DB Contracting North CC v National Union of Mineworkers and Others (JA 113/13) [2015] ZALAC 30

ISSUE

When may an employer proceed to retrench employees if they have not accepted an alternative to retrenchment by the deadline for doing so?

SUMMARY

An offer of an alternative to retrenchment which is reasonable must be clearly accepted by the consulting party failing which the employer is entitled to proceed with the retrenchment.

COURT’S DECISION

In DB Contracting North CC v National Union of Mineworkers and Others (JA 113/13) [2015] ZALAC 30 (2 July 2015) the Labour Appeal Court (“LAC“) had to determine whether DB Contracting’s (“the employer“) decision to retrench a number of employees was fair given that the employer had offered an alternative to retrenchment which the employees had failed to accept by the offers deadline or at any time thereafter.

In March 2009 a collective agreement was concluded in the National Bargaining Council for the Electrical Industry of South Africa in terms of which the remuneration of all electrical assistants’ had to increase from R11.55 per hour to R16.98 per hour. During 2009, the employer issued a notice to the National Union of Mineworkers (“NUM“), the majority union in its workplace, advising that it intended to commence with retrenchment procedures due to financial difficulties. During the consultation process, the employer offered NUM an alternative to retrenchment. The offer provided that all affected employees would be retained, provided that they accept that their remuneration remained unchanged. The deadline for the acceptance of this offer was 4 December 2009. Neither NUM nor the affected employees responded to the offer by the deadline.

On 4 December 2009, the employees were issued with their final payslips and confirmation of their dismissals with effect from the same day. NUM referred an unfair dismissal dispute to the Labour Court, alleging that it had not in fact rejected the offer of an alternative to retrenchment. The Labour Court upheld the NUM’s claim and ordered that the employees be reinstated.

On appeal, the employer argued that it expected an acceptance or rejection of the offer to be communicated to it prior to the deadline. NUM argued that its negotiator met with the employer on the deadline date with the intention of accepting the offer but the dismissal process had commenced prior to his arrival. The LAC had to determine which version was more probable.

The LAC held that the party who alleges an acceptance must prove it and, on the evidence, there was no acceptance of the offer. Accordingly, the retrenchment was fair.

IMPORTANCE OF THIS CASE

The principle and requirements of offer and acceptance apply equally to retrenchment consultation processes. Failure to adhere to these principles and requirements can have dire consequences.