National Union of Metal Workers of South Africa and Others v Aveng Trident Steel (a division of Aveng Africa (Pty) Ltd) and Another

Aveng Trident Steel, experiencing economic distress, initiated retrenchment consultations under section 189 of the LRA in May 2014, initially indicating 400 jobs might be affected. After 253 employees accepted voluntary severance packages or were retrenched, an interim agreement was reached for remaining employees to work under redesigned job descriptions for six months with 60 cents/hour additional payment. In February 2015, NUMSA reneged on the interim agreement, demanding employees cease performing redesigned jobs unless a five-grade structure was implemented. After further consultations failed, Aveng offered employees the option to continue in redesigned positions or face retrenchment. 71 employees accepted; 733 refused and were dismissed on 24 April 2015. Approximately one year later, Aveng outsourced its transport business to Imperial Logistics, transferring 110 employees. NUMSA challenged the dismissals as automatically unfair under section 187(1)(c) of the LRA.

• Whether the dismissal of 733 employees was automatically unfair under section 187(1)(c) of the Labour Relations Act 66 of 1995
• Whether section 187(1)(c) requires application of the causation test from Afrox to determine the true reason for dismissal
• Whether section 187(1)(c) prohibits dismissals for operational requirements when employees refuse a demand on a matter of mutual interest
• The proper interpretation of section 187(1)(c) post-2014 amendment
• The distinction between section 189 retrenchment consultations and collective bargaining
• Whether reinstatement by Imperial Logistics was reasonably practicable

1. The application for leave to appeal is granted. 2. The appeal is dismissed. 3. There is no order as to costs.

Section 187(1)(c) of the LRA does not prohibit dismissals for operational requirements merely because employees refuse to accept proposed changes to terms and conditions of employment. The true reason for dismissal must be determined objectively. Where an employer demonstrates genuine operational requirements necessitating restructuring, conducts good faith consultations under section 189, and offers reasonable alternatives to dismissal, the subsequent dismissal of employees who refuse such alternatives is not automatically unfair under section 187(1)(c). The provision targets tactical or conditional dismissals aimed at compelling acceptance of demands, not final dismissals based on legitimate operational requirements. The key enquiry is whether the dominant or true reason for dismissal was the employees' refusal to accept a demand or the employer's operational requirements.

Mathopo AJ observed that retrenchments have more significant social and economic effects than other dismissals because they affect larger numbers of employees. The judgment noted that in an ever-changing economic climate, restructuring is often necessary for business survival and adaptability. Courts must guard against disguised retrenchments in collective bargaining contexts but should not defer uncritically to employers. The judgment emphasized that one purpose of the 2014 amendment to section 187(1)(c) was to cure the anomaly whereby employers were discouraged from offering re-employment to retrenched employees. Majiedt J observed that the Afrox causation test, while followed in subsequent cases, was adopted without proper analysis of whether section 187(1) requires causation, and those cases "have been wrongly decided." Jafta J noted that applying causation to section 187(1)(c) would lead to the absurdity that employees caused their own dismissal by refusing demands, which could never have been Parliament's intention.

This is the first time the Constitutional Court fully considered section 187(1)(c) of the LRA. The judgment clarifies that section 187(1)(c) does not prohibit all dismissals where employees refuse employer demands on matters of mutual interest - dismissals for genuine operational requirements remain permissible. The case demonstrates the distinction between section 189 retrenchment consultations (aimed at consensus-seeking to minimize job losses) and collective bargaining (aimed at negotiating terms and conditions). The decision protects employers' ability to restructure for economic viability while preventing tactical dismissals to coerce acceptance of demands. The judgments reveal a significant methodological divide: the majority endorsed the Afrox causation test for determining the true reason for dismissal, while the minority argued for conventional evidence evaluation methods, rejecting the importation of delictual causation principles into labour law. This interpretive tension may require future clarification.