This month, the Labour Appeal Court (‘the LAC’) handed down a seminal judgment in NUMSA v SAA Technical SOC Ltd. Centring on an analysis of section 189A(7)(b)(ii) of the Labour Relations Act (‘the Act’), the case provides much-needed clarity on whether conciliation is required before approaching the Labour Court for a ruling on the substantive fairness of large-scale retrenchments.
In April 2021, SAA Technical SOC Ltd (‘the Respondent’) commenced the process of dismissing more than 1 000 employees for operational reasons under section 189A of the Act by issuing a written notice to the affected employees pursuant to section 189(3). The Commission for Conciliation, Mediation and Arbitration (‘the CCMA’) facilitated the consultation under section 189A and the process was finalised in early October 2021. Two weeks later, the Respondent dismissed 1 193 of its employees for operational reasons.
In January 2022, NUMSA (‘the Appellant’), acting on behalf of its members, challenged the substantive fairness of the employees’ dismissal by referring a statement of claim to the Labour Court for adjudication. In doing so, it avoided first referring the matter for conciliation. The Respondent contested this. It argued that section 191 of the Act, which delineates the procedure for bringing various unfair dismissal disputes to adjudication, required the Applicant to first pursue conciliation of the dispute before approaching the courts. The Respondent thus argued that the Applicant’s referral was ‘premature’ and ‘irregular’. On this basis, it averred that the Labour Court lacked the jurisdiction to hear the claim.
At the heart of the matter is the correct interpretation of section 189A(7)(b)(ii) of the Act, which governs the referral of an unfair dismissal dispute to the Labour Court post-conclusion of facilitated consultations in large-scale retrenchments. Specifically, it provides that if a facilitator is appointed to assist the parties to engage in consultations, and 60 days have elapsed from the date of issuing the retrenchment notice under section 189(3) of the Act, the employees who received the notice – or a registered trade union – may refer a dispute to the Labour Court to determine whether there is a fair reason for the dismissal in accordance with section 191(11).
Judicial views on the interpretation of this provision differ. Some courts have ruled that referral to conciliation is a necessary prerequisite to enable the Labour Court to exercise its jurisdiction. For instance, the court in Catering Pleasure and Food Workers Union v National Brands Limited found that the certificate obtained from the conciliation process constitutes a ‘jurisdictional fact’ to be established prior to referral. Conversely, some authorities are of the view that conciliation is unnecessary given the involvement of a facilitator in pre-dismissal consultations. Ultimately, however, the LAC found in favour of the Respondent, holding that conciliation is a necessary first step.
Firmly agreeing with the reasoning and conclusions of the court a quo, the LAC adjudicated that a proper interpretation of section 189A(7)(b)(ii) requires reading various relevant provisions, which govern unfair dismissal for operational reasons, together. Section 191(1) mandates referral to conciliation as a necessary prerequisite to resolving unfair dismissal disputes. In the event that conciliation remains unresolved, the matter may be arbitrated or referred to the Labour Court, as per section 191(5). Notably, section 191(5)(b)(ii) enables an employee to refer a dispute for adjudication if the reason for dismissal was based on their employer’s operational requirements, provided the dispute remained was not resolved through conciliation.
Rejecting the Applicant’s argument that the Legislature’s failure to expressly mandate conciliation under section 189A(7) was deliberate, the LAC affirmed that statutory laws do not incorporate unnecessary provisions. Indeed, section 189A(7)(b)(ii) specifically refers to section 191(11), which gives an employee 90 days to refer the matter to the Labour Court once the CCMA – or a bargaining council – has certified that it is unresolved. It is thus unlikely that the Legislature would have incorporated reference to section 191(11) under section 189A(7) had it intended to permit direct referrals to the Labour Court post-facilitation.
Finally, the LAC emphasised that facilitation and conciliation are conceptually distinct. Whereas facilitation takes place pre-dismissal and encourages compliance with section 189(3) of the Act, conciliation occurs post-dismissal and is designed to assess the fairness thereof – with the aim of amicably resolving the dispute. As such, a new cause of action arises where an employee challenges the fairness of their dismissal. On this basis, the LAC held that referring the matter to the ‘portal of conciliation’ after facilitation is a pre-condition to approaching the Labour Court.
Clarifying the scope of section 189A(7)(b)(ii), the judgment affirms that referral to conciliation is a prerequisite to contesting the substantive unfairness of large-scale retrenchments through adjudication.
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Read the full judgment here.
