SOUTH AFRICAN LABOUR COURT FINDINGS DISCOURAGE SECTION 189A(13) ABUSE

By Yonela Sicam Thursday, October 29, 2020
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Due to the COVID-19 pandemic, many employers have been embarking on consultation processes applicable to contemplated mass retrenchments as set out in section 189A of the Labour Relations Act, 1995 (LRA).

Where the workplaces are unionised, these mass retrenchment consultations have involved trade unions as consulting parties. In light of the difficulties of holding consultations during a pandemic and, particularly with unions involved, there have been several challenges to the procedural fairness of the retrenchment process on an urgent basis in the Labour Court in terms of section 189A(13).

Two of these are Transport and Allied Workers’ Union of South Africa (TAWUSA) and Another  v  Barloworld Transport (Pty) Ltd (the TAWUSA case) and Solidarity obo Members and Another v Barloworld Equipment (the Solidarity case).

The TAWUSA and Solidarity cases are important ones for employers, employees and trade unions engaging in the section 189 consultation process.

The cases deal with (a) the duty to consult; (b) what constitutes procedural fairness as contemplated in section 189; (c) the duties of the Commission for Conciliation, Mediation and Arbitration (CCMA) facilitator during the consultation process; and (d) when a consulting party should approach the Labour Court for relief in terms of section 189A(13).

In addition, the cases deal with the issue of procedural fairness versus an employer’s obligation in terms of the law.

The Judgements have found that:

  • inasmuch as it is the employer who commences the consultation process, once the consultation process has commenced, it becomes a shared process between the consulting parties; and
  • where any procedural irregularities arise, they should be referred to the CCMA facilitator for ruling, where applicable, or to the Labour Court to assist the parties in getting the consultations back on track.

In the case of the latter, this should be done as soon as the alleged irregularity arises in order to best address the interests of both parties. It should not be referred at the latest opportunity, which can, as a consequence, result in the aims of this process being undermined.

Further detail on each case is provided below.

The TAWUSA Case:

The Facts

On 21 May 2020, Barloworld Transport issued section 189(3) letters to employees stating that the reason for the contemplated retrenchments was the loss of a contract from its client, PPC Cement (Pty) Ltd. On 29 May 2020, Barloworld issued another section 189(3) letter to employees, stating the reason as being the economic loss occasioned by the advent of the COVID-19 lockdown.

A request for a facilitation process by CCMA within the contemplation of section 189A of the LRA was made. It was agreed by the parties that a single facilitation process would occur, and the 60-day period was to end on 31 July 2020. However, the parties agreed on an extension of a further seven days. On 7 August 2020, Barloworld issued termination notices to the employees to be dismissed, effective 7 September 2020.

Following the termination notices, on or about 4 September 2020, TAWUSA and SATAWU launched their urgent application.

The Judgement

Before delving into the merits of the application before him, the Honourable Judge Moshoana dealt with the purpose of section 189A(13). In doing so, the Labour Court held as follows:

  • The role of the Labour Court is one of being a supervisor akin to a judicial management process and, in order to understand the role of the Labour Court, it is important to carefully consider the statutory obligations of the consulting parties.
  • The point of departure in relation to the duty to consult is the provisions of section 189(1) which obligates an employer to consult once it contemplates dismissing one or more employees for reasons based on its operational requirements. The dictionary meaning of the word consult is to seek advice or information. Therefore, the statutory obligation of an employer would be to seek advice or information before dismissing.
  • Although the LRA does not prescribe how the process of consulting should unfold, it does prescribe what must happen in the process (i.e. the employer and consulting parties must engage in a meaningful joint consensus-seeking process, the purpose of which is to attempt to reach consensus on the issues listed in section 189(2).)
  • The difficulty then arises in respect what the meaning of ‘meaningful joint consensus-seeking process’ is. After dissecting the phrase and considering the grammatical meaning of the words ‘meaningful’,’ joint’ and ‘consensus’, respectively, the Labour Court concluded that the intention of the legislature with this phrase is to oblige the employer and the employee forum or representatives to purposefully share an agreement searching process.
  • The employer commences the consultation process by issuing a letter in terms of section 189(3). The focal point thereafter is on the consulting parties as a unit. Consultation is a shared process and in performing its supervisory task, the Labour Court does not only consider what the employer does in the process but looks at the conduct of the consulting parties as a unit.
  • In large scale retrenchments an option is available to convert the consultation process into a facilitation process, which is a guided consultation process. During the facilitation process, the CCMA facilitator has powers to make final and binding rulings with regard to issues of procedure and to order production of relevant documents. Therefore, when regard is had to the powers of a CCMA facilitator, it is not to be expected of the consulting parties to engage the jurisdiction of the Labour Court under section 189A(13) during the facilitation process.
  • A party can only approach the Labour Court in terms of section 189A(13) if an employer does not comply with a fair procedure. If the employer (a) consults once it contemplates to dismiss for operational reasons; (b) invites the other consulting party in writing; (c) allows the other consulting party an opportunity during consultation to make representations and (d) considers and responds to the representations made, then that would constitute a fair procedure as required in terms of section 189. Once CCMA facilitation is invoked, it then becomes the role of the CCMA facilitator and not the Labour Court, to ensure that the statutory obligations are complied with by the employer.
  • There is an interpretative tension between subsections 189A(13) and (17) of the LRA regarding when a consulting party should approach the Labour Court. Section 189A(13) of the LRA states that if an employer does not comply with a fair procedure, a consulting party may approach the Labour Court by way of an application. Section 189A(17) states that an application in terms of subsection (13) must be brought not later than 30 days after the employer has given notice to terminate the employee’s services or, if notice is not given, the date on which the employees are dismissed.
  • In order to resolve the tension, one must have regard to the purpose of section 189A(13), which is to bring the consulting parties back on track. Therefore, section 189A(17) must be afforded an interpretation that accords with the purpose of the intervention in subsection (13). That is to say, the application must be launched once an irregularity arises and a consulting party should not simply wait for a termination notice and/or dismissal – the last opportunity.

Turning to the facts of the application before it, the Labour Court held that the complaints of TAWUSA and SATAWU were not procedural in nature as they related to points that they deemed were important and raised but not satisfactorily answered during the consultations.

If the issues raised by TAWUSA and SATAWU were procedural in nature they ought to have been brought before the Labour Court shortly after they were not answered satisfactorily in order to bring the process back on track. In addition, given the powers of the CCMA facilitator, any irregularity ought to have been raised with the CCMA facilitator.

The Solidarity Case:

The Facts

In April 2020, Barloworld Equipment contemplated a dismissal of a number of its employees for operational requirements and issued section 189(3) letters calling the relevant parties to a consultation. For a period of about four months, Barloworld Equipment and other consulting parties were engaged in a CCMA- facilitated consultation process. Towards the end of the process, the appointed facilitator abandoned the process due to some apparent ‘despicable’ conduct of one of the consulting parties.

In August 2020, Barloworld issued termination notices. Almost a month later, in September 2020, Solidarity and NUMSA launched an urgent application.

The Judgement

In this judgment, the Honourable Judge Moshoana echoed his findings in the TAWUSA case to a large extent. In addition to what was stated in the TAWUSA case, the Labour Court held as follows:

  • 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 approach the Labour Court by way of an application for an order compelling the employer to comply with a fair procedure. There is a huge and essential difference between seeking to find procedural fairness and the compliance with a fair procedure. In a procedural fairness concept, the net is wider as opposed to compliance.
  • In relation to the so-called mass retrenchment the legislature deliberately took away the powers to adjudicate procedural fairness disputes and introduced a quick and less complicated process which can only be carried out through an application to compel an employer to comply. The issue is a simple one: did the employer comply with its statutory obligations or not. At times an employer may be obligated by a collective agreement to do certain things, and if an employer fails to do so, a consulting party may approach the Labour Court for an order to compel. This becomes a statutory obligation in the sense that section 23 of the LRA gives collective agreements legal effect. Where the Labour Court adjudicates procedural fairness disputes under the banner of section 189A (13) it would be acting ultra vires.
  • The primary relief in section 189A (13) is that of compelling compliance. Once the horse has bolted it serves little or no purpose to make an order to compel and/or interdict. Even temporary reinstatement would not assist in an instance where the horse has bolted. The termination notices were issued from August 2020 and the applicants approached the Labour Court at the end of September for relief. Much as section 189A (17)(a) provides an outer period, applications of this nature ought to be brought earlier than that if the purpose of section 189A(13) is to be served – to bring the consulting parties back on track.

Solidarity took issue with transformation being used as a selection criterion and alleged that Barloworld did not consult with it in that regard. The Labour Court held that section 189(2) of the LRA employs the word ‘engage’ and not ‘consultation’. The word engage has as one of its meanings to occupy oneself; become involved.

Clearly, the consultation envisaged in section 189(1) is an engagement. That engagement must be done by the employer and the consulting party. Therefore, the engagement as a process is not the duty of the employer alone.

The court further held that the issue of which selection criteria to apply is an issue of substance and not procedure, which cannot be dealt with in terms of section 189A(13) of the LRA. On the issue of using transformation as a selection criterion, the court commented that there is nothing unlawful for an employer to give due regard to the transformation and/or employment equity considerations when choosing the method to use for selecting employees to be dismissed.

NUMSA alleged that Barloworld Equipment failed to consider its proposed alternative selection criterion of LIFO with bumping. The Labour Court held that section 189(6)(a) of the LRA obligates an employer to 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.

There is no obligation on the part of the employer to agree to a representation. Therefore, there was no legal obligation on the part of Barloworld to agree to the alternatives proposed by NUMSA. The issue of failure to consider alternatives and to not agree to LIFO with bumping are therefore issues of substance.