Labour Court rejects union bid to stop job losses at Tulbagh cannery

A recent Labour Court ruling is a setback for the Agricultural, Food and Allied Democratic Workers’ Union’s bid to halt the loss of jobs at Premier’s Tulbagh fruit cannery. Archive photo: Greg Dor

• The Labour Court has dismissed an urgent application by the Agricultural, Food and Allied Democratic Workers’ Union (AFADWU) that would halt job losses at Premier FMCG’s Tulbagh cannery.
• The court found that the company had followed a fair consultation procedure.
• Nearly all employees have accepted voluntary severance packages.
• The ruling does not resolve other challenges to the cannery closure from fruit producers and the Competition Commission.

The Labour Court has dismissed an urgent application by the Agricultural, Food and Allied Democratic Workers’ Union (AFADWU) to halt voluntary severance packages at Premier FMCG’s Tulbagh fruit cannery.

Acting Judge May found that Premier had followed a fair procedure in consulting employees about the planned closure of its Fruit Products Western Cape operation.

The judge found no factual basis for the union’s contention that Premier had not followed a fair procedure, stating: “On the facts, there is nothing that supports this contention at all. In fact, the contrary seems true.”

The judgment is a setback for the union’s efforts to challenge the consultation process.

Voluntary severance packages

AFADWU launched its urgent application on 21 September, asking the Labour Court to halt the section 189 retrenchment process and the voluntary severance packages (VSPs) offered to employees.

The application was heard on 5 October. Judgment was delivered on 6 November.

The judgment sets out how the VSPs were negotiated during the facilitation process that began on 6 August. The process involved AFADWU, Solidarity, National Union for All Sectors (NUFAS), representatives of non-unionised salaried and wage staff, and representatives from the commercial and shipping departments.

AFADWU was the only union to bring an application to court challenging the process.

At the third facilitation meeting, after Premier had presented its financial information in response to questions from the parties, representatives of employees put forward their demands.

These included severance pay of four weeks’ wages for every year of service, with partial years of at least six months rounded up to a full year. They also called for three months’ notice pay and a minimum severance payment of R100,000.

They further sought gratuity payments for seasonal workers who would reach retirement age in the coming season, continued funding for employees on formal training programmes, including apprentices, and assistance with acquiring skills that could improve their employment prospects.

At the following meeting, Premier presented its VSP proposal. It offered two weeks’ wages for every completed year of service to permanent salaried employees, permanent wage employees and employees on fixed-term contracts as at July 2026. The proposal included backdating service calculations to 1 January 2015 for permanent employees who had been made permanent in October 2024.

Employees would receive one month’s notice pay, with work ending on 30 September and October paid as notice.

Premier subsequently agreed to add a further two weeks’ pay instead of notice.

The company also proposed a minimum payment of R50,000, provided that all affected employees accepted the VSPs. Where work remained outstanding, employees would first be offered VSPs and then retained on fixed-term contracts.

The judgment says the parties concluded the meeting on the understanding that they had reached an agreement on the VSP proposal. A further meeting was scheduled for 30 September to finalise the process.

By the time Premier signed its answering affidavit on 24 September, all affected salaried staff had signed VSPs. Among wage staff, all but two had signed.

Premier has subsequently said that 407 of the 409 affected employees had accepted VSPs.

Claims of duress

The union had also asked the court to give employees who had signed VSPs unintentionally or under duress the option of returning to work if alternatives to retrenchment could be found.

The court found that AFADWU had provided no evidence that the VSPs had not been entered into freely and voluntarily and found no basis to set them aside.

Only one of AFADWU’s 107 members had not signed by the time the matter was heard.

The court noted that the facilitation process would continue for him and that he could later challenge any dismissal as unfair.

Potential buyer

A pillar of AFADWU’s case concerned a potential investor or buyer. The union said it had provided Premier with the prospective buyer’s contact details on or around 8 September, and that the investor was willing to purchase the business as a going concern under section 197 of the Labour Relations Act.

The union contended that Premier’s failure to consider this proposal meant there had not been meaningful consultation about alternatives that could avoid retrenchments.

Premier disputed this. It told the court that no offer to buy the business had been made and argued that it was not required to wait for an offer before offering employees VSPs.

Citing case law, the judge said that “nothing prevents an employer from offering a voluntary severance package as a measure to avoid retrenchment”.

The judge said, “On the evidence before the court, it is apparent that there was meaningful consultation duly facilitated by the CCMA commissioner that culminated in a negotiated agreement to offer the VSPs on the terms agreed upon.”

The court therefore found that Premier had complied with a fair procedure.

The application for the section 189A process to be interdicted was dismissed. The court ordered each party to pay its own costs.

Judge May said the union had approached the court in good faith, seeking to protect its members’ rights and should not be discouraged from approaching the Labour Court in future where it had a deserving case.

Other disputes

Premier says the decision to close the Tulbagh cannery was driven by commercial pressures, including changing global demand, pressure in export markets, rising input costs and low factory utilisation. It has argued that the facility needed greater scale to compete internationally and that these pressures would have affected the business regardless of the merger with the Rhodes Food Group earlier this year.

Five Western Cape fruit producers have approached the High Court seeking an interim order compelling Premier to receive, grade and pay for fruit covered by their supply agreements for the 2026/27 harvest. They argue that Premier has refused to honour the contracts after announcing it would no longer buy fruit for canning.

The Competition Commission has also asked the Competition Tribunal to revoke approval of Premier’s R6.5-billion acquisition of Rhodes Food Group, alleging that the companies failed to disclose plans for the Tulbagh cannery’s closure before the merger was approved. Premier denies withholding material information and says the closure decision was taken after the merger.

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