BUSINESS LAW &TAX
FEBRUARY 2024 WWW.BUSINESSLIVE.CO.ZA
A REVIEW OF DEVELOPMENTS IN CORPORATE AND TAX LAW
Unions, CCMA applicants should heed court ruling
STING IN THE TAIL
Restructuring exercise cannot be challenged by •being classified as an unfair labour practice dispute Brian Patterson & Shivani Moodley ENSafrica
I
n one of the first reportable judgments of 2024, SAA v Numsa & Sacca, the labour court has sent a strong message to unions which litigate in the Commission for Conciliation, Mediation and Arbitration (CCMA) and CCMA commissioners who consider preliminary issues in the CCMA. During December 2019, South African Airways (SAA) was placed in voluntary business rescue, as the airline found itself in a parlous financial position and as such required restructuring to achieve commercial viability. SAA accordingly initiated a restructuring exercise in
2020. The restructuring involved large-scale retrenchments as well as changes to the terms and conditions of employment of those employees who were retained by SAA. To reduce the adverse impact of the retrenchments, employees were also given the opportunity to participate in a training and lay-off scheme for 12 months after their retrenchment. The changed terms and condi-
PARTIES WHO REFER DISPUTES TO THE CCMA BEAR THE ONUS TO ESTABLISH THE CCMA’S JURISDICTION IN THE MATTER
tions and placement in the scheme took place with the agreement of individual employees. Some eight months after the restructuring exercise was implemented and completed, and outside of the statutory periods to challenge a retrenchment, Numsa and Sacca referred an unfair labour practice dispute to the CCMA. Their ostensible complaint was that the new terms and conditions of employment and placements on the training and lay-off scheme constituted an unfair labour practice dispute. SAA challenged the jurisdiction of the CCMA, as the dispute arose from a largescale restructuring exercise and any challenge ought to have been referred to the labour court, by way of an
/MAREK SLUSARCZYK urgent application and within the time periods set by section 189A of the Labour Relations Act, 1995. SAA argued that this was not an unfair labour practice dispute but a retrenchment dispute and that the CCMA had no jurisdiction. Commissioner Phala ruled that the matter must be arbitrated, after which he would determine whether the CCMA had jurisdiction and whether the dispute was truly an unfair labour practice dispute. Over about 19 months, the parties attended six CCMA hearings on the merits, with Numsa and Sacca being unprepared on each occasion. At its wit’s end, SAA
launched an application to dismiss the CCMA referral, owing to the unions’ failure to proceed with the dispute. Commissioner Phala dismissed that application and stated that CCMA commissioners do not have the power to dismiss matters before they are arbitrated. Accordingly, SAA took the unusual step of launching a review application in the labour court, seeking to have the jurisdictional ruling, the dismissal ruling and a condonation ruling reviewed and set aside before the arbitration was held. Norton AJ granted SAA’s review application with costs in a carefully considered and detailed judgment.
The labour court held that the unions impermissibly morphed a dispute about a retrenchment process into an unfair labour practice dispute, which this was not. In any event, there could be no challenge to the fairness of SAA’s actions when the employees accepted the new terms and conditions of employment and the terms of the training and layoff scheme. Parties who refer disputes to the CCMA bear the onus to establish the CCMA’s jurisdiction in the matter. Despite being called on to do so, the unions were unable to lay any factual basis for the matter to CONTINUED ON PAGE 2