Legal updates and opinions
News / News
Employer may fairly dismiss employees for refusing to accept operational changes in the context of restructuring
Refusing to accept operational changes in the context of restructuring
Explanatory Note
Generally, the dismissal of employees to coerce them into accepting a particular employment outcome amounts to an automatically unfair dismissal within the meaning of Section 187 of LRA.
The Constitutional Court, in the matter of NUMSA and Others v Aveng Trident Steel and Another, introduced a new dimension to the dismissal of employees for refusing to accept an employer’s proposed operational changes in the context of restructuring. The Court’s central focus, in this case, was to determine the true reason for dismissal. However, this explanatory note does not deal with this aspect.
Aveng was in financial distress, and it took a decision to implement an organizational plan (which involved the restructuring of its operations), in an attempt to save its business. The restructuring entailed, amongst others, the redesigning of job descriptions. As a result, the employees were going to earn less. The arrangement was initially interim and agreed to by NUMSA. Surprisingly, when the employer sought to implement the restructured job descriptions NUMSA refused. Consequently, the employees were dismissed.
The Court, having considered that Aveng “faced harsh economic conditions and needed to restructure in order to survive and avoid the wholesale loss of jobs of its entire workforce“, determined that Aveng was justified in dismissing the employees for operational reasons. In other words, the employees were dismissed for refusing to accept the operational changes proposed by the employer (or alternatives to dismissal), and their dismissal was declared by the Court to be fair.
The Court in arriving at the decision has reminded us not to lose sight of one of the primary purposes of the LRA – to advance economic development.
Additional resources on labour law and Employment
Latest News
Agonists and APIs: High Court Injects Clarity into Compounding Debate
by Neil Kirby, Director and Head of Healthcare & Life Sciences and Slade van Rooyen, Associate The practice of compounding [...]
Minority shareholders and disposals of “controlling interests”: The limits of Section 11 of the MPRDA
by Chris Stevens, Director and Head of Mining & Resources, Kyra South, Director and Sandile Shongwe, Senior Associate Given that [...]
Constitutional subsidiarity: An important clarification
by Dakalo Singo, Director and Head of Pro Bono Constitutional subsidiarity is an important principle of South African law. While [...]
Franchisors Beware! The Competition Commission may come knocking soon
by Paul Coetser, Director and Head of Competition and Kwanele Diniso, Associate The franchising industry has long been a bone [...]
Mind the Conduct: A Guide to COFI – Part 6: COFI – What Really Changes?
by Hilah Laskov, Director Introduction In this article series, we take a deep dive into the South African Conduct of [...]
Remuneration governance under the amended Companies Act: A closer look at some of the key questions
by Kevin Trudgeon, Director and Helena Stoop, Senior Knowledge Lawyer 1. Introduction On 22 May 2026, a proclamation by President [...]
