Association of Mineworkers and Construction Union and Others v Edge Line Engineering (Pty) Ltd (JS808/19) [2024] ZALCJHB 308 (16 July 2024)

FLYNOTES: LABOUR – Dismissal – Operational requirements – Unilateral decision to retrench specific employees – Particularly those affiliated with AMCU, without transparent criteria – Company did not present any evidence that it considered re-deployment or training – Dubious financial justification and immediate re-employment of subcontractors – Dismissal of applicants was substantively unfair – Reinstatement ordered with back-pay – Labour Relations Act 66 of 1995, s 189.

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Reportable

Case No: JS808/19

In the matter between

ASSOCIATION OF MINEWORKERS AND CONSTRUCTION UNION First Applicant AMCU MEMBERS AS PER ANNEXURE “X” Second to Further Applicants and EDGE LINE ENGINEERING (PTY) LTD Respondent

Heard: 16 to 18 October 2023

Delivered: 16 July 2024

Summary: Condonation application for the late filing of the Applicant’s statement of case – Merits: The employees represented by a trade union instituted an action against the employer for unfair dismissal due to operational reasons. The trade union challenges both the substantive and procedural fairness of the retrenchment of its members as outlined in section 189 of the Labour Relations Act 66 of 1995, as amended.

This judgment was handed down electronically and was circulated to the legal representatives of the parties. The date and time for hand down is deemed to be 16 July 2024,10:00am.

JUDGMENT

MORGAN AJ

Introduction

[1] This matter concerns the dismissal for operational reasons of the Second to Further Applicants, who are members of the Association of Mineworkers and Construction Union (AMCU) and former employees of Edge Line Engineering (Pty) Ltd (Edge Line). This matter was brought in terms of section 191(5)(b)(ii) of the Labour Relations Act (LRA)[1] and was set down for hearing for three days commencing on 16 October 2023.

[2] The Applicants allege that their dismissals were both substantively and procedurally unfair. Edgeline, denies these allegations and maintains that the dismissals were both necessary (substantively) and fairly executed (procedurally).

[3] A retrenchment, in essence, refers to a formal dismissal of employees where the termination is not due to any fault of their own. This process is often necessitated by various factors inter alia economic downturns, restructuring, or technological changes within an organisation.

[4] It is crucial to emphasise that retrenchments can have far-reaching and profound effects on both the employees who lose their jobs and the business as a whole. This impact is especially pronounced in countries like South Africa, where the unemployment rate is alarmingly high and job opportunities are scarce.

[5] The ramifications of retrenchments extend beyond immediate financial distress for the affected employees. They can also lead to psychological stress, loss of self-esteem, and significant disruptions to their personal lives and those of their families. Furthermore, the loss of experienced and skilled workers can hamper the operational efficiency and morale of the remaining workforce within the business.

[6] To mitigate these adverse effects and to ensure that the retrenchment process is conducted in a fair and transparent manner, labour legislation has been established. These laws are designed to safeguard the rights of the retrenched individuals, ensuring that they receive fair treatment and adequate compensation. Labour legislation mandates that employers follow a structured process when conducting retrenchments, which includes providing sufficient notice, engaging in meaningful consultation with employees or their representatives, and exploring alternatives to retrenchment where possible.

[7] Moreover, these legal frameworks are not only aimed at protecting employees but also at reducing the overall incidence of job losses. They encourage businesses to consider other cost-saving measures before resorting to retrenchments. Additionally, compliance with these laws ensures that businesses uphold their legal and ethical obligations, thereby fostering a fairer and more equitable workplace environment.

[8] While retrenchments may sometimes be unavoidable, it is imperative that they are carried out with due consideration for the well-being of the affected employees and in strict adherence to labour laws. By doing so, businesses can minimise the negative impact on both individuals and the broader economy, particularly in regions with high unemployment rates like South Africa.

[9] The Applicants challenge the dismissals of the employees and seek the following orders: (i) an order reinstating the employees listed in annexure “X” from date of dismissal, including back pay; and (ii), alternatively maximum compensation.

[10] The dispute primarily revolves around whether the dismissals were genuinely due to operational requirements or if they were influenced

by anti-union sentiment. The case brings into focus the application of section 189 of the LRA, which governs dismissals based on operational requirements.[2] In other words, the question before this Court is whether the dismissal of the employees was substantively fair or not, based on the requirements as stipulated by section 189 of the LRA.

[11] AMCU argues that immediately after the retrenchments were implemented, the Respondent proceeded to engage the services of sub-contractors and/or casual workers to perform the duties of the Second to Further Applicants. The Respondent argues that this is not the case. In amplification, the Respondent argues that the dismissals were substantively and procedurally fair.

[12] There is an application for condonation for the late filing of a statement of case. This was filed by AMCU.

[13] The delay in delivering the judgment stems from several factors inherent to the complexities and procedural intricacies involved in adjudicating such matters. Firstly, while the trial was initially scheduled to be heard over five days, it was completed in three, indicating a potential condensation of arguments and evidence presentation. Despite this, the nature of labour disputes often involves detailed examination of contractual terms, employment practices, and the assessment of both parties' compliance with labour laws. Each of these aspects requires meticulous analysis to ensure that the judgment is not only fair but also comprehensive in addressing all pertinent issues.

[14] Moreover, I must thoroughly review the evidence and testimonies presented during the trial. This involves sifting through substantial documentation, evaluating witness credibility, and considering the legal arguments made by both sides. In addition, labour law in South Africa encompasses a wide range of regulations and precedents that must be accurately interpreted and applied to the specific circumstances of the case. Ensuring that all legal standards are met and that the judgment withstands potential appeals necessitates a careful and deliberate approach. Therefore, the time taken to deliver the judgment reflects my commitment to due diligence, fairness, and the upholding of legal integrity.

Condonation application for late filing

[15] It is well-established that a party who has missed a deadline set by the rules, a court order, or a directive must request the court's leniency by applying for condonation of the delay. To be successful, the applicant must justify the delay. The court considers several factors, including the reason for the delay, the length of the delay, the prospects of success in the main dispute, and the lack of prejudice to the other party when deciding whether to grant condonation.

[16] In Foster v Stewart Scott Inc[3], Froneman J described the principle as follows:

‘It is well settled that in considering applications for condonation the court has a discretion, to be exercised judicially upon a consideration of all the facts. Relevant considerations may include the degree of non-compliance with the rules, the explanation

therefor, the prospects of success on appeal, the importance of a case, the respondent's interest in the finality of the judgment, the convenience of the court, and the avoidance of unnecessary delay in the administration of justice, but the list is not exhaustive. These factors are not individually decisive, but are interrelated and must be weighed one against the other. A slight delay and a good explanation for the delay may help to compensate for prospect of success which are not strong. Conversely, very good prospect of success on appeal may compensate for an otherwise perhaps inadequate explanation and long delay. See, in general, Erasmus Superior Court Practice at 360-399A.’

[17] An application for condonation must provide valid reasons for non-compliance. In Melane v Santam Insurance Co Ltd[4], Holmes JA articulated the principle as follows:

‘In deciding whether sufficient cause has been shown, the basic principle is that the Court has a discretion, to be exercised judicially upon a consideration of all the facts, and in essence it is a matter of fairness to both sides. Among the facts usually relevant are the degree of lateness, the explanation therefor, the prospects of success, and the importance of the case. Ordinarily these facts are interrelated; they are not individually decisive, for that would be a piecemeal approach incompatible with a true discretion...’

[18] Although the factors considered in a condonation application are interrelated, a reasonable explanation for the delay combined with a good prospect of success can improve the chances of the application being granted. A weak explanation but good prospects of success and the importance of the case can also lead to the granting of condonation. The court exercises wide discretionary powers judicially in evaluating the relevant factors in each case, with the interests of justice being paramount. However, a good explanation without prospects of success on the merits leads to a denial of condonation.

[19] The court may still grant condonation despite a poor explanation for the delay if it serves the interests of justice. This can occur when an appellant seeks to overturn an erroneous judgment and order but has failed to meet the deadlines for filing and prosecuting the appeal. In such cases, the interests of justice necessitate granting condonation to enable the court to set aside the disputed judgment and orders.

[20] The absence of prejudice to the other party is also considered, especially when the prejudice cannot be remedied by an order of costs. In National Union of Mineworkers v Council for Mineral Technology[5], the court clarified the legal position as follows:

‘he approach is that the court has a discretion, to be exercised judicially upon a consideration of all the facts, and in essence it is a matter of fairness to both sides. Among the facts usually relevant are the degree of lateness, the explanation therefore, the prospects of success and the importance of the case. These facts are interrelated: they are not individually decisive. What is needed is an objective conspectus of all the facts. A slight delay and a good explanation may help to compensate for prospects of success which are not strong. The importance of the issue and strong prospects of success may tend to compensate for a long delay. There is a further principle which is applied and that is that without a reasonable and acceptable explanation for the delay, the prospects of success are immaterial, and without prospects of success, no matter how good the explanation for the delay, an application for condonation should be refused...’

[21] It is recorded that the Applicants filed a condonation application for the following reasons:

21.1. The statement of case was filed two days late.

21.2. In terms of section 191 (11) of the LRA, the Applicants have a period of 90 days to refer the dispute to the above Honourable Court after the Metal and Engineering Industries Bargaining Council (MEIBC) certifies that the dispute remains unresolved.[6]

21.3. The Applicants’ statement of case being filed late resulted due to a miscalculation of the 90-day period by the Applicants’ attorneys of record. The Applicant’s attorney states that she sincerely believed that the 90th day was in October 2019 and submitted that this was an innocent oversight on her part and was not deliberate.

21.4. The Applicant’s attorney of record further submits that she has no good reason to intentionally file a client’s statement of case out of time.

[22] There is no foreseeable prejudice on the part of the Respondent for this minor delay.

[23] If the present application is denied, the Applicants will suffer significant and disproportionate prejudice. Without condonation, the Applicants will be unable to proceed with their case and present evidence related to their

dismissals, thereby denying them the opportunity to demonstrate the unfairness of the actions taken against them.

[24] Denying condonation would effectively deny the Applicants their right to be heard, in violation of the audi alteram partem principle, leading to a gross miscarriage of justice in this case. The importance of ensuring a fair trial and the opportunity to present one's case cannot be overstated. The interests of justice strongly favour granting condonation, especially given the minimal delay and the lack of any substantive prejudice to the Respondent.

Background facts

[25] Edgeline is a private company operating in the electrical and mechanical engineering field.

[26] Edgeline initiated a retrenchment process while employing approximately 98 employees. Despite the retrenchments, Edgeline continues to operate.

15 employees were purportedly dismissed based on operational requirements. These employees are Wilson Baloyi, Gift Serete, Onke

Sidwenga, Elphus Pika, Solomon Mutlaneng, Elton Sithole, Daniel Mcineka, Jabulani Mlambo, Jim Keneth Mathebula, Lucaine Sergi Hoffman, Slake Zakeu Mahlobo, Eric Nkosi, Zandisile Qotiwe, Louis Mnyai, and Mxolosi Mdunge.

[27] On 16 March 2019, the Respondent issued a notice in terms of section 189(3) of the LRA, informing the Applicant of the potential dismissal of several employees due to operational requirements. The reasons cited for these dismissals were:

27.1. Edgeline has incurred substantial financial losses over the past two years.

27.2. Due to a lack of business and growth, a department will be closed, rendering the positions within it redundant.

[28] 17 staff members received notices in terms of section 189(3), including 15 AMCU members and two non-unionised employees.

[29] The Commission for Conciliation, Mediation and Arbitration (CCMA) was requested to facilitate the consultation process in accordance with section 189A of the LRA.

[30] On or about 26 March 2019, representatives of Edgeline met with Jeffrey Chauke and Tladi Mokwena, representing the First and Second Applicants, to discuss the section 189(3) notice.

[31] The facilitation process under section 189A of the LRA began on 8 April 2019, without AMCU's presence.

[32] The second facilitation meeting occurred on 3 May 2019, but AMCU was absent as they were not notified of the meeting date. The Commissioner proceeded with the meeting for the non-unionised members.

[33] Two unionised employees were subsequently removed from the list of affected employees: one secured an alternative position, and the other retired

due to age.

[34] AMCU met with Edgeline on 16 May 2019 to review the company’s finances and was asked to sign a non-disclosure agreement in this regard.

[35] The fifth and final consultation took place on 17 May 2019, with AMCU in attendance, represented by Jeffrey.

[36] AMCU expressed their intention to propose measures aimed at saving as many jobs as possible.

[37] Upon reviewing Edgeline’s financials, AMCU raised concerns about significant expenditures on entertainment, donations, and transport/vehicles.

[38] AMCU proposed terminating contract workers to save permanent employees. Edgeline responded that some contract workers possessed skills superior to those of the Second to Further Applicants but agreed to further investigate this suggestion.

[39] Additionally, AMCU highlighted discrepancies in wages and suggested rectifying these to reduce costs.

[40] At the final consultation meeting, Edgeline announced a reduction in the number of affected employees from 26 to 15.

[41] AMCU expressed concern that the initial list of 26 employees was misleading, including directors, management, accountants, and Human Resources personnel, who were unlikely to be retrenched due to their roles. AMCU believed this was an attempt to demonstrate to the Commissioner

that 11 positions had been saved through consultation. However, the remaining employees slated for retrenchment were AMCU members,

leading AMCU to suspect that their union affiliation was the reason for their dismissal.

[42] Following the consultation on 17 May 2019, the affected members received dismissal notifications, despite Edgeline having secured two new business contracts.

[43] Immediately after implementing the retrenchments, Edgeline engaged the services of subcontractors and/or casual workers to perform the duties previously carried out by the dismissed employees.

Issues in dispute

[44] The issue before this Court is whether Edgeline’s dismissal of the Second to Further Applicants was substantively fair. The Applicants argue that:

44.1. The Respondent failed to conduct any meaningful consultations in relation to the implementation of avoidance measures;

44.2. The Respondent failed to reduce the unnecessary expenses being incurred by the company;

44.3. The Respondent secured two new business contracts, creating additional work for the company;

44.4. The Respondent failed to explore the possibility of moving employees from one operation to another to avoid or minimise retrenchments;

44.5. After the retrenchments of the members, Edgeline obtained the services of contract workers and/or casual workers, including

subcontractors; and

44.6. The Respondent’s powder coating department has continued to operate despite the Applicants being informed that the department was closing down.

Applicable legal principles

[45] Section 23(1) of the Constitution of the Republic of South Africa, 1996 (the Constitution) provides that everyone has the right to fair labour practices. More comprehensively, section 23 addresses labour relations and the rights of workers. It delineates multiple rights afforded to workers, including, but not limited to, the right to fair labour practices, the right to establish and join trade unions, and the right to engage in collective bargaining. Furthermore, it explicitly forbids unfair discrimination against workers and enshrines the right to strike. This section underscores the Constitution's commitment to ensuring equitable and just working conditions, promoting the collective representation of workers, and safeguarding their ability to advocate for their interests without fear of discrimination or retribution.[7]

[46] The importance of section 23 cannot be overstated. It forms the bedrock of labour law in the country, ensuring that workers' rights are protected and promoted within the workplace. By affirming these fundamental rights, section 23 fosters a fair and just labour

market, essential for the social and economic stability of the nation. It empowers workers to negotiate better terms and conditions, thus contributing to improved living standards and reducing socio-economic inequalities. Moreover, by prohibiting unfair discrimination and supporting the right to strike, it ensures that

workers have the necessary tools to challenge injustices and hold employers accountable, thereby fostering a culture of mutual respect and cooperation between employers and employees.

[47] The normative justification for section 23 is deeply rooted in South Africa’s history, particularly the struggle against apartheid. Under apartheid, labour laws were explicitly discriminatory, systematically marginalising non-white

workers and denying them basic rights and protections. The apartheid regime's oppressive labour practices included severe restrictions on the formation of trade unions, collective bargaining, and the right to strike, all of which were used to suppress the economic and social advancement of the majority population.

[48] In light of this history, section 23 serves as a transformative measure aimed at redressing past injustices and ensuring that such discrimination and exploitation never recur. It is a foundational component of the broader project of building a democratic, equitable society where the dignity of every individual is respected. By embedding these rights in the Constitution, South Africa affirms its commitment to human dignity, equality, and freedom. This constitutional guarantee is not only a safeguard against the return of oppressive practices but also a proactive tool to promote fair treatment, economic justice, and social cohesion. In this way, section 23 is essential for healing the wounds of apartheid and fostering a more inclusive and equitable future for all South Africans.

[49] On the international stage, the Termination of Employment Convention, 1982, adopted by the International Labour Organisation (ILO), establishes minimum standards for justifiable reasons for employee dismissal. South Africa, along with 36 other countries, has ratified this Convention. Ratification obliges South Africa, as mandated by its Constitution, to integrate the Convention's principles into its national labour law framework, thereby ensuring that dismissals are conducted fairly and justly.

[50] The LRA was enacted to fundamentally reshape the legal landscape of labour relations in South Africa. It superseded pre-existing laws that governed labour practices prior to the adoption of the Constitution. The LRA's long title explicitly states its purpose as giving effect to section 23 of the Constitution, which pertains to labour relations and workers' rights. This focus on aligning with the Constitution is further emphasised in section 1(a) of the LRA, which declares as one of the Act's primary objectives "to give effect to and regulate the fundamental rights conferred by section 23 of the Constitution”.

[51] Section 189(1) of the LRA stipulates that before any retrenchment, employers must consult with any person or entity required by any existing collective agreement. In the absence of such an agreement, consultations should

be held with all employees potentially affected by the retrenchment. This provision ensures that the retrenchment process is conducted

transparently and fairly, allowing for meaningful dialogue and negotiation with those affected.

[52] The LRA's enactment marked a significant departure from the labour laws of the apartheid era, which were characterised by severe restrictions on workers' rights and pervasive discrimination. By aligning national legislation with international standards and constitutional principles, the LRA aims to promote fair labour practices, protect the rights of workers, and foster equitable labour relations.

[53] The incorporation of the Termination of Employment Convention into South African law reflects the country's commitment to upholding international labour standards and ensuring that the fundamental rights of workers are respected. This alignment with international norms not only enhances the legal protections available to workers but also reinforces South Africa's position as a responsible member of the global community, dedicated to promoting fair and just labour practices.

[54] Moreover, the consultation requirements outlined in section 189(1) of the LRA are crucial in maintaining industrial peace and stability. They provide a structured mechanism for addressing the concerns of employees and unions, thereby reducing the potential for conflict and fostering a more cooperative and harmonious workplace environment. This consultative approach is essential for building trust and ensuring that retrenchment decisions are made with due consideration of their impact on workers' lives and livelihoods.

[55] Thus, the integration of the Termination of Employment Convention and the enactment of the LRA represent a comprehensive effort to modernise South Africa's labour laws, aligning them with constitutional mandates and international standards. These legal frameworks are designed to protect workers' rights, promote fair labour practices, and

contribute to the development of a more equitable and just society.

[56] In any event, section 213 of the LRA defines ‘operational requirements’ as “requirements based on the economic, technological, structural or similar needs of an employer”.

[57] Section 189(2)(b) of the LRA mandates that an employer and the other consulting parties engage in a meaningful, joint consensus-seeking

process to attempt to reach agreement on the method for selecting employees to be dismissed for operational reasons. During these

consultations, the employer is required to consider and respond to any suggestions made by the union or employees, rather than ignoring them. Even if the parties do not reach an agreement, the employer must still demonstrate that the selection method used was fair and objective.[8]

[58] The Labour Appeal Court in Decision Surveys International (Pty) Ltd v Dlamini and others[9] held that:

‘The ultimate decision to retrench must be fair. In this context, fairness means that the ultimate decision to retrench must “properly and genuinely” be justified by operational requirements. The ultimate decision must be “genuine and not merely a sham”

(SACTWU & others v Discreto (supra) at paragraph 8). The court’s function, therefore, is not merely to determine whether the requirements for a proper

consultation process have been followed and whether the decision to retrench was commercially justifiable. There may be other options

open to the employer other than retrenchment such as short time, casual employment, or demotion. If the employer resorts to retrenchment when alternatives to retrenchment are available, it cannot be said that the ultimate decision to retrench is necessarily fair. The court will, therefore, examine the reasons advanced for retrenchment in order to determine whether the ultimate decision to

retrench is genuine and not a sham. However, this is not to say courts are to second guess the commercial or business efficacy of the employer's decision. Nor is the enquiry whether the best decision was taken… The enquiry is whether the retrenchment is properly and genuinely justified by operational requirements in the sense that it was a reasonable option in the circumstances.

[59] Substantive fairness requires the employer to demonstrate that retrenchment was a last resort, with no viable alternatives available. The employer must show that all other options were exhausted before deciding to retrench an employee. A crucial factor

in this assessment is whether there is any available work that the affected employee can perform. If such a position exists, fairness

dictates that the employer should offer it to the affected employee.

[60] In situations where a suitable position is available but the employee lacks the necessary skills, the employer is obliged to consider providing additional training to help the employee meet the required performance standards. This approach aligns with the principle of avoiding retrenchment, as outlined in section 189(2)(a)(i) and (ii) of the LRA. The same consideration applies when new positions are created; if the new role demands a higher skill level and the employee is not adequately trained, the employer must consider training as a viable alternative to retrenchment.

[61] In Oosthuizen v Telkom SA Ltd[10], Zondo JP (as he then was) held:

‘[4] … Implicit in s189 (2)(a)(i) and (ii)… of the Act is an obligation on the employer not to dismiss an employee for operational requirements if that can be avoided. Accordingly, these provisions envisage that the employer will resort to dismissal as a measure of last resort. Such an obligation is understandable because dismissals based on the employer’s operational requirements constitute the so-called ‘no-fault terminations’.

…

[8] In my view an employer has an obligation not to dismiss an employee for operational requirements if that employer has work which such employee can perform either without any additional training or with minimal training. This is because that is a measure that can be employed to avoid the dismissal and the employer has an obligation to take appropriate measures to avoid an employee's dismissal for operational requirements. Such obligation particularly applies to a situation where the employer relies on the employee's redundancy as the operational requirement. It is in accordance with this obligation ... A dismissal that could have been avoided but was not avoid is a dismissal that is without a fair reason.’

[62] The loss of employment due to retrenchment significantly affects the lives of workers and their families. Consequently, even if legitimate reasons for retrenching employees are present, they will only be deemed acceptable if the employer can demonstrate that all feasible

alternative measures have been thoroughly considered and implemented to avoid or minimise the need for retrenchment. This underscores the necessity for employers to exhaust all possible options to protect jobs before proceeding with retrenchment.[11]

[63] The final decision to retrench must be fair, meaning it must be genuinely and justifiably based on operational requirements. It should not be a façade. The court's role extends beyond assessing whether the correct

consultation process was adhered to and whether the retrenchment decision was commercially sensible. The key question is whether the retrenchment is truly and reasonably justified by operational needs, making it a reasonable option under the given circumstances.[12]

[64] The principles established in cases like SA Chemical Workers Union & others v Afrox Ltd[13] (Afrox) highlight employers’ need to genuinely engage in meaningful consultations and consider all possible alternatives to dismissal. In Fry's Metals (Pty) Ltd v National Union of Metalworkers of SA and others[14] (Fry’s Metals), it was held that retrenchments must be genuinely necessitated by operational requirements and not used as a pretext for other motives.

Application of the law to the facts

[65] For a retrenchment to be substantively fair, it must be genuinely necessitated by operational requirements. Edgeline cited financial losses and the closure of a department as reasons for the retrenchment. However, the subsequent engagement of subcontractors and casual workers, alongside the securing of two new business contracts, calls into question the authenticity of these operational needs. This suggests that the retrenchment may have been a façade to target union members, rather than a necessity driven by genuine financial distress.

[66] The argument that Edgeline was in financial distress is contradicted by its actions post-retrenchment. The acquisition of new contracts

and continued operation of the powder coating department, which was purportedly closed, demonstrate that the financial justification for the retrenchments was tenuous. This inconsistency suggests that the retrenchment was not a measure of last resort, but rather a pretext to remove specific employees.

[67] The immediate engagement of subcontractors and casual workers to perform the duties of the retrenched employees further casts doubt on the legitimacy of the retrenchment process. This action not only contradicts the stated need for retrenchment due to redundancy but also indicates that the dismissal

of the affected employees was not genuinely based on operational requirements.

[68] The law requires employers to explore all viable alternatives before resorting to retrenchment. AMCU proposed several alternatives, including terminating contract workers and addressing unnecessary expenditures. Edgeline's partial consideration of these suggestions, such as agreeing to review the role of contract workers, was insufficient. The absence of a thorough and genuine exploration of these alternatives further undermines the substantive fairness of the retrenchment.

[69] AMCU raised concerns about significant expenditures on entertainment, donations, and transport/vehicles, suggesting these costs could be curtailed to avoid retrenchments. The failure to address these non-essential expenditures seriously raises questions about the company's commitment to avoiding retrenchment and prioritising its workforce's stability.

[70] The selection of employees for retrenchment must be based on fair and objective criteria, such as the "last-in, first-out" (LIFO) principle. There is no evidence that Edgeline adhered to any agreed or objective selection method. The unilateral decision to retrench specific employees, particularly

those affiliated with AMCU, without transparent criteria, indicates a lack of fairness in the selection process.

[71] AMCU's concerns that the retrenchment targeted its members raise serious issues of potential discrimination and union-busting. The disproportionate impact on AMCU members, coupled with the flawed consultation process and dubious financial rationale, supports the claim that the retrenchment may have been motivated by anti-union sentiment rather than genuine operational needs.

[72] The principle of substantive fairness requires that retrenchment be a measure of last resort, with no viable alternatives available.

Edgeline failed to demonstrate that it had exhausted all other options before deciding to retrench the affected employees. This includes not adequately considering AMCU's proposals to save jobs through cost-cutting measures and re-assignment of duties.

[73] In situations where a suitable position is available but the employee lacks the necessary skills, the employer is obliged to consider providing additional training to help the employee meet the required performance standards. Edgeline did not present any evidence that it considered re-deployment or training for the affected employees, which would have been a reasonable alternative to retrenchment.

[74] The Labour Appeal Court has emphasised that the ultimate decision to retrench must be "properly and genuinely" justified by operational requirements. Edgeline's decision does not meet this standard, as the company's post-retrenchment actions suggest that the operational requirements cited were not the true motivators for the dismissals.

[75] The principles established in cases like Afrox highlight the need for employers to genuinely engage in meaningful consultations and consider all possible alternatives to dismissal. In Fry's Metals, it was held that retrenchments must be genuinely necessitated by operational requirements and not used as a pretext for other motives. Edgeline's failure to adhere to these principles further questions the fairness of the retrenchments.

[76] The loss of employment due to retrenchment significantly affects the lives of workers and their families. Consequently, even if legitimate reasons for retrenching employees are present, they will only be deemed acceptable if the employer can demonstrate that all feasible alternative measures have been thoroughly considered and implemented to avoid or minimise the need for retrenchment.

[77] Substantive fairness requires the employer to demonstrate that retrenchment was a last resort, with no viable alternatives available. The employer must show that all other options were exhausted before deciding to retrench an employee. A crucial factor in this assessment is whether there is any available work that the affected employee can perform.

[78] Edgeline's retrenchment process was substantively unfair. The dubious financial justification, immediate re-employment of subcontractors,

inadequate consideration of alternatives, and potential discrimination against union members collectively render the retrenchment unjustifiable. The dismissal of the Second to Further Applicants is found to be unfair, and appropriate remedial action, including possible reinstatement or compensation, should be considered to rectify the injustice suffered by the affected employees.

[79] Substantive fairness can significantly impact procedural fairness, underscoring the interdependence between the two concepts. Substantive fairness, which evaluates the legitimacy and justifiability of an employer's action based on valid reasons, proportionality, and consistency, can influence the procedural process. If the substantive grounds for an employer's decision are weak or unjustified, it can compromise the integrity of the procedural steps, leading to biased hearings, inadequate investigations, and flawed evidence collection. This interplay means that even if procedural steps are meticulously followed, the presence of substantive unfairness can taint the overall fairness of the process, rendering it procedurally unfair as well. Consequently, employers must ensure that their decisions are not only procedurally sound but also substantively justifiable to maintain a fair and lawful workplace environment.

[80] On the premise, I make the following order:

Order

1. The condonation of the late filing of the Applicant’s statement of case is granted.

2. The dismissal of the Second to Further Applicants by way of retrenchment is substantively unfair.

3. The Respondent is ordered to reinstate those listed under annexure “X” from the date of dismissal, inclusive of back-pay.

4. There is no order as to costs.

M. Morgan

Acting Judge of the Labour Court of South Africa

Appearances

For the Applicant: Adv A Cook Instructed by: LDA Attorneys Incorporated For the Respondent: Adv H van der Merwe Instructed by: Brain Wilken Attroneys Inc

[1] Act 66 of 1995, as amended. Section 191(5)(b)(ii) provides: ‘(5) If a council or a commissioner has certified that the dispute remains unresolved, or if 30 days have expired since the council or the Commission received the referral and the dispute remains unresolved – (b) the employee may refer the dispute to the Labour Court for adjudication if the employee has alleged that the reason for dismissal is – … (ii) based on the employer's operational requirements.’

[1] Act 66 of 1995, as amended. Section 191(5)(b)(ii) provides:

‘(5) If a council or a commissioner has certified that the dispute remains unresolved, or if 30 days have expired since the council or the Commission received the referral and the dispute remains unresolved –

(b) the employee may refer the dispute to the Labour Court for adjudication if the employee has alleged that the reason for dismissal is –

(ii) based on the employer's operational requirements.’

[2] Section 189 of the LRA reads: ‘189. Dismissals based on operational requirements (1) When an employer contemplates dismissing one or more employees for reasons based on the employer's operational requirements, the employer must consult – a. any person whom the employer is required to consult in terms of a collective agreement; b. if there is no collective agreement that requires consultation – i. a workplace forum, if the employees likely to be affected by the proposed dismissals are employed in a workplace in respect of which there is a workplace forum; and ii. any registered trade union whose members are likely to be affected by the proposed dismissals; c. if there is no workplace forum in the workplace in which the employees likely to be affected by the proposed dismissals are employed, any registered trade union whose members are likely to be affected by the proposed dismissals; or d. if there is no such trade union, the employees likely to be affected by the proposed dismissals or their representatives nominated for that purpose. (2) The employer and the other consulting parties must, in the consultation envisaged by subsections (1) and (3), engage in a meaningful joint consensus-seeking process and attempt to reach consensus on – a. appropriate measures- i. to avoid the dismissals; ii. to minimise the number of dismissals; iii. to change the timing of the dismissals; and iv. to mitigate the adverse effects of the dismissals; b. the method for selecting the employees to be dismissed; and c. the severance pay for dismissed employees. (3) The employer must issue a written notice inviting the other consulting party to consult with it and disclose in writing all relevant information, including, but not limited to- a. the reasons for the proposed dismissals; b. the alternatives that the employer considered before proposing the dismissals, and the reasons for rejecting each of those alternatives; c. the number of employees likely to be affected and the job categories in which they are employed; d. the proposed method for selecting which employees to dismiss; e. the time when, or the period during which, the dismissals are likely to take effect; the severance pay proposed; f. any assistance that the employer proposes to offer to the employees likely to be dismissed; g. the possibility of the future re-employment of the employees who are dismissed; h. the number of employees employed by the employer; and i. the number of employees that the employer has dismissed for reasons based on its operation requirements in the preceding 12 months. (4) (a) The provisions of section 16 apply, read with the changes required by the context, to the disclosure of information in terms of subsection (3). (b) In any dispute in which in which an arbitrator or the Labour Court is required to decide whether or not any information is relevant, the onus is on the employer to prove that any information that it has refused to disclose is not relevant for the purposes for which it is sought. (5) The employer must allow the other consulting party an opportunity during consultation to make representations about any matter dealt with in subsections (2), (3) and (4), as well as any other matter relating to the proposed dismissals. (6) (a) The employer must 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. (b) If any representation is made in writing, the employer must respond in writing. (7) The employer must select the employees to be dismissed according to selection criteria- a. that have been agreed to by the consulting parties; or b. if no criteria have been agreed, criteria that are fair and objective.”

[2] Section 189 of the LRA reads:

‘189. Dismissals based on operational requirements

(1) When an employer contemplates dismissing one or more employees for reasons based on the employer's operational requirements, the employer must consult –

a. any person whom the employer is required to consult in terms of a collective agreement;

b. if there is no collective agreement that requires consultation –

i. a workplace forum, if the employees likely to be affected by the proposed dismissals are employed in a workplace in respect of which there is a workplace forum; and

ii. any registered trade union whose members are likely to be affected by the proposed dismissals;

c. if there is no workplace forum in the workplace in which the employees likely to be affected by the proposed dismissals are employed, any registered trade union whose members are likely to be affected by the proposed dismissals; or

d. if there is no such trade union, the employees likely to be affected by the proposed dismissals or their representatives nominated for that purpose.

(2) The employer and the other consulting parties must, in the consultation envisaged by subsections (1) and (3), engage in a meaningful joint consensus-seeking process and attempt to reach consensus on –

a. appropriate measures-

i. to avoid the dismissals;

ii. to minimise the number of dismissals;

iii. to change the timing of the dismissals; and

iv. to mitigate the adverse effects of the dismissals;

b. the method for selecting the employees to be dismissed; and

c. the severance pay for dismissed employees.

(3) The employer must issue a written notice inviting the other consulting party to consult with it and disclose in writing all relevant information, including, but not limited to-

a. the reasons for the proposed dismissals;

b. the alternatives that the employer considered before proposing the dismissals, and the reasons for rejecting each of those alternatives;

c. the number of employees likely to be affected and the job categories in which they are employed;

d. the proposed method for selecting which employees to dismiss;

e. the time when, or the period during which, the dismissals are likely to take effect; the severance pay proposed;

f. any assistance that the employer proposes to offer to the employees likely to be dismissed;

g. the possibility of the future re-employment of the employees who are dismissed;

h. the number of employees employed by the employer; and

i. the number of employees that the employer has dismissed for reasons based on its operation requirements in the preceding 12 months.

(4) (a) The provisions of section 16 apply, read with the changes required by the context, to the disclosure of information in terms of subsection (3).

(b) In any dispute in which in which an arbitrator or the Labour Court is required to decide whether or not any information is relevant, the onus is on the employer to prove that any information that it has refused to disclose is not relevant for the purposes for which it is sought.

(5) The employer must allow the other consulting party an opportunity during consultation to make representations about any matter dealt with in subsections (2), (3) and (4), as well as any other matter relating to the proposed dismissals.

(6) (a) The employer must 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.

(b) If any representation is made in writing, the employer must respond in writing.

(7) The employer must select the employees to be dismissed according to selection criteria-

a. that have been agreed to by the consulting parties; or

b. if no criteria have been agreed, criteria that are fair and objective.”

[3] (1997) 18 ILJ 367 (LAC) at 369B - E.

[4] 1962 (4) SA 531 (A) at C-F.

[5] [1999] 3 BLLR 209 (LAC) at para 10.

[6] Section 191(11) of the LRA reads: ‘(11) (a) The referral, in terms of subsection (5)(b), of a dispute to the Labour Court for adjudication must be made within 90 days after the council or (as the case may be) the commissioner has certified that the dispute remains unresolved. (b) However, the Labour Court may condone non-observance of that timeframe on good cause shown.’

[6] Section 191(11) of the LRA reads:

‘(11) (a) The referral, in terms of subsection (5)(b), of a dispute to the Labour Court for adjudication must be made within 90 days after the council or (as the case may be) the commissioner has certified that the dispute remains unresolved.

(b) However, the Labour Court may condone non-observance of that timeframe on good cause shown.’

[7] The text of section 23 of the Constitution provides: ‘23. Labour relations (1) Everyone has the right to fair labour practices. (2) Every worker has the right – (a) to form and join a trade union; (b) to participate in the activities and programmes of a trade union; and (c) to strike. (3) Every employer has the right – (a) to form and join an employers' organisation; and (b) to participate in the activities and programmes of an employers' organisation. (4) Every trade union and every employers' organisation has the right – (a) to determine its own administration, programmes and activities; (b) to organise; and (c) to form and join a federation. (5) Every trade union, employers' organisation and employer has the right to engage in collective bargaining. National legislation may be enacted to regulate collective bargaining. To the extent that the legislation may limit a right in this Chapter, the limitation must comply with section 36(1). (6) National legislation may recognise union security arrangements contained in collective agreements. To the extent that the legislation may limit a right in this Chapter the limitation must comply with section 36(1).’

[7] The text of section 23 of the Constitution provides:

‘23. Labour relations

(1) Everyone has the right to fair labour practices.

(2) Every worker has the right –

(a) to form and join a trade union;

(b) to participate in the activities and programmes of a trade union; and

(c) to strike.

(3) Every employer has the right –

(a) to form and join an employers' organisation; and

(b) to participate in the activities and programmes of an employers' organisation.

(4) Every trade union and every employers' organisation has the right –

(a) to determine its own administration, programmes and activities;

(b) to organise; and

(c) to form and join a federation.

(5) Every trade union, employers' organisation and employer has the right to engage in collective bargaining. National legislation may be enacted to regulate collective bargaining. To the extent that the legislation may limit a right in this Chapter, the limitation must comply with section 36(1).

(6) National legislation may recognise union security arrangements contained in collective agreements. To the extent that the legislation may limit a right in this Chapter the limitation must comply with section 36(1).’

[8] See: Chemical Workers Industrial Union and others v Latex Surgical Products (Pty) Ltd (2006) 27 ILJ 292 (LAC) at paras 94-96. See also: Southern African Clothing and Textile Workers Union and Others v Stephead Military Headwear CC [2017] ZALCJHB 96 at para 32.

[9] [2002] ZACC 27; [1999] 5 BLLR 413 (LAC) (Decision Surveys) at para 27.

[10] (2007) 28 ILJ 2531 (LAC) at paras 4 and 8.

[11] General Food Industries Ltd v FAWU (2004) 7 BLLR 667 (LAC) at para 55.

[12] Decision Surveys supra. See also, NEHAWU and others v The Agricultural Research Council and others [2000] 9 BLLR 1081 (LC).

[13] (1999) 20 ILJ 1718 (LAC).

[14] (2003) 24 ILJ 133 (LAC).