South African Commercial Catering and Allied Workers Union and Others v JDG Trading (Proprietary) Limited

JDG Trading (Pty) Ltd, a retail group, contemplated restructuring and possible retrenchments due to poor economic conditions. On 17 February 2017 it issued a notice in terms of section 189(3) of the Labour Relations Act 66 of 1995 (LRA) to SACCAWU, the representative union, initiating consultation over proposed operational requirement dismissals affecting over 1,000 employees. Prior to issuing the notice, JDG’s executive committee had adopted a resolution stating that store staff numbers "must further be reduced through operational requirements". SACCAWU contended that this resolution meant JDG had already taken a final decision to retrench, rendering subsequent consultations a sham and the dismissals a fait accompli. Several consultation meetings were held, information was disclosed, voluntary severance packages were offered and alternatives were discussed. Before retrenchments were implemented, SACCAWU brought an urgent application under section 189A(13) of the LRA to interdict the retrenchments and compel JDG to restart a fair consultation process. The Labour Court dismissed the application, and SACCAWU appealed to the Labour Appeal Court.

The appeal was dismissed and the Labour Court’s judgment upheld. No order as to costs was made.

The case clarifies the interpretation of section 189 and 189A of the LRA, confirming that an employer may form a preliminary view that retrenchments are necessary without rendering consultation unfair. It affirms that courts will adopt a contextual and purposive approach when assessing whether an employer had a closed mind, and that subsequent conduct is relevant in determining procedural fairness in retrenchment consultations.