Retrenchment is a measure utilized by the Employer to remain economically viable in times of economic strife or uncertainty. This measure results in the Employer having to dismiss a portion of its workforce without fault of their own through a process of consultation and for reasons relating to its operational requirements. In Association of Mineworkers and Construction Union and Others v Royal Bafokeng Platinum Limited and Others CCT 181/18, the Constitutional Court had to determine whether trade unions with the majority of the workforce as its members, enjoy the exclusive right to be consulted with during the retrenchment process.

Overview

Section 189(1) of the Labour Relations Act 66 of 1995 (“the LRA”) states that “When an employer contemplates dismissing one or more employees for reasons based on the employer's operational requirements, the employer must consult-

(a) any person whom the employer is required to consult in terms of a collective agreement;

(b) if there is no collective agreement that requires consultation-

(i) a workplace forum, if the employees likely to be affected by the proposed dismissals are employed in a workplace in respect of which there is a workplace forum; and

(ii) any registered trade union whose members are likely to be affected by the proposed dismissals;

(c) if there is no workplace forum in the workplace in which the employees likely to be affected by the proposed dismissals are employed, any registered trade union whose members are likely to be affected by the proposed dismissals; or

(d) if there is no such trade union, the employees likely to be affected by the proposed dismissals or their representatives nominated for that purpose.

The interpretation and constitutionality of section 189(1) was the subject of scrutiny in the Constitutional Court in this case.

Background

In August 2015, mining company Royal Bafokeng Platinum Limited (Employer), entered into consultations in respect of the retrenchment process and in terms of Section 189(1) of the LRA with the National Union of Mineworkers (NUM), a trade union which represented the majority of its employees. However, the Association of Mineworkers and Construction Union (AMCU), a trade union which represented a minority of its employees, was never included in these consultations. In September 2018, as a result of the consultations, a retrenchment agreement was concluded and signed which extended to members of NUM but not AMCU, despite members of AMCU being similarly retrenched in the process.

In the light of the retrenchment of its members without consultation, AMCU challenged its members’ dismissals by arguing that Section 189(1) of the LRA was unconstitutional by allowing the exclusion of minority trade unions in the consultation process thereby stripping employees who were represented by the minority trade union of their right to fair labour practices.

Judgment

The Constitutional Court, by majority decision, concluded that Section 189(1) of the LRA is in fact consistent with the Constitution and does not infringe on the right to fair labour practices as enshrined in the Constitution. It further added that in circumstances such as this, individual consultation could prove near futile; therefore, the majoritarian principle realizes the objectives of the majority of the workforce and in the circumstances AMCU’s challenge was dismissed.

Written by Petrus Khumalo, Candidate Attorney, Schoeman Law