Billiton Aluminium SA Limited v National Union of Metal Workers of South Africa (DA25/2001) [2003] ZALAC 17; (2003) 24 ILJ 2259 (LAC) (20 November 2003)

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[2003] ZALAC 17
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Billiton Aluminium SA Limited v National Union of Metal Workers of South Africa (DA25/2001) [2003] ZALAC 17; (2003) 24 ILJ 2259 (LAC) (20 November 2003)

18
IN THE LABOUR
APPEAL COURT OF SOUTH AFRICA
HELD IN JOHANNESBURG
CASE NO: DA25/2001
In the appeal between:-
BILLITON
ALUMINIUM SA LIMITED Appellant
and
NATIONAL
UNION OF METAL WORKERS
OF
SOUTH AFRICA Respondent
__________________________________________________________________
JUDGEMENT
__________________________________________________________________
ZONDO
JP
Introduction
[1] This is an appeal from a
judgement of the Labour Court in an application brought by the
appellant for an order declaring a secondary
strike planned by the
respondent to take place in two sites from which the appellant
operates in Kwa – Zulu Natal unprotected
and interdicting “
the
respondent and its members ... from promoting, inciting, instigating
and participating in the proposed secondary strike against
the
[appellant]”
and
for the payment of costs. The Labour Court dismissed the application
but made no order on costs. The judgement of the Labour
Court is
reported as
Billiton
Aluminium SA Ltd v NUMSA (2001) 22 ILJ 2434 (LC).
An
application for leave to appeal was made. The Court a quo granted
the application for leave to appeal but simultaneously made
another
order in these terms:
“Pending
the outcome of the appeal and by way of interim relief, the
respondent and its members are interdicted and restrained
from
promoting, inciting, instigating and participating in the proposed
secondary strike against the applicant.”
No order as to costs was made in the application for leave to
appeal. The appellant now appeals to this Court against the whole
of
the judgement and order of the Court a quo dismissing the
application.
The facts
[2] The appellant, Billition
Alluminium SA Limited, is a registered company. The respondent is
the National Union of Metal Workers
of South Africa, (hereinafter
referred to simply as “
the
union
” or “
the
respondent
”).
The union has members who are employed by the appellant as well as
others employed by a company called SAMANCOR Limited, (hereinafter
referred to simply as either “
Samancor
”
or “
the primary
employer”).
BHP
Billiton owns 100% of the appellant’s shares and 60% of Samancor’s
shares. The remaining 40% of Samancor’s shares are
owned by Anglo
American.
[3] The appellant manufactures
aluminium at two sites in Richards Bay, Kwa -Zulu Natal. The one
site is Hillside Smelter, the other
Bayside Smelter. Samancor is
involved in the business of mining chrome and manganese ore and the
conversion thereof into chrome
alloys and manganese alloys
respectively. Samancor’s chrome ore is converted into chrome
alloys at four sites. These are at Witbank,
Middelburg
,
Krugersdorp
and Steelpoort. It employs about 6500 employees of whom about 4000
are employed in the chrome division. About 2000 of the 4000
are
employed in the chrome mines at Eastern Chrome in Steelpoort and
Western Chrome Mines in Rustenburg.
[4] A dispute arose between Samancor
and the union about wages and terms and conditions of employment of
the union’s members employed
by Samancor. On the 14th October 2001
the union’s members employed by Samancor commenced a strike in
respect of the dispute.
On the 17
th
October 2001 the respondent notified the appellant that the
appellant’s employees at the Hillside Smelter and Bayside Smelter
would engage in a secondary strike in support of the primary strike
at Samancor. The secondary strike was going to take the form
of a
total withdrawal of labour. After attempts by the appellant to get
the respondent to call the secondary strike off had failed,
the
appellant brought the application referred to earlier in the Labour
Court to effectively have the secondary strike declared
unprotected
and interdicted.
The
constitutional and statutory framework
[5] Before dealing with the merits
of this appeal, it is necessary to set out the constitutional and
statutory framework within
which it must be considered. Sec 23(1) of
the Constitution of the Republic of South Africa No. 108 of 1996
(“the
Constitution”)
provides that that
“(e)veryone
has the right to fair labour practices”.
Sec
23(2)(a),(b) and (c) provide that
“(e)very
worker has the right –
(a) to form and join a trade union;
(b) to participate in the activities and programmes
of a trade union; and
(c) to strike.”
From sec 23(2) it is clear that the
Constitution makes no distinction between a primary strike and a
secondary strike. Sec 23(5)
provides that
“(e)very
trade union, employers’ organisation and employer has the right to
engage in collective bargaining”.
Sec 23(5) goes on to provide that national legislation
“may
be enacted to regulate collective bargaining”.
It is generally accepted that the right to strike is an integral
part of collective bargaining.
[6] Secondary strikes are regulated
by the provisions of sec 66 of the Labour Relations Act, 1995 (Act
66 of 1995)
(“the
Act
”). Sec 66
has six subsections. Subsection 1 defines a secondary strike as
meaning “
a
strike, or conduct in contemplation or furtherance of a strike, that
is in support of a strike by other employees against their
employer
but does not include a strike in pursuit of a demand that has been
referred to a council if the striking employees, employed
within the
registered scope of that council, have a material interest in that
demand”
.
[7] Subsection (2) reads thus:-
“No
person may take part in a secondary strike unless ...”
“
(a) the strike that is supported complies with
the provisions of sections 64 and 65;
(b) the employer of the employees
taking part in the secondary strike or, where appropriate, the
employers’ organisation of which
that employer is a member, has
received written notice of the proposed secondary strike at
least seven days prior to its
commencement, and,
(c) the
nature and extent of the secondary strike is reasonable in relation
to the possible direct or indirect effect that the
secondary
strike may have on
the business of the primary employer.”
Subsection (2) lays down a general
rule about secondary strikes and one exception to the general rule.
The general rule is that
secondary strikes are precluded. The first
part of ss(2) reads:
“No
person may take part in a secondary strike unless…”.
The word “
unless
”
introduces an exception to the general rule. The exception is that a
secondary strike is permitted where the three conditions
stipulated
in (a),(b) and (c) of sec 66(2) have been met.
[8] It is common cause that in this matter the first
two conditions were met. What is in issue is whether the third
condition laid
down in sec 66(2)(c) has been met. The appellant’s
attack on the respondent’s secondary strike is that the secondary
strike
will be in breach of the provisions of sec 66(2)(c). The
respondent contends that that condition has been met.
The
parties’ contentions
[9] The appellant’s case, as set
out in the founding affidavit, was that the proposed secondary
strike was in contravention of
sec 66(2)(c) because
“the nature and extent of the secondary strike [at the appellant]
will not be reasonable in relation to the possible direct or
indirect effect that the secondary strike may have on the business
of the employer (SAMANCOR)”.
The appellant submitted that the secondary strike at the appellant’s
premises would not be proportional to the primary strike
in that it
would have no effect on the business of Samancor. The appellant also
stated that there were no business dealings whatsoever
between the
appellant and Samancor and that the two work in unrelated sectors.
The appellant also emphasised that it has no shares
in Samancor but
that it is wholly owned by BHP Billiton which in turn owns 60% of
the shares in Samancor. The appellant pointed
out that, while there
may be some “
nexus
”
between the appellant and Samancor in terms of shareholding which is
that they have a common shareholder in BHP Billition -
that “
nexus”
did not have an effect on Samancor’s business. It also pointed out
that neither the appellant nor BHP Billiton is directly involved
in
the day to day running of Samancor and, therefore, is unable to
determine the outcome of the dispute between the respondent
and
Samancor.
[10] The appellant stated that, if it was not granted
the relief it sought, it would be severely prejudiced because it
would be
left with no alternative but to close down its operations
at the two smelters if the secondary strike continued for any period

of time. The appellant stated that, once the smelters had been
closed, their re-commissioning would cost the appellant well in

excess of a billion rand.
[11] The appellant also stated that its manufacture of
aluminium was on a continuous basis from the stage of the
commissioning of
a plant until it no longer operates as an aluminium
manufacturing plant. The appellant estimated that it would require
approximately
R700 million to re -commission the Hillside Smelter
alone if it closed down as a result of the secondary strike. It said
that the
loss that it would suffer as a result of the closure would
be in excess of R 2 billion in income at the Hillside Smelter alone.
The appellant also stated that it would be unable to continue its
business without its artisans and this would bring the plant
to a
halt within a few days. The appellant also said that such losses as
it would suffer as a result of the strike would not be
recoverable.
[12] The respondent delivered an
answering affidavit in support of its opposition. In par 10.3 of the
answering affidavit the deponent
to the answering affidavit alleged
that it was common cause that the appellant is the majority
shareholder in Samancor. This allegation
formed the basis of what
the respondent offered as its defence to the appellant’s case. The
respondent then stated that the shareholders
of a company are able
through their capital investment to wield control and power over the
company in which they are shareholders.
The respondent submitted in
par 10.4.3 of the answering affidavit that
“the
primary strike at SAMANCOR will result in a depreciation of the
capital investment of the appellant as the majority shareholder”
.
It further said that a secondary strike at the appellant’s plants
would have the effect of putting pressure on it to intervene
in the
primary strike in order to protect the value of its capital
investment. It said that the purpose of the secondary strike
was to
exacerbate the capital loss in order to pressurise the appellant as
the majority shareholder in Samancor to intervene in
order to
resolve the primary strike.
[13] In par 10.4.6. the respondent
said that, although the appellant may not be involved in the day to
day running of Samancor,
the issue at stake is one of capital
funding in which the appellant has a real and substantial interest
and thus an incentive to
use its influence over the collective
bargaining process between Samancor and the respondent’s members.
In par 10.4.7 the respondent
submitted that another effect of the
secondary strike at the appellant would be to provide “
support
and solidarity
”
to the employees involved in the primary strike and thereby
strengthen that strike. In par 10.4.11 the respondent submitted
that
the reasonableness of the effect is dependent on the strength of the
causal connection between the primary employer and the
secondary
employer and also upon the possible extent of the direct or indirect
effect. The respondent then states at par 10.4.12
that
“in deciding this question the court should have regard to the
following factors:-
10.4.12.1 whether the secondary employer has a
minority or controlling share in the business of the primary
employer;
10.4.12.2 whether there is a direct relationship in
terms of shareholding or whether the shareholding relationship is
attenuated,
i.e the share trail between the primary and secondary
employer passes through one or more intermediary company(ies). (sic)
10.4.13 it is submitted and I am advised that in
this case the effect is reasonable in that the relationship is
clearly of a substantial
and direct nature.”
The
merits of the appeal
[14] The
respondent’s contention that the condition prescribed by sec
66(2)(c ) has been met has as its main basis the assertion
that the
appellant is the majority shareholder in the primary employer and
that, by virtue of that relationship between the two,
pressure will
be put on the appellant to intervene in the primary dispute and get
the primary employer to settle it. It is necessary
to point out that
in the founding affidavit the appellant had, as the applicant in the
Court a quo, alleged that it had no shares
in the primary employer.
It was in the answering affidavit that the respondent denied this
allegation and alleged that the appellant
was the majority share -
holder in the primary employer. In the replying affidavit the
appellant stood by its version as set out
in the founding affidavit.
This has created a dispute of fact between the parties. I shall
assume in the respondent’s favour
that it is also a material
dispute. In the light of this it is necessary to determine the
version on the basis of which this matter
must be decided.
[15] There is no indication in the
judgement of the Court a quo that any of the parties requested in
the Court a quo that this dispute
of fact or any other dispute of
fact in the papers be referred to oral evidence. On appeal we were
not informed that such a request
had been made. Accordingly, the
disputes of fact in the papers must be dealt with in accordance with
the approach set out in
Plascon
– Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A)
at 634 H –
635C.
[16] The
general rule in terms of Plascon Evans that, if final relief is
sought in motion proceedings and there is a material dispute
of
fact, it is on the basis of the version of the respondent party in
the Court of first instance that the matter must be decided
is
subject to certain exceptions. One of the exceptions is where the
version of the respondent is a bare denial or is so far fetched
or
untenable that the court would be justified simply to reject it on
the papers. In this matter the union had an opportunity in
its
answering affidavit to produce proof of its allegation that the
appellant was the majority shareholder in the primary employer,
especially because not only did they know that the appellant’s
case was that it had no shares in the primary employer but, also,
because they knew that this related to a very important part of
their case. The union did not furnish such proof and was content
simply with a bald allegation. The appellant would have been unwise
to deny that it had shares in the primary employer if in fact
it did
have them because the falsity of its denial could easily be exposed
and the appellants’ officials would have known this
very well. It
is, therefore, difficult to think that they would have taken the
risk of making a statement that could be so easily
proved to be
false.
[17] The
appellant did not just state that it did not own any shares in the
primary employer but it went on to state that its only
connection
with the business of the primary employer was that its sole
shareholder was the majority shareholder in the primary
employer. To
the extent that the union may have denied this allegation, its
denial was a bare denial. Accordingly, I am of the
view that,
applying the Plascon – Evans approach, the appellant’s version
that it had no shares in the primary employer is
the version that
should form part of the basis on which this matter must be decided.
[18] The conclusion I have reached
above that this matter must be decided on the basis that the
appellant does not own any shares
in the primary employer – let
alone being the majority shareholder - disposes of the respondent’s
main case. This is because
the respondent’s real case was based on
the assertion that the appellant is the majority shareholder in the
primary employer
and, because of that, will intervene in the primary
dispute to protect its capital investment or capital funding. Indeed
in par
10.4.5 of the answering affidavit the deponent thereto stated
that the purpose of the proposed secondary strike
“is
to exacerbate the capital loss in order to pressurise the
[appellant] as the majority shareholder of SAMNCOR to intervene
in
order to resolve the primary strike”.
In par 10.4.6 of the answering affidavit it was said on behalf of
the respondent that
“the
issue at stake is one of capital funding in which the [appellant]
has a real and substantial interest and thus an incentive
to use its
influence over the collective bargaining process between SAMANCOR
and the respondent’s members”.
In par 10.4.11 it was submitted that
“the
reasonableness of the effect [of the secondary strike] is dependent
on the strength of the causal connection between the
primary
employer and the secondary employer and also upon the possible
extent of the direct or indirect effect”.
The respondent then itself went on to state in par 10.4.12 that in
deciding the strength of the causal connection between the primary
employer and the secondary employer, the court should have regard
to:-
(a)
“whether
the secondary employer has a minority or controlling share in the
business of the primary employer
”;
(b)
“whether
there is a direct relationship in terms of the shareholding or
whether the shareholding relationship is attenuated i.e
the share
trail between [the primary employer] and the secondary employer
passes through one or more intermediary company(ies)”.
sic.
The
factor mentioned in (a) must be decided against the respondent since
I
have
already concluded that this matter must be decided on the basis of
the
version
that the appellant has no shares in the primary employer. The factor
in
(b) must also be decided against the respondent because there is no
evidence
that there is any company in which the appellant owns shares which
in
turn owns shares in the primary employer. The appellant does not own
any
shares
in BHP Billiton which is the company that is the majority
shareholder
in
the primary employer. Accordingly, the appellant cannot put pressure
on
BHP
Billiton to intervene in the primary dispute and get the primary
employer
to settle the primary dispute because the tail cannot wag the dog.
[19] I
have noted that the respondent has in its heads of argument conceded
that the statements in the answering affidavit that
the appellant
was the majority shareholder in the primary employer was incorrect.
It is there stated that BHP Billiton is the sole
shareholder in the
appellant and the majority shareholder in the primary employer. It
is further stated that this was clarified
in the respondent’s
heads of argument at the hearing in the Court a quo. This may be so
but the difficulty is that the respondent’s
case was almost wholly
based on this incorrect statement. Indeed, the effects that the
respondent relied upon as the effects that
the secondary strike
would produce were the effects that were based on the appellant
being the majority shareholder in the primary
employer. They were
not the effects that would result if the appellant’s sole
shareholder was the majority shareholder in the
primary employer. No
factual basis was laid for the latter case.
[20] What
the respondent should have done after it realised that the statement
by the deponent to the answering affidavit was incorrect
was to
supplement its case by way of a supplementary affidavit because this
change of the factual basis of the case was fundamental.
The case
that the respondent had to argue after realising the incorrect
statement on which its main case was based was the one
to the effect
that BHP Billiton is able to exercise control over its subsidiary
companies. But that is not the case that the appellant
was called
upon to answer in the answering affidavit. In the answering
affidavit the appellant was called upon to answer the case
that it
was the majority shareholder in the primary employer and, because of
that, was able to wield power and control over the
primary employer.
It met that case head on.
[21] An example of the difficulties
arising from the respondent’s approach in seeking to argue a case
based on facts that are
different from those on which its case was
based in the answering affidavit is to be found in the fact that in
its heads of argument
before this Court, it stated that from its
point of view the purpose of the secondary strike was to put
pressure on the appellant
(via its relationship with the holding
company, BHP Billiton) to intervene in the primary strike in order
to protect the value
of BHP Billiton’s capital investment in the
primary employer. It also said in its heads of argument that BHP
Billiton
“thus
has the power and incentive to influence the outcome of the primary
collective bargaining dispute between [the respondent]
and [the
primary employer]”.
That is not what the respondent says in its answering affidavit. In
its answering affidavit the respondent says in par 10.4.5 that
the
purpose of the secondary strike is
“to
exacerbate the capital loss in order to pressurise [the appellant]
as the majority shareholder of [the primary employer] to
intervene
in order to resolve the primary strike”.
It said in par 10.4.6 of the answering affidavit that
“the
issue at stake is one of capital funding in which the [appellant]
has a real and substantial interest and thus an incentive
to use its
influence over the collective bargaining process between [the
primary employer] and the respondent’s members”.
It is, therefore, clear that almost the respondent’s entire case
on the papers was based on the appellant being the majority
shareholder in the primary employer. In my judgement once the
respondent had admitted that the appellant’s statement that the
appellant had no shares in the primary employer was correct and that
its own version that the appellant was the majority shareholder
in
the primary employer was factually incorrect, that was almost the
end of the respondent’s case.
[22] The respondent also sought to
defend the secondary strike on another basis, namely, an alleged
trading relationship between
the appellant and Samancor. In this
regard it stated that Samancor makes a product called “
paste
”
which it sells to the appellant for the purpose of making what the
respondent referred to as electrodes. The respondent alleged
that
almost every week
“paste”
is
loaded on to trucks “
at
Ferrovelt, a business unit of Ferrometals which is one of the
SAMANCOR plants
”
on strike. The respondent alleged that the
“paste
”
is transported in trucks which have the names,
“Bayside
Aluminium”
and
“Hillside
Aluminium”,
emblazoned on them. The respondent also alleged that a company known
as
“Alusaf
”
also supplied paste to the appellant. The respondent alleged that
Alusaf is
“a
SAMANCOR company that falls under the Manganese Division”
.
The respondent also submitted in the answering affidavit that the
secondary strike would have a direct effect on Samancor’s
business
in that the trade of paste from both Ferroveldt and Alusaf would be
detrimentally affected and cause Samancor financial
loss.
[23] The appellant had this to say in reply:-
(a) Ferroveldt is not a business unit of Ferrod Metals
but is a joint venture between Highveld Steel and Samancor and
Ferroveld
supplies plus/minus 50% of its paste to various Samancor
works or plants which include Samancor (Meyerton), Ferro Chrome
(MidSteelpoort);
(b) the
transportation of the paste from Ferroveld to its customers is made
by independent transport companies;
(c) Corsair is used to transport paste to Durban
Harbour for exports;
(d) Ferroveld does not sell any paste to either
Hillside Aluminium or Bayside Aluminium;
(e) Hillside Aluminium does not purchase any paste
from Ferroveld nor does Bayside Aluminium nor do they have any
business dealings
whatsoever with Ferroveld;
neither
Hillside Aluminium nor Bayside Aluminium has any
transport trucks which have the name
“Hillside
Aluminium”
or
“Bayside
Aluminium”
“
emblazoned”
on the sides.
(g) there is no Samancor company
called “
Alusaf
”
but its name was previously
“Alusaf
Limited”
but was
changed in about 1997 into its present name.
[24]
I am
of the view that the version put up by the respondent is not one
that is so untenable or that is so inherently improbable or
far
fetched that it would be justified to simply reject it on the
papers. For this reason, and applying the Plascon – Evans

approach, it seems to me that the matter must be decided on the
basis of the respondent’s version. That, therefore, means that
it
has to be accepted, for purposes of the determination of this
appeal, that Samancor makes a product called
“paste”
which it then sells to the appellant and the latter uses that
product to make “
electrodes”.
The respondent’s version is also that every week the
“paste
”
is loaded on to trucks
“at Ferrovelt
”.
However, the difficulty with this part of the respondent’s case in
this matter is that the information placed before the
Court is not
sufficient to justify a conclusion that, based on the paste issue,
the nature and extent of the proposed secondary
strike may possibly
be reasonable. No indication has been given as to the size or
quantity of the paste that is transported from
the primary employer
to the appellant. No indication has been given as to how many
workers employed by the appellant have something
to do with the
paste. The indication is that the paste is transported from the
primary employer to the appellant weekly. On this
information I am
unable to conclude that the nature and extent of the secondary
strike may possibly be reasonable. If I cannot
reach such a
conclusion, I cannot go on to find that the condition prescribed by
sec 66(2)(c) has been met. Since that condition
has not been met,
the proposed secondary strike would be unprotected.
[25] If
follows that the appeal must succeed. As to costs, the appeal was
argued on the basis that costs should follow the result.
I propose
to make an order of costs on that basis.
[26] In
the premises I make the following order:-
The appeal is upheld with costs.
The order of the Court a quo is set aside and replaced
by the following one:-
“
(a) The respondent is hereby interdicted from
calling for or instigating anyone of the applicant’s employees to
participate in
the secondary strike in respect of which a written
notice was given by way of a letter from the respondent to the
appellant dated
14 October 2000 in support of a primary dispute then
existing between the respondent and SAMANCOR.
The respondent is ordered to pay the
applicant’s costs”.
Zondo
JP
I
agree.
Davis
AJA
I
agree.
Du
Plessis AJA
Appearances:
For
the Appellant: Adv. M.S.M. Brassey SC
Instructed
by: Denyz Reitz Inc, Durban
For
the Respondent: Adv. J.G. Van Der Riet SC
Instructed
by: Cheadle Thompson & Haysom Inc
Date
of Judgement: 20 November 2003