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 Chief Restructuring Officer in South Africa in 2026: A real option for the turnaround of distressed entities
by Eric Levenstein, Head of Insolvency and Business Rescue As South African companies continue to suffer from an ailing economy, [...]
Business rescue recapitalisations upheld: the legal and commercial significance of White Rivers Exploration v Polsun
by Jonathan Stockwell, Director, Amy Mackechnie, Senior Associate and Clio Patricios, Candidate Attorney The Gauteng High Court, Johannesburg, has delivered [...]
Leave to Appeal Refused, but Questions Remain: The Matric Results Privacy Dispute and the Meaning of Personal Information under POPIA
by: Armand Swart, Director and Isabella Keeves, Candidate Attorney On 3 June 2026, the Gauteng High Court refused the Information [...]
Mind the Conduct: A Guide to COFI – Part 3: Consumer Protection and Transparency
by Hilah Laskov, Director Introduction In this article series, we take a deep dive into the South African Conduct of [...]
Cryptocurrency is money and capital for exchange-control purposes
by Azraa Sidat, Candidate Attorney, reviewed by Janice Geel, Associate and Natalie Scott, Director and Head of Sustainability 1. Introduction [...]
Merger condition compliance: Proposed Rule 39 amendment brings improvements to process but shifts the burden of proof to merged entities
by: Paul Cleland, Director and Kwanele Diniso, Associate Key implications of the proposed amendment to the procedure that will be [...]
