms of section 96 of
the LRA. The second to further applicants are former employees of the first respondent
and members of NUMSA . NUMSA and t he second to further applicants , will
collectively be referred to as the applicants. The first respondent is Aveng Trident Steel
(a division of Aveng Africa (Pty) L imited), a duly registered company that operates in
2 66 of 1995.
3 National Union of Metalworkers of SA on behalf of Members v Aveng Trident Steel (A Division of Aveng Africa)
(Pty) Ltd (2018) 39 ILJ 1625 (LC) (Labour Court judgment).
4 The language in section 187(1)(c) of the LRA above n 2, as it now stands, was brought about by section 31 of
the Labour Relations Amendment Act 6 of 2014. Prior to its amendment, the provision read:
“(1) A dismissal is automatically unfair if the employer, in dismissing the employee, acts
contrary to section 5, or if the reason for the dismissal is—
. . .
(c) to compel the employee to accept a demand in respect of any matter of mutual
interest between the employer and employee”.
MATHOPO AJ
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the metal industry as a steel manufacturer and supplier of a wide range of steel products
(Aveng). The second respondent is Imperial Logistics Dedicated Contracts (a division
of Imperial Group Limited), a duly registered company (Imperial).
Background facts
The material facts have been fully set out in the judgments of the Labour Court
and the Labour Appeal Court. They need not be repeated here. Only those facts that
are germane to the purpose of this judgment will be restated.
During April 2014, as a result of harsh economic conditions, Aveng experienced
a decline in sales and profitability. To maintain its profitability, it had to reduce its
increasing costs, especially in relation to labour, electricity and transport. The drop in
the volume of sales meant that some of the machines were under -utilised. This
necessitated the alignment of Aveng’s workforce and production output with the market
conditions. Aveng soon realised that it could no longer continue with its business model
and resorted to restructuring its business in order to survive.
On 15 May 2014, Aveng initiated the consultation process by filing a notice with
the Commission for Conciliation, Mediation and Arbitration (CCMA) in terms of
section 189(3) of the LRA. In the notice, Aveng indicated that about 400 jobs might be
affected, and had hoped that some employees would agree to work in the redesigned
positions to avoid the necessity of initiating retrenchment proceedings. At that stage,
Aveng had a total workforce of 1784 permanent employees.
On or about 29 August 2014, a consultation meeting was held, at which Aveng’s
management indicated that employees were invited to apply for voluntary severance
packages (VSPs) or early retirement if they so wished, and that the opportunity to do so
would remain open until 5 September 2014. NUMSA requested an assurance that no
“forced retrenchments” would take place. In response, Aveng stated that while it was
envisaged that no “forced retrenchments” would ensue, no guarantee could be provided
in this regard. NUMSA then proposed, as an alternative to the redesigning of the job
MATHOPO AJ
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descriptions, a five-grade structure. At that time, Aveng had a thirteen-grade structure
in place. NUMSA’s understanding was that the five-grade structure would allow for a
redesigning of the job descriptions withou t interfering with Aveng’s organisational
structure and reduce costs beyond those provided for in a collective agreement; which
Aveng was a party to and which was referred to as the main agreement of the Metal and
Engineering Industries Bargaining Council (MEIBC).
During September 2014, another consultation meeting was held where Aveng’s
Employee Relations Executive, Mr Komane, mentioned that , in order to avoid
“forced retrenchments”, employees who did not receive VSPs had to be placed in the
redesigned positions . Furthermore, that there would not be any need for
“forced retrenchments” if “grey areas” were addressed. The “grey a reas” were
identified as follows: (i) that Aveng would have a workforce with an adequate skill set
for its business to operate effectively and successfully; (ii) finalisation of job
descriptions; and (iii) selection and placement of existing employees in appropriate
redesigned posts , after the VSPs and Limited Duration Contracts ( LDCs), for those
fixed term employees who had contracts for a duration of less than six months on
average.
It is common cause that further consultation meetings were held, which resulted
in the termination of the services of 253 employees, of which 249 employees opted for
VSPs and the remaining four were retrenched. Those who opted for VSPs were given
notice of termination of employment which took effect on 10 October 2014.
Termination of employment for those retrenched employees took effect on 7 November
2014.
During October 2014, NUMSA and Aveng concluded an inter im agreement in
terms of which employees agreed to work in accordance with Aveng’s redesigned job
descriptions until the five-grade structure was finalised . It was contemplated that this
would only be in March 2015. It was further agreed that the employees performing
additional functions would be paid 60 cents per hour. The employees worked under the
MATHOPO AJ
6
proposed new s tructure for a period of six months. However, on 13 February 2015,
NUMSA reneged on the interim agreement and sent an email to Aveng , informing it
that its members would no longer perform the redesigned jobs. This , according to
NUMSA, was because Aveng had not yet negotiated the five -grade structure that was
supposed to be implemented from the beginning of March 2015.
On 30 March, it became clear to Aveng that NUMSA had no desire to engage in
a meaningful consensus-seeking consultation process to resolve the five-grade structure
issue, but rather sought to use the consultations to demand wage increases. Aveng thus
addressed a letter to NUMSA informing it, among other things, that after considering
its proposals, it was unable to accom modate its demands any further and could not
increase its costs. NUMSA was informed that the consultation process had been
exhausted. Aveng would continue , however, to implement its new redesigned job
descriptions structure to address its operational req uirements, as the jobs that existed
prior to the consultations had now become redundant. As employees of NUMSA had
been performing the redesigned jobs, Aveng offered them an opportunity to remain in
those jobs, but “should they reject it, they [would] unfortunately be retrenched”.
The parties tried to resolve their issues, but to no avail. On 31 March 2015, the
parties met and Aveng refused to withdraw its letter dated 30 March 2015. The parties
met again on 16 April 2015 where NUMSA expressed its confusion over Aveng’s letter.
NUMSA asserted that it was led to believe that the forced retrenchments had ended
following the termination of the contracts of employees who had accepted the VSPs and
those that were on LDCs. The parties were unable to resolve their differences and, on
17 April 2015, Aveng addressed a letter to NUMSA in the following terms:
“Given that your members and other employees have performed the duties as per the
new job descriptions in terms of the interim arrangement agreed to between the parties,
we shall afford them the opportunity to be engaged in the new positions at the rate
prescribed by the main agreement of the MEIBC for performing work in such positions.
This reasonable offer of alternative employment is a further bona fide effort on our part
MATHOPO AJ
7
to avoid the contemplated retrenchments. Should they reject it, they will unfortunately
be retrenched.”
During April 2015, 71 employees accepted Aveng’s offer . However,
approximately 733 employees rejected the offer and their services were subsequently
terminated on 24 April 2015 for reasons that Aveng advanced as retrenchments for its
alleged operational requirements.
Approximately a year after the dismissal of the second to further applicants,
Aveng outsourced its fleet and transferred its transport business to Imperial, including
110 of its employees . The takeover relates to one of the claims pursued by N UMSA
for the reinstatement of its members. Adjudication of this claim would require an
examination of the potential and practicable reinstatement by Imperial of some 110
employees who form part of the second to further applicants.
Litigation history
Bargaining Council
On 22 May 2015, NUMSA refe rred an unfair dismissal dispute to the Metal
Engineering Industries Bargaining Council (MEIBC) for conciliation .5 The dispute
could not be resolved and a certificate of non -resolution was issued. Thereafter,
NUMSA approached the Labour Court.
Labour Court
Before the Labour Court, NUMSA argued that the dismissal of the second to
further applicants was automatically unfair in terms of section 187(1)(c) of the LRA.
In disputing this, Aveng argued that the dismissal of the second to further applicants
was for operational requirements in terms of the LRA. It adduced the evidence of its
5 This referral occurred after NUMSA’s urgent application before the Labour Court, challenging the procedural
fairness of the dismissal and praying for an order interdicting Aveng from dismissing any further employees which
was dismissed by the Labour Court. See Numsa Obo Members v Aveng Trident Steel (a division of Aveng Africa)
(Pty) Ltd (J864/15) [2015] ZALCJHB 155 (21 May 2015).
MATHOPO AJ
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Chief Operating Officer, Mr Moodley. He testified about the challenges facing the steel
industry and particularly the economic distress Aveng found itself in as a result thereof.
According to him, it was necessary for Aveng to restructure its operation s because of
the decline in its profitability and sale s volume. The head of the Human Resourc es
Department, Ms Mofokeng, gave evidence on the consultative process between Aveng
and NUMSA. In short, her evidence was that NUMSA did not negotiate in good faith
as it continued to make unreasonable demands by soliciting wage increases for its
members when the financial position of Aveng had been clearly disclosed to NUMSA.
The last witness for Aveng was the Managing Director of Imperial, Mr Enslin. His
evidence dealt with the impracticability of reinstatement. On the other hand, NUMSA
closed its case without leading any evidence, despite propositions by counsel that
witnesses would be called to lead countervailing evidence.
The Labour Court held that the individual employees were not dismissed for
refusing to accept any demand , but for opera tional requirements after rejecting the
alternative to dismissal proposed by Aveng during the retrenchment consultation. It
reasoned as follows:
“A dismissal where the reason for it is the refusal to accept a demand is prohibited.
However, a dismissal where the reason for it is the operational requirements is not to
be precluded in the section. To say so would render the provisions of
section 188(1)(a)(ii) read with section 189 nugatory.”6
The Labour Court held that NUMSA had a duty , first, to produce credible
evidence to show that there was a demand followed by a refusal to accept such a demand
that led to an automatically unfair dismissal in terms of section 187(1)(c). NUMSA
failed to provide such evidence and therefore there was no demand.7 Second, NUMSA
failed to produce any evidence disputing the evidence of Mr Moodley and
Ms Mofokeng with the result that this evidence remained unchallenged. The Labour
6 Labour Court judgment above n 3 at para 36.
7 Id at paras 61-5. For this, the Labour Court relied on Kroukam v SA Airlink (Pty) Ltd [2005] ZALAC 5; [2005]
26 ILJ 2153 (LAC) (Kroukam).
MATHOPO AJ
9
Court concluded that it had to be accepted that the old jobs performed by the second to
further applicants were redundant and the retrenchments were thus substantively fair.8
It relied on the judgment of the Labour Appeal Court in Mazista Tiles where it was held
that:
“The [employer] could still decide its business required that the employees’ terms and
conditions of service be changed in order to be more profitable and more competitive.
If the employees rejected the proposal on changing terms and conditions, as it was the
position in this matter, then the [employer] would be entitled to dismis s them for
operational reasons under section 189.”9
The Labour Court reasoned that the dismissal of the employees was not
automatically unfair.10 It would not be reasonably practicable for Imperial to reinstate
the dismissed employees. 11 Aggrieved by the outcome, NUMSA appealed to the
Labour Appeal Court.
Labour Appeal Court
On 13 June 2019, the Labour Appeal Court upheld the Labour Court judgment
and agreed with Aveng that no demand was made as envisaged under
section 187(1)(c).12 It h eld that Aveng made a proposal to NUMSA, the primary
purpose of which was to facilitate Aveng’s restructuring for operational reasons , in
order to ensure that it survived its economic distress.13 It further held that NUMSA took
advantage of the economic pl ight of Aveng and sought to convert the consultative
processes into a collective bargaining opportunity for increased wages.14 The failure of
8 Id at para 71. At para 67, the Court found it unnecessary to decide on the procedural fairness of the dismissal as
he deemed the matter to have been sufficiently resolved by Steenkamp J in the earlier Labour Court judgment.
9 Mazista Tiles (Pty) Ltd v National Union of Mineworkers [2004] ZALAC 16; (2004) 25 ILJ 2156 (LAC) (Mazista
Tiles) at para 57.
10 Labour Court judgment above n 3 at para 66.
11 Id at para 77.
12 Labour Appeal Court judgment above n 1 at para 72.
13 Id.
14 Id at para 74.
MATHOPO AJ
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the employees to accept the employer’s proposal , based on dire operational
requirements, contributed to their dismissal and was accordingly fair. 15 Consequently,
it held that the second to further applicants were dismissed as a result of Aveng’s
operational needs , and not as a consequence of their refusal to accept a demand in
respect of a matter of mutual interest.16 It concluded that “[t]he employees’ dismissals
accordingly fell within the zone of permissible dismissals for operational requirements
and did not fall foul of section 187(1)(c) of the LRA”.17
In reaching its conclusion, the Labour Appeal Court held that section 187(1)(c)
does not preclude an employer from dismissing employees, provided that the dismissal
is for operational reasons. 18 The question of whether the section is contravened does
not depend on whether the dismissal is co nditional or final, but on the true reason for
the dismissal of the employees. 19 Thus, the true reason for the dismissal of the
employees must be determined and , in that examination, the employer’s operational
requirements play a pivotal role.
In determining whether the true reason for the dismissal was a refusal to accept
the proposed changes to employment or whether it was based on operational
requirements, the Labour Appeal Court applied the “true reason” or “dominant cause”
test as laid down by the Labour Appeal Court in Afrox.20 The Labour Appeal Court
concluded that, on the facts, the dismissal would not have occurred without the refusal
of alternative employment. 21 The true reason for the dismissal was the employer’s
operational requirements.22
15 Id.
16 Id at para 75.
17 Id.
18 Id at para 64.
19 Id at para 61.
20 SA Chemical Workers Union v Afrox Ltd [1999] ZALAC 8; (1999) 20 ILJ 1718 (LAC) (Afrox).
21 Labour Appeal Court judgment above n 1 at para 71.
22 Id at para 74.
MATHOPO AJ
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In dismissing the appeal , the Labour Appeal Court concluded that NUMSA’s
interpretation of the section would undermine the fundamental purpose of section 189
of the LRA. The section encourages engagement between employers and employees ,
facilitating the creation of alternatives to retrenchments, and to avoid scenarios where
employers are shackled and render ed unable to propose changes to the terms and
conditions of employment in terms of section 189 consultations. 23 Aggrieved by this
outcome, NUMSA approached this Court for leave to appeal.
In this Court
Applicant’s submissions
Before us, NUMSA argues that the judgment of the Labour Appeal Court must
be overturned and that the second to further applicants should be reinstated. It submits
that if their reinstatement is not reasonably practicable, as contended by Imperial, then
the employees should be appropriately compensated. NUMSA argues further that the
Labour Court’s interpretation , which was endorsed by the Labour Appeal Court, is
inconsistent with the literal, purposive and contextual interpretation of
section 187(1)(c). According to NUMSA, a plain reading of the provision contains
three requirements: (i) a demand; (ii) that relates to a matter of mutual interest; and (iii)
the dismissal of employees because they failed to accept such demand. It contended
that on a plain reading of the section, a dismissal is automatically unfair even if
employees are dismissed for rejecting a demand that arises from or as a result of the
employer’s operational requirements. In other words, it posited that there are no
qualifications or exceptions in this regard . It further contended that section 187(1)(c)
of the LRA does not expressly allow for an exception based on operational requirements
for employers to dismiss employees as it does in relation to fair dismissals in accordance
with section 188 or dismissals for operational re asons during a protected strike under
section 67(5) of the LRA.
23 Id at para 66.
MATHOPO AJ
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It alleges that the Labour Appeal Court erred in applying the true reason and
dominant cause of the dismissal test, as enunciated in Afrox. It submits that the Afrox
case is distinguishable from the facts in this matter and that the application of the test is
not appropriate.
NUMSA argues further that the Labour Appeal Court’s interpretation of the
provision limits the right to strike as set out in section 23(2)(c) of the Constitution, and
urged this Court to adopt an interpretation that best promotes the constitutional right to
strike.
NUMSA contend s that the Labour Appeal Court’s assessment of facts is yet
another reason why the appeal should succeed; and that, in truth, the offer was a demand
as contemplated by section 187(1)(c) because it had a serious sting and consequences
attached to it. It submit s that the dismissal w as consistent with the tenor of the letter
which suggested that if employees failed to accept the offer, dismissal would ensue. It
was urged upon us to accept that the employees were put on terms by the employer and
this conduct was not akin to a proposal as suggested by Aveng. It was suggested in oral
argument that the Labour Appeal Court overlooked the fact that this was a second
notice, preceded by the first notice of 31 March 2015. The effect of the latter notice,
according to NUMSA, rendered it a matter of mutual interest.
NUMSA further contend s that the parties were engaged in section 189
consultations and that the section requires that there should be proposals aimed at
reaching consensus. It argued that a n employer should negotiate with the trade union
with an open mind and seek to find a viable solution . Aveng, by its letters, displayed
its unwillingness to act accordingly in this process. NUMSA submits that, when the
section 189 notice was issued , Aveng indicated that only 400 jobs would be affected
and undertook not to retrench any of its employees, but nevertheless went on to dismiss
733 employees. According to NUMSA , taking into account the high number of
dismissed employees, the reason for the dismissal s could not have been operational
requirements.
MATHOPO AJ
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Respondents’ submissions
In opposing the application for leave to appeal, Aveng and Imperial support the
reasoning of the Labour Appeal Court. They place particular emphasis on the purpose
of the amendment to the section and stressed that the amendment sought to cure the
anomaly that arose as a result of previous court decisions,24 which sought to preclude
employers from dismissing employees for operational reasons , only to re-hire some of
them whenever circumstances permitted. They rely on the explanatory memorandum
which they co ntended clearly articulated the purpose of the amendment. More about
the explanatory memorandum later.
Aveng argues that it was engaged in a contin uous bona fide (good faith)
retrenchment consultation process throughout. R ealising the distressed financi al
position it faced, it suggested the restructuring of the company and the redesigning of
the job descriptions as an alternative to retrenchment. The employees agreed and started
working in terms of the new agreement. It was only in February 2015 that NUMSA
inexplicably started demanding higher wages. Aveng was held to ransom, as it had
retrenched some of its employees by that stage. It contended that the parties were not
engaged in collective bargaining but that Mr Komane’s statements were made during
retrenchment consultations. Aveng submit s that the interpretation of the section
contended for by NUMSA undermines the right of employers to dismiss employees for
operational reasons. Moreover, it undermines the right to fair labour practices in section
23(1) of the Constitution.
Imperial confined its case to the reinstatement of the dismissed employees. As
stated earlier, it aligned itself with Aveng in supporting the findings of the
Labour Appeal Court. For its part, it contended that on the undisputed evidence of
Mr Enslin, it would be impracticable to reinstate the employees. It submits that
24 This will be discussed below at [60] – [68].
MATHOPO AJ
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reinstatement would cripple Imperial by increasing its monthly costs and that this would
result in the entire contract25 failing with possible job losses of around 200 employees.
Leave to Appeal
It is axiomatic that in order for leave to appeal to be granted, a matter must
engage this Court’s jurisdiction and it must be in the interests of justice to grant leave
to appeal. A matter engages this Court’s jurisdiction when it raises a constitutional
issue or an arguable point of law of general public importance which ought to be
considered by this Court.26
This Court has held that matters which concern the interpretation and application
of legislation enacted to give effect to the Bill of Rights do raise constitutional issues.27
This matter clearly engages this Court’s jurisdiction as it concerns the proper
interpretation and application of section 187(1)(c) of the LRA which gives content to
automatically unfair dismissals underpinned by the right to fair labour practices which
are entrenched by section 23(1) of the Constitution. Thus, it raises a constitutional issue.
Allied to this are other constitutional issues, which also engage this Court’s
jurisdiction. First, NUMSA’s averment that the provision must be interpreted in a
manner that best promotes the right to strike in section 23(2)(c) of the Constitution.
Second, Aveng’s rebuttal that NUMSA’s construc tion of the provision undermines its
right as an employer to dismiss for operational requirements which in turn undermines
its right to fair labour practices provided for in section 23(1) of the Constitution.
25 Imperial’s role in this litigation is limited, given the context in which it took over a portion of Aveng’s business.
In brief, during April 2015, Aveng terminated the employment of approximately 733 employees on the grounds
of operational requirements, and appointed replacements, either permanently or by way of labour brokers. One
year later, Aveng outsourced the transport function in respect of its Trident Steel business to Imperial. A written
contract governs the transaction.
26 Section 167(3)(b)(i) and (ii) of the Constitution.
27 National Education Health and Allied Workers Union v University of Cape Town [2002] ZACC 27; 2003 (3)
SA 1 (CC); 2003 (2) BCLR 154 (CC) (NEHAWU) at para 14.
MATHOPO AJ
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Notwithstanding the engagement of its jurisdic tion, this Court enjoys the
discretion to determine whether it is in the interests of justice to grant leave to appeal.
It considers a number of factors in this regard. In addition to reasonable prospects of
success, which although not determinative, carries substantial weight, there is a string
of other key factors to be considered.28 These include the importance of, and the public
interest in , the determination of the constitutional issues raised. 29 Retrenchments
usually involve the loss of jobs and income by a number of employees through no fault
of their own. They have a more significant “social and economic ill effect” than other
forms of dismissals because they affect a “larger number of employees.”30 Such issues
are of critical importance to the parties involved, the labour force and other future
employment relationships . Therefore, reaching certainty and finality on when
dismissals constitute retrenchments that are not automatically unfair in terms of section
187(1)(c) of the LRA , is in the publ ic interest and warrants a determination by this
Court.
Also implicated is the robust debate concerning the impact of the amended
section 187(1)(c) of the LRA. This Court is called upon to decide on how this provision
is to be interpreted in the context of the LRA as a whole , taking into account its
structural integrity as well as the jurisprudential force of prior case law. Importantly,
this matter is not narrowly circumscribed to the parties in the present matter; it has a
broad practical reach. Employers, employees and their representatives alike will benefit
from clarity from this Court on this matter. The interests of justice thus warrant that
leave to appeal be granted.
28 General Council of the Bar of South Africa v Jiba [2019] ZACC 23; 2019 JDR 1194 (CC); 2019 (8) BCLR 919
(CC) at para 36.
29 Glenister v President of the Republic of South Africa [2011] ZACC 6; 2011 (3) SA 34 7 (CC); 2011 (7) BCLR
651 (CC) at para 53; De Reuck v Director of Public Prosecutions (Witwatersrand Local Division) [2003] ZACC
19; 2004 (1) SA 406 (CC); 2003 (12) BCLR 1333 (CC) at para 3; and Islamic Unity Convention v Independent
Broadcasting Authority [2002] ZACC 3; 2002 (4) SA 294 (CC); 2002 (5) BCLR 433 (CC) at paras 15 -6.
30 Grogan Workplace Law 13 ed (Juta & Co Ltd, Cape Town 2017) at 267.
MATHOPO AJ
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Issues for determination
As stated earlier, the overarching issue that arises on the merits is whether, on a
plain reading of section 187(1)(c) of the LRA, a dismissal is automatically unfair even
if employees are dismissed for rejecting a demand that arises as a result of the
employer’s operational requirements. At the heart of t his matter is the proper
interpretation of section 187(1)(c) of the LRA.
On my reasoning, it is not necessary to decide whether Aveng’s letter of
17 April 2015 was a demand.
Analysis
Section 189 retrenchment consultations versus collective bargaining
From the outset, t here is a need to distinguish between the section 189
consultation process and collective bargaining.31 This is so because dismissals that are
truly for operational requirements would not trigger section 187(1)(c), and the fact that
a dem and is made in the context of retrenchment consultations is thus a significant
factor in ascertaining whether the true reason for the dismissal was the employer’s
operational requirements.
Retrenchments should not be resorted to until “certain procedural requirements
intended to minimise the impact on employees” have been complied with. 32 When
employers contemplate dismissing their employees for operational requirements, they
are required to consult in terms of section 189(1) of the LRA. The nature of such a
consultation process, including “its objective and agenda” , is prescribed by
31 While the LRA does not use these terms per se, “the LRA delineates between them in terms of the institutions
and process that are available to the parties seeking to resolve the particular disputes. Broadly speaking, the Act
divides disputes into those t hat may be referred to arbitration and adjudication – which is generally (but not
always) the case with disputes of rights – and those that may form the subject matter of industrial action – which
is generally (but not always) the case with disputes of int erest.” See Collier et al Labour Law in South Africa:
Context and Principles (OUP, Cape Town 2018) at 95.
32 Grogan (2017) above n 30 at 266.
MATHOPO AJ
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section 189(2) of the LRA .33 This consultation “requires engagement by all the
consulting parties with the purpose of reaching consensus”. 34 It is important to note
that the approach to this consultation must not merely be a checklist approach – that is,
it must not be purely formalistic.35 There is both a procedural and substantive aspect to
this consultation process. This has been clarified by the Labour Appeal Court in Afrox
where the Court stated:
“It is implicit in the terms of section 189(2) that an employer, apart from taking part in
the formal consultations on the aspects set out in the se ction, should also take
substantive steps on his or her own initiative to take appropriate measures to avoid the
dismissals; to minimise the number of dismissals; to change the timing of the
dismissals; to mitigate the adverse effects of the dismissals; to select a fair and objective
method for the dismissals and to provide appropriate severance pay for dismissed
employees.”36
On the other hand, collective bargaining is the process through which both
employers and trade unions “seek to reconcile their conflicting interests and goals
through mutual accommodation [ in matters of mutual interest]. The dynami cs of
collective bargaining are demand and concession; the objective is agreement.”37 Thus,
in contrast to a consultation process, collective bargaining entails negotiating “so as to
arrive at some agreement on terms of give and take.”38
33 Le Roux Retrenchment Law in South Africa (Lexis Nexis, Cape Town 2016) at 92. See also section 189(2)(a)
of the LRA above n 2 which provides:
“The employer and the other consulting parties must in the consultation . . . engage in a
meaningful joint consensus-seeking process and attempt to reach consensus on—
(a) appropriate measures—
(i) to avoid the dismissals;
(ii) to minimise the number of dismissals;
(iii) to change the timing of the dismissals; and
(iv) to mitigate the adverse effects of the dismissals.”
34 Id at 96.
35 Id at 94.
36 Afrox above n 20 at para 36.
37 Grogan Collective Labour Law 2 ed (Juta & Co Ltd, Cape Town 2014) at 126.
38 Metal & Allied Workers Union v Hart Ltd (1985) 6 ILJ 478 (IC) (MAWU) at 493H.
MATHOPO AJ
18
It is said that collective bargaining “supersedes , but does not replace
negotiations” between the parties and that it results i n agreements “which bind
employers and individual employees and supersede individual contracts to the extent
that they conflict” .39 Furthermore, it entails bargaining which “falls between the two
extremes of dictation and submission”.40 What is abundantly clear is that there are two
aspects to collective bargaining: collective and bargaining in the sense that it is a
process which is aimed at reaching consensus and binding the parties. 41 Importantly,
there must be a willingness to reach agreement, even by compromise.42
It was noted in MAWU that there is a “distinct and substantial difference between
consultation and [collective] bargaining”. 43 The former , in anticipation of
retrenchments, “calls for a joint problem solving approach so that the needs of all parties
can be explored” .44 The latter seemingly “tends to close the mind [of the parties] to
exploring in good faith all options for finding mutually acceptable solutions” and, in its
very nature, sees the parties “wrangle with each other to secure the best deal for their
respective constituencies, often by bluffing and trying to outwit or outmanoeuvre each
other.”.45
This does not mean , however, that there should be a rigid or mechanica l
distinction between the two processes. In some instances , the processes may be
inextricably linked to each other in such a way that the distinction may become difficult
to discern. Collective bargaining can only yield changes to terms and conditions of
employment if it culminates in an agreement.
39 Grogan (2014) above n 37 at 126.
40 Id at 127.
41 Id at 126-7.
42 Id.
43 MAWU above n 38 at para 493G.
44 Karachi v Porter Motor Group (2000) 21 ILJ 2043 (LC) at para 37.
45 Id at para 36.
MATHOPO AJ
19
On the applicants ’ interpretation, if no agreement is reached in the context of
retrenchment consultations, the employer is left with no means of addressing its
operational requirements and may never resort to retrenchments without contravening
section 187(1)(c). This construction is untenable . The facts of this case demonstrate
that NUMSA was not inclined to agree to any changes unless they resulted in wage
increases for its members. This was at odds with the purpose of the retrenchment
consultation process which was geared at addressing Aveng’s distressed financial
position.46 I will elaborate further on this later on.
Historical development of section 187(1)(c)
Before considering the correctness of the Labour Appeal Court judgment, it is
necessary to have regard to the legislative framework wi thin which Aveng dismissed
the employees and the history of the section at the core of this matter. Prior to its
amendment, section 187(1)(c) read as follows:
“(1) A dismissal is automatically unfair , if the employer, in dismissing the
employee, acts contrary to section 5, or if the reason for the dismissal is—
. . .
(c) to compel the employees to accept a demand in respect of any matter
of mutual interest between the employer and the employee.”
Before the amendment, section 187(1)(c) prohibited the dismissal of employees
if the reason for the dismissal was to compel employees to accept a demand in respect
of a matter of mutual interest between the employer and the employee. In terms of this
46 See for example the explanation of this purpose by Ledwaba AJ, and endorsed by the majority judgment of
Froneman J in AMCU v Royal Bafokeng Platinum Ltd [2020] ZACC 1; 2020 (3) SA 1 (CC); 2020 (4) BCLR 373
(CC) at paras 70-1:
“[C]onsensus-seeking is neither collective bargaining nor negotiation. There is no duty on the
consulting parties to reach consensus and the employer need not accept the employees’
proposals. This is not to say that an employer can ‘go through the motions’ in the consulting
process. Instead all that is required is a bona fide (good faith) attempt to reach consensus on
the part of the employer. This determination, as seen throughout the law reports, is in many
respects fact sensitive. Ultimately, the employer retains the discretion to press on with the
proposed retrenchment or not.
MATHOPO AJ
20
section, an employer who wished to implement changes to the terms and conditions of
employment could, if their proposals were refused, embark on a section 189 exercise
with a view to retrenching those who were not prepared to work within its operational
requirements, provided that the retrenchment was final and irrevocable. This clearly
meant that the requirements of section 189 had to be complied with first. This line of
reasoning was also endorsed in ECCAWUSA.47 There, the Labour Court held:
“[W]here the amendment to the terms and conditions is proffered by an employer as an
alternative to dismissal during a bona fide retrenchment exercise and it is a reasonable
alternative based on the employer’s operational requirements, the employer will be
justified in dismissing employees who refuse to accept the alternative on offer”.48
The aforegoing remarks found favour with the Labour Court judgment when it
dismissed NUMSA’s case.49
Owing to the difficulties presented by the interpretation of this section, the
Labour Court in Fry’s Metal50 was confronted with a similar problem, albeit in the realm
of collective bargaining. That case involved an adjustment of shifts and the removal of
a transport subsidy. The employer, Fry’s Metal, wished to introduce operational
changes that necessitated alterations to the employees’ terms and conditions of
employment. It sought to negotiate a collective agreement on the proposed changes and
tried to convince the employees that the changes would ensure an increase in
productivity, resulting in its continued viability and , consequently, would enhance job
security. But no collective agreement was reached. Fry’s Metal announced at a meeting
with employee representatives that employees who were prepared to accept the intended
changes would be retained in their positions while those who refused may be retrenched.
47 Entertainment Catering Commercial & Allied Workers Union of SA v Shoprite Checkers t/a OK Krugersdorp
(2000) 21 ILJ 1347 (LC) (ECCAWUSA) at para 27.
48 Id at para 28.
49 Labour Appeal Court judgment above n 1 at para 51.
50 National Union of Metalworkers of SA v Fry’s Metal (Pty) Ltd (2001) 22 ILJ 701 (LC) ( Fry’s Metal Labour
Court judgment).
MATHOPO AJ
21
The Labour Court, per Francis AJ, considered two question s in determining
whether the dismissal constituted an automatically unfair dismissal. The first was
whether the proposed changes constituted a matter of mutual interest as contemplated
in section 187(1)(c). 51 The second was whether the employer, in insisting on a new
shift system, sought to compel the employees to accept a demand in respect of a matter
of mutual interest or, in the alternative, whether the employer could legitimately
implement the new shift system for operational reasons. 52 The Labour Court held that
the dispute involved the creation of new rights or th e diminution of existing rights , as
per the conception of disputes of mutual interest.53 It further held that the employer had
sought to avoid the path of conciliation and that there had been a subsequent lock-out
to persuade the employees to accept its proposals. 54 It came to the rescue of the
employees and held that the dismissal was not a legitimate instrument of coercion in the
collective bargaining process. It further held that the defin ition of lock-out meant that
tactical dismissals were precluded and section 187(1)(c) of the LRA rendered any
dismissal to compel acceptance automatically unfair.55
In essence, the Labour Court found that this sub-section deserved a wide reading,
giving employees protection against both threats of dismissal and actual dismissal if the
employer’s object was to secure altered terms and conditions of employment. However,
this decision was reversed on appeal by the Labour Appeal Court.56 The Labour Appeal
Court, per Zondo JP, held that a dismissal fell within the scope of section 187(1)(c) if it
was conditional in the sense that the employer retain ed an intention to accept the
employees back into its employ if they acceded to its demand. The Labour Appeal
Court expressed itself in the following terms:
51 Id at para 19.
52 Id at para 20.
53 Id at para 28.
54 Id at para 37.
55 Id at para 38.
56 Fry’s Metals (Pty) Ltd v National Union of Metalworkers of SA [2002] ZALAC 25; (2003) 24 ILJ 133 ( Fry’s
Metal Labour Appeal Court).
MATHOPO AJ
22
“A dismissal that is final cannot serve the purpose of compelling the dismissed
employee to accept a demand in respect of a matter o f mutual interest between
employer and employee because, after he has been dismissed finally, no employment
relationship remains between the two.”57
It further held:
“[T]here is a distinction between a dismissal for a reason based on operational
requirements and a dismissal the purpose of which is to compel an employee or
employees to accept a demand in respect of a matter of mutual interest between
employer and employee. The distinction relates to whether the dismissal is effected in
order to compel the employees to agree to the employer’s demand which would result
in the dismissal being withdrawn and the employees being retained if they accept the
demand or whether it is effected finally so that, in a case such as this one, the employer
may replace the employees permanently with employees who are prepared to work
under the terms and conditions that meet the employer’s requirements. An ordinary
retrenchment, where the employees who are being retrenched will not be replaced, is,
of course, also a dismissal for operational requirements.”58
In essence, the Labour Appeal Court emphasised the distinction between
automatically unfair dismissals under section 187(1)(c) and ordinary dismissals under
section 188, which include dismissals for reasons of the employer’s operational
requirements. The former are prohibited by the LRA, while the latter are not.
The Labour Appeal Court’s decision in Fry’s Metals was followed by Algorax.59
The latter case also conce rned changes to the terms and conditions of employment in
the form of new shifts. The salient difference was that the employer in Algorax offered
its employees the option of accepting changes to terms and conditions and this offer
remained open, even when the matter was before the Labour Court. The employees
57 Id at para 26-8.
58 Id at para 31.
59 Chemical Workers Industrial Union v Algorax (Pty) Ltd 2003 ILJ 1917 (LAC) (Algorax).
MATHOPO AJ
23
refused to accept the new terms and conditions and were retrenched for refusing to
accept these changes. The employer was unsuccessful in defending its actions, because
the Labour Appeal Court held that, although there were indications that the employer
had the intention to compel the employees to accept its demand as well as indications
that the purpose was to get rid of the employees permanently, on a balance , the
employer’s purpose was to compel the employees to agree to the employer’s demand.60
Relying on the Labour Appeal Court decision in Fry’s Metals, the Court held that for a
dismissal not to be automatically unfair in terms of section 187(1)(c), it could not be
subject to withdrawal upon the employee accepting a demand in a matter of mutual
interest and therefore must not be temporary.61 It also held that the dismissal of the
employees was substantively unfair because there were alternatives, short of dismissal,
that adequately could have solved the employer’s operational requirements.62
The Fry’s Metals decision was taken on appeal to the Supreme Court of Appeal.
That Court expressed itself as follows:
“To deal with the apparently overlapping categories the LRA creates, [Thompson]
suggested that the courts would have to determine on a case -by-case basis when an
employer-employee dispute had p ermissibly ‘migrated’ from the bargaining domain
(where matters of mutual interest cannot legitimately trigger dis missals) to the ‘legal
domain’ (where the employer is permitted to dismiss for operational reasons). The core
difficulty with this argument is that the dichotomy between matters of mutual interest
and questions of ‘right’ do not, in our view, form the basis of the collective bargaining
structure that the statute has adopted. The unavoidable complexities that arise from the
supposed ‘migration’ of issues from matters of mutual interest to matters of ‘right’
demonstrate, in our view, that the dichotomy does not form the basis of the statutory
structure, and section 187(1)(c) cannot, accordingly, be interpreted as if the legislation
proceeds from that premise.”63
60 Id at para 39.
61 Id at para 38.
62 Id at para 71.
63 National Union of Metalworkers of SA v Fry’s Metals (Pty) Ltd [2005] ZASCA 39 ; 2005 (5) SA 433 (SCA)
(Fry’s Metals Supreme Court of Appeal judgment) at para 54.
MATHOPO AJ
24
Thus, both the Labour Appeal Court and the Supreme Court of Appeal held that
section 187(1)(c) means no more than that an employer may not resort to a temporary
and tactical dismissal in order to coerce employees into accepting a particular
employment outcome. What is apparent from the Fry’s Metals and Algorax judgments
is that section 187(1)(c) does not prevent employers f rom dismissing employees who
do not accept proposals to amend the terms and conditions of employment on
operational grounds.
These judgments attracted a lot of academic interest. Their legal effect was
summarised by academics, Coetzee and Beerman, as follows:
“[I]n Fry’s Metals the Labour Appeal Court and Supreme C ourt of Appeal together
devised a reading of the section which construed it narrowly. It interpreted
section 187(1)(c) to indeed only protect employees from being dismissed if the purpose
of the dismissal was to compel them to accept a demand on a matter of mutual interest,
and the dismissal was of a temporary nature. If the employer effected a permanent
dismissal, because employees would not accept its demands, section 187(1)(c) could
not come to the employees’ protection.”64
As academics continue d to grapple with these issues, m uch of the criticism
centred around what the y described as the anomaly in the interpretation of
section 187(1)(c). Thompson 65 raised the po ssibility of an amendment to
section 187(1)(c) to outlaw all dismissals in the context of economic disputes as
follows:
“It is suggested that such ‘remedial’ steps would not serve industrial society well. On
reflection, if the intention was that section 187(1)(c) should outlaw all dismissals in the
context of economic disputes, it was being asked to do too much heavy lifting. And in
64 Coetzee and Beerman “Can an Employer Still Raise the Retrenchment Flag in Interest Negotiations? The Fry’s
Metals case under the Labour Relations Amendment Bill 2012” (2012) 2 De Jure 348 at 351.
65 Thompson “Bargaining over Business Imperatives: the Music of the Spheres after Fry’s Metals” (2006) 27
Industrial Law Journal 704.
MATHOPO AJ
25
any event, to locate that kind of control measure in the ‘automatically unfair’ basket
was simply too drastic. The contest between claims for business flexibility on the one
hand and protection against labour exploitation on the other is too complex and too
important to be addressed by blunt-nosed legislative injunctions. A wide interpretation
of section 187(1)(c) had the po tential to hamstring the adaptive capacity of business
mightily, and so inflict a great game on the economy. The court could have tempered
this again by a generous and overriding interpretation of the sweep of the operational
dismissal provision (the ‘emp loyer’s leeway’), section 188(1)(a)(ii), but the exercise
would have been a tricky and uneasy one.”66
In Fry’s Metals the Supreme Court of Appeal criticised Thompson’s view on the
identification of viability as a factor in illuminating the case for an operational
requirements dismissal67 and labelled it as an imprecise concept.68
Some academics suggested that section 187(1)(c) offered little assistance on how
best to reconcile the imperatives of collective bargaining and operational requirements.
Employers who wished to implement changes to the terms and conditions of
employment could, if their proposal were refused, embark on a section 189 exercise. 69
This uncertainty or confusion made it difficult for employer s intent on embarking on
retrenchments to initiate that process without flouting the law , with the result that
employers were w ary of offering any form of reinstatement or re -employment to
employees retrenched in t he context of restructuring , even if there was a valid
66 Id at 729-30.
67 Thompson “Bargaining, Business Restructuring and the Operational Requirements Dismissal” (1999) 20
Industrial Law Journal 755.
68 Fry’s Metals Supreme Court of Appeal judgment above n 63 at para 53.
69 See for example the following criticism proffered by Newaj and van Eck “Automatically Unfair and Operational
Requirements Dismissals: Making Sense of the 2014 Amendments” (2016) 19 PER at 16:
“[T]he Supreme Court of Appeal was misdirected in finding no contradiction, or at least an
eroding effect, between the sta tutory provisions which permit dismissal on the grounds of
operational requirements and terminations by reason of compelling employees to accede to an
employer’s demand. We agree with Thompson that there are grey areas where operational
requirement dismis sals and strategic dismissals which form part of collective bargaining
overlap. This is so, particularly where an employer has its proverbial back against the wall and
is fighting for its financial survival. Rather than admitting that such a shadowy area exists, and
assuming the responsibility of evaluating on a case -by-case basis where there are substantive
reasons to endorse such dismissal, the S upreme Court of Appeal stuck to the structured divide
between strategic and permanent dismissals.”
MATHOPO AJ
26
requirement for the retrenchment. This was because some courts construed offers to
take back workers as the true reason for the retrenchment. This resulted in dismissed
employees being deprived of offers of re-employment.
The proper meaning of section 187(1)(c) as amended
Section 187(1)(c) was amended with effect from 1 January 2015 in order to
address and cure the anomaly .70 The explanatory memorandum provides that the
purpose of the amendment is to—
“[A]mend section 187 of the Act to remove an anomaly arising from the interpretation
of section 187(1)(c). In the case of Fry’s Metals (Pty) L td (2005) 26, the [Supreme
Court of Appeal] held that the clause had been intended to remedy the so-called ‘lock-
out’ dismissal which was a feature of pre-1995 labour relations practice. The effect of
this decision when read with the decision of Algorax is to discourage employers from
offering reemployment to employees who have been retrenched after refusing to accept
changes in working conditions.
The proposed amendment seeks to give effect to the intention of the provision as
enacted in 1995, which is to preclude the dismissal of employees where the reason for
the dismissal is their refusal to accept a demand by the employer over a matter of
mutual interest. This is intended to protect the integrity of the process of collective
bargaining under the Act and is consistent with the purposes of the Act.”71
The explanatory memorandum shows that the amendment of the provision was
not aimed at altering the existing law relating to the provision but simply to address the
identified anomaly that came from an interpretation of the provision by the
Supreme Court of Appeal and the Labour Appeal Court in Fry’s Metals and in Algorax.
This anomaly, as the unintended consequence of those decisions, resulted in employers
being discouraged from offering re-employment to retrenched employees who had been
retrenched after refusing to accept changes to working conditions. The amendment
70 Section 187(1)(c) of the LRA above n 2 was amended by the Labour Relations Amendment Act 6 of 2014.
71 Memorandum of Objects on Labour Relations Amendment Bill, 2012 available at
https://static.pmg.org.za/bills/120522bill.pdf.
MATHOPO AJ
27
reinforces the fact that the LRA does no t allow employers engaged in collective
bargaining to dismiss employees for refusing to accept the employer’s demands.72
Evidently, it did not outlaw Fry’s Metals type dismissals altogether.
The parties expressed the explanatory memorandum as follows: on the one hand,
Aveng was of t he view that the amendment resonate d with the intention of the
Legislature. NUMSA, on the other hand, argued that the explanatory memorandum is
ambiguous and does not spell out the specific anomaly which the amendment was
intended to cure. The centrepiece of NUMSA’s argument is that the amendment of
section 187(1)(c) has the effect that employers are no longer permitted to dismiss
employees and replace them with others who are prepared to work in accordance with
the terms and conditions that are operationally required. NUMSA fur ther contended
that the distinction between final and conditional dismissals has fallen away, as has the
causation test, which determines whether the dominant reason for the dismissal was the
employer’s operational requirements or the refusal to accept a demand.
One would have thought that with the amendment, the position would have been
clarified. Regrettably, as the facts and differing views of the parties in this case
demonstrate, uncertainty still abounds.
In order to ascertain the proper meaning of section 187(1)(c) as amended, it is
appropriate to illustrate how legislative instruments are to be interpreted. The meaning
of the section must be garnered from the plain language of the text, its scope, location
in the scheme of the LRA and its purpose.73 In doing so, we must also heed the
interpretative injunction that promotes the spirit, purport and objects of the Bill of
Rights.74 In NEHAWU, this Court held:
72 This, of course, does not mean that section 187(1)(c) may apply only in the context of collective bargaining.
Likewise, it may also apply to any demand that has, as its trigger , an employer’s desire to compel employees to
accept a demand in respect of any matter of mutual interest between them and the employer.
73 SATAWU v Moloto [2012] ZACC 19; 2012 (6) SA 249 (CC); 2012 (11) BCLR 1177 (CC) at paras 19 -20.
74 Section 39(2) of the Constitution.
MATHOPO AJ
28
“The declared purpose of the LRA ‘is to advance economic development, social justice,
labour peace and the democratisation of the workplace’. This is to be achieved by
fulfilling its primary objects, which includes giving effect to section 23 of the
Constitution. It lays down the parameters of its int erpretation by enjoining those
responsible for its application to interpret it in compliance with the Constitution and
South Africa’s international obligations. The LRA must therefore be purposively
construed in order to give effect to the Constitution.”75 (Footnotes omitted)
This Court, in Bertie Van Zyl, explained that “[t]he purpose of a statute plays an
important role in establishing a context that clarifies the scop e and intended effect of a
law”.76 The purpose of the section must therefore be contextualised within the right to
fair labour practices pursuant to section 23 of the Constitution and the purpose of the
LRA as a whole. More importantly, in the context of this case, the section must be read
to create clear and properly circumscribed parameters which employers and employees
engaging in retrenchment proc esses must understand and through which they must
operate. The LRA makes provision for an employer to dismiss striking workers for
conduct, in terms of section 67(5) or for operational requirements.
A closer look at section 187(1)(c) reveals an inescapable need to determine the
real reason for the dismissal. The provision sets out the salient requirements that need
to be met before an automatically unfair dismissal can be triggered . The question that
arises is whether section 187(1)(c) permits an employ er to dismiss employees for
rejecting a demand that arises as a result of the employer’s operational requirements.
A careful analysis of the wording of the section , alongside the explanatory
memorandum, demonstrates that the interpretation contended for by NUMSA is
incongruous with the section. What th at contention boils down to is that an employer
considering operational requirements may never resort to retrenchments without
contravening the section. This, in my view, would undermine an employer’s right to
75 NEHAWU above n 27 at para 41.
76 Bertie van Zyl (Pty) Ltd v Minister for Safety and Security [2009] ZACC 11; 2010 (2) SA 181 (CC); 2009 (10)
BCLR 978 (CC) (Bertie van Zyl) at para 21.
MATHOPO AJ
29
fair labour practices as entrenched in section 23(1) of the Constitution , since it would
take away its right to resort to retrenchments where operational requirements render
them necessary . The fallacy in NUMSA’s submission can best be described in the
following scenario : employers are allowed to retrench for operational requirements
during a protected strike, including a lock -out, but not in a normal retrenchment
situation where job -losses could be minimised or av oided. In my assessment, the
purpose of amending the provision was to deal with the anomaly created by case law
which had the detrimental effect of precluding employers from offering alternative
positions, short of dismissal , to employees, or from offerin g any dismissed employee
reinstatement on amended terms and conditions of employment following a
restructuring process.
NUMSA’s submission is startling because it would perpetuate the anomaly that
the amendment sought to cure . On that interpretation, employers engaged in
section 189 consultations would be wary of proposing any changes to the terms and
conditions of employment which may , if accepted, address their operational
requirements and save jobs, for fear of facing automatically unfair dismissal cla ims if
changes are rejected and retrenchments follow. NUMSA’s construction would render
such consultations nugatory and undermine the fundamental purpose of section 189 ,
which is to encourage engagement regarding viable alternatives to retrenchments.
Determining the true reason for dismissal
The sole enquiry under section 187(1)(c) is whether the reason for the dismissal
is the refusal to accept the proposed changes to employment. A proper interpretation
of the section requires a careful analysis. The wording of section 187(1)(c) does not
suggest that simply because a proposed change is refused and a dismissal ensues
thereafter, the reason for the dismissal is necessarily the refusal to accep t the proposed
change. On the contrary, the true reason for t he dismissal, irrespective of whether a
proposed change is rejected, stands to be determined.77
77 Collier et al above n 31.
MATHOPO AJ
30
Determining the reason for a dismissal is a question of fact and the enquiry into
the reasons for the dismissal is an objective one.78 One of the ways this can be done is
to apply the test in Afrox.79 There is no basis on which to exclude an employer’s
operational requirements from consideration as a possible reason for dismissal. The
causation analysis espoused in Afrox was premised on the fact that section 187(1)(c)
uses the phrase “if the reason for the dismissal is” and not the nature of the rights at
play. While, admittedly, the provision itself does not place an injunction to utilise the
Afrox test per se, I will demonstrate below that, in determining what the true reason for
the dismissal is, the Afrox test is most useful.
NUMSA sought to meet this argument by contending that even if employees are
dismissed for rejecting a demand that arises as a result of the employer’s operational
requirements, the dismissal is automatically unfair. According to NUMSA’s
construction, an employer faced with operational requirements is precluded from
dismissing employees under such circumstances. The Labour Appeal Court disagreed
with NUMSA and held that the employee s were dismissed as a result of Aveng’s
operational needs, rather than their refusal to accept a demand in respect of a matter of
mutual interest. The material enquiry is whether the reason for the dismissal was the
refusal to accept the proposed changes to the terms of employment in terms of the Afrox
test for factual and legal causation. In my view, if the purpose of the amendment was
to do away with the Fry’s Metals type dismissals, this could have been clearly done in
both the amendment as well as the explanatory memorandum.
I agree with the Labour Appeal Court that , on a proper interpretation of the
section, “[i]t no longer matters what the employer’s intention or purpose might be” since
78 Labour Court judgment above n 3 at para 30. See also Afrox above n 20 at para 32.
79 While it is called a “causation” test, its essential utility is in determining the proximate or dominant factor in an
event. This is borne out by the facts of each case, such as in the present one, when there may be multiple competing
reasons for a dismissal. The determination by a court as to the “true” or “ dominant” reason strikes the balance
between outlawing all operational dismissals in the context of collective bargaining and allowing all dismissals
provided, however, that an employer proves that they were for operational requirements.
MATHOPO AJ
31
there has been a shift in focus “from the employer’s intention in effecting the dismissal
to the refusal of the employees to accede.” 80 It also correctly held that the “question
whether section 187(1)(c) of the LRA has been contravened does not depend on whether
the dismissal is conditional or final, but rather on what the true reason for the dismissal
of the employees is.”81
To resolve the issues that arise from the facts of this matter, the
Labour Appeal Court relied on the Afrox causation test to determine the true cause for
the dismissal.82 For those cases where it is not easy to determine what the true reason
is, I agree that a useful analysis is found in the Afrox test.
In Afrox the issue was whether the dismissal occurred as a result of the
employees’ participation or support (or intended participation or support) in a protected
strike in terms of section 187(1)(a) or whether it was based on the employer’s
operational needs by virtue of sections 188(1) and 189.83 The Court held:
“The enquiry into the reason for the dismissal is an objective one, where the employer’s
motive for the dismissal will merely be one of a number of factors to be considered.
This issue (the reason for the dismissal) is essentially one of causation and I can see no
reason why the usual twofold approach to causation, applied in other fields of law,
should not be utilised here”.84
80 Labour Appeal Court judgment above n 1 at para 61.
81 Id at para 65.
82 Id at paras 68-75.
83 Afrox above n 20 at para 5.
84 Id at para 32. The Court cites the locus classicus delictual causation cases including Minister of Police v
Skosana 1977 (1) SA 31 (A) ( Skosana) at 34. Many decades ago, a general and flexible test of legal causation
was developed in Skosana. The test as developed was whether the factual cause of a particular consequence was
reasonable or directly linked to it. If a reasonably close or direct relationship existed, the factual cause would also
be the legal cause of that particular consequence. Such a reasonably close or direct relationship might exist either
because the particular consequence or harmful result was reasonably foreseeable or because the consequence was
directly related to the conduct. This approach has been followed in many cases. What this now boils down to is
that in determining the true reason for the dismissal, the court must in view of all the circumstances of the case
determine whether a reasonably close or direct relationship existed between the relevant factually related cause
and consequence.
MATHOPO AJ
32
And went on to state that:
“The first step is to determine factual causatio n: was participation or support, or
intended participation or support, of the protected strike a sine qua non (or prerequisite)
for the dismissal? . . . [T]he next issue is one of legal causation, namely whether such
participation or conduct was the ‘main’ or ‘dominant’, or ‘proximate’, or ‘most likely’
cause of the dismissal. There are no hard and fast rules to determine the question of
legal causation.”85
In such cases, the court would determine what the factual and legal causes of the
dismissal were by first asking whether the dismissal would have occurred if the
employees had not refused the demand. If the answer is in the affirmative, the dismissal
does not amount to an automatically unfair dismissal. If the answer is in the negative,
the second leg is necessary: is such refusal the main, dominant, proximate or most likely
cause of the dismissal?86 This means, as the Labour Appeal Court found, that the merits
of the employer’s decision in such circumstances must be examined.87
The Afrox test has been endorsed and applied in various cases dealing with
section 187(1) dismissals that are automatically unfair in contrast to section 189
dismissals for operational reasons that are not automatically unfair.88 Admittedly, some
of these cases, like Afrox, concerned section 187(1)(a) versus section 189 ; not
section 187(1)(c). In my view, it is not controversial to apply the Afrox test with equal
force in the context of section 187(1)(c). This is supported by the string of cases that
reveals how the Afrox test has been accepted and applied by the Labour Appeal Court
85 Afrox above n 20 at para 32.
86 See Labour Appeal Court judgment above n 1 at para 68. Although the terms “main”, “dominant”, “proximate
or most likely” are not included in the sections, they have become terms of art which assist the court in determing
the true reason of the dismissal based on a probable inference.
87 Id at para 69.
88 See further Simmadari v Absa Bank Ltd (2018) 39 ILJ 1819 (LC) at para 50 in the context of section 187(1)(f);
Heath v A & N Paneelkloppers (2015) 36 ILJ 1301 (LC) at para 42, where it was found that the same principles
would apply in terms of section 187(1)(e); and Kaltwasser v Isambulela Group Administrator (Pty) Ltd (2014) 35
ILJ 3436 (LC) at para 73.
MATHOPO AJ
33
in the context of other subsections of section 187(1).89 In any event, the Afrox test is
employed more generally when the courts are required to ascertain the true reason for
dismissals.
Turning to the specific text of section 187 (1) of the LRA, the wording of that
section provides that “[a] dismissal is automatically unfair if the employer, in dismissing
the employee, acts contrary to section 5 or, if the reason for the dismissal is. . . .”90 This
requires courts to interrogate and determine , among various factors, what the cause of
the dismissal is. In this matter, the key enquiry is whether it is the refusal by employees
to accept the proposed changes to the terms of employment or Aveng’s op erational
requirements.
The Labour Appeal Court in Department of Correctional Services v Police &
Prisons Civil Rights Union91 held:
“The reason contemplated and to be sought by the court is the objective reason in a
causative sense. The court must enqui re into the objective causative factors which
brought about the dismissal, and should not restrict the enquiry to a subjective reason,
in the sense of an explanation from one or other of the parties.”92
This requires the courts to determine the probable cause of the dismissal by
examining the facts before them and assessing whether that cause is the main or
dominant, or proximate, or most likely cause of the dismissal.93 As a result, there is no
logical reason why the Afrox test, which in essence seeks to distinguish automatically
89 See TFD Network Africa (Pty) Ltd v Faris [2018] ZALAC 30; (2019) 40 ILJ 326 (LAC) at para 26 – 7 in the
context of section 187(1)(f); Long v Prism Holdings [2012] ZALAC 5; (2012) 33 ILJ 1402 (LAC) (Long) at paras
35-6 in the context of section 187(1)(g);and State Information Technology Agency (Pty) Ltd v Sekgobela [2012]
ZALAC 16; (2012) 33 ILJ 2374 (LAC) at para 16 in the context of section 187(1)(h). It is worth mentioning that
the Afrox test is invoked despite the fact that these sub -sections do not expressly state “causation” or require the
Afrox test.
90 Section 187(1) of the LRA above n 2.
91 Department of Correctional Services v Police & Prisons Civil Rights Union [2011] ZALAC 21; (2011) 32 ILJ
2629 (LAC) (POPCRU).
92 Id at para 34.
93 Long above n 89 at para 35.
MATHOPO AJ
34
unfair dismissals from those that are not automatically unfair , cannot similarly be
applied in the context of section 187(1)(c). This is further buttressed by the fact that
the section itself uses the language “if the reason for the dismissal is” , making it clear
that establishing the true and dominant reason for the dismissal is paramount. In doing
so, i t clearly denotes that an examination of the reason, which can be ascertained
through a causal analysis, must be established in order to determine whether or not the
section has been contravened. Since the section itself implies a causation requirement,
it is apposite to utilise the causation test as articulated in Afrox.
I have had the benefit of reading the judgment penned by my brother, Majiedt J
(second judgment), and that of my brother, Jafta J (third judgment) . We arrive at the
same conclusion that the appeal must fail. However, o ur differences lie in our
approaches to the conclusion. To be clear, I accept that the point of departure is to
consider the facts and evidence of a particular matter. Our labour law jurisprudence
supports the Afrox test as a nifty mechanism to determine the true reason for the
dismissal. The second judgment disagrees with this judgment on two fronts: first,
whether on the proper interpretation of section 187(1)(c) causation is still a requirement.
Second, whether the Afrox causation test is still relevant for determining the true reason
in terms of section 187(1)(c).
The second judgment adopt s the approach in Algorax where the
Labour Appeal Court, with Zondo JP writing for the majority, applied the conventional
method of evaluating evidence for the resolution of irreconcilable versions.94 Although
Zondo JP did not expressly refer to Stellenbosch Farmers’ Winery ,95 a reading of the
judgment indicates that he adopted the principles laid down in that case.
The third judgment endorses the second judgment, but goes further to find that
the language of section 187(1) “is not capable, let alone being reasonably capable, of
94 Second judgment [108] and [125].
95 Stellenbosch Farmers ’ Winery Group Ltd and v Martell Et Cie [2002] ZASCA 98 ; 2003 (1) SA 11 (SCA)
(Stellenbosch Farmers’ Winery).
MATHOPO AJ
35
an interpretation that the provision requires the invocation of causation, whether factual
or legal, for determining the reason for dismissal. At the level of interpretation, there
can be no legal basis for imputing causation to the provision.” 96 And that this
interpretation “is text-defiant and as a result there is no legitimate legal basis th at I can
think of which grounds the application of causation to matters regulated by section
187(1).”97
Before dealing with our differences, it is apposite to make the following
observations and demonstrate how reliance on Algorax to the total exclu sion of Afrox
is misplaced : Algorax was a case of an automatically unfair dismiss al in terms of
section 187(1)(c) where Zondo JP did not discard the test in Afrox. Nor did he propagate
for different tests being applied in the various subsections of section 187(1). The
suggestion that there are two tests does not bear scrutiny.
I interpose to say that the approaches, generally speaking, seem to represent two
fundamentally opposed view points to the question of the determination of the reason
for the dismissal in the context of section 187. The obvious danger of preferring one
test and disregarding the other is apparent as I will demonstrate later in this judgment.
I now turn to address the apparent dichotomous approaches in this and the second
judgment. To properly contextualise this dichotomy, sight should not be lost of the fact
that in its pre -amendment form, section 187(1)(c) provided that a dismissal is
automatically unfair if the reason for the dismissal is “to compel the employee to accept
a demand in respect of a ny matter of mutual interest between the employer and
employee.” Section 187(1)(c), before the amendment, therefore envisaged an
investigation into the probable motive or purpose on the part of the employer which
would amount to a prohibited r eason for a dismissal. The other subs ections of
section 187(1), on the other hand, and which were interpreted in the Afrox case,
contemplated a state of affairs or event rather than a motive that would constitute the
96 Third judgment [145].
97 Id [153].
MATHOPO AJ
36
reason for a dismissal , hence the causation test. Since t he amendment in 2014 ,
section 187(1)(c) provides that a dismissal is automatically unfair if the reason for the
dismissal is “a refusal by the employees to accept a demand in respect of any matter of
mutual interest betwe en the employer and the employee” . The language of
section 187(1)(c) has thus been brought in line with the rest of section 187(1).
It is unclear to me why section 187(1)(c) requires a different test to the one
applied to the rest of the subsections in section 187(1). I find it difficult to accept that
there should be a different interpretation. There is accordingly no basis for the finding
that section 187(1)(c) is distinguishable or warrants a different treatment to the other
provisions contained in section 187(1). I hasten to add that Algorax was decided on the
basis of section 187(1)(c) in its pre-amended form and is no authority for the proposition
that causation is not the appropriate enquiry when interpreting section 187(1)(c) in its
current form. In any event, it is not apparent to me that Algorax does not, in fact, apply
the causation requirement. There is no need to depart from the Afrox test in the context
of section 187(1)(c).98
Lastly, the second judgment concludes that the causation test as applied in the
law of delict is fraught with difficulties and impracticable to apply. A reading of
Algorax suggests otherwise. Even though Zondo JP did not specifically refer to the
causation enquiry in the determination of the true reason or dominant cause of the
dismissal, he conducted an evaluation of the facts. Essentially, he embarked on a n
enquiry into causation which sought to determine the dominant factor precipitating the
dismissals. Factual causation , as I understand it , concerns a particular kind of link or
connection between at least two facts or set of facts. As with all facts, factual causation
is something that either exists or does not. The court usually determines the test on the
98 The Afrox approach in this context has also been endorsed by academic writers such as Newaj and van Eck ,
above n 69 at 26, who state that:
“It is in our view that the test which the [Labour Appeal Court] applied in [Afrox] in determining
the true reason for the dismissal in the context of strikes and retrenchments is also the
appropriate test to be applied in the intersection between automatically unfair and operational
requirement dismissals.”
MATHOPO AJ
37
basis of evidence and probabilities before it. The Labour Appeal Court rightly enquired
into the circumstances that led to the dismissal. In doing so it relied on the knowledge
of the facts as well as reliable evidence. This approach resonates neatly with the Afrox
test.
Zondo JP’s silence regarding the Afrox test does not imply that the test has been
departed from. It does not follow that because he adopted the common sense approach
or conventional method of evaluating evidence, he discarded the Afrox test. Rather, the
law reports are replete with various judgments of the Labour Appeal Court endorsing
and applying the Afrox approach.99 The clearest examples of this includes POPCRU
and Long where the Court continued to rely on Afrox and stated that:
“ In order to determine whether section 197 applies, the question that has to be asked
is whether the probable cause of the dismissal was the transfer of the business as a
going concern or a reason related to such transfer.”100
99 See n 89 above.
100 The Labour Appeal Court in Long above n 89 at para 35 relied on paras 46-7 of Afrox above n 20 where it was
held:
“To determine whether the employees’ participation or conduct in the protected strikes was the
reason for their dismissal, and thus made the dismissal automatically unfair , one first has to
ascertain whether such participation or conduct was a factual cause for the decision to dismiss.
To do this one must ask whether the dismissal would have taken place had there been no
participation in the strike (or had there been no st rike). In my view the answer to this must be
no. On the available evidence Afrox was quite happy with the modified staggered shift system
which was in operation from the beginning of October 1996 until the strike started in January
1997. It does not seem probable that Afrox would have implemented a contracting out system
when it was happy with the results of the modified staggered shift system. What must also,
however, be kept in mind is that no dismissals would have occurred had there been no need to
modify the old overtime system. This need was the original factual cause of all that followed.
Once it is accepted that participation in the strike was also a factual cause for the dismissal of
the employees, the next question is whether participation in t he strike was, as a matter of
probable inference from the facts, the only real or proximate cause of the dismissal (in other
words, whether such participation was the legal cause of the dismissals). I do not think that the
question must necessarily be answered positively. The need to change the old system predated
the strike. The possibility of retrenchment was first mentioned in October 1996, before the
strike; consultations about the implementation of the contracting out took place during the
strike; and the union was warned that dismissal would follow on the lapse of these consultations.
Although it is probably true to say that the continued participation in the strike contributed to,
or accelerated the decision to dismiss, it seems to me that it cann ot be said to be the main, or
proximate, or dominant cause for the dismissal. The need to get the business going again on a
permanent and more stable basis was as pressing a consideration, if not more so. Whether the
timing of the dismissals was appropri ate belongs more properly to the enquiry whether the
dismissals were fair.”
MATHOPO AJ
38
In my view, stripped of all the conflicting textual interpretations in this judgment
and that of my brother, Majiedt J, the factual determination of the true reason for the
dismissal in both judgments remains the same. It is in any event questionable whether
the Court in Algorax applied a test that is different from the Afrox test. The parties also
did not require this Court to determine whether the two tests are incompatible. Thus,
circumventing the Afrox test merely because it is cumbersome is unsustainable. Algorax
does not provide compelling support for the view that factual causation is not the proper
enquiry in interpreting section 187(1)(c ), and a ny suggestion that Afrox is no longer
good law is, thus, misplaced.
Causation seeks the true cause for the dismissal and it does so by interrogating
the reason for the dismissal . In this case the causation test seeks the ultimate cause of
the dismissal – whether it is because of the refusal of a demand or due to operational
requirements. The causation test accepts that in some scenarios there may be more than
one possible outcome.
Ultimately, this judgment and that of my brother , Majiedt J , reach the same
conclusion in relation to the facts of this matter and there is no need to say which of the
approaches adopted is better in law. What matters most is that w e both hold that the
dismissal in this case is not automatically unfair.101
Application of the facts
As mentioned above, the central question is whether the true reason for dismissal
is the refusal by the employees to accept the proposed changes to employment or
101 See the judgment of Willis J where he interestingly held in Kroukam above n 7 at para 67 that:
“Both Zondo JP and Davis AJA arrive, by somewhat different routes, at the same factual
conclusion: that the appellant was dismissed primarily as a result of the activities undertaken by
him on behalf of the union. . . . As long as we all arrive at the same destination on the questions
of fact, I think it irrelevant for me to indicate which route I prefer. It will be of no assistance to
anybody. . . . I cannot say that either of Zondo JP or Davis AJA is incorrect in following the
route which he does. . . each journey will have its own charms. Questions of law are a different
matter. On such questions the reasons of judges do matter, not only in the particular case but
also for those that may come afterwards.”
MATHOPO AJ
39
Aveng’s operational requirements . On the facts, the approach in Afrox cannot be
faulted. In terms of factual causation, i t is undisputable that the second to further
applicants would not have been dismissed if they had accepted the proposed changes to
employment. However, the facts clearly reveal that the letter was intended to avoid or
minimise job losses. It is difficult to conceive why after the employees had been
working in terms of the interim agreement for a period of six months, they inexplicably
changed tack and reneged on the agreement, and demanded more money. There is force
in the submission that when parties are engaged in economic bargaining one of them
should not lightly be allowed to threaten to pull the plug on the process resulting in the
demise of the other if it does not get its way. This is exactly what NUMSA did.
Aveng faced harsh economic conditions and needed to restructure in order to
survive and avoid the wholesale loss of jobs of its entire workforce. It proposed to
remedy this by restructuring and getting rid of redundant positions. I t commenced
consultations in this context and received a proposal to change from the thirteen -grade
structure that was utilised under the main agreement, to the five-grade structure. While
consulting on ways to change structures, the remainin g employees performed
redesigned job descriptions. Sight must not be lost of the fact that there were several
employees that had been retrenched as part of the VSPs and LDC.
This restructuring occurred in the context of retrenchment consultations and not
collective bargaining over wages. The effectiveness of th e new structure under the
interim agreement was, however, disrupted when NUMSA reneged on the interim
agreement before it had terminated by effluxion of time. The refusal to work within the
new structure amounted to an “insurmountable operational requirements” problem for
Aveng. The jobs that were performed before the redesigning of the job descriptions
were no longer viable. If Aveng so wished, it could have terminated the services of its
employees then. However, it did not. Instead, when this joint-consensus-seeking effort
failed, it offered the second to further applicants reasonable alternative employment, on
the same terms and with the same redesigned job descriptions according to which they
MATHOPO AJ
40
had previously been employed. When they refused to accept the offer, they were
retrenched.
No fault can be found in the way Aveng pursued and responded to the process
of negotiations and consultations. It conducted itself in a transparent, honest and bona
fide manner. During the negotiations, there were continuing grounds for it to argue that
it had a fai r reason to terminate the services of its employees on the basis of its
operational requirements, but it elected not to do so. It continued to engage with
NUMSA to avoid job losses.
Although it is probably true to say that the refusal to accept the proposed changes
to employment accelerated the decision to dismiss, it seems to me that it cannot be said
to be the main, proximate, or dominant cause for the dismissal. The need to ensure that
the business was economically viable and remained sustainable was the most pressing
consideration. Aveng could no longer compromise in light of its circumstances.
Importantly, it was not in a position to bind itself any further to more than it could offer.
As the Labour Appeal Court noted:
“Aveng’s viability was at stake, proceedings with a bargaining power play . . . was not
a realistic option in the circumstances. The primary purpose of Aveng in making the
proposal was not to grasp an advantage in the wage bargain, it was rather to restructure
for operational reaso ns to ensure Aveng’s long term survival. . . . The bargaining
pressure thus brought to bear exacerbated the operational requirements problem. The
proposal having been negotiated to impasse, the imperative or dynamic to dismiss for
operational reasons transcended tactical positioning to become fair reason. The failure
of the employees to accept the proposals engendered an insurmountable operational
requirements problem that constituted a fair reason for dismissal.”102
I agree with the Labour Appeal Court t hat “[t]he proposals were the only
reasonable and sensible means of avoiding dismissals and entailed no adverse financial
102 Labour Appeal Court judgment above n 1 at para 74.
MATHOPO AJ
41
consequences for the employees” .103 Therefore, the dismissal of the employees for
operational reasons was the main or dominant cause for the dismissals, and constituted
a fair reason for the dismissals.
Conclusion
In an ever -changing economic climate characterised by increasing global
competition, operational reasons not only relate to the downsizing of the workforce, but
also to restr ucturing the manner in which an existing workforce carries out its work.
Restructuring entails a number of possibilities , including shift system duties; adjusted
remuneration; and merging of jobs or duties. Generally, businesses that adapt quickly
will survive and prosper. Those that do not will decline and fail. Realising its
predicament, Aveng engaged with its employees through NUMSA regarding a
re-organisational plan through a structured consultative process. NUMSA’s
intransigence played a major rol e in making it impossible to save jobs. To prohibit
Aveng from invoking the provisions of the section and dismiss ing employees under
these circumstances would undermine the LRA’s objectives in ensuring the viability
and vitality of businesses.
It is in the best interests of society that an employer remains economically viable.
The owners and managers of the business are best placed to run the businesses. Sight
should not be lost o f one of the primary purposes of the LRA – to advance economic
development.104 Aveng took NUMSA into its confidence, by disclosing its financial
position as early as April 2014. At no stage did NUMSA argue that it was misled. On
the contrary, the evidence demonstrates that NUMSA reneged on the interim agreement
and failed to act in good faith, placing Aveng in a precarious position.
Nothing in the section, read in the context of the LRA as a whole, precludes
employers from dismissing employees for operational requirements. This is subject to
103 Id at para 73.
104 Section 1 of the LRA above n 2 provides that “the purpose of [the LRA] is to advance economic development,
social justice, labour peace and the democratisation of the workplace. . . .”
MATHOPO AJ
42
the requirements that the di smissal is substantively fair (for bona fide operational
requirements) and procedurally fair (after a satisfactory consultation process).
On a plain reading of section 187(1)(c), it cannot be suggested that the section
should not be interpreted in a manner that permits dismissal for operational
requirements. That said, it does not mean that employers have carte blanche (complete
freedom to act as one wishes) to dismiss employees . Courts must guard against
disguised retrenchments that take place where collective bargaining prevails. Courts
can police opportunistic or disingenuous employers by determining the true reason for
the dismissals. As I have said above , one of the ways th is can be done is by applying
the Afrox test, to unmask the true reason for the dismissals. As Zondo JP stated in
Algorax:
“The court must not defer to the employer for the purpose of answering that question.
It cannot say that the employer thinks it is fair, and therefore, it is or should be fair.
Furthermore, the court should not hesitate to deal with an issue which requires no
special expertise, skills or knowledge, but simply common sense. Where an employer
has chosen a solution that results in the dismissal of a number of employees when there
is an obvious and clear way in which it could have addressed the problem without any
or fewer employees losing their jobs, and the court is satisfied, after hearing the
employer on such a solution, that it can work, the court should not hesitate to deal with
the matter on the basis of the employer using a solution that preserves jobs, rather than
one that causes job losses.”105
I am satisfied that, on the facts of this case, the applicants were not dismissed for
rejecting a demand in respect of a matter of mutual interest. The dominant or true reason
for their dismissal was the employer’s operational requirements. It follows that the
dismissal of the second to further appli cants was not automatically unfair in terms of
section 187(1)(c) of the LRA.
105 Algorax above n 59 at paras 69-70.
MATHOPO AJ / MAJIEDT J
43
In light of the finding that Aveng was justified in dismissing the employees for
its operational reasons, it is not necessa ry to make a determination on whether it is
reasonably practicable to order Imperial to reinstate the second to further applicants.
Order
The following order is made:
1. The application for leave to appeal is granted.
2. The appeal is dismissed.
3. There is no order as to costs.
MAJIEDT J (Jafta J, Mhlantla J, Tshiqi J, and Victor AJ concurring):
I have read the comprehensive, st rongly reasoned judgment of my brother,
Mathopo AJ (first judgment). I concur with the outcome and, save in one respect, with
the sound reasons advanced for that outcome. My point of disagreement concerns the
first judgment’s approach in determining the true reason for the employees’ dismissal.
In answering that question, the first judgment interprets section 187(1)(c) of the LRA
as importing the application of the causation test propounded in Afrox.106 For the
reasons that follow, I do not subscribe to that approach.
The facts have been fully recounted in the first judgment and I will accordingly
confine this judgment to a discussion of the law. Section 187 of the LRA in relevant
parts reads:
“(1) A dismissal is automatically unfair if the employer, in dismissing the
employee, acts contrary to section 5, or if the reason for the dismissal is—
. . .
106 Afrox above n 20.
MAJIEDT J
(c) a refusal by employees to accept a demand in respect of any matter of
mutual interest between them and their employer.”107
To my knowledge, this is the first time that this Court is required to fully consider
section 187(1)(c). As indicated in the first judgment, Afrox has been followed by a
number of other cases, but none of those cases concerned the correct interpretation o f
section 187(1)(c).108 Instead, they concerned sections 187(1)(a), (d), (e) and (f),
respectively. I unhesitatingly accept, though, that the enquiry remains the same: what
is the true reason for the dismissal? A more detailed analysis of these cases will be
undertaken shortly. On the other hand, Algorax specifically dealt with section 187(1)(c)
and the approach adopted there commends itself to me. In Algorax, which I will discuss
in more detail, the majority judgment, penned by Zondo JP, adopts the conv entional
method applied by courts in the evaluation of evidence in respect of a dispute of fact
with two conflicting versions, in order to determine the true reason for the dismissal of
employees.
In the present instance we are faced with two conflicting reasons for dismissal:
one proffered by the employer, Aveng, and the other advanced by NUMSA. We are
required here to determine the true reason for the dismissal in the context of interpreting
section 187(1)(c). In doing so, we must, if possible, prefer one of these conflicting
versions above the other and furnish reasons for that preference. This judgment will
demonstrate why, in the context of interpreting section 187(1)(c), the causation test,
traditionally employed in delict and criminal cases, is no t suitable for making that
determination and why the conventional method, as applied in Algorax, is to be
preferred.
107 As the first judgment explicates a bove n 4 , this section was amended by section 31 of the Labour Relations
Amendment Act 6 of 2014, but the amendment plays no role in the present discussion.
108 See cases cited above n 88-9.
MAJIEDT J
45
The two -staged causation test is well -established in delict cases. In Afrox,
Froneman DJP cit ed Mokgethi109 and Skosana110 as examples of this two -staged
approach. In preferring this test to determine the true reason for dismissal,
Froneman DJP reasoned:
“The enquiry into the reason for the dismissal is an objective one, where the employer’s
motive for the dismissal will merely be one of a number of factors to be considered.
This issue (the reason for the dismissal) is essentially one of causation and I can see no
reason why the usual twofold approach to causation, applied in other fields of law,
should not also be utilised here (compare Mokgethi at 39D-41A; Skosana at 34). The
first step is to determine factual causation: was participation or support, or intended
participation or support, of the protected strike a sine qua non (or prerequisite) for the
dismissal? Put another way, would the dismissal have occurred if there was no
participation or support of the strike? If the answer is yes, then the dismissal was not
automatically unfair. If the answer is no, that does not immediately render the dismissal
automatically unfair; the next issue is one of legal causation, namely whether such
participation or conduct was the ‘main’ or ‘dominant’, or ‘proximate’, or ‘most likely’
cause of the dismissal. There are no hard and fast r ules to determine the question of
legal causation. I would respectfully venture to suggest that the most practical way of
approaching the issue would be to determine what the most probable inference is that
may be drawn from the established facts as a cause of the dismissal, in much the same
way as the most probable or plausible inference is drawn from circumstantial evidence
in civil cases. It is important to remember that at this stage the fairness of the dismissal
is not yet an issue. Only if this test of legal causation also shows that the most probable
cause for the dismissal was only participation or support of the protected strike, can it
be said that the dismissal was automatically unfair in terms of section 187(1)(a). If that
probable inference cannot be drawn at this stage, the enquiry proceeds a step
further.”111
It is unclear from Afrox as to whether the causation test was to be followed in all
enquiries relating to the reason for dismissal in the context of automatically unfair
109 S v Mokgethi [1989] ZASCA 105; 1990 (1) SA 32 (A) (Mokgethi).
110 Skosana above n 84.
111 Afrox above n 20 at para 32.
MAJIEDT J
46
dismissals. In my view, Afrox did not set a precedent that the causation test must be
followed in every section 187 dismissal. It is important to avoid uncritically supplanting
the causation test that is typically utilised in the delict and criminal contexts, for the
purpose of evaluating disputed facts. Furthermore, there is neither ambiguity in the
section nor is any aspect of it unclear; there are no exceptional circumstances to import
the concept of causation when interpreting section 187(1)(c).
Causation as a leg al concept has its genesis in Roman -Dutch law. In terms of
Roman-Dutch law, for delictual liability to be imputed to a defendant, a causal nexus
between the defendant’s wrongful conduct and the harm suffered by the plaintiff has to
be established.112 Without a causal nexus having been established between the wrongful
conduct and the harm suffered, there could be no delict. The test for causation in delict
was authoritatively laid down by this Court in Lee,113 and further explicated in
Mashongwa.114 In Lee, the primary enquiry concerned the test traditionally utilised for
the first leg of the enquiry, factual causation, the condictio sine qua non
(an indispensable condition) determined by the ‘but-for’ test. The majority held that
“[o]ur existing law does not require, as an inflexible rule, the use of the substitution of
notional, hypothetical lawful conduct for unlawful conduct in the application of the
‘but-for’ test for factual causation”. 115 It observed that it is not necessary for this
traditional ‘but-for’ test to be developed in the circumstances of that case.116 This was
confirmed in Mashongwa, where this Court explicated:
“[Lee] adopted an approach to causation premised on the flexibility that has always
been recognised in the traditional approach. It is particularly apt where the harm that
has ensued is closely connected to an omission of a defendant that carries the duty to
prevent the harm. Regard being had to all the facts, the question is whether the harm
112 Van der Walt and Midgley Principles of Delict 3 ed (LexisNexis, Durban 2005) at 196-7.
113 Lee v Minister of Correctional Services [2012] ZACC 30; 2013 (2) SA 144 (CC); 2013 (2) BCLR 129 (CC).
114 Mashongwa v Passenger Rail Agency of South Africa [2015] ZACC 36; 2016 (3) SA 528 (CC); 2016 (2) BCLR
204 (CC).
115 Lee above n 113 at para 50.
116 Id at para 72.
MAJIEDT J
47
would nevertheless have ensued, even if the omission had not occurred. However,
where the traditional ‘but-for’ test is adequate to establish a causal link it may not be
necessary, as in the present case, to resort to the Lee test.”117
According to Neethling et al, the ‘but-for’ test is a natural way of determining a
causal link, which has found favour from the courts because it is the simplest and most
intelligible way to construe or identify the causal link. 118 This test is based on the
premise that every event is the result of many conditions, which are jointly sufficient to
produce it. 119 It therefore postulates that the defendant’s wrongful conduct can be
considered as the cause-in-fact of the harm only if it was a necessary condition for the
occurrence and existence of a particular conseque nce.120 This entails a process of
reasoning, which differs depending on whether the defendant’s wrongful conduct is a
positive act or an omission. 121 Where the defendant’s wrongful conduct is positive, a
process of mental elimination of the defendant’s wrong ful conduct is applied from the
conditions that lead to harm to determine whether the harm would still have occurred.
If the answer is no, then the defendant’s wrongful conduct was the cause of the harm.
In the case of an omission, the omission would be substituted with a lawful course of
conduct and, if after the substitution the harm could have been prevented from
occurring, then the omission is the necessary causal link.122
In Bentley, Corbett CJ set out the well-established test for factual causation:
“The enquiry as to factual causation is generally conducted by applying the so -called
‘but-for’ test, which is designed to determine whether a postulated cause can be
identified as a causa sine qua non of the loss in question. In order to apply this test one
must make a hypothetical enquiry as to what probably would have happened but for
the wrongful conduct of the defendant. This enquiry may involve the mental
117 Mashongwa above n 114 at para 65.
118 Neethling et al Law of Delict 7 ed (LexisNexis, Durban 2015) at 185.
119 See Van der Walt and Midgley above n 112 at 198.
120 Id.
121 Loubser et al The Law of Delict in South Africa 2 ed (OUP, Cape Town 2012) at 72.
122 Id.
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elimination of the wrongful conduct and the substitution of a hypot hetical course of
lawful conduct and the posing of the question as to whether upon such a hypothesis
plaintiff’s loss would have ensued or not. If it would in any event have ensued, then
the wrongful conduct was not a cause of the plaintiff ’s loss; aliter, if it would not so
have ensued. If the wrongful act is shown in this way not to be a causa sine qua non
of the loss suffered, then no legal liability can arise. On the other hand, demonstration
that the wrongful act was a causa sine qua non of the loss does not necessarily result
in legal liability.”123
The second leg of the causation enquiry entails a determination whether the
wrongful act is linked sufficiently closely to the loss for legal liability to ensue or, put
differently, the loss is too remote to impose legal liability. Legal causation is in essence
a juridical problem where considerations of public policy play a role.124 There are
various criteria gleaned from judicial decisions and legal literature for the determination
of legal causation, such as the absence of a novus actus interveniens (intervening cause),
proximate cause, direct cause, foreseeability and sufficient causation.125
In delict, therefore, causation entails asking whether there is a sufficiently close
causal connection between the act or omission in question and the harm caused.126 But,
on a plain reading of section 187(1)(c), there is nothing which suggests, either directly
or impliedly, even on a remote basis, the application of a causation enquiry in
interpreting the section. Imposing a causation test unduly strains the language of the
section and misconstrues the rationale for causation as a legal requirement. The
recognition of causation as a legal requirement emerges particularly from the problem
of interruption in the chain of causation. To this end, the Appellate Division in Regal
referred to the American Restatement of the Law of Torts, where the learned authors
state:
123 International Shipping Co (Pty) Ltd v Bentley [1989] ZASCA 138; 1990 (1) SA 680 (A) (Bentley) at 700E-H.
124 Lee above n 113 at para 38.
125 Bentley above n 123 at 701C-F and Siman & Co (Pty) Ltd v Barclays National Bank Ltd 1984 (2) SA 888 (A)
at 914F-G.
126 Lee above n 113 at para 38.
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“In some cases the physical condition is not, of itself, harmful, but becomes so upon
the intervention of some other force – the act of another person, or force of nature. In
such cases the liability of the person whose activity created the physical condition
depends upon the determination that his activity was a substantial factor in causing the
harm, and that the intervening force was not a superseding cause.”127
The language of section 187(1)(c) does not envisage an interruption in the chain
of causation. The issue for determination is simple – either an employee was dismissed
for a refusal to accept a demand in respect of a matter of mutual interest or for some
other rea son(s). Ultimately, for the purposes of this matter, there are two possible
reasons for the dismissal of the employees: the first being a reason relating to the
employer’s operational requirements and the second being a refusal to accept a demand
in respect of a matter of mutual interest.
To determine whether a dismissal is automatically unfair, a court is required to
enquire into the actual reason for the dismissal – that is, whether the dismissal is based
on a prohibited ground. It seems to me wholly i nappropriate to apply the approach
espoused in the first judgment, namely “where it is not easy to determine what the true
reason [for the dismissal] is . . . a useful analysis is found in the Afrox test”128 and that:
“In such cases, the court would determi ne what the factual and legal causes of the
dismissal were by first asking whether the dismissal would have occurred if the
employees had not refused the demand. If the answer is in the affirmative, the dismissal
does not amount to an automatically unfair dismissal. If the answer is in the negative,
the second leg is necessary: is such refusal the main, dominant, proximate or most
likely cause of the dismissal.”129
By endorsing the Afrox test, the first judgment loses sight of the rationale underlying
causation as a legal requirement. There is no need for a court to conduct a factual and
127 Regal v African Superslate (Pty) Ltd 1963 (1) SA 102 (A) at 116A-B.
128 First judgment at [73].
129 Id at [76].
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legal causation enquiry, which effectively entails a process of elimination in a quest to
link the wrongful conduct to the ensuing harm, and which in the context of labour law
has the potential to yield an incorrect outcome.
As I see it, the language of section 187(1)(c) is plain and unambiguous. The
section simply requires a determination of whether the reason for the dismissal is a
refusal by employees to accept a deman d in respect of a matter of mutual interest
between them and their employer. A dismissal is effected for a reason. Instead, it
results from a decision of the employer to dismiss. And the employer advances the
reason to justify the decision to dismiss. In that context, the ensuing issue is whether
the reason proffered by the employer sufficiently supports that decision. The
determination of the true reason for the dismissal appears to me to be simply a matter
of fact, which is established in accordance with the rules applicable to the evaluation of
evidence. Where an employee proffers a contrary version regarding the true reason for
the dismissal, a court must resolve the dispute of fact by evaluating the evidence and by
making a finding as to which of the two versions is to be preferred on a preponderance
of probabilities, and why. Where there are two conflicting, irreconcilable versions
before it, a court must apply the well -established approach laid down in
Stellenbosch Farmers’ Winery:
“The techniq ue generally employed by courts in resolving factual disputes of this
nature may conveniently be summarised as follows. To come to a conclusion on the
disputed issues a court must make findings on (a) the credibility of the various factual
witnesses; (b) their reliability; and (c) the probabilities. As to (a), the court’s finding
on the credibility of a particular witness will depend on its impression about the
veracity of the witness. That in turn will depend on a variety of subsidiary factors, not
necessarily in order of importance, such as (i) the witness’s candour and demeanour in
the witness -box, (ii) his bias, latent and blatant, (iii) internal contradictions in his
evidence, (iv) external contradictions with what was pleaded or put on his behalf, o r
with established fact or with his own extracurial statements or actions, (v) the
probability or improbability of particular aspects of his version, (vi) the calibre and
cogency of his performance compared to that of other witnesses testifying about the
same incident or events. As to (b), a witness’s reliability will depend, apart from the
MAJIEDT J
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factors mentioned under (a)(ii), (iv) and (v) above, on (i) the opportunities he had to
experience or observe the event in question and (ii) the quality, integrity and
independence of his recall thereof. As to (c), this necessitates an analysis and
evaluation of the probability or improbability of each party’s version on each of the
disputed issues. In the light of its assessment of (a), (b) and (c) the court will then , as
a final step, determine whether the party burdened with the onus of proof has succeeded
in discharging it. The hard case, which will doubtless be the rare one, occurs when a
court’s credibility findings compel it in one direction and its evaluation of the general
probabilities in another. The more convincing the former, the less convincing will be
the latter. But when all factors are equipoised probabilities prevail.”130
The different approaches to determining the true reason for the dismissal are
starkly evident in the judgments of the Labour Court and of the Labour Appeal Court
in this matter. The Labour Court made extensive reference to the evidence before it and
placed emphasis on NUMSA’s failure to adduce any evidence to controvert the
evidence adduced by Aveng. 131 That Court referred to Bakulu, in which the
Labour Court held:
“[I]n order to establish a basis for his case of automatically unfair dismissal, Bakulu
needed to adduce some evidence that would tend to suggest that the real reason for his
dismissal was not incapacity, which was the reason given by Isilumko, but was possibly
race.
…
It may well be that he has an arguable case that his dismissal for incapa city was
nonetheless unfair, but he has brought his case to this court on the basis that the real
reason was because of his race and he needed at least to provide sufficient evidence to
raise a credible possibility that his dismissal in question fell withi n the scope of
section 187(1)(f).”132
130 Stellenbosch Farmers’ Winery above n 95 at para 5.
131 Labour Court judgment above n 3 at paras 59-64.
132 Bakulu v Isilumko Staffing (Pty) Ltd (2018) 39 ILJ 597 (LC) at paras 9 and 15.
MAJIEDT J
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The Labour Court also relied on Kroukam,133 as authority that “the employee must
produce credible evidence that shows that an automatically unfair dismissal has
occurred. . . . Should an applicant fail to cross this hurd le such an applicant must, to
my mind, fail”.134
The Labour Appeal Court, on the other hand, adopted a completely different
approach in its judgment. It did not refer to the evidence at all, but simply followed
Afrox:
“[T]he essential enquiry under section 187(1)(c) of the LRA is whether the reason for
the dismissal is the refusal to accept the proposed changes to employment. The test for
determining the true reason is that laid down in Afrox. The court must determine factual
causation by asking whether the dismissal would have occurred if the employees had
not refused the demand. If the answer is yes, then the dismissal is not automatically
unfair. If the answer is no, as in this case, that does not immediately render the
dismissal automatically unfair; the next issue is one of legal causation, namely whether
such refusal was the main, dominant, proximate or most likely cause of the
dismissal.”135
After considering all the facts, that Court concluded:
“The dominant reason or proximate cause for the dismissal of the employees, therefore,
was Aveng’s operational requirements, which underpinned the entire process
throughout 2014 and 2015 and informed all the consultations regarding the changes to
the terms and conditions of employment.”136
What follows next is a brief discussio n of the cases cited in the first judgment
that advocates for a causation enquiry for determining the true reason for a dismissal.
In Afrox the issue was whether the reason for the employees’ dismissal was their
133 Kroukam above n 7.
134 Labour Court judgment above n 3 at para 65.
135 Labour Appeal Court judgment above n 1 at para 68.
136 Id at para 75.
MAJIEDT J
53
participation or support (or intended participation or support) of a protected strike, and
not for operational requirements. If it was the former, the dismissal would have been
automatically unfair in terms of section 187(1)(a). As stated earlier, the
Labour Appeal Court embarked on a causation enquiry as set out in the passage cited
above. Simmadari concerned an alleged unfair dismissal under section 187(1)(f).137 In
Heath, the Labour Court was seized with a section 187(1)(e) dispute.138 In Kaltwasser,
the Labour Court ha d to adjudicate an alleged automatically unfair dismissal claim
under section 187(1)(d).139 The last three cases are Labour Court decisions and, as they
were required to do in accordance with the doctrine of precedent, followed Afrox, a
decision of the Labour Appeal Court. As I will demonstrate, the Labour Appeal Court
cases, which subsequently applied Afrox, did so uncritically and without a proper
engagement of what the plain language of the section meant and without any regard to
Algorax and Kroukam.
It bears emphasis that, barring Afrox, none of the decisions cited by the first
judgment construed and applied section 187(1)(c). Therefore, they do not support the
proposition that the section requires a determination of factual causation. The factual
causation test is not consistent with the plain language of section 187(1)(c). Not
surprisingly, the first judgment does not refer to any words in the section that sustain
the interpretation that includes factual causation. On the contrary, the section mere ly
states that a dismissal is automatically unfair if the reason for it was a refusal by
employees to accept a demand by the employer in respect of a matter of mutual interest.
Algorax, on the other hand, is a decision of the Labour Appeal Court, decided
after Afrox. As is the case here, the dismissed employees also relied on
section 187(1)(c) for their automatically unfair dismissal claim on the basis that it was
based on a refusal to accede to the employer’s demand in a matter of mutual interest.
While the majority judgment dealt at length with the Fry’s Metals decision of that same
137 Simmadari above n 88.
138 Heath above n 88.
139 Kaltwasser above n 88.
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54
court (an aspect that also features prominently in the first judgment here), its approach
to determining the true reason for the dismissal is instructive. Algorax concerned a
dispute regarding the employer’s proposed introduction of a rotating shift system for a
more cost-effective operation to ensure profitability. When the employees rejected the
employer’s proposal, they were dismissed. At issue was whether the dismissal was by
reason of the employer’s operational requirements or the employees’ refusal to accede
to the employer’s demand concerning a matter of mutual interest. The
Labour Appeal Court found for the appellant trade union and its members, upheld the
appeal and ordered the reinstatement of the dismissed employees.140
Writing for the majority, Zondo JP, after summarising the evidence, extensively
analysed it and found that “on balance the appellants’ contention that the purpose of the
dismissal was to compel the individual appellants to agree to the respondent’s demand
must prevail”.141 The learned Judge stated that there were a number of areas in the
evidence that in his view supported that finding. 142 He then undertook a meticulous
evaluation of the evidence of t he various witnesses to assess the cogency of that
evidence in order to reach an ultimate finding on the probabilities. 143 That careful
analysis included several verbatim quotes from the record. Ultimately, Zondo JP
concluded on the evidence that, on a bal ance of probabilities, the dismissal was
automatically unfair in terms of section 187(1)(c) as “the dismissal was effected for the
purpose of compelling the individual appellants to agree to the respondent’s demand
that they work the rotating shift”.144
I f ind the approach adopted by the majority in Algorax enlightening and
persuasive. In order to ascertain the true reason for the employees’ dismissal, Zondo JP
did not follow the approach adopted in the earlier decision of that same court in Afrox,
140 It must of course be borne in mind that Algorax above n 59 was decided before the decision of the Fry’s Metal
Supreme Court of Appeal judgment above n 63, that ultimately led to the amendment of section 187(1)(c).
141 Algorax above n 59 at para 39.
142 Id.
143 Id at paras 40-54.
144 Id at para 55.
MAJIEDT J
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by embarking upon a causation enquiry. Instead, he followed the conventional method
of evaluating evidence to determine, on a preponderance of probabilities, what the true
reason for dismissal was, in the face of two conflicting versions. His evaluation of the
evidence featured a full narration of the testimony of the various witnesses, a punctilious
analysis thereof and fully reasoned findings on its cogency and reliability. Ultimately,
comprehensive reasons were furnished for the acceptance of one version abov e the
other. That is the approach required in this case – the one followed by the Labour Court.
It bears repetition that a dismissal follows upon a decision of an employer. The reason
or reasons advanced by the employer for that decision to dismiss, mus t be subjected to
the evaluation usually undertaken to assess evidence, as Zondo JP did in Algorax. And,
where there are two conflicting, irreconcilable versions before a court, the tried and
tested method enunciated in Stellenbosch Farmers’ Winery must be utilised.
A similar approach was adopted in both the majority and minority judgments in
Kroukam. In that matter, the Labour Appeal Court had to determine whether the reason
advanced by the employer, Airlink, or the reason advanced by the employee,
Captain Kroukam, was the true reason for the latter’s dismissal by Airlink. Both Davis
AJA, writing for the majority, and Zondo JP, writing for the minority, undertook a wide-
ranging, thorough analysis of the evidence. In the latter instance, Zondo JP, a fter a
comprehensive narration and evaluation of the evidence, concluded:
“In the light of all of the evidence I find that the principal or dominant reason for the
appellant’s dismissal was that the respondent was not happy with the role that he was
playing in seeking to represent the interests of the union and its members in his or the
union’s dealings with the respondent as well as with the role that he played in bringing
the interdict application and the contempt of court application on behalf of the union in
March 2001.”145
As can be seen, there was no mention at all by Zondo JP of applying a causation test; it
is simply an application of the traditional factual enquiry. And when Zondo JP said that
145 Kroukam above n 7 at para 90.
MAJIEDT J
56
“I am of the view that, when all the circumstances are taken into account, the principal
or dominant reason for the appellant’s dismissal is the one I have given above”, 146 he
simply meant, as he set out immediately thereafter, that where there may be several
reasons for a dismissal, a court must ascertain the dominant (or principal or main) reason
to determine whether that reason renders the dismissal automatically unfair.
Davis AJA adopted the same approach – he recounted the evidence and, mindful
of the divergences, set out to determine which of the two versions was to be preferred
in ascertaining the true reason for the dismissal. Thus he said“[i]n argument before this
court, the key issues were the determination of the onus of proof, and the inferences
which could legitimately be drawn from the evidence”.147 And later he continued—
“[i]n my view, section 187 imposes an evidential burden upon the employee to produce
evidence which is sufficient to raise a credible possibility that an automatically unfair
dismissal has taken place. It then behoves the employer to prove to the contrary, that
is to produce evidence to show that the reason for the dismissal did not fall with in the
circumstance envisaged in section 187 for constituting an automatically unfair
dismissal.”148
Inasmuch as Davis AJA, after quoting Afrox,149 seemingly with approval, suggested that
this is a causation test (although he does not directly say so) he was, with respect, wrong.
This was, in fact, the classic approach applied in the evaluation of evidence. My view
is buttressed by his reference to Lord Justice Griffiths’ dictum in Maund:
“[I]t is not for the employee to prove the reason for his dismissal, but merely to produce
evidence sufficient to raise the issue or, to put it another way, that raises some doubt
146 Id at para 91.
147 Id at para 25.
148 Id at para 28.
149 Id at para 26.
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about the reason for the dismissal. Once this evidential burden is discharged, the onus
remains upon the employer to prove the reason for the dismissal.”150
On a number of occasions, this Court has emphasised that when interpreting
legislation through a contextual or purposive approach, a court should “remain faithful
to the actual wording of the statute”. 151 By proposing the application of the caus ation
test as applied by the Labour Appeal Court in Afrox, the first judgment overlooks the
actual wording of section 187(1)(c). This is, with respect, incorrect. A statutory
provision cannot be assigned a meaning that is not borne out by its language. Nor can
the language be strained unduly in order to arrive at a particular meaning. It is not
surprising that in Algorax the Labour Appeal Court itself did not follow Afrox. And, as
I have sought to demonstrate, in Kroukam, the judgments penned by Zondo JP and by
Davis AJA, in effect also applied the traditional evaluation of evidence approach.
Inasmuch as Afrox has been followed by other judgments of that Court, as alluded to in
the first judgment, for the reasons set out here, they have been wrongly decided. Those
judgments did not undertake a proper analysis of the language in section 187(1) and
merely followed Afrox without a close analysis of its reasoning. Furthermore, they did
not have any regard to the different, fact -evaluation approach adopted in Algorax and
Kroukam.
The concept of causation in the discourse of law is technical and depends on a
myriad of variables, some requiring public policy decisions when coming to
conclusions. Complexity also arises when there are a multiplicity of factors causing the
harm (in the present instance, dismissals). There may be concurrent causes such as
where two actors’ negligent acts combine to produce one set of damages, where but for
150 Maund v Penwith District Council [1984] ICR 143 at 149, cited in the majority judgment in Kroukam above
n 7 at para 27.
151 Bertie van Zyl above n 76 at para 22. Reiterated in the minority judgment in President of the Republic of South
Africa v Democratic Alliance [2019] ZACC 35; 2020 (1) SA 428 (CC) ; 2019 (11) BCLR 1403 (CC) at para 59
and Provincial Minister for Local Government, Western Cape v Oudtshoorn Municipal Council [2015] ZACC
24; 2015 (6) SA 115 (CC); 2015 (10) BCLR 1187 (CC) at para 13.
MAJIEDT J
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either of their negligent acts, no harm would have occurred at all. 152 This may require
an apportionment enquiry.
Another difficulty in analysing and testing the nature of a dispute through the
lens of causation is when assessing liability for damages in delict and contract, a
counterfactual question must be asked which is a h ypothesis, or other belief that is
contrary to the facts. O ne would have to consider what the factual cause is as well as
the counterfactual . This line of reasoning is neither appropriate nor helpful in an
enquiry that is essentially an evaluation of disputed facts.153
The difficulties with the causation enquiry are amply demonstrated by the wide-
ranging discussion in Lee. Writing for the majority, Nkabinde J aptly described its
challenges by stating that “[l]ike other jurisdictions our courts have als o struggled to
come to terms with the difficulties of causation”. 154 So, for example, the substitution
exercise in the application of the ‘but-for’ test for factual causation was regarded by the
majority in Lee as particularly troublesome because it was con sidered to be too
inflexible.155 And, more importantly for present purposes, the danger of introducing
social and policy considerations into the evaluation of facts, was emphasised by
Nkabinde J in Lee:
“The substitution exercise of determining hypothetica l lawful conduct involves an
evaluation of normative considerations. The determination of a question of fact,
152 Bavli “Counterfactual Causation” (2019) 51 Arizona State Law Journal 879 at 881.
153 Applying this reasoning to the facts of this case, various examples illustrating the difficulties with regard to
the cause of the problem include: if the steel industry did not go into a global slump, would Aveng still have been
required to change job descriptions and embark on retrenchment? Must the ‘but-for’ test in the causation analysis
be embarked upon – is the steel slump the essential cause of the steps Aveng took? Is it bad management by the
company that led to the harm in this case? The further question that arises is what was the proximate cause that
is not too remote? Was the demand justified (if there was one)? Another question is: but for the ulterior motive
of a demand for a higher wage on the part of NUMSA, would there have been a problem at all? Thus the enquiry
can continue and multiple questions keep escalating.
154 Lee above n 113 at para 45.
155 Id.
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although it is also an evaluative exercise, cannot depend on social and policy
considerations.”156
The second leg of the causation enquiry, legal causation, is not bereft of difficulty
either. In De Klerk , this Court alluded to the challenges in applying the criteria
traditionally utilised in determining legal causation.157 It pointed out that public policy
plays a role and that considerations of pu blic policy should be infused with
constitutional values.158
The causation test does not seem to be practical in the context of
section 187(1)(c). When considering section 187(1)(c), we are not concerned with
multiple conditions that may confuse a court to a point that it has to consider which one
of the various conditions was the reason for the dismissal. The dismissal of the
employees followed upon a decision by Aveng to restructure its business by redesigning
posts. Aveng furnished reasons for its dismissal of the employees, based on operational
requirements, but NUMSA disputed those reasons. NUMSA contended that the
dismissal was automatically unfair, as it was as a result of NUMSA’s refusal to acce de
to Aveng’s demand, concerning restructured posts, a matter of mutual interest. The
tried and tested method of evaluating evidence to assess its cogency and reliability and
to ultimately prefer one version above the other, with full reasons for doing so , is how
the determination should be made.
Adopting this approach leads one to the same conclusion as the one reached in
the first judgment. NUMSA led no evidence controverting that adduced by Aveng.
While the fi rst judgment does not engage in an evaluation of the evidence, since it
adopts the Afrox approach, I do not understand it to be critical of the evidence adduced
on behalf of Aveng. That evidence presented a clear, coherent picture of continued
good faith negotiations and consultations to achieve consensus on Aveng’s proposed
156 Id at para 51 and fn 103.
157 De Klerk v Minister of Police [2019] ZACC 32; 2020 (1) SACR 1 (CC); 2019 (12) BCLR 1425 (CC) at para 29.
158 Id at para 30.
MAJIEDT J / JAFTA J
60
restructuring. It demonstrated Aveng’s persistent and consistent attempts at saving the
jobs of the workers who remained in its employ after the voluntary severance package
and limited duration contract terminations processes had been concluded. There is no
reason not to accept that evidence, particularly since there was no evidence to contradict
it. On that accepted evidence, the true reason for the dismissal was Aveng’s
restructuring for operational requirements. The employees’ refusal to agree to the
restructuring presented Aveng with an insurmountable operational requirements
conundrum, leaving it with no choice other than to dismiss the employees.
In summar y, the tried and tested method of evaluating evidence to assess its
cogency and reliability and to ultimately prefer one version above the other, with full
reasons for doing so, is how the true reason for the dismissal should be determined for
the purpose of section 187(1)(c). There is no jurisprudential or procedural basis for
introducing the complex concept of causation in order to evaluate disputed evidence in
the present dispute. NUMSA’s reliance on section 187(1)(c) must therefore fail as the
dismissal was fair. For the balance of the reasons compre hensively enunciated in the
first judgment, I agree with the order set out there.
JAFTA J (Majiedt J, Mhlantla J, Tshiqi J and Victor AJ concurring)
I have had the benefit of reading the judgment of my colleague Mathopo AJ
(first judgment) and the judgment of my colleague Majiedt J (second judgment). Like
the second judgment, I agree with the first judgment, except with regard to its
interpretation of section 187(1)(c) of the LRA and its approval of the
Labour Appeal Court’s decision in Afrox which advocated for the invocation of factual
and legal causation in determining whether a dismissal of employees by an employer is
automatically unfair.159
159 Afrox above n 20 at para 32.
JAFTA J
61
I embrace the reasoning in the second judgment but I write separately to address
the interpretation of section 187(1)(c) and illustrate that on its proper interpreta tion the
section does not incorporate causation as a requirement for determining whether a
particular dismissal of employees by the employer constitute an automatically unfair
dismissal contemplated in that section. The question whether the dismissal is
automatically unfair may be answered only with reference to the language employed in
that provision. It is either the text of the section requires both factual and legal causation
or it does not.
But before I commence the interpretation, it is necessary t o remind ourselves of
what interpretation of statutes entails. It is a well -established principle of our law that
statutory interpretation involves nothing else but the exercise of giving meaning to each
and every word used by the law-giver in the provision under construction.160
The allied principle is that the language chosen by the law -giver must be
respected.161 Departing from the actual wording of a statutory provision takes the
interpreter outside the ambit of interpretation. In Zuma this Court observed:
“We must heed Lord Wilberforce’s reminder that even a constitution is a legal
instrument, the language of which must be respected. If the language used by the
lawgiver is ignored in favour of a general resort to ‘values’ the result is not
interpretation but divination.”162
Yet another relevant principle is that respect to be accorded to the language
employed in a statute forbids distortion of that language. Proper interpretation is limited
160 Case v Minister of Safety and Security; Curtis v Minister of Safety and Security [1996] ZACC 7; 1996 (3) SA
617 (CC); 1996 (5) BCLR 609 (CC) at para 57; and Natal Joint Municipal Pension Fund v Endumeni Municipality
[2012] ZASCA 13; 2012 (4) SA 593 (SCA) at para 18.
161 Bertie Van Zyl above n 76 at para 22 and S v Zuma [1995] ZACC 1; 1995 (2) SA 642 (CC); 1995 (4) BCLR
401 (CC).
162 Zuma id at para 18.
JAFTA J
62
to what the words used are reasonably capable of meaning 163. A strained meaning too
may not be assigned to the wording of a statute.
With these principles in mind, I proceed to consider the relevant provision.
Section 187(1) provides:
“A dismissal is automatically unfair if the employer, in dismissing the employee, acts
contrary to section 549 or, if the reason for the dismissal is–
(a) that the employee participated in or supported, or indicated an intention to
participate in or support, a strike or protest action that complies with the
provisions of Chapter IV;
(b) that the employee refused, or indicated an intention to refuse, to do an y work
normally done by an employee who at the time was taking part in a strike that
complies with the provisions of Chapter IV or was locked out, unless that work
is necessary to prevent an actual danger to life, personal safety or health;
(c) to compel the employee to accept a demand in respect of any matter of mutual
interest between the employer and employee;
(d) that the employee took action, or indicated an intention to take action, against
the employer by–
(i) exercising any right conferred by this Act; or
(ii) participating in any proceedings in terms of this Act;
(e) the employee's pregnancy, intended pregnancy, or any reason related to her
pregnancy;
(f) that the employer unfairly discriminated against an employee, directly or
indirectly, on any arbitrary ground, including, but not limited to race, gender,
sex, ethnic or social origin, colour, sexual orientation, age, disability, religion,
conscience, belief, political opinion, culture, language, marital status or family
responsibility;
(g) a trans fer, or a reason related to a transfer, contempl ated in section 197
or 197A; or
163 National Coalition for Gay and Lesbian Equality v Minister of Home Affairs [1999] ZACC 17; 2000 (2) SA
(CC); 2000 (1) BCLR 39 (CC) at para 24.
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(h) a contravention of the Protected Disclosures Act, 2000, by the employer, on
account of an employee having made a prote cted disclosure defined in
that Act.”
The language of the section is plainly unambiguous. It sets out circumstances
under which a dismissal becomes automatically unfair. The section lists no less than
nine instances in which a dismissal by the employer becomes automatically unfair. If
the employer acts in breach of section 5 of the LRA when dismissing employees, the
dismissal is taken to be automatically unfair. The majority of the other instances relates
to what may have been done by an employee, like if the reason for dismissal is that the
employee part icipated in a protected strike or t hat the employee refused to do, in
addition to her own work, the work normally done by a co -worker who at the relevant
time is taking part in a protected strike.
Pertaining to section 187(1)(c) the dismissal becomes automatically unfair if the
reason for the employer to dismiss the employees was “a refusal by employees to accept
a demand in respect of any matter of mutual interest between them and their employer”.
This language is unquestionably clear. For that reason t o come into existence, there
must first be a demand by the employer directed at the employees on a matter of mutual
interest. And the employees must have refused to accept the employer’s demand. The
employer must have dismissed them for refusing to accept the demand.
The language of section 187(1)(c) does not suggest that the dismissal in question
must have been caused by the employees’ refusal. To hold otherwise constitutes a
distortion of that language. That language is not capable, let alone being r easonably
capable, of an interpretation that the provision requires the invocation of causation,
whether factual or legal, for determining the reason for dismissal. At the level of
interpretation, there can be no legal basis for imputing causation to the provision.
Causation, as the second judgment lucidly illustrates, relates to conduct capable
of producing consequences, like causative conduct that produces harm to a claimant for
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delictual compensation. In that instance, liability of the wrongdoer does not stem from
his reasons for committing the wrongful conduct but from the conduct that caused the
harm hence the need to establish a causal link between the conduct concerned and the
ensuing harm. That wrongful conduct cannot, by any stretch, be describe d as a reason
for the harm. What motivated the conduct is distinct from the conduct itself.
One example will sufficiently demonstrate the point. If A has a motive to kill B
and decides to achieve his goal by shooting B multiple times with a gun. If B dies as a
result of the injuries inflicted by A, his conduct in shooting B will be the cause of the
latter’s death. Notably, the reason or motive for the killing cannot be the cause of death.
But if B despite being shot by A dies as a result of diabetes, the shooting of him by A
cannot be taken as having caused B’s death. And yet even in that instance A would still
have had the reason to kill B. In this example, the reason can never be a causative
conduct for A’s death because it is not capable of producing death.
When that reasoning is applied here, the question is whether the employees’
refusal is capable of producing dismissal, as a consequence. Applying causation to
section 187(1) of the LRA is inappropriate for a number of reasons. First, it defies the
language of the text, particularly section 187(1)(c). Second, it leads to an absurdity that
could never have been envisaged by Parliament. It would mean that by their refusal,
the employees had caused their own dismissal. Otherwise there would be no causal link
between the refusal and the dismissal. This could never have been what Parliament
sought to achieve through the provision. Causation renders the provision senseless and
upends the scheme of section 187 which is to render dismissals by an employer under
certain defined circumstances automatically unfair.
An automatically unfair dismissal relieves employees who are challenging it
from establishing that the dismissal was unfair. All that they need to show by way of
facts is that they were dismissed for refusing to accept the employer’s demand. If they
establish this fact, section 187(1) tells us that the dismissal must automatically be taken
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to be unfair. Therefore, the section creates a presumption of unfairness once certain
facts are established.
A dismissal, if there were to be one, which has been caused by the employees’
conduct cannot be unfair from the employees’ point of view. They cannot by their own
conduct cause unfairness to themselves. This is illogical. Yet this is what causation
would lead to. How for example, can causation apply to the dismissal by the employer
which violates section 5 of the LRA? What would be the causative conduct in that case?
The employer’s violation of the Act or his decision to terminate employment? Applying
causation to section 187(1) is like fitting a square peg in a round hole.
The first judgment does not address these absurdities. Instead, it readily endorses
what was said by the Labour Appeal Court in Afrox. In that matter the Labour Appeal
Court did not give any reasons for the conclusion that causation applies. It merely
stated:
“The enquiry into the reason for the dismissal is an objective one, where the employer’s
motive for the dismissal will merely be one of a number of factors to be considered.
This issue (the reason for the dismissal) is essentially one of causation and I can see no
reason why the usual twofold approach to causation, applied in other fields of law,
should not also be utilised here.”
It is apparent from the L abour Appeal Court’s judgment in Afrox that the Court
proceeded from an incorrect premise. That Court did not base its conclusion on the
language of section 187(1). Instead, the Court asked itself whether there were reasons
against the invocation of caus ation. And when it could conceive of none, the Court
simply held that causation applied. Having noted that the test appropriate to a
section 187(1) inquiry was an objective one, the Labour Appeal Court mistakenly held
that “the employer’s motive for the dismissal will be one of a number of factors to be
considered”. It is difficult to appreciate how a motive or reason for a dismissal becomes
one of the factors to be taken into account in determining the reason for a dismissal
which is the only fact to be ascertained in the inquiry.
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The judgment concludes that the reason for dismissal “is essentially one of
causation” without substantiation. As shown earlier, this is text -defiant and as a result
there is no legitimate legal basis that I can think of whic h grounds the application of
causation to matters regulated by section 187(1). The error in Afrox is compounded by
the fact that it also calls for the application of a legal causation. This too is inappropriate
to section 187(1). Legal causation, as the second judgment shows, is applied to
determine liability in a case where there is doubt that the wrongdoer should be held
responsible for the harm suffered by a claimant164.
There is simply no need to apply legal causation to the section 187(1) scenario.
If a dismissal of employees is unfair, regardless of whether it is automatically unfair or
has been proved to be unfair, a claim in which the dismissal is challenged must succeed.
For as long as it was the employer who dismissed the employees, the claim must be
successful. The employees need not prove that the reason or motive for the dismissal
was too remote or sufficiently close to the dismissal for purposes of imposing liability
on the employer. Terms like “main”, “dominant”, “proximate” and “most li kely” are
not relevant to an inquiry for determining the reason for a dismissal. These terms
suggest that a refusal may be one of the reasons but if it is not the main, dominant,
proximate or most likely reason, then the presumption that the dismissal is automatically
unfair is not activated. This is what the Labour Appeal Court concluded here. It is
incorrect, for this conclusion is not grounded in section 187(1).
For these additional reasons to those contained in the second judgment, I hold
that causation does not apply to reasons for dismissal listed in section 187(1) of the
LRA.
164 Second judgment at [116].
For the Applicants:
For the First Respondent:
For the Second Respondent:
P Kennedy SC and N Lewis
Instructed by Ngako Attorneys
A Franklin SC and R Itzkin
Instructed by Wilken Incorporated
A Redding SC and G Fourie SC
Instructed by Cliffe Dekker Hofmeyr
Incorporated