Tulbagh cannery closure upheld by South African court

South African judge ruled Premier FMCG met legal requirements for closing its Western Cape fruit processing facility.

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A Labour Court judge dismissed a union challenge to job losses at a Premier FMCG cannery.
The decision confirms that voluntary severance deals with nearly all staff were legally valid.

Acting Judge May of the South African Labour Court ruled that Premier FMCG adhered to legal standards when negotiating the closure of its Tulbagh fruit cannery. According to AllAfrica, the judge rejected an urgent bid by the Agricultural, Food and Allied Democratic Workers' Union (AFADWU) to pause the exit of staff. The decision, issued on 6 November, confirmed that the company’s consultation steps were procedurally sound, even though the union argued that better alternatives existed to prevent layoffs.

The union filed its application on 21 September, aiming to stop the section 189 retrenchment process and the associated voluntary severance deals. The judge determined that the union lacked evidence to prove the company acted unfairly. AllAfrica reported that the judge observed, "On the facts, there is nothing that supports this contention at all." This finding validated the negotiations that began in August and involved multiple labour groups and non-unionised staff representatives.

Premier FMCG proposed severance pay of two weeks’ wages for each year of service for permanent staff. The offer included backdated service calculations for employees who gained permanent status in October 2024. The company also agreed to provide additional pay in lieu of notice. By late September, most staff had agreed to these terms. AllAfrica noted that 407 out of 409 affected workers accepted the packages, leaving only two wage staff and one union member without signed agreements at the time of the hearing.

A key point of contention was a potential buyer for the business. AFADWU claimed Premier ignored a prospective investor who wanted to purchase the cannery as a going concern. The company countered that it did not need to wait for a formal offer before offering severance. The judge agreed, citing precedent that allows employers to use voluntary packages to avoid formal retrenchment.

The ruling does not end all legal disputes surrounding the closure. Five fruit growers in the Western Cape have petitioned the High Court to force Premier to honour their supply contracts for the upcoming harvest. Meanwhile, the Competition Commission has requested the Competition Tribunal to undo the approval of Premier’s R6.5-billion purchase of Rhodes Food Group, arguing that the cannery closure was not fully disclosed during the merger review.

Tulbagh cannery workers accept severance after court ruling

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