When retrenchment masks retaliation: A wake-up call for South African employers

A closer look at the Nomvula Mqikela v Pristo Response Trading judgment.

Background

Mqikela lodged a grievance in 2020, citing victimisation, salary discrepancies, and exclusion from HR duties. Her grievance was ignored for over a year. When she finally referred the matter to the CCMA in January 2022, she was informed of her potential retrenchment the very next day.

The court found the retrenchment was not genuine but a retaliatory act—a façade to silence her.

What the court said about automatically unfair dismissals

Definition and legal framework

Section 187(1)(d) of the LRA states that a dismissal is automatically unfair if the reason for the dismissal is that the employee:

• exercised any right conferred by the LRA; or
• participated in any proceedings in terms of the Act.

In this case, the court found that Mqikela’s referral of an unfair labour practice dispute to the CCMA was a direct exercise of her statutory rights under the LRA.

Distinction between grievance and statutory right

The court clarified that while a grievance may be an internal matter, referring a dispute to the CCMA is a formal exercise of a statutory right. Therefore, retaliation for such a referral falls squarely within the scope of section 187(1)(d).

Causation test: Afrox principle

The court applied the two-stage causation test from the Afrox case, endorsed by the Constitutional Court in Aveng:

• Factual causation: Would the dismissal have occurred if the employee had not exercised the right?
• Legal causation: Was the exercise of the right the main, dominant, or most likely cause of the dismissal?

The court found that:

• The dismissal would not have occurred had she not referred the dispute.
• The referral was the main and most likely cause of her dismissal.

Retrenchment as a façade

The court found that the employer’s stated reason—retrenchment due to operational requirements—was not credible. The inconsistencies in testimony, contradictions in documentation, and the timing of the dismissal (just one day after the CCMA referral) led the court to conclude that the retrenchment was a pretext to mask retaliation.

Why this matters

This case is not just about one individual. It is about the integrity of our labour system. It is about whether employees can safely raise concerns without fear of losing their livelihoods. And it is about holding leaders accountable when they misuse their power.

Key takeaways for employers

Strict prohibition against retaliation

Section 187(1)(d) of the LRA makes it automatically unfair to dismiss an employee for exercising any right under the Act or for participating in any proceedings under it. This includes lodging grievances, referring disputes to the CCMA, or joining a union.

The court will look at the true reason for the dismissal, not just what is stated on paper.

Severe financial consequences

Employers found guilty of automatically unfair dismissal may be ordered to pay up to 24 months’ compensation. In Mqikela’s case, the employer was ordered to pay an amount equivalent to 20 months’ salary.

Reputational and legal risk

Such cases can damage an employer’s reputation and expose them to further litigation, including claims for costs, damages, or reinstatement.

Duty to follow fair procedure

Even if a dismissal is for operational reasons, employers must follow a fair and transparent process. Any inconsistency, contradiction, or lack of evidence can undermine their case.

Key takeaways for employees

Protection of rights

Employees are protected when they exercise their rights under the LRA, such as referring disputes to the CCMA or raising grievances. Retaliation by the employer is unlawful.

Right to compensation or reinstatement

If dismissed for a prohibited reason, employees can claim compensation (up to 24 months’ salary) or reinstatement, depending on the circumstances.

Burden of proof

Employees must show a credible possibility that the dismissal was linked to their exercise of rights. Once this is established, the employer must prove otherwise.

Legal recourse

While the CCMA can assist with conciliation, only the Labour Court can adjudicate automatically unfair dismissal claims unless both parties agree to arbitration.

Importance of documentation

Keeping records of grievances, communications, and timelines is crucial. In Mqikela’s case, her email trail and consistent testimony were key to her success.

Final thoughts

The judgment in Mqikela v Pristo Response Trading is more than a legal victory, it is a moral reckoning for workplaces across South Africa. It reminds us that power must be exercised with responsibility, and that silencing dissent through dismissal is unfair.

For employers, this is a moment to reflect: Are your HR practices truly fair, or are they just compliant on paper? For employees, it’s a call to courage: Your rights are real, and the law stands with you when you choose to use them.

Let us build workplaces where grievances are heard, rights are respected, and leadership is held accountable. Because justice at work is not just a legal standard, it is a human one.

For advice or more information, contact Riona Kalua, head of our Labour and Employment team.