NUMSA & others v Dorbyl Ltd & another (2004) 25 ILJ 1300 (LC)

Principle:

If the reason for the dismissal of employees during a strike is the participation in a protected strike, and not the employer's operational requirements, then the dismissals will be automatically unfair in terms of s 187(1)(a) of the LRA.

Facts:

A protected strike took place in spite of knowledge of the employer's dire financial situation. The company decided to close its Letaba operations and to relocate them to existing premises in Gauteng. The union then notified the company that its members had accepted an earlier offer made by the company. The company asserted that its decision to relocate was based not on the strike but was a purely economic decision. The court had to decide if those retrenched were dismissed for participating in a protected strike or fairly retrenched. The court found the company had proper operational requirements when it dismissed the employees. Although the court found the timing troubling, this was not decisive because the financial state of the company was known to the union before the strike and the strike demand itself was an operational requirement which contributed towards the company's decision to close the Letaba operation. The dismissals were held to be substantively fair. Because of a flawed consultation process, the court found there was procedural unfairness, awarding two months compensation to each retrenched employee. Interestingly the court ordered this to be paid by the buyer of the business which had purchased it as a going concern.

Extract from the judgment:

[At 1321D]   As a strike by its very nature results in economic hardship for the employer a further vexed question... is how much more economic hardship is an employer required to tolerate before it is entitled to retrench employees. [In certain cases] it was held that dismissal must be the last resort of the employer. However in [other cases] the court accepted a threshold of 'the likelihood of substantial economic loss'.

[At 1323A-C]   In the event than 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... If an employer makes a decision to retrench employees before consultation has been completed, it essentially presents employees with a fait accompli and that is fatal to the procedural fairness of the retrenchments.