Barloworld Equipment Southern Africa underwent restructuring in April 2020, allegedly due to Covid-19's impact, and issued a section 189 notice for mass retrenchments affecting 750 employees. The CCMA appointed a facilitator, and several consultation meetings were held between Barloworld and trade unions including Solidarity and NUMSA. The main dispute centered on selection criteria, particularly Barloworld's inclusion of "transformation" (employment equity) as one of the criteria alongside LIFO (Last-In, First-Out) and skills/qualifications. Solidarity consistently rejected transformation as a selection criterion, arguing it constituted racial discrimination. After the initial 60-day consultation period expired on 3 August 2020, consultations continued, but the parties reached deadlock on the transformation issue. Barloworld issued termination notices in early August 2020. Solidarity approached the Labour Court in September 2020 under section 189A(13) of the LRA, alleging procedural unfairness in the consultation process and seeking reinstatement of dismissed members and resumption of consultations excluding transformation as a criterion.
1. Leave to appeal is granted. 2. The appeal on the merits is dismissed. 3. The appeal against costs is upheld and paragraph (3) of the Labour Court order is substituted to read: "Each party is ordered to pay its own costs."
The binding principles established are: (1) Section 189A(13) of the LRA is the appropriate mechanism for addressing non-compliance with the fair procedures prescribed in sections 189 and 189A, and such non-compliance constitutes procedural unfairness. (2) There is no substantive distinction between "procedural fairness" and "compliance with a fair procedure" in the context of retrenchment consultations under the LRA. (3) For consultation to be meaningful under section 189(2), the employer must: (a) keep an open mind; (b) disclose sufficient information to enable informed representations; (c) seriously consider representations made; and (d) provide reasons for rejecting representations. However, failure to reach consensus does not automatically render consultation inadequate. (4) The Labour Court's jurisdiction to adjudicate procedural fairness is only ousted by section 189A(18) in respect of disputes referred under section 191(5)(b)(ii), not in applications brought under section 189A(13). (5) Disputes about the substantive fairness of selection criteria (whether particular criteria are fair) are distinct from disputes about compliance with consultation procedures and should be addressed through section 191 proceedings, not section 189A(13) applications. (6) Section 189A(13) applications can be brought after dismissals have occurred, provided they are brought within 30 days as required by section 189A(17)(a). (7) Costs in labour matters should generally not be awarded unless specific reasons justify departure from this principle, taking into account constitutional and statutory imperatives including fair labour practices and access to courts.
The Court made several non-binding observations: (1) While there is no clear example where non-compliance with sections 189 and 189A would not translate to procedural unfairness, that possibility cannot be entirely ruled out, though no such scenario was presented in this case. (2) The Court noted that the legislative policy choice to separate procedural challenges (through section 189A(13)) from substantive challenges (through section 191) was sensible, as it reduces the likelihood of courts having to "unscramble the proverbial scrambled egg" after mass retrenchments have been completed. (3) The Court observed that transformation is part of employment equity in the workplace and was legitimately disclosed as part of Barloworld's selection criteria. (4) The Court suggested that by too eagerly dismissing section 189A(13) applications without considering condonation, courts risk allowing employers to evade responsibility for flouting their obligations under sections 189 and 189A. (5) The Court noted that section 189A(13) is in place to serve the interests of expediency and efficiency, ensuring procedural requirements are followed and defects can be cured before jobs are lost. (6) While the Court found that Solidarity's section 189A(13) application was not appropriate in this case, it rejected the Labour Court's characterization of the application as an abuse of process, noting that the matters raised were arguable and affected the livelihood of many workers.
This case clarifies important aspects of South African retrenchment law, particularly regarding section 189A processes for large-scale dismissals. It confirms that: (1) There is no meaningful distinction between "procedural fairness" and "compliance with a fair procedure" under sections 189 and 189A of the LRA – non-compliance with statutory procedures constitutes procedural unfairness. (2) The Labour Court's jurisdiction to adjudicate procedural fairness is only ousted in respect of unfair dismissal proceedings brought under section 191(5)(b)(ii), not in section 189A(13) applications. (3) Section 189A(13) provides the proper mechanism for addressing procedural defects in the consultation process, even after dismissals have occurred (within the prescribed timeframe). (4) Meaningful consultation requires disclosure of information, keeping an open mind, seriously considering representations, and providing reasons for rejecting them. However, failure to reach consensus does not automatically mean the consultation was inadequate. (5) Disputes about the substantive fairness of selection criteria (as opposed to procedural compliance with consultation requirements) should be addressed through section 191 proceedings. (6) Costs should generally not be awarded in labour matters unless there are specific reasons warranting departure from this principle, considering the constitutional right to fair labour practices and access to courts. The case is significant for defining the boundaries between procedural and substantive fairness challenges in retrenchment disputes and clarifying the appropriate forum and mechanism for each type of challenge.
Explore 3 related cases • Click to navigate