In his latest editorial Prof Darcy du Toit seems to concede that legally and for ‘present purposes the point is that the practice of outsourcing university services appears to be unchallengeable provided it is done in accordance with the requirements of the LRA’.  He has mooted the idea of non-standard workers using co-operatives as service providers in preference to commercial agencies.  It is suggested that especially from the point of view of universities the ‘democratic and empowering nature of co-operative organisation (as laid down by law) gives a social incentive for choosing co-operatives as service providers’.

Read the full editorial “#OutsourcingMustFall” – then what? first published by LexisNexis on IR Network under the title [subscription required].

Prof du Toit mentions that many years ago the lawfulness and fairness of the process of outsourcing was tested at the University of Pretoria. The trade union contended the dismissals were substantively unfair because of preference for outsourcing and that the dismissals were also procedurally unfair.  Reference was made to the Labour Court judgment of Revelas J in Nehawu v University of Pretoria (2002) 23 ILJ 740 (LC) where this argument was rejected.  But there is no mention of what happened to the union’s appeal to the Labour Appeal Court (LAC).

The union’s appeal was disallowed by the Judge President Raymond Zondo, as he then was, with Moegoeng JA and Jafta AJA, as they then were, concurring in Nehawu v University of Pretoria [2006] 5 BLLR 437; (2006) 27 ILJ 117 (LAC).

It is clear from the following excerpt that the trade union did not dispute that the reason was substantively sufficient, in the sense that it was based on operational requirements.  In other words it can be assumed that the union conceded that the university did have a right to engage in outsourcing of a non-core function of an educational institution.

“Before the appeal can be considered, it is necessary to set out the factual background to the dismissal of the second and further appellants.  I propose to do so below. However, before I do so, let me say this.  For purposes of this judgment, it is not necessary to set out all the facts or events relating to the second and further appellants’ dismissal, particularly those relevant to the substantive fairness of the dismissal.  This is because in this appeal the appellants do not challenge the substantive fairness of the dismissal.  The appellants only challenge the procedural fairness thereof. Even that challenge to the procedure is a very narrow one.  It is that, when the respondent initiated the consultation process required by sec 189(1) of the Labour Relations Act, 1995 (Act 66 of 1995)(“the Act”), the union was faced with a fait accompli.  In the light of the fact that the appellants’ challenge to the fairness of the dismissal is a very narrow one, I propose to confine the factual background to this matter to the facts and events that are relevant to the determination of whether or not the appellants were faced with a fait accompli” [para 3].

Prof Van Zyl, the new Rector and Vice-Chancellor, spoke at the opening of the 1997 academic year on 28 January 1997.  He set out his vision for the university and its role in society.  He said the university had to meet certain challenges and reconsider the performance and execution of its core functions.  This could mean partnerships with the private sector, particularly by outsourcing support services.

In the Labour Appeal Court the union argued that  the dismissals were procedurally unfair and based the argument on two levels, both of which tried to show ‘that the union was faced with a fait accompli by the time that the consultation in terms of sec 189 of the Act commenced . . . ’.

In my view the respondent’s management’s inclination towards outsourcing did not begin to exist before the commencement of the sec 189 consultation process.  However, even if it existed before, that would not render the sec 189 consultation or the resultant dismissal procedurally unfair.  This is because such an inclination or pre-disposition is not in conflict with sec 189 of the Act.  I deal below with the provisions of sec 189 in so far as they relate to this point [para 50].

. . . .

Section 189(3) requires the employer to disclose the reason for the proposed dismissals, the alternatives that he considered before proposing the dismissals and the reasons for rejecting each one of those alternatives, the number of employees likely to be affected and the categories in which they are employed, the time when or the period during which the dismissals are likely to take effect. The content of what sec 189(3) requires the employer to disclose suggests quite clearly that the employer is allowed to initiate the consultation process after he has done a lot of work to try and resolve the problem on his own [para 52].

. . . .

The fact that sec 189(3)(b) contemplates that, when the employer initiates the consultation process in terms of sec 189(1) of the Act, he has already considered alternatives to dismissals which he has rejected for certain reasons and requires him to disclose the reasons why he rejected such alternatives does not mean that such alternatives cannot be revisited in the consultation process.  Of course, they can be because the other consulting party or parties may view them as potentially viable solutions.  Obviously, the employer may have strong views on such alternatives because he will have had an opportunity to consider them already and will have already rejected them before. [para 53]

. . . .

In the light of the above I conclude that there is nothing wrong with an employer coming to the consultation table with a predisposition towards a particular method of solving the problem which has given rise to the contemplation of dismissal of employees for operational requirements.  What is critical is that the employer should nevertheless be open to change its mind if persuasive argument is presented to it that that method is wrong or is not the best or that there is or may be another one that can address the problem either equally well or even in a better way.  He should engage in a joint problem-solving exercise with the other consulting party or parties [para 55].

With regard to the second level complaint Zondo JP is reported to have stated:

[60]        The fact that the union participated in the process that took place between February and November 1997 and that it was free to suggest or to propose whatever it wanted to suggest or propose means that, since the union did not suggest at the time that the process be conducted any differently, it cannot now be heard to complain that the process should have been dealt with differently.

[61]        Secondly, the union cannot be heard to say that the process which occurred from February to November 1997 was not consultation.  I say this fully aware that the respondent did say that the sec 189 consultation process only commenced in November 1997.  However, the fact of the matter is that, by any standards and objectively speaking, that process cannot be said to have been anything less than consultation.  Indeed, nothing can be pointed out in that process which rendered it less than a consultation.  In my view it was very much a joint-problem solving exercise in the sense that all stakeholders took part to investigate what the problem was and to look into what possible solutions existed to address the problem.  It is true that to a very large extent it was driven by the consultants.  But the result of that work was given to the senior management.  And, before the senior management could take a decision on the recommendations emanating from that process, they gave all the steakholders [sic], including the union, copies of the relevant reports and asked them to comment thereon.  Various steakholders [sic] submitted their comments and the union failed to submit its comments over a long period even when it had been granted extensions of time to do so. . . .