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[2010] ZALCJHB 328
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Coca Cola Fortune (Pty) Ltd v Food And Allied Workers Union and Others (J01/2010) [2010] ZALCJHB 328 (28 January 2010)
IN
THE LABOUR COURT OF SOUTH AFRICA
(Held
at Johannesburg)
REPORTABLE
CASE NUMBER: J01/2010
In
the matter between:
COCA
COLA FORTUNE (PTY)
LTD
Applicant
and
FOOD
AND ALLIED WORKERS
UNION
First
Respondent
THE
PERSONS WHOSE NAMES
ARE
LISTED IN ANNEXURE ‘A’
TO
THE NOTICE OF
APPLICATION
Second
to Further Respondents
JUDGMENT
BHOOLA
J:
Introduction
[1]
This is the return date of a
rule
nisi
issued by this Honourable Court on 6 January 2010,
inter
alia,
requiring the second to further respondents to show cause why a
secondary strike due to commence at the applicant on 7 January
2010
should not be declared to be an unprotected strike as contemplated in
section 68 read with 66(2) (c) of the Labour Relations
Act, 66 of
1995 (“the Act”).
[2]
The respondents oppose confirmation of the
rule
nisi.
Material common
cause facts
[3]
The applicant conducts business as a producer and distributor of soft
drinks. It has various bottling depots throughout South
Africa which
supply soft drink products to wholesale and retail customers.
[4]
The applicant is a franchisee of Coca Cola Africa (Pty) Ltd (“Coca
Cola Africa”) and has rights to bottle and distribute
Coca Cola
products to certain designated regions in South Africa. It is the
exclusive distributor in these regions.
[5]
The first respondent’s members employed at Amalgamated Beverage
Industries (“ABI”) are currently participating
in a
nationwide protected strike at ABI.
[6]
ABI has a franchise agreement with Coca Cola Africa which affords it
exclusive rights to bottle and distribute Coca Cola products
in
certain regions in South Africa other than those where the applicant
distributes.
[7]
The first respondent has not initiated a secondary strike at Coca
Cola Africa.
[8] On 30 December 2009
the first respondent addressed a notice of commencement of a
secondary strike to the applicant. The notice
stated,
inter alia
,
that:
“
The
secondary strike by our members at Coca Cola Fortune (Pty) Ltd is in
furtherance to putting preasure (sic) on SAB Ltd to resolve
the
strike currently obtaining at their soft drinks division t/a ABI
Coke. The primary strike concerns dispute on wages, working
conditions and benefits …..The basis for such a strike is that
Coca Cola Fortune is one of the South Africa’s (sic)
bottling
companies of coca cola products”.
[9]
The secondary strike at the applicant would likewise be nationwide
and for an indefinite period.
The issue for
determination
[10]
It is common cause that the requirements of section 66(2) (a) and (b)
of the Act have been met. The only issue for determination
is whether
the secondary strike proposed at the applicant would comply with the
substantive requirements of section 66 (2)(c),
which requires the
nature and extent of a secondary strike to be “
reasonable
in relation to the possible direct or indirect effect that the
secondary strike may have on the business of the primary
employer”.
[11]
It is now settled law that proportionality is the test for
determining reasonableness in this context:
SALGA
v SAMWU
[1]
and
Samancor
Ltd & Another v NUMSA
[2]
.
This test requires the harm caused to the secondary employer to be
proportional to its impact or likely impact on the business
of the
primary employer. This requires, as held by Van Niekerk AJ (as he
then was) in
SALGA
[3]
: “...
weighing
up two factors – the reasonableness of the nature and extent of
the secondary strike (this is an enquiry into the
effect of the
strike on the secondary employer and will require consideration,
inter alia, of the duration and form of the strike,
the number of
employees involved, their conduct, the magnitude of the strike’s
impact on the secondary employer and the sector
in which it occurs)
and, secondly, the effect of the secondary strike on the business of
the primary employer, which is, in essence,
an enquiry into the
extent of the pressure that is placed on the primary employer”.
[12]
The applicant makes the averment in its founding papers that no
contractual nexus or business relationship exists between it
and ABI
or any of its subsidiaries, and it is therefore unable to exert any
influence or pressure in respect of the primary strike.
Mr Naidoo, on
behalf of the respondents, submitted that the contractual nexus or
relationship requirement (the “ally”
or “associated
employer” doctrine adopted in the United Kingdom and the United
States, and which is not embraced by
the Act
[4]
),
misconstrues the test established by section 66(2)(c). Furthermore,
the nexus requirement, in the words of Cheadle
[5]
,
begs the question since it is the
effect
of
the secondary strike on the business of the primary employer that
should be the subject of the enquiry. Cheadle articulates
this
as follows:
“
The
fact that one can infer a ‘nexus’ between the two
employers once one finds that the secondary strike has an effect
on
the business of the primary employer does not logically mean that one
has to predicate a ‘relationship’ or ‘nexus’
before one can determine whether a secondary strike has an effect ‘in
the way as to make the nature and extent of the secondary
strike
‘reasonable’”.
The
nexus requirement has furthermore been expressly rejected by Van
Niekerk AJ (as he then was) in
SALGA
[6]
.
In his oral submissions however, Mr Van As, for the applicant,
conceded that the nexus requirement was not applicable. It is
therefore
not necessary for me to determine the issue.
[13]
I turn now to consider whether the nature and extent of the secondary
strike is reasonable given its proposed indirect effect.
The first
respondent alleges in its answering affidavit that the applicant and
ABI have a contractual relationship with Coca Cola
in respect of
distribution of its product, and that a secondary strike would result
in a significant amount of products not being
distributed in the
regions they are franchised to do so, resulting in a shortage of Coca
Cola products in the market. These facts
do not appear to be in
issue. However, the first respondent then blandly asserts that:
“
[t]he
Coca Cola Company (presumably a reference to Coca Cola Africa
)
will be able to exert influence
[7]
over ABI to resolve the disputes underlying the primary strike”.
This
is relevant to determining the possible effect of the secondary
strike. In this regard Mr Naidoo submitted that a shortage
would
indeed create a “
credible
possibility
”
that Coca Cola Africa would exert pressure on ABI to resolve the
primary dispute, and hence the indirect effect requirement
of section
66 (2) (c) would be satisfied. Mr Van As submitted that, on the
contrary, all that the applicant would be in a position
to do would
be to exert pressure on Coca Cola Africa in the hope that as a
consequent or “
knock
on
”
effect this would lead to Coca Cola Africa exerting pressure on ABI
to resolve the dispute giving rise to the primary strike.
I agree
with the applicant that this is a remote possibility and could open
the floodgates to secondary strikes with potentially
limited indirect
effect. However, even the potential “
knock
on”
effect, Mr Van As submitted, is a remote possibility given that that
the primary and secondary employers are co-franchisees and
in fact
competitors. This is particularly so in circumstances where there is
no secondary strike at Coca Cola Africa, which would
render the
likelihood of a shortage of product resulting in Coca Cola Africa
exerting pressure on ABI to resolve the primary strike
to be even
more fallacious.
[14]
Mr Van As made the further submission that even if the secondary
strike were to have any indirect effect, this would be
disproportionate
to the harm occasioned by the applicant given the
extent and duration of the strike. Mr Naidoo submitted that in order
for there
to be any possibility of an indirect effect, and for Coca
Cola Africa to exert influence on ABI, the secondary strike would of
necessity have to be significant and hence the proposed extent and
duration were reasonable. Mr Van As submitted however that this
matter was distinguishable on the facts from SALGA
[8]
where a one day strike was held to be justified in circumstances
where its effect would have been limited and indirect. The secondary
strike
in
casu
would not be short and sharp, but expected to be prolonged, with
little if any possible indirect effect on ABI or its subsidiaries.
In
such circumstances, the effect on the primary dispute would have to
be more direct given the potential prejudice to the applicant.
In
casu
,
it was submitted, the harm caused to the applicant would be extensive
and disproportionate to its limited unlikely impact on the
primary
strike.
[15]
In my view, the absence of a secondary strike at Coca Cola Africa,
for which no reasons have been furnished, would render the
effect on
the primary dispute a remote possibility, and would on its own
justify a refusal of the relief sought by the respondents.
The
reliance by the respondents’ on the potential indirect “
knock
on”
effect of the secondary strike on the business of ABI would not in my
view render the proposed nationwide and indefinite secondary
strike
at the applicant reasonable. Accordingly, in my view, the nature and
extent of the proposed secondary strike does not appear
to be
reasonable in relation to its possible effect on the primary dispute.
Thus the requirements of section 66(2) (c) read with
section 68 have
not been satisfied.
[16]
In the circumstances, I make the following order:
1. The
rule
nisi
is confirmed, with costs.
______________
Bhoola
J
Date
of application: 13 January 2010
Date
of judgment: 28 January 2010
Appearance:
For
the Applicant: Adv MJ Van As instructed by Verveen Attorneys
For
the Respondents: Cheadle Thompson & Haysom Attorneys
[1]
[2008]
1 BLLR 66 (LC).
[2]
[1999]
11 BLLR 1202 (LC).
[3]
Supra, at para
[16].
[4]
Thompson &
Benjamin, SA Labour Law, Vol 1, AA1-329.
[5]
Halton Cheadle,
“Strikes and Lockouts”, Current Labour Law 1997, page
31.
[6]
Supra, note 1.
[7]
My emphasis.
[8]
Supra, note 1.