CWIU & others v Algorax (Pty) Ltd [2003] 11 BLLR 1081 (LAC)

Principle:

  1. Where there is a dismissal which has as its purpose the compelling of the employee to agree to the employer’s demand that they agree to a change of terms and conditions of employment, it will fall within s 187(1)( c) of the LRA and will be automatically unfair.

  2. The Court must determine the fairness of the dismissal objectively but must not defer to the employer in answering that question.  The court should not deal with the matter on the basis that preserves jobs rather than one which causes job losses. Dismissal for operational requirements is a measure of last resort

Facts:

The employees were dismissed after they refused to accept a proposal by the employer to change from a straight day shift from Mondays to Fridays to a rotating shift system, which required them to work some nights and on alternate weekends. The employer proposed the new shift system because it was then running two separate shifts, with the night shift staffed by contract workers. Management was of the view that a rotating shift would resolve certain problems, including a lack of communication between management and permanent night shift workers. After several meetings with shop stewards, the employer informed the union that it was planning to introduce the new shift system. When the workers refused to accept the proposed shift system, the employer declared a dispute and referred the matter to the CCMA for conciliation.

The union failed to attend the conciliation meeting. The employer then proposed that the dispute be referred for advisory arbitration, failing which a retrenchment exercise would begin. The employer rejected the employees’ request for a further meeting. Each employee was asked to sign a written undertaking to work the new shift system, failing which he would be dismissed. After the initial deadline to sign the undertaking was extended, those employees who failed to sign the agreement were dismissed.

A week later, the employer offered to reinstate the employees without back pay if they accepted the new shift system. The union rejected that offer, and referred the matter to the Labour Court. In its statement of defence, the employer again offered to reinstate the employees if they accepted the new shift system. The Labour Court held that the dismissal was unfair, and ordered the employer to compensate the employees.

On appeal, the employees claimed that their dismissal was automatically unfair. The employer argued that where an employer dismisses employees for valid operational requirements, the dismissal is not effected for the purposes of compelling them to accept a demand in respect of a matter of mutual interest.

The Court held that an employer may dismiss those employees who do not satisfy the operational needs of the business if its purpose is to get rid of them permanently and replace them with others prepared to work in accordance with the employer’s operational requirements. However, where an employer wishes to retain workers who decline to satisfy its operational requirements, and then dismisses them in the hope that they will be thus induced to comply with its needs, the dismissal is for the purposes of compelling the workers to comply with a demand, and is therefore automatically unfair. The critical issue is the purpose of the dismissal.

After examining the evidence, the Court held that the indications that the employer intended to rid itself permanently of the employees were outweighed by the indications that the purpose of the dismissal was to compel the employees to comply with the employer’s demands. The dismissal of the employees was accordingly automatically unfair.

Having decided that the dismissals were automatically unfair, the Court also went on to decide whether the dismissals would have been unfair for operational reasons under s.189 of the LRA. Here, the Court examined the criteria for evaluating the substantive fairness of the reasons for the dismissals. The Court said it had to determine the fairness of the dismissal objectively, and must not defer to the employer for the purpose of answering that question. In other words it cannot say that the employer thinks it is fair, and therefore, it is or should be fair. The Court said it should not hesitate to deal with the matter on the basis of the employer using a solution which preserves jobs rather than one which causes job losses. This is especially so because resort to dismissal, especially a so-called no-fault dismissal, which some regard as the death penalty in the field of labour and employment law, is meant to be a measure of last resort. The LRA places an obligation on the employer to only resort to dismissing employees for operational requirements as a measure of last resort.

The Court found that the employer had not considered all measures to avoid the dismissals and accordingly found that the dismissals would also have been unfair under s 189 of the LRA.  

Extract from the award:

[At para 55]   In these circumstances I conclude that the dismissal was effected for the purpose of compelling the individual appellants to agree to the respondent’s demand that they work the rotating shift and, accordingly, fell within the ambit of section 187(1)(c) and was automatically unfair. This conclusion is sufficient to dispose of this appeal. Accordingly it is, strictly speaking, not necessary for me to deal with the question whether, if the dismissal was not automatically unfair, it nevertheless was unfair for lack of a fair reason to dismiss. I have, however, decided to deal with that issue in any event because it may well be that, even if the dismissal was not automatically unfair, it was, nevertheless, unfair for lack of a fair reason.

[56]   The appellants contended that, even if the dismissal was not effected for the purpose of compelling the individual appellants to agree to the respondent’s demand on the issue of a rotating shift and was, therefore, not automatically unfair, it nevertheless, was unfair in that there was no fair reason for it. The respondent contended that there was a fair reason. I now turn to consider this part of the case.

[57]   Section 188(1)(a)(ii) of the Act provides that a dismissal that is not automatically unfair is unfair if the employer fails to prove that the reason for dismissal is a fair reason based on the employer’s operational requirements. The term “operational requirements” is defined in section 213 of the Act as meaning “requirements based on the economic, technical, structural or similar needs of an employer”.

[58]   In determining whether there was a fair reason for the dismissal of the individual appellants, the starting point is the determination of the reasons for the dismissal. The individual appellants were dismissed because they were not prepared to work the rotating shift which the respondent sought to introduce. That is separate from the purpose of the dismissal. The latter question has been dealt with above. The next question that arises is that of why the introduction of the rotating shift was so important that employees had to be dismissed when they refused to work according to it. This question makes it necessary to establish what the problem was or what the problems were that the respondent was facing which it sought to address by introducing a rotating shift………………..

[69]   Sometimes it is said that a court should not be critical of the solution that an employer has decided to employ in order to resolve a problem in its business because it normally will not have the business knowledge or expertise which the employer as a businessperson may have to deal with problems in the workplace. This is true. However, it is not absolute and should not be taken too far. When either the Labour Court or this Court is seized with a dispute about the fairness of a dismissal, it has to determine the fairness of the dismissal objectively. The question whether the dismissal was fair or not must be answered by the court. The court must not defer to the employer for the purpose of answering that question. In other words it cannot say that the employer thinks it is fair, and therefore, it is or should be fair.

[70]   Furthermore, the court should not hesitate to deal with an issue which requires no special expertise, skills or knowledge that it does not have but simply requires common sense or logic, especially where the employer has had an opportunity of commenting on such an issue and has not said anything that indicates that any special knowledge or expertise required. This is such a case. The respondent’s problem required simple common sense and did not involve any complicated business transaction or decision. Accordingly, where, as in this case, the employer has chosen a solution that results in a dismissal or in dismissals of a number of employees when there is an obvious and clear way in which it could have addressed the problems without any employees losing their jobs or with fewer job losses, and the court is satisfied, after hearing the employer on such a solution, that it can work, the court should not hesitate to deal with the matter on the basis of the employer using that solution which preserves jobs rather than one which causes job losses. This is especially so because resort to dismissal, especially a so-called no-fault dismissal, which some regard as the death penalty in the field of labour and employment law, is meant to be a measure of last resort. After all, section 189(2)(a)(i) and (ii) read with subsection (3)(a) and (b) imply that the employer has an obligation, if at all possible, to avoid dismissals of employees for operational requirements altogether or to “minimise the number of dismissals,” if possible, and to consider other alternatives of addressing its problems without dismissing the employees and to disclose in writing what those alternatives are that it considered and to give reasons “for rejecting each of those alternatives”. It seems to me that the reason for the lawmaker to require all of these things from the employer was to place an obligation on the employer to only resort to dismissing employees for operational requirements as a measure of last resort. If that is correct, the court is entitled to intervene where it is clear that certain measures could have been taken to address the problems without dismissals for operational reasons or where it is clear that dismissal was not resorted to as a measure of last resort. The evidence in this case was that the company did not consider the measure referred to above.

[71]   It seems to me, therefore, that the individual appellants’ dismissal was not warranted because the problems that the respondent sought to address when it demanded that the individual appellants agree to work the rotating shift could have been adequately addressed without the implementation of the rotating shift system and without harming the respondent’s business in any manner or in any significant manner. If the dismissal was unwarranted, it was without a fair reason and was, therefore, unfair.