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
The Clock Is Ticking: Labour Disputes and the Perils of Miscalculating Timeframes
The recent Labour Court decision in Nelson Mandela Bay Municipality v SAMWU obo Bukula and Others (PR174/2023) provides a sobering [...]
Automatic Termination Clauses Do Not Trump the LRA: The Biyana Case
and Isabella Keeves – Candidate Attorney The CCMA’s recent decision in Biyana v National Consumer Commission (2025) 34 CCMA 7.17.2 [...]
FICA: Proposed changes to Public Compliance Communication 50 and Directive 3 previously issued by the Financial Intelligence Centre
by Sandiso Dhlomo, Associate and Nhlonipho Mthembu, Candidate Attorney reviewed by Tracy Lee Janse van Rensburg On 14 March 2025, [...]
Proposed R100 Billion Transformation Fund Will Have Significant Implications For Broad-Based Black Economic Empowerment (“Bbbee”) Regulation In South Africa
On 19 March 2025, the Department of Trade, Industry and Competition ("DTIC") issued a draft Transformation Fund Concept Document for [...]
Sorry Not Sorry
and Mike Searle, Candidate Attorney In the recent Labour Court decision of Standard Bank Insurance Brokers (Pty) Ltd v Dlamini [...]
Discrimination – it’s not unfair when its fair
In a notable judgment delivered on 6 November 2024, the Labour Appeal Court (LAC) in Passenger Rail Agency of South [...]