Maluti Transport Corporation Limited v Manufacturing, Retail, Transport and Allied Workers Union and others (JA58/98) [1999] ZALAC 9 (23 June 1999)

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[1999] ZALAC 9
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Maluti Transport Corporation Limited v Manufacturing, Retail, Transport and Allied Workers Union and others (JA58/98) [1999] ZALAC 9; [1999] 9 BLLR 887 (LAC); (1999) 20 ILJ 2531 (LAC) (23 June 1999)

““““““““
IN THE LABOUR APPEAL COURT
OF SOUTH AFRICA
HELD AT
JOHANNESBURG
Case no : JA 58/98
In
the matter between :
MALUTI TRANSPORT CORPORATION
LIMITED
Appellant
and
MANUFACTURING,
RETAIL, TRANSPORT AND
ALLIED WORKERS UNION
First respondent
39 WORKERS
Second
respondents
OTHER WORKERS
Third
respondents
JUDGMENT
FRONEMAN
DJP :
[1] During 1991 two groups of
employees were dismissed by the appellant. The first group (“the
39 workers”) were dismissed
on 5 November 1991. The second group
of 317 workers (“the other workers”) were dismissed a week
later, on 12 November 1991.
This appeal has a tortuous and long
history (none of the parties, however, made any point of the long
delay in bringing matters
to a head) but it is nevertheless a sad
commentary on the legal system that it allowed a period of more than
7 years to elapse
before finality could be reached in this matter.
[2] The two groups of
dismissed workers had been employed in the so-called self-governing
territory of Qua-Qwa under the previous
constitutional dispensation,
that is, prior to 27 April 1994. Labour disputes in Qwa-Qwa were
not governed by the then South African
Labour Relations Act, no 28
of 1956 (“the old Act”), but by the Qwa-Qwa Labour Relations
Act, no 13 of 1988 (“the Qwa-Qwa
Act”). The terms of these
statutes were, however, materially similar.
[3] The dismissed groups of
workers initially challenged their dismissal by seeking
status
quo
relief in the Qwa-Qwa Industrial Court. This was
unsuccessful. They then took that decision on review to the Orange
Free State
Provincial Division of the then Supreme Court of South
Africa (now the High Court) and this application was also
unsuccessful,
it being dismissed with costs on 29 November 1993.
Thereafter an application was made to the industrial court in terms
of section
48 of the Qwa-Qwa Act for an order declaring their
dismissals to be an unfair labour practice. This only occurred in
1996. The
apparent explanation for the long delay in bringing the
application was that the new provincial government, elected to
power in
1994, appointed a commission of enquiry into the events
surrounding the dismissal of the workers, but the commission’s
efforts
eventually came to nought.
[4] So it came to be that the
industrial court was called upon to pronounce its verdict on the
dispute. The parties agreed that
the court would initially
determine only whether the dismissal amounted to an unfair labour
practice and that the relief flowing
from that finding would stand
over to be determined later. In the event the industrial court
found in favour of the two groups
of dismissed workers, a finding
which is now the subject of this appeal. The appealability of the
finding is not in question.
[5] As is the case with many
matters of this kind, the origin of the industrial action which
eventually erupted in November 1991
is to be found in events which
occurred a long time before that. These events have a bearing on
the ultimate issue of the fairness
of the dismissals, so reference
to them cannot be avoided.
[6] For approximately twenty
years, until December 1990, workers were paid an annual bonus equal
to their salary as a “thirteenth
cheque”. This was not a
contractual entitlement : whether it would be paid to them was
within the discretion of the appellant’s
board of directors. In
December 1990 only half of the bonus was paid to the workers. The
reason given was that the appellant
was in financial difficulty.
[7] The failure to pay the
full bonus caused great unhappiness and resentment. The workers,
through the first respondent (“the
union”), repeatedly raised
their concerns about it at various meetings held with management
during 1991. Management indicated
that they would recommend payment
of the full bonus, but the board remained unpersuaded and refused to
change its stance on the
issue.
[8] Into this volatile mix a
further, racial, factor was added towards the end of 1991. During
May 1991 the union and the appellant
had reached a wage settlement
for the 1991/92 financial year in terms of which the workers (all
black) would get a general increase
of 12%. However, on 25 October
1991 union representatives informed management that workers would no
longer work overtime until
two demands were met, namely payment of
half of the bonus for 1990 and an immediate wage increase of 6,5%.
The former had been
declared the subject of deadlock in June 1991,
but the declaration had been withdrawn and the parties continued to
negotiate over
the issue into October 1991. The latter related to
an allegation by the workers that they had been discriminated
against because
white artisans had initially been appointed at a
higher wage than their black counterparts.
[9] Management of the
appellant informed the workers that their demands could not be met
and instructed them to work scheduled overtime
shifts. The workers
refused and imposed a ban on any overtime, including overtime over
weekends as well as a refusal by technical
staff to work at night.
A meeting was held with shop stewards on 28 October 1991 in an
attempt to resolve the issue, but it proved
to be unsuccessful. On
29 October appellant’s management issued a notice pointing out
that it rendered an essential service
and that it could not function
effectively without overtime being worked (the inhabitants of
Qwa-Qwa relied on the bus service
to get to work in adjacent South
African territory - there was no other public means of transport
available). The notice warned
that if the workers continued with
their ban on overtime, resort would be taken to disciplinary action
and a court interdict would
be sought.
[10] The (interim) interdict
was obtained on 30 October. It proscribed industrial action by the
workers taking place without compliance
with the procedures of a
recognition agreement and the Qwa-Qwa Act, and prohibited workers
from taking part in the refusal to work
overtime.
[11] The appellant then
selected 39 workers to work overtime over the weekend preceding 5
November. A notice was issued warning
the 39 workers that a failure
to work overtime would be in breach of their terms and conditions of
employment and would result
in disciplinary action. The nature of
the envisaged disciplinary action was, however, not spelled out in
the notice.
[12] The notice and interim
interdict was ignored. The 39 workers did not work overtime over
the weekend and were dismissed, as
a result, on 5 November. What
followed can justifiably be called mayhem.
[13] Workers occupied the
appellant’s premises overnight and prevented access by management
and other employees. Vehicles and
equipment was damaged, sawdust
was thrown into the fuel tanks of vehicles and brake fluid was
drained from vehicles. A general
strike by the other workers then
ensued. They added one further demand to the two raised earlier :
reinstatement of the 39 workers
who had been dismissed for not
working overtime. The strike brought appellant’s operations to a
complete halt.
[14] The appellant’s
management responded by sending a letter to the union on 6 November
and issuing two notices to the employees
on the same day. The
letter invited the union to intervene, saying that if the strike
continued serious disciplinary actions,
including dismissals, would
have to be considered. The notices urged workers to resume work and
to follow the recognised dispute
procedure to resolve any dispute.
It warned of “drastic action [that] would be taken” if this was
not done.
[15] The workers paid no heed
to these warnings. The strike continued on 7 November. Two further
notices were issued to the workers
on that day. Because of their
later importance their terms are quoted in full :
“
QWA-QWA BUS CORPORATION
NOTICE
TO ALL EMPLOYEES
As a result of your unfair and illegal action management has decided
to :
1. Close the Corporation until 23 November 1991.
Employees must report at the Corporation on 23 November 1991 at
07h30. At this meeting employees will be informed about the future
of the Corporation.
Those employees who were dismissed can collect the monies owed to
them on 25 November 1991 at 10h00.
We confirm that there has been a collective refusal to work
overtime, nightshift and after 17h00, notwithstanding the court
interdict.
The shop stewards and Union official has not been able
to resolve this. This illegal and unfair action appear to be taking
place
with the consent of the shop stewards and Union official.
No undertaking could be given by the shop stewards or Union official
to the effect that employees will return to work and work
normally.
In the absence of this undertaking, and in the light of the
employees conduct (illegal occupation of depot etc.), the
Corporation
will be closed as mentioned.
(
Signed
) 7.11.91
GENERAL MANAGER DATE
(
Initialled
)
”
The second notice reads :
“Issued on 7 November 1991 at 15h40
NOTICE
TO ALL EMPLOYEES
1. All employees must vacate the premises before 16h30 on 7 November
1991 after which the Corporation will be closed as explained
in the
circular preceding this one.
Employees failing
to vacate premises as requested, will be removed as instructed by
the shareholders.
Signed by : (
Signed
)
GENERAL MANAGER
(
Initialled
)”
[16] In response to these
notices the workers vacated the premises. They did not return to
work until 23 November.
[17] At the request of the
union a meeting was held on 8 November, attended by union officials,
members of the board and management.
The agenda reflected that
union demands relating to the reinstatement of the 39 workers, the
outstanding bonus, the court interdict
and the implementation of
salary adjustments were to be discussed. After the union restated
these demands the board members requested
a caucus before
responding. The response was uncompromising : exception was taken
to the manner in which the union handled the
dispute; the interdict
would stand until adjudication on 22 November; the 39 workers could
apply for re-employment on Monday 11
November; the other workers had
to resume employment on 11 November failing which their contracts of
employment would be deemed
to have ‘automatically terminated’ ;
and the recognition agreement would also be deemed to have been
revoked by the union if
employment did not resume on 11 November.
[18] The union complained that
the issue of the arrear bonus had not been addressed and that there
was no discussion of issues;
it appeared that the meeting was being
used ‘merely to advise the union about decisions reached
unilaterally’. The board responded
that the situation first had
to be normalised before anything further was discussed, a response
which in turn elicited the reply
from the union that it would be
difficult to persuade the workers to return to work if the bonus
issue is not resolved ‘and consequently,
the Board can then
dismiss them as it wishes’. The Board, however, adhered to its
view.
[19] The meeting, according to
the minutes, ended without any agreement reached. The union, in
conclusion, expressed concern about
the time available to inform the
workforce and community about the resumption of duties on Monday 11
November. The Board then
resolved that :
The issue of the
community involvement cannot be addressed at this stage - VAT
national stayaway is now history - most people
desire to return to
work;
Because of the time
factor and being on Friday, the Board acknowledged that the problem
of getting hold of all employees will
be experienced. As a result,
it would appreciate any position of buses which will operate on 11
November 1991 (even if its 20
busses or more).
The Chairman of the
Board undertook to endeavour to get hold of the Chief Minister
during the week-end and (illegible) the issue
of securing
additional funds with a view to paying the arrear bonus;
It was agreed
cognisance was taken of the intricacy of the situation of 39
dismissed employees and it was agreed that in the meantime
they can
come to work - their issue plus all other grievances cited - will
be negotiated on 11 November 1991 at a meeting to
be held at QTC
Training Centre at 10h00.
Failure by the
workforce to resume normal duties from Monday 11 November 1991 will
result in their service with the Corporation
being terminated and
monies due to them will be ready for payment within a reasonable
time.”
[20] The workers did not
return to work on 11 November. A meeting, however, was held on that
day, attended by shop stewards of
the union and members of the board
and management. Management expressed the view that an agreement had
been reached at the previous
meeting on 8 November that normal
operations would resume on 11 November, whilst negotiations would
continue. The union officials
disputed this. The chairman enquired
whether operations would be restarted only after the issues relating
to the disputed bonus
and dismissal of the 39 workers were
finalised, to which the union responded affirmatively. Three issues
were then discussed,
namely the payment of the bonus, reinstatement
of the 39 workers and the damage to property during the strike by
the other workers.
No agreement was reached on any of these issues.
After the discussion about the bonuses the appellant indicated
that, (1) normal
bus operations must resume before further
negotiations could continue, (2) the position of the 39 workers
would be handled once
buses are running, and (3) that operations
must start on the morning of 12 November, failing which the workers
would be dismissed.
The meeting ended with a discussion of when the
workers would be paid in the event of a mass dismissal the next day.
[21] The workers did not
return to work on 12 November either. They were then notified of
their dismissal for failure to comply
with the ultimatum to return
to work on that day.
[22] On 22 November the union
wrote a letter to management stating that the workers would, in
compliance with the appellant’s
notices to them on 7 November,
report at the appellant’s premises on 23 November. Management
responded by reiterating that by
reason of the events from 8 to 12
November the workers had been dismissed.
[23] The workers presented
themselves at the appellant’s premises on 23 November and tendered
their services. Appellant refused
their services, but invited them
to apply for re-employment. The workers did not take up the
invitation, but responded by engaging
in unruly behaviour which led
to another interdict against them, obtained in the High Court. The
end result was that the workers
lost their employment, which they
sought to rectify by litigation more than 5 years later. They
succeeded in the industrial court
and the appellant seeks to
overturn this finding on appeal.
[24] Mr Campbell, who appeared
on behalf of the respondents on appeal, in his argument
distinguished the position of the 39 workers
from those of the other
workers. The dismissal of the 39 workers was unfair because, he
said, they were not afforded a proper
hearing prior to their
dismissal, nor did the ultimatum given to them indicate what the
sanction would be if they did not comply
with it. In respect of the
other workers, he contended that the ‘cooling-off’ notices given
to the individual employees was
an election by the appellant not to
dismiss the other workers before 23 November, a position from which
the appellant could not
resile before that date.
[25] Mr Kennedy, who appeared
for the appellant submitted that, given the history of the matter,
the strike embarked upon by the
workers was illegal; not functional
to collective bargaining; flouted not only the peace clause in the
applicable recognition agreement,
but also the provisions of the
court interdict; and was associated with misconduct of a
reprehensible kind. With reliance on cases
such as
National
Union of Metalworkers of SA v Vetsak Cooperative Limited and others
[1996] ZASCA 69
;
1996 (4) SA 577
(A); (1996) 17 ILJ 455 (A),
National Union of
Mineworkes v Black Mountain Mineral Development Co (Pty) Ltd
1997 (4) SA 51
(SCA); (1997) 18 ILJ 439 (HC) and
Dube and
others v Nasionale Sweisware (Pty) Ltd
1998 (3) SA 596
(SCA); (1998) 19 ILJ 1033 (SCA), he submitted that the point had
been reached where the process of negotiation had failed to resolve
the impasse between the parties and termination of employment was
justified.
[26] There is no doubt that
the conduct of the workers leading up to, and including, the events
on 7 November, cannot be condoned
as acceptable behaviour. Even if
one accepts that they were frustrated at the lack of a proper
response to their demands over
a period of more than a year they
were not justified in acting in the manner in which they did. The
appellant was clearly entitled
to bring matters to a head at that
stage, but the crucial question remains whether it went about doing
it in a proper manner.
[27] Prior to the dismissal of
the 39 workers on 5 November they were given an ultimatum to work
overtime. The ultimatum did not
specify the sanction that would
follow upon non-compliance. At the time when the 39 workers were
instructed to work overtime it
was known to the appellant that the
entire workforce had decided not to work overtime. Following upon
their failure to work overtime
the 39 workers were dismissed without
a further hearing.
[28] In
Performing Arts
Council of the Transvaal v Paper Printing Wood & Allied Workers
Union and others
(1994) 15 ILJ 65 (A)
[1993] ZASCA 201
; ;
1994 (2) SA 204
(A),
Goldstone J quoted with approval the following passage by Van
Rensburg J in
Plaschem (Pty) Ltd v Chemical Workers Industrial
Union
(1993) 14 ILJ 1000 (LAC) at 1006 H-I:
“When considering the question of dismissal it is important that
an employer does not act overhastily. He must give fair warning
or
ultimatum that he intends to dismiss so that the employees involved
in the dispute are afforded a proper opportunity of obtaining
advice
and taking a rational decision as to what course to follow. Both
parties must have sufficient time to cool off so that
the effect of
anger on their decisions is eliminated or limited” (at 75 B-C
(ILJ); 216 C-D (SA)).
Goldstone J did, however,
qualify this by saying that
“whether an illegal strike may fairly be met with an immediate
dismissal or whether fairness calls for an ultimatum or other
appropriate action short of dismissal is an issue which can only be
determined on the facts of each case” (at 75 D (ILJ); 216
E (SA)).
[29] In the present case,
however, the appellant chose to issue an ultimatum. Its failure to
state in the notice that it intended
dismissing the 39 workers if
they did not work overtime is a factor to be considered in assessing
the ultimate fairness of the
dismissal.
[30] The presiding officer in
the industrial court found the dismissal of the 39 workers to be
‘indicative of inconsistent and
unequal treatment’ in view of
the fact that the appellant knew that not only the 39 workers, but
the other workers as well, had
indicated that they would not work
the required overtime. Whilst this in itself is perhaps not
sufficient reason to brand the
dismissals as selective and unfair,
it does raise a question about the procedure followed by the
appellant in their dismissal.
It is common cause that the 39
workers returned to normal work after the weekend. There was thus
no urgency for dismissing them
without a hearing. It is not clear
why the 39 workers could not have been given individual disciplinary
hearings. They were not
chosen to work on a collective basis - why
then dismiss them collectively and not individually? It is quite
conceivable that individual
hearings could have given some of them
at least an opportunity to explain why they felt compelled not to
work overtime, or to undertake
to do so in the future. It is easy
to be wise in hindsight, but it is difficult to escape the feeling
that such a course of conduct
might have had more beneficial
consequences than the immediate dismissal of the 39 workers had.
[31] Having regard to the
above I am not convinced that the finding in the industrial court
that the 39 workers were unfairly dismissed
should be disturbed on
appeal.
[32] Their dismissal was a
major contributing cause to the general strike and misconduct by the
other workers, but I have no doubt
that that in itself would not
have rendered the other workers’ dismissal unfair. The only
possible reason that could save the
other workers from a fair
dismissal is the effect of the ‘cooling-off’ notices issued on 7
November.
[33] There was some debate
during argument on the legal effect of the ‘cooling-off’ notice
or, rather, the correct legal ‘pigeon
hole’ for it. It is at
least arguable that when the workers left the premises in
consequence of the notice they were no longer
on strike and that
their contract of employment was suspended until 23 November. This
‘suspension’ of the contract was, so
Mr Campbell argued,
consensual in nature and could only be undone by agreement as well.
He submitted that it is clear from the
minutes of the meetings that
there was no agreement to this effect and therefore the unilateral
notices issued by the appellant
could not affect the dismissal of
the other workers. Not so, countered Mr Kennedy: the ‘cooling-off’
notice was done within
the appellant’s (unilateral) prerogative to
issue instructions to workers in terms of the employment contract
and, because of
this, it could (unilaterally) change its mind later,
provided that it did so fairly.
[34] In the sometimes strange
world of an employment relationship governed at the same time by two
legal regimes, the one based
on the old Act’s unfair labour
practice jurisdiction, (which corresponds with the Qwa-Qwa Act in
this regard) and the other one
based on the common law contract of
employment, unaffected by equitable considerations, I do not think
it is always useful to try
and cast events in contractual molds.
What is lawful in contract may be unfair under the old and Qwa-Qwa
Acts, and what is fair
under these Acts may be unlawful in strict
contract. What is important about the ‘cooling-off’ notice is
that it unequivocally
stated that the workers should leave the
premises (which they did), and to return only on 23 November (which
they also did). Was
it fair for the appellant to require them to
return to work earlier, in the way it sought to do so from 8 to 11
November?
[35] The principle of
‘estoppel by election or waiver’ (as it was called by Hoexter JA
in
Chamber of Mines of SA v National Union of Mineworkers
1987 (1) SA 668
(A) at 690 J) has been applied to labour law, both
against a union (the
Chamber of Mines
case above) and an
employer (
Administrator, Orange Free State & others v
Mokopanele & another
(1990) 11 ILJ 963 (A) ). The
principle is based on ‘considerations of elementary fairness’
(
Chamber of Mines
case at 690 J) and for this reason I do not
agree with Mr Campbell’s submission that once made, an election
cannot be undone.
Where fairness dictates it, and it causes no
injustice to the other party, I see no reason why a party cannot
change his or her
mind (in a labour context) on this kind of issue
(compare
Mshumi & others v Roben Packaging (Pty) Ltd t/a
Ultrapark
(1988) 9 ILJ 619 (IC) at 625 G-I).
[36] In my view the two basic
requirements (there may be more) for a fair renunciation or
retraction of an earlier election would
be that (1) a good reason
exists for the change, and (2) that the other party is given timeous
notice of the change so as to prevent
that party from being
prejudiced thereby. Where either one of these two requirements are
not capable of being met the change of
heart will not be given legal
effect to. In the context of the present matter it means that the
appellant had to show that a good
reason existed why it considered
it necessary for the workers to return to work on 11 or 12 November
and not only on 23 November
as indicated earlier in the
‘cooling-off’ notice. It also had to show that the workers had
sufficient time and notice to return
to work on 12 November.
[37] The latter aspect
presents no problem. Both the union and shop stewards were given
notice of the earlier expected return to
work. On 8 October the
union indicated that it might have problems informing the workers of
the new ultimatum before 11 November,
but the shop stewards did not
raise this as a difficulty on 11 November. None of the workers
testified that they were unable to
get to work on 12 November, or
that they did not know that the appellant required them to resume
work on that day.
[38] Somewhat more problematic
is the reason why the appellant required the workers to return
earlier than that which they were
told of on 7 November. It may be
that the appellant considered that the ‘cooling-off’ period
allowed in the notice was too
long and would adversely affect its
continued operations - that it was issued by mistake, in other
words. If that was the real
reason, the difficulty that arises is
that the appellant tendered no evidence to this effect at the trial,
nor did it even raise
the issue as an item on the agenda for
discussion at the meetings on 8 and 11 November. In addition there
is no indication on
record that it sought to continue its operations
between 12 and 23 October by hiring replacement labour or the like
in that period,
something one would have expected them to do if they
really were in dire operational straits.
[39] Another possible reason,
suggested by the contents of the minutes, is that the decision was
motivated by the union’s uncompromising
demands at both meetings,
namely that there would be no work if the 39 workers were not
reinstated and the bonus not paid. But
to adopt that attitude would
undermine the whole purpose of a longer ‘cooling-off’ period :
to reflect on one’s options when
emotions have been brought under
control and to consider the prospect of losing one’s employment in
the cold light of day, perhaps
urged to do so more carefully by
circumstances at home. It is not possible to say, on the evidence
on record, that the workers
would not have relented in their demands
before 23 November. The stark facts of possible unemployment may
have struck home more
forcibly the closer the day of 23 November
approached. In addition, one would have expected evidence from the
appellant to substantiate
that this was indeed the reason for the
change. There was none.
[40] The conclusion I
therefore come to is that no good reason for the appellant’s
change of heart is demonstrated by the facts
on record and in the
circumstances its retraction of the earlier notice requiring the
workers only to return to work on 23 October
was not fair. It
follows that its ultimatum to the workers to return to work earlier
than 23 November was unjustified and that
the subsequent dismissal
of the workers for not doing so was unfair.
[41] I have not reached this
conclusion without considerable hesitation. It goes against the
grain to come to the assistance of
the workers in the circumstances
described above. The outcome is certainly not an endorsement of
their behaviour; it is only a
case of holding the appellant to the
standards it set for itself and the workers by issuing the
‘cooling-off’ notice on 7 November.
Their misconduct could have
been dealt with in other ways, and it may yet still have a material
effect on the relief that they
are entitled to.
[42] In the result the appeal
is dismissed with costs.
Froneman DJP
I
agree,
Nicholson
JA
Date of hearing : 18 May
1999
Date
of judgment :
Counsel for appellant : Mr P
Kennedy
Instructed by : Deneys
Reitz (Sandton)
Counsel for respondent : Mr
J Campbell
Instructed by : Routledge -
Modise Attorneys
This
judgment is available on the internet at http:
//www.law.wits.ac.za//labourcrt