Retrenchment of single employees – The LAC has spoken on jurisdiction
Johanette Rheeder

Since 2007, the question of jurisdiction of the CCMA in a single employee retrenchment was a much argued and discussed topic. Some employers welcomed the decision of Rand Water v Bracks NO & others (2007) 28 ILJ 2310 (LC) from a tactical point of view as, in terms of this case, the single employee was deprived of the right to refer a procedural compliant for an unfair retrenchment to the CCMA, effectively forcing the down and out ex employee to consider whether the last bit of his money should be spend on attorneys or advocates on the more expensive and longer processes of the Labour Court or to abandon his procedural claim.

Then came Scheme Data Services (Pty) Ltd v Myhill NO & others (2008) 17 LC 1.11.90 and Butterworths [2009] 4 BLLR 381 (LC), where the Labour Court rejected Rand Water, causing many more procedural arguments in the CCMA, as we now had two Labour Court cases conflicting each other, leaving the dismissed employee and the employer stuck between a rock and a hard place, whilst looking at the CCMA for some direction.

In the Scheme Data Case, the employee was retrenched and referred a dispute to the CCMA. The respondent commissioner found that the employer had failed to follow a fair procedure and had not shown good cause for dismissing the employee. The matter went on review and the Labour Court held that the judge in the Bracks matter had failed to heed his own observation that the LRA should be interpreted purposively to give effect to the objective of expeditiously resolving labour disputes.

The judge's interpretation of section 191(12) of the Labour Relations Act appeared to have been influenced by a desire to spare CCMA arbitrators the need to determine complex procedural issues in retrenchment cases. The Court held that there is nothing in the Labour Relations Act or the law to support the proposition that procedural issues in retrenchments are more complex than issues of substantive fairness. Furthermore, the analysis in Bracks of the wording of section 191(12) suggested that employers are not required to follow a fair procedure when retrenching only one employee.

This was patently incorrect. The procedure set out in section 189 (dealing with retrenchments) must be followed before dismissing "one or more employees" for operational requirements". Section 191(12) refers to "a consultation procedure in terms of section 189". Both sections191(12) and 191(5)(b)(ii) make it plain that an individual employee who has been dismissed for operational requirements may refer a dispute to either the Labour Court or the CCMA, whether the case is founded on procedural fairness or substantive fairness, or both.

Various cases followed where it was found that the plain wording of the section is clear that a single employee who is dismissed for operational reasons, is free to refer the dispute – whether founded on procedural fairness or substantive fairness or both – either to the CCMA or to the Labour Court." The CCMA then referred the matter to the Labour Appeal Court in Bracks N.O. v Rand Water and Swart, unreported case no JA2/08.

Swart was reinstated by the acting commissioner, and the Labour Appeal Court now looked at the long criticized ruling that the words: "following a consultation procedure in terms of section 198", meant that the consultation process had taken place as required by the Act, therefore must not be in dispute, to grant the CCMA jurisdiction.

The LAC found that this interpretation defeats the object of section 191(12) (which gives the right to the single employee to choose jurisdiction) and works against speedily resolution of labour disputes. The LAC also noted that the explanatory memorandum to the 2002 amendments also does not support this interpretation of the Labour Court and that the plain purpose of the section is to grant the employee the choice to go to the CCMA or the Labour Court for both substantive and procedural complaints. The LAC did not deal with the question as to reinstatement or not.

For more information contact Johanette Rheeder at Johanette Rheeder Attorneys
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