We look at when it is compulsory for employers to involve MISA in the process of restructuring, retrenchments, or the demotion of staff members.

MISA’s legal department often receives queries from members only after they have been retrenched or demoted and already have been greatly prejudiced by the unilateral actions of their employer. Some members are even required to sign agreements with little to no protection.

When is it compulsory for the employer to include MISA in these processes?

1. Retrenchment

The Labour Relations Act 66, of 1995 (LRA), Section 189 prescribes that “When an employer contemplates dismissing one or more employees for reasons based on the employer’s operational requirements, the employer must consult… any registered trade union whose members are likely to be affected by the proposed dismissals.”

The Oxford dictionary defines contemplates as follows: “look thoughtfully for a long time.”

It is therefore clear that an employer must involve the union even when they are still thinking about the process and not after they already decided to dismiss staff members.

In NUMSA & others v Dorbyl Ltd & another (2004) 25 ILJ 1300 (LC) the Judge reiterates that “In the event that an employer is able to show that the dominant or main reason(s) for the dismissal is a proper operational requirement, that is not the end of the matter. The employer is also required to show that the retrenchments were procedurally fair. This court and the Labour Appeal Court have on many occasions emphasized that consultation in the context of a retrenchment exercise means a 'joint problem-solving' or a 'joint consensus seeking' exercise. If an employer makes a decision to retrench employees before consultation has been completed it essentially present’s employees with a fait accompli and that is fatal to the procedural fairness of the retrenchments.”

2. Operational Requirements

The Labour Appeal Court confirmed in Chemical Workers Industrial Union of SA v Lennon Ltd (1994) 15 ILJ 1037 (LAC) the employer was not obliged to give notice to or to consult with the union before taking its decision to restructure. This was after the employer provided reasons for the need to restructure with reference to various graphs and figures.

Should an employer, however, try to disguise, for example demotion, by attempting to rationalise the action as restructuring the Court will scrutinise the decision and/or rationale provided.

In Banking Insurance Assurance Workers Union & another v Mutual & Federal Insurance Co Ltd (2002) 23 ILJ 1037 (LC) the Labour Court “analysed the evidence relating to the posts held by the employees before restructuring and the posts created by the restructuring, the redundancy of posts and the training given to employees to fill the new posts and found very little difference between the old and new structures.”Applying the law to the facts, the Labour Court was of the view that the respondent had attempted to disguise a classic retrenchment exercise as reorganisation or restructuring based on non-delivery of services in the employees' department.

Should our members believe that the restructuring they are involved in is just a blind sight, MISA should be contacted in order to assist and advise them accordingly.

3. Recognition Agreements

Lastly, it is important that our members should know that MISA concluded Recognition Agreements with the following Groups and/or Employers:

• Unitrans Automotive (Pty) Ltd t/a Toyota;
• Unitrans Automotive (Pty) Ltd t/a VW & Audi;
• Unitrans Automotive (Pty) Ltd t/a Williams Hunt;
• Unitrans Automotive (Pty) Ltd t/a BMW;
• Unitrans Automotive (Pty) Ltd t/a IC Auto;
• Associated Motor Holdings (Pty) Ltd;
• Marble Gold 182 (Pty) t/a Volkswagen Polokwane;
• NICBO Motors (Pty) Ltd t/a Nic Bottari Toyota
• NLR Motors (Pty) Ltd t/a NSB Motors; and
• Kempston Motor Group Trust.

It is imperative that MISA becomes involved in consultations when there is a Recognition Agreement concluded between MISA and an employer irrespective of the process the employer embarked on.

Should you have any questions, do remember MISA is always only a phone call away.

Article by Kay Barnard, Labour Relations Officer, MISA.

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