Common law does recognise the concept of dismissal based on operational requirements. It recognises dismissals that are based on breach of expressed or implied terms of contract of employment. The concept of operational requirements has its roots in the Labour Relations Act 28 of 1956. This Act recognised termination of employment of a number of employees due to ability, capacity, productivity, conduct and operational requirements and needs of undertaking industry trade or occupation of the employer as legitimate. Under the 1956 LRA, employers were allowed to dismiss employees if employees refused to accept the proposed change to conditions of employment. The dismissal is called lock-out dismissal. This kind of dismissal entitled employers to dismiss employees on condition that the dismissal was temporary and the workers would be re-employed when they agree to the demands of the employer. After the contract of employment was terminated between the employer and employees, the employer was allowed to implement the changes using scab labour. The 1995 Labour Relations Act introduced section 187(1)(c) that was intended to re-enforce the abolishing of the lock-out dismissal. This section strictly forbids the dismissal of employees in order to compel them to accept demands of the employer in matters of mutual interest. Such dismissals are regarded as automatically unfair. In terms of section 64(4) of the 1995 LRA employers are not permitted to unilaterally effect changes to employees’ terms and conditions of employment. They are required to seek and obtain consent of the affected employees. If employees refuse to accept the proposed changes, the employer can use lock-out as defence. Firstly, the employer can initiate lock-out until employees accede to its demand. Secondly, the employer can lock-out employees in response to the notice of strike or strike of the employees. The employer can use scab labour during this lock-out period. Unlike the lock-out dismissal, lock-out under the 1995 LRA does not include termination of contract of employment. iv In contrast, employers are allowed to dismiss employees who refuse to agree to change to their terms and conditions of employment on the ground of operational requirements provided a fair procedure is followed. This reason for dismissal is not viewed by the courts as a dismissal to induce employees to accept the demand of the employer. The question that this study seeks to examine is the relationship between automatic unfair dismissal in terms of section 187(1)(c) of the Labour Relations Act and dismissal for operational requirements. A dispute between the employer and employees regarding change to terms and conditions of employment is a mutual interest dispute; and it therefore falls under collective bargaining. The same dispute can easily fall to rights dispute, because the reason for the proposed change to the production system and demand to the pursuit of improved efficiency and better achievement of profit objective related to operational requirement. There is obvious overlap between operational requirements and wage work bargaining. In Schoeman v Samsung Electronics, the court held that the employer is entitled to run its business in a prosperous way and this may entail affecting changes to terms and conditions of employment when the market forces demand so. In Mwasa v Independent Newspapers, the court held that change to terms and conditions of service of an employee can be proposed as a way to avoid retrenchment; dismissal of employees for refusing to accept the change is not covered by section 187(1)(c). In Fry’s Metals v Numsa, the court has rejected the notion that there is tension between section 187(1)(c) and section 188(1)(a)(ii). The court held that section 186(1) refers to dismissal or termination of workforce with the intention to end the employment contract and replacing the workforce with employees that are prepared to accept terms and conditions of employment that suit the employer’s operational requirements. The court argued further that the meaning of dismissal should be a v starting point when one wants to dispute the two sections. On the other hand, section 187(1)(c) was effected with a certain purpose, which is to prohibit the employer from dismissing employees in order to compel them to accept its demand in dispute of mutual interest. The court held that the dismissal in this case was final. The employer dismissed its employees because it did not need them anymore. This dismissal is in accordance with section 186(1). The court rejected that operational requirements is confirmed to saving business from bankruptcy. The court argued that the principle includes measures calculated to increase efficiency and profitability. The employer can dismiss and make more profit.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:nmmu/vital:10226 |
| Date | January 2009 |
| Creators | James, Ncumisa Portia |
| Publisher | Nelson Mandela Metropolitan University, Faculty of Law |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis, Masters, LLM |
| Format | v, 48 leaves, pdf |
| Rights | Nelson Mandela Metropolitan University |
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