The words operational requirements and retrenchment have become synonymous to the retail motor industry.
The MISA Legal Department engages or consults with employers on behalf of our members daily, in an attempt to assist with securing jobs and finding alternative positions. Throughout these dealings, MISA always stresses the concept of fairness when employers revisit their operational requirements.
What ‘operational requirements’ mean
The Labour Relations Act 66 of 1995, (LRA) defines operational requirements as “requirements based on the economic, technological, structural or similar needs of an employer”.
The core of this definition is “needs of the employer”. Legislation gives an employer the right to restructure a business with the prerequisite of fairness and for one of the following reasons:
The most common reason for restructuring is economic reasons, but what does this mean?
In a Labour Appeal Court matter, Kotze v Rebel Discount Liquor Group (Pty) Ltd (2000) 21 ILJ 129, the court concluded that economic reasons include reducing costs, increasing profit, as well as a change in business requirements.
Interestingly, this reason does not only relate to affordability. In General Food Industries Ltd v Food & Allied Workers Union (2001) 25 ILJ 1260, the Labour Appeal Court held that “The act recognises an employer’s right to dismiss for a reason based on its operational requirements without making any distinction in the context of a business the survival of which is under threat and a business which is making profit and wants to make more profit.”
In a recent restructuring and retrenchment case, the operational requirements laid down by the manufacturer (OEM) resulted in a new dealership with specifications regarding new technology, equipment and techniques. The employees who possessed the skills and the know-how to adjust to the advanced technology and specifications then had to be identified as part of the process.
This need refers to the operational structure. For instance, this is when a business operationally needs longer productive hours or requires their workers to work on public holidays or shifts. Sometimes a business has to revisit their managerial structure or change from a joint-business to an individual business. This all depends on the needs of the employer.
As an example, Albany Bakeries had to change their structural needs by having employees work on public holidays. The structural change was met with hostility and the employees embarked on a violent strike. The perpetrators could not be identified and the employer was left with no other alternative but to embark on retrenchments to keep the business viable. In Tiger Food Brands Ltd t/a Albany Bakeries v Levy and Others (C104/07)  ZALCCT2(10 April 2007), the Labour Court held in para 40 that “The ultimate result required by the employer is the protection of its business and its management from the criminal actions.”
Trust your trade union
While being in the midst of a restructuring process is disconcerting, please remember that MISA always has our members’ best interests at heart.
Yet, we need you to trust us when employers re-assess their operational needs.
This is a right afforded to the employer through legislation, bearing in mind that with this right, accountability and fairness is implied.
We have your back, don’t jump ship!