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How to overcome unforeseen delays during a retrenchment consultation

The current economic situation that we all currently face has ultimately left employers with little or no option but to reconsider the number of people they employ and retrenchments then become a reality.

Retrenchment tips

This unfortunate step is referred to as a ‘dismissal based on operational requirements’ in terms of section 189 of the Labour Relations Act (LRA) or, more commonly, a ‘retrenchment’. Our labour laws seek to achieve a speedy and effective resolution of all disputes. However, this is never as easy as it seems when a militant union is involved in the retrenchment consultation process.

The court, in the case of AMCU v Tanker Services (Pty) Ltd (LC) JS 148/16 (Unreported), on 7 June 2018 had to deal with a union that constantly delayed and made the retrenchment consultation process unbearable. The court relied on the following cases in order to rule on the matter before it:

  • In the case Van Rooyen v Blue Financial Services (SA) (Pty) Ltd (2010) 31 ILJ 2735 (LC), the court held that ‘Fair procedure primarily requires that the parties engage in a meaningful joint consensus seeking process’. This obligation, which has its origins in Johnson & Johnson v Chemical Industrial Workers Union (1999) 20 ILJ 89 (LAC), requires that the parties should at least attempt to reach consensus on the issues listed in section 189(2) and (3). More precisely, the employer must invite representations on these issues from the appropriate consulting party and seriously consider and respond to any representations that are made. Both parties are required, in good faith, to seek consensus. This is not a mechanical process – meaningful joint decision-making requires that the parties should have the honest intention of exploring the prospects of agreement. If no joint consensus-seeking process has occurred, this court is obliged to determine which party was responsible for the state of affairs. If it was the employer party, the dismissal would be deemed procedurally unfair.
  • In Visser v Sanlam (2001) 22 ILJ 666 (LAC), the Labour Appeal Court held that ‘the process of consultation envisaged in section 189(2) involves a bilateral process in which obligations are imposed upon both parties to consult in good faith in an attempt to achieve the objectives specified in the section’.
  • In Smith & others v Courier Freight (2008) 29 ILJ 420 (LC), the court held that ‘the union was responsible for frustrating the restructuring process to the detriment of its members, the employees’. In NUMSA v Kaefer Thermal Contracting Services (Pty) Ltd [2002] 6 BLLR 570 (LC), the court held that ‘where the consultation process has been frustrated, it is not for the party who caused the frustration to complain that there was non-compliance with the consultation process. I am satisfied that the employer made genuine attempts to engage with the union on the retrenchment process. However, it could not allow the union to delay the process of restructuring indefinitely. The union overplayed its hand and must now accept the consequences of its ill-advised decision unnecessarily to delay the consultation process’.

The court in the Tanker Services case held decisively that ‘In so far as the procedure in a retrenchment is concerned, the LRA contemplates that the consultation process is one in which the parties jointly seek to avoid retrenchment and ameliorate its consequences’.  It is not a process in which the employer party simply announces the decisions that it intends to implement – the employer must remain open to persuasion. Equally, union parties to the consultation are obliged to co-operate in achieving the objectives of the process. Of course, a union can and no doubt will bring whatever collective muscle it may have in order to influence the outcome of any consultation process, but the nature of the process is one in which active co-operation rather than obstruction is required. The court thereafter held that the retrenchment process adopted by the employer was procedurally fair.

SERR Synergy assists employers with regard to the preparation of the notice of invitation to consult in terms of the LRA to be served on a union or the employees. Our services include chairing the said consultation meetings between the employer, the union and the employees. We strive to ensure that the consultation meetings are dealt with in a fair, professional and prompt manner where no unnecessary or unreasonable delays by the union or the employees will be permissible.

About the Author: Jared Francis joined SERR Synergy in October 2016, and currently holds the title of KZN Labour Manager. He is an admitted attorney who has practised in KZN and Gauteng. He holds an LLB degree, a post-graduate Diploma in Industrial Relations and a post-graduate Certificate in Forensic Investigation from the University of KwaZulu-Natal. He also holds post-graduate Certificates in Advanced Labour Law, Corporate Law, Advanced Human Resource Management and Health and Safety from UNISA and has more than 10 years’ experience in the legal and industrial relations fields respectively.

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