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
From Promise to Practice: Responsible AI in South African Healthcare
by Aphindile Govuza, Director, Boitumelo Moti, Director, Janice Geel, Associate and Malique Ukena, Candidate Attorney Artificial intelligence (“AI“) is reshaping [...]
Cracking Down or Catching Up? South Africa’s Approach to Crypto Regulation: Part 1 – Payments
by Armand Swart, Director, Hilah Laskov, Director and Hlonelwa Lutuli, Associate Introduction Crypto assets (“crypto“) exist in a unique regulatory [...]
Employers must timeously take steps to deal with any allegations of sexual harassment raised with them, failing which they may be held liable
by Andre van Heerden, Director and Hannah Fowler, Candidate Attorney Introduction In Independent Municipal and Allied Trade Union obo S and [...]
Proposed Economic Opportunity Tax for Casino Operator Licensees in the Western Cape to relocate their casinos
by Wendy Rosenberg, Director and Head of Digital Media & Electronic Communications On 6 June 2025, the draft Western Cape [...]
When does an acquisition by a company of its own shares constitute a scheme of arrangement?
Understanding the relationship between Section 48 and Section 114 of the Companies Act in Light of the Companies Amendment Act, [...]
Are we seeing an end to the appointment of board members to act as CEOs of SOEs / Private Companies?
by Sandile July, Director and Head of Employment and Nonkosazana Nkosi, Director 1. The Labour Court has officially put a [...]