A retrenchment process often leads to employers feeling overwhelmed by the various statutory requirements contained in the Labour Relations Act (“LRA”).
For employers who hold a mining right, the provisions of the LRA are however not the only provisions that should be considered as section 52 of the Mineral and Petroleum Resources Development Act 28 of 2002 (“the MPRDA”) requires its own pound of flesh.
Section 52(1) of the MPRDA requires the holders of a mining right to notify the Minister of Minerals and Energy (“the Minister”) in writing once (1) “Economic conditions cause the profit-to-revenue ratio of the relevant mine to be less than six percent on average for a continuous period of 12 months” or (2) “If any mining operation is to be scaled down or to cease with the possible effect that 10 percent or more of the labour force or more than 500 employees, whichever is the lesser, are likely to be retrenched in any 12-month period”.
Accordingly, section 52(1)(b) could be triggered, for example, when the relevant mining right holder’s management decides to issue section 189(3) notices (“retrenchment notices”) to its employees because (1) the relevant mine is being placed into “care and maintenance” or (2) the mine’s management intends to apply for a closure certificate in terms of section 43 of the MPRDA.
Unions have, on several occasions, attempted to utilise a mining right holder’s failure to issue a section 52 notice to the Minister prior to or during the section 189 consultation process as grounds to interdict a retrenchment exercise.
In National Union of Mineworkers v Anglo American Platinum Ltd and others [2013] 12 BLLR 1253 (LC), the Labour Court considered whether the failure of Anglo American Platinum (“Amplats”) to issue a section 52 notice had any impact on the fairness of the section 189 consultation process. The Labour Court confirmed that section 52 of the MPRDA does not replace the procedure laid down by either sections 189 or 189A of the LRA and accordingly an employer’s failure to issue a section 52 does not affect the validity of the restructuring process for the purposes of the LRA.
The Court highlighted, however, that certain duties are assigned to the holders of mining rights in terms of section 52(4) and that holders of the mining rights should carefully consider the timing of issuing section 189(3) notices.
The timing of issuing a section 52 notice depends on the specific facts and circumstances of each matter but would closely relate to the circumstances that would trigger the requirements to give notice to the Minister as set out in section 52(1). The Court stated that:
“In other words, notice in terms of section 52 may conceivably be required in circumstances where section 189 does not apply and conversely, section 189 can apply where there is no requirement to give notice under section 52. When notice must be given to the minister and when employees and their representatives must be invited to consult over the terms of any proposed retrenchment are matters dealt with by the MPDRA and LRA respectively”.
Employers who hold mining rights should notify the Minister in terms of section 52 as soon as is reasonably possible in order to allow the two processes envisioned in the LRA and MPDRA to run in parallel and to avoid any union claiming that the necessary notices have not been issued in terms of the MPDRA.
Another crucial element that should be taken into account when considering a restructuring exercise is that section 52(4) places the obligation for the downscaling or restructuring processes on the holder of a mining right, who in certain cases may not be the employer of the affected employees.
From the above, it is clear that section 52 of the MPRDA provides a unique cross-over between the restructuring provisions of the LRA and the MPRDA. It is also important to note that the section allows the Minister to issue a directive to the holder of the mining right to take specific steps when considering downscaling or retrenchments. Should the holder of the mining right fail to follow the steps set out in the directive the Minister may interfere in the operations of the relevant mine to “provide assistance” or the Minister may apply to the relevant Court for judicial management of the mining operation. This would effectively result in the control of the mining operations being handed over to the Minister and/or the Department of Mineral Resources and Energy (“DMRE”).
Mining right holders need to seek specialist legal advice regarding their obligations under section 52 when considering the implementation of a restructuring exercise in terms of section 189 of the LRA.
