The Facts
In the months leading up to
On
On or about
During
The employees worked in the re-designed jobs for a period of six months. Then, on
On
The parties were unable to resolve their differences and, on
NUMSA referred a dispute to the
The Judgment
The crux of NUMSA's case was that the dismissals were automatically unfair in terms of section 187(1)(c) of the LRA.
Prior to
'(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'.
After the 2015 amendments to the LRA, 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'.
In considering NUMSA's claim, the Labour Court held that NUMSA had 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. The Labour Court accordingly held that the dismissal of the employees was not automatically unfair. Aggrieved by the outcome, NUMSA appealed to the Labour Appeal Court.
The Labour Appeal Court (LAC) upheld the Labour Court judgment. The LAC held that
The LAC concluded that NUMSA's interpretation of the section would undermine the fundamental purpose of section 189 of the LRA, which encourages engagement between employers and employees, facilitating the creation of alternatives to retrenchments, and to avoid scenarios where employers are shackled and rendered unable to propose changes to the terms and conditions of employment in terms of section 189 consultations. Again, aggrieved by the outcome, NUMSA appealed to the
In the majority judgment penned by Mathopo AJ, the
- On NUMSA's 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 and is at odds with an employer's right to dismiss employees on the basis of its genuine operational requirements. It also undermines the purpose of a retrenchment consultation process which, in this case, was geared at addressing
Aveng's distressed financial position. -
In addition, this would undermine an employer's right to 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 Court held that NUMSA's submission was startling because it would perpetuate the anomaly that the 2015 amendment to section 187(1)(c) 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 claims 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.
The Court held that sole enquiry under section 187(1)(c) is whether the reason for the dismissal was the refusal to accept the proposed changes to employment conditions. A proper interpretation of the section requires a careful analysis. Simply because a proposed change is refused and a dismissal ensues thereafter, does not necessarily mean that the reason for the dismissal was the refusal to accept the proposed change. On the contrary, the true reason for the dismissal, irrespective of whether a proposed change is rejected, must be determined. Determining the reason for a dismissal is a question of fact and the enquiry into the reasons for the dismissal is an objective one.
In such cases, the court should 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 yes, the dismissal does not amount to an automatically unfair dismissal. If the answer is no, the second leg is necessary: is such refusal the main, dominant, proximate or most likely cause of the dismissal?
Turning to the facts, the
Importantly, the
Conclusion
This is an important case for employers. The
Dismissals in these circumstances are not automatically unfair as contemplated in section 187(1)(c) of the LRA. This does not mean that employers have carte blanche and complete freedom to act as they wish to dismiss employees and the court will carefully scrutinise the real reason for the dismissal, as well as the process that preceded the dismissal.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Ms
Bowmans
Sandton
2146
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