Steenkamp v Edcon Ltd (CCT46/15, CCT47/15) [2016] ZACC 1 (22 January 2016) per Cameron J: [1] to [86] and Zondo J [87] to [195].

An important question that often arises is whether something done contrary to a statutory provision is a nullity.  The Constitutional Court has confirmed that the purpose of the statute determines whether any breach is rendered a nullity or not.  Adequate remedies, in the statute itself, suggest that the purpose of the LRA was not to nullify the short-notice.  Determining factors include:

  • the purpose of the statute or the relevant section;
  • the mischief being addressed;
  • any remedies in the statute for the breach;
  • whether in the absence of nullity the statute may be breached with impunity; and
  • where the statute does provide remedies, are they adequate ?

According to Cameron J the difference is in the extent to which one ‘recognises as distinctive the protections section 189A sought to introduce into a workplace at risk of large-scale retrenchments.  More particularly, it depends on appreciating the power that making a short-notice dismissal invalid has to constrain an employer to think again before effecting a mass retrenchment’.  In the opinion of Cameron J the approach of the majority inhibits ‘the efficacy of the process section 189A seeks to command.  It seems to me to place a burden on employees, requiring them to rush to court, or to invoke “the nuclear option”, namely a strike, in an effort to secure compliance with section 189A(8)’.

The correct approach [majority judgment with footnotes omitted]

[182]    The approach that the use of the word “shall” in a statutory provision means that anything done contrary to such a provision is a nullity is neither rigid nor conclusive.  The same can be said of the use of the word “must”.  Many factors must be considered to determine whether a thing done contrary to such a provision is a nullity.  There are cases where the performance of an act in breach of a statutory obligation does not necessarily result in the act being invalid and of no force and effect.   When the question arises whether something that was done contrary to a statutory provision is invalid and of no force and effect, the proper approach is to ascertain what the purpose of the legislation is in this regard.  Sometimes, the purpose of the legislation will be to render it a nullity.  At other times the purpose will not be to render such a thing a nullity.  In each case the legislation will need to be construed properly to establish its purpose.

[183]    Some of the factors that should be taken into account in the construction of the statute to establish its purpose are the following: the purpose of the legislation as a whole, the purpose of the relevant section of the Act, the mischief sought to be addressed, whether the statute makes provision for remedies for its breach or whether, if the act is not held to be null and void, it would mean that the provision may be breached with impunity.   Where the statute does make provision for some remedies for the breach of the relevant provision, the Court would also have to take into account whether the remedies provided are adequate.  Where they are adequate, there seems to be no justification for the conclusion that the purpose of the legislation is to visit an act committed in breach of the provision with nullity.  It would be a different case where the remedies provided by the statute are not adequate, particularly if they are substantially inadequate or where such remedies cannot be easily obtained.

[184]    This approach is consistent with that taken in Standard Bank,  Metro Western Cape (Pty) Ltd,  Palm Fifteen (Pty) Ltd  [1978] 3 All SA 406; 1978 (2) SA 872 (A),  Pottie v Kotze and Swart v Smuts.   In Palm Fifteen Miller JA said:

“. . . the subject matter of the prohibition, its purpose in the context of the legislation . . ., the remedies provided in the event of any breach of the prohibition, the nature of the mischief which it was designed to remedy or avoid and any cognisable impropriety or inconvenience which may flow from invalidity, are all factors which must be considered when the question is whether it was truly intended that anything done contrary to the provision in question was necessarily to be visited with nullity”.

This passage was quoted with approval in Absa Insurance Brokers (Pty) Ltd.   In that case the Supreme Court of Appeal made the following important point after quoting the above passage from Palm Fifteen (Pty) Ltd:

“In answering the question as to whether a contract entered into in contravention of the provisions of s 20bis is a nullity, the purpose of the section is crucial.”  (Emphasis added.)

[185]    If one were to apply to the present case the factors mentioned by Miller JA, one would need to point out that—

(a)        the purpose of the procedural obligation that has been breached is to give effect to the employer’s obligation to ensure compliance with a fair procedure before there can be a dismissal for operational requirements and to give the parties enough time to try and reach an agreement on the various issues;

(b)        the statute is silent on whether a breach of the procedural obligation in question results in the invalidity of the dismissal;

(c)        there is no provision in the statute making a breach of the procedural obligation a criminal offence; and

(d)        this is not a case where a breach of the procedural obligation will have no consequences if it is held that the purpose of section 189A(8) is not to visit the dismissal or notices with nullity; this is a case where the statute spells out serious consequences for the employer if the employer acts in breach of the procedural obligation including an order that would effectively reverse the decision of the employer until the employer has complied with the procedural obligation; that reversal may include reinstatement of employees; also included is that the employer may be “hit” with a strike.

The approach of Cameron J and Van der Westhuizen J [with footnotes omitted]

[43]      The obligation the provision imposes on the employer to give notice in accordance with its provisions (“must”) has to be seen against this background.  It is not a mere procedural add-on to the processes that section 189 already creates.  Nor is it a mere palliative for the impending retrenchment.  On the contrary, it is foundational to the change of tone that section 189A signals, and pivotal to the shift of power its provisions seek to effect.

[44]      In short, a dismissal that violates section 189A’s time periods does “stick out”.  It cannot be smoothed into the larger fabric of the LRA’s treatment of dismissals.  While it also constitutes a dismissal without notice under section 186(1)(a),  it is also signally different from other dismissals covered by Chapter 8.  Section 189A is exceptional, in wording and remedy and object and effect.  It was enacted precisely to oblige the employer to deal differently with big retrenchments.

[45]      The obligation it imports to respect the time periods it sets out (“must”) was enacted to create a dismissal-free zone during which consensus may be sought and alternatives may be explored.  In other words, the employees must be safe from dismissal while the stipulated statutory periods elapse.

[46]      To treat the time period obligation as merely directory – in other words, as having no consequence other than making the dismissal procedurally unfair for the purposes of section 185’s remedies – is to deny the powerful novelty the provision imports as well as to misjudge its structure.  The provision sought to effect a power shift from employers in mass retrenchments – and it did so in the best and most effective way.  It rendered dismissals in disregard of its notice provisions invalid.

. . .

[50]      These are not unattractive propositions.  But ultimately they do not seem convincing to me.  First, fairness and lawfulness overlap.  We cannot rigidly separate them, banishing the latter from the purview of the statute.  Evaluating fairness requires a judgment on competing interests and rights of both workers and employers.  This is a value judgment.   In this, a court must have regard to the statutory provisions before it, its scope and its objects.   In this weighing, lawfulness and fairness are not exclusionary opposites.

[51]      Second, the LRA has not impoverished a wronged worker’s cache of weapons.  That the LRA creates specific remedies for most labour and employment disputes does not mean that it does not concomitantly create other remedies, especially when the claim is rooted in the language and logic of the LRA itself.   The lawfulness ground, in other words, is a claim seeking to enforce compliance with the provisions of section 189A.

. . .

[53]      The applicants do not seek a remedy outside the LRA.  Nor do they seek a remedy alien to its provisions.  They rely on a unique remedy that section 189A has specifically afforded those vulnerable to mass retrenchment.

[54]      Third, the failure to provide for a criminal sanction does not entail that there is no need to hold a party accountable for violating the provision’s prohibition on short service terminations.  When an employer trespasses onto the minimum 30-day period, it rides roughshod over the aim of encouraging consensus and seeking to avoid mass dismissals.  No criminal sanction is needed to spell this out.

[55]      What of the remedies internal to section 189A?  The interdict to compel a fair procedure, and the retaliatory strike?  Understanding the unique character of section 189A’s dismissal protection entails certain correlative conclusions.  The first is that the provision’s compulsory time periods are not aspects of “a fair procedure” envisaged in section 189A(13).  The second is that employees given short notice may not go on strike for that reason.

. . . .

[57]      The judgment of Zondo J reasons that the availability of these remedies must mean that non-compliance with section 189A(8) gives rise to a question of unfair procedure.  Hence, nullity is not visited upon non-compliance.   It also suggests that the other remedies in 189A provide “employees [with] . . . strong weapon[s] to deal with the employer”.

[58]      The difference with the analysis here lies in the extent to which one recognises as distinctive the protections section 189A sought to introduce into a workplace at risk of large-scale retrenchments.  More particularly, it depends on appreciating the power that making a short-notice dismissal invalid has to constrain an employer to think again before effecting a mass retrenchment.

[59]      The approach of the Labour Court and the judgment of Zondo J inhibit the efficacy of the process section 189A seeks to command.  It seems to me to place a burden on employees, requiring them to rush to court, or to invoke “the nuclear option”, namely a strike, in an effort to secure compliance with section 189A(8).