Edcon v Steenkamp, and Related Matters

• Jurisdiction: South Africa
• Citation: 2015 (4) SA 247 (LAC)

Edcon v Steenkamp, and Related Matters
2015 (4) SA 247 (LAC)

2015 (4) SA p247

Citation	2015 (4) SA 247 (LAC)
Case No	JS 648/13
Court	Labour Appeal Court, Johannesburg
Judge	Tlaletsi DJP, Musi JA and Murphy AJA
Heard	October 23, 2014
Judgment	March 03, 2015
Counsel	AT Myburgh SC (with FA Boda) for the applicant.; ESJ van Graan SC for the first, fifth and further respondents.; JG van der Riet SC (with LH Barnes) for the third respondent.

Flynote : Sleutelwoorde B

Labour law — Dismissal — Notice of termination — Prescribed statutory procedures and notice periods in Labour Relations Act 66 of 1995, ss 189A(2)(a) and 189A(8) — Whether non-compliance rendering subsequent dismissal invalid. C

Headnote : Kopnota

Section 189A(2)(a) of the Labour Relations Act 66 of 1995 (the LRA) provides that 'in respect of any dismissals covered by this section [dismissals based on operational requirements by employers with more than 50 employees] an employer must give notice of termination of employment in accordance with the provisions of this section; . . . .' Section 189A(8)(b) applies '(i)f a D facilitator is not appointed' and provides that in such instance notice of termination may be given 'once the periods in s 64(1)(a) of the LRA have elapsed', ie 30 days after referral to a bargaining council or the CCMA of an issue in dispute that is the subject of a contemplated strike or lock-out.

At issue in this case was whether non-compliance with the notice and procedural E provisions of s 189A(2)(a) read with s 189A(8) of the LRA resulted in invalidity of the dismissals and an entitlement to reinstatement on that ground. This where notice of termination was given before first referring the dispute to conciliation — a requirement that must be read into s 189A(8) [*] — and also given prematurely, ie before lapsing of the period referred to in s 189A(8)(b).

Held: The general principle that a thing done contrary to the direct prohibition F of the law was void and of no effect, no longer applied in all cases but depended upon the proper construction of the legislation in question. The crucial enquiry was whether the legislature contemplated that the relevant failure should be visited with nullity. The fact that a statute provided for remedies in the event of a breach of its provisions was a significant factor G counting against making an inference of invalidity, as was that a declaration of invalidity would have capricious, disproportionate or inequitable consequences. (Paragraphs [43], [44] and [45] at 264E, 265B and 265E – F.)

A declaration of invalidity and consequential relief in the form of automatic reinstatement on the grounds of procedural non-compliance, were inconsistent with the intention of the legislature to generally limit relief for H procedural lapses. Other remedies existed to deal with the problem of prematurity, which in their application would lead to more proportionate and less capricious consequences, in keeping with the aim of the LRA to promote orderly collective bargaining and the effective resolution of labour disputes. (Paragraph [50] at 267D – F.)

Accordingly it could not have been the intention of the legislature that a failure I to comply with s 189A(8), read with s 189A(2) of the LRA, would result in the dismissals being invalid. (Paragraph [52] at 268B – C.)

2015 (4) SA p248

Cases Considered

Annotations A

Case law

Southern Africa

Absa Insurance Brokers (Pty) Ltd v Luttig and Another NNO 1997 (4) SA 229 (SCA): referred to

De Beers Group Services (Pty) Ltd v NUM [2011] 4 BLLR 318 (LAC): criticised B

Gcaba v Minister for Safety and Security and Others 2010 (1) SA 239 (CC) (2010 (1) BCLR 35; [2009] 12 BLLR 1145; [2009] ZACC 26): referred to

Hubbard v Cool Ideas 1186 CC 2013 (5) SA 112 (SCA) ([2013] ZASCA 71): referred to C

Hyprop Investments Ltd and Others v NSC Carriers and Forwarding CC and Others 2014 (5) SA 406 (SCA) ([2014] 2 All SA 26): dictum in para [21] applied

Independent Outdoor Media (Pty) Ltd and Others v City of Cape Town [2013] 2 All SA 679 (SCA): referred to

Kylie v CCMA and Others 2010 (4) SA 383 (LAC) ((2010) 31 ILJ 1600): compared D

Leoni Wiring Systems (East London) (Pty) Ltd v NUMSA and Others (2007) 28 ILJ 642 (LC): referred to

Louw v Matjila and Others 1995 (11) BCLR 1476 (W): compared

Lupacchini NO and Another v Minister of Safety and Security 2010 (6) SA 457 (SCA) ([2010] ZASCA 108): referred to E

Mphahlele v First National Bank of SA Ltd 1999 (2) SA 667 (CC) (1999 (3) BCLR 253; [1999] ZACC 1): referred to

National Union of Mineworkers v De Beers Consolidated Mines (Pty) Ltd (2006) 27 ILJ 1909 (LC): criticised

National Union of Textile Workers and Others v Stag Packings (Pty) Ltd and Another 1982 (4) SA 151 (T): referred to F

Nokeng Tsa Taemane Local Municipality v Dinokeng Property Owners Association and Others [2011] 2 All SA 46 (SCA) ([2010] ZASCA 128): referred to

Oudekraal Estates (Pty) Ltd v City of Cape Town and Others 2004 (6) SA 222 (SCA) ([2004] 3 All SA 1; [2004] ZASCA 48): compared

Palm Fifteen (Pty) Ltd v Cotton Tail Homes (Pty) Ltd 1978 (2) SA 872 (A): dictum at 885E – G applied G

Pottie v Kotze 1954 (3) SA 719 (A): dictum at 726F – H applied

Revan Civil Engineering Contractors and Others v National Union of Mineworkers and Others (2012) 33 ILJ 1846 (LAC): criticised

Schierhout v Minister of Justice 1926 AD 99: dictum at 110 qualified H

Strachan v Lloyd Levy 1923 AD 670: considered.

England

Howard v Bodington (1877) 2 PD 203: dictum at 211 applied.

Statutes Considered

Statutes

I The Labour Relations Act 66 of 1995, ss 189A(2) and 189A(8): see Juta's Statutes of South Africa 2013/14 vol 4 at 1-161.

Case Information

AT Myburgh SC (with FA Boda) for the applicant.

ESJ van Graan SC for the first, fifth and further respondents.

JG van der Riet SC (with LH Barnes) for the third respondent. J

2015 (4) SA p249

An application for declaratory orders. A

Order

1.

It is declared that the interpretation of s 189A(2)(a) read with s 189A(8) of the LRA by this court in De Beers Group Services (Pty) Ltd v NUM [2011] 4 BLLR 319 (LAC); and B Revan Civil Engineering Contractors and Others v NUM [2012] 33 ILJ 1846 (LAC) that non-compliance with the provisions of s 189A(2)(a) read with s 189A(8) results in the invalidity of any ensuing dismissal, is wrong and an erroneous interpretation and therefore that non-compliance with these provisions does not lead to an invalid dismissal.

2.

The first, second and third respondents are ordered to pay the costs C of the application, jointly and severally, the one paying the others to be absolved, such costs to include the employment of two counsel.

Judgment

The court:

[1] During April 2013 the applicant (Edcon) commenced with a process D of restructuring based on operational requirements. The process resulted in the retrenchment of about 3000 employees (some of whom accepted voluntary severance packages) during the period April 2013 to mid-2014. Edcon at the relevant time employed about 40 000 employees nationwide and the retrenchments occurred throughout the company. E

[2] Since the retrenchments involved more than 50 employees, the provisions of s 189A of the Labour Relations Act [1] (the LRA) applied to the exercise. Section 189A(1) of the LRA provides that the provisions of the section apply inter alia to employers employing more than 500 employees if the employer contemplates dismissing by reason of its operational requirements at least 50 employees. F

[3] Section 189A was inserted into the LRA by s 45 of Act 12 of 2002. The general purpose of the amendment was to enhance the effectiveness of consultation in large-scale retrenchments by seeking to reduce friction in the process. The section provides for facilitation at an early stage and G lays down the requirements and elements of due and fair process. The section contains 20 subsections, some of which are not relevant to the present dispute. Nonetheless, it will assist in the discussion which follows to examine the section as a whole contextually with regard to its purpose and the circumstances of its enactment. H

[4] The dispute between the parties relates to whether there has been compliance with the section and, significantly, whether previous pronouncements upon and the interpretation of the section by this court are correct and constitutionally sustainable. Given the importance of the case, the Judge President, acting in terms of s 175 of the LRA, directed that the matter be heard by this court sitting as a court of first instance. I

[5] The respondents in the matter are several employees of Edcon affected by the retrenchments, the National Union of Metalworkers of

2015 (4) SA p250

The Court

A South Africa (Numsa), the Minister of Labour and the Minister of Justice and Constitutional Development. We deal with the relevant facts and issues related to the referral of the dispute after first providing an overview of s 189A.

[6] Section 189A of the LRA, as we have said, regulates large-scale B retrenchments. It is an adjunct to s 189 of the LRA which governs operational-requirement dismissals in general. In terms of the latter provision, as is well known, the employer is obliged to consult with appropriate bargaining agents and to engage in a meaningful joint consensus-seeking process aimed at reaching consensus on appropriate C measures to avoid, minimise and mitigate the adverse effects of the dismissals, as well as the method for selecting the employees to be dismissed and the severance pay to be paid. Section 189(3) of the LRA requires the employer to issue a written notice inviting the other consulting party to consult with it and to disclose relevant information D about the reasons for the proposed retrenchment, the alternatives...