Case CCT275/17
[2018] ZACC 44

Hearing Date: 29 May 2018
Judgement Date: 06 November 2018

Post Judgment Media Summary  

The following explanatory note is provided to assist the media in reporting this case and is not binding on the Constitutional Court or any member of the Court.

On Tuesday, 6 November 2018 at 10h00, the Constitutional Court handed down judgment in an application for leave to appeal by the South African Commercial Catering and Allied Workers Union (SACCAWU) against Woolworths (Pty) Limited (Woolworths). The applicants sought to appeal against relevant parts of the judgment and orders of the Labour Appeal Court relating to the substitution by the Labour Appeal Court (LAC) of the remedy of retrospective reinstatement granted by the Labour Court, for a remedy of 12 months’ compensation.

Until 2002, Woolworths’ employees were engaged on full-time contracts with fixed hours totalling 45 hours per week. In 2002, Woolworths decided that it would in future only employ workers on a flexible working hour basis, which was limited to 40 hours per week. In order to cater for the current market, Woolworths decided that it needed the entire workforce to be flexi-timers and would convert all full-time employees to flexi-timers on terms and conditions applicable to flexi-timers. Woolworths first initiated a voluntary conversion process, without the involvement of SACCAWU. At the end of the voluntary process, Woolworths issued a prescribed notice of intention to retrench the 144 full time employees who had decided not to participate in that process. This resulted in a consultation process with SACCAWU facilitated by the CCMA. During the consultation process SACCAWU and its 44 members who did not accept the conversion, early retirement or voluntary severance had appreciated the need to work flexi-time and accepted that the full time employees should indeed be converted to flexi-time. SACCAWU initially suggested that the full-timers should retain their existing full-time wages and benefits but towards the end of the process had varied its stance to suggest that the employees would work flexi-time for 40 hours and be paid for those hours but at a lower rate. Woolworths did not understand this to be a different proposal from the initial one and thus rejected it. Woolworths subsequently proceeded with the retrenchment of 92 full-time employees, including the 44 members of SACCAWU.

Aggrieved by the retrenchment procedure adopted by Woolworths, SACCAWU launched an application in the Labour Court. The Labour Court held that Woolworths had failed to prove, that the dismissal of the affected employees was operationally justifiable, failed to appropriately consider the alternatives to dismissal and did not meaningfully consult with SACCAWU. Accordingly, the dismissal of the 44 full-timers was held to be procedurally and substantively unfair. Woolworths was ordered to reinstate the 44 dismissed workers retrospectively from date of their dismissal without loss of pay. On appeal, the LAC confirmed that the dismissal was substantively unfair, but found that reinstatement would be inappropriate as the full-time posts were redundant and instead awarded the payment of 12 months’ compensation.

Aggrieved by the retrenchment procedure adopted by Woolworths, SACCAWU launched an application in the Labour Court. The Labour Court held that Woolworths had failed to prove, that the dismissal of the affected employees was operationally justifiable, failed to appropriately consider the alternatives to dismissal and did not meaningfully consult with SACCAWU. Accordingly, the dismissal of the 44 full-timers was held to be procedurally and substantively unfair. Woolworths was ordered to reinstate the 44 dismissed workers retrospectively from date of their dismissal without loss of pay. On appeal, the LAC confirmed that the dismissal was substantively unfair, but found that reinstatement would be inappropriate as the full-time posts were redundant and instead awarded the payment of 12 months’ compensation.

In a unanimous judgment written by Khampepe J, the Constitutional Court held that Woolworths had failed to show that the retrenchments were operationally justifiable on rational grounds, as required by section 189A(19)(b) of the LRA. This was based on the fact that the sole reason for the retrenchments was the need for flexibility and the SACCAWU members had agreed to work the flexible hours and days required. Furthermore, this Court found that Woolworths did not properly consider a number of possible alternatives to retrenchment as was required in terms of section 189A(19)(c) of the LRA.

The Court considered whether reinstatement, being the primary remedy in cases of unfair dismissal, was ‘not reasonably practicable’ in this case. This was the only possible exception set out in section 193(2) that could be applicable in this case. The Court held that “not reasonably practicable” means more than inconvenience and requires evidence of a compelling operational burden. Most importantly, in determining the appropriate remedy, presiding officers must take into account the facts of the matter and make a decision as to what is feasible in the particular circumstances. The Court therefore found that Woolworths had failed to show that reinstatement was not possible, appropriate or that it was futile. The Court therefore upheld the appeal.   

 

              

The Full judgment  here.