Why Procedural Fairness in Retrenchments Can’t Be Ignored

46 Employees’ Jobs Saved on Christmas Eve!

On Christmas Eve, 46 employees narrowly avoided losing their jobs thanks to a critical Labour Court intervention. This outcome serves as a strong reminder to employers and employees alike of the importance of meaningful consultation and strict compliance with labour law procedures—particularly during large-scale retrenchments under section 189A of the Labour Relations Act (LRA).

What Happened?

Following an urgent application to the Labour Court, an order was granted interdicting an employer from proceeding with the dismissal of 46 employees—42 of whom are union members. These employees were facing their last day of work on 24 December 2025 after refusing to accept a substantial salary reduction proposed as an alternative to retrenchment.

The proposed salary cut raised serious concerns. Only a year earlier, in December 2024, employees had secured a wage increase through lawful and orderly collective bargaining. To then introduce a wage reduction shortly thereafter was argued to be a case of what can best be described as “buyers’ remorse”—a troubling approach that undermines the integrity of collective bargaining agreements.

The Court’s Message: Procedure Matters

The Labour Court’s order reinforced a fundamental principle of South African labour law: employers must engage in joint, meaningful, consensus-seeking consultations when conducting a section 189A retrenchment process.

Where employers fail to comply with fair procedures, the Court has the power to prohibit dismissals until proper consultation has taken place. In this case, the Court:

Restrained the employer from dismissing the employees
Ordered the employer to return to the consultation table
Directed the employer to disclose all relevant information within 14 days
Required that consultations continue for a minimum of 30 days
Ordered that the process be facilitated by the CCMA

As a result, these employees will not have their services terminated—at least for now.

Section 189A(13): Procedural Fairness Has Teeth

Since the introduction of section 189A(13) of the LRA, procedural fairness has been clearly separated from substantive fairness in large-scale retrenchments. This means:

Procedural defects can be challenged urgently
The Labour Court has exclusive jurisdiction to hear these matters
Applications must be brought within 30 days
Employers can be stopped from dismissing employees purely on procedural grounds

Importantly, if an employer proceeds with dismissals in defiance of a court order, it opens the door to findings of automatic unfair dismissal—a serious legal risk that no business should ignore.

Why This Case Matters

This matter is likely to attract further attention in the Labour Court, particularly when questions of substantive fairness are eventually considered. However, even at this stage, the case sends a clear signal:

Procedural fairness is not a box-ticking exercise—it is a legal obligation.

It is encouraging to see the legislature’s intentions behind section 189A being upheld. Employers are compelled to engage transparently, disclose relevant information requested by unions, and genuinely seek consensus before making decisions that impact livelihoods.

A Final Thought

Thanks to the Union’s decision to obtain legal representation and act swiftly, 46 families have been spared devastating news on Christmas Eve. For employers, this case is a cautionary tale. For employees and unions, it is a reminder that the law provides powerful protections—when used correctly.

Key Takeaways for Businesses

For employers, this case offers important lessons that should not be ignored:

Consultation must be genuine and meaningful: Section 189A consultations are not a formality. Employers must actively seek consensus and properly consider alternatives to retrenchment.
Procedural fairness can stop dismissals: Even where operational challenges exist, failure to follow correct procedures can result in dismissals being interdicted by the Labour Court.
Collective agreements matter: Attempting to reverse recently negotiated wage increases may undermine trust and expose employers to legal challenge.
Disclosure of information is compulsory: Employers are legally required to disclose all relevant information requested by unions to enable proper consultation.
Court orders must be respected: Proceeding with dismissals despite an interdict may lead to findings of automatic unfair dismissal, with serious financial and reputational consequences.
Early legal advice is essential: Engaging labour law specialists early can prevent urgent court applications.

Procedural fairness is not optional—it is enforceable.

This case highlights how procedural missteps can halt retrenchments entirely. HR Consult assists employers with compliant retrenchment planning, meaningful consultation processes, and engagement strategies that reduce legal risk and protect business continuity.

📌 Speak to HR Consult before retrenchment decisions are finalised to ensure your process meets both legal and procedural requirements.

Office: 012 997 0037

E-mail: info@hrconsultsa.co.za

Adapted by HR Consult, specialists in South African labour and employment law compliance.

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