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
Gucci is well-known in singapore
By: Donvay Wegiersk, Director A mark is considered well-known if a larger portion of the public can immediately recognise the mark [...]
Olympic games: exclusivity and revenue
By: Donvay Wegierski, Director The protection of the Olympic Symbol, and its torch, flag and anthem is extremely important. According to [...]
Copyright: blurred lines effect?
On 21 March 2018, Robin Thicke and Pharrell lost their appeal against Marvin Gaye's estate in relation to their hit [...]
#METOOZA – sexual harassment in the workplace in South Africa
Recently, and on an ongoing basis, revelations of sexual harassment in Hollywood have made the headlines, and stories of sexual [...]
Budget proposal to provide much needed clarity to managers and unit holders of Collective Investment Schemes
The taxation of collective investment schemes ("CIS") and their participatory interest holders is governed by sections 25BA and 10(1)(iB) of [...]
The International Arbitration Act spells opportunity for South Africa
With the coming into operation of the International Arbitration Act[1] ("Act") on 20 December 2017, South Africa for the first [...]
