Case Law Watch | The Road To Court Just Got Shorter

Retrenching under pressure? The route to court just got shorter.

Retrenchment is no longer a theoretical topic for this membership. The Quarterly Labour Force Survey for the first quarter of 2026 recorded 345 000 fewer employed people than the previous quarter, and an official unemployment rate of 32.7%. Behind numbers of that scale sit thousands of businesses making the hardest decision an employer can make, and making it under exactly the cost pressures this edition documents.

Two developments in the courts over the past weeks matter directly to any member contemplating, or currently running, a retrenchment process. One shortens the road between a failed large-scale retrenchment process and the Labour Court. The other draws a firm line around what a CCMA facilitator may and may not do inside that process. Both reward the same thing: an employer whose consultation process is genuinely fair and thoroughly documented.

Case: National Union of Metalworkers of South Africa and Others v Industrial Oleo Chemical Products (CCT 367/24) [2026] ZACC 22

Decided: 29 May 2026, Constitutional Court of South Africa

The question: Where a section 189A facilitation process in a large-scale retrenchment has failed, must dismissed employees first refer the dispute to conciliation before approaching the Labour Court?

The answer: No. The majority held that conciliation is not a jurisdictional precondition, and that section 189A(7)(b)(ii) of the LRA permits a direct referral to the Labour Court once facilitation has failed

Who it affects: Employers with more than 50 employees whose contemplated retrenchments meet the thresholds that trigger section 189A

Source: NUMSA and Others v Industrial Oleo Chemical Products [2026] ZACC 22 (saflii.org); Cliffe Dekker Hofmeyr employment law alert, 1 June 2026

What the Constitutional Court decided, and why it took three courts

The dispute arose from a large-scale retrenchment conducted by Industrial Oleo Chemical Products in 2020, in which a CCMA facilitator was appointed under section 189A. The facilitation did not produce agreement, employees were dismissed, and NUMSA referred an unfair dismissal dispute directly to the Labour Court without first referring it to conciliation.

The Labour Court found that it had jurisdiction to hear the matter. The Labour Appeal Court disagreed and overturned that finding, holding that conciliation had to precede adjudication. The Constitutional Court has now settled the question in the union’s favour: where facilitation under section 189A has failed, section 189A(7)(b)(ii) permits the dispute to go straight to the Labour Court. A further round of conciliation is not required, and its absence cannot be raised by the employer as a jurisdictional objection.

The logic is not difficult to follow. Facilitation is itself an intensive, structured attempt to reach consensus, conducted by a CCMA-appointed facilitator inside the consultation process. Requiring the parties to repeat a version of that exercise at conciliation, after it has already failed, adds delay without adding much prospect of settlement.

Source: [2026] ZACC 22; Industrial Oleo Chemical Products v NUMSA [2024] ZALAC 53; Tabacks case analysis, June 2026

What this means for employers in practice

The buffer is gone.

Under the interpretation the Labour Appeal Court had adopted, an employer emerging from a failed facilitation could expect a conciliation stage before litigation, a stage that often produced settlement, and always produced time. That expectation no longer holds. A dispute can now move from failed facilitation to Labour Court proceedings directly, and an employer must be ready for that from the moment the facilitation concludes without agreement.

A standing jurisdictional defence has fallen away.

Employers facing section 189A disputes have in the past been able to challenge the Labour Court’s jurisdiction where no conciliation took place. Legal advisors consistently read this judgment the same way: that objection is no longer available in the failed-facilitation context. Cases will be decided on their substance, which is to say, on the fairness of what the employer actually did.

The consultation process is now, more than ever, the whole game.

If disputes reach adjudication faster and procedural objections carry less weight, then the employer’s protection lies in one place only: a consultation process that was genuinely fair, genuinely consultative and genuinely documented. The court that hears the matter will be looking at the notice given, the information disclosed, the alternatives considered, the selection criteria applied, and the record of it all.

Know what a facilitator may and may not do

The second development is a reminder rather than a new rule, and it comes from commentary by employment law practitioners on the conduct of current facilitations. The Labour Court has confirmed, in jurisprudence going back to NUM v CCMA and Others [2011] 7 BLLR 713 (LC), that a CCMA facilitator’s role in a section 189A process is procedural and facilitative. Unless the parties agree otherwise, a facilitator may not make binding substantive rulings on disputed issues, such as the level at which consultations must be conducted. Practitioners report that some facilitators nonetheless continue to overstep this line.

The point matters because section 189A processes run against a statutory clock, in circumstances that are already difficult for the business. A facilitator who converts a consultative process into a series of rulings changes the character of the process in a way the law does not authorise. An employer who encounters this should record its position clearly in the process and take advice promptly, rather than acquiescing and attempting to unwind the consequences later.

Source: NUM v CCMA and Others [2011] 7 BLLR 713 (LC); Cliffe Dekker Hofmeyr employment law alert, 22 June 2026

The fundamentals that decide these cases

Neither development changes the substance of what a fair retrenchment requires. Both raise the cost of getting it wrong. For members, the essentials remain what they have always been.

Start the consultation process early, with a proper notice under section 189(3) that discloses the required information honestly and completely
Consult with the genuinely correct parties, and engage with representations rather than merely receiving them, since consensus-seeking is the legal standard
Consider alternatives to dismissal seriously and record why each was or was not viable, because this is where fairness cases are most often won and lost
Apply selection criteria that are objective and agreed where possible, and apply them consistently
Keep a complete record of every meeting, disclosure, proposal and response, on the assumption that a court will one day read it
Where section 189A applies, treat the end of a failed facilitation as the start of potential litigation, and be ready accordingly

Members should also keep the legislative horizon in view. As covered in our Labour Policy Watch, the Labour Law Amendment Bill proposes to double statutory severance pay from one week to two weeks per completed year of service for operational requirements dismissals, applying prospectively. That proposal is not yet law, but employers modelling the cost of future restructuring should already be running both scenarios.

Final consideration

The judgment in Industrial Oleo Chemical Products does not make retrenchment harder. It makes poor process more expensive, faster. An employer who consults properly, considers alternatives honestly and documents everything has little to fear from a shorter road to court. An employer who treats consultation as a formality now has less time and fewer technical defences between that choice and its consequences.

No member should commence a retrenchment process alone. (SA)UEO organisers assist members with section 189 and 189A processes as a core function, and the right time to involve your organiser is before the first notice is issued, not after the process is in dispute. Members are encouraged to contact their organiser or info@saueo.co.za.

Sources:

National Union of Metalworkers of South Africa and Others v Industrial Oleo Chemical Products (CCT 367/24) [2026] ZACC 22, 29 May 2026 (saflii.org); Industrial Oleo Chemical Products v NUMSA and Others [2024] ZALAC 53 (saflii.org); Cliffe Dekker Hofmeyr, Conciliation after failed facilitation, Employment Law Alert, 1 June 2026; Cliffe Dekker Hofmeyr, Labour Court has confirmed the limited powers of CCMA facilitators in section 189A retrenchment consultations, Employment Law Alert, 22 June 2026; NUM v CCMA and Others [2011] 7 BLLR 713 (LC); Statistics South Africa, Quarterly Labour Force Survey Q1: 2026, Media Release, 12 May 2026.