Dis-Chem faces backlash from the Solidarity Trade Union (“Solidarity”) on the memorandum released on 9 September 2022. Solidarity Trade Union has released a statement whereby it has addressed the situation as being in violation of South Africa’s Employment Equity Act (“EEA”).

Dis-Chem has stated that there will be a policy implementation whereby white South Africans will neither be appointed nor promoted within the franchise, in an attempt to boost its transformation agenda.

Transformation policies and the Employment Equity Act

Consequently, Solidarity has stated that the policy is in violation of South Africa’s EEA and has subsequently noted that an application to the Labour Court for the disclosure of information is soon to be served on the franchise along with an application to declare Dis-Chem’s racial policy unlawful after Dis-Chem remained silent in respect of the October 21 deadline that Dis-Chem imposed, essentially requesting feedback on whether the above-mentioned policy had been withdrawn.

The EEA provides that each employer must take steps to promote equal opportunity in the workplace by eliminating unfair discrimination in any employment policy or practice and should any preferential measures exist, they should exclude quotas.

According to Section 15(1) of the EEA, designated employers must adopt affirmative action measures that are not against having suitably qualified people from designated groups enjoying equal employment opportunities and are equitably represented in all occupational levels in the workforce.

Inadequate and unfair procedure

On or about May 2021, Solidarity launched an urgent application in the Labour Court in terms of section 189(13) in the case of Solidarity Trade Union v Barloworld Equipment, in which they alleged that the consultation process followed by Barloworld Equipment was inadequate and resulted in an unfair procedure.

Fast forward to 6 May 2022, where an appeal to the Constitutional Court was granted due to the Labour Court dismissing the abovementioned applications. Barloworld argued that Solidarity does not deny that it was consulted on the selection criteria and that the use of transformation as a selection criterion in a retrenchment exercise is not completely forbidden. Barloworld therefore submitted that whether the selection criteria were fair or was fairly applied, is a matter for determination at a trial on the substantive fairness of the dismissals, and not though the mechanism created by Section 189A(13).

Creating meaningful consultations

The Constitutional Court found that meaningful joint consensus-seeking consultations should take place whereby the following factors are taken into account:

  1. A willingness to respond to requests for further information;
  2. All proposals from the respective parties must be considered;
  3. Reasons must be given for the rejection of proposals as well as all representation;
  4. An open mind must be kept and all sufficient and crucial information must be disclosed; and
  5. Employers are not obligated to disclose what is not relevant, available or harmful to the employer’s business or interests during the consultation process, this includes trade secrets or confidential information.

The purpose of all consultations is to seek consensus with no requirement to reach agreement amongst the parties. One should also note that a failure to reach consensus or agreement does not translate to no meaningful consultation process.

Adequate protection for employees

The Constitutional Court distinguished that in light of the limitation found in Section 189A(18), Section 189A(13) provides adequate protection for employees where a fair procedure has not been observed. The Court held that the Labour Court was correct in holding that there was adequate consultation between the parties because Solidarity’s primary complaint relates to the inclusion of transformation as part of the selection criteria matrix and to the fact that there was no agreement between the parties.

The Court held that on the evidence before it, Barloworld genuinely and meaningfully considered the representations made by Solidarity. The Court further held that Solidarity persistently rejected the inclusion of transformation, with the effect that the parties dead-locked. There is no requirement in our jurisprudence requiring that there should be an agreement in consultations. The Court further held that Solidarity could approach the Labour Court to adjudicate on the substantive fairness of its inclusion in the criteria.

What does “meaningful consultation” mean?

Essentially the above-mentioned case has established what a “meaningful consultation” constitutes and that a joint consensus-seeking process does not mean there has to be an agreement but where selection criteria has been agreed upon, such employer must make their decisions on such selection criterion and where no selection criteria has been agreed upon, the employer is required to use criteria that is fair and objective.

Furthermore, there exists no distinction between “procedural fairness” and “compliance with a fair procedure”. Section 189 of the Labour Relations Act requires the employer to consult any person impacted by their decisions (including trade union members whose members may be affected by various decisions).