CCMA NO LONGER HAS JURISDICTION OVER SINGLE EMPLOYEE RETRENCHMENTS

By Lyndal Cook
                                                 
Few are aware of a recent judgement whereby if a single employee has been retrenched and he or she intends to challenge the procedure relating to the dismissal, the CCMA no longer has jurisdiction to adjudicate on the dispute.
 
The unreported Labour Court matter of Rand Water v Bracks and Others JR 1965/05 holds that the Commission for Conciliation Mediation and Arbitration (CCMA) only has jurisdiction when the substantive fairness of a single employee’s dismissal for operational requirements is in issue. Any dispute on the procedure must be referred to the Labour Court for determination.
 
The case concerned an employee (Miss Swart) who was employed by Rand Water as a GIS Specialist in its Scientific Services Division. Rand Water had two GIS sections, one in the Scientific Services Division and the other in the Engineering Services Division. Swart’s letter of appointment included that statement that her appointment would be “subject to the changing requirements of Rand Water”.
 
During June 2002 Rand Water considered a merger of its Engineering Services Division with the Water Treatment and Technology Divisions. If this happened Swart would have been required to move from the former division to the latter.
Correspondence was exchanged between Swart and Rand Water on this issue and various meetings took place, culminating in Rand Water making an offer to Swart that she be transferred to the Engineering Services Division. Her salary and conditions of employment were to remain the same. Despite this, Swart refused to accept the offer and in May 2003 Rand Water wrote to Swart terminating her services.
 
Swart referred the matter to the CCMA for conciliation, and when it remained unresolved she referred it to arbitration. The commissioner found in Swart’s favour and it was on the basis of this award that Rand Water appealed to the Labour Court.
 
The relevant and important aspect of the Labour Court’s judgment relates to the question of whether or not the CCMA had jurisdiction to hear the dispute in the first place. Rand Water argued that it did not, stating that in terms of section 191(12) of the Labour Relations Act 66 of 1995 (the LRA) the jurisdiction of the CCMA to hear single retrenchment dismissals is restricted.
 
In terms of Section 191(12), if an employee is dismissed by reason of the employer’s operational requirements following a consultation procedure in terms of section 189 that applied to that employee only, the employee may elect to refer the dispute either to arbitration or to the Labour Court.
 
Rand Water’s representative argued that on a proper interpretation of this section:
 
·        It is clear that the CCMA has jurisdiction only when the substantive fairness of a single employee’s retrenchment is in issue; and
·        By inserting the phrase “following a consultation procedure in terms of section 189” the legislature intended to grant specific jurisdiction to the CCMA for single retrenchments only when the substantive issues surrounding the dismissal were in dispute.
 
He premised his argument on a literal reading of the section, stating that if the legislature intended the CCMA to have general jurisdiction to arbitrate disputes involving a single employee where both substance and procedure were in issue, section 191(12) would not have contained the words highlighted above.
 
In coming to its decision the Labour Court relied on the established canon of statutory interpretation; that in interpreting a particular section of an act, effect must be given to all the words encapsulated by that section.
 
In interpreting the phrase “following a consultation procedure in terms of section 189”, the Labour Court found that the language of the section was peremptory in that the word “following” (in the context of the section) indicated causation – that is, a consequence or a result.
 
Essentially the Labour Court interprets the section to mean that after adhering to the requirements of a fair procedure as laid out in section 189, if a retrenchment is still in dispute (and logically it would only be in dispute for substantive reasons), then the aggrieved employee may refer the matter to the CCMA for arbitration.
 
The court maintained that this interpretation is further supported by the explanatory memorandum to the 2002 amendment (which introduced section 191(12) of the LRA), which indicated that this section’s introduction was designed to allow the CCMA the jurisdiction to deal with relatively simple cases involving the dismissal of an individual who may not be able to afford the costs of Labour Court litigation.
 
The court held further that the issue of whether or not an employer has substantive cause to retrench an employee is more often than not relatively clear cut – far less complicated an issue than the factual web which may need to be unpacked when dealing with procedural issues. The latter, so the court reasoned, is something on which the Labour Court is far better equipped to adjudicate.
 
I suggest that this judgment, although favourable for employers, is open to criticism, as it ultimately fails to recognise what the LRA and CCMA seek to achieve – cheap, easy and accessible dispute resolution for those who are unable to afford the costs of Labour Court litigation.
 
The CCMA is a forum that was created to mediate on and resolve dispute that arise between employers and employees. In the area of dismissals based on operational requirements, its jurisdiction should not be limited to only those disputes relating to the reasons for a dismissal. To restrict the CCMA’s jurisdiction in this way fails to promote the LRA’s objective of accessible dispute resolution.
 
It remains to be seen whether this judgment will remain authoritative or whether an employee with the requisite means will tackle it head on.
 
Lyndal Cook is a candidate attorney at Bowman Gilfillan