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[2011] ZALCD 39
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Apollo Tyres South Africa (Pty) Ltd (Durban) v National Union of Metal Workers of South Africa (NUMSA) and Others (D289/09; 294/09) [2011] ZALCD 39 (7 October 2011)
CELE
J
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT DURBAN
Not
Reportable
Case
Nos: D289/09 & 294/09
In
the matter between:
APOLLO
TYRES SOUTH AFRICA (PTY) LTD (Durban)
......................
Applicant
and
NATIONAL
UNION OF METALWORKERS OF
SOUTH
AFRICA (“NUMSA”)
.......................................................
1
st
Respondent
INDIVIDUAL
RESPONDENTS as set out
in
annexure “A” attached to
Statement
of Claim
........................................................
2
nd
to 11
th
Respondents
FURTHER
INDIVIDUAL RESPONDENTS as set out
in
annexure “B” attached to Statement of Claim
...
12
th
and Further Respondents
Date
of Hearing: 3 March 2011
Date
of Judgment: 7 October 2011
JUDGMENT
Cele J
Introduction
[1] The respondents seek
condonation for the late filing of their statements of response to
the applicant’s statements of
claim. The respondents’
statements of defence were filed eight months late. The appellation
of the parties shall be retained
as they are in the pleadings. The
first respondent will be referred to as the union while the second to
further respondents will
be referred as the employees. Two claims
were filed against the respondents emanating from the Ladysmith and
the Durban plants
of the applicant. The claims have been amalgamated
into one action, hence the two case numbers cited above. This
judgment deals
with condonation applications for both matters. The
applicant opposed the condonation applications.
Factual background
[2] This condonation
application has a genesis from the claim for compensation filed by
the applicant against all respondents, in
terms of section 68 (1) (b)
of the Act.
1
The response in each
claim was filed some eight months late.
[3] The claims of the
applicant are premised on strikes embarked upon by the Ladysmith
based employees on 7 March 2009 till 24 March
2009 and by the Durban
based employees on 16 to 17 March 2009. The claim for the Ladysmith
branch is in the amount of R12 663 000,00
and that of the
Durban branch is R1 256 000.00.
[4] Parties have since
filed a pre-trial minute upon the direction of this Court, in terms
of which certain facts have been identified
as common cause between
them. For purposes of this application, Court will assume the
correctness of those facts.
[5] In its operation, the
applicant suffered a down turn in the volume required by the tyre
market at large. This was due to sales
in the new car sector being
severely down on previous years and also as a result of the general
replacement market not replacing
worn tyres at the usual intervals.
This impacted negatively on the required volume produced by the
applicant’s manufacturing
plants.
[6] The applicant was at
the time operating 24 hours, 7 days per week at its Ladysmith plant.
That excluded the shutdown or public
holidays and the year-end plant
closure. The shift pattern was a 4 days on 2 days off rotation
pattern, operating 7 days per week.
The Ladysmith employees were paid
double time on Sunday when they were scheduled to work.
[7] As from 9 September
2008, the applicant instituted a lay-off on Sundays, meaning it did
not operate on Sundays at its Ladysmith
plant. The employees were not
happy with the change of shifts and in November 2008, they embarked
in an unprotected strike. The
applicant launched an urgent
application to interdict the strike under case number D837/08 which
was postponed
sine die
due to discussions held by the parties.
[8] On 23 February 2009,
the union served and filed a section 189A referral to the applicant
and the Commission for Conciliation,
Mediation and Arbitration, the
CCMA, requesting the CCMA to appoint a facilitator. The referral had
not been preceded by any notice
issued by the applicant in term of
section 189 (3) of the Act, seeking to proceed with retrenchments as
a result of the lay-off
and short time. Nor was the referral made in
terms of section 189A (3) of the Act. The respondents relied on the
interpretation
they place in clause 9 of the collective agreement
between them and the applicant.
[9] On 27 January 2009,
the Ladysmith employees embarked on a strike which led to the
applicant setting the urgent application in
case D837/08 down for
hearing as a matter of urgency. The application was dismissed by
Court on 28 January 2009 due to insufficient
notice of the
application given to the respondents. On the morning shift of 3
February 2009 ,employees returned to work, following
a collective
agreement reached by the parties. The union and the employees
undertook never to participate in an unprotected strike
and the
respondents agreed to a dispute resolution procedure to be followed
should an industrial action be contemplated.
[10] Three facilitation
meetings were set down and held by the parties beginning on 4
February 2009 before Mr S M Govender. The
employees’ grievances
and demands to be retrenched were among issues discussed. The
applicant had unsuccessfully objected
to the jurisdiction of the
CCMA, contending that the facilitation was not held pursuant to a
section 189 (3) notice. Then on 4
February 2009, the applicant issued
a notice in terms of section 180 (3) of the Act in which it gave
notice of a possible retrenchment,
only in the event it was unable to
implement a proposed shift pattern change.
[11] To ensure
efficiencies and quality, a normal regularized shift pattern needed
to be introduced to eliminate the situation where
an employee might
work, for an example, on Monday, Tuesday, Wednesday, Saturday and be
off duty on Thursday, Friday and Sunday.
[12] On 17 February 2009,
a certificate of outcome was issued to the parties, indicating that
the dispute between them remained
unresolved and could be referred to
this Court. On the same day the applicant issued a letter to the
union, stating that the certificate
of outcome did not give the
respondents a right to strike and therefore that any industrial
action based on that certificate would
be unprotected and would be
interdicted by the applicant. The letter stated also that the
applicant had not terminated any employment
contract of its
employees.
[13] The applicant then
issued a letter to the union dated 20 February 2009 in which it
confirmed an agreement reached by the parties
at a meeting of 17
February 2009, in terms of which the CCMA would be requested to
provide Ms Hilda Grobler as a facilitator pursuant
to the applicant’s
notice dated 4 February 2009, in terms of section 189 (3) of the Act.
The applicant stated that in light
of the facilitation, the demands
of the employees as contained in their letter of 20 February 2009
headed “48 hours”
would be appropriately dealt with at
such facilitation. As to retrenchment, the position of the applicant
was that changing the
shift pattern would significantly mitigate
retrenchment. The respondents disputed that contention.
[14] In a letter dated 4
March 2009, the applicant re-stated its view on the jurisdiction of
the CCMA and it stated that it would
apply to review and set aside
the certificate of outcome. On 5 March 2009, the union addressed
correspondence to the applicant
headed: “48 Hour Notice:
Protected strike Action: Indefinite Lay–Off”. The letter
concluded in the following
terms:
“…
workers
want to make use of the certificate which was issued by CCMA
Commissioner S M Govender on 17 February 2009 to embark on
protected
primary strike action for Ladysmith and secondary strike action for
Durban operations in terms of Section 66 of the LRA.
This
then serves to inform you that our members will embark on a protected
strike action in support of their demand to bring to
an end to unfair
lay-off imposed by the company”.
[15]
The applicant’s legal representatives
issued a letter dated 5 March 2009, calling upon the union to retract
its 48 hour strike
notice and on the following day, the applicant
filed an application to review and set aside the certificate of
outcome dated 17
February 2009.
[16] In the afternoon of
7 March 2009, the Ladysmith plant employees commenced with their
strike. On 9 March 2009, the applicant’s
attorneys issued a
letter to the union informing it that they had been instructed by the
applicant to apply to this Court for an
interdict against the
unprotected strike. A rule
nisi
was
indeed granted by this Court under case number D162/09 on 10 March
2009, returnable on 18 June 2009. Still on 10 March 2009,
the
applicant served what it thought was a rule
nisi,
to the union and the Ladysmith employees but, despite
oral and written demands over the period of 10 to 12 March 2009, the
employees
did not return to work. Instead, on 12 March 2009,
attorneys of the union sent a letter to the applicant’s
attorney in which
they pointed out that the order served on the
respondents was marked “Draft Order.” They asked for a
copy of the order,
while asking how employees were to tender their
services since in terms of the Draft Order prayed the employees
were:
”
interdicted and restrained from
approaching or being within 500 metres of the access road in the
immediate vicinity of the gate
to the applicant’s premises”.
A response was only received on 16 March 2009 from the attorneys of
the applicant. The
employees only returned to work on 24 March 2009,
in terms of a special agreement reached by the parties on 21 March
2009.
[17] The employees in the
Durban plant did not work normally on 27 February 2009 but on 2 March
2009 work normality was restored.
On 12 March 2009, the applicant
addressed correspondence to the union stating,
inter
alia
that:
Any planned industrial
action at the Durban plant amounted to unprotected industrial action
as the requirements of Section 64
of the Act had not been complied
with;
Since the so-called
“primary” strike in Ladysmith had been declared
unprotected by this Honourable Court, that there
could be no
question of such industrial action being protected at the Durban
plant;
If a new issue,
grievance or demand was being raised, then industrial action would
be unprotected until section 64 of the Act
had been complied with.
[18] On 16 March 2009,
and soon after 10h00, the employees at the Durban plant downed tools
and embarked on a strike. Parties exchanged
correspondence and the
applicant indicated its intention to urgently interdict the strike,
the notice of which was served on the
union’s attorneys on 18
March 2009. The employees resumed normal work on 18 March 2009.
[19] On 15 June 2009, the
applicant served the statement of case in this matter to the union,
but file same with the registrar on
17 June 2009, thus perfecting
service. The respondents had 10 days within which to file a statement
of response, if any and it
should have been filed on or before 1 July
2009. The statement of defence was only filed on 17 March 2010. The
delay is thus a
period of eight months and one week.
The condonation
application
[20] The principles
governing the consideration of a condonation application are trite.
In
Melane
v Santam Insurance Company Limited,
2
court held that:
“
In
deciding whether sufficient cause has been shown, the basic principle
is that the Court has a discretion, to be exercised judicially
upon a
consideration of all the facts, and in essence it is a matter of
fairness to both sides. Among the facts usually relevant
are the
degree of lateness, the explanation therefor, the prospects of
success, and the importance of the case. Ordinarily these
facts are
interrelated: they are not individually decisive, for that would be a
piecemeal approach incompatible with a true discretion,
save of
course that if there are no prospects of success there would be no
point in granting Condonation. Any attempt to formulate
a rule of
thumb would only serve to harden the arteries of what should be a
flexible discretion. What is needed is an objective
conspectus of all
the facts. Thus a slight delay and a good explanation may help to
compensate for prospects of success which are
not strong. Or the
importance of the issue and strong prospects of success may tend to
compensate for a long delay and the Respondents
interest in finality
must not be overlooked. I would add that discursiveness should not be
discouraged in canvassing the prospects
of success in the Affidavit.
I think that all the foregoing clearly emerges from decision of this
Court, and therefore I need not
add to the ever-growing burden of
annotations by citing the cases.
[21]
The relevant considerations for this application
are accordingly, the degree of lateness, the explanation thereof, the
prospects
of success, the importance of the case, the opposing
party’s interest to finality, and any prejudice and the degree
thereof
to the opposing party.
3
The explanation for
the delay
[22] The explanation for
the delay proffered by the Acting Head of the Legal Department of the
union, Mr Mtileni was not seriously
placed in dispute in any material
effect and therefore stands to be accepted as correct, in which case
it has then to be considered
whether the explanation is reasonable
and acceptable. The statement of case was served on the predecessor
to Mr Mtileni, Mr Moshego
based in the Johannesburg offices. The
union was not satisfied with his work performance and it suspended
him in November 2009.
In December 2009, Mr Mtileni was appointed to
act in his place. It was on 19 February 2009 that he stumbled on the
notice of set
down for the matter D289/09, which was set down in the
unopposed roll of this court. He instructed attorneys of the union to
oppose
the matter. Later he was informed by the attorneys that there
were in fact two such matters, including D294/09. On 26 February
2009, the matter in D289/09 was removed from the unopposed roll and
on 3 March 2009 the matter in D294/09 was also removed from
the roll,
with certain directives.
[23] After the March 2009
strike the employees, the Regional Organiser of the union and the
applicant became engaged in a number
of facilitation processes,
including a section 189A facilitation process until December 2009.
The purpose was to conclude agreements
on shift patters, flexible
working arrangements and other work arrangement issues that had
caused the strike. The issue of the
compensatory damages claim
against the respondents was places on the agenda of those meetings
and was discussed on numerous times
by the parties, so as to avoid
unnecessary litigation. The submission is that the respondents were
not in willful default.
[24] The applicant denied
that an agreement was made by the parties in respect of the
compensatory damages claimed and it said that
there was no reason for
Mr Mashego and Ngubane to advise the attorneys to await the outcome
of such discussions. The submission
is further that the reasons for
the delay are outweighed by the period of the delay as they are not
justifiable.
Prospects of success
Respondents’
explanation:
[25] It is mainly in this
aspect that the condonation application is opposed by the applicant.
The common cause facts leading up
to the strikes form the main reason
why the respondents considered the acts of the applicant to
constitute an unlawful lockout.
In particular the respondents contend
that:
The collective lay-offs
resulted in severe financial loss for many Ladysmith employees and
pay imbalances;
The collective lay-offs
were implemented without the consent of the employees, in the
absence of proper consultation and without
reasonable notice;
The system was
implemented to force the employees to agree to the new shift system
proposed by the applicant;
The Main Agreement of
the Tyre Manufacturing Bargaining Council contained a which read:
“
In
the event of an employer extending any lay-off beyond a period of
thirty (30) consecutive days, Numsa shall be entitled to require
the
employer to initiate the provisions of Section 189A of the Labour
Relations Act.”
[26]
Although the applicant contended that the
certificate of outcome and the strike notice were defective, the
employees of both plants
embarked on an industrial action because
they believed their strike was protected in that:
they had referred their
dispute to the CCMA and the CCMA had, in effect, conciliated the
dispute when it facilitated discussions
between the parties
regarding their demand and grievances. Their pre-strike procedures
were therefore in compliance with section
64 of the Act;
the commissioner who
facilitated the discussions on the dispute gave them the impression
that the process and certificate were
valid when he dismissed the
applicant’s objections;
the strike notice, which
was issued on 5 March 2009, effectively gave the commencement date
of the strike. The strike at the Ladysmith
plant commenced soon
after 48 hours had lapsed, namely in the afternoon on 7 March 2009;
although the notice used
the term “secondary strike” in respect of the Durban
employees, they did not embark on a
secondary strike. All employees
had the same employer, namely the applicant. Employees were merely
posted at different plants;
[27] Even if the
industrial action is declared unprotected by this Court, there was
substantial compliance by the respondents with
section 64 of the Act.
Further the applicant did not plead that the strikes were prohibited
by section 65 of the Act and that the
nature of the dispute referred
to the CCMA was not a strikeable or interest dispute. The strike was
functional to collective bargaining.
As a result of the strike, the
applicant and the Ladysmith employees concluded a collective
agreement which resolved all disputes
which formed the basis of the
industrial action.
[28] Although the
applicant obtained an interdict against the Ladysmith strike, the
application was not opposed, basically because
of the extremely short
time period involved in such an urgent application. By the return
date, the dispute had been settled to
the satisfaction of the
parties. The union opposed only the costs order and was successful.
[29] The financial
situation of the respondents was also a relevant issue for
consideration. Over years, the union had suffered
great loss due to
various reasons including the fact that its membership had decreased
due to massive industry wide retrenchments.
Its members, the
employees, were merely working class employees. Yet, after the strike
the applicant increased production targets
in Ladysmith, to the
mutual benefit of both parties.
Applicant’s
reply:
[30] The applicant’s
submissions on the prospects of success, as contained in the
answering affidavits amounted to a bare
denial of the assertions made
by the respondents. The applicant contended that the respondents made
no attempt to comply with the
provisions of section 64 of the Act and
failed to refer the dispute to the CCMA or the Bargaining Council for
the New Tyre Manufacturing
Industry.
[31] The contention was
that the union failed to give 48 hour notice in the proper form of
the proposed strike but fraudulently
purported to act in terms of a
defective certificate of outcome after advised by the applicant’s
attorneys that the certificate
did not
authorise
such action. The union also made no attempts to comply with the
agreement reached between the applicant and the respondents on
3
February 2009. The industrial action by the employees was unlawful
and unprotected.
[32] The submission was
that the union intentionally encouraged the unprotected strike which
the employees took part in for 17 days.
As a result, all respondents
were liable to the applicant for damages suffered by it.
[33] The applicant said
it was entitled to compensation in the sum claimed due to losses it
incurred as a result of the under recovery
of fixed overhead costs,
cost of waste product and IGP on lost sales of tyres. The union had
resources to finance and compensate
the applicant and the employees
were in a position to satisfy the compensation award collectively, if
made against them.
Prejudice
[34] The submission by
the respondents was that no prejudice would be suffered by the
applicant if condonation was granted. Any
prejudice that the
applicant might suffer was ameliorated by the Court order in term of
which the respondents agreed to pay the
applicant’s wasted
costs occasioned by the matter being postponed to give the
respondents an opportunity to file their statements
of response. The
respondents contended that they stood to suffer extreme prejudice in
a claim involving more than R12m, should
condonation be refused. The
simple submission by the applicant was that the granting of
condonation would be prejudicial to it,
without indicating the basis
for the submission.
[35] While there are
other considerations which might feature in a condonation
application, they did not play any particular role
in this matter.
Evaluation
[36] The period of delay
in this matter is fairly long when seen against the 10 days’
period within which the statement of
defence
ought to have been filed. As already pointed in the
Melane
decision (supra), a slight delay and a good explanation may help to
compensate for prospects of success which are not strong. Or
the
importance of the issue and strong prospects of success may tend to
compensate for a long delay and the opposing party’s
interest
in finality must not be overlooked. While the explanation for the
delay has its own shortcomings, it comes across as justifiable,
in
the circumstances of this matter. It then falls to be weighed against
the other considerations.
[37] The prospects of
success of the
defence
raised by the
respondents need to be seen against section 68 of the Act, on the
basis of which the claim for damages of the applicant
is founded. To
the extent relevant in this matter, section 68 (1) of the Act reads:
“
(1)
in the case of any strike or lock-out, or any conduct in
contemplation or in furtherance of a strike or lock-out, that does
not comply with the provisions of this chapter, the Labour Court has
exclusive jurisdiction –
…
to
order the payment of just and equitable compensation for any loss
attributable to the strike or lock-out, or conduct, having
regard to
–
whether
–
(aa)
attempts were made to comply with the provisions of this Chapter and
the extent of those attempts;
(bb)
the strike or lock-out or conduct was premeditated;
(cc)
the strike or lock-out or conduct was in response to unjustified
conduct by another party to the dispute; and
(dd)
there was compliance with an order granted in terms of paragraph (a);
the
interests of orderly collective bargaining;
the
duration of the strike or lock-out or conduct; and
the
financial position of the employer, trade union or employees
respectively.”
[38]
It is clear that, in terms of section 68, where
an award of damages is to be made by Court, it must be a just and
equitable compensation
of any loss and therefore, not necessarily,
the actual loss proved to have been incurred by the claimant. The
discretion of this
Court is accordingly wider than in ordinary civil
claims of damages.
[39]
The factors which are to be taken into account in considering the
award of damages as outlined in section 68 (1) (b) (i) of
the Act are
also of importance in this application. The respondents have pleaded
various facts pertaining to these considerations.
Even if one were to
assume that the strike was unprotected and that the respondents did
not have a
bona fide
belief
in the protected status of their strike, it would not follow that
they might not defend the claim. An award of damages against
the
respondents which is materially less than the amount claimed by the
applicant could, arguably be seen to be some success on
the part of
the respondents.
[40] The applicant’s
counsel referred Court to various decisions regarding the prospects
of success. What tends to distinguish
this matter from most of these
decisions is that evidence is yet to be led in this matter, if the
application is successful and
therefore some of the discrepancies
identified in those cases can very easily be cured by evidence of the
witnesses called during
the trial.
[41]
In my view, the respondents have shown that there are some prospects
of success in their
defence
.
When these are seen against a not so excellent explanation of the
delay, I am satisfied that the prospects of success outweigh
the
explanation given. Further, justice does appear to justify the
granting of condonation. While the strike created a situation
that
could very easily explode to beyond control, as one often sees these
days, these parties were able to resolve the impasse
and to restore
peace in their work place. To that extent no reference was made in
these proceedings to any other unprotected strike
that has
subsequently taken place.
[42] Accordingly the
following order will issue:
Condonation for the late
filing of the statement of defence is granted.
No costs order is made.
_______
Cele J.
Appearances:
For the Applicants: Mr A
Rocher
Instructed by Farrell &
Associates
For the Respondent: Ms B
Whitcher
Instructed by Brett
Purdon Attorneys.
1
The
Labour Relation Act Number 66 of 1995.
2
1962
(4) SA531 (A).
3
Wolgroeiers
Afslaers (Edms) Bpk v Municipaliteit van Kaapstad
1978 (1) SA 13
(A).
15