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
Reviewing and updating your privacy notices
Transparency is one of the key principles for the lawful processing of personal information worldwide. If you collect and use [...]
Whistleblowing in South Africa – employers’ obligations
Whistleblowing is an important tool in identifying, preventing and eradicating criminal conduct, irregular activities, and other improprieties in both the [...]
Payment of Prescribed Minimum Benefits
In the case of Keyhealth Medical Scheme v the Honourable Mr Justice SM Ngoepe N.O, the Registrar of Medical Schemes [...]
A double-edged sword: revenge porn and the Cybercrimes Act
Recently, South Africa has been experiencing a barrage of cyber-attacks and/or cyber-related/enabled crimes, with many individuals and organisations being caught [...]
Riding Off Into The Sunset – Labour Appeal Court Settles Questions On Retirement Age
by Kerry Fredericks, Director There is no specified retirement age for employees in terms of South African law. Employers are, [...]
Tsunami of a Penalty as “Lucky Monopolist” gets Unlucky
by Rudolph Raath, Director and Nokwanda Zondi, Candidate Attorney In a rare display of its utmost displeasure, the Competition Tribunal [...]