Retrenchment without a Section 189(3) Notice found to be fair

Section 189(1) of the Labour Relations Act (“LRA”) requires that if an employer contemplates dismissing one or more employees due to operational requirements, they must consult with the relevant parties as outlined in the section. Section 189(3) then requires that the “employer must issue a written notice inviting the other consulting party to consult with it and disclose in writing all relevant information…”

In the case of Padayachee v Serero & Others, the Joburg Property Company (“JPC”) dismissed Ms Padayachee for operational requirements without issuing a written section 189(3) notice. Ms Padayachee contended that the failure to issue her with a written notice made her dismissal procedurally unfair because section 189(3) mandates the issuing of a written notice.

The JPC argued that despite not issuing a written notice, it had substantially complied with section 189(3). The JPC further argued that all relevant information as required by section 189(3) had been disclosed to Ms Padayachee or was within her knowledge. The Labour Court accepted this argument, recognising substantial compliance with section 189(3) had taken place despite the absence of a written notice.

Additionally, the JPC had written to Ms Padayachee’s union, IMATU, stating: “You are aware of the reasons for the contemplated dismissal for purposes of Section 189(3) of the Labour Relations Act. It is, accordingly, not necessary to issue the notice referred to therein.” Neither Ms. Padayachee nor IMATU requested or insisted on a written section 189(3) notice following this communication. Consequently, the Labour Court ruled that Ms Padayachee could not fault the JPC for not issuing the notice under these circumstances.

The Labour Court concluded that Ms. Padayachee’s dismissal was fair even though a written section 189(3) notice was not issued. The Court however emphasised that this finding does not set a precedent that section 189(3) is not mandatory. Instead, it highlighted that the unique circumstances of this case allowed for a departure from the mandatory provision due to substantial compliance with section 189(3).

This case highlights the importance of providing employees with relevant information during operational requirements dismissals. It emphasises that a mechanical approach to section 189(3) compliance should be avoided. Instead, the purpose of section 189 should be met by ensuring employees receive all pertinent information for meaningful consultation. While this case deviates from the mandatory provisions of section 189(3), it remains best practice for employers to issue written section 189(3) notices. This helps memorialise the information disclosed to affected employees and prevents unnecessary disputes. It is also important to note that the issuance of a section 189(3) notice initiates specific timelines for large-scale retrenchments. This could mean that substantial compliance as accepted in this case may not be accepted in large-scale retrenchments.

By Jan Norval