Section 189 of the Labour Relations Act (hereinafter called “the Act”) relates to the dismissal of employees based on operational reasons and prescribes a very clear procedure to be followed in the event of such retrenchments.  Throughout this specific section, the Act obliges the employer to consult both the affected employee(s) and/or union on the envisioned retrenchments.  The purpose of this consultation is that the parties must engage in a “meaningful joint consensus-seeking process” and attempt to reach an agreement on possible ways to avoid or postpone the impending retrenchments.  This article will focus on what is expected of the parties in order to satisfy the Act’s requirement of a “meaningful joint consensus-seeking process”.


Ordinarily, the word consult would mean that parties genuinely consider any suggestions made.  However, the Act now requires the consulting parties to attempt to reach an agreement on the avoidance or postponement of retrenchments, and this goes much further than the ordinary meaning of a consultation as just mentioned.


Pre-retrenchment consultation is not merely a box to be ticked on a checklist in order to adhere to the procedural requirement of the retrenchment process.  In other words, an employer may not just have a so-called consultation meeting with the employees, just for the sake of meeting a procedural requirement.  The consultation meeting must be exhaustive and thorough and not merely insincere and superficial.


The Act requires the employer to allow the other consulting party an opportunity during consultation to make representations on the avoidance or postponement of the retrenchments, among other things.  The Code of Good Practice on Operational Requirements, paragraph 5, clearly states that proper consultation will include the opportunity for the employer to meet and report back to employees/union, the opportunity for the employees/union to meet with the employer and the request, receipt and consideration of information by either party.


Subsequently, the following seems to be the test in determining whether a “meaningful joint agreement-seeking” consultation was held prior to retrenchments being effected: that the employees or their representative union were afforded a fair opportunity to meet with the employer and voice their suggestions on avoiding or postponing the envisioned retrenchments.


The above does not mean that the employer is obliged to accept these suggestions made by the employees or their representatives as the final decision whether to retrench lies with the employer.  However, it does mean that the employer must maintain an open mind to the suggestions made, in that the employer could be persuaded to consider any feasible options, raised by the employee and/or union, to avoid or postpone retrenchments.


Employers must remember that the ultimate decision whether a retrenchment is fair, lies with the courts.  For this reason, employers should refrain from rushing the consultation process.  This does not mean that the employer is obliged to entertain any delay-tactics from the employee(s) and/or union.  It is, however, advisable that employers take steps to showcase their attempts to obtain feasible suggestions from the employee(s) and/or union regarding whether, in their opinion, retrenchments could be avoided or postponed.


Article by: Carine van Blerk

Dispute Resolution Official – Cape Town