Dismissals for operational requirements

June 29th, 2015
Talita Laubscher BIur LLB (UFS) LLM (Emory University USA) is an attorney at Bowman Gilfillan in Johannesburg.

Talita Laubscher BIur LLB (UFS) LLM (Emory University USA) is an attorney at Bowman Gilfillan in Johannesburg.

In Ketse v Telkom SA Soc Ltd and Others [2015] 4 BLLR 436 (LC), Mr Ketse approached the Labour Court in terms of s 189A(13) of the Labour Relations Act 66 of 1995 (LRA) to apply for an urgent order that his notice of termination was of no force and effect and that he be reinstated until the employer complies with a fair retrenchment procedure. He also sought an order interdicting the employer from appointing any other employees to his position pending his reinstatement. In the event that the court found that an order in terms of s 189A(13) was not appropriate, he sought just and equitable compensation.

The employer opposed the application alleging that Mr Ketse did not have locus standi to bring the application as he had not been a consulting party as contemplated in s 189A(13) of the LRA. In this regard, the employer alleged that the various trade unions who had participated in the consultation process were the consulting parties who had the locus standi to bring the s 189A(13) application.

The employer further alleged that the dispute relating to alleged non-compliance with the procedural requirements of the LRA was res judicata as Solidarity had already brought an application to this effect and an agreement had been reached as to the consultation process and the appointment of a facilitator, which agreement was made an order of court. It was also argued that the termination of Mr Ketse’s employment was lawful as more than 120 days had lapsed since the s 189(3) letter had been issued.

The employer argued that Mr Ketse was not a consulting party as defined in s 189(1) of the LRA and referred to a number of cases that recognised a hierarchy of consulting parties in a consultation process. In this regard, an employer is first required to consult with any person with whom it is required to consult in terms of a collective agreement. In the absence of a collective agreement the employer is required to consult with a workplace forum and registered trade union. Only if there is no trade union is the employer then required to consult with the individual employees. Mr Ketse on the other hand argued that s 189(1) of the LRA should be purposively interpreted and to recognise a hierarchy of consulting parties would mean that non-unionised employees would not be consulted with and would be denied recourse to procedural fairness in terms of s 189A(13).


Monique Jefferson BA (Wits) LLB (Rhodes) is an attorney at Bowman Gilfillan in Johannesburg.

Lallie J considered the arguments by both the employer and Mr Ketse as regards locus standi and followed the cases where it had been found that there is a hierarchy in s 189(1) governing the consultation process. He found that in cases where a failure to consult with individual employees was found to constitute procedural unfairness, there had not been a collective agreement in place that required consultation with a particular body. This was distinguishable from the present case where the employer had consulted with the unions, which it was required to consult with in terms of recognition agreements. Lallie J accordingly held that Mr Ketse was not a consulting party as defined in s 189(1). Furthermore, Lallie J found that Mr Ketse was not able to show that he was a de facto consulting party as he had not been present at the facilitated meetings and although he had been provided with certain information by the employer, he had adopted a passive role and had not engaged with the employer on this information. It was accordingly held that he did not have locus standi to bring the application in terms of s 189A(13).

As regards the issue of res judicata, Lallie J found that there was no legal basis for a finding of res judicata as each consulting party may experience procedural unfairness in different ways and thus the agreement reached between Solidarity and the employer regarding procedural unfairness as perceived by Solidarity did not preclude other consulting parties from approaching the court in terms of s 189A(13).
Mr Ketse argued that the termination of his employment was unlawful as the parties had not consulted for the prescribed time period. A facilitator had been appointed and thus the parties were required to consult for a minimum of 60 days. The consultation period had been 120 days and thus Lallie J found that the termination was not unlawful. Lallie J dismissed Mr Ketse’s argument that the employer had breached s 189A as it had not appointed a Commission for Conciliation, Mediation and Arbitration facilitator but instead a private facilitator. Thus, the termination of employment was found to be lawful.
In Vermeulen v Investgold CC and Another [2015] 4 BLLR 447 (LC), a stock controller, Ms Vermeulen, was issued with a s 189(3) letter on 6 December 2012 and told to pack her bags and remain at home until attending a meeting on 12 December 2012. During the meeting the employer rushed through all the topics required for consultation such as the operational rationale, selection criteria, proposed alternatives, timing and severance pay. Ms Vermeulen’s representative proposed that she be trained so that she could occupy a vacant position of assistant accountant. A second proposal was that she be offered an enhanced severance package. Ms Vermeulen was requested to put her proposal in writing, which she then did. On 14 December 2012 Ms Vermeulen was issued with a retrenchment notice and given details of her retrenchment package.

As regards substantive fairness, Ms Vermeulen did not directly challenge the operational rationale for her dismissal but alleged that the dismissal was substantively unfair as she was not appointed to available positions as an alternative to retrenchment. In this regard, there were two vacant positions that she was suitably qualified for but would require her to undergo a pay cut. There was also the role of assistant accountant, which she would have been able to perform if she received adequate training. Van Niekerk J held that it was not unreasonable for the employer to not offer Ms Vermeulen the role of assistant accountant as she would require about eight to 12 months training and the business could not be expected to delay the appointment for such a long period of time. As regards the other positions, Van Niekerk J found that given the fact that Ms Vermeulen had indicated that she would not accept a lower salary, the employer did not act unfairly in failing to consider Ms Vermeulen for the other two positions that would require a substantial salary cut. It was held that the dismissal was substantively fair.
As regards procedural fairness, Van Niekerk J held that it is not appropriate to simply apply a checklist approach to retrenchments and that the employer must engage openly and honestly in a manner that allows both parties to express their views and proposals. Procedural fairness also requires an employer to seriously consider any proposals made by the employees. In this case the consultation process took only two hours. Van Niekerk J commented that there may be circumstances where a truncated consultation process may be justified. This may be the case if the survival of a business is at stake but this was not the case in these circumstances. Van Niekerk J concluded that the employer should have engaged further with the employee and thus the employer failed to engage in a joint consensus seeking manner. The dismissal was accordingly procedurally unfair and compensation equal to three months’ pay was ordered.

Moksha Naidoo BA (Wits) LLB (UKZN) is an advocate at the Johannesburg Bar.

Moksha Naidoo BA (Wits) LLB (UKZN) is an advocate at the Johannesburg Bar.


Numerical targets v quotas – national demographics v regional demographics
Solidarity and Others v Department of Correctional Services and Others (LAC) (unreported case no CA23/13, 10-4-2015) (Waglay JP, Davis JA et Mngqibisa – Thusi AJA).

Ten of the appellant’s members, cited as the second to 11 appellants (the employees) applied for various promotions while working for the Department of Correctional Services (DCS) in the Western Cape.

Save for one employee, the remaining employees were unsuccessful in their respective applications, prompting the appellant to refer an unfair discrimination dispute to the Labour Court. The appellant’s claim centred on the allegation that the DCS’s employment equity plan (the plan) contravened the Employment Equity Act 55 of 1998 (EEA) in that it firstly, required a rigid application of quotas based on demographic representation; and secondly, failed to take into account regional demographics of the Western Cape (nine of the ten employees were members of the Coloured community residing in the Western Cape.)

In terms of relief, the employees wanted to be placed into the posts they applied for and which remained vacant, alternatively that they be constructively promoted (ie, be given the same remuneration and benefits associated with the post they applied for).

Rabkin-Naicker J, in Solidarity and Others v Department of Correctional Services and Others (Police and Prisons Civil Rights Union as amicus curiae) (2014) 35 ILJ 504 (LC), found the DCS’s plan unfair in that it failed to take into consideration regional demographics. In failing to do so, the court found that the DCS recruitment and selection process amounted to discrimination, which was not protected by either the EEA or the Constitution. The judge ordered that when setting numerical targets, the DCS must consider both national as well as regional demographics. The remaining relief sought by the employees was dismissed with no order as to costs.

At the LAC the appellant’s appeal lay against the decision of the court a quo refusing to grant the relief sought. The respondents cross-appeal was limited to the finding that the DCS’s plan did not take into account regional demographics.

The LAC began by examining the DCS plan.

The plan created numerical targets by race and gender; these targets were informed by the national demographics estimated in 2005. Material to the judgment is the fact that the plan allowed the National Commissioner of the DCS to deviate from the plan when considering business delivery, critical positions or when an employee from underrepresented groups was not available. Similarly the DCS affirmative action plan also affords the Commissioner the discretion to deviate from the affirmative action plan in consideration of certain factors and circumstances.

Did the plan embody a quota system that was impermissible in terms of the EEA or did the plan set numerical targets contemplated in the EEA?

The appellant argued that the DCS’s plan embodied a quota system whereby appointments, transfers and promotions were done in strict accordance to national demographics without taking into account the individual circumstances of those applying for promotions, transfers etcetera. As a result thereof, according to the appellant, the plan was based on ‘race and gender norming’ without any proper regard to the individual’s circumstances and past disadvantages.

In addressing this argument the LAC held:

‘Much of the debate before this court turned on the distinction between a quota, which in terms of the EEA, is an impermissible mechanism, and the permissible concept of numerical targets. The key distinguishing factor between these two concepts turns, it appears, on the flexibility of the mechanism. An inflexible set of numbers with which the designated employer is required to comply, “come what may” constitutes a quota and would therefore be in breach of s 15(3) of the EEA. By contrast, a plan based on designated groups filling specified percentages of the workforce, but which allowed for deviations therefrom so that there was no absolute bar to present or continued employment or advancement of people who do not fall within a designated group (s 15(4)) would pass legal muster. Similarly, a plan which provides that the numbers provided for in the plan constitute a goal to be achieved over a defined period would be congruent with the EEA.’

Relating this to the merits at hand, the LAC observed that from 2010 to 2013 the DCS had deviated from its plan 13 times in the Western Cape. This fact supported the view that the DCS was not inflexible when implementing the plan and that there was no absolute bar to promotions and appointments as argued by the appellant.

In addressing the argument that the plan violated the right to equity, the court adopted the Constitutional Court test used to decide whether a restitution measure, in casu the DCS’s plan, violated the equality provision contained in s 9(2) of the Constitution. The test is a threefold inquiry, which seeks to evaluate whether the measure –

  • targets persons or categories of persons who have been disadvantaged by unfair discrimination;
  • is designed to protect or advance such persons or categories of persons; and
  • promotes the achievement of equity.

The court was satisfied that the DCS’s plan met the first two requirements. In dealing with the third requirement the court acknowledged that it is at this stage that the rights of individuals can be protected and a court is required to balance an individual’s right to dignity against the substantive nature of the right to equity. The measure must not ‘impose disproportionate burdens … or impose substantial and undue harm’ against those who do not benefit from such measures.

In keeping with the third requirement of the inquiry the court upheld the finding that the failure of the DCS to take into account the regional demographics of the Western Cape meant the plan was not compliant with the EEA and hence unfairly discriminated against the appellants.

Section 42 of the EEA obliged the DCS to take into consideration both regional as well as national demographics when implementing an employment equity plan. The coloured community in the Western Cape made up 50% of the economically active population yet the DCS’s plan only allowed 8,8% of its workforce in the Western Cape to be employed from the coloured community. Therefore the implementation of the plan would result in a ‘clear infringement on dignity to those who were the very target of Apartheid’s racist policies’.
Prior to making this point the court did, however, say that the mere fact that one person from a designated group is advantaged over another person also from a designated group does not in itself lend to an equity plan being contrary to the EEA nor was it axiomatic that under such circumstances, the designated person excluded from the measure would be successful in a claim for unfair discrimination.

The court also rejected the DCS’s argument that under the 2014 amendments to the EEA, there was no longer an obligation to consider regional demographics when developing an equity plan (s 42 of the amended EEA replaced the word ‘must’ with ‘may’). In justifying its decision the court held that it would be difficult to envisage how a plan could pass legal muster without taking into account regional demographics and that a failure to do so would substantively reduce the contribution of restitution towards substantive equality.

On the issue of remedy, given the lack of certain evidence, in particular that certain employees would have been promoted had the DCS’s plan taken account of regional demographics, as well as having regard to the lapse in time from when the dispute arose to when the appeal was heard; the court did not grant the relief the employees sought.
Both the appeal and cross appeal were dismissed with no order as to costs.

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This article was first published in De Rebus in 2015 (July) DR 54.