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ABR224. Lecture 16 Discipline and Dismissal Operational requirements (retrenchments). Lecture 16. You need to follow the studyguide re the sections to be studied in the handbook Dismissal: Operational requirements Additional non compulsory reading WL (2009:270-293); PLL (2005: 177-195)

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  • Lecture 16
  • Discipline and Dismissal
  • Operational requirements (retrenchments)
lecture 16

Lecture 16

You need to follow the studyguide re the sections to be studied in the handbook

Dismissal: Operational requirements

Additional non compulsory reading

WL (2009:270-293); PLL (2005: 177-195)

Country Fair Foods v OCGAWU & another [2003] 7 BLLR 647 (LAC);

Wanda & Others v Toyota SA Marketing, a division of Toyota SA Motors [2003] 3 BLLR 268 (LAC));

Tiger Food Brands Ltd t/a Albany Bakeries v Levy No & Others (2007) 28 ILJ 1827 (LC); Mthombeni v Air Traffic & Navigation Services Ltd (2008) 29 ILJ (LC) 188(LC); Unitrans Zululand (Pty) Ltd v Cebekhulu[2003] 7 BLLR 688 (LAC); Scheme Data Services (Pty) Ltd v Myhill NO (2009) 30 ILJ 399 (LC); National Union of Metalworkers of SA & others v Genlux Lighting (Pty) Ltd (2009) 30 ILJ 654 (LC); Schatz v Elliott International (Pty) Ltd & another (2008) 29 ILJ 2286 (LC); BMD Knitting Mills (Pty) Ltd v SACTWU [2001] 7 BLLR 705 (LAC).

theme 16 learning outcomes
Theme 16 (Learning outcomes)
  • Discuss the requirements for the substantive and procedural fairness of dismiss due to an employer’s operational requirements
  • Give an indication of the way in which disputes regarding unfair dismissals should be dealt with
  • Discuss the possible remedies in the case of unfair dismissals.
  • Distinguish between a section 189 and 189A process.
  • Briefly discuss the transfer of a contract of service with reference to section 197 and 197 A of the LRA
theme 16 introduction
Theme 16 (Introduction)
  • Commonly referred to as retrenchments.
  • Operational requirements refer to circumstances such as technological changes in company which result in posts becoming redundant, downturn in economy necessitating retrenchments and closure, relocation/sale and transfer of business.
  • Sect 189 governs minor and major retrenchments and sect 189A also governs major retrenchments. (LRA)
intro continued
Intro continued
  • 189 Small /small scale retrenchments
  • 189A large / big scale retrenchments
  • 189A – may strike over SUBSTANCE not procedure OR may refer for adjudication
  • 189A refers to number of “retrenchees” envisaged or number of employees retrenched in the past 12 months with the current one
sect 189 i
(Sect 189 I)
  • If employer contemplates dismissing one/more employees for reasons based on its operational requirements, consultation must take place.
  • Hierarchy of consulting parties with whom employer must consult is as follows: (See Aunde-case)
    • Any person who has been identified as consulting party in collective agreement/workplace forum.
    • Any registered trade union whose members are likely to be affected by proposed dismissals or any registered union whose members are likely to be affected by proposed dismissals as well as a workplace forum, or only a registered union if no workplace forum exists.
    • If no such trade union, employees likely to be affected or their representatives.
  • Employer must issue written notice to other consulting party, inviting it to consultation.
sect 189 2
(Sect 189 (2))

Notice must disclose all relevant info, including:

  • Reason for proposed dismissals.
  • Alternatives considered before proposing dismissals and reasons for rejecting alternatives.
  • Number of employees likely to be affected and job categories in which they are employed.
  • Proposed method for selecting which employees to dismiss.
  • Time when, or period during which, dismissals will take effect.
  • Severance pay proposed. (Sect 41 of the BCEA deals with this aspect. If employee unreasonably refuses offer of employer i.r.o. alternative employment in company or with other employer, employee forfeits right to severance pay. Severance pay is usually one week’s salary for every year of continuous service.)
  • Any assistance the employer proposes to offer.
  • Possibility of future re-employment
  • Number of employees employed by employer.
  • Number of employees dismissed for operational requirements during preceding 12 months.
sect 189 3
(Sect 189 (3))
  • Consulting parties musttry to reach consensus on the following aspects:
    • Appropriate measures to:
      • Avoid dismissals.
      • Minimise the number of retrenchments.
      • Change the time of the retrenchments.
      • To mitigate adverse effects of retrenchments.
    • The method of selection of employees to be retrenched.
    • Severance pay for employees.
  • Employer must allow other consulting party to make representations about issues under consultation. Employer must consider representation and must react upon it, and if employer is not in agreement with representation, he must provide reasons for disagreement. If representation was made in writing, it must be responded to in writing.
  • After consultation, employer must select employees to be dismissed in accordance with agreed selection criteria or fair and objective criteria.
  • See Naude-case.
theme 13 sect 189a large scale retrenchments
Theme 13 (Sect 189A) Large scale retrenchments
  • Applicable to employers employing more than 50 employees and who contemplate dismissing number of employees for operational reasons.
  • Applies if employer contemplates dismissing:
    • 10 employees where employer employs 50-200 employees
    • 20 employees where employer employs 201-300 employees
    • 30 employees where employer employs 301-400 employees
    • 40 employees where employer employs 401-500 employees
    • 50 employees where employer employs more than 500 employees
  • Sect 189A applies either if employer dismisses abovementioned numbers at same time or at different times during 12-month period.
  • Consulting parties may request CCMA to appoint facilitator to assist parties in consultation.
  • If consulting party does not follow fair procedure, Labour Court may be approached for an order.
  • Dismissed employee must be paid a severance package (at least one week’s remuneration for each completed year of continuous service) additional to salary.
  • CCMA hasjurisdictiontoconcilliate dispute.
  • Labour Courthasjurisdictiontoadjudicate matter.
  • Normallyonlythe Labour Courtwillhavejurisdictiontoarbitrate matter (afterconcilliationhasfailed) exceptif it was only 1 employeewho was retrenchedorifpartieshaveconsentedtojurisdiction of CCMA.
  • In the 2 lastmentionedcasesthe CCMA willthereforebeabletoarbitrate matter.
transfer of a business as a going concern read only
Transfer of a business as a going concern- READ only
  • When a business or part of a business is sold as a going concern, the old employer is substituted by the new employer and all contracts of employment move over from the old to the new employer.
  • Conditions may net be “on the whole” “less favourable “ than the ones they had before the transfer of business.
  • Old and new employers must agree on a valuation of accrued employee entitlements and the value on accrued leave ,severance pay that would become payable in the event of retrenchment and other accrued entitlements such as bonuses and commissions