When the worst is over.

May 21, 2023 | News

With the advent of Covid-19 in 2019 which resulted in a national lockdown in March 2020, many Employers suffered financial distress which forced them to restructure their businesses, impacting significantly on their employees, with widespread retrenchment becoming the order of the day.

Post Covid-19 we have seen a slow and steady recovery with certain businesses returning to turnover levels which they experienced prior to the National Lockdown, or close to such levels, e.g. the Travel Industry, and certain of those employers have commenced recruiting employees to meet the upturn in business.

Certain employers also adopted mandatory vaccination policies during the Pandemic which in certain cases resulted in objectors being dismissed on the grounds of operational requirements. Many such employers have since abandoned their mandatory vaccination policies as a result of the Country having reached a comfortable level of herd immunity, however those objectors who were retrenched in many cases, may remain unemployed.

The question which now arises is whether those employers who during the lockdown/pandemic dismissed employees on the basis of operational requirements and whose circumstances have changed to such a degree that the operational requirements which existed during the Pandemic are no longer present, have any legal or other obligation to either reinstate or reemploy such employees, where such employees never challenged their dismissals at the time?

Where a re-employment agreement was reached during a retrenchment exercise which took place during the lockdown/pandemic, a contractual obligation would arise, and if the employer fails to honour the terms of the agreement, such failure could amount to an unfair Labour practice in terms of s186(2) of the LRA and if the employees concerned are successful with their claim they could be re-employed.

The Labour Court held in NUMSA obo Members v Timken SA (Pty) Ltd [2009] ZALCJHB 52 that “it is an established principle of our law that whenever the situation that led to the retrenchment improves, resulting in the need for additional personnel, the employer is obliged to give preference to the re-employment of the retrenched employees should they be suitably qualified”. This obligation, however, does it is submitted, not automatically arise and when the employer’s rehabilitation occurs sometime after the retrenchment, it would need to be triggered by an agreement having being concluded in this regard.

However, it must be noted that an unfair Labour practice in terms of section 186(2)(c) i.e. where an employer fails to re-employ retrenched employees arises only if there is an existing agreement requiring re-employment.

This was reiterated in National Union of Mineworkers and Others v WBHO Construction (Pty) Ltd (2017) ZALCJHB 512 where it was held that in order to successfully rely on a failure to re-employ in terms of an agreement, the employee bears the onus of proving that the agreement imposes an obligation on the employer to re-employ the employee on certain terms.

Once the employee has satisfied the onus referred to above, the employer will have to justify why it failed to re-employ the complaining employee. A possible reason could be that the retrenched employee was not considered as he/she did not satisfy the criteria for the vacancy which arose. However, if the employer fails to provide a valid and fair reason, the employer could find itself in a situation where the terms of the agreement can be enforced against it.

It is, however, advisable for employers to always consider the re-employment of the retrenched employees first when filling vacancies that arise shortly after a retrenchment. Where a re-employment agreement is reached between the employer and its retrenched employees, such agreement should also include a time frame within which employees will be considered for re-employment as well as the criteria which will be used to select employees for re-employment, as this will protect the employer from an open-ended obligation to re-employ several years down the line and will also assist in defending an allegation of selective re-employment.

In conclusion, there is no legal duty on the employer to re-employ or re-instate a previously retrenched employee who has not challenged the unfairness of his/her retrenchment, nor is there a legal duty resting on employees to enter into an agreement that provides for preferential re-employment/re-instatement in the case of retrenchment. The employer is, however, obliged to meaningfully consult on the possibility of future re-employment during the consultation process, and depending on the outcome thereof, this could result in a re-employment agreement being concluded. Employees retrenched for reasons relating to the Pandemic and who have not challenged the fairness of their dismissals, will in the absence of a re-employment or preferential re-employment agreement, not be entitled to claim re-employment once the business recovers or should the employer abandon a mandatory vaccination policy which it may have adopted during the Pandemic.

Article by Robihn Modau & Ali Sonday
FAIRBRIDGES WERTHEIM BECKER In the Employment Law Department

In the event of you requiring any further information or assistance in respect of either what is set out above or with any other employment related matter, you are invited to contact any member of our Labour Department:

Cape Town – Ali Sonday, Robihn Modau
Johannesburg – David Short, Ephraim Lehutso