C&A Friedlander Attorneys

The Covid-19 pandemic brought about strict regulations and directives that restricted the travel and everyday operations of various companies in South Africa. This forced companies to develop a new business module, which, in turn, resulted in large groups of staff being retrenched. The common theme during this period, which lasted from about 23 March 2020 through December 2020, was dismissals as a result of operational requirements, as found in the Labour Relations Act 1995 (“LRA”). Section 189 of the LRA sets out specific remedies and procedures that employers should comply with when embarking on a large-scale retrenchment.

The procedure for employers to follow when engaging in retrenchment include, inter alia, a notice as per section 189(3) of the LRA and a fair consultation process addressing the issues stipulated in section 189 of the LRA. However, this article will be addressing the remedies available when the employer fails to embark on a fair consultation process.

Employees who allege that their dismissals were substantively unfair, have the election of embarking on a protected strike or referring the dispute to the Labour Court for adjudication. However, employees who alleged that their dismissals and or retrenchment process was procedurally unfair, may, in terms of sections 189A(13) of the LRA, approach the Labour Court for an order:

  1. compelling the employer to comply with a fair procedure (section 189A(13)(a));
  2. interdicting or restraining an employer from dismissing an employee prior to complying with a fair procedure (section 189A(13)(b));
  3. directing an employer to reinstate an employee until it has complied with a fair procedure (section 189A(13)(c)); or
  4. to make an order of compensation if the remedies described above are not appropriate (section 189A(13)(d)).

There are, however, specifics to consider when electing the above remedies. The first specific requirement is one of urgency, as found in the matter of BEMAWU and others v SABC and Others [Case No. J1199/20]. The judgement made it clear that before the parties approach the court in terms of section 189A(13) of the LRA, it must be sure that circumstances exist for it to move the application on an urgent basis. The applicant must bring the application at the first available opportunity or risk failing on urgency, and it must also not have created urgency by its own conduct.

The Section 189A(13) applications are intended to provide an opportunity for courts to proactively intervene to remedy procedural irregularities in the restructuring consultation process. It is important to note that the application must be instituted preferably before the dismissal of the employee and before the consultation process has ended or run its course. The above preference does not exclude employees who have been dismissed and who have launched their applications immediately after the dismissal as a matter of urgency.

When developing your application, it is important to note that only procedural issues may be brought forth under section 189A(13), not substantive issues. The court stated the following when distinguishing between what it regards to be procedural and what it regards to be a substantive issue;

“The failure to consult on selection criteria would be procedural failure. However, and where it comes to the proper application of the selection criteria that has been consulted upon, that would be an issue of substantive unfairness.

The remedies as mentioned above include, inter alia, reinstatement, compelling fair procedure, and compensation. The court in AMCU v Piet Wes Civils CC, reinstated employees in terms of section 189A(13) of the LRA pending the outcome of a fair procedure and proper consultation process. The employees were employed per fixed term contracts and were dismissed due to operational requirements. The court found that LRA section 198B considered fixed term contracts not to be terminated automatically when the client gave notice to terminate, and that the employer failed to adopt a fair procedure in terms of section 189A(13). The court herein was entitled to order reinstatement pending the outcome of a proper joint consensus seeking procedure.

The court in Karin Steenkamp and 1817 Others v Edcon Limited was required to make a decision on the issue of urgency and compensation as an initial remedy. Edcon, during its restructuring in 2013, dismissed 1818 employees for operational reasons, which employees on second attempt, approached the Labour Court in terms of section 189A(13) and argued that their dismissals were procedurally unfair because they were in breach of the procedures set out in section 189A. They claimed 12-months’ compensation in terms of section 189A(13)(d) referred to above. They, however, in launching their application, found that Section 189A(17) provides that an application in terms of section 189A(13) must be brought within 30 days of the employer giving notice of dismissal. Because of the legal strategy they had adopted (i.e. claiming that their dismissals were invalid rather than unfair), the application in terms of section 189A(13) was out of time. They therefore had to apply for condonation of the failure to comply with the 30-day time limit.

The Labour Court granted condonation and argued that it would be unfair not to grant condonation in circumstances where the delay had been occasioned by the employees seeking a remedy that they were entitled to seek at the time that they instituted proceedings but was later found to be an incompetent remedy. In addition, should the applicants be successful in their procedural unfairness claim, they would at least be entitled to relief in the form of the payment of compensation in terms of section 189A(13)(d) if relief in terms of paragraphs (a)-(c) was not appropriate. Aggrieved by this outcome, Edcon approached the LAC, which upheld the appeal, stating that the application by the applicants was “fatally flawed and the judgment a quo in error”, principally on the basis that the Labour Court misconceived the purpose and functioning of section 189A(13).

The applicant thus approached the Constitutional Court, which found that the primary purpose of section 189A(13) is to allow for early corrective action in order to get the retrenchment consultation process back on track. The section does not allow for the option of claiming compensation for procedural unfairness long after the retrenchment. It does not contemplate a procedure claiming compensation “at some future remote time”. Paragraphs (a) to (d) establish a hierarchy of appropriate relief. Only where it is not appropriate to grant an order in terms of paragraphs (a) to (c), may an order be granted in terms of paragraph (d) for procedural unfairness. Paragraph (d) provides for an exceptional remedy that is granted only where the primary remedies provided for in paragraphs (a)-(c) are inappropriate. On this basis, the court upheld the LAC’s decision not to grant condonation.

In conclusion, the remedies found under section 189A(13) are of use to employees that have faced an unfair process when engaging dismissal due to restructuring. It is important for the above employees or unions to note the above specifics, which include urgency and the hierarchy when determining the remedy to rely on. It is my prediction that the above application will be relied on more often in our current pandemic.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).