To Flexi-time or not to Flexi-time:

The case of SACCAWU v Woolworths (Pty) Ltd [2018] ZACC 44 explained

 

Background

The matter arose from the retrenchments effected by Woolworths in 2012.

In 2002, Woolworths decided that it would in future only employ workers on a flexible working hour basis, which was limited to 40 hours per week. Prior to this change, Woolworths’ employees were engaged on full-time contracts with fixed hours totalling 45 hours per week.

In order to cater for current market trends, Woolworths decided that it needed the entire workforce to be flexi-timers and sought to convert all full-time employees to flexi-timers on the flexible-hours arrangement.

In their process of conversion, Woolworths failed to comply with key legal requirements related to retrenchments. One such failure was that when Woolworths first initiated their voluntary conversion process, it was without the involvement of the South African Commercial, Catering and Allied Workers Union (“SACCAWU”). This means that SACCAWU’s input in a consensus-seeking effort aimed at exploring a mutually acceptable outcome to this conversion was not obtained.

The consultation process was thereafter facilitated by the CCMA, however the facilitation failed as the parties could not reach a settlement. Woolworths then resorted to retrenching the employees who did not want to participate in the voluntary process and who did not want to accept the new terms and conditions of their employment which were being implemented by Woolworths.

Some of the new terms being implemented included:

  1. A drastic reduction in their hourly rate;
  2. Unilateral imposition of a seven day rolling week; and
  3. Downward variation of other terms and conditions of employment.

 

 

Court battle

The Union challenged both the procedural and substantive fairness of the dismissals through the Labour Court, which ruled in favour of the Union. The employer then challenged the judgment through the Labour Appeal Court and the appeal was upheld in part.

Essentially, Woolworths was ordered by the Labour Court to reinstate the dismissed workers retrospectively from the date of their dismissal without loss of benefits.

On appeal the LAC confirmed that the dismissal was substantively unfair, but found that reinstatement would be inappropriate as the full-time posts were redundant and instead elected to order the payment of 12 months’ compensation to the dismissed employees.

It is against this substituted order that the applicants (SACCAWU) sought leave to appeal in the Constitutional Court.

In a unanimous judgment written by Khampepe J, the Constitutional Court held that Woolworths had failed to show that the retrenchments were operationally justifiable on rational grounds, as required by section 189A(19)(b) of the LRA. This it held was based on the fact that the sole reason for the retrenchments was the need for flexibility and the SACCAWU members had agreed to work the flexible hours and days required.

Furthermore, this Court found that Woolworths did not properly consider a number of possible alternatives to retrenchment as was required of it in terms of section 189A(19)(c) of the LRA.

The Court considered whether reinstatement, being the primary remedy in cases of unfair dismissal, was ‘not reasonably practicable’ in this case. This was the only possible exception set out in section 193(2) that could be applicable in this case.

The Court held that “not reasonably practicable” means more than inconvenience and requires evidence of a compelling operational burden. Most importantly, in determining the appropriate remedy, presiding officers must take into account the facts of the matter and make a decision as to what is feasible in the particular circumstances. The Court therefore found that Woolworths had failed to show that reinstatement was not possible, appropriate or that it was futile. The Court therefore upheld the appeal.

 

What this means for the working man…

This case is important because it amounts to advancement in the protection of worker’s rights. The case reaffirms the Employer’s duty of effective consultation and seeking of alternatives in the retrenchment process and clarifies that Employers may not unilaterally slash employee salaries and benefits in order to maximise profits.

 

Provided by Allardyce & Partners Attorneys

By Zinhle Mavuso (Candidate Attorney)

Kindly note that this cannot be considered to be legal advice and should you require assistance kindly contact Allardyce & Partners on 011-234 2125 or enquiries@allardyce.co.za