Abstract

The merger or amalgamation is a popular option for companies when they want to increase their market share and expand their business operations. This may be good for the company in the long run, but it hurts workers, as they normally get retrenched as a result of the duplication of posts. Once the companies have merged, more than one employee could likely occupy or compete for positions that they occupied before and which carry over from the old company to the newly formed company. Merging companies must prepare a merger agreement setting out the conditions of the merger, including non-dismissal of employees for reasons related to the merger. The Competition Act also prohibits the dismissal of employees if it is merger-specific. The Labour Relations Act labels it an automatically unfair dismissal if the reason is related to the merger of companies. Despite an undertaking not to retrench or dismiss after the merger, companies fail to honour this undertaking and dismiss workers or change workers’ conditions of work, creating hostile work relations with workers. The paper is informed by the conduct of two companies: Clover SA and Central Bottling Company (Israel company). After the merger of these two companies, employees were retrenched, while others had their salaries reduced immediately after the merger. The author investigates the remedies available to employees affected by these developments and whether a merger can be reversed if it is found to be hostile to workers and their job security. The author argues that the dismissal of employees after the merger or the threat of reducing their wages causes unhappiness and frustration among workers, compelling them to embark on a strike to force the employer to adhere to the conditions specified in the merger agreement.