Introduction
[1]
The appellant is General Food Industries Ltd (“the company” or “Genfood”). Some explanation is required at the outset to cover sales and mergers of previous corporate entities involving Genfood.
As I understand the position Genfood’s holding company, National Cereal Industries Limited (“NCI”), bought the shares in Premier Food Industries Ltd (“PFI”) during August 1998 and merged Genfood with PFI to create a new Genfood. Although NCI acquired the right to use the name “Premier” it did not use it. Genfood’s name was later changed to Premier Foods Limited. The appellant will be referred to as such
or as Genfood and the old Premier Food Industries Ltd, before the merger with Genfood, as PFI. The respondent is the Food and Allied
Workers Union (“the union”), a registered trade union acting for and on behalf of 58 of its members who were dismissed by the appellant on 15 February
2000.
[2]
This appeal concerns a dispute about the fairness or otherwise of the dismissal by the company of
58 of its employees (all members of the union) at the appellant’s Salt River Mill in Cape Town. Dismissals were also effected
by the company at its Epping depot, Blue Ribbon Bakeries in Lakeside, and Blue Ribbon Bakeries in Cape Town. The union and the company
entered into an agreement in terms of which the Salt River Mill dismissals would be regarded as a test case which would enable the
parties in the remaining cases to consider the judgment and decide thereafter whether litigation in the remaining cases was necessary.
[3]
The respondent referred the unfair dismissal dispute to the Labour Court and sought the reinstatement
of its dismissed members. The appellant defended the claim. The court found that the dismissals were automatically unfair in terms
of section 187(1)(c) of the Labour Relations Act 66 of 1995, as amended (“the Act”) and also substantively and procedurally unfair. Arendse AJ made an order for reinstatement on 8 August 2002 with retrospective
effect from 15 February 2000 after a trial spanning the period 4 to 13 March 2002 with argument on 26 April 2002. Costs were ordered
against the appellant with the exclusion of those relating to one amendment. With the leave of the Court a quo, the appellant now
appeals to this Court against the whole of that judgement and order. Before I can deal with the appeal, it is necessary to set out
the history and background to the matter.
History and background
[4]
Genfood has wheat mills in centres throughout South Africa, including one at Salt River, Cape Town
as well as maize mills, depots, distribution centres and bakeries throughout the country. Genfood mills wheat at its Salt River mill
in Cape Town and operates 24 hours a day, six days a week and is labour intensive. Essentially, a mill buys wheat and processes it.
The flour that is produced is sold to bakeries within the group (one third) and the remainder to others. The jobs performed by the
dismissed employees still exist, but have been outsourced by the company to a service provider, Staffgro (Pty) Ltd (“Staffgro”).
[5]
Up until the birth of the new South Africa in 1994, the wheat and milling industry was very profitable
and was regulated by the Wheat Board under permit. The Wheat Board was, however, abolished in 1994, and, following deregulation,
wheat and maize could be sourced freely in the open market. Farmers could demand international dollar prices for their crops. Tariff
and price protections were abolished, prohibitions on the import of wheat and flour fell away and the industry felt the strictures
of foreign competition and threats from smaller and medium-sized millers entering the fray.
[6]
Ms Esselaar, its director of organisational effectiveness, came from the PFI group, having started
there in 1987 and, after the acquisition of PFI, became the human resources manager in the company’s milling division. Esselaar
testified that the respondent had been recognised by Genfood prior to the acquisition in 1998, but only at plant level. The relationship
between the respondent and PFI prior to 1998 was regulated by a national collective agreement and a participative agreement. These
agreements provided for various structures at national, divisional and plant levels. At plant level, for example, joint management
teams (“JMTs”) were formed with full union participation.
[7]
In 1997 PFI was in a poor financial state and investors in the company were unhappy. As a result
it appointed consultants called Competitive Capabilities Africa (“CCA”) in an attempt to revitalise the organisation and to make it competitive. CCA used the JMTs provided for in the participative
agreement. The process involved the election of task forces on which both union and management were represented. These task forces
undertook an analysis and audit of the business to help create an understanding of a world-class business. One such task force, the
national outsourcing task force, was established to look at merchandise, canteens, etc on a group basis.
[8]
In October 1997 the possibility of the sale of PFI’s food assets to Tiger Milling was discussed
and at a meeting between PFI and the union on 6 November 1997 the union was told that a joint effort could stop the merger. The proposal
that was ventilated involved restructuring PFI as the company’s principal shareholders were dissatisfied. Management proposed
that a retrenchment of 2000 employees be effected on an urgent basis and other matters were addressed relating to the terms and conditions
of those remaining. An agreement was reached which included retrenchments and the union was thanked for the positive spirit with
which it had conducted the negotiations. 1211 employees were retrenched and Esselaar testified that consultations in this regard
took place at various levels. Her evidence included concessions that the rationale and number of retrenchments were dealt with nationally
and the timing and selection of retrenched workers at plant level. The process came to an end when PFI’s chief executive officer,
Mr Ian Heron, called a halt in mid-1998.
[9]
During August 1998 the company bought the milling and baking businesses of PFI as going concerns
and merged the businesses of PFI with those of the company. The evidence of Nelissen reveals that this resulted in a duplication
of mills with concomitant inefficiencies which resulted in economic problems and questions about its viability in the food business.
Esselaar testified that the reasons for the sale by PFI to Genfood were that the objects of the rescue plan had not been achieved,
major shareholders were not satisfied with the returns; and Genfood was attracted to PFI’s brand-names and national presence.
[10]
After the sale the appellant moved to effect a reconstruction of its operations to counter the depredations
of market conditions and what it perceived as over inflated salaries. Reference will be made to various minutes of meetings, which
the parties agreed correctly reflected what transpired at the said gatherings. On 18 August 1998 the minutes of an Exco meeting referred
to the rationalization of the Group and to redundancy declarations and the application of a uniform policy in regard thereto. A week
later a plan to fire PFI staff and then rehire them with Genfood was mooted but then rejected – in favour of a plan to offer
new terms to those that came over and to retrench those who did not accept. After the purchase of PFI the total staff of Genfood
was 9 889 employees and the board contemplated retrenching 1 000 before the end of the year.
[11]
Esselaar was at a meeting on 10 September 1998, shortly after the acquisition in August 1998, when the
company announced to the union that downsizing was inevitable, and that retrenchments would take place at the workplace level. She
testified that at the “old” PFI businesses, negotiations took place in accordance with the previous (centralised) arrangement;
and at the “old” Genfood businesses, negotiations took place at plant level. It was common cause that wages at PFI were
higher than at previous Genfood businesses and were higher than any of the appellant’s competitors.
[12]
While in PFI less profitable units would have been subsidized by more profitable ones, Genfood adopted a decentralized
structure and Nelissen testified that each business unit was required to be viable in its own right. Before Genfood had acquired
shares in PFI, the latter had already closed mills at Butterworth, Port Elizabeth and East London and was outsourcing its non-core
functions – examples of this being Pretoria and the Durban mill. Limited outsourcing occurred at Thaba Nchu and Kroonstad.
[13]
The union wanted centralized wage negotiations and was of the opinion that PFI wages should prevail throughout
the company. The union was told that if they continued pushing up wages, then the company would have to look at outsourcing and further
job cuts.
[14]
Esselaar maintained that outsourcing was widely used in the industry and the union was aware of this
as it represented its members who worked in the industry for the appellant’s competitors. Before the acquisition in August
1998, retrenchments and outsourcing had taken place at PFI plants as well as at Genfood operations. To further illustrate that PFI
workplaces were not targeted – because the workers there earned comparatively higher wages, where there was duplication of
depots after the acquisition, the Genfood depots were closed, and the PFI ones kept open. Esselaar confirmed that 58% of the union’s
members lost their jobs at the Salt River Mill due to outsourcing. Retrenchments which took place at PFI plant level after November
1997 took place following an agreement that was reached between PFI and the union.
[15]
After Genfood acquired the shares in PFI it commenced rationalizing operations and retrenchment exercises took
place at Vereeniging and Isando. After August 1998 problems emerged between the company and the union as the collective bargaining
arrangement between PFI and the union was highly centralised, whereas the appellant operated in terms of a decentralised system of
collective bargaining. The need to outsource and retrench was also imperative because the cost of raw materials escalated by some
300%.
[16]
At the meeting of the 4th May 1999 the chairman of the board of the Exco meeting took note of the forthcoming dates for wage increases and spoke of rectifying
the gap between old PFI and Genfood salary scales. The minutes of a meeting held on the 12th June reflect under the heading ‘rationalisation’ that staff had been placed on the [lower] Genfood pay scales at Pietersburg
with negative consequences and that the matter had been referred to the CCMA. It was also noted that since the commencement of the
rationalization policy the complement of staff had been reduced by 1000. Mr Hansen, the appellant’s Human Resources Director,
told Exco on 10 July that a 6% increase had been budgeted for in respect of the bakery division but that the appellant could face
a strike which - the meeting concluded - should be prevented at all costs.
[17]
Centralised wage negotiations commenced on 22 July 1999 between the appellant and the union and were
conducted in terms of the recognition agreement entered into between the union and PFI, although the appellant had given notice in
February 1999 of its intention to cancel it. At the first round of national wage negotiations Mr Sibongile Pohlongo was present representing
the Western Cape. He was the chairman of the shop steward committee at the Salt River mill. The appellant explained to the union
that it faced tremendous problems, which its competitors were tackling by way of rationalisation (which included outsourcing). The
appellant explained that it was paying more than its competitors and suggested a wage freeze in the wheat division, 4% in the urban
depots and a 20% reduction in the rural depots. The respondent started with a demand of a 14% wage increase but stated that it would
not accept below 11%. It said that it certainly would not accept any change in the wage structure downwards as it had no guarantee
that retrenchments and outsourcing would come to an end. The appellant was unwilling to give any undertakings on job security in
return for reduced wage demands but modified its position to a 2% increase for the urban wheat sector and urban depots and minus
10% for rural depots.
[18]
The appellant explained its parlous state and the reasons for its losing market share because “our labour cost is the second highest cost of the product; we are paying at least 10 % higher wages than our major competitors; the
small millers are paying about 25% of our wages only, this being a matter that should be addressed by the union…” So clearly the appellant was asking the union to moderate its demands for increases.
[19]
It is clear that outsourcing and retrenchments were discussed as the minutes record this “motivating the demand of 14% the union said that it had no guarantee that retrenchments and outsourcing would come to an end; it would
not be easy to motivate to the employees a 0% increase in light of the aforesaid; at the end of the day the members will still be
retrenched.” Clearly the union knew that retrenchments would take place and wanted a sweetener for the rest of the workers who were not laid off.
Later in the minutes it is recorded that “the union also wanted to record that it is not happy with rationalizations that are only taking place in the old Premier operations;
it will voice its objection that Maizecor and the other operations are not being affected by retrenchments…”
[20]
Finally the union made mention of the fact that, as “70% costs have been saved through outsourcing and retrenchments”, and other factors, including that it was “against the idea of being paid the same rate as companies that use cheap labour”, it was reducing its demand to 11%. This was the clear position at the meeting and no evidence was tendered on the side of
the respondent to gainsay it. The inevitable conclusion to be drawn from this is that at national level the union was being asked
to persuade its members to lower their wages or face the retrenchments that had taken place at other mills.
[21]
That position did not change at the next national wage negotiations on 10 August at which Pohlongo was
also present, where the respondent made its position clear that “anything relating to a wage freeze or minus will not be discussed.” Appellant again emphasized the high level of wages in comparison to other companies and “management reminded [the union] that during the Premier days the union was strong. High wages were demanded. The long-term impact
caused the Company to be uncompetitive. The wage increase were (sic) always above inflation rates. All this caused the business to
close and jobs were lost. Management said that people must be mature about this and allow other companies to catch up on wages. Continuation
of un-competitiveness will lead to further job losses.” Again the importance of reducing or moderating the wage increases and the possibility of retrenchment were clear. The dispute was
then referred to the CCMA where an across the board settlement of 6% increase in the relevant bargaining units was agreed on 14 October
1999.
[22]
The Salt River Mill was making a profit in 1999 but, nevertheless, the company was looking at flexibility,
including outsourcing as utilized by its competitors, given that flour can be stockpiled. Nelissen stated in his evidence that the
mill had limited warehousing space and had capacity for only three days storage. There were peaks and troughs with extra demands
at weekends and lag periods where the fixed costs of labour and other items persisted. Tiger Foods and Pioneer Foods had utilized
outsourcing to achieve flexibility in this regard. Although the mill was profitable, account had to be taken of a loan to purchase
PFI and the proportionate level of interest repayment to the mill. The profit margin was 5.9% and at least 10% was required to remain
viable.
[23]
Nelissen testified that he attempted on 19 August 1999 to approach the shop stewards at the Salt River
Mill to discuss these issues, in particular about the need for operational requirements to change. Reference was made to a document,
which evidenced the view of the Department of Trade and Industries that the South African milling industry was inefficient and had
a few years to improve. The shop stewards were told that alternatives were being explored including outsourcing. He explained that
the wages paid at Cape Town were much higher (by between 8 to 47%) than other mills, including those of the opposition companies.
He reminded them that the Vereeniging mill had been through the outsourcing exercise and the union had been involved. After consultations
between the parties an agreement was reached there between the company and the union. There were alarming cost differentials between
Salt River and other mills belonging to the appellant, the average cost per ton was R76,19 at Salt River compared to R46.83, as the
average for all the other mills combined.
[24]
The shop stewards’ response, however, was that these sorts of discussions should take place at
national level in terms of the recognition agreement. The discussions were therefore unsuccessful. Hansen told Exco on 24 August
1999 that, while the union was not in favour of the appellant’s policy of outsourcing, the company was going to continue with
the process because the appellant’s competitors were already implementing it.
[25]
The minutes of the Exco meeting of the 29th September reflect that 16 workplaces were to be the subject of outsourcing and restructuring. As I have already mentioned, on 14
October a wage agreement had been concluded with a 6% increase across the board, valid for a year from 1 July 1999.
[26]
The 6% across-the-board increase agreed on 14 October 1999 was a surprise to Nelissen. Esselaar denied
that the company had agreed on a 6% wage increase because it had already decided to outsource. She confirmed that no decision had
been taken to outsource and that the company had agreed to a 6% increase because of the overriding consideration to strike sensitivity.
[27]
The minutes of the Exco meeting of the 28th October 1989 dealt with questions relating to human resources and the meeting noted the progress of restructuring at various divisions.
Hansen emphasized that outsourcing was becoming increasingly important and that Genfood should continue to keep control of the venues,
where outsourcing was taking place. Esselaar prepared an outsourcing update in November 2000, which summarized the broad picture
during the period in question. It reflected that 36 workplaces had been the subject of outsourcing. As outsourcing had occurred at
76% of the work venues she and Nelissen were hard pressed to resist the suggestion that it had not occurred spontaneously but was
the result of a deliberate policy of the appellant.
[28]
By November 1999 no improvement had taken place at Salt River and the issue of outsourcing there was
deadlocked as the local shop stewards took note of these issues, but they maintained that it should be discussed at national level.
Nelissen told the court a quo that the only way he saw of moving forward was to force the workers to confront the issue, which he
had tabled at the previous meetings.
[29]
On 16 November 1999 Nelissen issued a retrenchment notice - designed to force the hand of the shop stewards.
At the first consultation meeting on 24 November 1999, the company proposed the retrenchment of 74 employees out of a total staff
complement of 98 in the packing, warehouse maintenance and mill production departments. These jobs would be outsourced. The company’s
wage bill would be reduced by R123 000 per month. Further consultations took place on 24 November, 8 December 1999 and on 25 January
2000. On the last-mentioned date alternative employment was discussed, in particular the issue of outsourcing.
[30]
Nelissen told the meeting that he had already (in August 1999) identified some service providers and
he could arrange meetings with them. He testified that he had consulted with certain labour brokers and they had supplied quotes
for supplying the manpower for the work. The union had been informed of this fact. He also consulted service contractors who provided
a specialized service and also managed the work in question. Nelissen explained that the use of a labour broker or service provider
also resulted in reduced costs as far as other non-labour items were concerned including administrative costs, staff loans, cleaning
costs and damage caused.
[31]
No formal response was elicited from the shop stewards and the union organiser contended that the meetings
were unlawful. The management expressed disappointment that an opportunity of alternative employment of the workers had been missed.
Nelissen also said “what we proposed is that when there’s a retrenchment programme that we deal with it so that the retrenched employees could find
alternative employment elsewhere in the company, and that might mean a relocation to either a different town or a different site…” Names were required of persons who were willing to take up employment within the company even though no vacancies existed at that
time. The respondent and the shop stewards committee wanted nothing to do with that suggestion.
[32]
On 28 January 2000, Nelissen addressed a letter to all union members, giving them notice of the termination
of their contracts of employment with effect from 15 February 2000. The last consultation was held on 2 February 2000, where the
union’s alternative proposals of a wage freeze, a reduction in paternity and compassionate leave, etc were discussed, but rejected
by the company. The union’s proposals only related to a saving of R20 160,00. The company informed the union and the shop stewards
that, if it remained at the same level of wages, it would go out of business. The union stated that it would not accept any reduction
in wages and salaries.
[33]
The company’s proposal on outsourcing was described as unlawful and unprocedural and was rejected
by the union. The advantages of outsourcing were explained in evidence by Nelissen, who testified that the labour broker or service
provider would attend to the flexibility issue and provide workers at the peak periods required and not have to pay for them at the
times of troughs when no work was required.
[34]
Nelissen made specific mention of finding jobs with the outsourcers. He said that he would arrange meetings
with them. The shop stewards wanted to have nothing to do with outsourcers. Nelissen denied that the company’s decision to
retrench was purely to increase profits as it needed to reduce operational costs in order that it could be more competitive. The
market was depressed, there was an over-capacity, prices were low, and the price of flour had come down.
[35]
One alternative that had been considered was to close the mill, and to import flour directly from overseas.
He furthermore denied demanding that the union’s members reduce their wages, or they would face dismissal. Nelissen explained
that lowering wages was not an adequate solution as there was a need for flexibility. The last mentioned consideration convinced
the company to contract with Staffgro which would provide its services from 16 February 2000.
[36]
Nelissen found the process of consultation frustrating given the union’s refusal to properly consider
the problems facing the company, and evaluate the solution of the company’s competitors i.e. outsourcing. He agreed that the
only way jobs could be saved would be to change the conditions of employment of the affected employees to suit the company’s
competitive needs. He denied that he was trying to get rid of the union and testified that outsourcing was employed by the company
throughout the group, only where this would reduce the operational costs.
[37]
The company advised the union in the course of the consultations that outsourcing would reduce its wage
bill by approximately 48% or R120 000 per month. The evidence of Nelissen was, furthermore, that the union was not invited to discuss
the issue of outsourcing at a national level, as the company wanted to deal with these issues at plant level and this was one of
the factors, which compelled the company to retrench employees at the Salt River Mill.
[38]
Staffgro was willing to employ the affected employees at Staffgro rates but, as will be discussed later
in this judgment, the proposal was not attractive to the union or the affected employees. Nelissen conceded that he had decided on
the Staffgro proposal at the meeting with the shop stewards on 25 January 2000. As the letter of 28 January 2000 had effectively
terminated their employment, it was suggested to Nelissen that the last consultation meeting of 2 February 2000 was merely going
through the motions, but he said he was obliged to respond to the union at this meeting. The company paid to the union’s members
a severance package of two weeks for each completed year of service.
[39]
Mr Van Dyk, the company secretary, testified that decisions on principle and policy such as mergers,
takeovers and such like would be made at board and executive level, and that operational decisions relating to employment and restructuring
would be dealt with at plant and regional level. The last mentioned matters would be referred by company executive directors to the
divisional director who, in consultation with the company’s human resources director, would make the plant-level decisions.
The human resources director reported to the national management meetings. Decisions as to methods of implementation during retrenchment
exercises were taken at plant and regional level. He testified that the plant management decided on restructuring, and in particular
whether or not to outsource any of the plant’s functions.
[40]
Van Dyk also testified that after the acquisition of PFI, the company engaged in a process of rationalization
aimed at avoiding duplication of operations, and in some instances this resulted in closures. Before the acquisition, the company
had used outsourcing to cut down on operational costs - after the acquisition outsourcing continued under the control of the managing
director of the plant. Van Dyk confirmed that wage negotiations had been delegated to plant and divisional level despite this being
contrary to the national agreement. He testified that the contract entered into between the Salt River Mill and Staffgro involved
the latter rendering services to the value of R261 000 during March 2000. The dismissal of the employees took effect on the
15th February 2000.
Proceedings in the Labour Court
[41]
A dispute arose between the parties on the fairness of that dismissal. The dispute was referred to the
CCMA for conciliation but, when attempts at conciliation failed, it was referred to the Labour Court for adjudication. At the trial
the appellant adduced the evidence of three witnesses, Mr Dominique Nelissen, the managing director of the company for the Cape region
(also responsible for the Salt River Mill), Mr Jan Stephanus van Dyk, the company secretary, and Ms Surita Esselaar, its director
of organisational effectiveness. The union did not call any witness. The respondent contended in that court that the dismissal was
automatically unfair in that the appellant’s reason for dismissing the employees was to compel them to agree to a demand relating
to a matter of interest. Alternatively, the respondent contended, the dismissal was unfair for lack of a fair reason to dismiss and
because the appellant had the employees. The appellant disputed the correctness of these contentions and submitted that the dismissal
was for operational requirements, was based on a fair reason to dismiss and had been preceded by a fair procedure before the dismissal
of the employees. The finding of the Court a quo and the order it made have been referred to above already and need not be repeated.
The judgment of the Court a quo
[42]
Arendse AJ, who heard the matter in the Court a quo, considered the argument of the present appellant
in the court a quo that the employees were dismissed after the company had decided that outsourcing was the solution to its operational
requirements, that outsourcing met its economic and structural needs and that no suitable alternatives to outsourcing could be found.
Accordingly, so the argument ran, that placed the dismissals firmly within the ambit of section 189 of the Act.
[43]
The Court a quo was satisfied that, on a balance of probabilities, these contentions were not supported
by the evidence. The company, so Arendse AJ held, was picking itself up by its own bootstraps by creating the conditions that validate
its decision to outsource at a time when those very conditions already existed before the wage deal was struck on 14 October 1999.
He asked why the company concluded a wage deal on 14 October 1999, and then undermined the effect thereof by serving notice of its
intention to retrench those very workers on 16 November 1999.
[44]
The Court a quo accepted that a company may outsource work to a third party that might otherwise be performed
by its employees and that this promoted the efficient operation of the business. Arendse AJ held that in this matter, however, outsourcing
constituted a threat to trade unions because it strikes at the core of job security and the survival of jobs. He held that “the company used outsourcing as a device for undermining the status of the wage agreement concluded on 14 October 1999, and, as a
device, for undermining the status of the union as the exclusive recognised collective bargaining agent of its members, the dismissed
employees.” Consequently, held the Court a quo, the company failed to demonstrate the existence of any compelling logic or economics
of operation to justify the use of section 189 of the Act, other than the wage bill, when it decided to outsource certain of its
operations.
The appeal
[45]
Before us there was argument directed at the legal implications of the union’s failure to testify
at all; the failure to put a version to the company’s witnesses (Small v Smith 1954 (3) SA 434 (SWA) at 438E–G; President of the Republic of South Africa v South African Rugby Football Union 2000 (1) SA 1 (CC) at paragraphs [58]–[65]); the selective use by the union of certain documentary evidence without agreement or formal admission;
and the union’s reliance on inference, in the absence of fact (Lazarus v Gorfinkel 1988 (4) SA 123 (C) at 135A–B).
[46]
Mr Wallis, very fairly in my view, submitted that the appellant’s witnesses were not sufficiently
unreliable or mendacious that their testimony could be dismissed out of hand. In the circumstances, in the absence of evidence from
the respondent, he conceded that he was stuck with such evidence, oral and documentary – and, given that it was peculiarly
within the knowledge of the appellant – there was little that could have been done about it. In my view, if the respondent
wanted to challenge the appellant’s version of what transpired at certain meetings and union officials or shopstewards were
present at such meetings, it should have adduced their evidence. However, it was up to the respondent to make the decision to call
or not to call a witness in this regard. In the absence of such evidence, if there were two versions the court would accept the evidence
of the appellant’s witnesses in so far as such evidence emerged unscathed from the rigours of cross examination.
[47]
Mr Wallis indicated that, as a result of the recent judgment of this Court in National Union of Metalworkers of SA v Fry’s Metals [2003] 2 BLLR 140 (LAC), he was unable to defend the finding of the Court a quo that the dismissals were automatically unfair. In that case this Court held
that the argument that an employer cannot dismiss employees for operational requirements in order to increase profits, but can only
do so to ensure its survival, is not supported by the provisions of the Act.
The issues as pleaded
[48]
The two questions that remained for decision in this appeal were whether the individual respondents’
dismissals were for a fair reason based on the employer’s operational requirements and implemented after following a fair procedure
as contemplated in section 188(1) of the Act. In terms of section 189 (as it read at the relevant time) when an employer contemplated dismissing one or more employees for reasons
based on the employer’s operational requirements, the employer must consult any registered trade union whose members are likely
to be affected by the proposed dismissals and try to reach consensus in terms of sub-section (2) on
“(a) appropriate measures
(i) to avoid the dismissals;
(ii) to minimise the number of dismissals;
(iii) to change the timing of the dismissals; and
(iv) to mitigate the adverse effects of the dismissals;
(b) the method for selecting the employees to be dismissed; and
(c) the severance pay for dismissed employees.”
In terms of section 189(3) – (7) “the employer must disclose in writing to the other consulting party all relevant information, including, but not limited to
(a)
the reasons for the proposed 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;
.RTF of original document