South Africa’s Mining and Natural Resources Sector, like most industries in South Africa, has been hit extremely hard by the contraction of both the global and local economy, and this has, inevitably, led to many mining companies placing operations on care and maintenance, and initiating processes under Section 189 and 189A of the Labour Relations Act, No. 66 of 1995 (LRA), commonly referred to as “mass retrenchments”.
Mass retrenchments in the Mining and Natural Resources Sector have significant consequences not only for the employees that are dismissed for operational reasons, but also numerous other persons who are economically or financially reliant on mineworkers due to the “multiplier effect”, and on the related service providers and their employees.
I have always been a firm believer in there being value in process, and that, for so long as parties are still talking to one another there is always a chance that outcomes can be changed or impacts can be minimised.
It was therefore with interest that I read the recent judgment of the Constitutional Court of South Africa in the matter between National Union of Metalworkers of South Africa & Others v Industrial Oleo Chemical Products [2026] ZACC [22].
The Constitutional Court was required to consider an application for leave to appeal against the judgment and order of the Labour Appeal Court (LAC). The Constitutional Court granted leave to appeal, upheld the appeal, set aside the order of the LAC, and reinstated the order of the Labour Court and remitted the matter to the Labour Court to decide the merits of the case.
The first applicant, the National Union of Metalworkers of South Africa (NUMSA) and six of its members (Applicants) challenged the interpretation, by the LAC, of Section 189A(7)(b)(ii) read with Section 191(11) of the LRA, which found that after a failed facilitation in the context of mass retrenchments, the parties are required to refer the dismissal dispute for conciliation before approaching the Labour Court to adjudicate the matter.
Following their dismissal, and after a failed facilitation process (Facilitation Process) the Applicants referred a dispute to the Labour Court in terms of Section 189A(7)(b)(ii) of the LRA. The respondent, Industrial Oleo Chemical Products (Respondent) raised a preliminary point, submitting that the Applicants were required to first refer an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) before they could approach the Labour Court. The Respondent contended that after a failed facilitation, dismissed employees cannot bypass conciliation and directly approach the Labour Court. The Labour Court dismissed the Respondent’s preliminary point and held that it is not necessary to refer a dispute to conciliation once a facilitation process in terms of Section 189A(7) of the LRA has taken place.
On appeal, the LAC held that a referral of a dismissal dispute to the CCMA for conciliation is mandatory after the failure of a Facilitation Process. The LAC found that there is a functional distinction between facilitation and conciliation. The LAC concluded that Section 189A(7) of the LRA is concerned with what should happen during the consultation process contemplated in Section 189/189A of the LRA and not with what happens after consultations have taken place. The LAC held further that a dismissal (following a consultation process) is a new dispute and that a referral of an unfair dismissal dispute must first be referred to conciliation with the exercise of the Labour Court’s jurisdiction deferred until a dispute has been conciliated. The LAC concluded that notwithstanding the Facilitation Process (during the conciliation process) a referral of a dismissal dispute to conciliation (under the auspices of the CCMA) after mass retrenchments, was mandatory. The Constitutional Court agreed with the decision of the Labour Court that conciliation is not a prerequisite to a referral of an unfair dismissal dispute to the Labour Court in the case of mass dismissals under Section 189/189A of the LRA.
While the decision of the Constitutional Court is legally sound, there is merit in a further opportunity (conciliation) for the parties to engage one another (under the auspices of another/different third party) with fresh perspective before referring a dispute to the Labour Court for adjudication. Once parties resort to litigation, it becomes extremely difficult to draw back from the brink and reach a sensible and practical solution. Resorting to litigation which may include the Supreme Court of Appeal or the Constitutional Court, is time consuming and leaves the parties in a state of uncertainty for lengthy periods, which is not desirable. In this matter, the Respondent initiated a large scale retrenchment exercise in early 2020 that resulted in the dismissal of the Second and Further Applicants in July 2020. The application for leave to appeal against the decision of the LAC was heard by the Constitutional Court on 30 September 2025, with the decision of the Constitutional Court only being handed down on 29 May 2026, some six years after the processes in terms of Section 189/189A of the LRA being initiated. Six years is a long time to be in a state of uncertainty and a conciliation presents a further opportunity for the parties to engage on another in a formal, third – party structure.
For more information please contact Warren Beech at warren@bv-inc.co.za.
Disclaimer: This article is provided for informational purposes only and is not intended to serve as legal advice. Readers should consult one of our legal professionals for advice tailored to their specific circumstances.