Case Law[2022] ZACC 15South Africa
Solidarity obo Members v Barloworld Equipment Southern Africa and Others (CCT 102/21) [2022] ZACC 15; (2022) 43 ILJ 1757 (CC); [2022] 9 BLLR 779 (CC); 2023 (1) BCLR 51 (CC) (6 May 2022)
Constitutional Court of South Africa
6 May 2022
Headnotes
Summary: Labour Relations Act — meaningful joint consensus seeking process — selection criteria
Judgment
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## Solidarity obo Members v Barloworld Equipment Southern Africa and Others (CCT 102/21) [2022] ZACC 15; (2022) 43 ILJ 1757 (CC); [2022] 9 BLLR 779 (CC); 2023 (1) BCLR 51 (CC) (6 May 2022)
Solidarity obo Members v Barloworld Equipment Southern Africa and Others (CCT 102/21) [2022] ZACC 15; (2022) 43 ILJ 1757 (CC); [2022] 9 BLLR 779 (CC); 2023 (1) BCLR 51 (CC) (6 May 2022)
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sino date 6 May 2022
CONSTITUTIONAL
COURT OF SOUTH AFRICA
Case
CCT 102/21
In
the matter between:
SOLIDARITY
obo
MEMBERS
Applicant
and
BARLOWORLD
EQUIPMENT SOUTHERN AFRICA
First Respondent
COMMISSION
FOR CONCILIATION, MEDIATION
AND
ARBITRATION
Second Respondent
NATIONAL
ASSOCIATION OF SOUTH AFRICAN
WORKERS
Third Respondent
ASSOCIATION
OF CONSTRUCTION AND
MINEWORKERS
UNION
Fourth Respondent
NATIONAL
UNION OF METALWORKERS OF SOUTH
AFRICA
Fifth Respondent
UASA
– THE
UNION
Sixth Respondent
Neutral
citation:
Solidarity
obo Members v Barloworld Equipment Southern Africa and Others
[2022]
ZACC 15
Coram:
Madlanga J, Madondo AJ, Mhlantla J, Majiedt J,
Pillay AJ, Rogers AJ, Theron J, Tlaletsi AJ and Tshiqi J
Judgments:
Tshiqi J (unanimous)
Heard
on:
11 November 2021
Decided
on:
6 May 2022
Summary:
Labour Relations Act — meaningful
joint consensus seeking process — selection criteria
ORDER
On
appeal from the
Labour
Court, Johannesburg
:
1.
Leave to appeal is granted.
2.
The appeal on the merits is dismissed.
3.
The appeal against costs is upheld and paragraph (3) of the order of
the Labour
Court is substituted with the following:
“
Each
party is ordered to pay its own costs.”
JUDGMENT
TSHIQI
J (unanimous)
Introduction
[1]
This
is an application for leave to appeal against the judgment of the
Labour Court that dismissed an application brought in
terms of
section 189A(13) of the Labour Relations Act
[1]
(LRA) by the first applicant,
Solidarity,
against the
first
respondent, Barloworld Equipment Southern Africa, a division of
Barloworld South Africa (Pty) Ltd (Barloworld). In the Labour
Court,
the National Union of Metalworkers of South Africa (NUMSA) had
brought a similar application, and the two applications were
heard
together. What lies at the core of this application is whether
Solidarity was entitled to invoke the provisions of section 189A(13)
of the LRA, in challenging mass dismissals of its members by
Barloworld for operational requirements in terms of section 189A of
the LRA, after the Commission for Conciliation, Mediation and
Arbitration (CCMA) consultations.
[2]
The essence of the dispute in the Labour Court was
whether there was a meaningful joint consensus seeking process
as envisaged
in section 189(2) of the LRA, before the dismissals took
place. Solidarity and NUMSA alleged that the consultation process was
inadequate which resulted in a fair procedure not being followed, and
they sought to invoke the provisions of section 189A(13).
They sought
an order setting aside the dismissals and declaring that the parties
should reconvene and continue with the consultations
with a view to
participating in a joint consensus-seeking process. For various
reasons that will be explored fully below, the Labour
Court held that
the applications did not raise compliance issues, but rather general
issues relating to procedural fairness and,
to a certain extent,
substantive fairness and that section 189A(13) should not have
been invoked. It dismissed the applications
with costs.
Parties
[3]
The
applicant is Solidarity, a trade union acting on behalf of its
members who are former employees of Barloworld.
NUMSA
was referred to as the second applicant in the Labour Court and
is
cited as the fifth respondent in this application for leave to appeal
because it has not participated as a party
.
[2]
For this reason, reference to the interaction between NUMSA and
Barloworld will only be made to a limited extent, insofar as it
is
necessary.
[4]
The
first respondent is Barloworld, the former employer of the dismissed
employees. The second respondent is the CCMA, the forum
through which
the consultations between the parties were facilitated during the
restructuring process. The third to sixth respondents
[3]
are cited as trade unions that might have an interest in the outcome
of these proceedings.
Background
[5]
On 27 April 2020, Barloworld sent a notice, as
envisaged by section 189(3) of the LRA, to its employees, including
Solidarity’s
members, relating to the restructuring of its
operations which it alleged was as a result of the impact of Covid-19
on the entity.
On 28 April 2020, Barloworld approached the CCMA and
requested it to appoint a facilitator in terms of section 189A(13)
to
facilitate a joint consensus-seeking process between the affected
parties. After a facilitator was appointed, several letters were
exchanged between Solidarity and Barloworld and various consultation
meetings were held. Reference will only be made to those that
are
relevant to the main bone of contention between the parties: whether
there was a meaningful joint consensus-seeking process
and whether
the Labour Court should have granted relief in terms of the
provisions of section 189A(13).
Correspondence
and meetings between the parties
[6]
On 10
June 2020, and after the CCMA had appointed the facilitator as
requested by Barloworld, the latter made a presentation to
the
members of Solidarity
[4]
and the
facilitator relating to the plan that was delineated for
restructuring. A further consultation was held by the parties
on 9
July 2020. On 23 July 2020, Solidarity made formal submissions to
Barloworld and rejected the restructuring plan tabled by
Barloworld.
This rejection was, according to Solidarity, due to Barloworld
proposing to retrench 750 of its members as a result
of a temporary
situation.
[7]
On 28 July 2020, Barloworld addressed a letter to
Solidarity. The letter referred to the third CCMA facilitated
consultation session
and thanked Solidarity for the formal submission
on its alternative proposals which it had received on 24 July 2020 in
line with
the outcomes of the consultation session. It stated that
the contents of the submission were noted, considered and deliberated
on by Barloworld and that the letter was a response to the
alternative proposals contained therein. In item 15 of its letter,
Barloworld
responded to a proposal by Solidarity to consider
employees who wanted to take early retirement. One of the responses
to this was
that where employees volunteer to be considered for early
retirement, Barloworld would evaluate the application, taking into
account
whether several listed factors including “transformation
targets (Employee Assistance Programme, Diversity and Localisation)
would be negatively impacted”.
[8]
On the same day, 28 July 2020, Solidarity
responded in writing and stated that its submission was made in a
further attempt to reach
consensus on the section 189A process.
One of the issues canvassed extensively in the letter was the
selection criteria. Item 5
of the letter was headed:
“Outstanding issues to be consulted on in terms of
section 189(3) of the LRA”. In paragraph
(A) of this
heading, Solidarity listed “selection criteria”. It made
several proposals pertaining to voluntary severance
pay, early
retirement, etc. Towards the end of the letter, it said: “[w]here
there are more associates to positions or there
are vacant positions,
the positions will be filled applying the Last-In, First-Out (LIFO)
principle subject to skills and qualifications
as the agreed
selection criteria”. It then continued and stated that
Solidarity upfront “rejects the proposal that
such placements
should be in line with [Barloworld’s] Employment Equity Plan as
[Solidarity] believe[s] the LRA specifically
prohibits possible
termination based on race”.
[9]
On 30
July 2020, Solidarity addressed a letter to Barloworld requesting
certain financial records and information.
[5]
Solidarity further stated that dismissals due to operational
requirements could not be effected until consultation on the issues
in section 189(3) had taken place. It further reserved its
rights to declare a dispute pertaining to the disclosure of
information
in terms of section 16 read with section 184(4) of
the LRA, should Barloworld fail to provide the information requested.
[10]
It is clear from the minutes of the consultation
meetings and the correspondence exchanged, that, although various
items were discussed
during the consultation process, the most
contentious one was the selection criteria proposed by Barloworld,
especially the inclusion
of transformation as part of the criteria.
The parties were unable to reach consensus on the proposed selection
criteria. After
the expiry of the initial 60 day period on 3
August 2020, the consultation process was extended. Barloworld
arranged further
meetings on 7 and 11 August 2020 to discuss
outstanding issues from the agreed agenda and these were attended by
Solidarity. One
of the items to be discussed was the selection
criteria. Under this topic, Barloworld proposed the following as the
“selection
criteria mix”: LIFO; Skills and Qualifications
and Transformation Targets (Employment Equity Plan (EEP) Targets,
Diversity
and Localisation). It is common cause that Barloworld had
issued notices of termination of employment at the beginning of
August
2020, but despite this, further consultations continued on 7
and 11 August 2020.
[11]
On 19 August 2020, Barloworld addressed a letter
to Solidarity stating that proper consultations in good faith had
taken place and
there was no legal basis for withdrawing its
termination letters and for re-opening the consultation process. It
further stated
that the CCMA concluded the facilitated consultation
process in terms of section 189A and in line with the initial
facilitation
period, which had expired on 3 August 2020. It also
stated that, subsequently, Barloworld arranged further meetings on 7
and 11 August 2020 in good faith in an attempt to discuss
outstanding issues from the concluded facilitated consultation
process. Regarding the selection criteria applied, it stated that,
“as previously indicated, a combination of selection principles
[was] being applied consistently” and that these were LIFO,
Transformation, Skills and Qualifications. The failure to resolve
the
outstanding issues led to Solidarity and NUMSA approaching the Labour
Court for relief in terms of section 189A(13) of
the LRA and, on
the part of Solidarity, ultimately this Court for relief.
Litigation
history
Labour Court
[12]
Solidarity
and NUMSA approached the Labour Court in separate applications based
on alleged procedural irregularities in relation
to the consultation
process. Solidarity alleged that Barloworld failed to consult on a
number of issues envisaged in section 189(2),
including one component
of its selection criteria, namely transformation. Further, it argued
that the implementation and application
of transformation as a
criterion was unlawful and unfair as it directly discriminates
against its members on the grounds of race
and gender.
Solidarity
sought
an order declaring that Barloworld had acted in a procedurally unfair
manner when dismissing its members for alleged operational
reasons
and reinstating its members with retrospective effect, with full
remuneration and benefits and directing Barloworld to
embark on and
continue with a meaningful joint consensus-seeking process (including
consultations) as envisaged by sections 189
and 189A of the
LRA but without relying on transformation as a selection
criterion.
[6]
It also sought an
order interdicting Barloworld from dismissing any of its members
prior to following fair procedures. In the alternative,
Solidarity
sought
compensation for the alleged procedurally unfair dismissals.
[13]
For
its part, NUMSA alleged that the consultation process was flawed in
the following respects: (a) Barloworld had failed to disclose
information that was essential to ensure the effective participation
of the unions in the consultation process; (b) there
had been no
meaningful consultation on alternatives to retrenchment; (c) there
had been no joint consensus-seeking consultation
on the selection
criterion to be used; and (d) Barloworld had called workers to
interviews without furnishing them with important
information that
they needed prior to attending the interviews.
[7]
NUMSA sought reinstatement and an order compelling the parties to
resume consultation.
[14]
The
two applications were consolidated and the Labour Court dealt with
them in one judgment. The Court emphasised that, in terms
of section
189A(18) of the LRA,
[8]
the
Labour Court “is precluded from adjudicating disputes about the
procedural fairness of a dismissal based on the employer’s
operational requirements”.
[9]
It referred to this Court’s decision in
Steenkamp
II
,
[10]
and held that “the jurisdiction of the Labour Court to
adjudicate on procedural fairness of a dismissal based on the
employer’s
operational requirements has been ousted”.
[11]
The Labour Court said that there is an incorrect view that its
jurisdiction in such matters was restored, pursuant to
section 189A(13)
of the LRA. The Court held that this view is
plainly incorrect because section 189A(13) does not make any
reference to procedural
fairness but specifically provides that if an
employer does not comply with a fair procedure, a consulting party
may apply to the
Labour Court for an order compelling the employer to
comply with a fair procedure. It does not, the Court emphasised,
refer to
procedural fairness.
[12]
[15]
The
Court distinguished between procedural fairness and compliance with a
fair procedure. It held that there is a vast difference
between
“seeking to find procedural fairness and the compliance with a
fair procedure”, because “in a procedural
fairness
concept the net is wider as opposed to compliance”.
[13]
It highlighted that prior to the introduction of section 189A, the
Labour Court could adjudicate disputes relating to procedural
fairness in respect of all retrenchment disputes and that it still
has jurisdiction to adjudicate those matters in respect of
retrenchments of less than 10 employees. In respect of mass
retrenchments, however, a quicker and less complicated process is now
available and it can only be enforced through an application to
compel compliance.
[14]
That
this process is provided for by way of motion proceedings is further
evidence of the fact that the Legislature did not intend
for the
Labour Court to adjudicate matters of procedural fairness, which
are likely to raise disputes of fact. According to
the Court the
issue in such applications is a simple one: it is whether the
employer complied with its statutory obligations.
[15]
[16]
The
Labour Court held that procedural fairness in a broader sense goes
beyond an employer’s statutory obligations alone. A
typical
example, according to the Court, relates to disclosure of
information. It also said that, notwithstanding that disputes
over
procedural fairness are excluded from the ambit of section 189A(13),
the LRA does not leave the consulting parties without
a remedy or
permit the employer to do whatever it wishes during the consultation
process. Rather, it enjoins facilitators to facilitate
the process
and, where necessary, exercise their wide powers to make rulings. In
addition, employees retain their constitutional
right to strike over
issues arising from procedural fairness throughout the consultation
process.
[16]
[17]
The
Labour Court concluded that the parties’ complaints regarding
the consultation process did not raise compliance issues,
but rather
general issues relating to procedural fairness and, to a certain
extent, substantive fairness.
[17]
[18]
Specifically,
in dealing with Solidarity’s complaints about the selection
criteria, the Labour Court stated that the allegation
was that
Barloworld did not consult over the transformation issue, and that
there was a dispute in this regard. The Court concluded
that the
notice sent on 27 April 2020 to the employees relating to the
restructuring disclosed the selection criteria and that
there was no
dispute, on the probabilities, that the parties engaged on the
criteria. The initial proposal was to take into account
the EEP,
which according to the Court includes transformation. The Court held
that the allegation that the employer did not engage
on
transformation was inconsistent with the evidence presented. The
Court also held that in its view transformation is not a selection
criterion per se, and that Solidarity’s complaint, properly
construed, related to substantive fairness. The issue of which
selection criteria to apply is one of substance and not procedure, so
reasoned the Court. It then stated that Solidarity had a
right, in
terms of section 189A(7)(b)(ii), to refer the dispute as to whether
there was a fair reason for the dismissal to the
Court in terms of
section 191(11) of the LRA. The Labour Court then concluded that
it would be inappropriate if it were to
adjudicate a procedural
fairness dispute brought as a section 189A(13) application, as
its powers were “taken away”
by section 189A(18).
[18]
It concluded that Solidarity’s application based on
section 189A(13) had to fail. The Court emphasised that the
primary
remedy envisaged by section 189A(13) is compliance,
which was no longer possible since the consultation process had
concluded
and the proverbial horse had bolted.
[19]
[19]
In passing, the Court found it unnecessary to
determine allegations of unlawfulness. These issues have not been
raised by Solidarity
in this application and will not be traversed in
this judgment.
[20]
The
Court then dealt with the issues presented by NUMSA, which it also
held were issues of substance that fell outside the ambit
of the
Labour Court’s powers in terms of section 189A(13).
[20]
The Court held that NUMSA ought to have dealt with Barloworld’s
alleged failure to provide it with certain information through
the
remedial procedure provided for in section 16 read with
section 189(4) of the LRA. It held that this process was
specifically
designated by the LRA, and could not be bypassed by the
Court purporting to exercise jurisdiction in terms of
section 189A(13).
[21]
[21]
Finally,
in dealing with costs, the Labour Court held that the requirements of
law and fairness dictated that an award of costs
against Solidarity
and NUMSA was apposite in the circumstances, because their
applications amounted to an abuse of court process.
[22]
[22]
Aggrieved by the Labour Court’s decision,
Solidarity and NUMSA applied to the Labour Court for leave to appeal
to the Labour
Appeal Court. The Labour Court concluded that it lacked
prospects of success and dismissed the application for leave to
appeal
with costs.
Labour Appeal Court
[23]
After finding no joy in the Labour Court,
Solidarity petitioned the Labour Appeal Court for leave to appeal to
it. The Labour Appeal
Court refused Solidarity’s petition with
no order as to costs.
Submissions
before this Court
Submissions on
jurisdiction and leave to appeal
[24]
Solidarity submits that this matter engages this
Court’s jurisdiction as it concerns, inter alia, the proper
interpretation
of sections 189 and 189A(13) of the LRA. These
sections, so it argues, give content to dismissals for operational
requirements
(and the fairness thereof), underpinned by the right to
fair labour practices which is entrenched in section 23(1) of the
Constitution.
It contends that the interpretation and application of
the LRA, which was enacted to give effect to the Bill of Rights, do
raise
constitutional issues. Thus, so submits Solidarity, this
Court’s jurisdiction is engaged.
[25]
Solidarity further argues that this matter raises
important issues that are not confined to the parties involved, but
relevant to
the general labour force and other future employment
relationships. It submits that:
“
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 any other forms of dismissals because
they affect a large number of employees”.
Therefore,
in Solidarity’s argument, reaching certainty and finality on
whether dismissals constitute retrenchments that are
not
automatically unfair in terms of section 187(1)(c) of the LRA is
in the public interest and warrants a determination by
this Court. It
therefore contends that the interests of justice favour the granting
of leave to appeal.
[26]
Barloworld submits that this matter neither raises
a constitutional issue
nor does it raise an arguable point of
law of general public importance that ought to be considered by this
Court. According to
Barloworld, this is evident from the fact that
Solidarity’s action and the primary relief sought is based on
section 187(1)(f)
of the LRA.
[27]
Barloworld further contends that even if this Court is inclined to
hold that its jurisdiction
is engaged, leave to appeal should be
refused because the matter is moot. This, according to Barloworld, is
because where a facilitated
consultation process is underway, the
Labour Court can only be approached for relief during the 60-day
consultation period. It
follows, so contends Barloworld, that the
application by Solidarity, brought roughly 30 days after the
notices of dismissal
were issued, was brought too late to obtain
substantive relief aimed at getting the consultation process back on
track. Barloworld
further argues that in any event this application
has no reasonable prospects of success.
Submissions on merits
[28]
Solidarity
submits that the distinction drawn by the Labour Court between a
“fair procedure” and “procedural fairness”
is
superficial. To substantiate this point, Solidarity asserts that
“there are no other precedents [apart from
TAWUSA
,
[23]
a judgment of the same Judge] to suggest that the words ‘a fair
procedure’ are confined only to the contents of section
189 of
the LRA”. In Solidarity’s submission, the Labour Court
drew a distinction between compliance issues and general
procedural
unfairness issues, thereby negating the requirement of consultation
and a meaningful joint consensus seeking process
and, instead,
requiring only that the relevant parties “
engage
”
(emphasis
added).
[29]
Solidarity
argues that it has been held that consultation must be exhaustive and
not sporadic, superficial or a sham, in order to
be considered
meaningful. And that the Code of Good Practice on Dismissal based on
Operational Requirements
[24]
codifies this where it states that the employer should in good faith
keep an open mind throughout and seriously consider proposals
put
forward.
[25]
This, in
Solidarity’s view, negates the description that the Labour
Court attaches to consultation as being mere engagement.
It submits
that consultation is seldom deemed sufficient when it is rushed. To
be meaningful in terms of section 189(2) of the
LRA, the consultation
process must allow sufficient time for disclosure, consideration and
dialogue. It argues that there was no
meaningful consultation on the
selection criteria in general and the criterion of transformation in
particular.
[30]
Although Solidarity accepts that the parties
discussed the selection criteria, it denies that these discussions
constituted adequate
consultations and further denies that an
agreement was reached about the selection criteria, which included
the criterion of transformation
that was eventually used. Solidarity
takes issue with the Labour Court’s finding that
“transformation is not a selection
criterion and that
Solidarity’s complaint relates to substantive fairness”.
[31]
Barloworld argues that Solidarity does not deny that it was consulted
on the selection criteria
used to select employees for dismissal. It
submits that whether the selection criteria were
fair, or were fairly applied, is a matter for determination at trial
on the substantive
fairness of the dismissals.
[32]
Barloworld submits that the Labour Court was
correct in drawing a distinction between the questions whether, all
things considered
and on the application of a value judgment, the
dismissal was procedurally fair; and, on the other hand, whether the
employer had
complied with its statutory obligation to engage in a
fair consultation procedure. Barloworld submits that the Labour Court
correctly
held that, in proceedings under section 189A(13), the only
relevant question was the second one.
[33]
Barloworld contends that Solidarity’s
argument that the enquiry into procedural fairness is far broader
ignores the express
limitation of the Labour Court’s
jurisdiction to adjudicate procedural fairness issues in mass
retrenchments, as explicitly
set out in section 189A(18) of the LRA.
The jurisdiction of the Labour Court in terms of section 189A(13) is
limited to a judicial
supervisory and oversight role,
which
enables the Court to intervene in exceptional circumstances where
there has been a gross failure in the consultation process.
Analysis
Jurisdiction and leave to
appeal
[34]
This
matter concerns the interpretation of the LRA and the crisp question
before the Court relates to the interpretation of sections
189 and
189A of the LRA. This Court, in
NEHAWU
,
[26]
held that the interpretation of the LRA, a statute that gives effect
to the constitutional right to fair labour practices, is a
constitutional issue. This principle was later confirmed in
Steenkamp
I
.
[27]
There the Court also held that the ambit of the employment rights
flowing from section 189A is an arguable point of law of general
public importance, which this Court ought to hear.
[28]
As this matter relates to interpretative issues flowing from section
189A, and as the issues raised will undoubtedly impact the
labour
rights of many South Africans, not just the litigants before the
Court, this Court’s general jurisdiction is also
engaged.
[35]
However, jurisdiction is not the only
consideration. The next question is whether leave to appeal should be
granted. Because in
Steenkamp I
and
II
this
Court has already interpreted the provisions of section 189A(13),
this would ordinarily have been a ground to refuse leave
to appeal.
However, this matter raises material errors made by the Labour Court,
which, if not corrected and clarified, may cause
confusion in labour
law jurisprudence. For instance, the Labour Court sought to make a
general distinction between procedural fairness
and compliance with a
fair procedure. The manner in which the distinction is formulated
may, if not clarified, lead to confusion
and to a deviation from the
jurisprudence of that Court, the Labour Appeal Court and this Court,
concerning what falls under the
umbrella of procedural unfairness in
terms of the provisions of the LRA.
[36]
Secondly, the Labour Court laboured under the
impression that once the consultation process has been finalised,
there can be no
reliance on section 189A(13). As will be
illustrated below, this view is contrary to the jurisprudence of this
Court in
Steenkamp I
.
Another issue that needs to be clarified pertains to what constitutes
meaningful joint consensus-seeking consultations. Although
this
concept is not novel, it is worth clarifying that this requirement
pertains to the quality rather than the quantity or duration
of the
joint consensus-seeking sessions. And further, to re-state in what
circumstances it can be said that there was a meaningful
joint
consensus seeking process in compliance with the provisions of
section 189(2) of the LRA. Leave to appeal is thus granted.
Merits
Issues for determination
[37]
The submissions on the merits raise a number of issues. However, as
stated earlier, the essence
of the dispute is whether the Labour
Court was correct in holding that Solidarity’s application
should not have been brought
in terms of section 189A(13). To
resolve this issue, I first have to determine whether there was
meaningful consultation between
the parties as required in terms of
section 189(2) of the LRA. The next issue to determine is whether the
Labour Court was correct
in refusing to grant an order in terms of
section 189A(13). If the Labour Court erred, then this Court will
have to determine appropriate
relief in order to remedy the defect in
the consultation process. This may include remitting the matter to
the Labour Court
or ordering the parties to re open the
consultation process or awarding compensation. Finally, it has to be
determined whether
this Court should interfere with the Labour
Court’s costs order against Solidarity.
[38]
I will firstly look at the law relating to dismissals based on
operational requirements, as
envisaged in section 189. I will then
consider, the jurisprudence relating to what the LRA envisages when
it requires that there
must be meaningful consultation between the
parties before dismissals for operational requirements take place.
This will lead me
to a conclusion on whether there was proper
consultation. The next enquiry will then be the jurisprudence
relating to when section
189A(13) may be invoked. The question that
will arise after this is whether section 189A(13) should have been
invoked. Finally,
I will deal with the costs order made by the Labour
Court.
Law relating to
dismissals based on operational requirements
[39]
Section 189(1) of the LRA requires an employer
contemplating dismissals based on operational requirements to consult
any person,
including trade unions whose members may be affected by
the proposed retrenchments, prior to implementing the dismissals.
Section
189(2) of the LRA requires the employer and other consulting
parties to “engage in a meaningful joint consensus-seeking
process
and attempt to reach consensus” on the issues listed in
section 189(2)(a) to (c). These issues include: appropriate measures
to avoid dismissals, to change the timing of dismissals, to mitigate
the adverse effects of the dismissals and the method for selecting
employees to be dismissed. Section 189(3) states that the employer
must issue a written notice inviting the other consulting party
to
consult with it and disclose in writing all relevant information
pertaining to the proposed dismissals.
[40]
Section 189(4)(a) refers to disclosure of information stipulated in
subsection 3 and
provides that the provisions of section 16,
read with the changes required by the context, apply to the
disclosure of information
in terms of this subsection.
Section 189(4)(b) deals with the onus in the event that there is
a dispute on whether the information
that the employer has refused to
disclose is relevant to the proceedings. Section 189(5) requires
that the employer should
allow the other consulting party an
opportunity, during consultation, to make representations about any
matter dealt with in subsections
(2), (3), and (4) as well as any
other matter relating to the proposed dismissals. In terms of section
189(6)(a), the employer
must consider and respond to the
representations made by the other consulting party and, if the
employer does not agree with them,
the employer must state the
reasons for disagreeing. In terms of section 189(6)(b) it is
required that if representations
are made in writing the employer
must respond in writing. Section 189(7)(a) and (b) provides that the
employer must select the
employees to be dismissed according to
selection criteria that have been agreed to by the consulting parties
or, if there has been
no agreement, criteria that are fair and
objective.
[41]
Section 189A regulates
dismissals for operational requirements by employers with more than
50 employees.
[29]
Barloworld
was such an employer. Section 189A(2) requires that an employer
must give notice of termination of employment in
accordance with the
provisions of the section, that an employee may participate in a
strike and an employer in a lock out, and
that the consulting parties
may agree to vary the time periods for facilitation or consultation.
Such variation of time periods
may not be refused unreasonably by
either of the consulting parties if it is required to ensure
meaningful consultation. The CCMA
is, in terms of section 189A(3),
required to appoint a facilitator to assist the parties engaged in
consultations if requested
to do so by either the employer or
consulting parties representing the majority of employees whom the
employer contemplates dismissing.
If a facilitator is appointed and
60 days have elapsed from the date on which the notice was given
in terms of section 189(3),
the employer may give notice to
terminate the contracts of employment in accordance with
section 37(1) of the Basic Conditions
of Employment Act.
[30]
In that event, the registered trade union or the employees may either
give notice of a strike in terms of sections 64(1)(b)
or (d) of
the LRA; or refer a dispute concerning whether there is a fair reason
for the dismissal to the Labour Court in terms
of section 191(11)
of the LRA.
[42]
Section 189A(13), which is at the centre of this
dispute, deals with the powers of the Labour Court if an employer
fails to comply
with a fair procedure during consultations. Section
189A(14) and (15) provides that the Labour Court may make an
appropriate order
referred to in section 158(1)(a) and that an award
of compensation made to an employee in terms of subsection (14) must
comply
with section 194. Section 189A(16) provides that the
Labour Court may not make an order in respect of any matter
concerning
the disclosure of information in terms of section 189(4)
that has been the subject of an arbitration award in terms of section
16. Section 189A(18) provides that the Labour Court may not
adjudicate a dispute about procedural fairness of a dismissal based
on the employer’s operational requirements in any dispute
referred to in terms of section 191(5)(b)(ii).
What section 189 requires
of the parties engaged in a consultation process
[43]
The
concept of a meaningful joint consensus-seeking process that is
envisaged in section 189(2) is not defined in the LRA.
In
Atlantis
Diesel Engines
,
[31]
the
Appellate Division had the following to say about it:
“
[This]
approach requires consultation once the possible need for
retrenchment is identified and before a final decision to retrench
is
reached. It proceeds on the premise that consultation requires more
than merely affording an employee an opportunity to comment
or
express an opinion on a decision already made. It envisages a final
decision being taken by management only after there has
been
consultation in good faith.
. . . .
However,
an employer cannot be expected to disclose information which, (a) is
not available to it, (b) is not relevant to the issues
under
discussion, and (c) could harm the employer’s business
interests for reasons other than its relevance to the consultation
process, e.g. trade secrets and other confidential information.”
[32]
[44]
Sufficient
information must be disclosed to make the process of consultation
meaningful. This includes information concerning the
need for
retrenchment, as well as information that will assist the employees
or trade union, as the case may be, in making contributions
about
ways of avoiding retrenchment.
[33]
[45]
The
above sentiments have recently been echoed by the Labour Appeal Court
in
SACCAWU
,
[34]
where the Court held that the requirements of a meaningful joint
consensus seeking process were satisfied as the employer
showed
willingness to respond to requests for further information, the
employer had considered the proposals received from the
parties and
provided reasons for the rejection thereof and the parties partook in
a lengthy engagement process spanning over three
months. In
Minister
of Trade
[35]
the Labour Court held that the purpose of consultation should be
considered as a process which entrenches the values of social
partnership and joint problem-solving aimed at affording all parties
a proper opportunity to make contributions towards a
consensus seeking
process.
[46]
What
may be gleaned from the authorities is that for a consultation
process to be meaningful, in the context of section 189, the
employer
must keep an open mind, disclose sufficient information to enable
consulting parties to make informed representations,
and seriously
consider the representations. This entails that the employer is under
an obligation to furnish reasons for rejecting
representations after
it has considered them carefully. Approaching the consultation with a
pre determined outcome and failure
to provide reasons for
rejecting representations will render the consultation process not
meaningful.
[36]
[47]
Did the parties then engage in a meaningful joint
consensus-seeking process in this matter? It is not in dispute that
on 27 April
2020 Barloworld sent out a notice in terms of section
189A concerning its contemplated restructuring. The notice complied
in all
material respects with the requirements of section 189(3)
and there is no suggestion to the contrary. Solidarity concedes that
there were several CCMA facilitated consultation sessions, ending in
August 2020, but argues that the consultation process was
inadequate
regarding transformation as part of the selection criteria. What
cannot be gainsaid, however, is that transformation
is a component of
Barloworld’s EEP, that it was tabled upfront during the
consultation process, and that in subsequent meetings
Barloworld made
it clear that the EEP would have to be complied with. That this is
so, is evident from the correspondence exchanged
between the parties
during the consultation process and from the agenda of the meeting
between the consulting parties dated 7 August
2020. It is also clear
that after the initial 60-day period expired on 3 August 2020,
the consultation process was extended
to enable the parties to
consult further on outstanding issues. We know that one of the issues
to be considered further was transformation
as a selection criterion.
It is unlikely that this would have been part of the agenda if there
was no desire on the part of Barloworld
to reach consensus on this
issue.
[48]
It is also not in dispute that Solidarity was
afforded an opportunity during the consultation process to make
representations about
several matters, including making its views
known on several occasions on transformation as part of the criteria
proposed. In addition,
it is also not in dispute that in subsequent
meetings, up to the end of the consultation process, when Solidarity
made its proposals,
it rejected the use of transformation as part of
the selection criteria. Towards the end of the consultation process
and in its
letter dated 28 July 2020, Solidarity stated its stance on
the topic categorically and said: “Solidarity upfront rejects
the proposal that such placements should be in line with Barloworld’s
Employment Equity Plan as we believe the LRA specifically
prohibits
possible termination based on race”.
[49]
The purpose of consultations is to seek consensus
and there is no requirement that the parties should reach agreement.
The contents
of a letter from Solidarity dated 2 September 2020
shows that Solidarity expected that there should have been an
agreement
between the consulting parties on the selection criteria.
The letter states:
“
3.4
What is also of concern is the fact that
the
selection criteria was not agreed upon
and
appears to have been unilaterally implemented. Our client clearly
indicated that LIFO and skills and qualifications may be acceptable
as fair and objective criteria. You, however, proceeded to
unilaterally implement so called ‘transformation’ as
a selection criterion. This renders the whole process unfair;
3.5
Furthermore, the employer unilaterally imposed a weighted score to
the three separate criteria which was neither
negotiated, nor
agreed
to;
3.6 The
scoring attached to the three weighted criteria was, and is
unilaterally imposed and implemented, and
was never properly
consulted on . . .;
3.7
Even if it is found that the inclusion of transformation is fair and
objective (which our client denies) then
the
application of the
selection criterion
, in the fashion that you are currently
implementing and applying same, is utterly unfair, discriminatory and
simply unacceptable.”
[50]
That there was this expectation is also evident
from Solidarity’s replying affidavit in the Labour Court, where
it complained
that
no agreement
was reached between the applicant, the respondent,
the non-unionised employees and the unionised employees pertaining to
selection
criteria. The affidavit reiterated that “there
was
no consensus
reached between the
parties as to selection criteria”.
[51]
It is curious, but of some importance to note that
presently there is a parallel process in the Labour Court where
Solidarity is
invoking section 191 of the LRA to challenge, amongst
others, the use or adoption of transformation as a selection
criterion. In
the statement of claim in those parallel proceedings,
Solidarity states that “the matter deals with the automatic
unfair
dismissal of the second to fifth claimants due to the
mala fide
actions
of the respondent, in terms of
using
transformation /race and gender as selection
criteria for dismissing the second to fifth claimants”. The
complaint there is
aimed at the fact that transformation was used as
a selection criterion. In its statement of claim in the section 191
process,
Solidarity refers to the agenda of the further meetings
scheduled for 7 and 11 August 2020 and states that “what is
evident
from the agenda . . . is that transformation is mentioned.
However, nowhere is it indicated why transformation would be adopted
and how it would be applied.
This was
not agreed to at the consultations
”
.
Solidarity further avers that during the consultation process, the
claimants agreed, in principle, to two of the pillars, namely:
LIFO
and the skills and qualification.
But
they did not agree
to the manner in
which the criteria would be assessed and applied. (Emphasis added.)
[52]
The relevance of the pleadings in the parallel
section 191 proceedings is that when one examines Solidarity’s
pleaded case
before the Labour Court in this matter, what emerges is
that Solidarity is also primarily unhappy about the fact that there
was
no agreement between the parties about the selection criteria
and, more specifically, the adoption of transformation as a component
of the criteria.
[53]
In light of the above, it is clear that
Solidarity’s complaint relates to the inclusion of
transformation in the selection
criteria and the fact that there was
no agreement on its inclusion. The failure to reach consensus or
agreement does not necessarily
mean that the consultation process was
not meaningful. The references to the correspondence, the pleadings
and the agenda show
that Barloworld genuinely and meaningfully
considered the representations made by Solidarity. Even after the
process almost collapsed
as a result of the behaviour of another
trade union, the National Association of South African Workers
(NASA), and although the
initial time period for consultation had
expired, we know that the consultation period was extended. We also
know that the consultations
continued, even after Barloworld had
issued notices of termination in terms of section 189A(7) of the LRA
read with section 37(1)
of the Basic Conditions of Employment Act.
The selection criteria, including transformation, were squarely
raised for discussion
during the consultations but Solidarity was
adamant that it rejected transformation as part of the selection
criteria. This is
still the stance in the pleadings as Solidarity
states that the inclusion of transformation was discriminatory and
unfair.
[54]
I am mindful of the fact that although this was
and still is the stance adopted by Solidarity, it also seeks to
challenge the procedural
fairness of the consultation process on the
apparent implementation of the contents of an undated annexure that
Solidarity argues
was introduced at the tail end of the consultation.
The impact of transformation on the different racial groupings at
Barloworld
seems to have been contained in the annexure to that
document. It is unclear whether the contents of this annexure were
discussed
during the consultations and counsel for Barloworld could
also not provide clarity on this aspect. I will deal with the debate
on whether Solidarity should have been successful in invoking section
189A(13). When dealing with that debate, I will also deal
with the
relevance of this annexure and whether the alleged failure to consult
on its contents compromised the consultation process,
such that
section 189A(13) should have been invoked.
The correct
interpretation and application of section 189A(13)
[55]
In order to deal with this topic, it will be
helpful to: (a) first clarify the correct interpretation of and
approach to section
189A(13) and deal with the circumstances in which
it may be invoked; and (b) consider the circumstances in which it is
appropriate
for parties to approach the Labour Court in terms of
section 191(5)(b)(ii) and the powers that the Labour Court has
pursuant
to that provision. This will resolve the question whether
Solidarity was entitled to invoke section 189A(13) of the LRA to
address its grievances. The next enquiry will be whether the Labour
Court was correct in holding that, generally, there is a distinction
between disputes about procedural fairness and those relating to
compliance with procedure. I will also determine the effect of
section 189A(18) on the jurisdiction of the Labour Court.
[56]
Section 189A(13) of the LRA provides:
“
If
an employer does not comply with a fair procedure, a consulting party
may approach the Labour Court by way of an application
for an order—
(a)
compelling the employer to comply with a fair procedure;
(b)
interdicting or restraining the employer from dismissing an employee
prior to complying with a fair
procedure;
(c)
directing the employer to reinstate an employee until it has complied
with a fair procedure;
(d)
make an award of compensation, if an order in terms of paragraphs (a)
to (c) is not appropriate.”
[57]
In
NUM
,
[37]
the Labour Court described section 189A(13) as follows:
“
Section
189A(13) was introduced in 2002 and was intended, broadly speaking,
to provide for the adjudication of disputes about procedural
fairness
in retrenchments at an earlier stage in the ordinary dispute
resolution process, and by providing for their determination,
inevitably as a matter of urgency, on application rather than by way
of referral. The section empowers employees and their representatives
to approach the court to require an employer to apply fair procedure,
assuming, of course, that the jurisdictional requirements
set out in
section 189A are met. The section affords the court a broad range of
powers, most of which appear to suggest that where
a complaint about
procedure is made by a consulting party, the court has a broad
discretion to make orders and issue directives,
thereby extending to
the court an element of what might be termed a degree of judicial
management into a contested consultation
process.”
[38]
[58]
In
Steenkamp
I
this
Court also considered the provisions of section 189A(13). There
an
employer, Edcon, had issued termination notices prior to the
expiration of the 30 day period prescribed by section 189A(8).
Aggrieved by this, the applicants referred 51 disputes,
involving 1 331 employees, to the Labour Court challenging the
validity
of the dismissals. It was alleged that Edcon had acted in
contravention of
sections 189A(2)(a)
and (8)
and
that the failure to comply with
those
provisions rendered the dismissals invalid.
In
its analysis, this Court highlighted that sections 189 and 189A
provide for procedures and processes that must be complied
with
before any dismissal for operational requirements can be effected,
and that they seek to give effect to the requirement in
section
188(1)(a)(ii) that a dismissal must be effected in accordance with a
fair procedure.
[39]
[59]
This
Court emphasised that the sole underlying purpose of section 189A(13)
is to provide a convenient and expedient mechanism
to ensure that a
fair procedure is followed during retrenchment consultations. This
Court held further that the Legislature has
gone out of its way to
give special protection for the rights of employees and to protect
the integrity of the procedural requirements
of dismissals governed
by section 189A.
[40]
It
also held that in cases of dismissals, other than those envisaged in
section 189A(13), such as those concerning alleged
infringement
of the right not to be unfairly dismissed, the protection for
employees is sourced elsewhere in section 191 of
the LRA.
[60]
Bearing in mind the purpose of invoking the
provisions of section 189A(13), it is apposite to consider
whether the failure,
in the present instance, to present the
selection criteria matrix as contained in the undated annexure leads
to a conclusion that
the consultation process was procedurally
unfair. In its founding affidavit, Solidarity states that its
perception was that Barloworld’s
desired outcome in
implementing transformation was to rid it of certain racial groups,
especially whites. It seems that this is
one of the reasons why
Solidarity made it clear that it rejected transformation as part of
the selection criteria. What cannot
be gainsaid is that
transformation, generally, as part of the selection criteria was part
of the ongoing discussions between the
parties during the
consultation process. Solidarity persistently rejected it as part of
the selection criteria until the period
of the CCMA-facilitated
consultations expired. As stated, this is still its stance in the
pleadings as Solidarity states that the
inclusion of transformation
was discriminatory. The relief Solidarity sought in the Labour Court
was that consultation be
resumed on the basis that transformation be
excluded altogether as a selection criterion. Curiously, Solidarity
has not submitted
that the failure to present the selection criteria
matrix deprived it of the opportunity of considering this aspect
further. This
is unsurprising because its stance throughout was that
this aspect was non-negotiable. The parties had therefore clearly
deadlocked
on this issue and the next route for Solidarity was to
approach the Labour Court in order for it to adjudicate on the
substantive
fairness of relying on transformation as part of the
selection criteria.
[61]
Furthermore, Solidarity did not specifically
allege in its founding affidavit that it did not have sight of the
weightings in the
selection criteria matrix during the consultations.
Barloworld therefore cannot be faulted for not specifically
addressing this
issue, nor could its version that there was
meaningful consultation be rejected on the papers. The issue was
raised in Solidarity’s
heads of argument in this Court where it
submits that:
“
[T]he
selection criteria proposed at the onset of consultations morphed
into something totally different during the last session
of 7 August
2020, by the implementation of a construct of ‘
weighted
scores/selection
criteria
’
and
then with the inclusion of ‘
transformation
’
,
versus the initial proposal as contained in the section 189(3)
notice of Barloworld’s ‘employment equity plan’”.
This
submission by Solidarity complains about the implementation of the
weighted score. It also complains about the inclusion of
transformation as part of the selection criteria. I have already
shown that the inclusion of transformation as part of the selection
criteria was disclosed upfront and was part of ongoing consultation.
The other complaint seems to suggest that the inclusion of
transformation as part of the selection criteria should be
differentiated or contrasted with the initial proposal as contained
in the section 189(3) notice of Barloworld’s EEP. As already
stated, transformation is part of employment equity in the workplace.
The Labour Court was therefore entitled to accept Barloworld’s
version that there had been meaningful consultation on the
selection
criteria.
Is there a distinction
between disputes about procedural fairness and those relating to
compliance with procedure?
[62]
In
Steenkamp I
the
Court also considered the consequences of dismissals that occurred
due to non-compliance with the provisions of section 189A.
It held:
“
If
non-compliance with section 189A results in dismissals being
procedurally unfair, the ordinary unfair dismissal provisions of
the
LRA as well as the special remedies that section 189A provides may be
invoked. If the employer’s operational requirements
for
dismissals are inadequate, this can be challenged as rendering the
dismissal substantively unfair with the advantage of immediate
access
to the Labour Court or the right to strike provided for in section
189A may be invoked.
If the
procedural requirements of section 189 or 189A are not complied with
in circumstances where there is no acceptable reason
for
non-compliance, the result will be that the dismissal was not
effected in accordance with a fair procedure as contemplated
in
section 188(1)(a)(ii). It is, therefore, procedurally unfair”.
[41]
[63]
The
Court explained that the orders the Labour Court may make under
section 189A(13) are very extensive. These include an order
for
re-instatement which could be with retrospective effect to the date
of dismissal.
[42]
The Court
elaborated on the process or procedure that an employer must follow
when contemplating the dismissal of an employee for
operational
requirements. It highlighted that section 189A creates rights and
obligations for a certain category of employers and
their employees
in regard to dismissals for operational requirements which did not
form part of the LRA before 2002. It is worth
noting that it also
makes provision for the referral to the Labour Court for adjudication
of a dispute about whether there is a
fair reason for dismissal. It
said that in section 189A(13), the LRA specifies special remedies for
non-compliance with a fair
procedure and that in section 191 it sets
out the dispute procedure that must be used to resolve disputes
concerning alleged infringement
of the right not to be unfairly
dismissed.
[43]
In considering
the remedies available to a dismissed employee, the Court stated:
“
If
an employer has not issued notices of dismissal but has failed or is
failing to comply with a fair procedure in the pre-dismissal
process,
a consulting party may make use of the remedy in subsection (13)(a).
In such a case the consulting party would apply to
the Labour Court
for an order compelling the employer to comply with a fair procedure.
If an employer gives employees notices of
dismissal without complying
with a fair procedure, or, if an employer dismisses employees without
complying with a fair procedure,
the consulting party may apply to
the Labour Court for an order interdicting the dismissal of employees
in terms of subsection
(13)(b) until there is compliance with a fair
procedure. This would include giving premature notices of dismissal.
If an
employer has already dismissed employees without complying with a
fair procedure, the consulting party may apply to the Labour
Court in
terms of subsection (13)(c) for an order reinstating the
employees until the employer has complied with a fair procedure.
The
significance of the remedy of reinstatement in subsection (13)(c) is
that it is made available even for a dismissal that is
unfair only
because of non-compliance with a fair procedure. That is significant
because it is a departure from the normal provision
that
reinstatement may not be granted in a case where the only basis for
the finding that the dismissal is unfair is the employer’s
failure to comply with a fair procedure. In such a case the norm is
that the Labour Court or an arbitrator may award the employee
only compensation.”
[44]
[64]
This
Court accordingly made it clear that “fair procedure”, as
contemplated in section 189A, refers to the procedure
that has
been set out in sections 189 and 189A, which gives effect
to section 188.
[45]
The Court
also dealt with the provisions of section 189A(18) and said that
it precludes the Labour Court from adjudicating
any dispute about
procedural fairness of a dismissal for operational requirements
referred to it in terms of section 191(5)(b)(ii).
The Court explained
the position as follows:
“
In
terms of [section 189A(8)(b)(ii)(bb)] only a dispute concerning
whether there is a fair reason for dismissal may be referred
to the
Labour Court for adjudication. In fact subsection (18) precludes the
Labour Court from adjudicating any dispute about the
procedural
fairness of a dismissal for operational requirements referred to it
in terms of section 191(5)(b)(ii). It reads:
‘
The
Labour Court may not adjudicate a dispute about the procedural
fairness of a dismissal based on the employer's operational
requirements in any dispute referred to it in terms of section
191(5)(b)(ii).’
Subsection
(18) may seem very drastic and harsh on employees who may be having a
dispute with their employer concerning the procedural
fairness of
their dismissal. However, it will be seen that, when read with
subsection (13), it is not harsh at all. Subsection
(13) provides
extensive protections to employees where the employer has failed to
comply with a fair procedure.”
[46]
[65]
It is thus clear that the Labour Court may not
adjudicate a dispute about the procedural fairness of a dismissal
based on the employer's
operational requirements in any dispute
referred to it in terms of section 191(5)(b)(ii). As this Court
reasoned, in
Steenkamp I
,
section 189A(13) provides adequate protection for employees
where there has been a failure to comply with a fair procedure.
Moreover, in
Steenkamp II
,
this Court confirmed the features of section 189A(13) and said:
“
A distinctive
feature of section 189A(13) of the LRA is the separation of disputes
about procedural fairness from disputes about
substantive fairness.
Disputes about substantive fairness may be dealt with by resorting to
strike action or by referring a dispute
about the substantive
fairness of the dismissals to the Labour Court in terms of section
191(11) of the LRA.
Disputes about procedural
fairness have been removed from the adjudicative reach of the Labour
Court and may no longer be referred
to the Labour Court as a
distinctive claim or cause of action that a dismissal on the basis of
operational requirements was procedurally
unfair.”
[47]
[66]
The Court elaborated further:
“
Where
procedural irregularities arise, the process provided for in
section
189A(13)
of
the LRA allows for the urgent intervention of the Labour Court to
correct any such irregularities as and when they arise so that
the
integrity of the consultation process can be restored and the
consultation process can be forced back on track. The purpose
of
s
ection 189A(13)
has been recognised in a long line of cases. In
Insurance
& Banking Staff Association
the
Labour Court explained:
‘
The
overriding consideration under
section
189A
is
to correct and prevent procedurally unfair retrenchments as soon as
procedural flaws are detected, so that job losses can be
avoided.
Correcting a procedurally flawed mass retrenchment long after the
process has been completed is often economically prohibitive
and
practically impossible. All too often the changes in an enterprise
with the passage of time deter reinstatement as a remedy.
So, the key
elements of
section 189A
are:
early expedited, effective intervention and job retention in mass
dismissals.’
Similarly in
SA Five
Engineering
the Labour Court held that—
‘
Suffice
it now to say that the intention of
section
189A(13)
,
read with
section 189A(18)
,
is to exclude procedural issues from the determination of fairness
where the employees have opted for adjudication rather than
industrial action, providing instead for a mechanism to pre-empt
procedural problems before the substantive issues become ripe
for
adjudication or industrial action.’”
[48]
[67]
The above excerpts read with section 189A(18)
remove disputes about procedural fairness, as a distinctive claim or
cause of action,
that a dismissal on the basis of operational
requirements was procedurally unfair, from the adjudicative reach of
the Labour Court.
[68]
It follows from this jurisprudence that, in order
for the Labour Court to adjudicate a claim of the unfairness of a
procedure in
dismissals for operational requirements, the Court must
be approached in terms of section 189A(13) on the basis of
non compliance
with the procedures prescribed by sections 189 or
189A of the LRA.
Steenkamp II
further holds:
“
In
exercising its powers in terms of section 189A(13) of the LRA, the
Labour Court thus acts ‘as the guardian of the process’
and exercises a ‘degree of judicial’ management or
oversight over the process. The aim is to proactively foster the
consultation process by allowing parties to seek the intervention of
the Labour Court on an expedited basis to ensure that procedural
irregularities do not undermine or derail the consultation process
before it ends.”
[49]
[69]
This
approach to section 189A(13) has been followed by the Labour Court in
numerous matters, including
AMCU
[50]
where the Labour Court was approached in terms of section 189A(13).
In that matter, it was common cause that the respondent
did not enter
into a consultation process with AMCU or the employees as required by
section 189 of the LRA. The Labour Court
accordingly confirmed
that the purpose of section 189A(13) is to “compel an
employer in large scale retrenchments to
follow a fair procedure if
it has not done so”.
[51]
The Court held that the employer had failed to comply with a fair
procedure in that it did not find it necessary to consult, as
prescribed by section 189. Ultimately the Court ordered that:
“
The
employers have not consulted in terms of sections 189 and 189A of the
LRA. They must be compelled to do so. The employees must
be
reinstated until the employers have complied with a fair procedure,
as contemplated by section 189A(13)(c).”
[52]
[70]
When the matter was taken on appeal to the Labour
Appeal Court, that Court upheld the decision of the Labour Court:
“
The
Labour Court correctly stated that, after Exxaro terminated its
contracts with the appellants, there may exist ‘justifiable
and
fair reason for dismissing the employees for operational
requirements’ but that that issue would only be capable of
being ascertained
through
a proper consultation process as contemplated in section 189 and
section 189A
.
I agree. It follows for these reasons, that the Labour Correct was
correct in granting the relief sought by the respondents in
terms of
section 189A(13) and in reinstating the respondent employees to
enable the appellants to follow a fair pre dismissal
procedure
in accordance with section 189A.”
[53]
(Emphasis added.)
[71]
The
following emanates from the above discussion. Firstly, the power of
the Labour Court to adjudicate the procedural fairness
of
retrenchment consultations is limited to the “fair procedure”
that is prescribed in sections 189 and 189A, which
give effect to
section 188. Secondly, it is evident that a party seeking the Labour
Court’s intervention when an employer
fails to follow a fair
procedure during retrenchment consultations must approach the Court
for relief in terms of section 189A(13).
This is because the Labour
Court is barred from determining the procedural fairness of a
dismissal based on operational requirements
when it is approached in
terms of section 191(5)(b)(ii). Thirdly, it is evident that
these provisions are in place to serve
the interests of expediency
and efficiency, and to ensure that the procedural requirements of the
LRA are followed when parties
engage in consultation in anticipation
of a large scale retrenchment, and that any defects in the
procedures can be cured
before jobs are lost. This policy choice was
adopted to avoid the courts having to adjudicate alleged procedural
unfairness in
the aftermath of mass retrenchments. It was
self evidently a sensible legislative decision, for it reduces
the likelihood
of parties being exposed to the inconveniences and
complications that could arise from a court ordering them to
unscramble the
proverbial scrambled egg. Of course section 189A(13)
does envisage, and apply to a situation where a dismissal has already
taken place. Paragraph (c) of this section empowers the Court to
direct “the employer to reinstate an employee until
it has
complied with a fair procedure”. Because the section 189A(13)
process is meant to take place immediately and
to be finalised
expeditiously, the paragraph (c) power does not detract from the
metaphor of the scrambled egg, because the
scrambling will not be
complete.
[54]
[72]
In
light of these principles and the jurisprudence canvassed above, it
is clear that, other than
TAWUSA
,
[55]
there is no authority in support of the Labour Court’s finding
that there is a distinction between “compliance with
a fair
procedure” and “procedural fairness”. While there
is no clear example in law where non-compliance with
the statutory
provisions of section 189 and 189A would not also translate to
procedural unfairness, one cannot rule out that possibility,
but
there was no basis here for making that distinction. Until that
scenario is presented, it may be safely concluded that the
Labour
Court’s jurisdiction to adjudicate procedural fairness is only
ousted in respect of unfair dismissal proceedings brought
in terms of
section 191(5)(b)(ii). It is uncontroversial and has been settled by
this Court that if an employer fails to follow
the procedures
prescribed by section 189 and 189A of the LRA, a party is entitled to
approach the Labour Court in terms of section
189A(13) and the Court,
in turn, is entitled to grant any of the remedies contained in that
provision.
Non-disclosure of
information
[73]
Regarding
the complaint about non-disclosure of information, it is important to
note that this issue was raised by NUMSA, which
is not a party to
this appeal. The complaint was that the consultation was flawed
because Barloworld refused to disclose information
(the list of names
and the order books for 2019/20) that was vital to ensure the
effective participation of the unions in the consultation
process.
[56]
In this Court,
Solidarity takes issue with how the Labour Court dealt with this
issue. In essence, it argues that the Court “erred
in not
finding that a consulting party is entitled to an order of procedural
unfairness where an employer failed to disclose relevant
information
or, alternatively, directing the employer to disclose the information
and interdicting the dismissals as a result thereof”.
It seems
that Solidarity’s complaint in this regard concerns the failure
to discuss the annexure containing the selection
criteria matrix at
the consultation meeting. I have already found that this omission did
not lead to the process being procedurally
unfair. In light of that
conclusion, I do not deal with the issue further.
[74]
It follows that the Labour Court was correct in
holding that there could be no reliance on section 189A(13) of the
LRA.
[75]
The next enquiry is whether the Labour Court’s
assertion was correct that, once dismissals have taken place, the
horse has
bolted. It is helpful to deal with this issue,
notwithstanding that any conclusion on it will not impact the order
in this matter.
I am minded to deal with it because it was one of the
reasons the Court non-suited Solidarity. The Labour Court’s
stance,
as a general legal principle, is contrary to the various
decisions of this Court where it held that an application in terms of
section 189A(13) may be brought after consultations have
concluded. Section 189A(17)(a) of the LRA provides that “[a]n
application in terms of subsection (13) must be brought not later
than 30 days after the employer has given notice to terminate
the
employees’ services or, if notice is not given, the date on
which the employees are dismissed”. Section 189A(17)(b)
provides that “[t]he Labour Court may, on good cause shown
condone a failure to comply with [this time limit]”. In
Steenkamp II
,
this Court held that—
“
the procedure
within section 189A(13) of the LRA provides for an urgent remedy on
application whilst the parties are still locked
in consultations or
shortly thereafter in circumstances where the reinstatement of the
dismissed employees can still salvage the
consultation process by
restoring the status quo ante.”
[57]
[76]
In making the assertion that the horse had bolted,
the Labour Court reasoned that section 189A(13) is primarily
aimed at compelling
compliance with a fair procedure during the
consultation process, and that this was no longer possible in this
matter. In support
of this conclusion, the Labour Court simply stated
that Solidarity brought the application too late. Furthermore, by too
eagerly
dismissing a section 189A(13) application without
applying its mind to whether condonation ought to be granted, a court
risks
allowing employers to evade responsibility for flouting the
obligations imposed on them by sections 189 and 189A of the LRA.
Considering
that Solidarity’s members started receiving
termination notices on 17 August 2020 and Solidarity approached the
Labour Court
on 14 September 2020, the application was brought
within the requisite 30-day period.
Costs
Submissions
[77]
Solidarity challenges the costs order granted by
the Labour Court on the basis that the application raised
constitutional matters
as well as other matters deserving of the
Court’s attention pertaining to the patent unfairness meted out
to Solidarity’s
members. It also argues that the mere fact that
it was litigating against a private company and not the State does
not justify
an order as to costs. Furthermore, Solidarity submits
that the Labour Court erred in not having regard to the fact that the
trade
unions, which are non-profit organisations, have now been
mulcted in costs where a constitutional issue was raised. It also
argues
that there is no basis to award costs where general unfairness
in the process existed and where there was patently no malice or
vexatious conduct in bringing their applications. Finally, it asks
that costs in this application be costs in the appeal.
[78]
Barloworld
submits that
in
awarding costs against Solidarity, the Labour Court lamented the fact
that it had to deal with volumes of documentation during
truncated
time lines in an application that dealt with substantive issues and
which was not supposed to be brought in terms of
section 189A(13).
Thus, according to Barloworld, the Labour Court did furnish the
reasons for the adverse costs order, as this
Court had stated in
Union
for Police
.
[58]
Barloworld accordingly submits that this application ought to be
dismissed with costs.
Analysis
[79]
This
Court in
Union
for Police
confirmed
the position that applies to costs in labour matters. It held that
costs are not generally awarded in labour matters in
recognition of
the right to fair labour practices and the right of access to courts,
and also on account of section 165 of the
LRA, which requires a court
to make a costs order that accords with the law and fairness. It
reasoned that these rights ring hollow
when employees are at risk of
adverse costs orders which act as a deterrent to enforcing their
rights.
[59]
This Court
proceeded to confirm that in some instances, costs may be
appropriate, and that this will always be an exercise of a
court’s
judicial discretion. It reasoned:
“
In
the labour context, the judicial exercise of a court’s
discretion to award costs requires, at the very least, that the
court
must do two things. First, it must give reasons for doing so and must
account for its departure from the ordinary rule that
costs should
not be ordered. Second, it must apply its mind to the dictates of the
fairness standard in section 162, and the constitutional
and
statutory imperatives that underpin it.”
[60]
[80]
The costs order by the Labour Court has to be
considered against the backdrop of the fact that, although section
189A(13) should
not have been invoked, it is harsh to describe
Solidarity’s conduct as an abuse of court process. The matters
raised were
arguable and raised issues that affected the livelihood
of many members of Solidarity and NUMSA. Furthermore, one of the
reasons
the Labour Court decided to grant an adverse costs order
against Solidarity was its view that the application was an abuse of
the
Court’s process. In this regard, the Labour Court
misdirected itself in that its view was based on a fallacious
distinction
between “compliance issues” and general
procedural defects. The adverse costs order was thus not warranted
and should
not be allowed to stand as there was no basis for it.
[81]
I make the following order:
1.
Leave to appeal is granted.
2.
The appeal on merits is dismissed.
3.
The appeal against costs is upheld and paragraph (3) of the order of
the Labour Court
is substituted with the following:
“
Each
party is ordered to pay its own costs.”
For
the Applicant:
W P Bekker Instructed by Serfonteni Viljoen and Swart
For the First
Respondent: G Fourie SC and K T
Mokhatla instructed by Bowman Gilfillan Incorporated
[1]
66 of
1995.
[2]
A few
days before the hearing NUMSA addressed a letter to this Court
expressing its support for Solidarity’s application
for leave
to appeal. The status of the letter is not clear and it in fact did
not comply with the Rules of this Court and no
further reference
will be made to it.
[3]
National
Association of South African Workers; Association of Construction
and Mine Workers Union; National Union of Metal Workers
of South
Africa; UASA-The Union, respectively.
[4]
The
focus is on the consultation process with Solidarity. The
consultation with NUMSA is covered only to the extent necessary.
[5]
These
include the reasons for the retrenchments, alternatives to dismissal
that were considered and the reasons for rejecting
them, number of
employees affected, proposed method of selection, severance pay,
assistance offered by the employer and the possibility
of future
re-employment.
[6]
Solidarity
obo Members v Barloworld Equipment (a division of Barloworld SA
(Pty) Ltd)
,
unreported judgment of the Labour Court of South Africa,
Johannesburg, Case No J950/20 and J913/20 (2 October 2020)
(Labour Court judgment).
[7]
Id at
para 6.
[8]
Section
189A(18) provides that “[t]he Labour Court may not adjudicate
a dispute about the procedural fairness of a dismissal
based on the
employer’s operational requirements in any dispute referred to
it in terms of section 191(5)(b)(ii)”.
[9]
Labour
Court judgment above n 6 at para 7.
[10]
Steenkamp
v Edcon Limited
[2019]
ZACC 17
; (2019) 40 ILJ 1731 (CC);
2019 (7) BCLR 826
(CC)
(
Steenkamp II
).
[11]
Labour
Court judgment above n 6 at para 7.
[12]
Id at
para 8.
[13]
Id at
para 9.
[14]
Id.
[15]
Id at
para 10.
[16]
Id.
[17]
Id at
para 14.
[18]
Id at
para 13.
[19]
Id at
para 20.
[20]
Id at
paras 21-4.
[21]
Id at
para 22.
[22]
Id at
paras 25-8.
[23]
TAWUSA
obo Mothibedi v SATAWU
,
unreported judgment of the Labour Court, Case No J885/20
(17 September 2020).
[24]
Code
of Good Practice on Dismissal based on Operational Requirements, GN
1517,
GG
20254,
16 July 1999.
[25]
Id at
clause 3.
[26]
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 paras 13-4.
[27]
Steenkamp
v Edcon Ltd
[2016]
ZACC 1
;
2016 (3) SA 251
(CC);
2016 (3) BCLR 311
(CC) (
Steenkamp
I
).
[28]
Id at
para 25.
[29]
Reference
will only be made to the relevant parts of this provision.
[30]
75 of
1997.
[31]
Atlantis
Diesel Engines (Pty) Ltd v National Union of Metalworkers of South
Africa
[1994]
ZASCA 183; 1995 (3) SA 22 (AD).
[32]
Id at
28E-F
and 29J-30A.
[33]
Id at
28G-29B.
[34]
South
African Commercial Catering and Allied Workers Union v JDG Trading
(Proprietary) Ltd
[2018]
ZALAC 38
; (2019) 40 ILJ 140 (LAC) (
SACCAWU
)
at para 28.
[35]
National
Education Health and Allied Workers Union v Minister of Trade,
Industry and Competition
(2021)
42 ILJ 1992 (LC) (
Minister
of Trade
)
at para 21.
[36]
National
Union of Metalworkers of SA v Dorbyl Ltd
(2007)
28 ILJ 1585 (LAC).
[37]
National
Union of Mineworkers v Anglo American Platinum
Ltd
(2014)
35 ILJ 1024 (LC) (
NUM
).
[38]
Id at
para 19.
[39]
Steenkamp
I
above
n 27 at paras 123 and 131.
[40]
Id at
para 163.
[41]
Id at
paras 124-5.
[42]
Id at
para 128.
[43]
Id at
para 131.
[44]
Id
paras
160-1.
[45]
Section
188(1) of the LRA provides, in part:
“
A
dismissal that is not automatically unfair, is unfair if the
employer fails to prove—
(a)
that the reason for dismissal is a fair reason—
(i)
related to the employee’s conduct or capacity; or
(ii)
based on the employer’s operational requirements; and
(b)
that the dismissal was effected in accordance with a fair
procedure.”
[46]
Steenkamp
I
above
n 27 at para 158.
[47]
Steenkamp
II
above
n 10 at paras 47-8.
[48]
Id at
paras 52-3.
[49]
Id at para 54.
[50]
Association
of Mineworkers and Construction Union v Piet Wes Civils CC
(2017)
38 ILJ 1128 (LC) (
AMCU
).
[51]
Id at
para 21.
[52]
Id at
para 30.
[53]
Piet
Wes Civils CC v Association of Mineworkers and Construction Union
[2018]
ZALAC 18
; (2019) 40 ILJ 130 (LAC) at para 28. See also
Retail
& Associated Workers Union of SA v Schuurman Metal Pressing
(Pty) Ltd
(2004)
25 ILJ 2376 (LC) at para 32.
[54]
I
deal with the power more fully below.
[55]
TAWUSA
above
n 23.
[56]
Labour
Court judgment above n 6 at para 6.
[57]
Steenkamp
II
above
n 10 at para 71.
[58]
Union
for Police Security and Corrections Organisation v South African
Custodial Management
[2021]
ZACC 26
;
2021 (11) BCLR 1249
(CC) (
Union
for Police
).
[59]
Id at paras 24-8.
[60]
Id at para 35.
sino noindex
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