Safcor Freight (Pty) Ltd t/a Safcor Panalpina v South African Freight and Dock Workers Union (DA17/10) [2012] ZALAC 29; [2012] 12 BLLR 1267 (LAC); (2013) 34 ILJ 335 (LAC) (17 September 2012)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Labour Appeal Court
SAFLII
>>
Databases
>>
South Africa: Labour Appeal Court
>>
2012
>>
[2012] ZALAC 29
|

|

Safcor Freight (Pty) Ltd t/a Safcor Panalpina v South African Freight and Dock Workers Union (DA17/10) [2012] ZALAC 29; [2012] 12 BLLR 1267 (LAC); (2013) 34 ILJ 335 (LAC) (17 September 2012)

REPUBLIC OF SOUTH AFRICA
THE LABOUR APPEAL COURT OF SOUTH
AFRICA, DURBAN
JUDGMENT
Reportable
Case no: DA17/10
In the matter between:
SAFCOR FREIGHT (PTY) LTD t/a
SAFCOR PANALPINA
...............................................................................
Appellant
and
SOUTH AFRICAN FREIGHT AND DOCK
WORKERS
UNION (“SAFDU”)
.................................................................................
Respondent
Heard: 25 August 2011
Delivered: 17 September 2012
Summary: Appeal – Bargaining
Power – Differentiation in Wage Increase – Whether the
employer has a right to bargain
with employees who are not members of
a bargaining unit represented by a recognised trade union leading to
differentiation in wage
increase - Whether the appellant through its
conduct infringed the protections accorded by the right to freedom of
association
enshrined in Chapter II of the LRA. – Held that the
employer’s conduct led to the bargaining unit employees being
prejudiced/discriminated
against because of their membership of the
union - Remuneration increase declared to be in contravention of
section 5(2)(c)(i)
and
section 5(3)
of the
Labour Relations Act 66 of
1995
______________________________________________________________
JUDGMENT
MURPHY AJA
This is an appeal against a judgment
of the Labour Court (Cele J) in which it declared that the award of
a wage increase by the
appellant to certain of its non-unionised
employees was discriminatory and prejudicial in violation of section
5 of the Labour
Relations Act 66 of 1995 (“the LRA”) and
sections 9 and 23 of the Constitution. The appeal raises important
questions
of principle and policy in relation to the right of an
employer to bargain with employees who are not members of a
bargaining
unit represented by a recognised trade union.
The appellant is a freight forwarding
business with branches in all of South Africa’s major ports,
as well as in Johannesburg.
At the time that the dispute arose, it
employed more than 1100 employees throughout the country. The
present dispute concerns
the Durban operation where the appellant
employed 277 employees, of whom 31 were managerial employees.
The respondent is a registered trade
union which was recognised as the bargaining agent for its members
employed by the appellant
at the Durban branch.
On 25 October 2006, the appellant and
the respondent concluded a collective agreement described by them as
“a relationship
agreement” which manages their
relationship in detail. The respondent has been recognised as a
bargaining agent by the
appellant since 1996; the relevant
relationship agreement, however, was applicable only from late 2006.
Clause 4.1 of the agreement confers
recognition on the respondent as the bargaining agent of the members
of the bargaining unit.
The pertinent part of Clause 4.1 reads:
‘
The
Company shall recognize the Union as being a registered Trade Union
within the workplace, and as the representative of its members
within
the bargaining unit for the purpose of collective bargaining for so
long as the Union maintains a membership level of 50%
(fifty percent)
plus 1 of the employees within the workplace. In this respect, the
Union shall negotiate wages and substantive
conditions of employment
for its members in the bargaining unit on an annual basis ….’
The “bargaining unit” is
defined in clause 1.3 of the agreement to mean:
‘…
permanent
employees of the Company who are members of the Union with the
exclusion of the following categories of employees:
1.3.1
Managerial staff (Grade B and D and upwards);
1.3.2
Financial Accountants;
1.3.3
Payroll and Human Resources Administrators.’
It is common cause that at the
relevant time the respondent’s members at the Durban operation
numbered 111 of the total
of 277 employees. The remaining 166
employees were not union members and therefore fell outside of the
bargaining unit. The union
thus represented about 40% of the
employees working at the Durban operation. The appellant has not
challenged the union’s
level of representation in these
proceedings. One may infer, accordingly, that the employees that the
union represented made
up more than 50% of those employees who
qualified to be members of the union and the bargaining unit. In
terms of clause 4.1
of the agreement, the bargaining unit is defined
by and based on union membership.
The respondent is also recognised at
the appellant’s Johannesburg branch, but neither the
respondent nor any other agent
or union is recognised at the
operations in Cape Town, Port Elizabeth, East London and Richards
Bay.
The wages and terms of employment of
employees employed at the appellant’s branches where the
respondent does not enjoy
recognition are determined by the
appellant after consultation and consideration of any applicable
provisions of the Main Agreement
of the National Bargaining Council
for the Road Freight Industry.
With the exception of the Durban
branch, wage adjustments within the appellant’s operations
have been effected annually
with effect from 1 July to 30 June of
each year. In Durban, the wage year has run from 1 January to 31
December of each year.
In January 2007, shortly after the
relationship agreement was concluded between the appellant and the
respondent, the parties
agreed to a wage increase of 6,75% per annum
in respect of employees earning above R6000 per month, and an
increase of 7.25%
per annum in respect of persons earning below
R6000 per month. The respondent maintains that this increase was
extended and applied
to the employees who did not fall within the
bargaining unit. The appellant did not deny that this level of
increase was indeed
granted to the non-unionised employees, but
denied that the increase “was unilaterally extended to
non-union bargaining
unit members”. More accurately, the
appellant “applied a performance based increase based on CPI
and a scored performance
in respect of each of the individual
employees”. It is nonetheless not clear from the evidence
whether the non-union members
received more or less than the 6,75 –
7,25% granted to the union members in January 2007.
In mid 2007 the appellant decided to
change the wage cycle for the 166 employees who did not belong to
the bargaining unit in
Durban. As an incentive it proposed to grant
the non-bargaining unit employees a 4.5% across the board wage
increase, subject
to them accepting a change making their wage cycle
run from 1 July to 30 June of each year on a par with the cycle
applicable
at the appellant’s other branches.
On 8 August 2007, the appellant’s
Financial Manager for Kwa-Zulu Natal addressed a letter to all
non-union members employed
in the Durban branch. The letter’s
importance and centrality to the dispute requires that it be cited
in full. It reads:
‘
CHANGE
IN PAYCYCLE FROM JANUARY TO JULY
The
company’s consultations and previous correspondence with you in
respect of the above matter have reference.
The
company would like to change the annual salary review date for all
non-union staff from January to July.
In
order to facilitate the changeover from January to July, the company
would like to award all non-union staff an increase back-dated
to 1
July 2007. This increase, together with the increase you received in
January 2007, is intended to carry you through to 1 July
2008, which
will be your next annual salary review date.
The
increase you will be awarded with effect from July 2007 will be 4,5%,
which is based on the CPI for the six months ending June
2007.....
Acceptance
of this increase is on the express understanding that your annual
increase date is changed to July.
In
addition, please take careful note of the further conditions
pertaining to this increase, the details of which are outlined below.
CONDITION
PRECEDENT
1
The increase in remuneration referred to above is subject to you not
at any time during the period 1 July 2007 to 30 June 2008
(“the
2008 non-union staff wage cycle”) becoming a member of the
South African Freight & Dockworkers Union (“the
Union”)
and
thereby becoming part of the Union Bargaining Unit
established in terms of the Relationship Agreement between the
Company and the
Union dated 25 October 2006 (“the Relationship
Agreement”)
2
In the event that you elect to join the Union during the 2008
non-union staff wage cycle and become part of the Union Bargaining

Unit you agree that:
2.1
The increase in remuneration referred to in 1 above shall cease at
the end of the calendar month that you elect to join the
Union
Bargaining Unit (“the transfer date”).
2.2
You will be entitled to retain all increases paid to you in terms of
1 above up to the transfer date but not thereafter.
2.3
After the transfer date, you will be paid the remuneration you
received immediately prior to the commencement of the 2008 non

bargaining unit staff wage cycle.
2.4
You will be entitled to receive after the transfer date any increase
in remuneration which may be negotiated by the Union on
your behalf
as part of the Union Bargaining Unit, with effect from the transfer
date up to and including the 31 December 2008,
being the end of the
Union 2008 wage cycle.’
The consequence of the change was
that the non-bargaining unit employees in Durban would from July
2007 operate on a wage cycle
which was the same as the wage cycle
operating at the appellant’s other branches throughout the
country and received a
4.5% wage increase from that date that was
not extended to union members.
On 2 November 2007, the attorney for
the respondent addressed a letter to the appellant alleging unfair
discrimination on the
grounds of union membership and claimed that
the 4.5% increase had been granted to the non-bargaining unit
employees as an inducement
for changing the wage cycle without
consulting the respondent. The letter recorded that the respondent
had met with the appellant
and conveyed to it that the bargaining
unit employees were “agreeable to having their incremental
date similarly changed
to 1 July”. The appellant’s
attorney responded to this in a letter dated 15 November 2007 as
follows:
‘
4.5
Our client is under no obligation in terms of the relationship
agreement or in law to negotiate or consult with your Union in

respect of non-bargaining unit employees and may, subject to not
acting in an unfairly discriminatory manner in respect of your
union,
arrange its affairs in keeping with its own best interests.
4.6
Our client has a lawful binding wage agreement with your client which
is valid up to 31 December 2007. Your client is at liberty
to propose
a change to the bargaining unit wage cycle in the forthcoming
negotiations and to propose a 6 month, 12 month or even
12 month
substantive agreement should it choose to do so. Our client will
respond to such a proposal if and when it is made at
such
negotiations.
4.7
Our client notes that you have advised that your client is ‘agreeable
to having their incremental date similarly changed
to 1 July’.
We assume from you letter that you are proposing to amend the 2007
wage agreement. Our client will not agree
to this.
4.8
There is nothing inherently unlawful or unfairly discriminatory in
the fact that bargaining unit and non-bargaining unit members
have
separate wage cycles.’
The parties were unable to resolve
their differences, and on deadlock the respondent brought an
application to the Labour Court
for a declarator that the appellant
was in breach of the provisions of sections 5(1), 5(2)(a)(ii) and
(iii), 5(2)(c)(i), 5(3)
and 5(4) of the LRA; and further declaring
the award of increased remuneration to the non-bargaining unit
employees to be inconsistent
with sections 9 and 23 of the
Constitution. In addition, it asked the court either to reverse the
payment of the increased amounts
or to grant the bargaining unit
employees a similar increase back-dated to 1 July 2007.
Given the nature of the relief
sought, it was necessary for the respondent to join the
non-bargaining unit employees. This was
accomplished by an order of
the Labour Court dated 19 January 2009, after the appellant had
raised a preliminary objection in
that regard in its answering
affidavit.
The Labour Court, without distinctly
analysing or commenting upon the provisions of section 5 of the LRA
or section 9 and 23 of
the Constitution, concluded, in effect, that
the appellant’s wish to adjust the wage cycle did not provide
sufficient justification
for the unequal and discriminatory wage
increases which had the effect of discouraging employees from
joining or remaining a
member of the union and resulted in unequal
treatment by the appellant of its employees without a valid and fair
reason. The
learned judge consequently granted the declaratory
relief and directed the appellant to grant the bargaining unit
employees a
4,5% increase back-dated to 1 July 2007.
The central, if
not sole, issue in this appeal is whether the appellant through its
conduct infringed the protections accorded
by the right to freedom
of association enshrined in Chapter II of the LRA. In my view, the
Labour Court erred in declaring the
award of increased remuneration
inconsistent with section 9 (equality) and section 23 (fair labour
practices) of the Constitution.
Where legislation has been enacted
to give effect to a constitutional right, a party may not bypass
that legislation and rely
directly on a provision of the
Constitution, without challenging that legislation as falling short
of the constitutional standard.
1
Insofar as the
right to fair labour practices is given effect to by the LRA, the
respondent is obliged to found its cause of action
on the relevant
provisions of the LRA, and may not rely directly on the general
provisions of constitutional right to fair labour
practices in
section 23 or the equality clause in section 9 of the Constitution.
In any event, as far as the anti-discrimination
clause (section
9(3)) is concerned, it prohibits discrimination on the grounds
listed therein or on analogous grounds. Union
membership is not a
listed ground and it is unlikely to be considered an analogous
ground because such discrimination does not
involve the requisite
level of injury to human dignity; and adequate legislative
protection is in any event available in section
5 of the LRA. There
was for those reasons no need to declare the appellant’s
conduct unconstitutional. The Labour Court
accordingly erred in that
regard.
The germane provisions of section 5
of the LRA read:
‘
(1)
No person may discriminate against an employee for exercising any
right conferred by this Act.
(2)
Without limiting the general protection conferred by sub-section (1)
no person may do, or threaten to do, any of the following
–
(a)
require employee or person seeking employment –
(i)
not to be a member of a trade union or workplace forum;
(ii)
not to become a member of a trade union or workplace forum; or
(iii)
to give up membership of a trade union or a workplace forum;
(b)
prevent an employee or a person seeking employment from exercising
any right conferred by this Act or from participating in
any
proceedings in terms of this Act; or
(c)
prejudice an employee or person seeking employment because of past,
present or anticipated –
(i)
membership of a trade union;
…
(vi)
exercise of any right conferred by this Act;
…
(3)
No person may advantage, or promise to advantage, an employee or a
person seeking employment in exchange for that person not
exercising
any right conferred by this Act or not participating in any
proceedings in terms of this Act. However, nothing in this
section
precludes the parties to a dispute from concluding an agreement to
settle that dispute. . . ’
The provisions
must be read,
inter
alia
,
with section 4 of the LRA which guarantees every employee the right
to freedom of association, in particular the right to join
a trade
union and to participate in its lawful activities.
Simply put, the provisions of section
5 of the LRA constitute a prohibition against “anti-union
discrimination”. Although
section 5(1) does not qualify the
term “discriminate” with the adverb “unfairly”,
our constitutional
and anti-discrimination jurisprudence generally
require that discrimination be unfair and/or unjustifiable in order
to constitute
an infringement or violation. Differentiation which is
fair and/or reasonable will not amount to discrimination. A
contravention
of section 5(1) therefore comprises two elements:
discriminatory conduct or action and such being unjustifiable
because it is
irrational, lacking in proportionality, unreasonable
or actuated by improper or illegitimate motives.
The party alleging
discrimination (or violation of the specific protections in section
5) must establish the facts of the allegedly
objectionable
behaviour, in which event the onus of justifying it shifts to the
party who engaged in the conduct.
2
Moreover, the
existence of differentiation or disparate treatment is not enough;
generally, it must be established that the reason
for the
differentiation relates to a proscribed ground, in this case union
membership or union activities. Where there is more
than one reason
for the differentiation, the requirement normally will be met where
it is shown that the prescribed ground has
an element of
predominance. The general prohibition against discrimination in
section 5(1) is given content, without its generality
being limited,
by the provisions of sections 5(2) and 5(3) which impose stricter
liability in respect of specific forms of anti-union
discrimination.
Two of these are of greater significance in the present appeal,
namely: section 5(2)(c)(i) which prohibits prejudicing
an employee
because of past, present or anticipated trade union membership; and
section 5(3) which proscribes advantaging an
employee in exchange
for not exercising any right conferred by the LRA.
The appellant has advanced a number
of submissions in justification for the change in wage cycles and
the condition precedent
in the letter of 8 August 2009 rendering the
wage increase dependant on non-membership of the bargaining unit. It
stated that
it has always maintained a distinction between the terms
and conditions of employment of bargaining unit members which are
negotiated
and non-members whose terms are set after consultation.
It sees a business advantage in having all non-bargaining unit
employees
throughout the country on the same wage cycle. The basis
of the justification is vague. It is hard to discern the precise
nature
of the advantage achieved from the limited evidence
presented. What the appellant has not explained satisfactorily, in
my opinion,
is why it was imperative to exclude the 111 bargaining
unit members in Durban from the arrangement that applied to every
other
employee throughout the country, especially when the union
employees were willing to make the change and fall in line. The only

reason advanced at the time was that put forward by the appellant’s
attorney in his letter of 15 November 2007 that the
appellant was
unwilling to consider amending the wage agreement of 2007 until the
next round of annual negotiations. Yet, for
reasons that remain
opaque, it was willing to do exactly that for the non-bargaining
unit employees. The salary terms of the
non-bargaining unit
employees agreed to and implemented for the year 2007 were adjusted
generously without compunction. As the
Labour Court perceptively
observed, differentiation of that order would invariably risk
causing tension. The appellant’s
expressed hope to be “able
to plan its industrial relations strategy to avoid the disruption of
industrial action if it
has peace obligations with one group with
which it has settled” is difficult to understand in the light
of its actual behaviour
in the peculiar context. The bargaining unit
employees in Durban, out on a limb, represented about 10% of the
appellant’s
nationwide workforce.
The increase afforded to the
non-bargaining unit members was stated to be intended to compensate
them for the fact that unlike
the union members they would receive
no increase in January 2008. The respondent was able to negotiate a
7.5% increase for its
members with effect from 1 January 2008. That
meant union members may have been paid more than their equally
situated non-union
colleagues for the period 1 January 2008 until 30
June 2008. The record does not disclose the amount of the increase
granted
to non-union members in July 2008. Moreover, neither party
has adduced evidence substantiating the actual financial consequence

of the differential treatment. However, the rates of increase
awarded to the two different categories of employees for the 18

months from 1 January 2007 to 30 June 2008 probably resulted in a
discernible advantage for non-union members over the complete

period. Thus, for example, a union member earning above R6000 per
month would have received an increase of 6,75% for 2007 and
an
additional 7.5% for the first 6 months of 2008, while a non-union
member (assuming the January union increase was extended)
would have
received 6.75% in January 2007 plus an additional 4,5% from July
2007 for the 12 months of the new wage cycle. On
these figures a
non-union employee earning R10 000 per month would receive an
additional amount of about R5000 over the entire
18 month period.
Furthermore, the bargaining unit members would not have been
disadvantaged for the period 1 July 2007 –
31 December 2007
but for their union membership and the condition precedent. Had they
resigned from the union they would have
had the benefit of an
additional 4.5% for the period.
On that basis, one may conclude that
the bargaining unit employees were
prima facie
prejudiced or
discriminated against because of their membership of the union,
while the non-union employees were advantaged in
exchange for not
exercising the right to join the union, albeit most starkly only for
the 6 month period between 1 July and 31
December 2007.
The question then is whether that
discrimination or prejudice was unfair or unjustifiable, and whether
the (possibly temporary)
advantaging of the non-union members was
fair and justifiable in the circumstances.
The strongest
argument advanced by the appellant to justify its conduct and the
condition precedent is that the LRA permits and
encourages
industrial relations pluralism and multiple bargaining agents. The
structure of the LRA is such that employees are
free to choose their
bargaining agent and to conclude agreements on different terms to
other employees represented by other agents
or not at all. There has
been surprisingly little judicial comment on the implications of a
system of plural representation in
our labour relations system.
Counsel referred only to one case,
National
Union of Mineworkers v Henry Gould (Pty) Ltd and Another
,
3
where the
Industrial Court stated:
‘
Where
a system of plural representation is in existence, as in this case,
it necessarily holds within it the possibility that the
principle of
equality will be sacrificed. Plural representation, I apprehend,
would also encompass a group of employees who elected
to continue
settling terms and conditions of employment on an individual basis.
Where the members of a labour unit of equals elected
to belong to
different groupings they, in fact, elect to go their separate ways
and this at the expense of the former equality.
The result is that it
becomes legitimate for the employer to bargain or deal separately
with these two or more groups. It follows
that equals performing the
same work may be subject to different terms and conditions of
employment.
In
these circumstances, one group cannot be heard to complain about the
absence of equality between their terms and conditions of
employment
and that prevailing as regards the other group. The potential for
inequality and unfairness is inherent in their arrangement.’
There is undoubtedly merit in the
proposition that a system allowing a plurality of bargaining agents
or units may lead to unequal
outcomes that depending on the
justification may or may not be legitimate and fair. However, as
always in the evaluation of fairness,
reasonableness and equality,
much will depend on the circumstances. I pause to interpose here that
the prejudice or disadvantage
contemplated by section 5(2)(c) and
5(3) of the LRA, in the nature of things, is expected to be unfair.
The respondent has not disputed the
commercial advantages of the change in the work cycle. Presumably,
that is why its members
were prepared to agree to it. The
respondent’s chief concern, understandably, was that it had
been undermined as a bargaining
agent. For the period 1 July 2007 to
31 December 2007, the appellant created a strong financial
inducement for employees not
to join the union, and for members to
consider terminating their membership. The wage agreement in
February 2008 (effective from
January 2008) was reached while the
present dispute was in process and possibly signified a tactical
retreat by the appellant
aimed at partly ameliorating the situation
of the members of the bargaining unit. Plural representation, as
already stated, means
that there will indeed be times when wages and
terms of employment may be more favourable for one segment of the
workforce. But,
in order to pass the test of legitimacy, rationality
and fairness, the differentiation must be supported by a commercial
rationale.
The only commercial rationale offered by the appellant
was the aspiration to more efficiently use managerial resources and
the
need to hold the union to its agreement. Both lose force
(legitimacy and rationality) in the present circumstances, as I have
said, in view of the union’s willingness to agree to a change
in cycle, and the appellant’s inconsistency in amending
the
terms of the non-bargaining unit members while refusing to do
likewise for the bargaining unit members. It is hard to see
how
persisting with a redundant separate wage cycle for 10% of employees
located in a single branch would achieve greater efficiency.
Nor
would it logically advance any industrial relations objective.
The present state of affairs
therefore is different to one in which an employer, at the
conclusion of negotiations and a power
play with different
bargaining agents, has conceded to a proposal introducing more
favourable terms for one segment of its workforce
at variance with
those applicable to the others. Here we have to do with a disparity
advantaging non-union members which was
proposed, formulated and
unilaterally implemented by the employer, justified somewhat
vaguely, if not speciously, as a more efficient
use of management
resources, which efficiency it was curiously not prepared to enhance
by similarly adjusting the wage cycle
of the union members despite
their willingness to sign up to the proposal. In such circumstances
it is legitimate to infer that
the employer was engaged in a tactic
aimed at weakening the bargaining position of the union. If not
calculated or designed to
undermine the union as a bargaining agent,
objectively it had the potential to do so. Non-members would in
effect be discouraged
to join the union and members indirectly
induced to resign. Had members resigned to benefit from the increase
awarded or perceived
promise of more favourable treatment in the
future, the union risked losing its representative status and the
concomitant right
to act as a bargaining agent in terms of the
collective agreement. There is no onus on the respondent to prove
that the appellant
acted intentionally. Anti-discrimination law is
concerned with the effect of discriminatory conduct, irrespective of
the intention
or motive of the perpetrator.
The appellant’s conduct was
therefore a form of anti-union discrimination as proscribed by
section 5(2)(c) and section 5(3)
of the LRA. I agree thus with the
submission of counsel for the respondent that whatever gloss the
appellant may wish to place
on what it chose to do and its reasons
for doing so, and for why it was not willing to accommodate the
respondent to adjust the
annual wage cycle for union members, there
is no getting away from the impact of its actions, which would have
been self-evident,
and that was to provide a strong inducement to
non-union members not to exercise their right to join the union for
the relevant
six month period, or for union members to resign. The
fact that the disadvantage or prejudice was ameliorated later does
not
detract from the harmful effects. The measurement of the impact
of the discrimination must be made when the prejudicial or
disadvantageous
behaviour takes place. On 1 July 2007 and until 31
December 2007, the appellant differentiated prejudicially between
its employees
on the basis of the rights they respectively chose to
exercise in terms of the LRA to join or not join a trade union. It
is no
defence to argue, as the appellant has sought to do, that the
differentiation is based on bargaining unit membership, not union

membership, when the applicable agreement defines the bargaining
unit as synonymous with union membership. All the more the case,

when the introduced differentiation was subject to the condition
precedent that the non-union members were paid more on the express

understanding that their monthly remuneration would revert to what
it was before the increase if they chose to exercise their

fundamental right to join the union during the six month period.
The respondent does not seek unfairly
to prevent the employer from liaising or negotiating with employees
not represented by the
union and thereby to impose the equivalent of
a closed shop or agency shop without meeting the requirements of the
Act. What
it hopes to do is to prevent the employer from undermining
its position as a sufficiently representative bargaining agent by

resorting to unacceptable and unfair tactics aimed at prejudicing or
disadvantaging its members.
In the premises, the Labour Court did
not err in issuing a declarator that the appellant’s conduct
infringed the protections
afforded by section 5 of the LRA. The
formulation of the order is open to the criticism of being overly
broad. It declares that
the conduct infringed section 5(1) and other
provisions of section 5(2) of the LRA. It will be sufficient to
declare that the
conduct of the appellant contravened section
5(2)(c) and section 5(3) of the LRA in that it prejudiced the union
members because
of their membership of the trade union and
advantaged the non-union members in exchange for their not
exercising the rights conferred
upon them by section 4 of the LRA to
join a trade union and to participate in its lawful activities. The
order of the Labour
Court should therefore be varied to that end.
In addition to the declarators, the
Labour Court made the following order:
‘
Directing
the respondent to remedy its unlawful and unconstitutional conduct
and to this end that it be and is hereby directed to
inform all the
employees to whom the unilateral increases were awarded of the fact
that respondent’s conduct in awarding
the increases was
unlawful and furthermore is hereby directed within 21 days of the
grant this order (
sic
)
to grant all employees, including those who are or may become members
of the applicant similar increases in remuneration backdated
to 1
July 2007.’
The order so formulated will be
difficult to implement, but aims prudently at restoring equality
between the two groups of employees
by removing the effects of the
discriminatory conduct. The court had a choice of either directing
the appellant to extend the benefits
of the 4.5% increase to the
union members (levelling up) or to set aside that increase and to
withdraw it from those who received
it (levelling down). The order
instructs the appellant to level up. The problem with an order
levelling up, though, is that it
takes no cognisance of the fact that
the non-union members did not benefit from an increase for the period
1 January 2008 to 30
June 2008, whereas the union members did. And,
furthermore, there is no evidence regarding the increase awarded to
the non-union
members effective from 1 July 2008. Hence it is not
possible to calculate the precise financial prejudice suffered by the
union
members as a result of the 4.5% award made to the non-union
members in July 2007. Levelling up would unjustifiably advantage the

union members. Unfortunately, in consequence, the matter will have to
be remitted to the Labour Court for a proper determination
of the
actual financial prejudice caused by the discrimination, on the basis
of additional evidence. However, one is hopeful that
the parties can
agree on the arithmetical calculations in order to place a settlement
agreement before the Labour Court for the
purpose of making it an
order of court.
Lastly, there is no merit in the
argument that an award of damages or compensation amounts to
inappropriately re-writing the contractual
bargain between the
parties. The Labour Court’s power to redress discriminatory
conduct contravening section 5 by an award
of damages or
compensation is derived from section 158(1)(a)(iii) of the LRA which
confers upon it the power to make any appropriate
order including an
order directing the performance of any particular act which order,
when implemented, will remedy a wrong and
give effect to the primary
objects of the LRA.
The respondent has prevailed on
appeal and there is no reason why costs should not follow the
result.
The following orders are issued:
i) The appeal is dismissed.
ii) The order of the Labour Court is
varied and substituted as follows:
‘
1.
The award in August 2007 by the respondent of a remuneration increase
of 4.5% to employees who are not members of the applicant,
backdated
to 1 July 2007, subject to the condition that such employees shall
forfeit the benefit of the increase if they become
members of the
applicant, is declared to be in contravention of section 5(2)(c)(i)
and
section 5(3)
of the
Labour Relations Act 66 of 1995
on the
grounds that it prejudices the members of the applicant because of
their trade union membership and advantages the employees
who are not
members of the applicant in exchange for their not exercising the
right to join the applicant.
2.
The respondent is ordered to pay the costs of the application.’
iii) The matter is remitted to the
Labour Court for the purpose of receiving additional evidence and
argument for the determination
of the financial prejudice suffered by
the members of the respondent caused by or arising out of the award
of a remuneration increase
of 4.5% to the employees who were not
members of the applicant with effect from 1 July 2007, in
contravention of
section 5
of the Labour Relations Act 66 of 1995
(“the Act”) and for the further purpose of making an
order in terms of section
158 of the Act remedying the financial
prejudice caused by the appellant’s contravention of the Act.
iv) The appellant is ordered to pay
the costs of the appeal.
_______________
JR MURPHY
Acting Judge of the Labour Appeal
Court
Mlambo JP and Mocumie AJA concur in
the judgment of Murphy AJA.
Appearances:
For the Appellant: P Kennedy SC
Instructed By: Edward Nathan
Sonnenbergs
For the Respondent: M Pillemer SC
Instructed By: Brett Purdon Attorneys
1
Chirwa
v Transnet Limited and Others
[2007] ZACC 23
;
2008
(4) SA 367
(CC) at para 41.
2
Section
10 of the LRA.
3
(1988)
9 ILJ 1149 (IC) at 1158G-J.