Automated Summary
Key Facts
The applicants (25 employees) were retrenched by Bakhresa Food Product Ltd in March 2016 due to operational requirements (technological upgrades via Tetra Pack machines) and financial difficulties. They argued the 7-day notice period violated the 15-day notice requirement in their Collective Bargaining Agreement (CBA), impacting termination benefits tied to a recent salary increase. The court found the retrenchment procedures were followed, including a consultative meeting with TUICO (the recognized trade union), which agreed to the 7-day notice period to avoid business disruption. The CMA award was upheld as valid, with no unfair termination found.
Issues
- The second issue concerned the remedies available to the applicants. Since the court ruled the retrenchment procedures were valid, the applicants could not claim terminal benefits based on the new salary increment (effective 01/04/2016). The court dismissed the application, upholding the CMA award and finding no unfair termination, as the retrenchment date (31/03/2016) predated the salary increase. No compensation or other remedies were granted.
- The court examined whether the respondent adhered to retrenchment procedures outlined in Section 38(1) of the Employment and Labour Relations Act (ELRA) and Rule 23(4) of the Code of Good Practice. The applicants argued the 7-day notice period violated their Collective Bargaining Agreement (CBA), which required 15 days' notice. The respondent claimed the reduced notice was agreed upon during a consultative meeting with TUICO, the recognized trade union, to avoid business disruption. The court found the procedures were followed as TUICO's binding agreement superseded the CBA's notice requirement.
Holdings
- The court dismissed the application for revision, upholding the CMA award. It ruled that the applicants could not claim terminal benefits based on the new salary increment (effective 01/04/2016) because the retrenchment occurred before the increment and was mutually agreed. The claim for 12 months' compensation was also rejected as it was not raised before the CMA and lacked merit.
- The court determined that the respondent followed all retrenchment procedures as required by the Employment and Labour Relations Act (ELRA), including consultation with TUICO. The reduction of notice period from 15 days to 7 days was deemed a valid modification under the collective agreement, and the decision was binding on the applicants as TUICO's branch representatives participated in the process. This finding rendered the first ground of the application without merit.
Remedies
The court dismissed the applicants' revision application and upheld the CMA award. The applicants sought compensation for unfair retrenchment, but the court found that the retrenchment procedures were properly followed. As a result, the applicants were not entitled to the new salary increments or additional terminal benefits. The decision was based on the agreement between the employer and TUICO, which was binding on the employees.
Legal Principles
- The judgment references Rule 23(4) of the Employment and Labour Relations (Code of Good Practice) G.N. No.42 of 2004, which supports Section 38 of ELRA by outlining procedural and substantive obligations for retrenchment, including consultation requirements and criteria for employee selection.
- The court applied Section 38(1) of the Employment and Labour Relations Act (ELRA) regarding retrenchment procedures, emphasizing the employer's obligations to provide notice, disclose information, and consult prior to retrenchment. It also relied on Section 71(3) of ELRA, which establishes the binding nature of collective agreements on parties and their members, including non-member employees if the union is the exclusive bargaining agent.
Precedent Name
Alhamdu Ndimkana and Others Vs. Director of Vic Fish
Cited Statute
- Labour Court Rules, GN. No 106 of 2007
- Employment and Labour Relations (Code of Good Practice) G.N. No.42 of 2004
- Employment and Labour Relation Act, No.6 of 2004
Judge Name
A. E. MWIPOPO
Passage Text
- where the Workers Union branch fully collaborated in the retrenchment exercise, there is no need to consult to individual employees.
- I find that the termination of applicants' employment for operational requirements by the respondent followed all retrenchment procedures. Thus, this ground does not have any merits.
- the applicants cannot enforce the terms of the agreement before the commencement date.