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
Werksmans POPIA e-learning Course
Werksmans POPIA e-learning Course The Werksmans Protection of Personal Information Act (“POPIA”) e-learning course will provide your business and staff [...]
POPIA: A Guide to the Protection of Personal Information Act of South Africa
An Introduction to POPIA POPIA or POPI was promulgated on 26 November 2013. The Protection of Personal Information Act (POPIA) [...]
Large fines show FSCA is focused on enforcement to leave the grey list – a red flag for non-compliant financial services providers as more fines likely
Gone are the days of box-ticking. The FSCA has imposed penalties on financial services providers for non-compliance with FICA The [...]
Shifting gears and driving competition: Proposed changes to the Guidelines for Competition in the South African Automotive Aftermarkets
The Competition Commission is proposing changes to its Guidelines for Competition in the South African Automotive Aftermarkets ("Guidelines"), and interested [...]
The AI National Policy: South Africa’s initial step to establish an AI policy and regulatory framework
At the AI Government Summit on 5 April 2024, the Department of Communications and Digital Technologies ("DCDT") launched South Africa's [...]
Striking a balance: The impact of strike violence on protected strikes
Danelle Plaatjies - Candidate Attorney and Hanan Jeppie - Candidate Attorney Issue Whether a protected strike that was characterised [...]