3M SA (Pty) Ltd v South Africa Commercial Catering and Allied Workers Union (JA22/00) [2001] ZALAC 2 (15 February 2001)

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[2001] ZALAC 2
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3M SA (Pty) Ltd v South Africa Commercial Catering and Allied Workers Union (JA22/00) [2001] ZALAC 2; [2001] 5 BLLR 483 (LAC); (2001) 22 ILJ 1092 (LAC) (15 February 2001)

29
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA
(HELD
IN JOHANNESBURG)
CASE NO: JA22/00
In
the matter between
3M SA (PTY) LTD APPELLANT
AND
SOUTH AFRICA COMMERCIAL 1
ST
RESPONDENT
CATERING
AND ALLIED WORKERS UNION
GH
MOLEKO
AND 128 OTHERS 2
ND
AND FURTHER RESPONDENTS
_____________________________________________________________
JUDGEMENT
_____________________________________________________________
ZONDO JP
INTRODUCTION
[1] The second and further
respondents instituted a claim in the Labour Court
against the appellant, their employer,
for the payment to
them of wages for the period commencing from the 23rd
January 1997 to the 14th February 1997.
The appellant
defended the claim. Waglay J, who presided in the subsequent
trial, found against the second and
further
respondents in respect of the period from the 23rd to the 31st
January 1997 but in their favour
in respect of the period from
the 1st to the 14th February 1997. Consequently, he ordered
the appellant to pay the
second and further respondents such
remuneration as each one of them would ordinarily have
been entitled to
for the period 1-14 February 1997. With the
leave of the Court a quo, the appellant appeals against the
order
given against it in respect of this period. The second
and further respondents have noted a cross-appeal against
the order relating to the period from the 23rd to the 31st
January1997.
THE FACTS
[2] At all material times the
appellant was the employer of the second to the 129
th
respondents. The second and further respondents were members of the
South African Commercial Catering and Allied Workers Union
(
“the
union”
) which is the first respondent. Towards the end of
1996 there existed a dispute between the appellant and the
respondents on
a wage increase and other terms and conditions of
employment of the second and further respondents. Conciliation of
the dispute
failed. In due course the union gave the appellant a
strike notice as required by sec 64(1) of the Labour Relations Act,
1995
(
Act No 66 of 1995
) (
“the Act”
).
[3] On the 17th January 1997 the
second and further respondents commenced a protected strike in
support of their wage demands.
The strike took the form of a
go-slow and an overtime ban. On the 20th January the appellant sent
a letter to the union in which
it stated:-
(a)
that the go-slow and
overtime ban on which the second and further respondents had
embarked constituted a strike as defined in sec
213 of the Act;
(b)
that it was not obliged
to accept the second and further respondents’ tender of partial
services;
(c)
that
“ Accordingly
we hereby give you 48 (forty eight) hours notice that you are
required to either tender your services fully i.e
desist with the
partial tender of services and retardation and obstruction of work,
or failing that we do not require you to tender
your services at
all. ”
(d)
in the last paragraph
thereof:
“If we do not have a written undertaking in this
regard by 16h30 on Wednesday 22 January 1997 you will be excluded
from our premises.
”
[4] In paragraph three of a
memorandum addressed to the employees on the 21st January by its
General Manager: Human Resources, the
appellant stated that it was
going to exercise the option of the exclusion of the workforce from
the premises “
should this strike action not cease
” within
48 hours. In the fourth paragraph it said it was doing this in
order to protect “
3M Company’s principle corporate value of
ensuring continuous service to all our customers”.
On the
23rd January the appellant informed the workforce that it would only
pay for work that would actually have been done until
the 31st
January but said:
“The above only applies should strike action
continue.
”
[5] The respondents’ partial
strike continued until the 5th February. On that day a meeting took
place between the appellant
and the union. At the meeting the
second and further respondents tendered their services fully. The
appellant did not accept
the second and further respondents’
tender, stating that it would serve no purpose to do so. At the
meeting B. Andrews, appellant’s
human resources manager, stated in
response to a direct question that there was no demand accompanying
the exclusion of the second
and further respondents from the
appellant’s premises. In a letter dated the 6th February
addressed to the union, the appellant
rejected the respondents’
tender of their full services.
[6] For its rejection of the
tender, the appellant advanced the reason that it would serve no
purpose in the resolution of the wage
dispute to accept such tender.
The appellant was referring to the dispute which in its letter to
the union it said had arisen
“
from your failure to accept the
company’s final offer at the conclusion of the negotiations.
”
The appellant also said that it retained
“reasonable
apprehension that your members would either persist with disruptive
activity or merely resume strike action at a time
favourable to them
and prejudicial to the Company.”
[7] The appellant also stated that,
should the union maintain that the appellant had instituted a
lock-out, it would contend that
such lockout was in compliance with
the provisions of the Act. It referred the union to the provisions
of sec67 (3) of the Act.
This section is quoted later in this
judgement. The appellant said it was not liable for the payment of
the wages of the second
and further respondents. On or about the
14th February the parties reached an agreement on the wage dispute.
The parties also
agreed that the second and further respondents
resume their duties on the 17th February.
THE ISSUES
[7] Subsequent to their resumption
of duties, the second and further respondents instituted a claim
against the appellant in the
Labour Court for the period from the
23rd January to the 14th February. The basis of their claim was
that during the period from
the 23rd January to the 5th February
they were prepared to work, albeit whilst on a go-slow and without
overtime and, from the
5th February to the 14th February, they had
tendered their full services. The Court a quo held that the claim
in respect of the
period from the 23rd to the 31st January had
prescribed. It upheld the claim in respect of the period from the
1st to the 14th
February. The basis of the Court a quo’s decision
in respect of the second period was that the appellant’s conduct
in excluding
the second and further respondents
from the premises was part of an
unprotected lock-out.
THE CROSS APPEAL-THE PERIOD
FROM THE 23
RD
JANUARY- 5
TH
FEBRUARY
[8] Since the cross-appeal relates
to an earlier period than that of the appeal, I shall deal with it
first. The Court a quo did
not deal with the argument that the
appellant was not obliged to pay the second and further respondents
wages for the period from
the 23rd January to the 5th February
because their tender was not a tender of full services but a tender
of partial services.
Mr Reyneke, Counsel for the appellant,
informed us that this occurred despite that argument having been
presented to the Court
a quo. Mr Reyneke’s submission raises the
defence conveyed by the maxim
“exceptio non adimpleti
contractus”
which has been dealt with in a number of cases
over decades in the course of the development of our law. Some of
thesec in are:
HAUMAN V NORTJE
1914 AD 312
; VAN RENSBURG V
STRAUGHAN
1914 AD 293
;
BK TOOLING V SCOPE PRECISION
ENGINEERING
1979 (1) SA 391
(A);
NATIONAL UNION OF
TEXTILE WORKERS V JAGUAR SHOES (PTY) LTD
1987 (1) SA 39
(N);
VALASEK V CONSOLIDATED FRAME COTTON CORPORATION LTD
1983 (1) SA 694
(N);
COIN SECURITY (CAPE) (PTY) LTD V VUKANI
GUARDS AND ALLIED WORKERS UNION AND OTHERS
(1989) 10 ILJ 239
(C). This defence applies to those contracts which can be described
as synallagmatic or reciprocal contracts.
A contract of employment
is accepted in our law as such a contract. The defence can only be
used by a party to such contract
who is sued for performance in
terms of such contract when the other party to the contract has
neither performed nor tendered to
perform his or her reciprocal
obligation. Such obligation is only reciprocal if it falls due
prior to, or simultaneously with,
the defendant’s obligation (see
Jaguar Shoes, supra, at
45B).
[9] A defendant who has rejected
the claimant’s tender to perform or who has waived his right to
performance can similarly not
raise the defence successfully
(see
Jaguar Shoes, at 45G).
A defendant who has prevented the
claimant from performing his contractual obligation cannot rely on
this defence to avoid or escape
liability. In Jaguar Shoes it was
held, correctly in my view, at 46H-I that a dismissal from
employment excused an employee from
having to render or tender his
services pending the outcome of litigation about such dismissal.
[10] By tendering their services on
the basis that they would perform their duties slowly (
i.e.
go-slow
) which is not full or exact performance in terms of
their contracts of employment with the appellant, the second and
further respondents
were tendering incomplete performance. Indeed,
depending on the effect that their slow performance would have on
the appellant’s
business, it could well be that the service they
were tendering could be described as defective performance. A party
to a contract
is entitled to reject a tender of defective or
incomplete performance and to demand complete and proper
performance. That is what
the appellant did in this case and it was
within its rights to do so. During the events which gave rise to
this litigation, the
respondents’ stance was that, because their
go-slow and overtime ban were part of a protected strike, the
appellant was obliged
to accept their tender of partial or
incomplete service. This contention was without merit. It is not
justified by any provisions
of the Act.
[11] Mr Vally, who appeared for the
respondents, submitted that the second and further respondents were
entitled to payment of an
amount of their wages which would take
into account the fact that they had tendered their services albeit
on the basis of a go-slow
and without working overtime. He
contended that the basis of this submission was that the conduct of
the appellant in not allowing
the second and further respondents to
perform their duties, and, therefore, earn income, even on the basis
of a go-slow, was unfair.
He submitted that fairness was
fundamental to the determination of this matter because fairness is
what the Act and the Constitution
of the Republic of South Africa,
1996 required.
[12] In support of his submission
Mr Vally referred us to sec 23(1) of the Constitution which
specifically provides:
“Everyone has a right to fair labour
practices”.
He further invoked sec 1(a) of the Act which
provides that it is the purpose of the Act “
to give effect to
and regulate the fundamental rights conferred by section 23 of the
Constitution”.
He also relied on the fact that sec 151 (1)
and 167 (1) of the Act describe the Labour Court and this Court each
as
“a court of law and equity”
.
[13] In further support of his
submission on fairness, Mr Vally referred us to
Betha and Others
v BTR Sarmcol, A Division of BTR Dunlop Ltd
[1998] ZASCA 5
;
1998 (3) SA 349
(SCA) at 360F-361C,
Fulcrum Engineering v Chauke
(1997) 18
ILJ 679 (LAC),
National Union of Metal Workers of South Africa v
Henred Fruehauf Trailers
[1994] ZASCA 153
;
1995 (4) SA 456
(A) at
462F-H,
and
Maluti Transport Corporation Ltd v The Manufacturing Retail
Transport & Allied Workers Union and Others
(1999) 20 ILJ
2531 (LAC) at para 35. These cases do not assist Mr Vally because
they were decided under the Labour Relations Act,
1956 (Act No 28 of
1956 (
“the old Act”
) and the position then was governed
by the extensive unfair labour practice jurisdiction of the
industrial court. Mr Vally also
relied upon
Chotabhai
v
Union Government
1911 AD 13
at 23 for the proposition that there
is a rule of construction that new legislation only repeals former
legislation when it expressly
says so. The Act came into operation
for the most part on 11 November 1996. In Schedule 6 it repealed
the old Act, and, with
it, the unfair labour practice dispensation
provided for in that Act. Accordingly Mr Vally’s reliance on that
rule of construction
is misplaced.
[14] Section 212 (3) of the Act
originally read:
“
The transitional
arrangements in Schedule 7 must be read and applied as substantive
provisions of this Act.”
Item 2 of Schedule 7 of the Act
reads:
Item 2 Residual
unfair labour practice
(1) For the purposes of this
item, an unfair labour practice means any unfair act or
omission that arises between an employer
or and an employee,
involving-
(a) the unfair discrimination,
either directly indirectly, against an employee on any arbitrary
ground, including, but not limited
to race, gender, sex, ethnic or
social origin, colour, sexual orientation, age, disability,
religion, conscience, belief, political
opinion, culture, language,
marital status or family responsibility;
(b) the unfair conduct of the
employer relating to the promotion, demotion or training of an
employee or relating to
the provision of benefits to
an employee;
(c) the unfair suspension of an
employee or any other disciplinary action short of dismissal in
respect of an employee;
(d) the failure or refusal of
an employer to reinstate or re-employ a former employee in terms of
any agreement.
(2) For the purpose of sub-item
(1)(a)-
(a) ‘employee’ includes an
applicant for employment;
(b) an employer is not prevented
from adopting or implementing employment policies and practices that
are designed to achieve the
adequate protection and advancement of
persons or groups or categories of persons disadvantaged by unfair
discrimination, in order
to enable their full enjoyment of all
rights and freedoms; and
(c) any discrimination based on
an inherent requirement of the particular job does not constitute
unfair discrimination.”
[15] Sub-items (1)(a) and (2) of
item 2 were repealed by sec 64 read with Schedule 2 of the
Employment Equity Act 55 of 1998
with effect from 9 August 1999.
However, in terms of
sec 3
of Schedule 3 to the latter Act the items
are to be regarded as unamended in the present case. It was not the
respondents’ case
that a claim for wages such as the one in this
case fell within the ambit of an unfair labour practice dispute
relating to the
provision of benefits as contemplated in item
2(1)(b) of Schedule 7.
[16] None of the arguments relied
upon by Mr Vally provides a basis for the contention that either the
Court a quo or this Court
has power to adjudicate upon the claims
made by the employees in the light of general consideration of
fairness. In fact the description
of the Labour Court and this
Court as courts of equity does not add anything to the jurisdiction
of these two Courts. These two
Courts are superior Courts of law.
The only fairness that they apply in dealing with matters which come
before them is such fairness
as they are specifically required to
apply in specific sections of the Act in respect of specific types
of disputes as well as
such fairness as every Court of law is
required to observe in terms of the rules of natural justice.
Examples of such sections
are 185, 187, 188, 191, 192(2), 193, 194
and 162 (1). Save for sec 162 (1), all these sections relate to
unfair dismissal disputes.
Sec 162 (1) relates to orders of costs
and obliges the Labour Court to have regard to the requirements of
law and fairness in
deciding whether to award costs. In fact the
reference in the Act to the Labour Court and this Court as courts of
equity (in addition
to being courts of law) should be repealed
because, while it adds nothing, it may cause unwarranted confusion.
The Court a quo
was not required to have regard to general
considerations of fairness extraneous to the Act in adjudicating the
second and further
respondents’ claim. Accordingly Mr Vally’s
submission falls to be rejected.
[17] Even if considerations of
general fairness governed the determination of the second and
further respondents’ claim, I am
of the opinion that this would
not assist the second and further respondents. The
exceptio
on
which Mr Reyneke relied is based on considerations of fairness,
namely, that it is unfair for a party to a contract who has neither
performed his part of the contract nor tendered to do so to seek to
compel the other party to such contract to perform his part
in
circumstances where the former’s performance is already overdue or
falls to be performed simultaneously with the latter’s
performance.
[18] In his heads of argument Mr
Vally submitted that, because a protected strike was not a breach of
contract of employment
(see sec 67(2) (a) of the Act)
, the
appellant’s reliance on the
exceptio
was misplaced. This
submission, in effect, amounted to saying that section 67 (2)(a) of
the Act had abolished the
exceptio.
The relevant portion of
the provision reads:
“
A person does not commit
¼
a
breach of contract by taking part in-
(a) a protected strike
¼
”
This submission fails to take
account of the provisions of sec 67(3). Sec 67(3) reads thus:-
“
Despite subsection (2), an
employer is not obliged to remunerate an employee for services that
the employee does not render during
a protected strike
¼
”
In my view the effect of these words is to retain the operation of
the
exceptio
in circumstances such as those of this case.
Accordingly, this submission also falls to be rejected.
[19] During argument before us
counsel for the respondents also sought to support the claim for
wages in respect of the period 23
January-5 February 1997 by the
application of the provisions of sec 68(1)(b) of the Act. The
provision reads as follows:
“
In the case of any strike or
lock-out, or any conduct in contemplation or in furtherance of a
strike or lock-out, that does not
comply with the provisions of this
chapter, the Labour Court has exclusive jurisdiction-
(a)
¼
..
(b) to order the payment of just
and equitable compensation for any loss attributable to the strike
or lock-out, having regard to-
(i) whether-
(aa) attempts were made to
comply with the provisions of this Chapter and the extent of those
attempts;
(bb)the strike or lock-out was
premeditated;
(cc)the strike or lock-out was
in response to unjustified conduct by another party to the dispute;
and
(dd)there was compliance with an
order granted in terms of paragraph (a);
(ii) the interests of orderly
collective bargaining;
(iii) the duration of the strike
or lock-out; and
(iv) the financial position of
the employer, trade union or employees respectively.”
[20] It is relevant to this
argument to note that counsel for the appellant conceded in his
heads of argument that the lock-out
implemented by the appellant was
an unprotected one. A claim for wages may, it would seem, qualify
as compensation for any loss
attributable to an unprotected
lock-out. I find it unnecessary to determine to what extent sec
68(1)(b) may affect the applicable
rules of common law. However,
what is clear is that, before sec 68(1)(b) can be invoked, the loss
must be quantified, and in respect
of the tender of partial
performance during the period concerned, the respondents have made
no attempt to do so.
[21] In the light of the above, the
cross-appeal must fail.
THE APPEAL-THE PERIOD 6-14
FEBRUARY
[22] It is common cause that
during this period the second and further respondents made a tender
of their full services. This
entailed that they would perform their
contractual obligations normally and they would also work overtime.
The appellant rejected
the tender. The reason which the appellant
gave at the time for rejecting the tender was that the second and
further respondents’
return to work would “
serve no purpose
in resolving the dispute.”
It did this in the meeting of the
5th February which has already been referred to above. In the same
meeting, the appellant stated
that there was
“no demand put to
the workforce”
in connection with the exclusion of the second
and further respondents from the workplace. The union confirmed
this in a letter
dated the 5th February.
[23] In the second and third
paragraphs of its letter of the 5th February addressed to the
appellant, the union wrote
inter
alia
in these terms:-
“
We wish to confirm the
following:
(1) That the union has once more
reiterated that its members are willing to resume their normal
duties (full services) and once
again this was put forward as a
proposal by the union to the company today.
(2) That the period from the
23rd January 1997 up to the date workers are allowed to resume their
duties should be paid.
Both of these proposals were
rejected by the company. The company has also confirmed that the
lock-out is not accompanied by any
demand to the union.”
[24] In a letter dated the 6th
February the appellant replied to the union’s letter of the 5th
February. It said this about the
exclusion from the workplace and
the presence or absence of a demand in connection therewith and
about the second and further respondents’
proposal to resume their
duties:-
“The company believes that (the resumption of duties)
will serve no purpose in the resolution of the dispute
which
arose from your failure to accept the company’s final offer at the
conclusion of the negotiations.
Furthermore, the company retains
a reasonable apprehension that your members would either persist
with disruptive activity or merely
resume strike action at a time
favourable to them and prejudicial to the company” (Underlining
supplied).
[25] On appeal the only ground on
which the appellant attacked this aspect of the judgement of the
Court a quo was that the tender
of services by the second and
further respondents was conditional. In support of this contention
Mr Reyneke submitted that the
basis on which the second and further
respondents tendered their services was that they could resume their
strike at any time after
they had resumed duties. He submitted that
they made their tender conditional and that a conditional tender of
services by an
employee did not entitle the employee to payment of
wages. In this regard Mr Reyneke relied on the first three
sentences of paragraph
18 of the judgement in
Transportation
Motor Spares v National Union of Metal Workers of SA and Others
(1999) 20 ILJ 680 (LC) at 695 A-B.
[26] Paragraph 18 of the judgement
in the Transportation Motor Spares case reads thus:
“
If workers who have commenced
a strike seek to resume their work on the basis that they can still
go out again later and resume
the strike, the employer is under no
obligation to allow them back at work. This is so primarily because
the tender of their services
is not unconditional. In terms of the
law an employer’s obligation to pay wages to an employee who has
not performed his duties
is dependent upon
the employee’s
tender of services being unconditional. Quite apart from this, the
employer is entitled at the stage of the proposed
return to work on
the part of the strikers to lock them out until the dispute over
which they had gone out on strike has been resolved.
It is
therefore up to the employer to enquire from the strikers when they
seek to return to work, what the basis is for their
return to work
and to decide whether he will allow them to resume their duties or
not and if he will, then on what terms they will
be so allowed.”
[27] The last of the first three
sentences is correct. The balance of the passage requires
qualification within the context of
the present case. In the
present case where there was no protected lock-out, the employer is
obliged to accept the tender failing
which he would be liable for
wages if he did not accept the tender. Such a tender is not
conditional.
[28] The reason why a tender by
strikers to resume their work on the basis that they may later on
resume their strike is not conditional
is that, when strikers do
that, they place themselves in the position in which they were prior
to going out on strike. Prior to
the commencement of their
protected strike, the employer would not, in the absence of a
protected lock-out, be entitled to reject
their tender simply
because they had indicated that they would be going on a protected
strike but would be so entitled if there
was a lock-out. The
position cannot be different when they have gone on strike but later
tender their services on the basis that
they may later resume their
protected strike. In the light of the above the appellant’s
contention that the second and further
respondent’s tender was
conditional falls to be rejected.
[29] The appellant’s Counsel also
submitted that the appellant was entitled to reject the tender
because it had a reasonable apprehension
that the second and further
respondents would persist with
“disruptive activity”.
If
this refers to the go-slow and overtime ban, there was no
reasonable basis for such
apprehension. If it refers to any
other conduct, that apprehension,
too, was without any evidential basis. In those circumstances the
appellant’s appeal in respect
of its claim for the period from the
6th to 14th February must fail.
COSTS
[30] The respondents were
substantially successful in the Court below and an order for payment
of the remuneration of the employees
for the period 6th February to
14th February 1997 would also have amounted to substantial success
in such Court.
[31] Counsel for the respondents
argued that the appellant’s conduct during the litigation we have
been called upon to adjudicate
ought to be penalised in the costs
order we make. I disagree. In this Court the appellant has been
substantially successful.
It has reduced a period in respect of
which remuneration is to be paid to the employees from 14 days to 9
days and it has successfully
resisted the cross-appeal which would
have had such remuneration increased by that due in respect of an
additional nine days.
In these circumstances it seems to me that
the appellant is
entitled to its costs of the
appeal.
[32] In the result I make the
following order:-
1. The appeal succeeds.
2. The order of the Court a quo is
amended by the substitution of “6 February”
for “1 February” in
paragraph (i).
3. The cross-appeal is dismissed.
4. The respondents are ordered to
pay the appellant’s costs of the appeal and the
cross-appeal jointly and
severally the one paying, the
others to be absolved.
------------------------------
RMM ZONDO
JUDGE PRESIDENT
I agree.
------------------------------
E.L. GOLDSTEIN
Acting Judge of Appeal
I agree.
------------------------------
D.M. DAVIS
Acting Judge of Appeal
Appearances:
For the Appellant: Mr Reyneke SC
Instructed by: Hofmeyr Herbstein
& Gihwala Inc
For the respondent: Mr Vally
Instructed by: E.S. Makinta
Attorneys
Date of hearing: 7
th
November 2000
Date of Judgement: 15
th
February 2001