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[2021] ZALAC 52
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Actom (Pty) Ltd v National Union of Metalworkers of South Africa (NUMSA) obo Members and Others (JA63/2020) [2021] ZALAC 52; [2022] 3 BLLR 245 (LAC); (2022) 43 ILJ 818 (LAC) (10 December 2021)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case no: JA 63/2020
ACTOM (PTY)
LTD Appellant
and
NATIONAL UNION OF
METALWORKERS OF
SOUTH AFRICA (“NUMSA”)
OBO ITS MEMBERS First
Respondent
MEHHLOMELELE
Christopher MELLO NO Second
Respondent
COMMISSION FOR
CONCILIATION MEDIATION
AND ARBITRATION
(“CCMA”) Third
Respondent
Heard:
21
September 2021
Delivered:
10
December 2021
Coram:
Waglay
JP, Davis JA and Kubushi AJA
JUDGMENT
DAVIS JA
Introduction
[1]
This
appeal concerns a dispute about whether project bonuses have been
forfeited by members of the first respondent as a result
of
industrial action. The appellant conducts business
,
inter alia
,
as a construction company. It was one of the significant contractors
involved in the construction of a power station on behalf
of Eskom
SOC Ltd (“Eskom”) in the vicinity of Lephalale in the
Limpopo Province. The project is commonly known as the
Medupi
Project, (‘the project’).
[2]
As
part of the regulation of employment relations on the project, there
was a collective agreement concluded in respect of the project,
between representative trade unions and the various employers, as
represented by two employers’ organisations, being the
South
African Federation of Civil Engineering Contractors (SAFCEC) and the
Construction Engineering Association of South Africa
(CEA(SA)). This
collective agreement was concluded in 2010 and was known as the
Project Labour Agreement (“PLA”). The
first respondent
was an actual party to the agreement, and the appellant was bound to
the agreement by virtue of its membership
of SAFCEC.
[3]
The
PLA stipulated that all employees were to be employed at the
construction site of the Medupi power station on the terms set
out in
one of two pro-forma ‘Limited Duration Contracts.’ During
the latter part of 2014, the appellant employed 562
employees at the
Medupi Project. The first respondent represented the majority of the
employees.
[4]
It
is common cause that the first respondent’s members embarked
upon an unprotected strike action on 25 June 2014. On 1 July
2014,
the first respondent’s members went on a national strike and
only returned to work on 28 July 2014. The first respondent‘s
members, then again went on an unprotected strike on 7 August 2014.
[5]
As
the first respondent’s members refused to provide undertakings
that should they return to work they would comply with the
terms and
conditions of employment and not continue striking, they were not
allowed back on the premises until such time as a Memorandum
of
Understanding was concluded. This occurred on 16 August 2014.
Thereafter, the first respondent’s members resumed their
employment duties on 18 August 2014.
[6]
On
3 September 2014, the appellant provided representatives of the first
respondent with a letter informing them that their members
would not
be paid their project bonuses from December 2013 to August 2014. This
was a result of the first respondent’s members
having been
involved in an unprotected strike on 7 August 2014.
[7]
The
first respondent, on behalf of its members lodged a dispute with the
third respondent in which the second respondent was appointed
and
arbitrated the dispute. The essence of the first respondent’s
case was that their members should have only forfeited
their project
bonuses for the month during which its members embarked on the
unprotected industrial action.
[8]
The
dispute turned on the meaning of aspects of clause 13.25 of the PLA
which reads thus:
‘
13.25
Project Bonus
13.25.1 A
Project Bonus equal to 15 hours’ wages will accrue to each
employee for each completed
month worked on the Project for an
individual Contractor. (15 hours’ times the normal rate of
pay).
13.25.2 The
Project Bonus will only be paid by the contractor upon demobilisation
and not in the event
of fair dismissal, resignation or abscondment.
Payment will be calculated at the rate of pay applicable on date of
demobilisation.
13.25.3 The
Project Bonus will only be paid to the employee, provided that during
his/her period of
employment in the event the individual:
13.25.3.1 is
not absent without consent;
13.25.3.1.1 if
the individual is absent without consent on one occasion within a
calendar month, the individual
will lose half of the project bonus
hours for that month (7.5 hours)
13.25.3.1.2 if
the individual is absent without consent on a second occasion within
a calendar month, the individual
will lose the remaining half of the
project bonus hours for that month (7.5 hour)
13.25.3.2 does
not participate in any disruption or unprotected industrial action;
13.25.3.2.1 The
individual will not lose project hours if the individuals return to
work within the cooling off
period (as detailed in the annexure)
13.25.3.2.2 If
the unprotected industrial action takes place as a result of
provocation and this provocation is
not acknowledged and an
undertaking made to investigate / address the cause of the
unprotected industrial action, such unprotected
industrial action
shall not result in the individuals losing their project bonus.
13.25.3.2.3 Rolling
unprotected industrial action (where employees embarking on
unprotected industrial action return
to work only to go out of
further unprotected industrial action as the result of the same
event) will result in the individuals
losing their project bonus in
terms of PLA.’
[9]
The
second respondent issued an award in which he engaged with the
interpretation of clause 13.25. His reasoning bears detailed
repetition:
‘
The
meaning of these two provisions (clauses 13.25.3 and clause
13.25.3.2) of the agreement is in my view clear and straight forward.
The two clauses simply mean that an employee’s entitlement to
project hours is dependent on the condition that an employee
does not
during the period of his/her employment participate in industrial
action. There is no factual or legal basis to infer
that the clauses
should be interpreted to mean that the forfeiture is limited only to
the month in which the employee participated
in an unprotected
industrial action. If the drafters intended that employees who
participated in unprotected industrial action
be entitled to be paid
a portion of their project bonus in the year in which they
participated in such unprotected industrial action,
they would have
expressly said so, just as they did in the case of absence from work
without permission and refusal to work agreed
overtime…
I
see no contradiction between what clauses 13.25.3 and 13.25.3.2 mean,
and what the parties intended when entering into the agreement.
The
intention of the parties was clearly to discourage participation in
unprotected industrial action. The parties thus agreed
on a more
severe sanction for participation in unprotected strike than absence
from work without permission. The reason for this
is obviously that
the impact of an unprotected strike on the employer’s business
is always more severe than when an individual
employee is absent from
work without permission. That employees are strongly discouraged from
engaging in unprotected strikes is
clearly evident from the preamble
of the agreement, especially when regard is had on paragraphs 2.1 and
2.2 of the agreement. The
two clauses provide that parties must
commit themselves to the promotion of industrial peace and use of
proper channels and procedures
in resolving their differences. I do
not see how this construction of the agreement offends the objects
and purpose of the Labour
Relations Act.
I
therefore find that clause 13.25 of the project bonus does not
provide for forfeiture of project bonus for the month in which
an
employee participated in an unprotected strike.
Clauses
13.25.3 and 13.25.2 expressly state that an employee who participates
in unprotected industrial action shall not be paid
project bonus.
The
applicant’s members are therefore not entitled to be paid
project bonus for January to August 2014.’
[10]
Following
this award, the first respondent brought an application to review and
set aside this award.
Judgment
of the court
a quo
[11]
The
court
a
quo,
albeit
in a brief
ex
tempore
judgment, upheld the first respondent’s application for review,
finding that the only period during which the members of
the first
respondent were not entitled to a production bonus was when the
strike occurred; that is August 2014. Accordingly, the
appellant was
ordered to pay the project bonuses which had accrued from 1 December
2013 to 31 July 2014.
The
appeal
[12]
The
appellant contends that the court
a
quo
erred
in not following the judgment of Snyman AJ in
Civil
and Power Generation Projects (Pty) Ltd v Commission for
Conciliation, Mediation & Arbitration
&
others
(2019) 40 ILJ 2005 (LC) where the learned judge interpreted clause
13.25 of the PLA to the effect that where employees embarked
upon an
unprotected strike action, they forfeited their entire project bonus
for the year, even if such strike action occurred
only in a single
instance.
[13]
In
his judgment, Snyman AJ at para 51 summarised his interpretation of
clause 13.25 as follows:
‘
All
of the above leaves me convinced that when considering the clear
language of clause 13.25.3, the context provided by the actual
objectives of the LRA and the PLA itself, and with a generous helping
of common sense and logic, the result that must follow when
objectively interpreting this clause is that where employees embark
upon unprotected strike action, they forfeit their entire project
bonus for the year, even if it is only a single instance.
’
Evaluation
[14]
This
appeal thus depends wholly on the interpretation of clauses 13.25 and
particularly whether the finding of the second respondent
that the
intention of the parties to discourage participation in unprotected
industrial action justified a reading of the clause
that leads to a
justification of a forfeiture of the entire project bonus.
[15]
Hence
according to the second respondent’s award, the appellant was
entitled to invoke this clause and refuse to pay bonus
payments for
the period 1 December 2013 to 30 November 2014. It is common cause
that the unprotected strike took place on 7 August
2014 and that
strikers resumed duties on 18 August 2014. To recapitulate the second
respondent had held that, although clause 13.25
was silent about the
degree of forfeiture which would apply in the event of unprotected
strike action, ‘the parties thus
agreed on a more severe
sanction for participation in unprotected strike action than absence
from work without permission.’
[16]
While
clause 13.25.3.2.3 made it clear that, in the event of rolling
unprotected industrial action, that the ‘project bonus
in terms
of the PLA’ will be forfeited, there is no similar provision in
the case of other forms of unprotected industrial
action. The clause
is silent in this regard. The key question therefore is whether the
words as employed in clause 13.25 can justifiably
bear the weight of
the intention of the parties as divined by the second respondent.
[17]
The
key to unravelling the consequences of employees participating in
unprotected strike action is to be found in the wording of
clause
13.25.1 which provides for an
accrual
of a project bonus equal to 15 hours’ wages for each completed
month worked on the project. The use of the word ‘accrue’
is significant. The word ‘accrue’ has a clear meaning,
being a right to which an employee is legally entitled, albeit
that
payment takes place after the date of accrual. See
CIR
v Peoples Stones (Walvis Bay) (Pty) Ltd
[1990] ZASCA 1
;
1990 (2) SA 353
(A).
[18]
Once
the word ‘accrue’ is so defined, it follows that prior to
the commencement of unprotected industrial action, a
project bonus
may have accrued to the employees concerned; that is, they had a
legal entitlement to the bonus prior to the event
which is stipulated
to trigger a forfeiture. Only the period from December 2013 to July
2014 is in dispute, and the question is
whether from an engagement
with the text of the clause and thus the express wording employed by
the parties, the appellant was
justified in regarding the project
bonus for that period as being forfeited.
[19]
Turning
to the consequences of this approach to this appeal, the appellant
had already paid the project bonuses from September 2014
to December
2014. Given the interpretation of clause 13.25.1 as set out above,
the appellant cannot disregard the legal entitlement
of the
employees, who participated in unprotected industrial action, that is
to the project bonus which accrued prior to the date
of the
industrial action on which they had embarked.
[20]
Absent
an express provision in clause 13.25 to the effect that there would
be no entitlement to the bonus for the entire calendar
year during
which the unprotected industrial action took place, the appellant was
thus obliged to recognise the employees’
right to the project
bonus until the commencement of the industrial action in August 2014.
That means that, while the appellant
was entitled to refuse to make
payment of the project bonus during the month of August 2014, it
could not ignore the legal entitlement
to the project bonus for the
period of ‘accrual’; that is between 1 December 2013 to
31 July 2014.
[21]
For
these reasons, the finding of the court
a
quo
that
the appellant was obliged to pay the bonuses from 1 December 2013 to
31 July 2014 cannot be disturbed.
[22]
The
appeal is dismissed. There is no award as to costs.
Davis
JA
Waglay
JP and Kubushi AJA concur.
APPEARANCES:
FOR
THE APPELLANT: Adv
Van As
Instructed
by Fluxmans INC Attorneys
FOR
THE FIRST RESPONDENT: Adv Orr
Instructed
by Ngako Attorneys