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
I PAID HIM MORE BECAUSE HE ASKED FOR MORE
By Bradley Workman-Davies, Director Case law is beginning to develop the South African labour law around unfair discrimination which has [...]
New EEA Form Issued In Terms Of The Employment Equity Act
By Andre van Heerden, Senior Associate and Chelsea Roux, Candidate Attorney Reviewed by Jacques van Wyk, Director Section 27(1) of [...]
The Failure To Communicate An Extension Of Probation Does Not Always Amount To A Confirmation Of Permanent Employment
By Andre van Heerden, Senior Associate and Chelsea Roux, Candidate Attorney Reviewed by Jacques van Wyk, Director ISSUE Whether an [...]
NO MANDATORY REQUIREMENT FOR SOUTH AFRICANS TO JOIN FUND UNDER NHI BILL AS CURRENTLY PROPOSED
By Neil Kirby, Director The publication of the National Health Insurance Bill [B11-2009] has resulted in much public comment as [...]
THE LAW ON LAND INVASION
By Anele Ngidi, Director Land invasions have become an all too familiar fixture of our daily headlines. Images of occupiers [...]
HAUNTED BY THE PAST … UNTIL WHEN SHOULD HISTORIC CARTEL CONDUCT SPOOK YOU?
By Rudolph Raath, Director and Megan Livingstone COMPETITION COMMISSION V PICKFORDS REMOVAL (167/CAC/Jul18) How long does a firm remain at [...]
