By Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 0828522973 or on e-mail address: ivan@labourlawadvice.co.za. Go to: www.labourlawvideos.co.za
Due to the facts that retrenchments are no-fault terminations and that South Africa has a sky-high unemployment rate the law provides strict rules for retrenching employers. When an employer contemplates retrenching employees it is required by the Labour Relations Act (LRA) to first consult about this prospect before making any decision to retrench.
Section 189 of the LRA unequivocally requires employers to consult with the trade unions to which the affected employees belong.
An exception to this rule may be made where the employer has truly exhausted every effort to locate and contact the union without success. In the case of Numsa vs Ascoreg (CLL Vol.12 July 2008) the Labour Court found that the employer could consult directly with the employees where the union refused to consult. However, the employer will need solid proof of such trade union refusal as consultation with employees instead of their union is forbidden under normal circumstances.
However, the law clearly gives the employer the onus of ensuring, as far as it possibly can, that proper consultations with the union take place. Therefore, despite difficulties in getting the union to cooperate, the employer must do everything in its power to gain the union’s cooperation. It is only where the employer has proved that the union has been unreasonably uncooperative despite the employer’s best efforts that the courts may excuse the employer for retrenching without union consultations.
The employer’s duty to consult before retrenching lies at the heart of the employer’s duty to ensure procedural fairness. Despite the numerous and varied obstacles to the achievement of proper consultations the employer is likely to find that failure to consult (or to consult properly) extremely costly from a legal point of view. On the other hand, where the retrenchments are delayed due to hold ups in consultations this could be equally as costly from a salary bill point of view.
However, where the employer has made no effort to consult the union the retrenchment will be considered procedurally unfair.
In the case of Tsogo Sun Casinos vs SACCAWU the employer failed to consult the employee’s trade union before retrenching her. The Labour Appeal Court found that there was no acceptable reason for this failure and ordered the employer to pay the employee three months’ compensation for the procedurally unfair retrenchment.
Employers are therefore advised to ensure that they train their executives in charge of retrenchment decisions on the requirements of the law regarding retrenchment consultations.
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