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
Business must protect the data of all South Africans
If your business has met all the requirements of European data privacy regulations, do you then also comply with South [...]
Civil damages or even class action suits a possibility for companies failing to protect customer data
by Ahmore Burger-Smidt, Head of Data Privacy Practice Companies that fail to protect their customers’ personal information may face class [...]
Secretly Recording Your Boss: Allowable Under RICA But Problematic Under The LRA
By Bradley Workman-Davies, Director Very recently, the Amabhungane Centre for Investigative Journalism challenged portions of the Regulation of Interception of [...]
The Importance Of Having A Justifiable Reason For Fixed Term Employment
By Andre van Heerden, Senior Associate and Chelsea Roux, Candidate AttorneyReviewed by Jacques van Wyk, Director ISSUE Whether the termination [...]
Fringe Benefit Resulting From The Payment By An Employer For The Provision Of Tax Consulting Services To Its Expatriate Employees
By Erich Bell, Director In the recent case of BMW South Africa (Pty) Ltd v The Commissioner for the South [...]
When Is A Final Award Final?
By Pierre Burger, Director One of the cardinal sins an arbitration tribunal can commit is to deliver a final award [...]
