13 July 2020 by , and

Does the failure to appoint an employee to a more senior alternative position in a restructure amount to an unfair labour practice in relation to promotion?

In the Telkom SA Ltd V Commission for Conciliation, Mediation & Arbitration & Others (2019) 40 ILJ 1093 (LC), the Labour Court was called upon to determine two issues: (i) whether the CCMA had jurisdiction to adjudicate a dispute of an alleged unfair labour practice (ULP) where the alleged ULP arose in the context of a retrenchment which was the subject matter of pending litigation before the Labour Court and (ii) whether the company had committed an ULP when they failed to appoint the First Respondent to a more senior position in the new structure.

In 2016, the company embarked on a restructure. It is common cause there were limited positions available in the new structure, which employees were invited to apply for. The First Respondent unsuccessfully applied for the newly created, more senior, position of Senior Specialist: Industrial Relations. The First Respondent appealed the decision, his appeal was equally unsuccessful. The First Respondent then referred an ULP dispute on the basis of promotion to the CCMA, in relation to the failure by the company to appoint him to the more senior alternative position.

In light of the fact that the company found that there was no suitable position for the First Respondent in the new structure, the First Respondent was later retrenched. At the time of arbitration, the First Respondent was already retrenched and was no longer in the employ of the company.

At the CCMA, the Commissioner found that the CCMA had jurisdiction to adjudicate the dispute notwithstanding that the dispute arose in light of a consultation process preceding contemplated retrenchments and that the fairness of the retrenchments was the subject matter of pending litigation before the Labour Court. The commissioner found that it was common cause that there was a ‘hybrid’ situation, in that whilst the process exhibited the hallmarks of a section 189 of the Labour Relations Act (LRA) consultative retrenchment process, it also bore some elements of section 186 of the LRA in that ‘promotional opportunities’ were contemplated by the company and, accordingly, the dispute fell squarely within an ULP relating to promotion. The commissioner found that the company had committed an ULP by failing to promote the First Respondent and, as he was no longer in the company’s employ, ordered the employee’s reinstatement and promotion to the position of Senior Specialist: Industrial Relations.

The matter was later taken on review. On review, the Labour Court was called upon to determine whether the CCMA has jurisdiction to determine the dispute and whether the failure to place the First Respondent in a senior alternative position in the new structure amounted to an ULP on the basis of promotion.

The court held that the commissioner’s ruling in this regard was unassailable and, as such, the jurisdictional challenge had to fail. The court held the fact that the promotional opportunity coincided with the retrenchment process did not amount to a separate and new cause of action. The First Respondent accepted that his position had become redundant and to avoid retrenchment, he was offered an opportunity to compete for placement in one of the two new positions.

In this regard, the court endorsed the approach of the Labour Appeal Court in SA Breweries (Pty) Ltd v Louw, that an employer who seeks to avoid dismissal of a dislocated employee and who invites the dislocated employee to compete for one or more of the new posts, does not act unfairly, still less transgresses section 189(2)(b) or section 189(7) of the LRA. The court further held that it was inconceivable that in a restructuring process the affected employees could harbour an expectation of promotion as opposed to restructuring and was aggrieved by his/her nonplacement consequent to a competitive placement process he/she had to challenge same in terms of section 189. The court confirmed that in order the First Respondent to claim an ULP in relation to promotion, they must evidence that there was unfairness in their non-placement.

Applied to the facts, the court found that, assuming that the commissioner could order reinstatement, his order of reinstatement could only resuscitate the position that the First Respondent occupied prior to his retrenchment. Since that position was extinct, the commissioner’s award patently fashioned a new employment contract by awarding the First Respondent reinstatement and a promotion to a newly created position. In doing so, the court held that the commissioner exceeded his powers.

Therefore, an employee has no recourse to an ULP relating to promotion when unsuccessful in applying for new positions as an alternative to retrenchment, particularly where an employee cannot evidence that there was unfairness related to their non-placement. In such an instance, an employee may only find possible recourse in terms of the section 189.

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