DOES THE AMENDMENT TO
SECTION 187(1)(C) PROHIBIT
RETRENCHMENTS AIMED AT
CHANGING TERMS AND
CONDITIONS OF EMPLOYMENT?
INTRODUCTION
PROPOSED AMENDMENT OF S187
From:
A dismissal is automatically unfair if the reason is:
“to compel the employee to accept a demand in respect
of any matter of mutual interest between the
employer and employee”
To:
“A refusal by employees to accept a demand in
respect of any matter of mutual interest between
them and their employer.”
MEMORANDUM
RATIONALE FOR AMENDMENT
“The section is amended to remove an anomaly arising from the
interpretation of Section 187(1)(c) in [Fry’s Metals] which held that the
clause had been intended to remedy the so-called ‘lockout’ dismissal which
was a feature of pre 1995 labour relations practice. The effect of this
decision when read with decisions such as [Algorax] is to discourage
employers from offering reemployment to employees who have been
retrenched after refusing to accept changes in working conditions.”
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RATIONALE FOR AMENDMENT
“The amended provision seeks to give effect to the intention of the provision
as enacted in 1995 which is to preclude the dismissal of employees where
the reason for the dismissal is their refusal to accept the demand by the
employer over a matter of mutual interest. This is intended to protect the
integrity of the process of collective bargaining under the LRA and is
consistent with the purposes of the Act”.
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OUTLINE
1. INTERPRETATION DIFFICULTIES
2. UNDERSTAND BACKGROUND
-
SCHOEMAN v SAMSUNG
-
THOMPSON “BARGAINING RESTRUCTURING AND THE OPERATIONAL REQUIREMENTS
DISMISSALS”
-
TODD and DAMANT “UNFAIR DISMISSAL – OPERATIONAL REQUIREMENTS”
-
POST THOMPSON LABOUR COURT DECISIONS
-
FRY’S METALS
-
ALGORAX
-
THOMPSON “BARGAINING OVER BUSINESS IMPERATIVES: THE MUSIC OF THE SPHERE’S AFTER
FRY’S METALS”
3. POSSIBLE INTERPRETATION
4. UNDERSTAND IMPLICATIONS
5. EMPLOYER OPTIONS
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SCHOEMAN & ANOTHER V SAMSUNG ELECTRONICS
(PTY) LTD (1999) 20 ILJ 200 LC
- FACTS
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-
Implications for collective bargaining:
-
Constitutional right to bargain
-
Constitutional right to strike
-
Traditional bargaining terrain
-
Automatic unfair dismissal
CLIVE THOMPSON’S RESPONSE
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-
Clear division of mutual interest bargaining and operational requirement dismissal
-
Matter may not migrate from one to the other
-
In exceptional cases may migrate
THE LABOUR COURT POST THOMPSON
FAWU v GENERAL FOOD INDUSTRIES LTD (2002) 10 BLLR 950 (LC)
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-
INTERPRETATION OF “THE ECONOMIC NECESSITY TEST”
-
“AILING OR FAILING” TO SUCH AN EXTENT THAT TERMINATION FAIR
-
“VIABILITY” OF COMPANY AT STAKE
FRY’S METALS DECISION
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-
Facts
-
LAC Judgment
-
Dismisses Economic Necessity Test
-
Limitation of Automatic Unfair Dismissal to Temporary Dismissals
-
Confined to Tactical Dismissal
-
Rationale not Tested
-
SCA’s Approach
ALGORAX DECISION
-
Facts
-
Turns on Evidence
-
The Algorax anomaly
THOMPSON’S RESPONSE
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PROPOSED AMENDMENTS
TWO POSSIBLE INTERPRETATIONS
Obliges Employer to
Separate Processes
-
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Operational need for different terms and conditions
Abolish existing positions
Offer new positions
No demand is made
Offer can be kept open
Resolves Algorax anomaly
Never go bargaining route
Employer can never Retrench
for Terms And Conditions
-
An offer will be construed as a demand
Must go to bargaining
Cannot migrate to retrenchment
Resolves migration anomaly
Ends temporary dismissal finding
Permanent dismissals as in Fry’s Metals
included
- Protects integrity of bargaining process
IMPLICATIONS OF SECOND INTERPRETATION
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-
Major implications for ability of Employers to respond to changed market conditions
-
Outsourcing?
-
Lockout
-
No replacement labour
-
A rights issue is pushed into interest terrain
-
Correct response in S.A. context?
EMPLOYER OPTIONS
CONTRACTS OF EMPLOYMENT
-
Flexible Working Times
-
Flexible Job Content
-
No Fixed Reporting Lines
-
Increase discretionary remuneration
BARGAINING TACTICS
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IMPLICATIONS OF FIRST INTERPRETATION
SOLUTION TO THE SAMSUNG DILEMMA
EITHER:
-
Accept “free market”
OR
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-
More Rigorous Application of Test
-
Adoption of Thompson’s Proper Business Case
-
Not a “Necessity” Test
-
No “purely for profit” retrenchments
Thank you