WHY THE CONSTITUTIONAL COURT SAYS NO TO INDIVIDUAL CONSULTATION ON RETRENCHMENTS

By Yonela Sicam Friday, January 31, 2020
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Apart from the absence of any legal or constitutional right to individual consultation on retrenchments at workplaces where there is a majority union, it would be a pointless exercise to individually consult each affected employee. This is one of a number of reasons given in a recent majority judgment in which the Constitutional Court dismissed a minority union’s application to have two sections of the Labour Relations Act declared constitutionally invalid.

‘The Court’s majority judgment of 23 January 2020 held that individual consultation on retrenchments would be “near-futile”. The Court said even if an individual were to be consulted, this would carry no weight in the final outcome. It will still be the majority union’s implication in the retrenchment agreement that is decisive,’ says Yonela Sicam associate in the Employment and Benefits Practice at leading African law firm, Bowmans.

This is because the principle of majoritarianism is firmly embedded in South African law and international standards, meaning that a retrenchment agreement with a majority union can lawfully be extended across the workplace, applying to employees who are majority, minority and non-union members alike. ‘An employer has no obligation to reflect minority representations in the agreement,’ Sicam says.

Minority union’s challenge

The primacy of majority unions as consulting partners on retrenchments was brought to the fore in the Constitutional Court’s majority judgement on an application brought by the Association of Mineworkers and Construction Union (AMCU) on behalf of  its members. These members had been among 103 platinum mine employees retrenched in September 2015 by Royal Bafokeng Platinum Ltd.

AMCU, which represented 11% of employees at the mine concerned, said it had not been consulted during the retrenchment process. The employer had consulted only with the majority union, the National Union of Mineworkers (NUM), and another minority union, the United Association of South Africa Union (UASA), resulting in a retrenchment agreement that applied across the board.

Aggrieved, AMCU challenged the substantive and procedural fairness of the retrenchment process, turning first to the Labour Court and then to the Labour Appeal Court. Specifically, the union sought to have two sections of the Labour Relations Act declared constitutionally invalid: section 23(1)(d), dealing with union majoritarianism, and section 189(1), dealing with the parties with which employers must consult when contemplating retrenchments.

Both courts disagreed that an employer is obliged to consult with minority unions regardless of whether there is a valid agreement with a majority union. AMCU then turned to the Constitutional Court, which heard the matter in May 2019 and handed down judgment last week (23 January 2020).

‘A strong indication of the complexity of the matter is that five of the nine Constitutional Court judges hearing it were in agreement with the majority judgment, while four dissented,’ Sicam says.

Where they differed was in their views of the validity of section 189(1) of the LRA, and particularly the question of procedural fairness in dismissals for operational requirements, and specifically who must be consulted when retrenchments are contemplated.

‘In the end, the majority judgment prevails,’ Sicam says. ‘In essence, the ConCourt confirmed that there is no fundamental right to individual consultation on retrenchments in unionised workplaces, nor is there procedural or substantive unfairness in the consultation process under section 189 of the LRA as it relies on objective criteria, not individual conduct.’

Thus, there is no change in the way employers are required to consult when contemplating retrenchments. ‘That said, situations where uninformed and unconsulted employees suddenly hear they have been retrenched are not ideal, and responsible employers would arguably want to consider more appropriate ways of communicating the news about possible retrenchments to employees.’