No disclosure of relevant information, no dismissal for operational requirements

labour-guideBy Siphamandla Dube, an associate in the Labour, Employment and Human Rights department, Fasken Martineau DuMoulin LLP

Section 189 of the Labour Relations Act, 1995 regulates the dismissal of employees based on operational requirements.  The section 189 retrenchment procedure was designed as a problem solving process.  This is because the need to retrench is usually not the employee’s fault or within his or her control.

In De Klerk v Project Freight Group CC[1], the Labour Court had to consider what Steenkamp J described as an unusual application for an order by Mr De Klerk to restrain the employer from implementing its decision to dismiss him for operational requirements, pending the resolution of a dispute referred by Mr De Klerk to the CCMA for the disclosure of information in terms of section 16 read with section 189(4)(a) of the LRA.

In the De Klerk case, the parties embarked on a consultation process in terms of section 189 of the LRA and Mr De Klerk was legally represented while the employer was represented by ESOSA, the employers’ organisation.  During the consultation process, Mr De Klerk made a written request for information in terms of section 189(4) of the LRA in respect of the audited financial statements of the employer, the findings of the independent consultants that preceded the appointment of the business rescue practitioner as well as the findings of the business rescue practitioner.  Mr De Klerk sought this information since the employer had cited financial factors for his proposed retrenchment.

Neither the employer nor its representative responded to Mr De Klerk’s request.  Mr De Klerk’s representative again wrote to the employer requesting the information.  The employer eventually responded stating that the company was not prepared to provide him with the requested information as it was not pertinent to the case at hand.

Mr De Klerk’s representative then advised him that he should refer a dispute to the CCMA in terms of section 16 read with section 189(4)(a) of the LRA.  Mr De Klerk subsequently referred the dispute to the CCMA and at the same time sought an undertaking from the employer that, pending the determination of such dispute no further steps would be taken in the retrenchment process.  The employer refused to provide such an undertaking.  Consequently, Mr De Klerk launched this urgent application to restraint the employer from implementing the decision to dismiss him pending the outcome of the CCMA dispute.

Since the application was brought on an urgent basis, Mr De Klerk had to satisfy the requirements for an urgent interdict.  The court found that Mr De Klerk had a clear right to the relief he sought pending the determination of the section 16 dispute by the CCMA and that an injury had actually been committed on the basis that the employer had already given him a notice of his dismissal that would be effective on 31 August 2014.  The employer had also refused to either supply the financial information requested or to give an undertaking not to implement its decision to dismiss him pending the resolution of the CCMA dispute.

Notwithstanding that, Mr De Klerk had an alternative remedy which was to challenge his dismissal were he to be dismissed, but in this case the court found that this was not what he was challenging.  Mr De Klerk was merely asking for the consultation process to be suspended pending the resolution of the CCMA dispute and in that regard he had followed the remedy prescribed by the LRA by referring a dispute to the CCMA.  In the circumstances, the court distinguished Mr De Klerk’s application from usual cases that often clog the urgent court roll where an employee seeks to interdict a disciplinary hearing.

In response to Mr De Klerk’s urgent application, the employer contended that Mr De Klerk was not entitled to refer a dispute to the CCMA.  The employer further argued that the CCMA lacked jurisdiction on the basis that section 16 provided only for the disclosure of relevant information to a trade union representative and that it was only the trade union representative that could refer a dispute to the CCMA.

To contextualise the matter, the court considered the wording of section 16 and section 189(4)(a) of the LRA.  Section 16(2) states that “Subject to subsection (5), an employer must disclose to a trade union representative all relevant information that will allow the trade union representative to perform effectively the functions referred to in section 14(4).”  On the other hand, section 189(4)(a) provides that “The provisions of section 16 apply, read with the changes required by the context, to the disclosure of information in terms of subsection (3).

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