Full-time shop stewards not immune from retrenchment

In National Union of Metalworkers of South Africa (NUMSA) obo Mandla Phakathi v Assmang Machadodorp Chrome Works (Pty) Ltd (JS548/16), the Labour Court confirmed that a shop steward is an employee in the first instance and is subject to the employer’s operational requirements.

Phakathi was elected to a position of full-time shop steward in 2012, pursuant to a recognition agreement concluded between the employer and NUMSA.

In February 2015, the respondent embarked on a large-scale retrenchment exercise facilitated under the auspices of the Commission for Conciliation, Mediation and Arbitration (CCMA). This retrenchment exercise was the third in a series of large-scale retrenchments since Phakathi’s election in 2012 and resulted in a significant reduction in the employer’s workforce.

Phakathi’s position was earmarked for possible retrenchment in 2015 and NUMSA was invited to consult on this issue as part of the s189A facilitations. In response, NUMSA adopted the position that Phakathi, as a full-time shop steward, was not subject to the s189A retrenchment process as his position was entrenched by virtue of the provisions of the recognition agreement. The parties continued to engage on this issue and Phakathi was retrenched at the conclusion of the s189A process. NUMSA, on behalf of Phakathi, referred an unfair dismissal dispute to the Labour Court.

The Labour Court, however, was critical of the union’s argument that Phakathi was not subject to the s189A process and held that, “there is everything wrong and illogical with the applicant’s approach” and “there was no basis in law or fact, for the applicant to approach this court with this claim, and they should have known better”. In coming to this conclusion, the court specifically considered the following pertinent factors:

1. Phakathi was elected at a time where there was obviously a justification for the position of a full-time shop steward. Since then, the employer’s workforce had been reduced significantly and this, in turn, no longer justified the continuation of that position.
2. The union failed to advance any rational basis why the position of full-time shop steward was still necessary after the number of employee’s dwindled in 2015.
3. Following a previous large-scale retrenchment in 2014, Phakathi agreed to render limited services directly to the employer. The fact that Phakathi was required to assume further roles demonstrated an appreciation that his full-time role as a shop steward had diminished to a large extent.
4. A full-time shop steward is not immune from any operational requirement exercise embarked upon by an employer as they are, first and foremost, an employee like any other.
5. To the extent that the applicants relied on the provisions of the recognition agreement, NUMSA failed to approach the CCMA with a s23(4) and s24(2) referral (dispute regarding the interpretation of a collective agreement). In fact, no action was taken after the dispute concerning Phakathi’s position emerged during the facilitation process. And even if NUMSA had referred the dispute, this would not have prevented the employer from proceeding with the retrenchment of Phakathi. In other words, the fact that Phakathi was a full-time shop steward would not have shielded him from the application of fair and objective selection criteria.

The court further confirmed that a dismissal based on operational requirements would be substantively justified if the employer is able to demonstrate that:

1. The dismissal was to give effect to a requirement based on the employer’s economic, technological, structural or similar needs;
2. The dismissal was operationally justifiable on rational grounds;
3. There was a proper consideration of alternatives, and
4. Selection criteria were fair and objective.

The court held that once the substantive fairness of a dismissal is not challenged on any of the grounds listed above, a claim for substantive unfairness must fail.

For additional information, contact fiona.leppan@cdhlegal.com / devon.jenkins@cdhlegal.com.