BIFAWU obo Miya and Another v Scorpion Legal Protection (Pty) Ltd (J 250/2019) [2023] ZALCJHB 314; (2024) 45 ILJ 298 (LC) (8 November 2023)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Reportable

case no: J 250/2019

In the matter between:

BIFAWU obo LEBO MIYA AND 1 OTHER Applicant And SCORPION LEGAL PROTECTION (PTY) LTD Respondent

Heard: 2 November 2023

Delivered: 8 November 2023

Summary: Applicants allege unfair dismissal following dismissal for operational reasons – Section 189A process –

jurisdictional challenge

This judgment was handed down electronically by consent of the parties’ representatives by circulation to them via email. The date for hand-down is deemed to be 8 November 2023.

JUDGMENT

PRINSLOO, J

Introduction

[1] The individual applicants were dismissed during October 2018 for reasons based on the Respondent’s operational requirements. They subsequently referred an unfair dismissal dispute to the CCMA and after the dispute remained unresolved, a certificate of outcome was issued on 13 December 2018.

[2] On 5 February 2019, the Applicant filed a statement of case challenging the substantive and procedural fairness of their dismissal. The Respondent filed a statement of response and the parties filed a signed pre-trial minute.

[3] The matter was enrolled for trial on 9 September 2021, when it was postponed sine die to afford the Applicant an opportunity to inter alia file submissions on the jurisdictional issue raised by the Respondent.

[4] The matter was once again enrolled for trial and the Respondent persisted with its jurisdictional point. Arguments were presented on the issue of jurisdiction as both parties agreed that it was an issue to be decided before the matter could proceed to trial on the merits.

The jurisdictional challenge

[5] Ms Lancaster for the Respondent argued that the Labour Court lacks jurisdiction to determine any alleged procedural unfairness or

alleged non-compliance with procedural requirements in the Labour Relations Act[1] (LRA) and is precluded from deciding the procedural fairness of the Applicant’s dismissal, as the retrenchment was a large-scale one.

[6] Mr Nhlapo for the Applicant submitted that the LRA distinguishes between small-scale and large-scale retrenchments and that the Respondent had an obligation to indicate to the Applicant which process would be followed. The section 189 notice that was issued by the Respondent was quiet on the issue and at no stage was the Applicant aware that it was indeed a section 189A retrenchment. The Applicant cannot be penalised for that and had they known, they would have followed the process prescribed by section 189A of the LRA. It would be unfair to the Applicant if the procedural fairness of the individual applicants is not decided by this Court and for that reason, the Court should assume jurisdiction.

The facts

[7] Section 189A of the LRA applies only if the employer employs more than 50 employees and if the employer contemplates retrenching employees in accordance with the sliding scale provided for in section 189A(a)(i)-(v). It is commonly referred to as a large-scale retrenchment.

[8] The question of whether section 189A of the LRA is applicable is a factual and legal enquiry. If the facts show that the number of employees contemplated for dismissal due to operational reasons falls within the parameters set out in section 189A(1), the law dictates that the said section applies. Put differently, it would apply by operation of law, irrespective of the conduct or intentions of the parties. The fact that it is not specifically mentioned in the section 189(3) invitation to consult, does not mean that it does not apply, as it would apply by operation of law.

[9] In casu, it is undisputed that the Respondent employed 485 employees and contemplated the dismissal of 40 employees, within specified job

categories. It is evident that the number of employees contemplated for dismissal due to operational reasons falls within the parameters

set out in section 189A(1) and it follows that the said section applied by operation of law.

[10] Once it is established that section 189A is applicable, the consequences thereof follow. I will fully deal with those consequences infra.

Procedural fairness: Section 189A(13) of the LRA

[11] Section 189 of the LRA provides for dismissals based on operational requirements and sets out inter alia what should be contained in the written notice, inviting consultation and the matters the consulting parties should consult on. Section 189A of the LRA applies to employers employing more than 50 employees if such an employer contemplates dismissing, by reason of operational requirements, at least 10 employees if the employer employs up to 200 employees, at least 20 employees if the employer employs more than 200 but no more than 300 employees, at least 30 employees if the employer employs more than 300 but no more than 400 employees, at least 40 employees if the employer employs more than 400 but no more than 500 employees, and at least 50 employees if the employer employs more than 500 employees,

[12] The relationship between sections 189 and 189A of the LRA is symbiotic and this was confirmed by the Labour Appeal Court (LAC) in Gijima AST (Pty) Ltd v Hopley[2] where it was held that:

‘The two sections must be read together since they both apply to dismissals for operational requirements. Further, the overall obligation imposed by the two sections is for consultation on the matters referred to in s 189. It is also significant to note that the s 189A process is initiated by the very same s 189(3) notification issued for retrenchments. The items that form the subject of consultation are only listed in s 189(2) which includes the method for selecting employees to be dismissed. Such a provision is not found in s 189A.’

[13] Section 189A aims for a firm separation between substantive and procedural fairness and in the case of a large-scale retrenchment, procedural fairness can be addressed only via section 189A(13). As such, section 189A provides for a procedure in respect of procedural lapses whereby an applicant may approach the Labour Court by way of an application for relief. It also provides for adjudication of procedural disputes at an early stage, preferably for procedural lapses to be remedied early on and not once the process has run its course.

[14] Section 189A(13) provides as follows:

‘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 —

(a) compelling the employer to comply with a fair procedure;

(b) interdicting or restraining the employer from dismissing an employee prior to complying with a fair procedure;

(c) directing the employer to reinstate an employee until it has complied with a fair procedure;

(d) make an award of compensation, if an order in terms of paragraphs (a)–(c) is not appropriate.’

[15] An application contemplated by section 189A(13) is an application sui generis. There is little point in affording an applicant the remedy of an interdict or an order directing an employer to reinstate an employee

until it complies with the fair procedure unless the application is accorded a degree of urgency and is dealt with on that basis.

[16] The purpose of section 189A(13) is to prevent procedural issues from clouding the substantive fairness of the retrenchment, wherefore the relief will usually be sought on an urgent basis and be in the form of a pre-emptive interdict. An application in terms of section 189A(13) should not be delayed as the relief in terms of section 189A(13)(a)-(c) will be granted with the aim of ensuring that the consultation process serves its proper purpose.[3]

[17] In Insurance and Banking Staff Association and another v Old Mutual Services and Technology Administration and another[4] (Old Mutual), the Court described the aim and purpose of the 2002 amendments to the LRA, with specific reference to section 189A, as follows –

‘…section 189A was aimed at enhancing the effectiveness of consultations in large-scale retrenchments. It allows for a facilitator to be appointed to put back on track at the earliest possible moment a retrenchment process that falls off the rails procedurally. The overriding consideration under section 189A is to correct and prevent procedurally unfair retrenchments as soon as procedural flaws are detected, so that job losses can be avoided. Correcting a procedurally flawed mass retrenchment long after the process has been completed is often economically prohibitive and practically impossible. All too often the changes in an enterprise with the passage of time deters reinstatement as a remedy. So, the key elements of section 189A are: early expedited, effective intervention

and job retention in mass dismissals.’

[18] In National Union of Mineworkers v Anglo American Platinum Ltd and others[5] it was held that:

‘Section 189A(13) was introduced in 2002 and was intended, broadly speaking, to provide for the adjudication of disputes about procedural fairness in retrenchments at an earlier stage in the ordinary dispute resolution process, and by providing for their determination,

inevitably as a matter of urgency, on application rather than by way of referral. The section empowers employees and their representatives

to approach the court to require an employer to apply fair procedure, assuming, of course, that the jurisdictional requirements set out in section 189A are met. The section affords the court a broad range of powers, most of which appear to suggest that where a complaint about procedure is made by a consulting party, the court has a broad discretion to make orders and issue directives, thereby extending to the court an element of what might be termed a degree of judicial management into a contested consultation process.’

[19] In RAWUSA v Schuurman Metal Pressing (Pty) Ltd,[6] the Court held that the aim of section 189A(13) is to provide a remedy to employees to approach the Labour Court to set their employer on the right track where there is a genuine and clear cut procedural unfairness which goes to the core of the process. The section is aimed at securing the process in the interest of a fair outcome.

[20] In Banks and another v Coca-Cola SA - A Division of Coca-Cola Africa (Pty) Ltd,[7] the Court summarized the role of the Court in a section 189A(13) application as follows:

‘In short, the conclusion to be drawn from the wording of s 189A is that this court appears to have been accorded a proactive and supervisory role in relation to the procedural obligations that attach to operational requirements dismissals. Where the remedy sought requires intervention in the consultation process prior to dismissal, the court ought necessarily to afford a remedy that accounts for the stage that the consultation has reached, the prospect of any joint consensus-seeking engagement being resumed, the attitude of both parties, the nature and extent of the procedural shortcomings that are alleged, and the like. If it appears to the court that little or no purpose would be served by intervention in the consultation process in one of the forms contemplated by s 189A(13)(a), (b) and (c), then compensation as provided by para (d) is the more apposite remedy.’

[21] The Court in Old Mutual[8] said that the remedies set out in section 189A(13)(a)-(c) would be inappropriate if there is an undue delay between the occurrence of the procedural flaw or if the flaw is formal or insignificant and that it should not be granted after the retrenchment process is completed. This is so because procedural flaws must be corrected early and effectively to allow the parties to continue with the consultation process, with the possibility of the flaws being corrected and consensus being reached.

[22] In Steenkamp and Others v Edcon Limited[9] (Steenkamp II), the Constitutional Court dealt with the question of whether claims for relief for procedural unfairness in large-scale retrenchments can be dealt with ex post facto. The Constitutional Court endorsed the finding of the Labour Appeal Court[10] that section 189A(13) does not constitute a self-standing remedy for compensation for procedural unfairness long after the event.

[23] In Steenkamp II, the Constitutional Court held that the LRA specifically provides for a dispute-resolution mechanism designed to deal with procedural flaws that arise during or immediately after the consultation process and to allow the Labour Court, acting as the guardian of the process, to set the consultation process back on track.

[24] In considering whether section 189A(13)(d) provides a self-standing remedy to employees, the Constitutional Court noted that the primary purpose of section 189A(13) is to allow early corrective action to get the retrenchment process back on track and that the remedies set out in subsection (13)(a)-(d) establish a hierarchy of appropriate relief and only when relief in terms of subsection (13)(a)-(c) is not appropriate, the relief in (d) may be granted. However, it was held that the relief provided under subsection (13)(d) is not a self-standing remedy, nor can the relief set out therein be “divorced from the remainder of this section and given self-standing meaning”.[11]

[25] What are the legal principles that emerged from Steenkamp II? The Constitutional Court, considering the nature, purpose and functioning of section 189A(13) held that:

‘[45] The LRA provides for a consultative framework within which employees facing possible retrenchment may participate in the consultation

process in an attempt to either avoid a possible retrenchment or, where retrenchments are unavoidable, to participate in attempts to ameliorate the adverse effects of such a retrenchment.

[46] Where a retrenchment exercise involves a large number of employees, s 189A of the LRA applies. This section not only strives to enhance the effectiveness of the consultation process by providing for the appointment of a facilitator, but also provides for mechanisms to pre-empt and resolve disputes about substantive and procedural unfairness issues as and when they arise during the consultation process.

[47] A distinctive feature of section 189A(13) of the LRA is the separation of disputes about procedural fairness from disputes about substantive fairness. Disputes about substantive fairness may be dealt with by resorting to strike action or by referring a dispute about the substantive fairness of the dismissals to the Labour Court in terms of s 191(11) of the LRA.

[48] Disputes about procedural fairness have been removed from the adjudicative reach of the Labour Court and may no longer be referred to the Labour Court as a distinctive claim or cause of action that a dismissal on the basis of operational requirements was procedurally unfair.’

[26] The Constitutional Court made it clear that, although a clear policy decision has been made to remove claims of procedural unfairness from the ex post facto jurisdictional competence of the Labour Court, employees are not left without a remedy as they may approach the Labour Court in terms of section 189A(13) of the LRA for an order compelling the employer to comply with a fair procedure. Where employees have already been dismissed, the Labour Court has the additional power in terms of section 189A(13)(c) of the LRA to reinstate such an employee to allow for the consultation process to run its course. Only where these orders are not appropriate, may the Labour Court, where it is appropriate to do so, order compensation in terms of subsection (d).

[27] The Applicant’s retrenchment fall within the ambit of section 189A of the LRA and if they wanted to challenge the procedural fairness of the retrenchment process, the remedy at their disposal was to follow the process provided for in section 189A(13) of the LRA.

Jurisdiction

[28] In casu, the Applicant did not approach this Court within the time period contemplated in section 189A(17) of the LRA to challenge the procedural fairness of their retrenchment. Instead, they approached this Court for relief (including an order that their dismissal was procedurally and substantively unfair) by way of a statement of claim long after the termination of their services.

[29] The question that leaps out is whether this Court will have jurisdiction to adjudicate a claim for procedural fairness at the trial.

[30] The Constitutional Court, in considering the purpose of section 189A(13) held that:[12]

‘…considering the purpose and overall scheme of section 189A(13) and against the background of what is stated in section 189A(18) of the LRA, the wording of the legislation is to remove the option of claiming compensation for procedural unfairness long after retrenchment from the arsenal of remedies available to retrenched employees who are dissatisfied with the process followed during the consultation. Third, section 189A(13) does not contemplate a procedure claiming compensation at some future remote time. As the Labour Court held in Parkinson[13]:

“The time limits applicable to an application in terms of section 189A(13) are well known… This court has made clear on more than one occasion that the purpose of section 189A(13) is one that enables this court to supervise an ongoing retrenchment process or one that has recently been concluded; it is not a remedy that is available well after dismissals have been effected.”’

[31] Section 189A(18) of the LRA provides that:

‘(18) The Labour Court may not adjudicate a dispute about the procedural fairness of a dismissal based on the employer’s operational

requirements in any dispute referred to it in terms of section 191 (5) (b) (ii).’

[32] I already alluded to Steenkamp II where the Constitutional Court dealt with the question of whether claims for relief for procedural unfairness in large-scale retrenchments can be dealt with ex post facto and held that section 189A13(3) does not constitute a self-standing remedy for compensation for procedural unfairness long after the event.

[33] The facts in casu as submitted by Mr Nhlapo are that the Applicant was unaware that the retrenchment of the individual applicants was governed by section 189A. Even though I have empathy for the individual applicants on this score, this Court cannot assume jurisdiction on that ground.

[34] The primary purpose of section 189A(13) is to allow for early corrective action to get the retrenchment process back on track.

[35] Reinstatement as contemplated in section 189A(13)(c) is not designed to reinstate employees in order to “give them their jobs back”. The reinstatement is limited to the point ‘until’ the employer has complied with a fair procedure. Reinstatement in the context of section 189A(13) is part of a hierarchy of appropriate relief where this Court intervenes as a corrective measure to get the retrenchment process back on track. Reinstatement in the context of section 189A(13) is not the same as reinstatement contemplated in section 193(1)(a) of the LRA, which must be read with section 193(2).

[36] When this matter will eventually be enrolled for trial, the retrenchment process had been long gone and completed (October 2018), the individual applicants were all finally dismissed and reinstatement for the purpose of getting the retrenchment process back on track, is no longer appropriate relief. The relief in terms of sections 189A(13)(a) - (c) is no longer possible or appropriate.

[37] It would leave this Court with the only relief remaining, namely an award of compensation, as contemplated in section 189A(13)(d). The Constitutional Court has held that considering the purpose and overall scheme of section 189A(13) of the LRA, the option of claiming compensation for procedural unfairness long after retrenchment is removed from the arsenal of remedies available to retrenched employees who are dissatisfied with the process followed during the consultation. Section 189A(13) does not contemplate a procedure to claim compensation at some future remote time, as the main purpose of the section and the remedies it provides is to “get the retrenchment process back onto a track that is fair.”

[38] In Steenkamp II it was confirmed that:[14]

‘Moreover, the procedure within section 189A(13) of the LRA provides for an urgent remedy on application whilst the parties are still locked in consultations or shortly thereafter in circumstances where the reinstatement of the dismissed employees can still salvage the consultation process by restoring the status quo ante. This process does not contemplate a trial at some further time after the horse has bolted.’

[39] In summary: The provisions of section 189A(18) remove a claim for procedural unfairness in a large-scale retrenchment from this Court’s jurisdiction, where such a case was not pursued in terms of section 189A(13). Furthermore, none of the remedies provided for in section 189A(13)(a) - (c) are available to the individual applicants, having been dismissed as far back as October 2018 and the only remaining remedy is that of compensation. The position is clear: Disputes about procedural fairness have been removed from the adjudicative reach of the Labour Court and may no longer be referred to the Labour Court as a distinctive claim or cause of action that a dismissal, on the basis of operational requirements, was procedurally unfair. For these reasons, this Court has no jurisdiction to adjudicate the Applicant’s claim for procedural unfairness.

Costs

[40] Costs should be considered against the provisions of section 162 of the LRA and according to the requirements of the law and fairness.

[41] This Court has a broad discretion to make orders for costs. Considering the pleadings and the pre-trial minute filed, I am of the view that the issue of jurisdiction could have and should have been raised much earlier. It was only raised in the Respondent’s practice note and for that reason am I not inclined to make a cost order in favour of the Respondent.

[42] In the premises, I make the following order:

Order

1. The Respondent’s special plea on jurisdiction is upheld;

2. The Labour Court has no jurisdiction to determine the procedural fairness of the Applicant’s dismissal;

3. There is no order as to costs.

Connie Prinsloo

Judge of the Labour Court of South Africa

Appearances:

For the Applicants: Mr M Nhlapo from BIFAWU

For the Respondent: Ms S Lancaster from Lancaster Kungoane Attorneys

[1] Act 66 of 1995, as amended.

[2] [2014] ZALAC 9; (2014) 35 ILJ 2115 (LAC) at para 34.

[3] R le Roux, ‘Retrenchment law in South Africa’, (LexisNexis South Africa) 2016 at chapter 5.

[4] [2006] 6 BLLR 566 (LC) at para 9.

[5] [2013] ZALCJHB 262; [2013] 12 BLLR 1253 (LC) at para 19.

[6] [2005] 1 BLLR 78 (LC).

[7] [2007] ZALC 175; (2007) 28 ILJ 2748 (LC) at para 18.

[8] Old Mutual supra at paras 14 – 17.

[9] [2019] ZACC 17; (2019) 40 ILJ 1731 (CC).

[10] Edcon Ltd v Steenkamp (2018) 39 ILJ 531 (LAC).

[11] Ibid at paras 60 – 61.

[12] Steenkamp II supra at para 65.

[13] Parkinson v Edcon Ltd [2016] ZALCJHB 540 (28 June 2016) at para 4.

[14] Steenkamp II at para 71.