In the case of Koprindjiyska v 80 Westcliff (Pty) Ltd t/a Four Seasons Hotel (JS 994/20) [2022] ZALCJHB 325 (22 November 2022), an employee of the Four Seasons Hotel, employed as a Housekeeping Supervisor, sought an order by the Labour Court (LC) to declare her retrenchment as substantively and procedurally unfair.
The employee was retrenched on 13 August 2020 following a consultation process initiated by a section 189 (3) letter. She raised several issues related to the fairness of her retrenchment, including the selection criteria adopted by the employer, the alleged inconsistent application of the Last-In-First-Out (LIFO) principle, the employer’s failure to assist her with an international transfer, and the availability of other jobs.
The employer provided evidence that the hotel had suffered financially, leading to restructuring that included a significant reduction in the number of rooms and restaurants. The consultation process involved five one-on-one meetings with the employee, during which the employer explained that LIFO would be applied by department across the hotel, based on total length of service with the hotel.
Given this criteria, the employee was selected for retrenchment as she had less service than others in the Housekeeping department, which was set to reduce its staff count.
The LC noted that for a dismissal to be substantively fair due to an employer’s operational requirements, there needs to be a commercially defensible rationale for the retrenchment, and the selection criteria should be fair and objective, whether agreed upon with consulting parties or not.
The employee argued that she should not have been selected for retrenchment as her skills and qualifications enabled her to do the jobs of other employees with less service with the hotel, or because she had more service in the department in which she was employed.
However, the LC found that the criteria applied by the employer were fair and objective, and there was no obligation for the employer to use skills and experience as selection criteria. The court also held that the application of LIFO by department was not inherently unfair.
The LC concluded that the employee’s dismissal was substantively fair.
This case underscores the importance of employers demonstrating a commercially defensible rationale for retrenchments and adopting fair and objective selection criteria. It also illustrates that employees cannot require the adoption of particular criteria that would be favourable to them.
J Goldberg
