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LABOUR LAW IMPLICATIONS OF
ORGANISATIONAL RESTRUCTURING
LINDA HENRY GROOTBOOM
Submitted in partial fulfilment of the requirements
for the degree of
Magister Legum
in the Faculty of Law
at the University of Port Elizabeth
Date of submission: January 2003
Supervisor: Professor JA van der Walt
i
TABLE OF CONTENTS Page 1. INTRODUCTION 1 2. RESTRUCTURING WITHIN A SOUTH AFRICAN CONTEXT 2 2.1 Historical perspective 2 2.2 Comparative perspective 4 2.3 Structural flaws mandating restructuring 5 3. DISCUSSION 10 3.1 Regulated flexibility and labour law 10 3.2 Labour force displacement 13 3.3 Restructuring and fixed-term contracts 15 4. STATUTORY PROVISIONS 18 4.1 Statutory provisions and restructuring 18 4.2 Case law 19 4.3 Remedies for unfair “no fault” dismissals 22 5. ARGUMENT 24 5.1 Legislative lucanae in retrenchment disputes 24 5.2 Implications for social security law 26 5.3 Amendments to section 189 of the LRA 29 5.4 Restructuring and Transnational Corporations 30 5.5 The essence of section 189 of the LRA 32 5.6 Section 16 of the LRA 36 5.7 Section 197 transfers 37 5.8 Alternatives to “no-fault” dismissals 41 5.9 The Social Plan and retrenchability 43 6. CONCLUSION 47 7. BIBLIOGRAPHICAL REFERENCES 51 8. LIST OF CASES 51 9. LIST OF STATUTES 53
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1. INTRODUCTION
It is beyond debate that each job lost due to restructuring means a lost taxpayer, and
hence lost tax revenue, more poverty and increased crime. South Africa and the
world at the large have to deal with this problem head – on in view of the acute need
to better the lives of people and encourage investment.
Technological advancement should be embraced and used to benefit people and
stimulate economies, and that is further challenge in its own right. In Chapter 8 of
the White Paper on Transformation of the Public Service dated 15 November 1995
(hereinafter, the White Paper), it is said that:
“The Government of National Unity has embarked upon a concerted and comprehensive programme of administrative restructuring and rationalisation (my emphasis) with the object of: (a) Creating a unified and integrated service. (b) Creating a leaner and more cost-effective service.”
Various strategies are listed in the White Paper, and the fundamental approach
advocated is to right size, adjust remuneration structures, retrench and contract – out
services.
It is also indicated that the Government intends within the next four years to reduce
the wage bill. Naturally, a significant reduction in the overall size of the workforce is
anticipated.
In most rightsizing or downsizing exercises, technological innovation tends to
assume the form of robotization (in large manufacturing enterprises) and in some
cases, wide-scale systems computerisation.
Whilst the intended goals of such technology-driven processes is to achieve higher
levels of productivity and efficiency, various workplace experts argue that the
unintended consequences thereof could impact negatively on workplace health in the
sense that a dehumanized workplace could be the result. The World Health
Organisation, in fact, regards computers as a health risk. Experts further argue that
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people working on computers for about six (6) hours a day could lose their ability to
focus. Clearly, labour law implications would be unavoidable in such cases, making
it possible for negatively affected employees to litigate against corporations.
Professor Frank Horwitz of the University of Cape Town’s Centre for Labour Studies
believes that workplace innovation is organisational change that successfully
balances efficiency and equity. Equity, in this case refers to the acknowledgement of
differentness in the workplace, with the intention of addressing the imbalances. It is
precisely this notion of innovation that lies at the core of our new labour relations
system.
In this regard, the White Paper emphasizes the fact that, attention is shifting to the
longer-term question of creating a leaner and more cost-effective public service.
2. RESTRUCTURING WITHIN A SOUTH AFRICAN CONTEXT
2.1 Historical perspective
South Africa forms part of the global family of states and is a signatory of various
international conventions and covenants. Unavoidable trends towards market
liberalization or globalization have a major impact on South Africa’s economic
policies, which in turn propel the drive towards achieving organizational efficiencies
and higher productivity levels. Both the private and public sectors are affected by
these dynamics in a way which often translates into specific patterns of workplace
behaviour that shape employment relations in South Africa. Concepts such as
organisational restructuring, business re-engineering, rightsizing, systems redesign
and process improvement have become motifs in the vocabulary of corporate South
Africa and the public sector.
Commentators on organisation strategy usually regard these concepts as elements
of institutional transformation in as far as they seek to achieve organisational
equities, workplace synergies and structural realignments. For purposes of
terminological preciseness, organisational restructuring can be synonymised with
corporate recreation, which is definable as a “strategic change necessitated by
external events that usually threaten the very existence of the organisation”. Such
3
changes often require a radical departure from the past and result in shifts in
leadership, values, strategy, culture and so forth. In managerial parlance these are
usually termed frame-breaking changes.
This paper endeavours to explore, highlight and discuss the labour law requirements
regulating organisational restructuring in South Africa.1 Relevant case law, statutes
and case studies will be referred to and cross-referenced.
The Rand strike of 1922 signalled one of the early organisation restructuring
incidents in South Africa. The strike itself was a failure as a result of a restructuring
intervention by the mining companies, which was a strategic response to White union
demands for the exclusion of Blacks from “advancement opportunities” within the
mining industry. In this particular strike action, white unionism identified itself with
white interests.
The mining companies, in this instance, initiated a comprehensive reorganisation of
labour, which resulted in cost-cutting. White wages was cut, and blacks were
absorbed into the industry at lower wages. To a certain extent, this meant a
reduction of the colour bar. The white unions saw this as encroachment by so-called
profit-seeking capitalism and cheap labour competitors. This was followed by the
promulgation of the Industrial Conciliation Act of 1924
Black labour was excluded in this industrial law dispensation, although not declared
illegal. The effect thereof was that black labor organizations were denied the right to
bargain within the statutory structures and procedures. As can be seen from the
aforegoing, the concept of organisation restructuring is not an entirely new
phenomenon in South Africa, although it must be accepted that the drivers thereof
could be different in a contemporary sense as the national and global economic
situation has changed considerably.
Against this background, labour legislation in South Africa went through a process of
radical transformation and currently places a strong emphasis on workplace
1 s 189(1) of the Labour Relations Act 66 of 1995.
4
participation through workplace forums, entrenching a fair mechanisms to deal with
dismissals (including dismissals for operational reasons), and remedies in the event
of unfair dismissals.
In comparison with other global labour law systems, labour legislation in South Africa
is progressive, and draws its most important principles from the Constitution. For
instance, section 64(1) of the LRA guarantees the right to strike and the right to lock-
out.2 A major inhibiting factor in South Africa is the level of adversarialism, which
characterises negotiations between government labour and business.
As the country is currently experimenting with various restructuring and privatisation
models, the gap between the partners is widening, and threatening the national
economy. Lessons from other countries are, therefore, relevant.
2.2 Comparative perspective
West Germany:
The Works Constitution Act of 1951 (amended in 1972), and the Codetermination Act
of 1952 (amended in 1976) promotes codetermination and prohibits strike action.
Employees form part of the Works Councils and are tasked with discussing such
issues as; organizational change, manning, financial decision-making, protection of
labour, dismissals and work procedures. The highest decision-making body, the
Supervisory Boards, also include employee representatives that are tasked with
deciding on the approval of financial statements, termination of subsidiaries,
relocation of production facilities and approving decisions of the Management Board
regarding the appointment of executive staff. This is a good model for employee
empowerment, but could change due to the current dynamics in the global economic
situation as evidenced in the case of the USA, Japan, Europe, China, Germany and
South American countries.
2 s 64(1) of the LRA.
5
United States of America:
In the USA, corporate prosperity is ensured contemporaneously with guaranteeing
employee well being. Managerial prerogatives is a critical feature in labour relations,
and the government remains largely facilitative and non-interventionist in, most
cases. There is an agreed intention between business and labour to build the
national economy. Again, this depends on global economic dynamics, especially in
as far as strategic future arrangements are concerned.
Sweden:
In terms of the 1938 Salsjoben Agreement, unions do not oppose organisational
change, restructuring and the introduction of technology. Although to a large extent,
voluntarism shapes the nature of relations between business and labour, the
agreements are legislated.
Other examples in Austria and the Netherlands indicate a tendency towards co-
operation between labour and business.
2.3 Structural flaws mandating restructuring
It is not unusual for approved organisational structures to have fundamental flaws,
which inhibit the optimal functioning of organisations. In the case of local
government entities, there are usually legislated obligations relating to the delivery of
basic or core services in line with constitutionally entrenched human rights. These
basic rights are legally enforceable, and it follows that implementing agents such as
local governments must have organisational structures that optimalise the delivery of
basic services.
Private sector organisations have competition-related challenges, which may
threaten the long-term existence of these corporate entities.
In the words of McCormick E in Industrial and organizational Psychology, page 39:
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“There is hardly any aspect of management of human resources that does not depend in some way on job information …”
McCormick goes on to show that job design impacts on the structure of an
organization and organizational decisions. Job design and analysis are, therefore,
reviewed as a necessary basis for restructuring. In this, regard the concept of
customer focus is relevant in so far as it compels organisations to be structured in
such a way that specific optimalisations and efficiencies are achieved.
The career destinies of employees, therefore, cannot remain unaffected by large-
scale transformations and restructuring. Such processes will undoubtedly have wide-
ranging labour law implications.
The following are typical structural weaknesses giving rise to recreation:
(i) Lack of congruence between approved vacancies and staffing levels.
(ii) Poor organisation/environment fit.
(iii) Top heavy organisation structures.
(iv) Poor internal departmental synergies.
(v) Lack of workload analysis, resulting in under / over-capacitation.
(vi) Structures that are too steep.
These are but a few examples of factors necessitating corporate reviews or
reorganisation, and which usually affect the continued employment status of
employees in one way or another.
Jimmy Khoza, writing in People Dynamics comments as follows:
“Because of the rapid changes within organisations, who knows what jobs will be there down the line and what skills will be needed? Who can guarantee job security, let alone careers, under these circumstances? Companies, therefore, have to take stock of themselves in order to survive.”3
3 Khoza “Employability: whose responsibility is it?” People Dynamics September 1995 pg 5.
7
The “Temporarisation” trend is certainly motivated by this reality, as employers are
destined to ensuring that they carry lower labour costs. This, of course does not go
without invading employees’ constitutionally entrenched labour relations liberties.
On 30 April 1998, the Greater Johannesburg Metropolitan Council (GJMC) and its
four Metropolitan Local Councils accepted an Executive Report from commissioned
consultants and a high-powered team of internal Organisational Transformation
experts on the need to restructure the organisation.
The report was entitled Organisation Design Executive Report and highlighted a
number of structural flaws that hamper service delivery to the various communities,
and Ratepayers within Greater Johannesburg. Essentially, the report recommended
large-scale transformation which also envisioned outsourcing and corporatisation of
specific functions.
The exercise culminated in iGoli 2002, a strategy that sought to achieve growth with
sustainability. Section 12 of the Municipal Structures Act 117 of 1998 provides for
the establishment of various categories of municipalities. The iGoli 2002 strategy
sought to disestablish the metropolitan local councils within Greater Johannesburg,
and establish a single metropole. In the words of Allan K et al in Johannesburg, an
African City in change:
“IGoli 2002 is essentially a three- year strategic plan. It involves the structural transformation of Metro functions …”4
In the case of iGoli, numerous attempts to engage labour proved futile, prompting a
firm and officially sanctioned decision by the Transformation Lekgotla (Team of
political decision-makers) to unilaterally implement the Restructuring Plan.
Makgane Thobejane, Labour Relations Specialist for the GJMC says the following:
“Traditionally, relations between employees and employer are staged, and they are always antagonistic and conflictual. Labour relations are not driven by trust … But
4 Allan et al Johannesburg an African City in Change pg 53.
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iGoli played open cards with labour. We offered the Ace at the start and said let’s work together on the basis of trust.”5
Labour law repercussions in this organisational review exercise emanated from the
fact that large-scale transfers of contracts of employment to the new privatized
entities infuriated labour. Consequently, a dispute was lodged with the Labour Cour t,
and will be referred to hereunder (under section 197 provisions).
The effect of external economic forces on corporations cannot be underestimated.
Apart from the common and inherent structural weaknesses in organizations, certain
economic realities could necessitate radical corporate changes the deliverables of
which might have a labour law tinge.
A few common examples are enumerated hereunder:
- Corporatisations
- Privatisations
- Mergers
- Corporate take-overs/acquisitions/”cannibalisations”
- Outsourcing
- Rightsizing/downsizing
- Management buy–outs
- Introduction of new technology
- Contracting-in
- Broadbending of structures
It is common for some organizations to react to external pressures by engaging in
restructuring exercises such as those enumerated above whether that will remedy
the organisational ills or not. Organisational changes such as these will invariably
impact on the workplace status and welfare of employees and need careful analysis
and evaluation prior to implementation.
5 Allan et al Johannesburg an African City in Change pg 165.
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Employee commitment will also be negatively impacted upon, obviously with grave
consequences for productivity and long-term survival of the organisation.
At this stage it is appropriate to contextualize the concept organisational
commitment. Organisational Commitment has over the years been one of the most
exciting issues for management specialists, practitioners and organisational
researchers. Many studies have identified an umbilical connection between
organisational commitment and workplace turnover (and job performance). There is
a strong contention that it is impossible or extremely difficult for employees to exhibit
organisational commitment during times of massive restructuring and re-engineering,
downsizing. The reasoning behind this contention is obvious.
Not all forms of commitment are associated with high job performance as will be
evidenced and elucidated hereunder. The three basic forms of organisational
commitment are:
- Affective commitment
- Continuance commitment, and
- Normative commitment
For any corporate entity to succeed it requires that all its employees are committed.
Organisations are quickly learning to reconcile themselves with the reality that
commitment is outcome of organisation strategy.
Affective commitment relates to a feeling of attachment to an organisation,
identification with it, loyalty towards it and a desire for affiliation with it. Continuance
commitment refers to a sense of being locked in because of the high costs of exiting
the organisation, especially in an environment of high unemployment.
Normative commitment is a felt moral duty or perceived obligation, rather than a
positive emotional attachment, and is more associated to an internalisation of the
organisation’s norms and values, acceptance of its goals and mission.
10
According to Tichy NM and Sherman S; Control Your Destiny or Someone Else Will,
(2, p 162) “as speed, quality and productivity become ever more important,
corporations need people who can instinctively act in the right way … that calls for
emotional commitment”.
It follows that, where there is no real organisational commitment, there is a higher
likelihood of employees committing infringements, which would have disciplinary
consequences. The relationship between organisation restructuring and
organisational commitment is, therefore, a positive and defined one. In other words,
organisational commitment is severely tested in times of restructuring.
3. DISCUSSION
3.1 Regulated flexibility and labour law
Some corporations and labour law commentators use labour market flexibility as an
advocacy tool to “overcome“ perceived “rigidities” allegedly created by labour
regulation in South Africa. A common argument is that the regulatory framework in
labour law exercises an impeding and negative effect on economic growth in
industries and corporations, big and small. Market flexibility in this case connotes the
desired freedom of organisations to restructure, and thereby contract or reduce their
staff complements or payrolls.
This paper argues that labour regulation is umbilically connected to labour market
outcomes and business/service delivery outcomes (including impacts). New
production methods, which are a product of business process re-engineering,
organisation restructuring and recreation interventions, are usually intended to be
“cost cutters”.
The provision of a degree of labour market security is seen in this context as a cost
carrier and an impediment to economic expansion in a qualitative sense. This,
therefore, advocates “market clearance” or deregulationism. A closer analysis of this
concept reveals that, what deregulationists are actually arguing for is; greater market
regulation and lesser labour regulation.
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The legal parameters in terms of section 189, LRA are relevant in this regard and this
paper further argues that retrenchees invariably become a burden of the state as
they increase unemployment figures.
Apart from contributing to a depressed economic environment, high unemployment
figures impact negatively on the sustainability of the Unemployment Insurance Fund
(UIF) and other unemployment protection mechanisms within the province of Social
Security Law. Clearly, in this context, deregulation or freedom to restructure
organisations at will and rudderlessly inevitably creates labour market pathologies.
Section 189(2) of the LRA provides that:
“(a) The consulting parties must attempt to reach consensus on appropriate measures: (i) To avoid dismissals, (ii) To minimise the number of dismissals, (iii) To change the timing of the dismissals, (iv) To mitigate the adverse effect of the dismissals, (v) To agree on the methods for selecting the employees to be dismissed,
(vi) To agree on the severance pay for the dismissed employees.”
Labour regulation as evidenced by above section (section 189(2) of the LRA) is
emphatically directed at obviating social ills from eventuating. For example, the need
for the negotiating parties to agree on alternative means to avoid dismissals, places
the employee party in a position to challenge the merits and demerits of impending
staff reductions through or during prior consultation as regulated by section 189(1) of
the LRA. Clearly, where restructuring would give rise to unemployment, the courts
take the view that it is incumbent upon the employer party to assist potential
retrenches in every possible way to alleviate the consequences of joblessness.
Dismissals for operational requirements are commonly known as “no fault“
dismissals. It is inevitable that, by nature, dismissals lead to unemployment.
Unemployment is a major problem in South Africa and this impacts on the ability of
the State to derive revenue from employment taxation. The level of unemployment in
a country is usually called the unemployment rate.
12
Simply defined, this means:
“The number of unemployed persons expressed as a percentage (%) of the labour force in a country.”
Unemployment itself is the “involuntary idleness of a person willing to work at the
prevailing rate of pay but unable to find employment”. Full employment does not
mean Zero Employment, because this is practically unattainable. It is for this reason
that labour economists speak of full employment rate of unemployment.
This is defined as:
“The lowest unemployment rate consistent with a stable price level, or a constant inflation rate.”
The following types of unemployment can, therefore, be identified:
(a) Frictional unemployment
This type of unemployment is associated with the normal turnover of labour. People
leave jobs for all sorts of reasons, and whilst they are endeavouring to find new jobs,
they are frictionally unemployed.
(b) Structural unemployment
This refers to technology-driven changes in the composition of final demands for
goods and services. When the economy experiences structural change, some jobs
are destroyed and new ones created.
(c) Deficient-demand unemployment
This happens when there is an insufficient total demand to purchase all of the output
that could be produced by a fully employed labour force.
The demand for labour falls and thus unemployment increases.
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(d) Real-wage unemployment
This is known as classical unemployment, and is caused by the inflexibility of the
labour price, i.e. supply will be greater than the demand for labour, resulting in
unemployment as the price of labour is resistant to adjustment.
(e) Cyclical unemployment
This type of unemployment is usually caused by trade fluctuations, the booms and
slumps through which the economic system passes from time to time.
3.2 Labour force displacement
The labour force is a major component of the population of any economy and being
one of the four main factors of production, has quite a substantial effect on an
economic system’s performance.
South Africa’s productivity figures at present are amongst the lowest for the
developing countries, which causes grave problems for organizations if they hope to
be efficient and successful in their operations. Real economic growth is the main
economic aim of any government, and this results in improved living standards. It
follows that the desire for improved or higher living standards is actually a desire for
increased real income. The standard of living in a country is measured in terms of
average income per head of population (per capita).
Logically-speaking, therefore, full employment serves to ensure higher living
standards.
However, full employment is a relative term since there will always be permanently
unemployed people.
14
With regard to dismissals, they are not automatically unfair if based on operational
reasons.6 However, it can be argued that dismissals for operational requirements
have the effect of displacing labour, and increase unemployment.
The Code of Good Practice: Dismissals Based on Operational Reasons (Schedule 8)
LRA, lists three legally acceptable circumstances namely:
- economic,
- technological and
- structural.
The Code merely serves as a guiding framework for both employers and their
employees.
However, nothing stops the parties from exploring and implementing other creative
and constructive methods or formulae in dealing with potential retrenchments and
redundancies. Where technological reasons are advanced for organizational
restructuring, the displacement of labour by technology or machinery could translate
into one or all of the following:
(i) Increased unemployment.
(ii) Unsatisfactory quality of machine- made goods.
(iii) Disappearance of a skilled workforce.
Economy-driven “no fault” dismissals provide a more interesting debate. It is not
uncommon for employers to dismiss the workforce for operational reasons, but
subsequently hire contract labour on fixed-term contracts immediately thereafter. “No
fault“ dismissals, although not automatically unfair, are legally challengable in the
event where the employer fails to comply with procedural steps as regulated by
section 189 of the LRA.
6 Schedule 8 Item 2(4) Code of Good Practice: Dismissals based on Operational Requirements.
15
Specifically, section 189(3) provides that the employer party
“must disclose in writing to the other consulting party all relevant information, including, but not limited to - (a) The reason for the 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) … (e) … (f) … (g) … (h) The possibility of future re-employment of the employees who are dismissed.”
In this regard the point is now made that “relevant information“ is an open term, and
might not carry the same meaning to labour and management. At the same time, it is
important to note that the term must is peremptory, and not merely directive. The
other consulting party could be a union or unions or individual employees.
According to Grogan,7 consultation does not carry the same meaning as joint
decision-making or collective bargaining.
In terms of this meaning, consultation requires the employer to:
“Entertain and bona fide to consider suggestions from the employees or their representatives, negotiation requiring the parties to compromise in an effort to reach agreement.”8
The timing of consultation is specified by the Act in that it must commence when an
employer contemplates dismissing one or more employees.
3.3 Restructuring and fixed-term contracts
The increasing utilisation or engagement of the so-called contract and seasonal
employees warrants critical analysis in the context of dismissals for operational
reasons. This practice has become commonplace in South Africa and many
7 Workplace Law 6th ed (2000). 8 Grogan Workplace Law Chapter 13 pages 189-190.
16
employers see it as a cost-cutter, in that lesser benefits usually accrue to non-
permanent employees.
Furthermore, to cover themselves against specific labour law consequences of
indefinitely utilising non-permanent employees, it is typical of employers to put such
workforce on fixed-term contracts. These are contracts with a specific start date, and
a definite expiry date. This is commonly known as “casualisation” or
“temporarisation”. The question must, therefore, be asked as to whether casuals and
“temps“ must be put by their employers through training programmes in terms of the
Skills Development Act, Act 97 of 1998. It is obvious that the labour law rights of
contract employees under fixed- term contract arrangements deserve closer scrutiny.
With regard to the termination of fixed-term contracts, section 186(b) of the LRA
provides that:
“an employee reasonably expected the employer to renew a fixed-term contract of employment on the same or similar terms but the employer offered to renew it on less favourable terms, or did not renew it.”9
Applicable notice periods in this regard are regulated by section 37 of the Basic
Conditions of Employment Act 75 of 1997. It is not uncommon for such contracts to
be terminated unprocedurally. In the event where proper procedure was not followed
by the employer, the affected contract workforce have recourse to the Statutory or
Private Dispute Resolution Organs or the Labour Court.
The party initiating the termination must show good cause in advance otherwise the
aggrieved party may claim unfair dismissal. In the Bottger case,10 the contract was
terminated before the date of expiration and the employee claimed unfair dismissal.
An employer who has dismissed workers for operational reasons will have acted in
contravention of the law if the same employer engages the services of a contract
workforce immediately after the “no fault” dismissals.
9 s 186(6) of the LRA. 10 Bottger v Ben Nomoyi & Video CC (1997) 5 BLLR 621 (CCMA).
17
That would be the case, especially if the contract workforce is hired on a fixed-term
basis with less material benefits than the dismissed permanent employees.
Sometimes, unscrupulous employers even contract-in the services of an independent
contractor.
Such employer practices are quite possible in the labour law discipline. In such an
eventuality, the question is; would the dismissed employees be entitled to claim
wrongful dismissal and then litigate for either reinstatement or compensation?
In the contrary, does the struggling employer not have a right or self-imposed duty to
safeguard his or her business against the unintended consequences of a depressed
economy? Obviously, striking an acceptable balance between the needs of the
employees and those of employers is a delicate business indeed. It is this kind of
balance that poses major challenges to the creativity of both labour and capital. It
can be argued that “temporarisation” of the workforce is a natural consequence of
organisational changes within a globalization context.
In terms of the ILO Reports: 1992, 1993 there is an exponential increase in the
number of part-time employees the world over, the majority of which is women.
Arguably, a possible labour law rationale hereof, as far as employers are concerned,
is to be able to “manage” the financial consequences of women employees going on
maternity leave. Again, this seems tantamount to unfair discrimination, and
therefore, remains legally contestable or challengeable.
The sensitive issue relating to benefit differentials in the part-time or temporary
employment categories is well documented and has been strongly criticized by
labour law analysts and labour economists alike. Most employees in these
employment categories are without basic employment benefits such as housing
assistance or subsidies, medical aid, pension, provident and death insurance and
education subsidy. Again, this demonstrates the acuteness of the phenomenon of
underemployment or poor wh ilst employed.
Social security consequences in this regard are beyond the question. Advanced
corporate entities have and continue to display a propensity towards favouring
18
temporary employment arrangements under the guise of creating the so-called
“virtual or weightless organisations”. To these organisations, this trend “justifies” the
quest towards global competitiveness and radically reduced labour costs.
4. STATUTORY PROVISIONS
4.1 Statutory provisions and restructuring
Section 79 of the LRA makes provision for the establishment of workplace forums.
The section details both categories of employees, and the formulae, and it is further
provided that such forums are not in any way to be regarded as replacing trade
unions. Specifically, section 79 states that:
“A workplace forum established in terms of this Chapter - (a) must seek to promote the interests of all employees in the workplace whether or
not they are trade union members; (b) must seek to enhance efficiency in the workplace;
(c) is entitled to be consulted by the employer, with a view to reaching consensus,
about the matters referred to in section 84; and (d) is entitled to participate in joint decision- making about the referred to in section
86.”11
In terms of section 84 of the LRA, organisation restructuring and changes to
technology are some of the issues over which an employer must consult with a
workplace forum, unless the matter is regulated by a collective agreement. In the
past, the issues listed under section 84 were known as “employer prerogatives”.
Furthermore, section 85(2) provides that the employer must afford the workplace
forum an opportunity to:
“make representations and to advance alternative proposals.”
In this regard it is important to note that consultation is not synonymous with
negotiating or joint decision-making.
11 s 79 of the LRA.
19
The Public Service Regulations, 2001, (G.4), as contained in the Public Service Act
103 of 1994 provide as follows:
“(G.4.1) An executing authority may discharge employees for operational reasons if the discharge complies with – (a) sections 17(2)(b) and (c) of the Act and sections 189 and 190 of the Labour
Relations Act; and (b) any applicable collective agreement that determines benefits for employees to be
so discharged.”
There is a clear reference here to the need to consult.
4.2 Case law
The Constitutional Court case of eight foreign educators who challenged the Member
of the Executive Council (North-West Province) and the National Minister of
Education for refusing to renew their employment contracts presents interesting
insights and perspectives.12
This was a case of restructuring and rationalisation of TBVC, provincial and the
national education departments which resulted in redundancies. The matter was
heard on 27 May 1997 in the Constitutional Court, and Mokgoro J critically examined
the constitutionality of regulation 2(2) of the Regulations regarding the Terms and
Conditions of Employment of Educators contained in Government 16814 GN R1743
of November 1995. The eight appellants, all highly qualified, argued that regulation
2(2) was unconstitutional in terms of section 8(2) of the Constitution of South Africa
Act, Act 200 of 1993 (Interim Constitution) .
Regulation 2(2) provides that:
“no person shall be appointed as an educator in a permanent capacity, unless he or she is a South African citizen and meets the requirements of section 212(4) of the interim Constitution.”
12 Larbi-Ordam & Others v Member of the Executive Council for Education & Another 1996 (12)
BCLR 1612 (B).
20
In contrast, regulation 5(1) provides:
“Whenever a post becomes vacant, any educator may, notwithstanding anything to the contrary contained in these Regulations, with his or her consent, be appointed in a permanent capacity by the employer to such vacant post.”
Initially, the appellants appeared before Waddington J in the Appeal Court where the
finding was in favour of the education department. The rationalisation process in this
case was such that fifteen (15) education departments were transformed into one (1)
national department and nine (9) provincial departments. The education department
argued that a government was justified in providing employment to its own nationals.
The respondent further relied on the fact that the regulation in question was
negotiated at the bargaining council for educators where the applicants were
represented.
Finally, the argument continued that section 33(1), the limitations clause of the
interim Constitution13 served to justify unfair discrimination (if any) brought about by
regulation 2(2) above. On the contrary, the applicants argued that regulation 2(2)
was invalid because of its inconsistency with section 8(2) of the interim Constitution
of the Republic of South Africa. A further argument was that the regulation in
question was ultra vires, its enabling legislation being the Educator’s Employment Act
138 of 1994.
The finding of Mokgoro J was that all eight appellants are individuals who have
successfully obtained constitutional relief against an organ of state.
The appeal, therefore, succeeded with costs, and the judge held that regulation 2(2)
was invalid.14 The judgement of Waddington J in the court a quo was, therefore, set
aside. This particular case illustrates that decisions of a labour law nature originating
from rationalisation and restructuring may be referred to the Constitutional Court for a
final determination.
13 s 33(1) of the Interim Constitution of the Republic of South Africa Act 200 of 1993. 14 Larbi-Ordam & Others v Member of the Executive Council for Education & Another (CC) 1997-
05-27 Case No CCT 2/97.
21
Restructuring in response to recession and technological developments is
commonplace throughout the world.
In Wren v Eastbourne Borough Council,15 the Employment Appeal Tribunal held that
the transfer of refuse collection services from a local authority to an outside
contractor constituted a transfer of an undertaking within the meaning of the
regulations. Similarly, in Porter v Queens Medical Centre,16 two district authorities
made new arrangements for the supply of paediatric services. They terminated their
contracts with one hospital and contracted instead with an NHS Trust. The High
Court held that there was a transfer of an undertaking within the meaning of the
regulations.
Dismissals for operational reasons, therefore, must still be for a fair reason.
Grogan J agrees with this position:
“It must be added that retrenchment will not be fair where the employer seeks to achieve impermissible ends, such as ridding itself of trade union members or some other reason, even if such dismissal will, objectively speaking, have a favourable economic effect.”17
The right of an employee not to be unfairly dismissed is entrenched in terms of
section 85 of the LRA.
In Chemical Workers Industrial Union v Sopelog CC,18 the court held that:
“It is wrong or unfair for management unilaterally to conclude that, in the circumstances in which the employer finds itself, retrenchment is prima facie called for, that it may even decide, in principle, that retrenchment is, in all probability, the course of action it will adopt, unless the workforce is able, subsequently, to persuade it that there are other viable and acceptable alternatives to retrenchment available.”
In Hlongwane & Another v Plastix (Pty) Ltd 19 the court distinguished between
15 [1993] IRLR 425. 16 [1993] IRLR 486 (QBD). 17 Grogan Workplace Law at 22. 18 (1994) 15 ILJ 90 (LC) at 104 A-B. 19 (1990) 11 ILJ 171 (IC).
22
economy-driven and technology-driven no-fault dismissals. In the former case the
dismissal is of a temporary nature since a seasonal economic downturn is the cause.
But in the latter instance, the dismissal is of a permanent nature as the introduction of
new technology rendered the employees redundant.
4.3 Remedies for unfair “no-fault” dismissals
It is a matter worth interrogating whether alleged unfair dismissal on the basis of
operational reasons creates a title of reinstatement or any other form of
compensation.
In Gumede and Others v Richdens (Pty) Ltd t/a Richdens Foodliner,20 four
employees were dismissed as a result of workplace re-organisation or restructuring,
and were replaced.
The facts are such that, as a result of a visit by a trade union organiser and a
subsequent meeting, the first and second applicants enrolled about twenty of
Richden’s employees for the union. The other two applicants were already union
members.
Their application for temporary reinstatement was in terms of section 43 of the
Labour Relations Act 28 of 1956. They alleged that their retrenchment took place
because of their involvement in the union. The managing director of Richdens
alleged that in the delicatessen department certain personnel lacked the necessary
skills to perform their duties, hence people with better skills had to be appointed.
The applicants were never reprimanded for poor performance, but were dismissed as
their services were no longer required. In this case the court had to determine the
following:
- whether the applicants had prima facie established a title of the reinstatement;
20 (1984) 5 ILJ 84 (IC).
23
- whether a well-grounded apprehension of irreparable injury was conceivable;
- whether any other remedy was available; and
- whether on the balance of convenience that prejudice to the applicants would
outweigh the prejudice to the respondent.
Based on the court’s examination of each of these issues, it came to the conclusion
that reinstatement in terms of section 43(4)(b)(i) of the applicable Act was
appropriate. Furthermore, the court recommended that conciliation be pursued in the
light of the fact that relations between the parties did not seem irreparable nor hostile.
The decision of the court in this case is supported , as it confirms the principle that an
employee who plans to retrench employees but has no established procedures
should apply recognised retrenchment principles if he or she desires to avoid the
allegation that he or she has acted unfairly, particularly if the circumstances around
the retrenchment might evoke such suspicion.
Sections 193, 194 and 195 of the LRA21 regulate extensively on compensation.
Section 193 provides that:
“(1) If the Labour Court or an arbitrator appointed in terms of this Act finds that a dismissal is unfair, the Court or arbitrator may - (a) order that the employer to reinstate the employee from any date not earlier
than the date of dismissal; (b) order the employer to re-employ the employee, either in the work in which
the employee was employed before the dismissal or in other reasonably suitable work on any terms and from any date not earlier than the date of dismissal; or
(c) order the employer to pay compensation to the employee. (2) The Labour Court or arbitrator must … (3) If a dismissal is automatically unfair or, if a dismissal based on the employer’s
operational requirements is found to be unfair, the Labour Court in addition may make any other order that it considers appropriate in the circumstances.”
21 Act 66 of 1995.
24
In terms of section 193(1)(a)(b)(c), the Labour Court or an arbitrator are vested with
powers to order reinstatement of the employee, or re-employment of the employee or
that he or she be paid compensation as determined by the court or arbitrator.
In the event where the employee does not wish to be reinstated or relations are
damaged irreparably or it is impractical to reinstate or re-employ the employee, then
it would not be required that reinstatement or re-employment be pursued. Similarly,
in the case of procedural unfairness, the employer would be exempted from
reinstating or re-employing the employee. Where the dismissal is either
automatically unfair or is based on the employer’s operational requirements, the
discretion to make a determination or order rests with the court.
Section 194 of the LRA provides that:
“(1) If a dismissal is unfair only because did not follow a fair procedure, compensation must be equal to the remuneration at that the employee would have been paid between the date of dismissal and the last day of the hearing of the arbitration or adjudication, … Compensation may however not be awarded in respect of any unreasonable period of delay …
(2) The compensation … (3) The compensation awarded to an employee whose dismissal is automatically
unfair must be just and equitable …, but not more than 24 months’ remuneration …”
5. ARGUMENT
5.1 Legislative lacunae in retrenchment disputes
With regard to consultations with minority unions, there is ample evidence of lacunae
in labour law. Firstly, the general approach as regulated by the LRA is to favour
majoritarianism. A closer scrutiny of section 189(1) reveals that there is,
unfortunately, an order of preference displayed:
“any registered trade union …, section 189(1)(c ) and the use of the words; … if there is no … in section 189(1).”
At the same time, section 189(1)(a) does not refer to any representivity requirements
for collective agreements involved.
25
A logical suggestion, therefore, is that the order of preference interpretation is
questionable. In the event where a collective agreement has been extended to non-
members and section 23(1)(d) requirements have been met, there is no doubt that all
persons referred to in the agreement are bound, and that consultation with minority
unions can be excluded. It is submitted that such a situation is untenable, as the
principle of majoritanianism might not necessarily deliver sound outcomes or
decisions.
It is submitted that the LRA should, preferably, cover all affected employees, whether
unionised or not, including all minority unions.
Therefore, section 189(1) does not cover everything, as per Brassey’s contention in
Sikhosana & Others v Sasol Synthetic Fuels.22 This approach seems logical.
The lack of consultation opportunities seem to represent a drastic limitation on the
right to fair labour practices.
Further gaps pertain to the fact there is no employee reskilling provision in section
189, specifically. Although the purpose of the section is to regulate the process of
administering “no-fault” dismissals within a legal framework of substantive and
procedural fairness, this specific shortcoming is regretted. Retrenchees could simply
be forced to face an uncertain future without requisite skills, after having served an
employer for many years, honestly and diligently. Such a situation, also, seems
untenable for lack of fairness and justice. Ideally, the duty of a caring employer
should go beyond the retrenchment phase.
Furthermore, nothing prevents a company to retrench employees, not due to
economic tribulations, but because the enterprise intends making huge profits in
order to project a positive image to its shareholders. This intention could even be
disguised even though disclosure of information has taken place. The mere technical
nature of the information could confuse labour representatives and employees.
22 (2000) 21 ILJ 649 ( LC ).
26
It is argued here that this actually happens in practice.
Section 197 also has some shortcomings in the sense, that after employees have
been transferred to a new employer on terms and conditions of employment that are
not less favourable, nothing stops the new employer from negotiating new terms and
conditions that are far less favourable than the original terms and conditions. The
new employer could simply cite business exigencies to persuade the employees to
either accept the new terms or face retrenchment. This paper argues that, if that
happens, then it would be a case of indirect retrenchment, that is, the original
employer has actually retrenched the employees, albeit indirectly.
5.2 Implications for social security law
There is a strong and positive connection between retrenchments and a country’s
social security law obligations.
South Africa as a developing country, in an economic sense, has acute
unemployment problems. Apart from being effected by a depressed economy, these
are also consequences of both natural attrition and retrenchments as a result of
organisation restructuring.
The exponential increase in the number of refugees entering the country aggravates
an already colossal problem.
The Social Plan, adopted by the government, arguably, continues to be seriously
threatened.
The Constitution of the Republic of South Africa provides that:
“(1) Everyone has a right to have access to- (a) health care services, including reproductive health care; (b) sufficient food and water; and
27
(c) social security, including, if they are unable to support themselves and their dependants, appropriate social assistance.
(2) The state must take reasonable legislative and other measures within available
resources, to achieve the progressive realisation of each of these rights. (3) No one may be refused emergency medical treatment.”23
It is an incontrovertible fact that the objective of government in capitalist states is to
reduce unemployment, control inflation, remove the balance of payment deficits and
bring about economic growth. In order to achieve this objective, government
implements fiscal policy, which concerns taxation and budgetary considerations, and
monetary policy namely; that which concerns regulation of money in circulation in an
economy. Economic growth is vital in developing countries if the rapid population
growth is to be accommodated, and unemployment contained to acceptable levels.
However, the very policies which stimulate economic growth may fuel inflation, which
in turn may inhibit economic growth and bring about a recession.
It is, therefore, safe to say that economic policy and practice impinge directly on
labour law practices. As has been indicated in the aforegoing, South Africa is part of
the world economy. International pressures also have a considerable impact on
economic growth the country. The impact of technological change on society, and its
implications for labour law, is widely debated.
Private sector corporations, continually strive to reduce costs, and could be said to
share common intentions with governments in market driven economies and states.
For some time now, and still within the context of globalization, organized labour has
been focussing on the “perceived” effects of the common drive towards global
competitiveness.
The pessimistic position views technological change as leading to unemployment
due to direct replacement of labour by robotics and other computerised systems.
A concern that continues to be strongly vocalised is that there seems to be a drastic
fall in formal employment and a deliberate or engineered casualisation trend,
23 The Constitution of the Republic of South Africa Act 108 of 1996.
28
throughout the world. In some cases, co-optation of the workforce and its leaders is
suspected. Numerous labour relations experts and environmentalists around the
globe echo this sentiment.
In contrast, the President of Mexico, His Excellency Mr Ernesto Zedillo, speaking at
the Davos conference during the year two thousand, averred that the connection
between economic growth and the liberalisation of economies is a positive one. In
this regard, he fully supports the globalization quoting the lack of any viable
alternatives. Recently, a report has called for the restructuring of both the World
Bank and the International Monetary Fund (IMF).
Little doubt, therefore, exists that the basis of such advocacy is to ensure that the
operations and strategic focus of these bodies are concordant with global economic
and social changes. In addition, the report also recommended a “restriction of IMF
loans to countries experiencing short-term liquidity problems”. It is such realities that
ultimately add a further impetus to the need to ongoing restructure and readapt
organisations to better respond to socio-economic challenges.
The argument is now advanced, that such “strategic” options or alternatives cannot
be pursued without confronting the global reality of rising joblessness in so far as this
phenomenon impacts profoundly on social and political stability.
I agree fully with Anstey M, who is of the view, quite correctly that without
employment labour rights, trade unions and collective bargaining have no
foundations.
Labour, therefore, tend to lose its leverage in centralised bargaining. It is appropriate
to mention that even the ILO has supported the position adopted by organized labour
and various economic commentators that, the processes of globalization and
privatization are the two major contributors to unemployment.
Considering the veracity of projections that global unemployment trends are set to
grow over time, then it appears accurate to surmise that rapid population growth will
further aggravate the situation. It is inevitable that mass unemployment will also lead
29
to the demise of social security structures and systems in any country. Indeed, the
labour law implications hereof are frightening. Given such volatility, it would be
extremely difficult for employers to implement constitutionally entrenched labour law
obligations.
According to the Human Development Index (HDI) 1993, a decrease in the industrial
employment profile has consistently been countered by an increase in the services
employment sector. This is a further emphatic indicator that numerically, the manual
labour category has always been a casualty of restructuring. I make the point that
this need not be the case. If sorely needed jobs continue to be haemorraged out of
the system at the current rate, then the signs spell social disaster. For example, over
500 000 jobs in South Africa were lost since 1994.
Monden (1993), on the Toyota Production System, highlights the eventuality of
organisation restructuring
“Even during periods of slow growth, the Toyota production system could make a profit by decreasing costs in a unique manner - that is by completely eliminating excessive inventory.”
With respect, this viewpoint does not consider the equally costly ripple effects of
liquidating jobs, especially if substantive and procedural unfairness can be proved.
5.3 Amendments to section 189 of the LRA
Amendments to section 189 of the LRA were effected in terms of Government
Gazette Number 21407 of 27 July 2000.
The amendments recommend the appointment of a facilitator for dismissals based on
operational reasons.
Section 42(2) provides that:
“The Commission must appoint a facilitator to assist the consulting parties in any consultation in terms of section 189 in respect of a dismissal contemplated by subsection (1), unless the consulting parties have agreed in writing to appoint a
30
facilitator or that they will conduct the consultations without the assistance of a facilitator.”
Whilst this amendment is welcome, a major shortcoming is with regard to the fact that
the parties could still agree to continue without a facilitator. It is submitted here that,
facilitation is necessary, therefore, the section should leave no option in this regard.
This is particularly relevant in cases where there is a history of adversarialism
between the parties. The intention is not to undermine the ability of the parties to
resolve retrenchment related issues.
Section 9 of the amendment imposes certain limitations on the facilitator in the
execution of his or her duties, and this is appropriate as it protects parties and
bestows credibility on the process.
5.4 Restructuring and Transnational Corporations
Multinationals or Transnational Corporations (TNCs) may be broadly defined as
companies which have direct investments in foreign countries. Investments are
usually in the form of affiliates or subsidiaries. The nature of the investment is
usually direct than portfolio, as portfolio investment refers to the buying of shares in
companies situated in foreign countries. Such an arrangement does not normally
lead to the control of the companies.
Direct investment, on the other hand, implies that the transnational corporation, as
the parent company, has control over the foreign company. Despite such control, it
may not necessarily mean that the transnational corporation or multinational has
complete ownership over the foreign-based subsidiaries. It is also common cause
that multinationals have to operate within the constitutional and labour legislative
framework of the host countries. Regardless thereof, multinationals will always
exercise some form of control over the subsidiaries, and may even communicate
executive directives as to when, why and whom to retrench as a result of a major
restructuring exercise.
31
Globalization has, over the years, given rise to TNCs, signalling the end of the
concept of “traditional national corporations”. A clear demonstration of the exercise
of TNC executive prerogatives can be seen in Mzeku case24 when the local
management of Volkswagen SA were given instructions by the parent company in
Germany to dismiss the striking workers in the Uitenhage plant.
It is common practice with all TNCs to always strive to improve profit margins and to
discontinue all non-value adding operations. Labour movements are increasingly
becoming hostile to TNCs, but they (labour) are in a far weaker position to wage a
formidable challenge. This is due to the immense financial and other resources that
TNCs command. The international character of TNCs also make it quite easy for
them to wage the so-called “investment wars or strikes”. The reason for that is the
mobility of capital, whilst labour is not a mobile commodity.
In Jacobs C v Air Express International SA (Pty) Ltd,25 the South African-based
company was instructed by the American-based parent company to restructure its
operations and retrench local employees due to poor performance in the South
African operations. In this particular case, heard on 7 and 8 August 2000 in the
Labour Court in Johannesburg, Mpofu J held that the retrenchment of the applicant
was substantively fair.
Although the Judge found that the consultation shortcomings of the respondent
militated against the spirit of section 189 of the LRA, the efforts of the latter were
genuine with regard to avoiding retrenchment. This was by way of offering the
applicant a lower salary, more than once.
A developing labour law trend among TNCs favours towards individual employee
relations and “movement” away from collective bargaining. Technically, this implies
that TNCs are able to reduce wages drastically in their foreign-based subsidiaries.
One way of doing this is by either offering a lower restructuring-driven wage, and
retrench those who refuse the offer. This paper argues that such a practice is not
fair, and is tantamount to capitalising on the vulnerability of employees.
24 Mzeku & Others v Volkswagen of South Africa (Pty) Ltd & Others Case No PA 3/01 (LAC). 25 (2000) Case Number J2888/99 (LC).
32
The pertinent point made here is that the performance culture in an organisation is a
function of how people and other resources in that organisation are managed and
deployed. In an attempt to overcome this problem, the ILO (in 1977) adopted the
Tripartite Declaration of Principles Concerning Multinational Enterprises.
Granted that the success rate of this monitoring mechanism is not high, it
nevertheless succeeds in offering a certain level of employee protection.
A major predicament in this regard relates to standardised implementation. Driven
by global competition, it must be accepted that TNCs will continue to restructure their
operations, dismiss employees for operational reasons, and even engage in “price
wars”. It might not be possible to prevent such actions, but it is ideal to do so.
5.5 The essence of section 189 of the LRA
The provisions of section 189 of the LRA seem to have some similarities with those
contained in the ILO Termination of Employment Convention number 158 of 1982,
and the European Community Directive on Collective Redundancies. Sometimes, as
controversial is this may sound, a dismissal can be fair even if section 189 has not
been entirely complied with. In other words, mere non-compliance will not
necessarily invalidate a dismissal. Equally so, due compliance is not necessarily a
pre-condition for a fair dismissal.26
The discretion to determine whether a dismissal is fair or not rests with the court.
This is confirmed in decisions in Moloi v Avipvint Consulting CC t/a Sir Speedy
Instant Print,27 and Elias v Germiston Uitgewers ( Pty ) Ltd t/a Evalulab.28 In
Johnson & Johnson ( Pty ) Ltd v CWIU,29 Froneman DPJ said the following:
“… In testing compliance with its provisions (section 189) by determining whether the purpose of a joint consensus-seeking process has been achieved or frustrated, a finding of non-compliance by the employer will almost invariably result also in the
26 Brassey Employment Law Volume 3 at A8:42. 27 (1998) BLLR 147 (LC). 28 (1997) 18 ILJ 1346 (LC). 29 (1999) 20 ILJ 89 (LAC) at 97 B - E (par 31).
33
dismissal being unfair for failure to follow a proper procedure. It is difficult to envisage a situation where the result would be different.”
This is a case in which seventeen women employees in the East London plant of
Johnson and Johnson were retrenched due to inroads that were made by a
competitor to the business of the company. The employer approached the union to
inform them that retrenchments were anticipated. The union did not dispute the
figures tabled by the employer, but was of the view that retrenchments were not
warranted. When the employer continued with the retrenchments the union declared
a dispute. When conciliation failed, the matter was referred to the Labour Court for
adjudication.
In the Labour Court judgement, Zondo J found that the appellant did not consult with
the union on the method of selecting employees to be dismissed, and the severance
pay for the dismissed employees. Furthermore, Zondo J found that the commercial
rationale for the retrenchments had been established, but that fair procedure was not
followed. On that basis an order of compensation was made in favour of the
dismissed employees.
In his Labour Appeal Court judgement, concurred with by Myburgh JP and Cameron
JA, Froneman DJP found that appellant did make good its failure to consult barely
four days after communicating to the union its decision to retrench the employees.
The judge was of the view that compensation should not have been awarded,
because that would be to reward the employees for their unreasonable obstinacy, as
they had earlier refused to discuss issues except the need to retrench. According to
Froneman DJP, section 194 of the LRA “deals with how compensation must be
calculated in different circumstances, not when and why compensation must be
awarded”.
Furthermore, the judge held that “compensation need not necessarily be awarded
upon a finding of a procedurally unfair dismissal; another option is to grant
consequential relief”. As a result, the appeal was upheld with costs.
34
From a labour law point of view, therefore, the interpretation of section 189 of the
LRA is a contentious issue. This is further exacerbated by the insistence of labour on
negotiations rather than consultation. The tendency on the part of labour is to “read
negotiations into” the term consultation. There is a concern that the meaning of
consultation is open to different and competing interpretations.
Nevertheless, in the Johnson & Johnson case it would appear that the union was
merely invited to “assist in deciding the criteria to be followed in selecting the
retrenchees”. It is clear that the decision to retrench had already been taken by the
employer, and that consultation would not alter the position.
For that reason, the meaning attached to the term consultation is problematic. For
instance, when the employer party approached the union it indicated that
retrenchments are anticipated, not that they should critically interrogate the problems
affecting the company. It is submitted that there was no open-mindedness on he part
of the company. Likewise, this paper argues that the union was unreasonable in
their failure to advance viable alternatives when there was an opportunity to do so.
Such failure operated to mitigate the earlier failure on the part of the employer. The
judgement of Froneman DJP is, therefore, endorsed.
Judgements in Alpha Plant & Services ( Pty ) Ltd v Simmonds & Others,30 and Baloyi
v M & P Manufacturing31 may represent a return to the view that fairness is
equivalent to strict adherence to the wording of section 189. In both these cases, the
Labour Appeal Court moved to determining damages after determining non-
compliance with employer duties stated in the said section without a further
investigation of the fairness aspect in the retrenchments.
Brassey’s view in the Sikhosana case that “compliance or non-compliance with the
letter of section 189 does not necessarily result in fair or unfair dismissal,32 is further
expressed by the Court in Fernandes v H M Leibowitz (Pty) Ltd t/a The Auto
30 (2001) 22 ILJ 389 (LAC). 31 (2001) ILJ 391 (LAC). 32 IMATU & Others v Greater Johannesburg Metropolitan Council & Others (2000) Case Number J
3150/2000 (LC).
35
Industrial Centre Group of Companies.33 Failure to comply with employer duties
should be understood in the context of circumstances under which the retrenchments
take place. Although simple non-compliance will usually result in a finding of
procedural unfairness, as in the judgement of Zondo J in the Johnson & Johnson
case, the employer’s primary obligation to consult is counter-balanced by the union’s
corresponding duty to respond within a reasonable timeframe to the “overtures”
made by the other party. Unfortunately, section 189 fails to regulate with precision
on timeframes. The section merely seems to imply that parties must be allowed
reasonable time to consider proposals and counter-proposals period.
According to Brassey M, therefore, the underlying principle in no-fault dismissals is
that employers must be allowed the liberty to react to circumstances, respond to
developments and make innovations if the enterprise is to remain competitive and
prosper. Once employees become redundant, the employer has no contractual
obligation to keep them on the payroll. This is so “even if the enterprise is still
profitable, or a division in which the employees work is still profitable”, as was the
case in Keil case v Foodgro.34 In this case, Foodgro, a division of Leisurenet Ltd,
was still prospering at the time that Leisurenet was going through hard times.
The judge held that, success in one division of an ailing business enterprise does not
bar the employer from retrenching employees in order to save the entire business.
Therefore, the employees were retrenched accordingly. Admittedly, with the
provisions contained in section 189 of the LRA, the legislature is attempting to
minimize the effect of the hardship on affected employees. In this regard, and for
that reason, employers are expected to advance clear and acceptable reasons for
the dismissals.
Furthermore, the means to achieve such objectives must be fair. It is submitted that
this position is correct, and cannot be faulted. However, the catch is with regard to
consultation, as understood by the parties in retrenchment disputes.
33 (2000) 22 ILJ 153 (LC). 34 (1999) 4 BLLR 345 (LC).
36
On the issue of adversarialism, it is not difficult to understand the underlying reasons
for the traditionally contrasted positions adopted by negotiating parties, in view of the
culture of bargaining we have inherited in South Africa, as well as in other parts of
the world. This paper takes the position that, adversarialism must be discouraged at
all costs, and a new culture of principled conflict resolution embraced. The proposed
amendments to section 189 of the LRA are welcome in this regard.
5.6 Section 16 of the LRA
Proper consultation forms a solid basis as far pre-dismissal procedures are
concerned, and the basis of consultation is disclosure of information. Unfortunately,
it was indicated in the preceding section that, even consultations could be a mere
formality as the decision to dismiss could have been taken already. This is precisely
the issue that labour finds contentious.
The advantages of proper pre-dismissal consultation are two- fold, namely that:
(a) All views will be canvassed, leading to the adoption of an incontestable decision
around restructuring, even if retrenchments are to proceed.
The retrenchment deal could have elements of empowerment for the
retrenchees in that they could be assisted in becoming entrepreneurs who
assist the government’s job creation programmes.
(b) Secondly, adversarialism and the potential of disputes being lodged after
retrenchments are finalized could be obviated, due to common ground having
been found between the parties.
It is strongly submitted that disclosure of information in terms of section 16 of the LRA
is extremely important for ensuring that the best alternative is mutually agreed upon.
Relevance of information, it is noted, is a critical and contentious issue during
consultation. The question is an open one in that, it is not clear whether the
emphasis is on the quality or quantity of information.
37
The exception with regard to disclosure is in terms of subsection (5) of the same
section. Possibly, the intention of the legislator here is to protect the interests of the
employer party for obvious business intelligence reasons, and that is understandable.
At the same time, the disclosed information should be such that in enables the
parties to make intelligent decisions. Suspicion on the part of labour could be a
factor around this particular aspect during the consultation process.
Nevertheless, this it is argued here that strict compliance with the provisions of this
section is critical to ensure success during the consultation phase.
5.7 Section 197 transfers
Restructuring may often lead to the selling of a business enterprise in the case of
private sector organisations. The common law position regulating the transfer of a
business enterprise to a potential purchaser or buyer is that existing employment
contracts must be terminated, and new ones entered into.
The LRA has changed this position.35
Section 197 specifically seeks to regulate the consequences of transfers as follows:
“(1) A contract of employment may not be transferred from one employer (referred to as ‘the old employer’) to another (referred to as ‘the new employer’) without the employee’s consent ,unless -
(a) the whole or any part of a business, trade or undertaking is transferred as a
going concern; or (b) the whole or part of a business, trade or undertaking is transferred as a
going concern - (i) if the old employer is insolvent and being wound up or is
sequestrated; or (ii) because a scheme or arrangement or compromise is being entered
into to avoid sequestration for reasons of insolvency.
35 s 197 of the LRA.
38
(2) (a) If a business, trade or undertaking is transferred in circumstances referred
to in subsection (1)(a), unless otherwise agreed, all the rights and obligations between the old employer and each employee at the time of the transfer continue in force as if they were rights and obligations between the new employer and each employee and, anything done before the transfer by or in relation to the old employer will be considered to have been done by or in relation to the new employer.
(b) If a business is transferred in the circumstances envisaged by subsection
(1)(b), unless otherwise agreed, the contracts of all the employees that were in existence immediately before the old employer’s winding-up or sequestration transfer automatically to the new employer, but all the rights and obligations between the old employer and each employee at the time of the transfer remain rights and obligations between the old employer and each employee, and anything done before the transfer by the old employer in respect of each employee will be considered to have been done by the old employer.
(3) An agreement contemplated in subsection (2) must be concluded with the
appropriate person or body referred to in section 189(1). (4) A transfer referred to in subsection (1) does not interrupt the employee’s
continuity of employment. That employment continues with the new employer as if with the old employer.
(5) The provisions of this section do not transfer or otherwise affect the liability of any
person to be prosecuted for, and sentenced for, any offence.”
Clearly, the law makes provision for the automatic transfer of contracts of
employment to the transferee, as per section 197 of the LRA.
In Schutte v Powerplus Performance (Pty) Ltd,36 the court considered the impact of
this section. In this particular case, Super Group Trading decided on 31 August 1998
to restructure its vehicle rental business which resulted to the closing down of its
workshops. The consequence was contracting with Powerplus to service and repair
its vehicles. Application forms fo r employment were distributed to all or some
employees, but the terms and conditions of service were less favourable than those
of Super Group.
Refusal by the employees to accept the offer prompted Super Group to communicate
an intention to retrench the former.
36 (1999) 20 ILJ 655 (LC).
39
The Labour Court was then approached by the applicants to consider making the
following two declarations:
(a) that the contracts of the applicants were transferred from Super Group Trading
to Powerplus Performance pursuant to the transfer of business from the former
to the latter in terms of section 197(1)(a) of the LRA, and
(b) that their terms and conditions of employment with Powerplus Performance
remained on the same terms and conditions as existed with the Super Group
Trading transfer in terms of section 197(2)(a).
The assumption of the Labour Court, through Seady AJ, was that if a business is
transferred as a going concern, then section 197 takes effect, and consequently that
the transferor and transferee cannot agree to a different result as that would
eventuate in the retrenchment of the employees. In examining form over substance
the court concluded that there were overwhelming indicative factors confirming the
transfer of a part of a business as a going concern in this case. A series of positive
factors were listed, namely:
- that Powerplus Performance and Super Group Trading were part of the same
group of companies;
- that the same premises were used;
- that the same operations continued without interruption;
- that there was an in-principle agreement to sell the workshop;
- that there was an intended transfer of assets and equipment.
Consequently, the court held that the provisions of section 197(1)(a) and (2)(a) must
apply.
40
This paper argues that the decision of the court was correct, in that the effect of the
transfer, in this instance, created mutual rights and obligations between the new
employer and the transferred employees. However, it is not uncommon for parties to
agree on renegotiated terms and conditions of employment, and therefore, a different
result. This would be the case where the new employer can prove business
exigencies which suggest that the enterprise is treading on shaky and unhealthy
terrain, evidencing little or no prospects of sustainability.
Consequently, it is argued here that the court’s omission of this possibility or
eventuality in its conclusion is both contentious and of grave concern.
As part of organisation restructuring (iGoli 2002) and in line with the strategic agenda
to establish a one-city municipality in Johannesburg, the Greater Johannesburg
Metropolitan Council intended to transfer certain employees to the corporatised
entities. Letters were written to all affected employees informing them as follows:
“As communicated to you in more detail earlier this month, we now confirm that your employment contract will be transferred to … in terms of section 197(1) of the Labour Relations Act 66 of 1995 …”
Subsequently, in IMATU case,37 the union responded with a legal challenge to the
communication from the Council. The applicants lodged a challenge against the
transfer of the said contracts of employment, the basis of which was the Promotion of
Local Government Act of 1983.
In an urgency application lodged with the Labour Court on 28 July 2000, the
applicants sought final orders in terms set out in Notice of Motion as follows:
“1. Declaring that the purported transfer on 01 July 2000 of the contracts of employment of the first respondent’s members employed by the first respondent at the Johannesburg Fresh Produce Market, Bus Division and Zoo on 30 June 2000 to the second, third and fourth respondents respectively is void and of no force or effect.
37 IMATU & Others v Greater Johannesburg Metropolitan Council & Others (2000) Case Number J
3150/2000 (LC).
41
2. Declaring that such transfers can only be lawfully effected with the consent of the persons concerned in terms of section 17E of the Promotion of Local Government Act, Act 91 of 1983.
3. Ordering the respondents to pay the costs … 4. Granting further and/or alternative relief.”
In his finding, Jammy J dismissed the application and the applicants were ordered
jointly and severally to pay the respondent’s costs. The Judge held that “the consent
requirements of the Promotion of Local Government Act are manifestly in conflict with
those of section 197 of the LRA”.
In his view “it is the latter which must prevail in terms of section 210 of the LRA”. It is
further submitted that the decision of Jammy J was correct, in that the LRA, as the
principal Act regulating employment relations in South Africa takes precedence to
any other legislation regarding this specific matter, and is subject only to the
Constitution.
5.8 Alternatives to “no-fault” dismissals
Alternatives to no-fault dismissals are seldom explored by employers owing to the
common tendency to either short-circuit or overlook the need to engage the affected
workforce in proper consultations.
Current misconceptions around the consultation process include the following:
(i) On the employer side, there is a strong tendency towards regarding
consultations as just an information sharing process.
The serious impact of retrenchments for operational requirements places an
obligation on employers to conduct consultations in a proper and bona fide
manner. This paper argues that it is through proper consultation that viable and
creative alternatives are explored.
42
In addition, it is also through genuinely engaging the workforce that all parties
will be empowered to have a deeper understanding of the issues and
challenges confronting an organisation or company.
(ii) A further misconception is that putting information in writing is not important.
Again, this paper argues that it is of critical importance that all discussions and
deliberations are properly documented or recorded for future reference.
Documenting discussions would also assist in guiding the process of seeking
alternatives to retrenchments.
(iii) Another misconception is that reaching consensus is not important.
Preferably, it is critical to reach consensus prior to retrenchments, and that
necessitates that all viewpoints be considered.
(iv) Finally, there is a strong propensity on the part of employers towards a stringent
adherence to statutory regulations in the payment of severance packages.
Section 41 of the Basic Conditions of Employment Act, 75 of 1997 provides that:
“(I) For the purpose of this section, ‘operational requirements’ means requirements based on economic, technological, structural or similar needs of an employer.
(2) An employer must pay an employee who is dismissed, for reasons based on the
employer’s operational requirements, severance pay equal to at least one week’s remuneration for each completed year of continuous service with that employer, calculated in accordance with section 35.”
It is worth noting that the legislator regulates peremptorily on severance pay for
operational requirements. However, this paper argues that statutory regulations
regarding severance pay is a mere guide. Read closely, the regulation is intended to
contain the paying of amounts below the legislated minimum threshold. Therefore,
this means that nothing prohibits an employer from paying a severance stipend that
is above the minimum.
43
Consultations are intended to secure mutual agreement on this aspect, over and
above other issues.
Most employers fail to plan for or anticipate possible organisation restructuring, with
usually serious consequences. Understandably, the most common reaction of most
employers to crises situations is to retrench employees, followed by programmes to
augment staffing levels when the economic situation has stabilised. Such practices
are symptomatic of reactive or rudderless management and leadership, and are not
worth pursuing.
This paper takes the position that an organisation should, as part of a deliberate
strategy, conduct forward-planning so that it could adapt to fluctuating business
cycles, and a dynamic market environment. An important component of the
Corporate Master Plan should be a comprehensive and proactive Human Resources
Strategy intended to identify pathologies in organisational processes, systems and
management culture; systematically and well in advance.
Furthermore, instead of employers targetting “soft areas” or employees, they should
rather interrogate other cost-carrying areas such as:
(i) Ineffective or poor management processes, systems and practices;
(ii) Cumbersome decision-making processes and chains;
(iii) Poor productivity and systems inefficiencies;
(iv) Poor employee skills; and
(v) Non value-adding expenditure trends.
5.9 The Social Plan and retrenchability
The first version of an ILO Report on the Social Impact of Globalisation was tabled in
several meetings in South Africa, in 1998, by a carefully constituted and diverse
44
Commission of experts. Chapter 6 of the report examines and elaborates on the
intended impact of the Social Plan.
Paragraph 305 of the report (under the Chapter: The Social Plan) says the following:
“Major restructuring processes are associated with significant impacts upon the labour market, frequently reflected in the simultaneous destruction of existing jobs and the creation of new job opportunities. However, it is frequently the case that the individuals and the regions that suffer job loss do not benefit from new employment created in the restructuring process. This simple fact underpins the insecurity and the opposition generated by structural change. Many enterprises …”
The Social Plan, in further paragraphs, proceeds to propose the strengthening of
certain sections of the LRA, with a view to sequencing labour policy reforms, closing
gaps in section 189 and ensuring a more direct legislative intervention over and
above section 189 of the LRA. For instance, amongst other recommendations,
paragraph 316 proposes that:
“- the securing of access to relevant information as part of union and government involvement in the process that gives rise to sectoral or corporate restructuring initiatives and, hence, to the prospect of significant job loss;
- retrenchment procedures that specify criteria for identifying workers who will be
dismissed, that specify minimum periods of notice to the workers so identified, that provide for minimum levels of severance pay;
- training and retraining schemes …; - counseling for affected workers with the assistance of the Department of Labour
Career Counseling service where so requested; - assistance in securing …”
Paragraph 326 is responsible for the recent amendments to section 189 of the LRA
which legislates that the Minister of Labour be informed whenever large-scale
retrenchments are contemplated. The idea here “is not to freeze structural change,
but … to support sustainable employment growth”.
45
In the foreword to the Government Gazette Notice Number 1590 of 1999, the
Honourable Minister of Labour, MMS Mdladlana says the following in relation to the
Social Plan:
“The Social Plan is an agreement concluded at the Presidential Job Summit last year. It seeks to put in place three sets of measures: the first set of interventions seek to prevent retrenchments taking place at all (my emphasis); the second seek to ensure that where they are unavoidable then they are managed humanely; and thirdly where large scale retrenchments have taken place then measures to assist the affected individuals and communities to find alternative forms of employment or sustainable livelihoods are in place.“
Essentially, the document emphasises human resource development as the
cornerstone of creating better life for retrenchees after they have been dismissed for
operational reasons. The underlying principle is to ensure that they (retrenchees)
continue with their lives in a dignified manner after the retrenchment phase. The
Social Plan lists a number of forums and Task Teams that seek to co-ordinate and
enable the process of providing opportunities to retrenchees with a view to easing
their plight.
An important development in this regard is the establishment of Future Forums,
which are tasked with analysing workplace and restructuring problems before
retrenchments are effected. I submit that the principles and intentions as outlined in
the document are novel and progressive. The interventions as contemplated therein
will, without any doubt, benefit retrenchees. However, the problem exists in as far as
the definition of retrenchability is concerned, as well as the scope of that definition.
The key questions in this regard are:
- When does a person actually become retrenchable? Does it not perhaps start
whilst the person is undergoing academic training which does not meet industry
needs?
- Is it, perhaps, not possible to anticipate the skills required by a country’s
economy so as to enable forward planning, and reduce the impact of labour law
implications?
46
It is submitted that the focus of initiatives that are eminently articulated in the Social
Plan must consider not only the plight of currently employed people, but also the
student and pupil population, and properly prepare these categories for entry into the
job market. This means “skilling“ them appropriately to prevent productivity-induced
future retrenchments. A new dimension to the argument, therefore, is the necessity
for a Skills Development Accord between academia, other institutions of higher
learning, Department of labour, other government departments, business, labour and
all other relevant stakeholders.
It is further argued that a preventative approach is preferable to a reactive one.
Learning organisations regularly endeavour to engender a culture of planned
organisational reviewals and improvement. Perhaps, the starting point for
organisations intending to restructure themselves should be the establishment of task
teams composed of labour law experts, management, employees, union
representatives, workplace forum members (if possible) and organisation design
specialists.
The mandate of such task teams should be to jointly and creatively explore all
avenues in order to make the organisation more profitable or productive.
Furthermore, managers would also need to be ongoingly multiskillled and trained in
management and leadership strategies geared towards motivating employees to
raise performance and productivity levels.
Genericising the entire workforce would also make it possible to develop and
implement an employee rotation plan, should economic exigencies warrant it.
“Genericisation” in this context means; developing the workforce to reach high
competency levels in various core skill areas, so that strategic re-assignments may
be effected whenever the need arises. The reviewal of organisational structures
should, as a matter of principle and sound strategic management, be preceded by
the crafting of well-defined strategy, containing all possible design options.
47
It is a celebrated organisational transformation tenet that structure follows strategy
(and not the other way round). In that way, the skills will be retained, further nurtured
and improved, instead of opting for the easy retrenchment route, only to augment
payroll numbers when the buoyancy of market dynamics warrant it at a later stage.
That is indeed the fundamental reason why business leaders and managers are
there. That is also the type of lateral thinking culture that should characterize
workplaces.
The strategic options of reduced working weeks, compulsory paid leave, negotiated
earlier retirement dates, performance-linked bonuses instead of thirteenth cheques,
voluntary separation and other alternatives should be explored. In addition, out-
management is seldom explored by organisations and labour. This means that
“excess“ staff is encouraged and empowered to enter into independent service
contracts with the previous employer in terms of which they could render services to
the said employer on a client/service provider basis.
Skills acquired over many years could be utilised to create employment and to
expand the market for the previous employer. Service level agreements are usually
concluded as a monitoring mechanism. As independent contractors, the former
employees are responsible for their own workers, and logistical support could always
be provided by the former employer.
6. CONCLUSION
South Africa and the world at large are confronted by various crises which demand
implementable strategic solutions. Unemployment, the HIV/Aids epidemic and ailing
economies are the most prepotent of the challenges. As indicated earlier,
globalization trends add to the predicament of unbalanced competition between
developing and developed economies. However, it must be accepted that no country
can afford to operate from the fringes of the global community. One of the benefits of
playing the global game is that a country such as South Africa will be able to draw
from the experiences of other countries.
48
As a new democracy South Africa has had to create a new legacy, particularly in the
area of labour law. This paper adopts the position, that although there are immense
challenges along road ahead, they are surmountable. Indeed, extreme
adversarialism still dominates the workplaces, and this need not be the situation.
Amendments to the Labour Relations Act 66 of 1995 as contained in Government
Gazette Number 21407 of 27 July 2000 must be lauded in as far as the
administration of dismissals for operational requirements are concerned.38
It is also observed with appreciation that the provisions as contained in the
amendments go far beyond the Code of Good Practice on Dismissals Based on
Operational Requirements.
It is submitted that, the proposed referral of intended large-scale intended
retrenchments to the Minister of Labour is a step in the right direction.
Furthermore, the recommended appointment of a facilitator to assist the parties
during the consultation process is a positive development and will go a long way in
containing the usual adversarialism that characterises consultation sessions. Seen
in another way, this development strongly confirms the seriousness of the legislator
with regard to proper prior-dismissals consultation.
It is strongly recommended here that a country boasting one of the most progressive
constitutions in the world should go beyond the regulation mindset and practically
promote (not impose) positive co- operation between capital and labour.
In the final analysis, the two aforementioned partners have to jointly determine the
destiny of the workplace. Implications for the entire country are huge in this regard.
There is also a need to achieve the strategic objectives of the Social Plan Agreement
which was concluded at the 1998 Presidential Job Summit, and subsequently
published in Government Gazette 20305 of 23 July 1999.
38 Government Gazette Notice Number 21407 item 42(1)(a) and (b).
49
The glaring lacunae in labour legislation, secondary pieces of legislation and the
inefficiencies in certain legislative systems need urgent attention.
Furthermore, it is submitted that a National Human Resources Development Plan
must be developed as a matter of urgency, and the role of the employers (large and
small), labour movement, government, academic institutions and other stakeholders
is crucial here. The crafting of such a plan will also require that an accurate National
Skills Database is in place.
It is further averred here that the question of dismissals based on operational
requirements be revisited by all major roleplayers so that workable alternatives could
be explored, without undermining the prerogative of employers to manage. Clearly,
the tax regime in so far as it impacts on the ability of employers to survive also
require some reconsideration. As has been indicated in the preceding arguments,
the potential of employees to operate productively and meet and exceed bottomlines
is impacted upon by a variety of factors.
With regard to restructuring giving rise to the possibility of retrenchments, a conflict
partnership approach rather than a conflict management one will certainly deliver
maximum benefits for employers, labour and the state in that mutual and convergent
goals would be reached with little or even no adversarialism or suspicion.
Current labour legislation is clearly inadequate in this regard as it exhibits a
propensity towards conflict management rather than conflict prevention. Admittedly,
there will always be conflict in the workplace around no-fault and other forms of
dismissal, but such conflict need not be created in the first place.
On disclosure of information, the fact that the facilitator will be able to exercise the
powers of a commissioner in terms of section 16 of the LRA regarding, and further in
terms of subsections (11) and (14) of the same section mean that he or she is legally
empowered to make an arbitration award in terms of section 143 of the LRA.
50
Against this background, it is submitted that facilitators will have to exercise their
powers judiciously as both labour and the employer party may stall the process to the
detriment of the business and affected employees, and this must be prevented.
51
7. BIBLIOGRAPHICAL REFERENCES
Allan et al Johannesburg an African City in Change Zebra Press 2001
Anstey Labour Relations in Transition (An introduction to Comparative Labour Relations in a Global Economy)
Brassey Employment and Labour Law Volume 3 (Commentary on the Labour Relations Act) Juta 1999
Du Toit et al Labour Relations Law (A Comprehensive Guide) 3rd ed Durban Butterworth 2000
Grogan Workplace Law 6th ed Lansdowne Juta 2001
ILO Report on “The Social Impact of Globalisation“ May 1998
McCormick et al Industrial and Organizational Psychology 8th ed Unwin Hyman 1987
Olivier et al Social Security Law ( general principles ) Butterworth 1999
Report of the Presidential Commission to Investigate Labour Market Policy “Restructuring the South African Labour Market“ June 1996
Webster “Implications of a draft Labour Relations Bill for University Governance“ July 1995
8. LIST OF CASES
Alpha Plant & Services (Pty) Ltd v Simmonds & Others (2001) 22 ILJ 389 (LAC)
Baloyi v M & P Manufacturing (2001) 22 ILJ 391 (LAC)
Chemical Workers Industrial Union v Sopelog CC (1994) 15 ILJ 90 (LC) at 104 A-B
Elias v Germiston Uitgewers (Pty) Ltd t/a Evalulab (1997) 18 ILJ 1346 (LC)
52
Fernandes v HM Leibowitz (Pty) Ltd t/a The Auto Industrial Centre Group of Companies (2000) 22 ILJ 153 (LC)
Gumede and Others v Richdens (Pty) Ltd t/a Richdens Frontliner (1984) 5 ILJ 84 (IC)
Hlongwane & Another v Plastix (Pty) Ltd (1990) 11 ILJ 171 (IC)
IMATU & Others v Greater Johannesburg Metropolitan Council & Others (2000) Case Number J3150/2000 (LC)
Jacobs C v Air Express International SA (Pty) Ltd (2000) Case Number J2888/ 99
(LC)
Johnson & Johnson (Pty) Ltd v CWIU (1999) 20 ILJ 89 (LAC) at 97 B-E (par 31)
Keil v Foodgro [1999] 4 BLLR 345 (LC)
Larbi- Ordam & Others v Member of the Executive Council for Education & Another 1996 (12) BCLR 1612 (B)
Larbi- Ordam & Others v Member of the Executive Council for Education & Another CC 1997-05-27 Case No CCT 2/97
Moloi v Avipvint Consulting CC t/a Sir Speedy Instant Print (1998) BLLR 147 (LC)
Mzeku & Others v Volkswagen SA (Pty) Ltd & Others Case NO: PA3/01 (LAC)
Porter v Queens Medical Centre [1993] IRLR 486 (QBD)
Schutte v Powerpus Performance (Pty) Ltd (1999) 20 ILJ 655 (LC)
Sikhosana & Others v Sasol Synthetic Fuels (2000) 21 ILJ 649 (LC)
Wren v Eastbourne Borough Council [1993] IRLR 425
53
9. LIST OF STATUTES
Basic Conditions of Employment Act 75 of 1997
Constitution of the Republic of South Africa Act 108 of 1996
Employment Equity Act 55 of 1998
Government Gazette Volume 409 No 20305 General Notice 1590 of 1999
Government Gazette No 21407 Amendment to section 189 of Act 66 of 1995
Labour Relations Act 66 of 1995
Municipal Structures Act 117 of 1998
Municipal Systems Act 32 of 2000
National Economic Development and Labour Council Act 35 of 1994
Promotion o f Equality and Prevention of Unfair Discrimination Act 4 of 2000
Promotion of Local Government Act 91 of 1983
Public Service Act 103 of 1994
Skills Development Act 97 of 1998
Skills Development Levies Act 9 of 1999
Unemployment Act 30 of 1996
