The National Union of Metalworkers of SA (Numsa) on Thursday asked the Constitutional Court to reinstate 733 employees who were retrenched by Aveng Trident Steel in 2015.

The employer retrenched the workers due to operational requirements after a decline in the steel industry.

The union failed in its application before the labour court to declare that the dismissals were automatically unfair, and an appeal to the Labour Appeal Court also failed.

The issue in the case revolves around the interpretation of section 187 (1)(c) of the Labour Relations Act.

The section states that a dismissal is automatically unfair if the reason for the dismissal is to compel an employee to “accept a demand” in respect of any matter of mutual interest between the employer and the employee.

In its judgment, the labour court concluded that the employees were dismissed not for refusing to accept any demand, but for operational requirements after rejecting the alternative to dismissals proposed by the employer during retrenchment consultations.

The union, however, contended that the employees were dismissed because they refused to accept new terms of employment.

Aveng contended that the dismissals followed a series of consultations which began in mid-2014 when the company began restructuring as it faced a harsh economic environment and ended in April 2015 when the employees were retrenched.

It argued dismissals were not as a result of employees not accepting a demand by employees.

Aveng also argued that at the outset of the consultation process, the union did not contest the need to retrench nor the principle that restructuring  was an appropriate response to Aveng’s challenges.

Counsel for Numsa, Paul Kennedy SC, said there was a letter written by Aveng to the union in April 2015, in which employees were required to indicate whether they accepted new job descriptions or not, by no later than April 21 2015.

The letter said if the employees refused, they would be dismissed on April 24, 2015.

Kennedy said the letter was not a proposal, but a demand as envisaged in section 187(1)(c) of the Act. “It was the rejection of the demand, which led to these workers losing their jobs,” Kennedy said.

Alistair Franklin SC, for Aveng, said the Labour Appeal Court correctly found that the cause for the dismissal was Aveng’s operational requirements. He said such dismissals did not fall foul of section 187 (1)(c).

Franklin said if the reason for the dismissal was the employer’s operational requirements, then a dismissal based thereon was not automatically unfair. He said on the facts of the case, the employees were not dismissed for rejecting a demand.

“The fact that the individual applicants refused an offer of alternative employment which could have avoided their retrenchment does not mean that they were dismissed because they failed to accept a demand in respect of a matter of mutual interest,” Franklin said.

Andrew Redding SC, for Imperial Dedicated Contracts, the company that took over Aveng’s transport and logistics business following the retrenchments, said it would not be reasonably practicable for Imperial to absorb some employees if the court ordered reinstatement.

He said the Imperial business comprised 75 employees and it was profitable. Redding said if the court ordered reinstatement, there would be 110 more employees, and this might force Imperial to start retrenchments.

The court reserved judgment.