Retrenchments

Advocate Estelle Botha

 

Section 189 of the LRA, as amended, deals with the termination of the employment contract for operational requirements. The section prescribes a consultation process to be followed. In 2002 the LRA was amended and introduced section 191(12). This section gives a single employee who was retrenched, a choice whether to refer a dispute to the CCMA for arbitration, or the Labour Court for adjudication.

 

The section states : "If an employee is dismissed by reason of the employer's operational requirements following a consultation procedure in terms of section 189 that applied to that employee only, the employee may elect to refer the dispute either to arbitration or to the Labour Court."

 

From the wording it is clear that section 191(12) applies where a single employee was consulted and subsequently retrenched. It is not applicable where there was more than one employee retrenched. If more than one employee was retrenched, the CCMA has no jurisdiction – those employees must refer the dispute to the Labour Court. If a single employee was retrenched he/she has a choice to either refer the dispute to the Labour Court for adjudication or to the CCMA for arbitration.

 

The Labour Court had an opportunity to interpret section 191(12) in an unreported matter of Rand water vs Bracks & others JR1965/05. The court considered the section in the light of the explanatory memorandum of 2002 which stated that the CCMA was to deal with relatively simple cases of individuals who may not be able to afford the cost of labour court litigation.

 

The court makes an observation that a matter does not become complex merely because of the number of employees retrenched, but the facts of a matter determine its complexity. The court regards the substantive issues as possibly less complex and therefore the CCMA should deal with that. The court interprets the section to mean that the employee may only refer such a dispute to the CCMA if the substantive issues are in dispute only.

 

Because the section says; "following a consultation procedure in terms of section 189…" the court said that it was the intention of the legislator that section 191(12) only allows a single employee to refer a dispute on substantive issues to the CCMA. Any dispute on the procedure must be referred to the Labour Court for adjudication. In the light of this judgement it seems to be safer to refer all retrenchment disputes to the Labour Court after conciliation failed.

 

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