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Restructuring and the obligation to accommodate employees: Oosthuizen v Telkom SA Ltd (Unreported)

In the course of restructuring its business, Telkom selected employees as potential candidates for retrenchment. Those so identified were given an option to take a voluntary severance package, or join what was referred to as a "redeployment pool". For those employees who found themselves in the pool, the Company said that it would try to find alternative employment for all or as many of them as possible. Mr Oosthuizen applied for a total of 22 positions. He had 30 years service, with a clean disciplinary record. He was prepared to accept any position even if it was at a lower grade, and he was prepared to move to any part of the country to take up an alternative position. Despite being short-listed for a number of positions, Oosthuizen was not appointed to any of them, and he was ultimately retrenched. After his retrenchment, he applied for a further 4 positions, with the same result.

In upholding his appeal and reinstating him retrospectively into Telkom's employ, the Labour Appeal Court made a number of important observations on an employer's obligations in a restructuring exercise. The Court noted that Telkom had failed to explain the basis on which it had chosen to retain those employees who were not ultimately dismissed. It had undertaken to try to accommodate the employees in the redeployment pool, and to give them appropriate training. The Court found that it was "highly unlikely" that of all of the positions for which Oosthuizen applied, that there was not even one position in which he could be accommodated. In more general terms, the Court observed that "an employer has an obligation not to retrench an employee if the Company has work which the employee can perform either without any additional training, or with minimal training". In relation to the remedy granted, the Court stated that the purpose of reinstatment was to give Telkom an opportunity to offer Oosthuizen a specific position in its employ, or to enable all the parties to reach an agreement about Oosthuizen's future employment. The Court specifically noted that the order did not prejudice Telkom's right to dismiss Oosthuizen for valid reasons relating to its operational requirements at any future stage.


Blowing the Whistle: Charlton v Parliament of the Republic of South Africa (Unreported)

Mr Charlton was employed by Parliament until his dismissal for misconduct. Charlton claimed that he had been dismissed following disclosures relating to improper travel benefits claimed by members of Parliament and that his disclosure was protected under the Protected Disclosures Act. That being so, his dismissal was automatically unfair. Parliament argued that Charlton was not an "employee" as defined in the Labour Relations Act, nor was Parliament his employer. The importance of this contention is that the Protected Disclosures Act protects an employee against occupational detriments following the disclosure of information regarding any conduct of any employer or an employee of that employer. In essence, the argument was that members of Parliament, about whom the disclosures were made, were not Charlton's employer, nor were they employees of Parliament for the purposes of the Protected Disclosures Act. Therefore the protections granted by the Act could not apply.

The Court rejected this argument and held that there was no acceptable reason for excluding members of Parliament from the definition of "employer" for the purposes of the Protected Disclosures Act. (The Court did not find it necessary to decide whether members of Parliament are "employees" for the purposes of the LRA). The Court noted that the purpose of the Protected Disclosures Act was to root out corruption. To hold that Charlton was not an employee of Parliament and therefore entitled to protection under the Act "would deal a blow to the government intention and would be a national embarrassment". The preliminary point raised by Parliament was dismissed, and the case will no doubt continue on the merits.


Things go better…?: Banks & another v Coca-Cola South Africa (Unreported)

The Applicants were senior executives employed Coco-Cola South Africa. They brought an urgent application in the Labour Court to interdict the Company from retrenching them on the basis that the Company had not followed the procedures prescribed by Section 189 of the Labour Relations Act.

After the 2002 amendments to the LRA, challenges to the fairness of larger retrenchments must be bought in two phases. If procedural fairness is challenged, it must be done by way of application under Section 189A(13). Disputes about substantive fairness must be referred to the Labour Court, after conciliation by the CCMA.

In this case, all of the complaints made by the Applicants related to events that had taken place between November 2006 and the end of March 2007. They filed their application at the end of May 2007. The Court noted that in these circumstances, the remedy of an interdict was not appropriate. If there was any procedural unfairness, this could only be remedied by an award of compensation. However, it was not possible on the papers before the Court to make any judgment on the fairness of the procedure that the Company had adopted. The Court therefore postponed the matter and ordered that it be enrolled for hearing simultaneously with any dispute concerning substantive unfairness that may be referred to the Court.

The judgment highlights the point that the remedy of an interdict against a retrenchment, or reinstatement for the purpose of the employer conducting a proper consultation process, is one that ought to be invoked expeditiously. The judgment also highlights the difficulty, in practice, of separating substantive and procedural issues in a retrenchment dispute.

August 2007
Edition 7

In this Edition

Restructuring and the obligation to accommodate employees
Blowing the Whistle
Things go better…?


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"The state is concerned with criminal activities in the organs of the state. How does the state seek to root out the criminal activities committed by members of Parliament if people who disclose information relating to the members of Parliament would be subjected to occupational detriment?" - Charlton v Parliament of the Republic of South Africa


Perrott, Van Niekerk and Woodhouse offer five training courses aimed at both SMME's and corporates. Andre van Niekerk, responsible for the overseeing of each course, is an accredited assessor in terms of the Skills Development legislation.

Applications for accreditation of these courses has been submitted and are awaiting the processing thereof. These courses include: Arbitration Training, Chairing Disciplinary Enquiries, Applying the Basic Conditions of Employment ("BCEA"), Labour Law for Managers, and Restructuring Business - Transfers of a business, Outsourcing & Retrenchment


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