Wayne Pratten v Afrizun KZN (Pty) Ltd

The applicant, Wayne Pratten, was employed by the respondent (Afrizun KZN (Pty) Ltd) for 17 years in his second stint of employment, ultimately holding the position of Deputy Tables Manager at Sibaya Casino with an annual remuneration of R1,060,959. In February 2014, the respondent commenced a restructuring exercise based on operational requirements pursuant to section 189 and 189A of the Labour Relations Act. Following extensive consultations and presentations from February to September 2014, the respondent created new positions, including 12 Gaming Floor Manager: Tables positions and 4 Gaming Floor Manager: Slots positions. The selection process involved four stages: (1) compliance with minimum requirements; (2) psychometric assessment; (3) compliance with legal requirements (employment equity, BBBEE, gaming licence conditions); and (4) acceptance of new terms and conditions. The applicant applied for Gaming Floor Manager: Tables positions at Sibaya and Tables Manager at Grand West Casino. He met the minimum requirements but was unsuccessful based on psychometric test results, ranking 19th out of candidates competing for 12 positions at Sibaya, and third out of three for the Grand West position. The respondent offered the applicant alternative positions at other casinos (Gaming Floor Manager: Slots at Morula or Sun City, or Shift Manager: Tables at Wild Coast Sun), which he declined due to family circumstances (his wife also worked at Sibaya). The applicant was retrenched on 24 December 2014, receiving his severance package and six months' notice pay.

• Whether the dismissal was to give effect to a requirement based on the employer's economic, technological, structural or similar needs
• Whether the dismissal was operationally justifiable on rational grounds
• Whether there was proper consideration of alternatives to dismissal
• Whether the selection criteria used (psychometric testing) were fair and objective as required by section 189A(19) of the LRA
• Whether psychometric testing results, used to rank candidates for new positions created during restructuring, constitute 'selection criteria for dismissal' within the meaning of section 189(2)(b) of the LRA
• Whether requiring a dislocated employee to compete for a new post constitutes an unfair method of selecting employees for dismissal

The dismissal of the applicant was found to be fair in all respects. The applicant's claim was dismissed. No costs order was made.

The binding legal principles established are: (1) Psychometric testing used to assess and rank candidates competing for newly created positions during organizational restructuring does not constitute 'selection criteria for dismissal' within the meaning of section 189(2)(b) of the LRA, but rather is part of a legitimate process to avoid dismissals by offering alternative employment opportunities to dislocated employees. (2) Requiring dislocated employees to compete for new posts created during restructuring is not a method of selecting employees for dismissal, but a legitimate method of seeking to avoid the need to dismiss dislocated employees. (3) The fact that a dislocated employee who applies for a new post and fails, and by reason thereof remains at risk of dismissal, does not convert the assessment criteria for competition for that post into selection criteria for dismissal. (4) Where psychometric tests are valid, reliable, correctly administered and scored, and measure competencies relevant to the positions in question, their use as the primary ranking tool (after minimum requirements are met) constitutes fair and objective selection criteria under section 189A(19)(d) of the LRA. (5) An employer is not required to consider personal circumstances of individual employees when conducting objective competitive assessments for new positions created during restructuring. (6) The onus under section 189A(19) (as it existed before amendment) requires the employer to prove that: (a) the dismissal was to give effect to operational requirements; (b) the dismissal was operationally justifiable on rational grounds; (c) there was proper consideration of alternatives; and (d) selection criteria were fair and objective.

The court made several non-binding observations: (1) The court noted that if a candidate makes a favourable impression during interviews on account of genuine behavioural ability, psychometric testing should detect that ability and reward the candidate with a high score; conversely, candidates who are merely good at making impressions but lack substance will receive low scores. (2) The court observed that it is not uncommon for family members to split their residence to accommodate different places of work, suggesting that family location concerns may not always render relocation offers unreasonable. (3) The court noted that while salary reductions associated with alternative positions may be unpleasant, this does not necessarily render such offers unreasonable. (4) The court emphasized the extensive consultation process engaged in by the respondent, though it noted that procedural fairness was not challenged and could not be under section 189A(18). (5) The court observed that psychometric testing can reveal whether years of experience have genuinely developed exceptional ability or whether a candidate has merely managed to 'scrape by' without being dismissed, with the latter potentially contributing to the very inefficiencies justifying restructuring.

This judgment is significant in South African labour law for clarifying the distinction between 'selection criteria for dismissal' (regulated by section 189(2)(b) of the LRA) and 'assessment criteria for new positions' created during organizational restructuring. It establishes that when an employer restructures and creates new positions, requiring dislocated employees to compete for those positions through objective assessment methods (including psychometric testing) does not constitute an unfair selection method for dismissal. The judgment affirms that psychometric testing can be a fair and objective tool in restructuring exercises, provided the tests are valid, reliable, correctly administered, and relevant to the competencies required for the new positions. It reinforces the principle from SAB v Louw that being required to compete for a new post is a legitimate method of seeking to avoid dismissal of dislocated employees, not a method of selecting employees for dismissal. The case also clarifies that once minimum technical requirements are met, employers may rely primarily on objective psychometric assessments without being required to consider subjective personal circumstances of individual employees in the competitive process. This provides employers with greater certainty regarding acceptable selection methodologies in section 189A retrenchment processes involving restructuring.