On the 28th of May 2018, the Constitutional Court of the Republic of South Africa (“Constitutional Court”) reserved judgment in the case involving South African Commercial Catering and Allied Workers Union (“SACCAWU”) and Woolworths Proprietary Limited (“Woolworths”). The case began in 2012 when the retail giant retrenched 92 employees (including 44 SACCAWU members). The retrenched employees refused alternative options to the amendment of their work contracts from permanent to flexible time working arrangements (“flexi-time”).

According to Woolworths, the purpose of the flexi-time arrangement was to address flexibility regarding trading time, wage inequality and cost-effectiveness. A spokesperson for Woolworths, Kirsten Hewett, said the flexi-time needed to be implemented so that Woolworths could keep up with modern trading patterns. Woolworths offered several alternatives to these employees, including a severance package and early retirement for those who qualified. Those who opted to accept the flexi-time arrangement (“voluntary stage”) were given a once-off ‘sweetener’ of R 70 000.00, those who did not accept the arrangement were eventually issued with a notice to retrench.

In court, SACCAWU argued that the retrenchment was substantively unfair in that the retrenchment was not rational, proportionate nor was it necessary. Furthermore, SACCAWU contended that Woolworths could have converted the full-time employees to ‘flexi-timers without slashing their wages and benefits. SACCAWU further argues that there was a leg of procedural unfairness, in that the employer did not meaningfully engage with SACCAWU during the voluntary stage nor did they have any intention of negotiating with their employees and offered the packages on a ‘-take it or leave it’ basis. The members of SACCAWU, who were successful in both the Labour Court and the Labour Appeal Court, refused to accept the new changes to their working conditions which affected their working hours, salary and benefits.

South Africa anxiously awaits the Constitutional Court’s decision, as the outcome will have an immense impact on labour relations in South Africa. The Constitutional Court will decide at what stage of the negotiation process the unions need to be engaged and will confirm whether it is acceptable for an employer to slash salaries and benefits in order to maximise profits.

05 July 2018