Article 16/2022

In Pratten v Afrisun KN (Pty) Ltd (2020) 31 SALLR 159 (LC), the employer, following consultations, decided to day away with a number of existing positions within its organisational structure and to introduce a number of new positions.  Pursuant to the new positions being filled, some employees found themselves likely to be without a job, and thus at risk of being retrenched, absent other alternatives.

What are the principles identified by the labour appeal court, in South African Breweries v Louw (2017) 28 SALLR 71 (LAC); (2018) 39 ILJ 189 (LAC), so recently applied by the labour court in the Pratten matter and applicable to the above scenario?

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  1. typically, retrenchments result from one of two reasons, namely:
  • a need to cut costs by reducing staff, i.e. the very objective is to dismiss some staff and a decision has been made which post will be declared redundant or, alternatively, which incumbents will be reduced (this scenario intrinsically envisages job losses)
  • the other main reason that results in retrenchments is the restructuring of the business to achieve aims related to efficiency and the like: some existing posts are no longer required because either the need falls away or the functions are distributed amongst existing or new posts or subsumed into fewer functional broader posts: the result is the dislocation of incumbents of such affected posts
  1. an incumbent of a redundant post (with referenced to the second reason for retrenchment as set out above) is not automatically dismissed: the person is merely dislocated and, only after opportunities to relocate that person into another suitable post have been explored and exhausted may he or she be fairly dismissed;
  2. what has inappropriately been labelled as ‘selection criteria’ is the inclusion of past performance ratings in the assessment process for a competitive process to select a new incumbent.  This is not a method to select employees to be dismissed and not regulated by s189(2)(b) of the LRA.  Equally so, in the Pratten matter, it was inappropriate to label as selection criteria the utilisation of psychometric testing in the competitive process to select a new incumbent;
  3. a dislocated employee, who applies for a new post and fails, and by reason thereof remains at the risk of dismissal, if other opportunities do not exist, does not convert the assessment criteria for competition for that post into selection criteria for dismissal;
  4. this is the case notwithstanding that, broadly speaking, it is possible to perceive the assessment process for the new post as part of a long, logical, causal chain, ultimately ending in dismissal;
  5. it is contrived to allege that the taking into account of performance ratings (in the case of Louw) and psychometric testing (in the case of Pratten) in a process of recruitment for a post is the utilisation of a method for selection for dismissal as contemplated in s189(2)(b) and s189(7) of the LRA;
  6. an employer who seeks to avoid dismissal for a dislocated employee and who invites the dislocated employee to compete for new posts therefore does not act unfairly and does not transgress s189(2)(b) or s189(7) of the LRA – being required to compete for such a post is not a method for selecting an employee for dismissal, but rather it is a legitimate method for seeking to avoid the need to dismiss a dislocated employee; and
  7. intrinsically, a competitive process for appointment makes assessments of the relative strengths and weaknesses of a candidate (and, obviously, such principle is equally applicable in respect of psychometric assessments utilised to evaluate the competitiveness of applicants for new jobs)

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