Court rules in favour of virtual retrenchments



Labour law

In a case of whether employers are permitted to utilise Zoom when conducting consultations in a retrenchment exercise was heard by the Johannesburg Labour Court earlier this year. If not, does the continuation of the consultations in such circumstances result in procedural unfairness? 

The court ultimately ruled that yes – in light of the Covid-19 pandemic and the resulting “new normal”– retrenchment negotiations may now take place over video conferencing platforms such as Zoom. 

Consultations generally take place physically, though this is not a requirement as the Labour Relations Act 66 of 1995 (LRA) does not regulate how section 189 consultations are to be held (i.e. in person or via video conference). 

The pandemic and the subsequent social distancing measures put in place calls for a significant change in hiring and retrenchment procedures in the workplace. 

Jacques van Wyk, Director & Andre van Heerden, Senior Associate at Werksmans Attorneys submitted a report detailing the recent case of Food and Allied Workers Union (FAWU) vs South African Breweries (Pty) Ltd (SAB) as it relates to the matter. 

South African Breweries (the employer in this case) decided to restructure its business operations. As a result, a section 189(3) notice was issued as required by the Labor Relations Act (LRA).  

Note: Section 189 (3) of the LRA requires the employer to disclose in writing to the employees or their unions (where applicable) all relevant information relating to their retrenchment. 

A facilitator was also appointed due to the matter being a so-called ‘large scale retrenchment’.  

The facilitation process was affected by the Covid-19 pandemic and the resulting national lockdown.

Thereafter, the Commission for Conciliation, Mediation and Arbitration (CCMA) sought alternatives to how the facilitation process and consultations were to be implemented — one of which is the use of the video conferencing platform, Zoom.  

However, FAWU objected to the use of alternative methods to continue the facilitation process. 

This resulted in the facilitator being disqualified and a new facilitator being appointed to assist in the process.  

Before the implementation of national lockdown and the restrictive measures that followed, a timeline for consultations had been agreed to. 

One of the facilitation meetings was scheduled to take place via Zoom on 25 March 2020 or that the facilitated process is halted until the lockdown restrictions have been lifted.  

No agreement could be reached on which alternative to pursue, however. 

FAWU elected not to participate in the process until the restrictions had been lifted (i.e. the end of the lockdown period). After the required 60-day period had elapsed, the employer issued notices of termination to its employees.  

As a result of this, FAWU launched an application in the Labour Court in terms of section 189A (13) of the LRA. 

Note: The purpose of section 189A(13) applications is to enable the court to make real-time interventions designed to remedy any procedural shortcomings on the part of the employer and to put a retrenchment process that has already commenced back on track.  

FAWU sought, amongst others, an order declaring the consultation process procedurally unfair and asked the Court to forbid SAB from continuing with the consultation process without further facilitation from the CCMA and the physical presence of FAWU’s members.  

They also sought to prevent SAB from issuing termination notices and issuing new reinstatement notices of those employees already fired.  

Aside from the issue of whether Zoom was the appropriate medium through which to conduct the consultations, FAWU also had other objections regarding the consultation process.

The first being that the number of employees consulted in the retrenchment process had increased from that reflected in the initial section 189(3) notices (from 500 to 1200).  

The second objection involved the implementation of an organisational chart regarding the restructure without an agreement being reached. 

The third objection was that the consultation process had not been completed at the time the notices to terminate were issued.  

The Labour Court’s evaluation  

The Labour Court maintained that when one considers the issue of procedural fairness, one must have regard to the LRA and the Code of Good Practice: Dismissal.  

Any process which complies with the obligations set out therein will be procedurally fair. The Code provides that a consultation would be regarded as proper if an opportunity to meet and report back to employees is provided, the opportunity to meet with the employer is provided and the request to the receipt of information and consideration thereof is provided.  

Section 189 (3) also requires that the parties engage in a meaningful joint consensus-seeking process. 

The Labour Court noted that consultations do normally take the form of physical meetings but that this a requirement.  

It does not follow that where consultations cannot be held in person, they cannot be held at all. The use of video conferencing to hold consultations dates back to before the Covid-19 pandemic.  

Furthermore, the court found that the use of Zoom is a necessary tool to ensure that health and safety measures such as social distancing is observed. 

Van Wyk says that there is nothing procedurally unfair if a consulting party suggests the usage of the Zoom application or some other form of videoconferencing.  

“FAWU tried to demonstrate the problems inherent in using the Zoom application by pointing out an incident where screen and connectivity issues arose. The Labour Court accepted that wherever technology is used, problems are expected to emerge.” 

However, this does not necessarily give rise to procedural unfairness. FAWU’s application was dismissed by the Court. 

The Verdict 

The judgment ultimately shows that parties have to be adaptable and embrace the use of technology to accommodate health and safety concerns in the time of COVID-19, in what is sure to be the new normal for some time. 

Just because consultations cannot happen physically does not mean consultations cannot take place at all. 

Van Wyk concluded by saying that “due to the circumstances created by Covid-19, section 189 consultations may be conducted via videoconferencing. This is important to ensure that social distancing is maintained, and health and safety standards are upheld.”