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INTRODUCTION

DOES THE AMENDMENT TO SECTION 187(1)(C) PROHIBIT RETRENCHMENTS AIMED AT CHANGING TERMS AND CONDITIONS OF EMPLOYMENT? . INTRODUCTION. From: A dismissal is automatically unfair if the reason is: “ to compel the employee to accept a demand in respect

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INTRODUCTION

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  1. DOES THE AMENDMENT TO SECTION 187(1)(C) PROHIBIT RETRENCHMENTS AIMED AT CHANGING TERMS AND CONDITIONS OF EMPLOYMENT?

  2. INTRODUCTION From: A dismissal is automatically unfair if the reason is: “to compel the employee to accept a demand in respect of any matter of mutual interest between the employer and employee” To: “A refusal by employees to accept a demand in respect of any matter of mutual interest between them and their employer.” • PROPOSED AMENDMENT OF S187

  3. MEMORANDUM “The section is amended to remove an anomaly arising from the interpretation of Section 187(1)(c) in [Fry’s Metals] which held that the clause had been intended to remedy the so-called ‘lockout’ dismissal which was a feature of pre 1995 labour relations practice. The effect of this decision when read with decisions such as [Algorax] is to discourage employers from offering reemployment to employees who have been retrenched after refusing to accept changes in working conditions.” • RATIONALE FOR AMENDMENT

  4. “The amended provision seeks to give effect to the intention of the provision as enacted in 1995 which is to preclude the dismissal of employees where the reason for the dismissal is their refusal to accept the demand by the employer over a matter of mutual interest. This is intended to protect the integrity of the process of collective bargaining under the LRA and is consistent with the purposes of the Act”. • RATIONALE FOR AMENDMENT

  5. OUTLINE INTERPRETATION DIFFICULTIES UNDERSTAND BACKGROUND SCHOEMAN v SAMSUNG THOMPSON “BARGAINING RESTRUCTURING AND THE OPERATIONAL REQUIREMENTS DISMISSALS” TODD and DAMANT “UNFAIR DISMISSAL – OPERATIONAL REQUIREMENTS” POST THOMPSON LABOUR COURT DECISIONS FRY’S METALS ALGORAX THOMPSON “BARGAINING OVER BUSINESS IMPERATIVES: THE MUSIC OF THE SPHERE’S AFTER FRY’S METALS” POSSIBLE INTERPRETATION UNDERSTAND IMPLICATIONS EMPLOYER OPTIONS

  6. SCHOEMAN & ANOTHER V SAMSUNG ELECTRONICS (PTY) LTD (1999) 20 ILJ 200 LC FACTS Implications for collective bargaining: Constitutional right to bargain Constitutional right to strike Traditional bargaining terrain Automatic unfair dismissal

  7. CLIVE THOMPSON’S RESPONSE Clear division of mutual interest bargaining and operational requirement dismissal Matter may not migrate from one to the other In exceptional cases may migrate

  8. THE LABOUR COURT POST THOMPSON FAWU v GENERAL FOOD INDUSTRIES LTD (2002) 10 BLLR 950 (LC) INTERPRETATION OF “THE ECONOMIC NECESSITY TEST” “AILING OR FAILING” TO SUCH AN EXTENT THAT TERMINATION FAIR “VIABILITY” OF COMPANY AT STAKE

  9. FRY’S METALS DECISION Facts LAC Judgment Dismisses Economic Necessity Test Limitation of Automatic Unfair Dismissal to Temporary Dismissals Confined to Tactical Dismissal Rationale not Tested SCA’s Approach

  10. ALGORAX DECISION Facts Turns on Evidence The Algorax anomaly THOMPSON’S RESPONSE

  11. PROPOSED AMENDMENTS TWO POSSIBLE INTERPRETATIONS Operational need for different terms and conditions Abolish existing positions Offer new positions No demand is made Offer can be kept open Resolves Algorax anomaly Never go bargaining route Employer can never Retrench for Terms And Conditions Obliges Employer to Separate Processes • An offer will be construed as a demand • Must go to bargaining • Cannot migrate to retrenchment • Resolves migration anomaly • Ends temporary dismissal finding • Permanent dismissals as in Fry’s Metals included • Protects integrity of bargaining process

  12. IMPLICATIONS OF SECOND INTERPRETATION Major implications for ability of Employers to respond to changed market conditions Outsourcing? Lockout No replacement labour A rights issue is pushed into interest terrain Correct response in S.A. context?

  13. EMPLOYER OPTIONS CONTRACTS OF EMPLOYMENT Flexible Working Times Flexible Job Content No Fixed Reporting Lines Increase discretionary remuneration BARGAINING TACTICS

  14. IMPLICATIONS OF FIRST INTERPRETATION SOLUTION TO THE SAMSUNG DILEMMA EITHER: Accept “free market” OR More Rigorous Application of Test Adoption of Thompson’s Proper Business Case Not a “Necessity” Test No “purely for profit” retrenchments

  15. Thank you

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