Solidarity obo Fourie v Vanchem Vanadium Products (Pty) Ltd; In re: Numsa obo members v Vanchem Vanadium Products (Pty) Ltd (J385/16 & J393/16) [2016] ZALCJHB 106 ; [2017] JOL 37865 (22 March 2016) per Lagrange J.
The Labour Court refused applications in terms of s 189A(13) of the LRA for declaratory orders that the dismissal of members was procedurally unfair and that they be reinstated. Numsa relied on a fresh cause of action, in a replying affidavit, based on s 136 of the Companies Act 71 of 2008. Numsa claimed that the business rescue practitioner (BRP), appointed on 17 November 2015, could only dismiss employees in terms of an approved business rescue plan. But that did not exist at the time they were dismissed for a reason based on operational requirements.
Excerpts
“[35] On a proper construction of s 136(1) it seems to me to consist of two distinct parts. Subsection (1)(a) affirms the continuity of existing employees’ terms and conditions of employment and subsection (1)(b) obliges the business rescue practitioner to conduct any retrenchment in the business rescue plan in compliance with the relevant provisions of the LRA pertaining to retrenchments. It is the reference to changes occurring in the “ordinary course of attrition” that might be seen as a basis for interpreting the section to provide a guarantee of continuity of employment and not merely the preservation of conditions of employment. If this interpretation is correct, what is anomalous is why subsection (1)(b) was not worded in the form of an exception to subsection (1)(a) rather than simply an additional self-standing provision preserving the rights of employees retrenched under a business rescue plan, to be retrenched only in accordance with the applicable provisions of the LRA. Alternatively, subsection (1)(a) ought to have stated that the prohibitions it contains are subject to subsection (1)(b). In the absence of such qualifications to either subclause, the two provisions are irreconcilable unless the phrase “ordinary course of attrition” is interpreted too include all forms of lawful termination, including retrenchment.
[36] Section 136(2) permits a BRP to suspend obligations owed by the company at that time business rescue proceedings commenced. Section 136(2A) exempts employment contracts from this power of suspension. Once again, the provisions deal with the suspension of obligations, but are silent on the question of the lawful termination of obligations. Considering the section as a whole it seems the primary object of the section was to prevent the unilateral variation of company obligations by a BRP, but to permit the BRP to suspend the performance of certain contractual obligations except those relating to employees. It does not seem to be directed at preventing the lawful termination of obligations including employment contracts. Consequently, I am not persuaded that the provisions of section 136 effectively outlaw any retrenchments taking place except in terms of an approved business plan”.