Association of Mineworkers and Construction Union and Others v Royal Bafokeng Platinum Limited and Others [2020] ZACC 1
- The consultation process section 189 prescribes is procedurally fair, accords with international standards, and is not unconstitutional. The jurisprudence since the introduction of the LRA has consistently interpreted section 189 to exclude any requirement of individual or parallel consultation in the retrenchment process outside the confines of the hierarchy section 189(1) itself creates.
- S23(1)(d) of the LRA that provides for the extension of collective agreements with a majority union to cover all employees within a bargaining unit, is also not unconstitutional.
In September 2015 Royal Bafokeng Platinum retrenched 103 employees, some of whom were AMCU members. No prior consultation had taken place with AMCU, which represented approximately 11% of employees, or with the employees themselves. This was due to a retrenchment agreement concluded between the employer and 2 other unions at the mine, NUM the majority union with 75% membership, and UASA another minority union. The agreement was extended to cover all employees and contained a "full and final settlement clause", whereby all those party to the agreement waived their rights to challenge the lawfulness or fairness of their retrenchment.
S189(1) of the LRA says that when an employer contemplates retrenchments, it must consult -
- any person it is required to consult in terms of a collective agreement; failing which -
- a workplace forum, if one exists, and any registered union whose members are likely to be affected; failing which -
- the employees likely to be affected or their representatives nominated for that purpose.
The concept of 'majoritarianism' - a consistent theme under the LRA - is entrenched through s23(1) of the LRA that provides that an employer and a majority union can extend the binding nature of a collective agreement (eg a retrenchment agreement) to cover all employees within a bargaining unit, including members of another minority union.
AMCU essentially challenged whether this arrangement complied with the right to fair labour practice under s23(1) of the SA Constitution. This dispute wound its way through the Labour Court, the Labour Appeal Court and then on appeal to the Constitutional Court.
Persons who take the time and trouble to read the ConCourt's full judgment may be surprised to discover there are in fact 4 judgments: the majority judgment supported by 5 judges, a minority opposing judgment supported by 4 judges, and 2 other minority judgments by individual judges wishing to express further motivation for their views, one of which supported the conclusion reached by the 5 judges in the majority judgment and the other supporting the conclusion of the 4 judges in the main minority judgment. So the final tally was 6/5 - that's how close the final outcome was. We have commented before on how unhelpful minority judgments can be, sending a strong message to people at work trying to understand and apply SA's labour laws that even the top legal minds in the country can't seem to agree on how they should be interpreted and why.
The minority judgment would have found s189(1) of the LRA to be unconstitutional and invalid, by failing to impose a legal duty on an employer to consult with all those affected by a retrenchment. It suggests the interesting possibility that concluding a collective agreement on retrenchment with a majority union, which may be extended to cover non parties, and prior consultation with a minority union, are not necessarily mutually exclusive. Consultation and collective bargaining serve different purposes and vindicate different rights, and the outcomes from consultation (even with different groups) can then be taken into account by parties in concluding a subsequent collective agreement.
Notwithstanding the views expressed above, the ConCourt's majority judgment did not agree that s189(1) of the LRA is constitutionally invalid, and also dismissed the challenge to s23(1)(d) of the LRA that provides for the extension of collective agreements with a majority union to cover all employees within a bargaining unit.
The majority judgment found that the consultation process prescribed under s189 is procedurally fair and accords with international standards. It noted that since the introduction of the LRA, our jurisprudence has consistently interpreted s189 to exclude any requirement of individual or parallel consultation in the retrenchment process outside the confines of the hierarchy created in s189(1).
The majority judgment commented that dismissal for operational reasons involves complex procedural processes requiring consultation, objective selection criteria and payment of severance benefits. The process involves a shared attempt at arriving at an agreed outcome that gives joint consideration to the interests of employer and employees. Because it is not dependent on individual conduct and requires objective selection criteria, it is pre-eminently the kind of process where union assistance to employees will be invaluable, and it would be futile to provide for individual consultation. It accordingly found that the priority given to collective bargaining in section 189 is not only rational, but sound and fair.
Remembering that the final outcome in this case was mighty close (6/5 majority), it is worth noting what we perceive is a growing trend, both in various amendments to the LRA and in court decisions, to attempt to accommodate minority union representation alongside entrenched principles of majoritarianism. This trend recognises the interconnectedness between the rights of freedom of association, the right to form and join a union and the rights of unions to organise and engage in collective bargaining, which may be impaired if workers are not allowed to be represented by the union of their choice and are forced to be represented by a union they have chosen not to join.
As commented in the ConCourt's minority judgment, this is exactly what happened in this case: AMCU members were not permitted to be represented by their own union in the consultation process. Instead, they were forced to accept representation by NUM and UASA, after the collective agreement was extended to cover workers who were not members of those two unions. The ConCourt's minority judgment attempts to show that majoritarianism is, or should be, compatible with the existence of minority unions, and allowing those unions to organise and represent their own members in competition with the majority union.
Whilst the ConCourt's majority judgment confirms it may not be necessary to consult minority unions under s189(1), it also states there is nothing to prevent employers from agreeing to do so. If minority unions have a strong presence, employers may be wise to consider doing so in the interests of workplace stability, even when a collective agreement is subsequently concluded with a majority union that is extended to cover all employees.
Extract from the majority judgment:
(Froneman J)
[107] Although not always watertight in practice, the LRA thus distinguishes, first, between dismissals for misconduct, incapacity and operational requirements; and, second, between procedural and substantive fairness in relation to these dismissals. It has been accepted that the adjudication of fairness in relation to misconduct and incapacity involves an inquiry into individual conduct and capacity. By contrast, dismissal based on operational reasons is not dependent on individual conduct or capacity but on objective factors......................
[108] The procedural requirements for a fair consultative process are set out in section 189 of the LRA. Since the introduction of the LRA, as will be shown below, our jurisprudence has consistently interpreted section 189 to exclude any requirement of individual or parallel consultation in the retrenchment process outside the confines of the hierarchy created in section 189(1).
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[115] .............So what the applicant seeks is to invalidate a statutory scheme clearly emergent from the LRA - one that has been consistently interpreted and applied in our labour jurisprudence without constitutional challenge for at least twenty years.
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[119] The legislation embodies what is fair for retrenchments in the form of a consultation requirement. This was further refined to embody the policy principle of majoritarianism. To find that the statutory provision limits the right to consultation is in my view to get things back-to-front. It upends the very source of the entitlement and, in effect, begs the question at issue. The question is not whether section 189(1) limits an individual's right to be consulted, but whether the way in which the legislation embodies the right to a fair procedure in the retrenchment process passes the constitutional test of rationality.
[120] Thus approached, it is hard to see how the option the legislation embodies is anything but rational. This emerges from the very benefits that the inclusive approach that the first judgment argues for. All an individual employee gains is a right to be heard, notwithstanding the fact that retrenchment may be inevitable. The first judgment - in proper accord with our jurisprudence - emphasises that this process is not a negotiation or anything akin to bargaining. An employer is bound to hear and respond, but not to accept or comply. What then would be the substance of the right? It is difficult to imagine that an employee would find satisfaction in making representations that can, in effect, be brushed aside. Here, the retrenchment process differs fundamentally from a misconduct dismissal, a criminal trial or any similar process, such as a commission of enquiry, where the audi alteram partem principle operates. There, the right to a hearing arises from the very possibility that the representations might affect the final outcome.
[121] By contrast, it can only be near-futile to afford individual consultation. This emerges from the very benefits of the inclusive approach that the first judgment argues for and accepts - a necessary acceptance - that a retrenchment agreement can lawfully be extended across the workplace, affecting even unconsulted employees. So whilst an individual might have been a consulting partner, it will still be the majority union's implication in the agreement that is decisive. An employer has no obligation to reflect minority representations in the agreement.
[122] And this is for good reason. An individual employee, or even a group of individual employees, has or have scant bargaining clout, particularly where the employer is preoccupied with processing dismissal for operational requirements. A majority union, by contrast, wields coercive power, by immediate or future threat of industrial action. It is this power that may sway an employer to agree to benefits on retrenchment, or better yet, fewer or no dismissals. The first judgment does not seek to unsettle this age-old labour reality. Instead, it creates a burden with very little boon.
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[126] There is no procedural unfairness in the consultation process under section 189. We have seen that dismissal for operational reasons involves complex procedural processes, requiring consultation, objective selection criteria and payment of severance benefits. The process involves a shared attempt at arriving at an agreed outcome that gives joint consideration to the interests of employer and employees. Because it is not dependent on individual conduct and requires objective selection criteria, it is pre-eminently the kind of process where union assistance to employee members will be invaluable. 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.