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[2010] ZALCD 24
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South African Clothing And Textile Workers Union (SACTWU) and Another v Mediterranean Textiles Mills (Pty) Ltd (D176/08) [2010] ZALCD 24 (14 March 2010)
IN
THE LABOUR COURT OF SOUTH AFRICA HELD IN DURBAN
CASE
NO. D176/08
REPORTABLE
In
the matter between
SOUTH
AFRICAN CLOTHING & TEXTILE
WORKERS
UNION (SACTWU)
First
Applicant
THOSE
INDIVIDUALS IDENTIFIED IN
ANNEXURE
“A”
Second
Applicant
And
MEDITERRANEAN
TEXTILES MILLS (Pty)
LTD
Respondent
JUDGMENT
Cele
J
Introduction
[1]
This is a claim of unfair dismissal of the second to further
applicants on 4 December 2007 on the basis of their participation
in
an unprotected strike. The respondent opposed the claim by contending
that it did not act unfairly and with haste when it dismissed
the
said respondents. On the contrary, it said that it had an acceptable
reason for the dismissal and that the employees had shown
no
intention of stopping the strike in favour of returning to work.
Background
facts.
[2]
The second to further applicants will henceforth be referred to as
the “employees”. The respondent will also be
referred to
as the company. The facts of this case are basically common cause
between the parties.
[3]
On 23 November 2007 the first applicant (the union) issued a letter
to the respondent advising it that the International Trade
Administration Commission (ITAC) had published a notice in the
Government Gazette on 9 November 2007, indicating that it would
be
reviewing and possibly removing or reducing import on textile
products. The union expressed its concern in that letter that
the
removal of duties might lead to job losses. It needed to know what
the possible impact would be on the industry so that it
could make
its comments to the ITAC on a factual assessment. The letter
identified the categories of the products in relation to
which the
government notice applied and indicated that the union believed that
the respondent produced such product and it therefore
requested the
respondent to urgently fill in the required information in the table
attached to its letter and to submit the table
back to the union by
27 November 2007. For a better understanding of the attitude of the
respondent to the removal of import duties
from its product, the
letter it wrong in response to that of the union follows hereunder.
“
LOWERING
OF TEXTILE IMPORT DUTIES
It
is with dismay that we read the published notice in the Government
Gazette regarding the reviewing of
certain tariffs.
It
is obvious that the policy of the Trade & Industry regarding our
economy is at a crossroad. Barely a year ago quotas were
introduced
for a period of two years to give the Textile Industry a lifeline to
re-quip and tool up so it could meet the requirements
of the local
industry.
Mediterranean
Textile Mills did not directly benefit from these quotas, however it
invested in new technology, believing there was
an element of
sincerity and commitment by the Government and other stakeholders to
the Textile Industry.
The
Gazette clearly indicates that we misread the Government’s
intentions and it obviously is now grappling with the notion
to
sacrifice the Textile Industry to save the beleaguered Clothing
Industry.
There
are some garment manufacturers heralding this as a step in the right
direction, but this will only be for a short time. I
say this because
recently at a public meeting a senior executive of a South African
retailer quoted as follows:” It is time
that we accept that the
playing fields are not level and that local industry must not whinge.
It is a matter of fact that prices
are what they are, and we must
just get on with it.”
Quality
standards are also treated and managed in the same way. If the above
sentiments and philosophy go unchecked, manufacturers
will be the
losers and traders and retailers will be the winners. There is no win
– win under these conditions.
Referring
to your letter, I make brief comments on each of the points:
1. Flax
–Linen
The removal of the duties
will certainly close 30%of our business and no doubt the fledgling
Herdsman linen plant in Atlanta will
probably find it extremely
difficult.
2. The
opening of synthetic filament fabrics will certainly substitute spun
synthetics and will take care of another
60% of our business.
3.
Woven pile fabrics, include wool, so we can assume that customers who
bring in pile Melton could declare it
under this heading. This would
account for another 30% of our business and Mediterranean Textile
Mills will certainly be history.
4. With
regard to embroidered fabrics, of course people can have all types of
embroidered motifs, however small,
put onto the fabric, and this will
yet again open another avenue for duty free fabrics.
5. Warp
knit fabrics. We have no comment as we do not make this, but surely
the warp knitters will have an issue.
6.
Knitted and Crocheted. Again here new avenues are opened to confuse
and abuse what‘s left of any form
of protection.
7. With
regard to all the other points, fine weavers cotton rich, fine wools
etc. these will indirectly replace
fabrics that we currently produce.
In
summary, I do hear people say that it is not fair that they should be
paying duties on fabrics not produced in SA, however is
it fair that
we should be competing on unlevel playing fields? Quite frankly
if the authorities concede to any of these requests,
it will soon
follow that protection for clothing imports and other inputs will
eventually be wavered. (sic)
Now
that this Gazette has been published all our customers are holding
back on orders to await the outcome of the decision of Government.
This has meant that we have received no orders recently and are faced
with a very lean first three months of 2008.
Unfortunately
this is compelling us to seek exemption from paying a mandatory bonus
and we will shortly be advising your members
of our situation. “
[4]
It remained common cause though that ITAC did not, as a fact, reduce
the duties which were still in place when this matter was
heard.
[5]
On 29 November 2007 the respondent’s management held a meeting
with the union official and shop stewards and advised them
that the
respondent would not be paying the employees their annual bonus for
that year. The bonus was due, in terms of the main
collective
agreement of the National Textile Bargaining Council in the textile
industry, approximately two weeks from the date
of the announcement.
While the respondent was not a member of the Bargaining Council, the
main agreement was extended to all manufacturers
falling within the
scope of the main collective agreement.
[6]
The respondent informed the union that it intended to apply to the
bargaining council for exemption from its obligation to pay
the
bonus. There was no immediate disagreement with the
respondent's stance and the union advised that it would have to
consult with its members. On the same day a notice was placed on the
company notice board advising of the non-payment of the bonus
and
requesting the support of the employees of the company’s
exemption application. The notice also stated that due to the
Government Gazette, indicating the possible reduction/withdrawal of
tariffs, the respondent had not received a single order during
November.
[7]
Due to the fact that the bonus was due shortly, it was common cause
that the exemption process would not be finalised prior
to the bonus
becoming due. By Monday, 3 December 2007 the respondent’s
repudiation of its obligation to pay the bonus
had become known to
the majority of employees and they communicated to the shop stewards
that they did not support its application
for exemption.
[8]
On Tuesday, 4 December 2007 shortly before 7h00, the outgoing
nightshift and the incoming dayshift gathered at the company premises
and requested to speak to management. The workers were
approached by Mr. Norman Thompson, the IR Manager, who was informed
by the shop stewards that the employees wanted clarity on the payment
of their bonuses. Mr. Thompson indicated toward the
notice on
the board and told them that the position was as stated on the
notice. He advised the workers that if they did
not return to
work they would be participating in unlawful work stoppage and would
not be paid by the respondent.
[9]
The respondent’s Financial Director Mr. Martin Lotter arrived
at approximately 7h30 whereupon the notice, described as
constituting
a formal written warning was issued and handed out to the workers.
At the same time a letter was handed to the
shop stewards and sent to
the union offices asking why a final ultimatum should not be issued
to the workers.
[10]
At approximately 7h50 the shop stewards requested a meeting with
management to discuss the position regarding the bonus.
Mr.
Lotter again read to the shop stewards the notice handed out at 7h30
and the notice that had been placed on the notice board.
The
letter was also read out and answers to the questions posed therein
were requested. The respondent’s management were
informed by
the shop stewards that they were unable to persuade the employees to
return to work at that stage and the employees
were requesting that
management speak to them directly. Mr. Lotter advised the shop
stewards that the company would not negotiate
during an unprotected
work stoppage.
[11]
The shop stewards raised the fact that the workers were extremely
unhappy with the fact that the respondent would not be paying
their
bonus and also with the fact that they had been advised at such short
notice of the company’s intentions. At approximately
8h40 the
union official Mr. Sbusiso Ndawonde arrived and Mr. Lotter again read
out the notice and the letter. The employees
indicated to Mr.
Lotter that the respondent should sell the new machinery it had
bought and pay their bonuses. Mr. Lotter advised
the workers that the
respondent would continue with its exemption application, that a
bonus would not be paid at that time and
that the bargaining council
would rule on whether a bonus would be paid at all. Mr. Ndawonde then
spoke to the workers and informed
management that the workers still
wanted their bonus to be paid. The workers still wished the bonus to
be paid even if, as management
suggested, that meant that the company
would have to shut down.
[12]
At approximately 9h30, still on 4 December 2008, the ultimatum,
warning employees to return to work by 11h00 or face a dismissal,
was
read out and management attempted to hand same to the workers.
The workers generally refused to accept the ultimatum
and were
dismissed at approximately 11h15. The employees remained on the
premises until 16h30 when they disbursed and left
the premises.
[13]
The respondent had another site where it operated its business called
the Twisting Department. There were as well, day and
night shift
employees based at this department. On 4 December 2008, the employees
who had been working night shift on 3 December
2008 supported the
strike from 7h00. Those employees were also dismissed at 11h15, at
the time when they were not supposed to be
tendering their employment
services. The employees working the day shift commenced and continued
with their normal duties until
their tea time. Thereafter those
employees refused to return to their working stations. Instead they
remained in their canteen.
There were about 7 of such employees. The
respondent issued a warning letter at about 15h40 calling on the
employees to return
to work or to show cause why an ultimatum, which
could lead to their dismissal, was not to be issued. They did
not heed the
warning and the respondent issued an ultimatum calling
on them to return to work by 17h00, failing which they would be
dismissed.
Again they did not return to work and were also dismissed
in accordance with the letter of dismissal which stated the reason
for
such dismissal as being their participation in an unprotected
strike from 7h00 to 11h00.
The
issue for a decision.
[14]
It is to be decided whether the conduct of the respondent, prior to
the commencement of the strike, was of such a nature as
to leave the
applicants with no alternative but to strike and whether the
respondent, during the strike, gave the employees sufficient
time to
consider their positions before they were dismissed. As the dismissal
of the employees was common cause, the respondent
bore the onus of
proving that the dismissal was procedurally and substantively fair in
the circumstances.
Evidence
1.
Events before and leading up to the strike
.
Respondent’s
version
[15]
The
submission of an application for exemption from paying the
bonus was not unusual. In 2006 the respondent had advised its
employees
that it would not be paying a bonus. The respondent
was of the view that the Collective Agreement did not apply to it as
it had resigned from the Bargaining Council. The Collective
Agreement had not been extended to non parties at that time.
The dispute was eventually settled by agreeing to a deferred payment
of the bonus in 2007 subject to the respondent's trading conditions.
It was important to note that at the time of the settlement the
Collective Agreement had been extended to non parties.
What
was important to take into account however was that this deferred
payment was reached by way of a negotiated settlement.
It was
also clear that there was no guarantee of the 2006 bonus being paid
in 2007. It was subject to the 2007 trading conditions.
[16]
The conduct of employees in reaching the compromise for the 2006
bonus stood at odds with their conduct in December 2007 (zero-order
intake). By December 2007, the respondent's overdraft facilities had
been withdrawn, that legislation was being considered by Government
which would have a material impact on the respondent's business and
that its November trading position was particularly bleak.
[17]
To the
suggestion of the applicants that a
payment of R2 800.00 per worker was an insignificant amount in
the bigger picture,
Mr. Lotter explained that there was no
cash available in the business to make this payment. As the
Financial Director, he
had statutory duties to ensure that he did not
place the business in a precarious position, as he could not simply
make payment
when no cash reserves were available.
The
respondent had received loans in the amount of R12 million from the
IDC which were in the form of operating capital to purchase
machines
which were necessary for the respondent to attempt to trade out of
its current financial disaster. The fact that
a loan was
obtained to purchase new machinery did not mean that there was cash
available for bonuses. Further to this, the
loan as working
capital meant that the funds were made available for raw materials on
evidence provided by the respondent that
it needed to have been
purchased for a specific order. The money loaned could not be
used by the respondent as it saw fit.
It was also to be noted that
salary staff were also affected and would not be receiving a bonus
for 2007 and had not received a
bonus for some time and to date have
still not received bonuses.
[18]
Mr. Ronnie Meintjies, the respondent's Financial Manager confirmed
that the financial situation of the Respondent had not improved.
The company continued to operate in very tough financial
circumstances and struggled to pay creditors on a monthly basis.
The respondent had the capacity to produce 7 million metres of fabric
per year and to break even it was to sell 5 million metres
of fabric.
In 2007, the respondent had only received orders for approximately 4
million metres of fabric. The situation did not
improve in 2008, as
the respondent had only received orders for 1 million metres of
fabric during the first six months of trading.
The 2008 annual audit
was one where auditors had to decide whether they should in fact
qualify the financial statements. The projected
financial loss for
2009 was R38 million. The business was in the process of
restructuring and retrenchments were being considered.
Should the
employees be reinstated, a rough calculation of the back pay due to
them would be in the region of R10 million. Should
such an order be
made against the respondent, it would have no option but to close its
business. Given the restructuring of the
business since the
dismissals, the respondent might also not be in a position to
accommodate the 125 employees.
Applicants’
version
[19]
Mr. Ndawonde had been involved in the discussions with the respondent
since 2006 on behalf of the employees. He, together with
shop
stewards, attended the meeting of 29 November 2007 with the
respondent. The company informed them that it would not be paying
the
workers their bonuses which were due for payment in about two weeks
time as it sought to apply for an exemption. Alternatives
were then
suggested on behalf of workers to the company, being
·
To pay partial bonuses and
·
To defer payment of the bonuses till the
following tear.
[20]
The respondent declined to implement the alternatives suggested to it
and insisted that it would apply for an exemption. The
company had
been faced with a similar problem in 2006 and a compromise was agreed
to between the company and the union in terms
of which a wait and see
approach was adopted as a consideration for the payment of the
bonuses in the following year.
[21]
The reason for non payment of the bonuses for 2007 were not
justifiable as the Government did not give effect to its published
intention of
reviewing and possibly removing or reducing
import on textile products. It had not even been definitive in 2007
that the tariff
would be removed. The company did not have any reason
at all why it would not defer payment of bonuses to the following
year. Even
at the meeting of 29 November no valid reason for such a
deferment was ever given. It was understood that after the meeting of
29 November, shop stewards would report back to the workers, in a
meeting of the following Monday, the position taken by the company.
The meeting was held and workers refused to support the exemption
application. Instead, they insisted on the company having to
pay them
their bonuses which they considered would help to ameliorate the
difficult financial positions in which they found themselves.
[22]
While the financial situation of the company had been explained to
the union, no proof thereof had been provided to the union.
However,
the union was conceding that in 2007 the company received orders for
about four million metres of apparel fabric which
translated into an
annual turnover for 2007 of R90 million. That was down from R98
million in 2006, R96 million in 2005, R104 million
in 2004 and R136
million in 2003. A further concession was that the company had only
received orders for approximately one million
metres of fabric from
January to June of 2008. The publishing of the Government
Gazette did create an additional problem
to the company. However, as
the Gazette came out in November 2007, it followed that the company
had not budgeted for the payment
of bonuses when employees hoped they
would be paid. The right of the company to apply for an exemption was
also not challenged
by the union, neither was there a challenge to
the circumstances prevailing in the textile industry, as a whole or
the sectors
likely to be affected by the application.
2.
Events during the strike.
Respondent’s
version
[23]
The respondent conceded that it was told of the request of the
employees to be addressed by management. The company did not
find it
necessary to follow that approach. The position taken was that the
notice issued by the company to all workers on 29 November
was clear
and needed no explanation. Paragraph 2 of the notice was self
explanatory as it read:
“
THE
UNION LETTER DATED 23 NOVEMBER 2007 REGARDING THE POSSIBLE LOWERING
OF TEXTILE IMPORT DUTIES REFERS.
SHOULD
TEXTILE IMPORT DUTIES BE LOWERED OR REMOVED THIS WILL HAVE DIRE
CONSEQUENCES FOR THE FUTURE OF MEDITERRANEAN TEXTILE MILLS.
THE
GOMPANY IS OBJECTING TO THE POSSIBLE LOWERINNG / REMOVAL OF IMPORT
DUTIES, BUT WE MIGHT ONLY HEAR THE OUTCOME OF THIS OBJECTION
IN THE
FIRST QUARTER OF 2008.”
[24]
Even if the workers were given more time during the strike that would
not change anything as they were angry. It was for the
union official
and the shop stewards to address and dissuade them from engaging in
an unprotected strike. It was a known fact that
the company was not
receiving enough orders of its stock.
[25]
The Respondent had experienced significant
violence in a strike ten years ago. The misconduct included
employees being killed
and Mr Lotter's vehicle was shot at and was
peppered with three bullet holes.
[26]
Mr. Thompson's evidence was that when he was mingling with the
strikers and handing out notices, he heard one of the employees,
namely Ms Francinah Khumalo, say that they would burn down the
factory. Ms Khumalo was not called to give evidence save for
the fact that the factory was not burned down this allegation remains
uncontested. It was a threat that was not taken lightly
given
the previous conduct of strikers. It is important to note that
the workforce involved in the 2007 unprotected strike
participated in
the violent strike 10 years previously. Mr. Thompson's evidence
was that he was not a man who scared easily
but during the course of
handing out the notices, and engaging the striking employees, he was
afraid.
[27]
There was nothing in the law that required of the respondent to first
seek an interdict to prohibit the strike as suggested
at the instance
of the employees.
Given the respondent's
dire financial position, one could not have expected it to incur
further legal expenses at that stage of
proceedings. In any
event, that attitude also fails to recognise the union's and shop
stewards' failure to process their
dispute normally either through
the grievance procedure or by making application to court
themselves. At no stage was a formal
grievance lodged.
[28]
The decision to dismiss was not taken lightly by the company as there
was a very real possibility that a mass dismissal would
affect the
respondent's ability to satisfy its current order book. The
respondent avoided cancellation of orders by hiring temporary
labour
and having its managers and administration staff work the machines in
the production line.
Applicants’
version
[29]
Mr. Lotter had years of experience in the company and he knew
the workers very well. It lay in the hands of the company to persuade
the workers to support the exemption application and not to expect
the shop stewards and the union official to do it. Mr.
Ndawonde
never had a chance to dissuade the workers, even if the union had to
do it. In the meeting of workers held on 4 December
2007 at about
08h40 they made it clear to Mr. Ndawonde that they were very angry as
they needed the bonus to:
·
Pay the debts which they had accumulated in
the year in anticipation of bonus being paid and
·
To use it to pay off school fees and to buy
school uniforms for the following year.
[30] The anger of the
workers was borne out by the fact that:
Ø
In the previous years the company would
communicate with them directly. That was why they insisted on the
company coming to them
to explain its position;
Ø
One person from the company management had
refused to explain to them what workers had seen on the notice board;
Ø
The timing for the exemption application
was wrong. Even if the exemption was not granted, they would go on
the December vacation
without their bonuses as it was already a
couple of weeks before the shut down;
Ø
The R12 million machinery purchased by the
company had contributed in its financial difficulties. Workers were
not willing to accept
the explanation given to them by the company.
Ø
Workers did not see any difference in the
2006 and 2007 situations of the company as they were told the same
things in both situations.
They insisted on their payment, even if
the company were to close down as a result thereof because they were
told that in any event,
the money that the company had would last for
only a few months. The company had told them that it would close down
if it paid
them.
[31]
Workers required to be given some explanation on the position taken
by the company and they felt aggrieved that they were only
being
referred to the notice board. Had management agreed to address them,
they would lessen and then reflect on what to do. They
would have
considered going back to work as they were not even fighting or
acting violently. The company acted with haste in dismissing
them
before they had time to reflect on the ultimatum issued.
[32]
Mr.
Lotter should have first made
application to court for an interdict declaring the strike
unprotected and compelling individuals
to return to normal work
before dismissing them.
Submissions
by the parties.
Respondent’s
submissions
[33]
The employees’ stance that they should receive their
bonuses even if it meant that the respondent was to close was short
sighted.
Job security should, in current times,
trump all other considerations.
The strikers made it
abundantly clear to both the union representatives and the respondent
that they would not return to work unless
bonuses were paid.
The
respondent was in no position whatsoever to pay the bonuses as
demanded and therefore did not foresee that the strikers would
return
to work.
Urgent orders were to be completed before shut down
and if the strikers had no intention to return to work alternate
arrangements
needed to be made.
Whilst it was the
respondent's intention to seek exemption from paying the bonus, the
respondent was perfectly justified in making
such application whilst
the employees were not justified in unlawfully withholding their
labour.
[34]
The simplistic argument by the applicants that a R2 800,
00 bonus was insignificant when compared to a R12 million loan was
without foundation and was designed simply to confuse. Mr.
Lotter's explanation from an accountant's perspective could not
be
challenged and on that basis it could not be suggested that the
respondent acted recklessly and in bad faith by making an application
for exemption from paying the 2007 bonuses. The Government
Gazette notice was only published on 9 November 2007, a mere 20
days
before the notice advising employees of the company's position was
published.
[35]
It was conceded that there was no damage to property during
this particular strike. However, this conduct must be viewed
against
the very aggressive and violent circumstances that occurred
in the 1998 strike which although some time ago, remained fresh in
the minds of those managers having to deal with the striking group.
On the basis of the admitted facts and in light of
the agreed trading circumstances faced by the respondent, it was
difficult to
ascertain what other steps the respondent had open to it
when faced with a steadfast demand to pay bonuses.
[36]
The employees were aware that their strike was unprotected and
that their conduct might lead to their dismissal.
At
all times communication was had directly with the shop stewards who
also had a number of opportunities to address the strikers.
From an early stage during the unprotected strike, the union
organiser was also present. There was absolutely no evidence to
suggest
that, if more time had been given to the employees to
consider their fate, they would have calmed down and undertaken to
return
to normal work and to continue doing so pending the outcome of
the exemption application. It was apparent from the strikers'
attitude that unless the bonuses were paid, they would not return to
work. The respondent was entitled to make an application for
exemption from the payment of bonuses.
[37]
It is clear that the applicants showed flagrant disregard to
pre-strike procedures as envisaged by Section 64(1) of the Act
and that strikers intentionally thwarted the
employer's attempts to have them comply with warnings and ultimatums
issued.
Applicants’
submissions.
[38]
It is trite that participation in a strike
that does not comply with the provisions of chapter 4 of the Act may
constitute a fair
reason for dismissal. The Code of Good Practice:
Dismissal in Schedule 8 must be taken into account.
[39]
It is thus submitted that, in view of the constitutional
imperatives and similar considerations which apply to retrenchment
procedures,
an employer cannot simply follow a “checklist”
of issuing warnings and ultimatums and thereafter simply dismissing
the employees. Equity requires a proper consideration of all
facts and circumstances before a decision is taken to dismiss.
[40]
The respondent’s conduct on the bonus issue was patently
unlawful. It was common cause that the annual bonus provisions
of the main collective agreement applied in the respondent’s
workplace in 2007. It is trite that employers are obliged
to
comply with such provisions unless an exemption has been applied for
and granted. Thus, regardless of whether the exemption
was
ultimately granted or not, it was quite apparent that this would only
happen sometime in 2008, and the employees would not
receive their
bonus for that year’s Christmas. If not unlawful, the
respondent’s conduct was at the very least,
unfair because of
its effect on the employees.
[41]
The respondent’s Financial Director could not dispute the
importance of the annual bonus to the employees and that such
bonus
would have been of increased importance to employees at their lowest
end of the salary scale. On the respondent’s own
version it is
apparent that the company refused to compromise or to negotiate on
the issue of the bonus. In view of the fact
that the exemption
application could not be resolved until the following year, the
attitude of the company could only be viewed
as highly antagonistic
towards the employees. In that regard the following factors were
common cause, alternatively, were not placed
in dispute by the
Respondent:
Ø
At the meeting of 29 November 2007 the
Respondent informed worker representatives that it would not be
paying the bonus and would
be applying for an exemption in due
course. Suggestions that at least a partial payment be made and
/ or that the bonus be
differed until such time as the company’s
position might improve, were rejected out of hand.
Ø
The same attitude towards the workers was
exhibited by both Messrs Thompson and Lotter on the morning of 4
December 2007.
When asked for “clarity” about the
bonus situation Mr Thompson directed the shop stewards toward the
notice board and
the notice which confirmed that the respondent would
be applying for a complete exemption.
Ø
As was apparent from Mr. Lotter’s own
summary of the events, his repeated response, to suggestions by the
shop stewards that
he had to address the workers concerns, was to
refer them to the warnings, letters and ultimatum that had been
issued and to ask
why they should not be dismissed.
Ø Even when Mr.
Lotter finally agreed to discuss the issue with the workers he
remained utterly inflexible and advised the
workers that the
respondent would continue with the exemption application and that the
workers could make any representations they
wish to make to the
bargaining council in that regard.
[42]
In the circumstances, the repudiation of the respondent’s
obligation to pay the annual bonus and the absolute and
uncompromising
stance adopted by management on the issue constituted
unjustifiable conduct as contemplated by the Act. Even if this
were
not the case:
Ø the respondent’s
complete failure to meaningfully address the employees concerns:
Ø
the extremely short notice and lack of
proper consultation with the workers as against the bonus
issue;
Ø
the fact that the bonus was late the
previous year and should have been included in the 2007 budget; and
Ø
the fact that the respondent had spent
approximately R12 million on equipment during the year,
were
clearly factors which ought to be taken into account when determining
the appropriateness of the respondent’s actions
and whether
further steps should have been taken to allow the employees to calm
down and to persuade them to return to work.
[43]
There were legitimate frustrations felt by the employees which has to
be seen against the fact that:
Ø there was
clearly no urgency or compelling reason requiring the dismissal of
the employees as early as 11h15. The only
explanation given for
urgency, that there had been episodes of unlawful conduct by
unknown persons in the course of a strike
which occurred ten years
previously, was untenable. The evidence of the respondent in that
regard was an
ex post facto
attempt to rationalize the company
action.
Ø no acts of
violence, damage to property or intimidation were observed during the
course of the strike, despite vague assertions
by Mr. Thomas that one
of the employees had threatened to burn the workplace in the morning;
Ø At no stage was
there a need to call the South African Police Services or security
personnel to guard against any realistic
threat of unlawful conduct
of the strikers;
Ø Despite being
further angered by management’s conduct in the handing out of
the dismissal letters at 11h15, the employees
remained at the
premises until at about 16h30 again without any reports of violence
or unlawful conduct.
[44]
It was common cause that most of the employees had extremely long
service with the respondent as some had more than 20 years
of
service. That consideration should weigh heavily in their
favour. The respondent perceived the striking workers as disloyal
to
it by not accepting the non – payment of their bonuses. It was
that perception which fuelled the undue haste with which
the
employees’ services were terminated. The respondent acted
irrationally on 4 December 2007. Further evidence of it was
the
dismissal of the entire night shift staff along with the day shift
staff only to subsequently retreat from that position. Further
still,
the respondent dismissed employees in the Twisting Department but
none of its witnesses was able to explain why and how
those employees
had to be dismissed. Therefore the dismissal of all the employees was
premature and was carried out at a time when
the union was trying to
assist by persuading workers to return to work. There was a high
probability that employees would have
returned to work had the
respondent given them sufficient time to cool off or had the
respondent taken the simple step of obtaining
a court interdict from
court on that afternoon, the employees would have returned to work on
the following morning.
[45]
In the circumstances, the dismissal of all employees by the
respondent was substantively and procedurally unfair and they are
entitled to a re-instatement with back pay.
Evaluation.
[46]
The determination of whether participation in an
unprotected strike constitutes a fair reason for dismissal requires a
weighing
of all the facts with particular regard to the cause, nature
and extent of objectives of the strike; its timing and duration; the
conduct of the employees; and the consequences of the strike, see
NUMSA & Others v Atlantis Forge
(Pty) Limited [2005] 26 ILJ 1984 (LC)
at paragraph 108.
[47]
In
Coin Security Group (Pty) Ltd v Adams
& Others
[2000] 4 BLLR 371
(LAC)
the Labour Appeal Court said that the reasonableness of an ultimatum
must be assessed according to the interests of both employer
and
strikers, and that shorter notice was justified where strikers who
engaged in an unprotected strike had no intention to return
to work.
[48]
.
It is trite that participation in a strike that does not
comply with the provisions of chapter 4 may constitute a fair reason
for
dismissal in determining whether or not a dismissal is fair, see
the Code of Good Practice: Dismissal (the Code) in Schedule 8.
Item 6 of the Code provides that the fairness of any dismissal
pursuant to unprotected strike action must be determined in the
light
of the facts of each case, including, whether or not the strike was
in response to unjustified conduct by the employer.
[49]
In
Num & Others v Goldfell Security Limited (1999) 20 ILJ 155
(LC).
Court held that:
“
The Code of Good
Practice: Dismissals gives an indication of what is to be done in
such a situation. This procedure is rather
in the nature of the
process and is more akin to the procedure required in a retrenchment
situation than a disciplinary situation.
The aim and object of
a fair process in the case of both retrenchments and unproceedural
and impermissible strikes is to comply
with the constitutional
commitment to fair labour practices including the preservation,
within the limits of the law and equity,
of job security. To
that end a real and genuine effort must be made to avoid
dismissals”.
[50]
When considering the question of dismissal it is important that an
employer does not act overhasty. He must give fair
warning or
ultimatum that he intends to dismiss so that the employees involved
in the dispute are afforded a proper opportunity
of obtaining advice
and taking a rational decision as to what course to follow.
Both parties must have sufficient time to
cool off so that the effect
of anger on the decisions is eliminated or limited, see
Performing
Arts Council of the Transvaal v Paper Printing Wood & Allied
Workers Union & Others
[1993] ZASCA 201
;
1994 (2) SA 204
(A).
[51]
The cause of the strike in this matter was the announcement by the
respondent that it would not be paying its workers their
yearly
bonuses because of its financial difficulties. The company announced
that it would be applying for an exemption from the
compulsory
payment of bonuses and sought to have support from its staff.
Throughout the hearing of this matter, it was never in
dispute that
the respondent was facing a decline in its trade. Mr. Ndawonde
conceded to the financial challenges of the company.
Mr. Meintjie’s
evidence on the performance of the company basically stood
unchallenged. During 2007, the company had
received
orders for about four million metres of apparel fabric which
translated into an annual turnover for 2007 of R90 million.
That was
down from R98 million in 2006. The decline in trade took place long
before the publication of the Government Gazette of
ITAC dated 9
November 2007.
[52]
When this matter was heard two years had elapsed since the
publication of the gazette but the tariffs were neither reduced
nor
withdrawn. While there were serious and real concerns in the textile
industry of cheaper imports coming into the country as
a result of
the lifting or reduction of tariffs, the problems of the company
appear to have their origin elsewhere than in the
publication itself.
In the letter of the respondent dated 27 November 2007, as a response
to that of the union the company said
that the publication of the
gazette resulted in its customers holding back on orders to await the
out of the decision of Government
and that the company had received
no orders for November 2007. Yet it is known from Mr. Meintjies’
evidence that the company
was already experiencing financial
difficulties long before November 2007 and had to secure a loan of
R12 million.
[53]
It must follow that the respondent saw it much earlier than November
2007 that it would face difficulties in paying its staff
their
bonuses. Added to the financial difficulties of 2007, was the fact
that in the previous year it failed to pay bonuses of
its staff in
time and compromises had to be made with the union. It was therefore
very reckless of the respondent to sit back and
do nothing about the
payment of bonuses until almost the end of November 2007, when it
well knew that an exemption application
normally takes long for the
bargaining council to process and either approve or decline. A
reliance to the letter of the union
was rather opportunistic. The
same wisdom that informed the respondent to make a R12 million loan
should have informed the respondent
to timeously attend to the issue
of the bonuses. The failure of the respondent to attend to the bonus
issue in time was consequently
unfair to its employees. The
respondent was mainly responsible for the grievance of the employees
and was therefore partly responsible
for the cause of the strike.
[54]
The overwhelming evidence of both parties indicates that the strike
was not violent. The evidence led in favour of the applicants
was
that the main demand was for management to come to the employees and
to address them. It was admitted by the respondent that
in the past,
management had on occasions, address the staff on matters of their
concern. Mr. Ndawonde and the shop stewards took
the responsibility
of trying to resolve the impasse. They were not successful because
the respondent failed to own up to its responsibility.
As already
indicated, the gazette was not the real origin of the problems of the
respondent. A deferment by the respondent to its
notices on the
notice board was irresponsible in the circumstances of this case. Had
management attended the meeting of the strikers,
as invited, there
was a potential that the strike could be resolved.
[55]
The union had taken a responsible position in initiating the issue on
tariffs. It sent its representative to the company on
29 November
2007 and on 4 December 2007. There was no reason at all to doubt its
commitment in the resolution of the problems facing
the parties. The
strike did not last for a long time. In fact it lasted as long as the
respondent was refusing to meet the workers.
While the strike was
unlawful, its objectives were not. The workers were demanding of the
respondent to comply with the law, namely
the payment of a bonus in
terms of the
Basic Conditions of Employment Act 75 of 1997
. While the
respondent had a corresponding right to apply for an exemption to pay
the bonus, it had left the matter unattended for
a longer period than
was appropriate. Clearly, if the application was refused, the
respondent would not be able to pay the bonus
in time.
[56]
The strikers appear not to have timed the strike with the moment when
the respondent was at its vulnerable moment. The strike
started on
the very day workers had a meeting where they were to be told of the
outcome of the meeting of the shop stewards with
the company.
No damage to company property took place and even after their
dismissal, the employees gathered peacefully within
the company
premises, making it unnecessary that police be called in.
[57]
The respondent acted with unnecessary haste in dismissing the
employees. It acted with so much haste that it dismissed employees
that had not withdrawn their labour and were consequently not on
strike. This indicates that the respondent failed to apply its
mind
properly to the relevant issues as were confronting it. Instead it
acted emotionally. The same mistake was committed in relation
to the
employees of the twisting department. When weighing up all the facts
as against all relevant considerations, I form the
view that the
participation by the employers in the unprotected strike did not
constitute a fair reason for their dismissal. The
employees seek to
be re-instated. Whatever challenges come the way of the respondent,
it should be able to comply with the order
of re-instatement which
the applicants have shown an entitlement to. I have not been able to
find any condition listed in
section 194
of the Act that militate
against an order of re-instatement. I have reflected on an
appropriate costs order befitting the circumstances
of this case.
[58] Accordingly the
following order will issue:
1.
The
respondent is ordered to re-instate each of the applicants listed
from pages 40 to43 of the pleading bundle, which list is attached
to
the order hereof, with effect from the date of dismissal, (4 December
2007); with no loss of income and benefits.
2.
Each
such applicant is to report for duty on 4 April 2010 and at 07h00.
3.
The payment of the outstanding salary is to
be made within 14 days from the date hereof. Interest is thereafter
payable for any
outstanding salary.
4.
No
costs order is made.
_________
Cele
J.
DATE
OF HEARING
: 14 DECEMBER 2009
DATE
OF JUDGMENT
:
30 MARCH 2010
APPEARANCES
FOR
APPLICANT
: Adv P SCHUMAN
INSTRUCTED
BY
: BRETT PURDON
ATTORNEYS
FOR
RESPONDENT
: M G MAESO OF
SHEPSTONE
& WYLIE