24 October 2024
Employers with multiple operations or businesses are no strangers to the unique economic and operational obstacles of the business landscape in South Africa. Even when employers have exhausted all the available means to ensure that their operations and their workforce across all their businesses remain unaffected by economic difficulties, they may still have to implement retrenchment procedures. During these procedures, employers often attempt to ‘bump’ employees from one operation to the other, with varying degrees of success. The case of SACTWU obo Members v Fyvie G N.O and Others (LC) (unreported case no D258/2020, 5-5-2024) serves as a recent example of the difficulties that employers may face in their attempts at ‘bumping’.
What is ‘bumping’ and how is it applied?
Bumping is a practice often used by employers when LIFO (last-in-first-out) is the applicable selection criterion during retrenchments. The effect is that an employee is dismissed based on operational requirements when they were not initially selected for retrenchment to make way for another employee. Bumping usually occurs in one of two ways, namely – Horizontal bumping, where an employee in a redundant post displaces an employee with shorter service at the same or a similar level; and Vertical bumping, where an employee in a redundant post replaces an employee with shorter service engaged in a lower position in the occupational hierarchy.
Case Study
In the case of SACTWU obo Members v Fyvie G N.O and Others (LC) (unreported case no D258/2020, 5-5-2024), the respondent managed a vegetable farming operation and macadamia nut farming operation in KwaZulu-Natal. At the vegetable operation, the respondent employed 23 workers, 15 of whom were members of SACTWU, and these employees mainly grew sweetcorn, broccoli, cabbages, and peas. Their work was relatively simple in that they planted, harvested, sorted, and packed vegetables. However, on the macadamia nut farm, the employees carried out more complex duties, which required rigorous and complex training in the processes particular to the cultivation of macadamia nuts.
Following a series of unfortunate and unforeseen events, the respondent found that the vegetable farming operation was no longer viable and decided to cease farming vegetables. Thus, a large-scale retrenchment process commenced, and the 23 vegetable farm workers were informed that the respondent was considering ceasing the vegetable farming operations. On their last day of work, the workers launched an urgent application in the Labour Court to interdict the retrenchments, and the Labour Court duly ordered the respondent to conduct further consultations on alternatives short of dismissal and the selection criteria to be used during the retrenchments. SACTWU, on behalf of the workers, proposed that the respondent apply bumping as part of the LIFO principle, which meant that the long serving vegetable farm workers would replace the macadamia nut farm workers who had been employed for less than a year. Due to feasibility issues, the respondent rejected this proposal, and the 23 workers were retrenched.
SACTWU referred an unfair dismissal dispute to the Labour Court and contended that the retrenchments of the 23 workers were substantively unfair on the basis that the respondent did not implement bumping as part of the LIFO principle. The Court noted that bumping is not an uncommon procedure, nor is it necessarily unfair if it is implemented, but a key consideration is that the one set of employees must be able to carry out the duties of the employees with shorter service seamlessly, otherwise the practice of bumping would do more harm than good for an employer. Since the respondent was able to show that macadamia nut farming required complex irrigation, probing of soil moisture, scouting, mulching, and pruning, among other things, the Labour Court held that the respondent’s retrenchment of the 23 vegetable farm workers was reasonable and economically sensible.
Conclusion
Though bumping is not an uncommon practice during retrenchments, the Labour Court has urged employers, employees, and unions alike to be mindful of the feasibility of bumping because all employees across the employer’s operations should be able to do one another’s work and be integrated seamlessly for bumping to be remotely successful and feasible.
Contact Invictus for expert guidance and support with retrenchments. Contact our office at 086 173 7263 or email us at admin@invictusgroup.co.za.
