Is compensation in terms of s 189A(13)(d) of the LRA a self-standing remedy?

August 1st, 2019
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Steenkamp and Others v Edcon Limited (CC) (unreported case no CCT29/18, 30-4-2019) (Basson AJ (unanimous))

The case of Steenkamp entailed an employment dispute wherein Ms Steenkamp and 1 817 other employees (the applicants) were dismissed based on the operational requirements of their employer, Edcon Limited (the respondent). The respondent fell into financial hardship and issued each of the applicants with a notice in terms of s 189(3) of the Labour Relations Act 66 of 1995 (LRA), communicating, inter alia, its intention to retrench them. Due to the number of employees the respondent contemplated retrenching, the scope of s 189A of the LRA was triggered, resulting in the commencement of facilitation proceedings between the applicants and the respondent. Subsequently, the facilitation proceedings broke down, which ultimately prompted the respondent to issue each of the applicants with a notice of termination of their contracts of employment. The applicants, defeated in the first instalment of their battle against the respondent (Steenkamp and Others v Edcon Ltd 2016 (3) SA 251 (CC)), instituted an application in terms of s 189A(13) of the LRA, seeking 12 months’ compensation to ameliorate (as alleged by the applicants) their procedurally unfair dismissals in consequence of the respondent’s non-compliance with the peremptory provisions of s 189A of the LRA.

Issue before the Constitutional Court

One of the issues the Constitutional Court (CC) was required to decide on was: Whether s 89A(13)(d) was a ‘self-standing remedy’? Put differently, the CC had to determine whether an aggrieved employee could bypass the remedies provided for in terms of subs 13(a) to (c) and immediately claim compensation in terms of subs (d).

Section 189A(13) of the LRA reads as follows:

‘If an employer does not comply with a fair procedure, a consulting party may approach the Labour Court by way of an application for an order –

(a) compelling the employer to comply with a fair procedure;

(b) interdicting or restraining the employer from dismissing an employee prior to complying with a fair procedure;

(c) directing the employer to reinstate an employee until it has complied with a fair procedure;

(d) make an award of compensation, if an order in terms of paragraphs (a) to (c) is not appropriate.’

The CC held

The CC found that the broader context of s 189A and the primary purpose of s 189A(13) should be taken into account in order to aid the interpretation and consideration of the remedies provided for in terms of s 189A(13). The CC held that the primary motive of s 189A(13) is to make provision for corrective relief, which is directed at ensuring the retrenchment process resumes and is conducted fairly. In addition, the primary motive of s 189A(13) is informed by s 189A(18). Section 189A(18) removes the Labour Court’s (LC) jurisdiction in adjudicating disputes involving a procedurally unfair dismissal based on the employer’s operational requirements. In circumstances where an employer is not engaging in a fair procedure, the function of the LC is supervisory in nature and aimed at putting the employer and the employee in a position, which enables them to engage in a procedurally fair retrenchment process.

The CC considered the language, purpose and overall scheme of s 189A(13), in conjunction with the effect of s 189A(18), and concluded that a court is only permitted to consider subs (d) in specific circumstances, namely where awarding relief in terms of subss (a) to (c) would be inappropriate, given the particular facts placed before the court. Therefore, s 189A(13) creates a hierarchy of appropriate relief, wherein subss (a) to (c) are the preferred remedies and subs (d) is the ‘last resort’ remedy.

In the event that a court postpones the consideration of relief in terms of subs (d) to a later date, this does not have the effect of separating subs (d) from subss (a) to (c). In such circumstances, the court would have already been afforded the opportunity to, firstly, consider the relief provided for in terms of subss (a) to (c) and, secondly, to have satisfied itself as to the appropriateness of awarding the relief contained therein. Consequently, s 189A(13) does not provide an applicant with a procedure to pursue compensation at some future remote time. The CC referred to the LC’s finding in Parkinson v Edcon Ltd (CC) (unreported case no JR2644/14, 28-6-2016) (Van Niekerk J) at para 4, whereby it held that the object of s 189A(13) is to allow a court to ‘supervise an ongoing retrenchment process or one that has recently been concluded; it is not a remedy that is available well after dismissals have been effected’ (my italics).

Conclusion

The legislature phrased s 189A(13) in a way, which creates a condition precedent, namely that relief in terms of subss (a) to (c) are first required to be considered in their order of ranking, and thereafter, deemed inappropriate in the circumstances. Compliance with the condition precedent is peremptory before relief in terms of subs (d) may be awarded. Therefore, relief in terms of subs (d) is not a self-standing remedy, and thus, its consideration cannot be isolated from subss (a) to (c).

Samuel Mariens LLB (UWC) is a candidate legal practitioner at Herold Gie Attorneys in Cape Town. Mr Mariens writes in his personal capacity.

This article was first published in De Rebus in 2019 (Aug) DR 27.