Highest Court, in its first judgment of the new decade, upholds the principle of majoritarianism in retrenchments

In a landmark judgment*, the Constitutional Court has upheld the principle of majoritarianism inherent in sections 23(1)(d) and 189(1) of the Labour Relations Act 66 of 1995 (LRA).

In September 2015, Royal Bafokeng Platinum (RBPlat) concluded a retrenchment agreement with the National Union of Mineworkers (NUM) and United Association of South Africa (UASA). In terms of section 23(1)(d) of the LRA, the retrenchment agreement was extended to also cover employees who were not members of NUM or UASA. Before the retrenchments took place, consultations took place between RBPlat, NUM and UASA in accordance with section 189(1)(a) of the LRA (and an existing collective agreement).

The Association of Mineworkers and Construction (AMCU), on behalf of some of the retrenched employees of RBPlat, was of the view that the retrenchment agreement was constitutionally objectionable as it allowed for a majority trade union to conclude a collective agreement concerning a retrenchment process to the exclusion of minority trade unions in the workplace. They also argued that the extension of the retrenchment agreement was equally constitutionally objectionable.

AMCU sought to have the retrenchment agreement (and subsequent extension) set aside. AMCU also sought the retrospective reinstatement of the retrenched employees.

AMCU unsuccessfully challenged the retrenchments in the Commission for Conciliation, Mediation and Arbitration, the Labour Court (LC) and the Labour Appeal Court (LAC). The LC and LAC found that sections 23(1)(d) and 189(1) of the LRA embodied the principle of majoritarianism. This is an age-old principle of labour law that was a thoroughly thought-out policy choice of the legislature. AMCU then appealed to the Constitutional Court (CC). At the CC, AMCU argued that section 189(1) of the LRA limited their right to fair labour practices insofar as it excluded minority trade unions (and non-unionised employees) from participating in the retrenchment consultation process. AMCU also argued that a constitutionally compliant interpretation section 23(1)(d) of the LRA would not allow for a retrenchment agreement to be extended to parties who were not party to its conclusion.

The CC found that sections 23(1)(d) and 189(1) of the LRA remain constitutionally valid.

The court listed 7 main reasons to support its finding that section 189(1) of the LRA should remain constitutionally valid –

The CC concluded that –

“[126] There is no procedural unfairness in the consultation process under section 189. We have seen that dismissal for operational reasons involves procedural processes, requiring consultation, objective selection criteria and payment of severance benefits. This process involves a shared attempt at arriving at an agreed outcome that gives joint consideration to the interests of employer and employees… The choice made for the pre-eminence of collective bargaining in section 189 is not only rational: it is sound, it is fair and it is based on international practice and standards.”

In the end, the CC dismissed AMCU’s appeal.

Eugene Phajane, Mpumelelo Nxumalo, Kefilwe Mogatusi and Kgololego Pooe from our Webber Wentzel Employment Team successfully acted for RBPlat in this matter.