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
Jurisdiction in south african labour law
Labour law and jurisdiction Jurisdiction can be defined as the competence of a court to hear and determine an issue [...]
No work on public holidays – a gift from the labour appeal court
In terms of the Basic Conditions of Employment Act, 75 of 1997 ("BCEA"), all employees are entitled to a minimum [...]
What does the protection of personal information act, 2013 mean for south African elections?
by Ahmore Burger-Smidt, Head of Data Privacy Practice and Mahlogonolo Motimele, Candidate Attorney A CLOSER LOOK AT THE VOTERS ROLL [...]
Not your friend, buddy
The requirement to register as a credit provider under the National Credit Act That the National Credit Act[1] (the NCA) [...]
The inadvertent 8c trap
Section 8C of the Income Tax Act 1962 (the Act) includes in a taxpayer's income any gains or losses made upon [...]
Jurisdiction in South African Labour Law
Jurisdiction can be defined as the competence of a court to hear and determine an issue between the parties. A [...]
