In National Union of Metalworkers of South Africa and Others v Industrial Oleo Chemical Products [2026] ZACC 22, the Constitutional Court provided welcome clarity on the procedural route that follows a failed facilitation process in large-scale retrenchments under section 189A of the Labour Relations Act 66 of 1995 (LRA).
The central question was whether employees or a registered trade union must first refer an unfair dismissal dispute to conciliation before approaching the Labour Court. In a majority judgment, the Court held that they do not. It overturned the Labour Appeal Court’s interpretation and confirmed that section 189A(7)(b)(ii), read with section 191(11), permits direct referral to the Labour Court in this context.
Background
Following an initial large-scale retrenchment exercise in 2020, the employees successfully approached the Labour Court on an urgent basis under section 189A(13), were reinstated, and a fresh facilitation process followed. After that second facilitation also failed, the employees were dismissed on 12 November 2020 and referred the dispute directly to the Labour Court. The employer objected to the Labour Court’s jurisdiction on the basis that the employees had failed to first refer the matter to the Commission for Conciliation, Mediation and Arbitration (CCMA) for conciliation.
The Labour Court dismissed the jurisdictional challenge. On appeal, however, and in line with earlier authority, the Labour Appeal Court overturned the Labour Court’s decision, finding that a referral to the CCMA for conciliation is mandatory after a failed facilitation process. The Constitutional Court disagreed, and ultimately reinstated the Labour Court’s order and remitted the matter to that Court for determination of the merits.
The legislative framework
Section 189A of the LRA introduces a specialised framework for large-scale retrenchments, including an optional facilitation process aimed at achieving consensus on measures to avoid or mitigate dismissals. Upon the expiry of the facilitation period, employees may either elect to strike or to refer the dispute to the Labour Court in terms of section 189A(7)(b)(ii).
The dispute before the Court centered on the meaning of the reference to section 191(11), and whether that reference imported the conciliation requirements ordinarily applicable to dismissal disputes.
The Constitutional Court’s interpretation
The Court emphasised that section 189A(7)(b)(ii) must be interpreted contextually and purposively. It held that the provision allows direct access to the Labour Court and does not impose a requirement of post-dismissal conciliation.
The majority, in a judgment by Tshiqi J, reasoned that, if the Legislature had intended to require conciliation after facilitation, it would have stated so expressly. Instead, the reference to section 191(11), rather than sections 191(1) or 191(5), indicates that section 191(11) operates as the referral mechanism and timing provision for adjudication, without importing conciliation as a further jurisdictional prerequisite.
A minority judgment by Theron J disagreed with that interpretation. The significance of the decision, however, lies in the majority’s confirmation that the statutory pathway under section 189A(7)(b)(ii) envisages direct referral to the Labour Court after failed facilitation. This interpretation was also consistent, in the Court’s view, with the specialised and expedited framework created by section 189A for large-scale retrenchments.
Facilitation versus conciliation
A central aspect of the judgment is the Court’s analysis of the relationship between facilitation and conciliation. While the Court accepted that the two processes are distinct, it held that this distinction is not decisive in determining whether conciliation is required after facilitation in the section 189A context.
Importantly, the Court considered that a further conciliation process after failed facilitation would, in many instances, duplicate issues already canvassed during facilitation, including the fairness of retrenchments, selection criteria, and mitigation measures. In that setting, an additional conciliation step would serve little purpose and risk undermining the expedited framework contemplated by section 189A.
The judgment therefore does not suggest that facilitation and conciliation are identical. Rather, it recognises that, within this statutory scheme, post-facilitation conciliation is unnecessary as a precondition to adjudication.
Practical implications and considerations for employers
The decision has immediate practical consequences for employers managing large-scale retrenchments. First, litigation may follow relatively soon after dismissal because conciliation is not a jurisdictional precondition in disputes falling within section 189A(7)(b)(ii).
Second, the facilitation process becomes even more important. It is the principal forum in which parties are expected to engage on the reasons for retrenchment, alternatives, selection criteria, and measures to mitigate dismissals. Any shortcomings in consultation may therefore be scrutinised directly by the Labour Court without the buffer of a further conciliation stage.
Third, employers are unlikely to succeed with jurisdictional objections based only on the absence of conciliation. The statutory route to adjudication is triggered directly by section 189A(7)(b)(ii), read with section 191(11).
Fourth, timelines are compressed. The 90-day period for referral runs from the date the trade union or employees receive notices of dismissal following facilitation, which means employers should be prepared for litigation shortly after dismissals are implemented.
From a strategic perspective, the judgment calls for a more rigorous and proactive approach to facilitation. Employers should ensure full disclosure of relevant information, careful documentation of the consultation process, and a defensible rationale for any selection criteria adopted.
The message is clear: facilitation is not merely a procedural step. It is the stage at which the fairness of the process will often be tested if the dispute proceeds to litigation. In the absence of a further conciliation phase, employers should review internal retrenchment procedures, align them closely with section 189A, and ensure that managers and HR practitioners involved in consultations are properly prepared.
Conclusion
The Constitutional Court’s decision clarifies an important procedural issue and reinforces the objective of expeditious dispute resolution in large-scale retrenchments. By confirming, in a majority judgment, that conciliation is not required after a failed facilitation process before referral to the Labour Court, the Court has streamlined the adjudicative pathway and removed a layer of procedural uncertainty.
It is also worth noting that that this interpretation may soon be codified in the LRA itself, as among the amendments proposed in the Labour Relations Amendment Bill, published earlier this year, is an amendment to section 189A(7)(b)(ii) that expressly states that trade unions or employees are not required to refer the dismissal dispute to conciliation.
