REFUSAL TO CHANGE CONDITIONS: Can an employer dismiss employees for refusing to accept changes to working conditions?
Yes – said the labour court in Numsa vs Trident Steel.
The company needed to restructure its operations to survive. It redefined job descriptions and cut its workforce by about 500 mainly through VSP’s in consultation with Numsa. However, it still needed to reduce the workforce further. It initiated a S189 consultation process and offered the new positions to employees. A total of 71 employees accepted the offer, but 733 declined and were retrenched.
The Union did not challenge the Company’s need to restructure or new job descriptions. However, it disputed that the employees were dismissed for operational reasons. They claimed they were dismissed for refusing to accept the Company’s demand to sign new contracts of employment. This they said was automatically unfair in terms of s 187(1) (c) of the LRA. Trident argued that the dismissals were for operational reasons and were fair in terms of s189.
The Labour Court first had to decide what the real reason for the dismissal was. The purpose was to determine whether the dismissals were for operational requirements or if they qualified as an automatically unfair dismissal in terms of s187 (1) (c).
The court said three elements must exist for the dismissals to qualify as an automatically unfair dismissal. –
- There must be clear evidence of a demand,
- There must be a refusal to agree to that demand, and
- The dismissal, objectively viewed, must be as a result of that refusal.
The Labour Court found in the Trident Steel case that these elements did not exist. The real reason for the dismissals was for operational reasons which made the dismissals substantively fair.
TIP: An employer can validly change conditions of employment for genuine operational reasons. However, it must make sure that the process it follows does not open itself to interpretation as automatically unfair dismissal. It is only when all three elements exist – firstly, that there is clear evidence of a demand, secondly a refusal to agree to that demand, and thirdly that the ensuing dismissal, objectively viewed, was as a result of that refusal, that this would qualify as an automatically unfair dismissal under s187(1)(c) of the LRA.