The landmark Aveng v NUMSA Constitutional Court judgment was handed down today. It deals with when an employer may retrench employees who do not accept changes to their terms and conditions of employment.
Section 187(1)(c) of the Labour Relations Act renders a dismissal automatically unfair if the reason for the dismissal is a refusal to accept a demand on a matter of mutual interest. This means that the employer may not use dismissal as a weapon to secure an employee’s agreement in collective bargaining (employment negotiations).
NUMSA argued that the effect of the section is that where employees have contractual terms that are operationally unsustainable and where they are not willing to accept a change to those terms, the employer may not retrench them in order to employ persons who are prepared to work based on terms that are operationally required. Instead, the employer must negotiate with its existing employees to secure their agreement regarding the changed terms. It argued that where such a dismissal takes place, it would fall foul of section 187(1)(c) and be automatically unfair in that the reason for dismissal would be the refusal at accept a demand on a matter of mutual interest.
Aveng argued that it is permissible to retrench employees who are not prepared agree to work based on contractual terms that are operationally required. It argued that this would not fall foul of section 187(1)(c) where it can be shown that the main reason for dismissal was the employer’s operational requirements, rather than the refusal to agree to change their terms.
Ultimately, the Constitutional Court (in three separate judgments) upheld Aveng’s construction and found that such dismissals are not prohibited and do not fall foul of section 187(1)(c) where it can be shown that the reason for dismissal was the employer’s operational requirements, rather than the refusal to agree to change their terms.
