In Mqikela vs Pristo Response Trading, the South African Labour Court found that a supposed retrenchment had masked the real reason for dismissal.
The employee had referred an Unfair Labour Practice (ULP) dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA). This case exemplifies an automatic dismissal due to ULP.
The court held that the dismissal was automatically unfair under section 187(1)(d) of the Labour Relations Act, 1995 (LRA). Ms Mqikela was awarded 20 months’ remuneration as compensation, along with costs. The judgment demonstrates that courts will not tolerate dismissals disguised as retrenchments to circumvent or retaliate against employee rights, emphasising the principle of automatic dismissal due to ULP.
Case overview
Ms Mqikela worked as a Human Resources Manager at the Pretoria branch of Pristo Response Trading (Pristo). In 2020, she referred an internal grievance against Mr Mapalakanye, Pristo’s sole director, to her line manager. She alleged unfair treatment regarding salary increases and unpaid bonuses.
The grievance remained unresolved for about a year. Ms Mqikela then approached Mr Louw, Pristo’s external labour consultant, to discuss her concerns. After Mr Mapalakanye again refused to handle the grievance, Ms Mqikela indicated she would seek external assistance. She formally referred the ULP to the CCMA on 31 January 2022.
Only one day later, on 1 February 2022, Mr Louw, acting on behalf of Pristo, informed Ms Mqikela that she was at risk of retrenchment. The reason given was that Mr Mapalakanye wanted to outsource the human resources function. This notice was part of what the court later found to be an automatic dismissal due to ULP.
On 14 February 2022, Pristo issued a notice under section 189(3) of the LRA. The notice stated that financial difficulties due to contract losses and a decision to scale down and outsource certain functions justified the contemplated retrenchment. It also rejected salary reductions and short-term as alternatives. Ms Mqikela was the only employee listed as at risk.
After two consultation meetings, during which Ms Mqikela maintained that the process was retaliatory, she was notified of her dismissal on 1 April 2022. Following an initial CCMA conciliation, the matter proceeded to the Labour Court.
Labour Court findings
Ms Mqikela argued that Pristo dismissed her in response to her exercising rights under the LRA. She claimed the dismissal was an automatic dismissal due to ULP. She initially sought the maximum compensation of 24 months’ remuneration but reduced this to 20 months in her closing arguments.
Pristo denied that the dismissal was automatically unfair. The company claimed the reason was operational requirements and, therefore, fair. It cited outsourcing the human resources function, loss of a contract with the Department of Arts and Culture and the absence of HR duties at Ms Mqikela’s site.
The court found these reasons contradictory. The claim that HR duties did not exist was neither part of Pristo’s pleadings nor mentioned in the 189(3) notice. Mr Mapalakanye also gave conflicting dates for contemplating retrenchment, eventually settling on 2021 in Pristo’s statement of defence.
The true reason for the dismissal
Regarding section 187(1)(d) of the LRA, the court clarified that Ms Mqikela’s right exercised was the ULP referral to the CCMA, not the internal grievance. This distinguished her case from DBT Technologies (Pty) Ltd vs Garnevska, where the Labour Appeal Court held that internal grievances do not involve the direct exercise of statutory rights.
Ms Mqikela’s referral brought her claim clearly within section 187(1)(d). It did not matter whether the ULP had prospects, so long as it was not frivolous, vexatious or mala fide.
The next issue was determining the true reason for the dismissal. The court applied a two-fold test involving both factual and legal causation. The court examined Pristo’s operational requirements. It found no correlation between the 189(3) notice, evidence from Mr Louw and Mr Mapalakanye, and Pristo’s pleaded case.
The court rejected the claim that retrenchment was contemplated in 2021 as improbable. Instead, it accepted Ms Mqikela’s evidence that retrenchment was only considered after the ULP referral on 31 January 2022. Pristo’s defence and justification were incoherent and not credible.
Compensation and costs
Using the established test for causation, the court concluded that Pristo would not have dismissed Ms Mqikela if she had not referred the ULP to the CCMA.
The evidence indicated that her ULP referral was the dominant, proximate, or most likely cause of dismissal. The retrenchment was a façade, designed to conceal the true reason. This reinforced the principle of automatic dismissal due to ULP.
The court awarded Ms Mqikela ZAR 300,000 in compensation. In determining the amount, it noted that Pristo deliberately manufactured a dismissal reason, knowing the true reason was unlawful and unfair. It is also considered that Ms Mqikela remained unemployed for over 36 months after dismissal.
Since Pristo made no submissions regarding costs, the court ordered it to pay Ms Mqikela’s costs. The court criticised litigants who ‘come before it with dirty hands’. In these circumstances, law and fairness required that Ms Mqikela not be out of pocket for vindicating her rights, while Pristo persisted in justifying its misrepresentation.
Retaliatory and statutory right-based dismissals
Courts consistently frown upon misrepresenting the true reason for dismissal. Employers who disguise automatically unfair dismissals risk higher compensation, reinstatement and cost orders. However, genuine operational reasons for retrenchment may sometimes arise near the time an employee exercises LRA rights.
In such cases, courts may scrutinise the timing closely. Employers must justify operational requirements with clear, consistent evidence. Documentation should show that dismissal was due to genuine operational needs, not a response to the exercise of employee rights under the LRA.
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| Chloë Loubser | Knowledge & Learning Lawyer | Employment & Data Protection | mail me | | Grace Crocker | Associate | mail me | |
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