Reinstated Massmart employees not entitled to back pay, court rules

The Competition Appeal Court has revisited a case it disposed of eight years ago when it ordered that the merged entity of Wal-Mart-Massmart reinstate 503 employees who were dismissed in 2009 and 2010 before the merger.

In the latest case, it dismissed an application by the SA Commercial, Catering and Allied Workers Union (Saccawu) seeking that the reinstated employees receive back pay dating to when they were retrenched.

The issue before the court for determination this time was whether the court's reinstatement order of March 9 2012 was retrospective in effect, or was meant to operate from the date when the employees were retrenched.

Saccawu accepted that the 2012 order did not expressly make provision for back pay. However, the union contended that it was implicit in the order that the reinstatement of employees must be retrospective.

Saccawu sought to have this part of the 2012 order interpreted as requiring the payment of back pay to the date of retrenchment (in 2009 and June 2010) and sought orders directing Massmart to do this.

Following the judgment in 2012, in which the court approved the merger between Wal-Mart Stores and Massmart Holdings, the parties engaged one another to give effect to the conditions in the court order under the supervision of the Competition Commission.

As early as April 2012, controversy between the union and Massmart arose on whether the reinstatement order was retrospective.

Massmart’s stance was that it was not retrospective, whereas Saccawu's stance was that it was.

On July 15 2013, the commission weighed in on the debate and issued a letter expressing its view on the meaning of the term "reinstate" in the order. The commission's stated view was that "the reinstatement is not retrospective and does not include back pay".

In its judgment on Tuesday, the Competition Appeal Court said the original order recognised there would be a gap in service from the date of retrenchment to the date on which the service contracts resume following reinstatement.

"Having carefully considered the matter, I am satisfied the order permits only one interpretation, namely resumption of service with no implication of retrospectivity," judge Bhekisisa Mnguni said in a ruling in which judges Owen Rogers and Nolwazi Mabindla-Boqwana concurred.

Mnguni said the judges who authored the 2012 order served, or used to serve, as judges of appeal in the Labour Appeal Court.

"They would have known that in the labour sphere, reinstatement orders are not retrospective unless expressly so specified. I cannot conceive that they would have failed to include an express provision for retrospectivity if this is what they had intended," Mnguni said.