In our last article we looked at what happens when a single employee is retrenched, and how that dispute reaches the CCMA. This article deals with the other end of the scale, and with a step the Constitutional Court has just removed.

Two retrenchment regimes, not one

The Labour Relations Act treats retrenchments differently depending on size. Section 189 is the general framework. Section 189A applies once an employer is above 50 employees and the contemplated dismissals hit the statutory thresholds, and it introduces a more onerous process: possible CCMA facilitation, minimum waiting periods before notice of termination can be given, and different dispute pathways.

Facilitation is the heart of it. A facilitator is appointed to assist the parties in what the Act calls a “meaningful joint consensus-seeking process”. Sometimes it works. Often it does not.

The question the Court had to answer

Where a section 189A facilitation process has failed, must dismissed employees refer their dispute to conciliation before they can approach the Labour Court?

This mattered practically, not academically. Employers were raising the absence of conciliation as a jurisdictional point, and it was working. The Labour Appeal Court had held that facilitation and conciliation are functionally distinct, and that conciliation remained mandatory before referral.

What the Constitutional Court held

On 29 May 2026, in National Union of Metalworkers of South Africa and Others v Industrial Oleo Chemical Products [2026] ZACC 22, the Court disagreed.

The majority held that conciliation is not a jurisdictional precondition, and that section 189A(7)(b)(ii) permits a direct referral to the Labour Court once facilitation has failed. Tshiqi J held that the provision itself confers jurisdiction; the reference to section 191(11) serves only as a time clause, requiring referral within 90 days of receipt of the notice of dismissal. Requiring conciliation after facilitation would create unnecessary duplication and delay, undermining the very purpose of section 189A, which was introduced to expedite the resolution of mass retrenchment disputes.

It was not unanimous. In the minority, Theron J emphasised that the two processes are qualitatively different: facilitation is aimed at avoiding retrenchments, while conciliation addresses the fairness of dismissals after they have taken place.

What this means in practice

• If you were dismissed after a failed facilitation, you may go directly to the Labour Court. You do not have to sit through conciliation first.
• If you are an employer, you can no longer rely on the absence of conciliation as a jurisdictional point in section 189A(7) disputes. That defence is gone.
• Watch the clock. The referral must be made within 90 days of receipt of the notice of dismissal. That period is short, and it runs whether or not you have found a lawyer.

The wider point about retrenchment

Courts have repeatedly made clear that consultation is not a checklist. In one recent matter the court found the process fell short of a meaningful joint consensus-seeking exercise: the employee’s proposed alternatives were summarily rejected, he was accused of obstructing the process, and the employer had applied a checklist approach without engaging genuinely on selection criteria or exploring alternatives. The dismissal was procedurally unfair.

That cuts both ways. An employee who unreasonably refuses a reasonable offer of alternative employment is not entitled to severance pay under section 41(4) of the Basic Conditions of Employment Act. Whether a refusal was reasonable is exactly the sort of question worth taking advice on before you answer.

Sources: [2026] ZACC 22 (29 May 2026); ss 189, 189A(7)(b)(ii), 191(11) LRA 66 of 1995; s 41(4) BCEA 75 of 1997.

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