Article 52/2022

Section 187(1)(c) provides:

‘(1) A dismissal is automatically unfair if the employer, in dismissing the employee, acts contrary to section 5, or if the reason for the dismissal is –

(c) a refusal by employees to accept a demand in respect of any matter of mutual interest between them and their employer.’

Finally, the constitutional court had the opportunity to determine the content of the amended s187(1)(c) of the LRA.  Does such provision prohibit an employer from dismissing employees for operational requirements?

How do you determine the true reason for the dismissal when, on the one hand, the employer contends that the dismissal is on the basis of operational requirements but, on the other hand, the employees contend that same is based on automatically unfair grounds, namely, the refusal to accept new terms and conditions of employment?

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The constitutional court, in National Union of Metalworkers of South Africa and Others v Aveng Trident Steel (a division of Aveng Africa (Pty) Ltd) and Another (2021) 32 SALLR 3 (CC); (2021) 42 ILJ 67 (CC), adopted the following approach to the above issues:

  • the explanatory memorandum to the amendment shows that the amendment of the provision was not aimed at altering the existing law relating to the provision but simply to address the identified anomaly that came from an interpretation of the provision by the supreme court of appeal in National Union of Metalworkers of SA v Fry’s Metals (Pty) Ltd 2005 (5) SA 433 (SCA) (‘Fry’s Metals’) and the labour appeal court in Chemical Workers Industrial Union v Algorax (Pty) Ltd (2003) 24 ILJ 1917 (LAC) (‘Algorax’).  This anomaly, as the unintended consequences of those decisions, resulted in the employers being discouraged from offering re-employment to retrenched employees who had been retrenched after refusing to accept changes to working conditions.  The amendment reinforces the fact that the LRA does not allow employers engaged in collective bargaining to dismiss employees from refusing to accept the employer’s demands
  • this, of course, does not mean that s187(1)(c) of the LRA may apply only in the context of collective bargaining.  Likewise, it may also apply to any demand that has, as its trigger, an employer’s desire to compel employees to accept a demand in respect of any matter of mutual interest between them and the employer
  • in the scenario where a dismissal is final, when employees refuse to accept proposed changes, or is temporary, pending acceptance of such changes, same may constitute an automatic unfair dismissal in terms of s187(1)(c)
  • where, on the facts of a case, there may be multiple competing reasons for a dismissal, the true reason for the dismissal must be determined – for instance, where, on the one hand, the employer contends the dismissal is on the basis of operational requirements and, on the other hand, the employees contend that same is based on automatically unfair grounds
  • determining the true reason for dismissal is a question of fact and the enquiry into the reasons for dismissal is an objective one.  In casu, Mathopo AJ (Mogoeng CJ, Khampepe J, Madlanga J and Theron J concurring) indicated that the test to be applied is the causation test formulated in Afrox, which, inter alia, entails the following:
  • while it is called a ‘causation’ test, its essential utility is in determining the proximate or dominant factor in an event.  This is borne out by the facts of each case, such as in the present one, when there may be multiple competing reasons for a dismissal.  The determination by a court as to the ‘true’ or ‘dominant’ reason strikes the balance between outlawing all operational dismissals in the context of collective bargaining and allowing all dismissals provided, however, that an employer proves that they were for operational requirements
  • there is no basis on which to exclude an employer’s operational requirements from consideration as a possible reason for dismissal.  The causation analysis espoused in Afrox was premised on the fact that s187(1)(c) uses the phrase ‘if the reason for the dismissal is’ and not the nature of the rights at play
  • in such cases, the court would determine what the factual and legal causes of the dismissal were by first asking whether the dismissal would have occurred if the employees had not refused the demand.  If the answer was in the affirmative, the dismissal did not amount to an automatically unfair dismissal.  If the answer was in the negative, the second leg was necessary: was such refusal the main, dominant, proximate or most likely cause of the dismissal? (per paragraph [32] of Afrox)
  • on the other hand, Majiedt J (second judgment) and Jafta J (third judgment) held that the true reason for dismissal is to be determined not by applying the Afrox test but according to the rules applicable to the evaluation of evidence as laid down in Stellenbosch Farmers’ Winery Group Ltd and Another v Martell & Cie and Others 2003 (1) SA 11 (SCA), which entails the following:
  • when a court is faced with two irreconcilable versions, the best technique to deploy in dealing with a factual dispute was set out in Stellenbosch Farmers’ Winery Group Ltd and Another v Martell & Cie and Others 2003 (1) SA 11 (SCA), where the supreme court of appeal described the technique as follows:

‘[5] …To come to a conclusion on the disputed issues a court must make findings on (a) the credibility of the various factual witnesses; (b) their reliability; and (c) the probabilities.’

  • on making a finding on the credibility of the witnesses who testified, the supreme court of appeal, in Stellenbosch (supra), stated the following:

‘…the court’s finding on the credibility of a particular witness will depend on its impression about the veracity of the witness. That in turn will depend on a variety of subsidiary factors, not necessarily in order of importance, such as (i) the witness’s candour and demeanour in the witness-box, (ii) his bias, latent and blatant, (iii) internal contradictions in his evidence, (iv) external contradictions with what was pleaded or put on his behalf, or with established fact or with his own extracurial statements or actions, (v) the probability or improbability of particular aspects of his version, (vi) the calibre and cogency of his performance compared to that of other witnesses testifying about the same incident or events.’

  • thereafter, a court will make an enquiry into the reliability of the witnesses who testified. The supreme court of appeal, in Stellenbosch (supra), stated the following:

‘…a witness’s reliability will depend, apart from the factors mentioned under (a)(ii), (iv) and (v) above, on (i) the opportunities he had to experience or observe the event in question and (ii) the quality, integrity and independence of his recall thereof.’

  • once a witness is found to be both credible and reliable probability usually follows. The supreme court of appeal, in Stellenbosch (supra), ended the test with the following:

‘…this necessitates an analysis and evaluation of the probability or improbability of each party’s version on each of the disputed issues. In the light of its assessment of (a), (b) and (c) the court will then, as a final step, determine whether the party burdened with the onus of proof has succeeded in discharging it …’

  • as indicated above, if the true reason for the dismissal, when employees refuse to accept changes, is indeed the operational requirements dismissal of the employer (requiring consultation and not collective bargaining), then such dismissal does not constitute an automatically unfair dismissal in terms of s187(1)(c) of the LRA
  • however, in such circumstances, as indicated above, the employer is entitled to offer post-dismissal employment and is also entitled to offer alternative positions, short of dismissal, to the employees refusing to accept such proposed changes

Solidarity v Surf4Cars (2014) 25 SALLR 61 (LAC) and Jacobsen v Vitalab (2019) 30 SALLR 175 (LC)

With reference to Potgieter v Samancor Chrome Ltd t/a Tubatse Ferrochrome (2022) 33 SALLR 190 (LC) and Van Rensburg and Others v Department of Justice and Correctional Services and Others (2022) 33 SALLR 280 (LC); (2022) 43 ILJ 2110 (LC).

In what instances does the jurisdiction of the supreme court of appeal trump the jurisdiction of the labour appeal court?

Where an employer prematurely terminates a fixed-term contract and the employee challenges such termination as being unlawful and claims damages and not specific performance, the labour court has up to now ordered damages even though same is an unliquidated claim for damages.