SACCAWU & others v Gallo Africa (2005) 26 ILJ 2397 (LC)

Principles:
(1) While it will generally be unfair to relocate an employee to another part of the country without paying relocation costs, there may be circumstances where it is not unfair, particularly where there are financial constraints on the employer.
(2) Pre-retrenchment consultation is a two-way process and if an employee withdraws from those consultations, it will not be unfair for the employer to finalize the retrenchment process alone.

Facts:
As part of a national restructuring exercise caused by huge financial losses, 4 employees were included in a ‘bumping’ exercise and offered alternative positions by being transferred to Johannesburg. These employees wanted the company to cover their relocation costs but the company could not do so because of its financial position. It did however offer them loans to cover their relocation costs. The employees withdrew from the on-going consultations. When they failed to respond to the invitation to accept the offer of transfer, their services were terminated. In the Labour Court the employees alleged that their services had been terminated prematurely because the issue of relocation had not been resolved. The Court accepted that there was a need to restructure and, despite reservations about the general fairness of not paying relocation costs, found that in this case it was not unfair. It further found that the company had consulted as required by the LRA and because consultation is a two-way process, meaningful consultation cannot continue if one of the parties withdraws from the process. The Court found that the employees were not entitled to compensation as they had been dismissed fairly.

Extract from the judgment:
[At para 26] During the trial, I raised my concerns about the fairness or otherwise, of presenting the employees in question with an offer of employment in another province and refusing to pay their relocation costs. I was persuaded that the respondent’s conduct was not unfair in this regard.
[27] The respondent did offer in writing that it would assist the four employees by means of a loan. It is also of significance that they would be taking up positions of employees who had been retrenched in the course of a bumping exercise, agreed upon with the union. The retrenchment exercise was effected countrywide at several branches. To pay transfer costs for employees who were relocated as a means of avoiding retrenchment, would be adding to existing financial difficulties. Furthermore, the employees in question failed to participate in the final discussions...
[28] In my view, the respondent complied properly with the provisions of s 189 of the Act, insofar it could. It did all it could to achieve the kind of consultation envisaged by the Act and the law.
[29] Consultation in terms of s 189 of the Act is a two-way process. No meaningful consultation can take place if one party withdraws from the process. There should also ultimately be finality in the consultation process. It cannot be held in abeyance by a party who insists that the process is not finalized when it is quite clear that the process had been.