YOU CAN OFFLOAD EMP[LOYEES WHO RESIST CHANGES

This was Thursday 15th post.

As usual with the Labour Laws, it is not what you say, it is when and how you say it. There is nothing that cannot be achieved. The trick is to always follow laid down procedures carefully. That is why it is important to have a good Labour Attorney, not a labour consultant, but a Labour Attorney to assist you.

You can offload employees who resist changes
The secret, though, is to follow the correct processes
Pierre Marais

27 February 2008 at 06h00

When changing employment conditions, the question is not only how to do this fairly but also how to fairly dismiss employees who do not want to accept such change. Readers should note that where an employer dismisses employees who refuse to accept an employer demand in respect of a matter of mutual interest, such dismissals could be classified as automatically unfair, as per case law and in terms of section 187(1)(c) of the Labour Relations Act (LRA).

Such mutual interest matters could include various employment/ operational issues, for example, a change in a shift system, commission structure, working hours, remuneration, etc. The five Labour Appeal Court (LAC) decisions quoted in last week's article will provide readers with more details of employees being dismissed for their refusal to accept changes to conditions of employment or changes to matters of mutual interest. Conversely, they provide examples of how some of these employers followed a different legal angle, which was acceptable, namely to dismiss the employees for operational reasons.

Notwithstanding the customary usage/interpretation of the LRA's sections 189 and 189A, namely to retrench excess employees, other forms of "operational requirement" dismissals have also been accepted by the courts, namely the dismissal of employees who refuse to accept changes to conditions of employment. The previously quoted LAC cases support this submission.

The secret though is not only what is done, namely to dismiss employees for operational reasons, but also how it is done. Readers are directed to the following two cases for principles as to the correct procedures.

Fry's Metals (Pty) Ltd v National Union of Metalworkers of SA and Others (2003).
Numsa and Others v Fry's Metals (Pty) Ltd (2005).

Employers wishing to change terms and conditions of employment should, from the start, deal with the matter from an operational requirement angle, namely that the employer has an operational requirement to change, for example, the shift system. This approach obviously necessitates compliance with section 189 and, if applicable and to complicate matters even further, to also comply with section 189A.

An employer's primary objective is a dismissal, for operational requirements - to get rid of employees who do not meet the business requirements of the employer so that new employees, who will meet the business requirements, can be employed. Emanating from the aforesaid LAC decision and so supported by the SCA decision, the following principles are important:
There must be an operational requirement for the change.
Any dismissal must be based on the employer's operational requirement(s) and not because the employees refused to accept a demand around a matter of mutual interest.
Such an operational requirement dismissal must be final. It must thus not be the intention of the dismissals to compel the dismissed employees to accept the proposed change so as to then continue to employ them or to have the dismissals withdrawn upon acceptance by the employees of the proposed changes.

Because the required change was a reasonable alternative to retrenchment, severance pay doesn't need to be paid. From a procedural fairness perspective, case law also highlights a very thorough process of consultation followed by employers prior to making the final decision. Apart from numerous consultation meetings, those employers that did it correctly seem to have followed a very structured approach of also communicating in writing and choosing the terminology used with the utmost care. Legally this type of exercise could become extremely complicated as, for example:

The affected employees/union will argue a unilateral change to terms and conditions and may use section 64 in order to go on a protected strike or a section 187(1)(c) automatic unfair dismissal claim.

The time periods before the employer may dismiss for operational reasons depend on whether it is a section 189 or a 189A process and, should a facilitator be appointed in terms of section 189A, it also determines a different time period.

In conclusion, employers don't need to be stuck with an unacceptable operational situation. However, employers are strongly advised to seek expert labour law advice. With specific reference to employers having an operational need to effect changes in working hours and remuneration due to the electricity cuts, such employers should be aware that they are walking a tight-rope as they could be required to dismiss a large portion of their staff or critical staff/skills.

Pierre Marais is managing director of the Labour Law Group. Contact him on 011-679-5944.