Coca-Cola Beverage Africa (CCBA), the world's eighth largest bottling partner of Coca-Cola, has won an appeal in the Constitutional Court over the dismissal of around 400 employees.
In 2016, the Competition Tribunal approved the merger of several Coca-Cola authorized bottlers, resulting in the creation of CCBA. The merger was subject to a number of conditions, including retaining a certain number of employees from the pre-merger operations and prohibiting layoffs as a result of the merger. However, there was a provision for staff reductions necessary in the normal course of business.
Further mergers at holding company level were approved in 2017.
“According to Coca-Cola, the situation worsened after the second merger. In 2017, the economic situation worsened. From April 1, 2018, a health tax on sugar-sweetened beverages, colloquially known as the 'sugar tax' Promotional tax was implemented. ” states the Constitutional Court judgment.
“As a result, Coca-Cola… [Competition] On 19 January 2019, the Commission was informed of the challenges faced and warned that reductions in operational requirements may be necessary. ”
CCBA has also informed the Food and Allied Workers Union (FAWU) and the National Union of Food, Beverage, Wine, Spirits and Allied Workers (NUFBWSAW) that they may have to make workers redundant. FAWU filed a complaint with the commission alleging violations of the merger terms.
As of the end of May 2019, 368 workers were placed on involuntary redundancy, while a “significant number” opted for voluntary redundancy.
The matter went to court and CCBA was found to have complied with its terms. The Commission applied to the Competition Appeal Court, which overturned the court's decision. CCBA subsequently filed an appeal against this judgment with the Constitutional Court.
The Constitutional Court found that “the Competition Appeal Court misjudged the nature of the appeal and applied the wrong test as to both review and causation.”
“There was no legal basis or fact to overturn the court's decision. Therefore, the appeal succeeds.”