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[2012] ZALAC 45
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Ahlesa Blankets (Pty) Ltd v South African Clothing and Textle Workers Union (SACTWU) and Others (CA 5/2010) [2012] ZALAC 45 (2 March 2012)
Republic of
South Africa
IN THE LABOUR
APPEAL COURT OF SOUTH AFRICA
(HELD AT CAPE
TOWN)
Case no: CA 5/2010
In the matter between:
AHLESA BLANKETS (PTY) LTD
...................................................................
Appellant
versus
SOUTH AFRICAN CLOTHING AND
TEXTILES WORKERS UNION (SACTWU)
.......................................
First
Respondent
L M DLAZA & 53 OTHERS
.........................................
Second to further
Respondents
Heard; 15 November 2011
Delivered: 02 March 2012
CORAM: WAGLAY, DJP, MOLEMELA and
ZONDI, ajJa
_________________________________________________________
________
JUDGMENT
zondi, aja
Introduction
[1] This is an appeal against the
judgment and order of the Labour Court (Moshoana, AJ), delivered on
19 March 2010 in which it
found that the dismissal of the second to
further respondents (“the employees”) was substantively
unfair and ordered
the appellant to reinstate the employees with
effect from 1 December 2009, without loss of benefits. There was no
order as to costs.
[2] The appellant challenged the
findings and orders of the Court
a quo
on various grounds.
Factual Background
[3] It is common cause that the
appellant is a vertically integrated blanket manufacturing company.
Its activities range from dyeing
of fibres to the actual delivering
of the final product.
[4] The employees were dismissed by
the appellant in June 2008 for allegedly participating in an
unprotected strike action. The
second to further respondents are all
members of the first respondent (“the Union”). The
appellant recognises the Union
as the sole collective bargaining
agent in the workplace.
[5] The Union and the appellant are
parties to, and bound by, the Main Collective Agreement for the
Textile Industry (“the
main agreement”). Clause 19 of the
agreement dealing with the blankets sub-sector provides that an
employer may introduce
short-time by giving the Union and the
affected employees four hours notice if such short-time is owing to
slackness of trade.
The Main Agreement does not impose an obligation
on the appellant to consult over the introduction of short-time.
[6] The incorporation of this
provision in the Main Agreement was necessitated by the parties’
appreciation that the industry,
in which the appellant operates,
namely the blanket industry, is volatile and subject to fluctuations
in demand, and also seasonal
changes in demand.
[7] In the implementation of the
short-time arrangement, the appellant adopted the view that its
workforce in the dye house, spinning
and weaving departments would be
divided into two groups, so that one half of the workforce would work
for two weeks while the
other half would take two weeks leave, after
which those working would again be replaced by those on leave for two
weeks. Such
leave would be regarded as part of the employees’
statutory leave (of 15 working days), and they would then not receive
their
full quota of leave over the festive season.
[8] On Thursday 12, and Friday 13 June
2008, the appellant with the involvement of the supervisory staff,
communicated to the workforce
in the dye house, spinning and weaving
departments which employees would be required to work during the
forthcoming two weeks,
and which employees would be required to take
paid leave.
[9] The appellant did not conduct any
operations on Monday, 16 June 2008 as it was a public holiday. During
the course of 17 June
2008, some employees in the dye house, spinning
and weaving departments who were scheduled to work refused to attend
to their work
stations but gathered in the appellant’s canteen.
They were joined by some of the employees who had been (on the
appellant’s
version) placed on leave.
[10] Those employees who took up the
position in the canteen were advised by Mr Dan Buckle (“Buckle”),
the appellant’s
human resources manager, that their work
stoppage was unprocedural and illegal, and that they were required to
return to work.
The employees refused to return to work.
[11] In the course of the day, the
appellant issued three ultimatums to the employees gathered in the
canteen. In terms of the first
one, the employees were informed that
should they not return to work, disciplinary action would be taken
against them, which could
lead to their dismissal. In the second and
third ultimatums the employees were told that if they failed to
return to work by a
stated time ‘the company will have no
option but to summarily dismiss them’.
[12] I may add that in the affected
departments, the appellant conducts its operations on a three shift
system, namely the morning
shift (07h00 to15h00), the afternoon shift
(15h00 to 23h00) and the night shift (23h00 to 07h00). When the
employees scheduled
for the afternoon shift (15h00 – 23h00)
arrived at work, they also failed to take up their posts and joined
the other workers
in the appellant’s canteen. At approximately
17h00 on 17 June 2008, all the employees who had gathered in the
canteen left
the appellant’s premises.
[13] The employees employed in the dye
house, spinning and weaving departments, and who were rostered for
the night shift (23h00
to 07h00), did not arrive for work during that
evening. On the next day, 18 June 2008, the appellant sent a letter
to the Union
alleging that the strike action was unprotected and
recording certain events in respect thereof. The Union was also
advised that
all employees who were scheduled for work in the dye
house on 17 June 2008, and who failed to take up their posts on that
day,
were dismissed.
[14] On 19 June 2008, the day
following the dismissal, the appellant, sought and obtained from the
High Court an order interdicting
the employees from engaging in acts
of intimidation and other strike related misconduct.
[15] After their dismissal, all
dismissed employees received a notice inviting them to attend an
appeal hearing where they could
appeal against their dismissals.
[16] In addition to, dismissing
employees who were scheduled to work on 17 June 2008, the appellant
also, on 25 June 2008, dismissed
some of the employees employed in
the raising and despatch departments, for allegedly having absconded
although they were not required
to work on 17 June2008.
[17] Also, the appellant dismissed
employees who had been required to go on leave for the two-week
period commencing on 16 June
2008 and who allegedly failed to return
from leave and commence their duties.
[18] The appellant dismissed employees
in the following categories:
18.1. Employees who participated in
strike action whilst they were on duty on 17 June 2008.
18.2. Employees in departments other
than the dye house who commenced with industrial action on 17 June
2008, and who absconded
from duty in other departments even though
they were not required to go on leave, and did not convey to the
appellant any demand
in connection with their work stoppage.
18.3. Employees who were placed on
leave for the two week period from 16 June 2008 in terms of the
appellant’s arrangements
set out above, but who failed to
return from leave, and to provide any explanation for their absence.
The Evidence
[19] In relation to the facts which
were in dispute between the parties, the appellant presented the
evidence of Buckle who emphasised
that the blanket industry is a very
flexible or seasonal business; that the bulk of the appellant’s
orders are placed normally
in September of the year; that its peak
season starts in October and continues until May when there is a huge
demand for blankets
in preparation for winter season; and that, the
period between May and September is extremely quiet. He stated that
it is for this
reason that the appellant introduced a system in terms
of which the employees in some of its departments work short-time
during
the period when the business is slow. The short-time system is
run on split shifts basis. The employees in the affected departments
of the appellant were divided into groups such that they would work
for two weeks and then be granted two weeks leave on a rotational
basis.
[20] Buckle testified that when he
realised that there was a need to implement the short time system he
held discussions with the
shop stewards a week before its
implementation. He informed them that in terms of the envisaged short
time system, the employees
in the affected departments would work two
weeks and get two weeks off on a rotational basis. But the employees
would be paid while
on two weeks’ lay off. This arrangement did
not go down well with some of the employees who felt that it would
affect their
December leave days and they did not want to find
themselves in a situation where they would lose their December leave
pay. The
two week short-time arrangement was first introduced by the
appellant in 2006. He pointed out that each time the appellant sought
to implement the two week short-time arrangement it would inform the
shop stewards and the parties would then meet to determine
how it was
to be implemented. He conceded during cross-examination that not all
of the employees more especially those who came
from the Eastern Cape
were happy about the arrangement when it was introduced in 2006
because they wanted to take their three weeks
leave in December so
that they could spend time with their families. Also, in the past
alternative arrangements were made to accommodate
those employees who
were opposed to the arrangement by giving some of them extra time
off. The employees wanted the appellant to
shut down for three weeks
in December for Christmas holidays. According to Buckle it is the
appellant’s policy only to shut
down between Christmas and New
Year.
[21] Buckle also discussed the
proposed rescheduling arrangement with the Union organiser, Mr de
Bruyn and he subsequently confirmed
their discussion by a letter
dated 3 June 2008. With regard to the short time, the letter says:
‘
The
Spinning and Weaving Department will be going onto a 3 shift, 5 day
week effective 06 June 2008.
The
Dye house Department will be going onto a 2 shift, 4 day week
effective 06 June 2008...’
[22] On 17 June 2008 when the
appellant implemented the rescheduled arrangement, the employees
simply refused to carry out their
duties. They gathered at the
canteen on the appellant’s premises. When Buckle arrived at
work he held a meeting with the
shop stewards in which he informed
them that their action constituted an unprotected strike. Buckle also
informed de Bruyn of the
employees’ industrial action and
requested him to intervene. He told the shop stewards to tell the
employees to return to
work otherwise he could dismiss them. He
prepared an ultimatum which he addressed to the employees calling
upon them to return
to work by 09h45 and advising them that the
appellant reserved ‘the right to take the necessary
disciplinary
action”
’ leading to their dismissal
if they failed to do so.
[23] After the ultimatum was given to
the employees, Mr de Bruyn arrived on site. He was informed that the
employees were engaged
in an unprotected strike. De Bruyn undertook
to discuss the matter with the employees and to return to Buckle.
Buckle understood
that de Bruyn informed the employees that they were
engaged in an illegal strike and that they had to stop it, but the
employees
simply ignored de Bruyn.
[24] On the same day, a second
ultimatum was sent to the employees in terms of which they were told
that they would be summarily
dismissed unless they returned to work
by 13h45. The employees ignored this ultimatum as well and continued
with their industrial
action.
[25] At about 15h00, Buckle sent a
third ultimatum to the employees telling them to return to work by
16h00. It was now the start
of the second shift. The employees who
should have been on the morning shift did not do their shift. The
afternoon shift employees
also did not start their shift. They walked
straight into the canteen and joined the morning shift employees. The
whole day, on
17 June 2008, the shop stewards were moving between
Buckle’s office and the canteen in attempt to resolve the
dispute.
[26] At about 17h00, the employees
marched out of the appellant’s property. There were some,
however, who returned to work
and started their shift. Buckle
remained on the premises to ascertain if the night shift employees
would report for work when the
shift began at 23h00. Whereas six
employees were scheduled for the night shift on that day only one
employee reported for work.
Buckle did not issue any ultimatum to the
night shift employees as at that stage there were no striking
employees on the premises.
The shop stewards had also left the
premises. He could not have faxed the ultimatum to the Union offices
as he believed there would
be no one there to receive it at that time
of the night.
[27] On the morning of 18 June 2008,
Buckle sent a letter to de Bruyn advising him of the dismissal of all
employees identified
on the list attached to the letter. In the
letter, the appellant invited the Union to lodge an appeal by no
later than 20 June
2008 should it intend to challenge the dismissal
of the employees which it did on 18 June 2008 contending that the
dismissal was
unfair both substantively and procedurally.
[28] Buckle included the night shift
employees in the dismissal notification although he had not served
them with ultimatums. He
believed that they were aware of the
industrial action and that they had associated themselves with it by
not coming to work.
[29] During cross-examination, he
testified that the decision to dismiss the employees was taken late
on 17 June 2008 and the following
day the appellant wrote a letter to
the Union confirming their dismissal. He denied the suggestion that
the strike was triggered
by the appellant communicating confusing
messages to the Union and the employees on how short time arrangement
was to be implemented.
He stated that during the strike the appellant
lost out on production.
[30] During re-examination, Buckle
explained, that he regarded the dismissal to have taken effect in the
case of the morning and
afternoon shifts, on expiry of their
respective ultimatums. It is instructive to refer to the discussion
which took place between
the Court
a quo
and Buckle regarding
how the appellant had behaved in the past in its application of the
two week short-time policy. The following
discussion took place at
122 line 12 to 124 line 8 of the record:
‘
Court:
Mr Buckle there are a couple of issues that I want you to assist the
court, just for the court’s own understanding.
Can you explain
to me this two weeks issue what exactly was that, what was the
proposal? --- What would happen is that for the
workers not –
from our side, the company’s side first of all, that half the
staff would take two weeks leave, right.
Just
take is slow. Yes? --- And then upon their return the other half
would take their two weeks.
Yes.
--- Fully understanding the financial constraints that a lot of
employees have it is then paid for that period.
So
the two weeks period would be paid leave? --- Correct. However some
of the employees requested they only take one of the two
weeks, and
some of the employees requested the whole two weeks are unpaid.
So
those that wanted one week of the two weeks. --- They still go two
weeks, one week would be paid and one week would be unpaid.
Oh,
I see. --- So the period remains the same, that is the timing of the
payment.
Yes,
and other would take two weeks unpaid? --- Unpaid.
With
the request that that money they would have received gets paid out in
December to them.
Yes.
--- And each employee then, we sent out a circular to all the
employees, they then select or elect which of the options they
would
prefer.
Those
three options? --- Correct, correct.
Yes,
so that was how the company proposed the two weeks issue? --- That’s
how we’ve done it two years prior to that
we did it the same
way, 2006 and 2007 we did it that way as well.
2006/2007.
--- And we did it the same way in 2009 as well.
Now
you also testified that the – when this was introduced in 2006
there some were some employees who were complaining or
had complained
about it. --- They were not happy.
Oh,
they were not happy? ---They were not happy.
Yes,
what was the source of unhappiness? --- A lot – or not a lot,
those employees, some of the employees stay far away, when
we bought
out Waverley in East London and transferred it to Atlantis the
company then decided not to – to retain some of
the staff,
original staff from Waverley and transfer them to Atlantis, so they
don’t lose their jobs in East London, so the
company had to
sort of compassion about the situation there, and it’s come of
those employees that still return to East London
once a year, they
are the ones that tended to not be happy about it
.’
[31] Mr de Bruyn, who gave evidence
for the Union, confirmed that it is the practice in the industry for
the company to implement
short time on four hours’ notice. He,
however, pointed out that in practice the company would consult with
the Union and
the shop stewards to get its input on the issue before
implementing it.
[32] De Bruyn stated that when he met
with Buckle to discuss a matter unrelated to the short time
arrangement, Buckle mentioned
to him informally that the appellant
intended to implement short-time arrangement which he estimated to be
a day or two. De Bruyn
asked Buckle to put it down in writing so that
he could convey it to the employees. Buckle never did this. De Bruyn
denied that
the two week lay-off period featured in their discussion.
He was surprised when on Saturday, 14 June 2008 he received a
telephone
call from the shop steward enquiring whether he was aware
that the appellant was going to implement a two weeks lay-off
arrangement.
The shop steward informed him that the employees were
not happy with the arrangement and had resolved to hold a meeting on
Sunday
to discuss the short time arrangement which the appellant
intended to implement. De Bruyn is aware that the employees did hold
a meeting but to his knowledge they had taken a decision to report
for work as normal for him to address them on the issue.
[33] On Tuesday, 17 June 2008 at about
09h00, he received a telephone call from Buckle advising him that the
employees had gathered
in the canteen and were on strike. Buckle
asked him to come over immediately which he did. On his arrival at
the appellant’s
premises, he held a meeting with the employees
at the canteen to establish the cause of their unhappiness. The
employees reported
to him that they were not happy about the two week
short-time arrangement. He thereafter met with Buckle. His impression
was that
the employees were willing to resume their duties if the
appellant was prepared to reduce the short time from two weeks to two
days. He conveyed the employees’ proposal to Buckle but the
latter was not prepared to back down; the Union and the appellant
deadlocked on the issue. The employees remained in the canteen until
17h00 during which period the appellant sent them various
ultimatums.
At about 16h00 Buckle told him that the employees were dismissed. De
Bruyn left the appellant’s premises together
with the employees
at 17h00.
[34] On 18 June 2008, the appellant
sent him a letter confirming the dismissal of the employees who were
engaged in an unprotected
strike and extending to the employees an
opportunity to appeal which he did on their behalf. Their appeal was
dismissed and the
employees referred the matter to the Court
a quo
contending that their dismissal was unfair both substantively and
procedurally.
Proceedings in the Court a quo
[35] The Court
a quo
held that
the employees’ dismissal was substantively and procedurally
unfair and ordered their reinstatement. The bases for
its conclusion
were that the strike was of short duration and occurred in
circumstances where the appellant’s business was
slack which
therefore did not justify the appellant’s conduct to take a
harsh decision to dismiss the employees and secondly
the fact that
there was no violence during the strike. The Court
a quo
found
that the penalty of dismissal was clearly disproportionate to the
employees’ misconduct and for that reason it held
that the
dismissal in so far as it related to the morning and afternoon shift
employees, was substantively unfair but procedurally
fair, but in
relation to the evening shift employees it was both substantively and
procedurally unfair. It ordered their reinstatement
as there was no
evidence presented to suggest that continued employment relationship
had been rendered intolerable.
[36] The Court
a quo’s
findings are challenged on various grounds by the appellant. The gist
of its attack is that it was wrong for the Court
a quo
to find
that the employees’ dismissal was substantively and
procedurally unfair in circumstances where the employees’
conduct forming basis of their dismissal amounted to clear challenge
to the appellant’s authority which in the instant matter
was
the employees’ refusal to comply with the ultimatums and to
return to work (at least in so far as the morning and afternoon
shifts are concerned).
[37] The question whether the
appellant was justified in dismissing the employees for their
participation in an alleged unprotected
strike must be determined by
reference to the legal framework in which the appellant’s and
the employees’ rights are
located.
The Law
[38] Section 68 (5)
of the Labour Relations Act (“the Act”)
1
is a statutory
provision affording a right to the employer to dismiss employees who
participate in a strike that fails to comply
with the provisions of
the Act. In determining the fairness of the dismissal effected as a
consequence of the employees’
participation in an unprotected
strike, the Act enjoins the judge who is called upon to determine the
fairness of the dismissal
to have regard to the Code of Good
Practice: Dismissal in Schedule 8 (“the code”).
[39] Item 6 (1) and (2) of the code
deals with the substantive fairness of strike dismissals and provides
as follows:
‘
6.
Dismissal
and industrial action.
– (1) Participation in a strike that does not comply with the
provisions of Chapter IV is misconduct. However, like any other
act
of misconduct, it does not always deserve dismissal. The substantive
fairness of dismissal in these circumstances must be determined
in
the light of the facts of the case, including –
(a)
the seriousness of the contravention of this Act;
(b)
attempts made to comply with this Act; and
(c)
whether or not the strike was in response to unjustified conduct by
the employer.
(2)
Prior to dismissal the employer should, at the earliest opportunity,
contact a trade union official to discuss the course of
action it
intends to adopt. The employer should issue an ultimatum in clear and
unambiguous terms that should state what is required
of the employees
and what sanction will be imposed if they do not comply with the
ultimatum. The employees should be allowed sufficient
time to reflect
on the ultimatum and respond to it, either by complying with it or
rejecting it. If the employer cannot reasonably
be expected to extend
these steps to the employees in question, the employer may dispense
with them.’
[40] It is also clear from the
provisions of section 68 (5) that participation in a strike that does
not comply with the provisions
of Chapter IV (strike & lock-outs)
constitutes a misconduct. In other words, a judge who is called upon
to determine the fairness
of the dismissal effected on the ground of
employees’ participation in an illegal strike should consider
not only item 6
of the code but also item 7(b) which provides that
any person who is determining whether dismissal for misconduct is
unfair should,
inter alia
, consider whether dismissal was an
appropriate sanction for the contravention. See
Hendor Steel
Supplies (A Division of Argent Steel Group (Pty) Ltd formerly named
Marschalk Beleggings (Pty) Ltd) v National Union
of Mineworkers of SA
and Others
(2009) 30 ILJ 2376 (LAC) at 2385C.
[41] The determination of substantive
fairness of the strike-related dismissal must take place in two
stages, first under item 6
when the strike related enquiry takes
place and secondly, under item 7 when the nature of a rule which an
employee is alleged to
have contravened, is considered. It follows
that a strike-related dismissal which passes muster under item 6 may
nevertheless fail
to pass substantive fairness requirements under
item 7.
Contentions of the Parties
[42] In argument
before us, Mr Rautenbach, who appeared for the appellant, submitted
that the Court
a
quo
in
the determination of the fairness of the dismissal only had regard to
the factors in favour of the employees and paid no attention
at all
to those which were in the appellant’s favour. He argued that
the Court
a
quo
failed
to recognise that the employees’ refusal to comply with the
ultimatums and to return to work constituted a clear challenge
to the
employer’s authority which, he argued, amounts to gross
insubordination. He pointed out that there was a commercial
rationale
for the appellant to implement the two weeks leave policy. He
emphasised that the employees’ conduct undermined
the
appellant’s authority to take business decision. He argued that
the ultimatums were issued in clear and unambiguous terms
and gave
the employees sufficient time to reflect on their conduct.
[43] He added that
had the Court
a
quo
also
considered the facts which were in favour of the appellant, it would
have arrived at a different conclusion with regard to
the fairness of
the penalty. He argued that the Court
a
quo’
s
failure to have regard to the facts in favour of the appellant in its
determination constituted gross misdirection entitling this
Court to
interfere with its discretion.
[44] Mr Whyte
,
who
appeared for the employees, submitted that the suggestion that the
Court
a
quo
improperly
exercised its discretion in determining the fairness of the dismissal
was incorrect. He argued that having regard to
the short duration of
the strike, absence of violence during the strike action, the
slackness of the appellant’s business
at the relevant time and
the fact that the employees had a clean disciplinary record, the
penalty of dismissal was unfair and the
Court
a
quo
was
correct in its finding. He pointed out that there was no evidence to
suggest that as a consequence of the employees’ conduct
relating to their participation in the strike action the employment
relationship between the parties had become intolerable and
which
would have rendered dismissal appropriate.
[45] I disagree
with Mr Rautenbach’s
contention
that the Court
a
quo
failed
to have regard to the facts in favour of the appellant in its
determination of the fairness of dismissal and that such failure
constituted gross misdirection justifying this Court’s
interference. It is clear upon a proper analysis of the Court
a
quo’s
judgment
that in determining the fairness of the dismissal it considered all
the facts which items 6 (1) and 7 (b) (iv) of Schedule
8 enjoin the
Court to take into account. The fact that the Court
a
quo
failed
to mention in its judgment facts, which Mr Rautenbach argues, were in
the appellant’s favour, does not mean that it
overlooked them.
[46] In my view, it
is not entirely correct to argue, that the employees should have been
dismissed in the instant matter because
their conduct – failure
to comply with the ultimatums and return to work – constituted
gross insubordination which
resulted in the breakdown of employment
relationship between the parties. It is correct that the relationship
between employer
and employee is in essence one of trust and
confidence and that, at common law, conduct clearly inconsistent with
it would entitle
an innocent party to cancel the agreement (
Council
for Scientific & Industrial Research v Fijen
(1996) 17 ILJ 18
(A)). I think that it is important to contextualise the misconduct
relied upon by Mr Rautenbach. It occurred in
the context of the
strike
albeit
an illegal one. By
its very nature a strike action whether procedural or not whether
lawful or not involves the partial or complete
concerted refusal to
work unless the demands made by the striking workers are addressed.
In such circumstances to characterise
the employees’ failure to
comply with employer’s ultimatum to return to work as gross
insubordination is to completely
miss the point. The case of
Johannes
v Polyoak Industries
2
on which Mr
Rautenbach
relies is clearly
distinguishable on the facts from the instant case. In the
Polyoak
case, the
insubordination which underlined the employee’s dismissal was
her refusal to comply with an instruction to fill
in a quality
checklist until her grievance was resolved by the employer. The
dismissed employee was not engaged in a strike action.
It was simply
a refusal to obey employer’s instruction.
[47] In my view,
the Court
a
quo’s
findings
that the employees’ dismissal was unfair, by reason of the
short duration of the strike, absence of violence and
slackness of
the appellant’s trade, were correct and did not constitute
gross misdirection. In the circumstances, I would
dismiss the appeal.
[48] As far as cost is concerned, Mr
Whyte submitted that he would not ask for cost in the present matter
in light of the parties’
ongoing relationship. In the
circumstances, I would be disinclined to order the losing party to
pay the costs of the successful
party but would instead order that
each party pay its own costs.
The Order
[49] In the result, the appeal is
dismissed with no order as to costs.
______________
ZONDI AJA
I agree
______________
WAGLAY DJP
I agree
______________
MOLEMELA AJA
APPEARANCES:
FOR THE APPELLANT Adv. N F Rautenbach
Instructed by MZ Barday &
Associates
FOR THE RESPONDENTS Mr J Whyte of
Cheadle Thompson & Haysom Inc.
1
66
of 1995.
2
[1998]
1 BLLR 18
(LAC).