Section 189(2) of the Labour Relations Act directs that the employer and employee (or other consulting parties such as a Trade Union) must engage in a meaningful joint consensus-seeking process and attempt to reach consensus on appropriate measures to:
· avoid the dismissals;
· minimise the number of dismissals;
· change the timing of the dismissals; and
· mitigate the adverse effects of the dismissals;
· determine the method for selecting the employees to be dismissed; and
· the severance pay for dismissed employees.
In attempting to reach consensus on the above issues there is an equal responsibility on both parties.
In practice it is the employer who initiates and manages the consultation process by reason of its operational requirements. For this reason, the employer must set out fully its commercial rationale, all relevant information at that stage and what alternatives it has considered, before the employee can engage meaningfully. It is therefore insufficient for the employer to leave it to the employee party to come up with alternatives, suggestions, etc without venturing any of its own.
An employer is not exempt from observing all the requirements of section 189. Thus, in Keller v Transnet it was held that it was not enough to only discuss severance pay or early retirement.
However, in Peach & Hatton Heritage (Pty) Ltd v Neethling & others, the Labour Appeal Court found that strict compliance with section 189(2) was not required where the retrenched employees were senior managers who had engaged in extensive discussions about the future of the company and accepted their retrenchment.
In UPUSA & others v Grinaker Duraset it was noted that the above expression does not require an employer, in the absence of a collective agreement to the contrary, to actually reach consensus with its consulting partner. The process of seeking consensus is sufficient. In Wanda v Toyota SA Marketing the courtconfirmed that there is no legal requirement to reach consensus provided that the parties have engaged in a proper joint consensus-seeking exercise, even if it was suspended.