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[2012] ZALCJHB 160
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Transport and Allied Workers Union of South Africa (TAWUSA) and Others v Unitrans Fuel and Chemical (Pty) Ltd (JS359/11) [2012] ZALCJHB 160; (2013) 34 ILJ 1785 (LC) (13 December 2012)
Reportable
REPUBLIC OF SOUTH AFRICA
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Case
no: JS 359/11
In the
matter between:
TRANSPORT
AND ALLIED WORKERS
UNION
OF SOUTH AFRICA (TAWUSA)
............................................
First
Applicant
W. NGEDLE AND 302 OTHERS
.............................
Second
and Further Applicants
and
UNITRANS
FUEL AND CHEMICAL
(PTY)
LTD
................................................................................................
Respondent
Heard:
13 August and 31 October 2012
Delivered: 13 December 2012
Summary: Claim based on automatically unfair dismissal –
whether strike demanding wage increase in contravention of
bargainingcouncil agreement unprotected
– held demands for
increase not negotiable at plant level – strike unprotected and
dismissals fair
JUDGMENT
BHOOLA J
Introduction
The second to further applicants (“the employees”), were
dismissed by the respondent following their participation
in a
strike conducted from 28 October to 2 November 2010. They are all
members of the first applicant (“the union”).
They claim
that their dismissals were automatically unfair in terms of section
187(1) (a), alternatively procedurally and substantively
unfair in
contravention of sections 185 and 188 of the Labour Relations Act 66
of 1995 (“the Act”).
Background facts
The respondent conducts business in the haulage of petroleum, gas
and oxygen in bulk on behalf of clients and has numerous branches
and depots throughout the country.Its five-year contract with the
Shell Petroleum Company (“the Shell contract”)
terminated in February 2009, and approximately 110drivers became
redundant. Most obtained employment on new contracts but 31
drivers
were absorbed into the respondent’s business on other haulage
contracts. Their salaries however were reduced and
24 of them signed
their new contracts accepting the lower rate of pay. However, seven
(the ‘Shell 7’) of these drivers
refused to sign their
new contracts but continued to work at the lower rate of pay and the
respondent implemented the reduction
in respect of them as
well.Allegations were made that the drivers who had signed had done
so under threat of dismissal, but the
union never declared a formal
dispute in this regard and it is common cause that no steps were
taken during 2009 and 2010 to
resolve the dispute.The respondent
formed the view that the Shell 7 had acquiesced in the reduction of
pay and it had never been
informed that the othercontracts had been
signed under duress. The employees were at that stage members of
South African Transport
and Allied Workers Union (‘SATAWU’),
and allege that they joined TAWUSA because nothing was done to
further the dispute.
On 15 March 2010,TAWUSA appeared on the scene and its official,
Vuyani Madolo set out various concerns in a letter to the Human
Resources Manager of the respondent (Titus Sekano), and proposed a
meeting to address these. The concerns were as follows:
‘
1
Allocation of long distance work especially outside the country.
2 Registration of employees
especially Dulux contract and the others.
3 Wage discrepancies.
4 Wage cut.
5 Coupling Five Hundred Rand
(R500-) per week.
6 Clarification of NBCRFI
benefits
i. Leave pay/shift
ii.13 cheque
iii.Sick fund
7 Provident Trustees, and
transparency relating in death cover.
8 Report back meetings at
working time.’
The parties met on 11 May and on 14 May 2010. Subsequent to these
meetings, the respondent sent a letter to the union recording
the
issues discussed. It stated the following in respect of the “wage
discrepancies/cut” issue:
‘
In
2009 the company lost the Shell contract, and the company had to
source alternative employment within for all those employees
who were
affected by the closure of the contract. Employees were consulted and
they were placed onto different contracts at the
contract going rate
at that time, to avoid retrenchment. If an employee wants to transfer
from a high rated contract to a lower
rate [he] will be paid
according to that contract not what he was paid, only when the
company transfers a person on its own then
he will move with his rate
but if there was a possible retrenchment he will have to assume that
contract rate. All the transferred
employees ex Shell to Airliquide
were offered the Airliquide rate and none of them still earns Shell
rate. If there is anyone who
is still earning that rate, it will be
deemed as a mistake (sic) it has to be corrected, because the signed
letter does indicate
the new rate’.
The letter also recorded, in respect of demand for a coupling
allowance, that the respondent ‘does not negotiate any
remuneration at company level; any increase to production
remuneration has to be made at the NBCRFI negotiations’.This
was a reference to the National Bargaining Council for the Road
Freight Industry (“the bargaining council”), where
wages
were negotiated centrally in terms of the Main Collective Agreement
for the Road Freight Industry (“the collective
agreement”).It
is common cause that at all material time the respondent paid its
employees in excess of the minimum wages
set at the bargaining
council.
The applicants then referred three disputesand on 29 July 2010
following a conciliation meeting conducted by the bargaining council
a certificate of outcome in respect of the dispute referred on 6
July 2010 was issued. The certificate characterised the dispute
as
relating to “unilateral terms and conditions of employment
changes”.
On 30 July 2010, the respondent wrote to the union stating that it
was concerned at the allegations that there had been unilateral
changes in terms and conditions and requested the following
information :
‘
a)
Details of the unilateral changesof terms and conditions of your
members as alleged by you; and
b) Details of the status of
terms and conditions prior to the unilateral changes according to
you.’
No reply was forthcoming and following a telephone conversation
between Sekano and Madolo, the respondent sent a further letter
on 2
August 2010 (which the applicants deny receiving) and thereafter
another on 5 August 2010 requesting a response.
The union’s response was in the form of notice of its
intention to strike issued on 6 August 2010.The notice did not list
the demands but simply attached an Annexure A stating the following
:
‘
1. The
under listed demands were presented to you on the 15th March 2010,
and have been threshed (sic) out in various meetings without
the
resolve (sic).
2.The demand referred to in our
letter were further motivated in an attempt to resolve them before
Senior Commissioner Adv R. Braid
on the 29
th
July 2010.
2.1 Wage discrepancies
2.2 Wage cut
2.3 Coupling – R500 p.w
2.4 Unilateral change of the
administration of the fund from the Bargaining Council to your
in-house fund.’
The respondent responded with an urgent application on 11 August
2010 to interdict the strike. The Labour Court (per Van Niekerk
J)
dismissed the application and the strike was suspended pending
discussions between the parties. Further meetings followed
on 21 and
25 August 2010 in order to establish the nature of the demands that
were being made.
On 9 September 2010,the union gave notice that the strike would
commence on 16 September 2010. The abovementioned Annexure was
again
attached to the strike notice with the demands expanded as follows:
‘
1.
Wage discrepancies – there must be no wage discrepancy between
employees who perform work but on a different contract.
2. Wage cut – former Shell
contract employees must earn what they used to earn under Shell
contract plus annual increases.
3. Coupling – R500 p.w.
4. Unilateral change of the
administration of the fund from the Bargaining Council to your
in-house fund – the process to
be reversed to accommodate
Tawusa fund not Council fund.’
An urgent application for leave to appeal to the Labour Appeal
Court(“LAC”) against the order of Van Niekerk J was
grantedand on 23 September 2010, the LAC set aside the Labour Court
order and substituted it with the following order:
‘
(i)
The application is dismissed with respect to the demands relating to
‘wage cuts’ and ‘wage discrepancies’.
The first respondent and its
members are prohibited from promoting, encouraging, supporting,
participating in or otherwise furthering
any strike in support of
its demands fashioned as ‘coupling R500 p.w’ and
‘unilateral change of the administration
of the fund from the
Bargaining Council to your in-house fund’.
1
On the same day, the unionissued a strike notice notifying the
respondent that its members would embark on the strike on 13 October
2010 in respect of the following two demands :
‘
2.1
Wage discrepancies – there must be no wage discrepancy between
employees who perform work but on different contract.
2.2 Wage cut – former
Shell employees must earn what they used to earn under Shell contract
plus increases.’
Unclear as what exactly was in issue, on 28 September 2010,the
respondent requested information in order to establish the exact
nature of the demands that were being made. In correspondence to the
union it referred to the current demands i.e. ”wage
cuts”
and “wage parity for drivers” and requested urgent
proposals regarding the wage parity demand as well
as suggesting a
meeting on 30 September 2010 to discuss such proposals.
In a further letter dated 8 October 2010 the respondent noted that
attempts had been made to meet with the union without success
and
referring to telephone conversations with the union. The respondent
suggested a further meeting on 21 October 2010 to discuss
the issue
and suggested that the strike should be suspended. The parties then
met on 21 October at which point the strike had
been suspended. The
minutes record that the two issued to be discussed relate to “wage
cut” and “wage parity”but
that the union said
there were other underlying issues than those ruled upon by the LAC.
The union reiterated that the issues
raised in its letter of 15
March 2010 were still in dispute and the parties proceeded to
discuss all the issues raised therein.
The union confirmed that its
demand in respect of wage discrepancies or wage parity related to
the following :
‘
All
employees who are doing the same work or duties should be paid the
same rate of pay irrespective of their category EG. if a
driver earns
R20.00 and the other is on R60.00, those who are on a lower rate
should be lifted to the higher rate so as (sic) they
can be equal.
The discrepancies are on all the
categories including the non-bargaining unit. The union is expecting
that the company should provide
rate information. The discrepancies
should apply to all employees, not only the number that was mentioned
in the court ruling’.
In regard to the wage cut item the minutes record that the demand
was as follows:
‘
4.
Wage cut.
All employees, whose wages has
(sic) been cut, irrespective of whether it was an alternative
employment, transfer, signed the employment
contracts or any other
reason needs to be corrected, including back pay, and that is from
February 2009 onwards.’
A further meeting was arranged for 25 October 2010 at which the
respondent again sought to clarify the union’s demands.
The
minutes record that the question of what the union demanded was
posed four times and the standing answer was that ‘all
employees who are on a lower rate in any category including the
administrators should be paid at the highest rate in the company’.
The union explained that it wanted ‘all employees to go from a
lower rate to a higher rate. For example all code 14 licensed
drivers should earn the same nationally. There are employees in Cape
Town who are earning R47.00 per hour and those in Gauteng
earning
R27.00, it is the union demand that all should be equal in terms of
rate. It is not only those employees on (sic) the
court ruling but
nationally’. The minutes reflect that management asked why
employees on a higher rate could not be reduced
to the lower rate,
and the union explained that ‘it will disadvantage those
employees because they rely on that money and
that as soon as that
money is taken away they will be worse off’. The union
reiterated that ‘lower paid employees’
rates of pay
should be raised to be equal with those who are paid on the highest
rate’. In relation to the wage cut, the
union made it clear
that its demand went beyond the unilateral alternation of the
remuneration of the Shell 7 and related to
all employees who had
been affected by the wage cut. Its demand was that their wages
should be adjusted and that back pay should
in addition be paid.
In a letter dated 26 October 2010, the respondent issued a notice in
terms of section 68(2) of the Act confirming that during
the
meetings held on 21 and 25 October it had been stated by the union
that :
‘
6.1.
the demand in respect of ‘wage discrepancies’ is a demand
for an across the board increase for all drivers, general
workers and
administrative staff, to the rate atwhich highest paid staff are
currently paid;
6.2 the demand in respect of
‘wage cuts’ is a demand in respect of all staff who,
since 2009, have been transferred
to contracts that pay less than
their previous contracts; and
6.3 that the demand is also in
respect of drivers who signed employment contracts on the new
contracts, on the alleged basis that
the drivers signed the contracts
under duress.’
The letter indicated that these demands are substantive demands for
wage increases which are required to be negotiated at the
bargaining
council and that the strike was therefore prohibitedin terms of
section 65 of the Act. The union responded that it
was opposing the
interdict and stated that these issues had been dealt with by the
Labour Court and LAC. It confirmed that its
demands remain those
articulated in thestrike notice of 23 September 2010.
On 27 October 2010, the respondent brought a second application for
an interdict which was granted by Basson J. The court understood
the
strike to be in respect of new demands and not those identified by
the LAC and further dismissed the application for leave
to appeal.
The union advised the respondent in a letter the same day that the
strike would commence at 14:30 on 28 October since
Basson J had
confirmed that they could proceed provided they did not introduce
new issues and remained within the ambit of the
LAC judgment. The
notice stated that the strike would be in respect of “the very
same demands, as were during Labour Appeal
Court Judgment”,
and confirmed the demands as described in annexure A to the initial
strike notice.
The respondent’s attorneys wrote to the union on 28 October
2010 following the order of Basson J, stating that the only
issue
the union could legitimately strike on was the issue of the Shell 7
wage cut and not in respect of all employees as it
sought to do. The
letter stated further :
‘
2.4
With regard to the demand on alleged wage discrepancies – the
effect of the Court order granted yesterday is to make it
clear that
you may not strike in support of an
increase
to
wages across the board to match the highest level of wages currently
paid to a particular grade of driver. You may only strike
in support
of a claim for parity – which may well mean that current pay
rates be adjusted (either upward or downward) to
the weighted
average’.
The letter further warned the union that to avoid contempt of court
proceedings it was incumbent upon it to properly inform members
of
the demands they could strike on since it had been informing members
that they were striking for an increase in wages to the
highest
levels, which was misleading and a strike in accordance with such
demands would be unlawful. The respondent reserved
its rights to
claim damages arising from any unlawful conduct and to dismiss any
union members who embarked on such an unprotected
strike. A further
meeting was suggested and took place later that day, at which the
union confirmed that ‘all employees
should be paid all at a
higher rate, and no employee’s wages has to be reduced or
cut’, and also that ‘they
are not calling for a wage
increase but for wage parity, and it will be best if the company
does that to avoid further damages’.
A further meeting was held on 29 October 2010 at which the union is
again recorded as proposing that ‘all employees must
be paid
the same’. Management was prepared to discuss the Shell 7
employees in order to find an amicable solution, but
the union
insisted that they be provided with payroll information and the
issue included the 24 other Shell employees. The minutes
reflect
that Zack Mankge, the union’s General Secretary arrived during
the meeting and was briefed on the discussions after
which
management indicated it was amenable to dealing with parity in the
long term. The union indicated that it did not want
to discuss the
Shell 7 and that they were not talking about a “wage
increase”but about a “wage adjustment”.
The strike commencedon 29 October 2010. The respondent advised the
union that the strike was unprotected except in relation to
the
demand relating to the Shell 7. In its reply of 30 October the union
stated that ‘our demands are nothing other than
adjustment to
the employees and for your ease of reference we attach copies of our
letters dated 27 October 2010’.
Thereafter a letter was sent to the union confirming the telephone
conversation between Sekano and Madolo relating to unlawful
conduct
committed by union members in
inter alia
intimidation,
blockading the entrance to the Alrode depot, preventing vehicles
from leaving and severely disrupting operations,
which included the
delivery of oxygen to hospitals.
The ultimatums
The respondent issued a first ultimatum at 08:00 on 29 October 2010.
It stated as follows:
The industrial action in which
you are currently participating is unprocedural and unprotected. The
current TAWUSA demands relating
to “wage discrepancies”
and “wage cut” render your current strike action
illegal.
Kindly note that the Labour
Court has ruled that any demand for additional money is unlawful. We
understand that your “wage
discrepancies” demand
requires that the wages of Drivers on lower rates of pay be
increased to the highest wage paid by
the Company for the respective
Driver categories. The Labour Court on 27
th
October 2010
confirmed that this demand is unlawful and to strike on this demand
will be illegal.
Your demand regarding ‘wage
cut’is that all Drivers from the former Shell contract that
ended in February 2009 be
paid according to their rates valid at
that time. This also involves that adjustments as a result of
increases be determined
according to the former rates and back pay
be paid. Kindly note that this demand is not lawful, as, in terms of
previous court
rulings, only 7 employees can be affected by this
demand. Your strike action relating to this demand is therefore
unlawful.
The employees were urged to return to work by 10:00 AM failing which
disciplinary action could be taken which might result in
their
dismissal.
The second ultimatum was issued at 15:30 requiring a return to work
by 17:00 that day. It reiterated that the strike was unlawful
and
informed employees that if they did not return to work the
respondent would institute disciplinary action for which a sanction
of dismissal might follow, and invited them to provide reasons why
their strike was lawful and why they should not be dismissed.
A third ultimatum was issued at 07:30 AM on 1 November 2010, a copy
of which was forwarded to the union. This was a reiteration
of the
first and second ultimatums and requested employees to resume normal
duties by 14:00. It also indicated that meeting between
the union
and the respondent was scheduled for 8:30 AM that day in a last
endeavour to resolve the matters in dispute. Later
that day a letter
was issued to the union informing it that its members had not
complied with three ultimatums and that a final
ultimatum had been
issued requiring them to resume their duties by no later than 06:00
AM the following day. The final ultimatum,
issued at 14:05,
reiterated the terms of the previous ultimatums and also recorded
that the respondent had acceded to the demand
relating to the Shell
7. It required employees to resume work by 6:00 AM on 2 November and
made it clear this ultimatum would
not be repeated and that
employees who did not comply would be dismissed.
There was no communication from the applicants and on 2 November
2010, notices of dismissal were issued and the union was notified
accordingly.
The law
It is trite that an employer may not dismiss an employee for
participating in a protected strike.. However, participation in
unprotected strike does not
per s
e justify dismissal. Section
68(5) of the Act provides as follows :
‘
Participation
in a strike that does not comply with the provisions of the Chapter,
or conduct in contemplation or in furtherance
of that strike, may
constitute a fair reason for dismissal. In determining whether or not
the dismissal is fair, the Code of Good
Practice: Dismissal in
Schedule 8 must be taken into account’
The Code of Good practice specifies a number of considerations that
must be taken into account in dismissing unlawful strikers.
Item
6(1) provides in this regard as follows:
‘
Participation
in a strike that does not comply with the provisions of Chapter IV is
misconduct. However, like any other act of misconduct,
it does not
always deserve dismissal. The substantive fairness of dismissals in
these circumstances must be determined in the light
of the facts of
the case, including –
(a) the seriousness of the
contravention of this Act;
(b) attempts made to comply with
this Act;
(c) whether or not the strike
was in response to unjustified conduct by the employer.’
The pleadings
The main issue for determination is whether the strike was
protected. If so, the dismissals would be rendered automatically
unfair. If the court finds they are not automatically unfair the
applicants plead that :
The respondent did not conduct pre-dismissal hearings or hold
discussions with the first applicant prior to dismissing the
employees, rendering the dismissals procedurally unfair; and
The dismissals were substantively unfair and in this regard the
court is required to determine :
whether the strike related to issues permitted for strike action
by the Labour Appeal Court;
whether the dismissals were in accordance with the Code of Good
Practice : Dismissal; and
whether dismissal was an appropriate sanction for the alleged
misconduct.
Analysis
Was the strike protected?
In deciding on the lawfulness of the strike, I should have regard to
the LAC’s decision in this same matter referred to
above. The
LAC
2
noted
the reliance by the appellant (the respondent
in casu
) on the
limitation of the right to strike encompassed in section 65(1) (a)
and 3(a)(i) of the Act. This section provides that:
‘
(1) No
person may take part in a strike or a lock-out or in any conduct in
contemplation or furtherance of a strike or lock-out
if - :
that person is bound by a
collective agreement that prohibits a strike or lock-out in respect
of the issue in dispute…
Subject to a collective
agreement, no person may take part in a strike or lock-out or in any
conduct in contemplation or furtherance
of a strike or lock-out –
(a) if that person is bound by –
(i) any arbitration award or
collective agreement that regulates the issue in dispute.’
The Court then referred to the three collective agreements relied
upon by the respondent i.e. the main agreement, the dispute
resolution agreement and the provident fund agreement. The main
agreement provides in clause 50 (1) and (3) that :
‘
(1)
The forum for the negotiation and conclusion of substantive
agreements on wages, benefits and other conditions of employment
between the employers and employers’ organisations on the one
hand and trade unions on the other hand, shall be the council…
(3) No trade union or employers’
organisation shall attempt to induce or compel, or be induced or
compelled by, any natural
or juristic person or organisation, by any
form of strike or lock-out to negotiate the issues referred to in
subclause (1) above
at any level other than the council.’
The Court, per Waglay DJP ( with Mlambo JP and Tlaletsi JA
concurring) held
3
that it is clear in terms of this clause that ‘
all and any
negotiations in relation to wages and substantive issues
must be
negotiated
4
at
the council and that neither party may resort to industrial action
(strike or a lock-out) concerning these issues’.The
Court then
had regard to the definition of “substantive issues” in
the main agreement as being “all issues
involving costs and
affecting the wage packets of employees”. The Court accepted,
in dealing with the appellants’
argument that the demands
related to “wage discrepancies”, “wage reduction”
and “coupling R500
pw” are all “substantive
issues” as they affect wages,andwhere the demand is ‘for
an increase in remuneration
or for remuneration to be paid in
relation to a particular aspect of employment such demand relates to
wages and are substantive
issues’. However, the Court
continued ‘If the demands as we have them here are about wages
and substantive issues
then, as the appellant has properly argued,
the first respondent is prohibited from calling on its members to
embark on a strike
in respect of those issues’.
5
However, in relation to the wage discrepancies and wage cut demands
the LAC held that these were not demands which relate to
an increase
in wages
.
The
ratio
is as follows :
‘…
Seen
in the context of what transpired at the appellant’s workplace
it is clear that the aforementioned demands relate to
the fact that
the appellant unilaterally decided to reduce the wages of those of
its employees who previously serviced the Shell
contract for the
appellant. When the appellant’s contract with Shell came to an
end it did not seek an agreement (at least
not with the seven
employees referred to earlier) with those employees who decided to
remain in the appellant’s employ but
reduced their wages. The
seven employees were simply paid a lesser salary. This reinforces the
first respondent’s averment
that the appellant unilaterally
reduced the wages of its employees. Appellant’s response is
that the Shell contract was of
a greater value than the present
contracts on which these ex-Shell drivers were now placed. This may
be so, but this does not mean
that the appellant is entitled
unilaterally to enforce a reduction in salary without concluding an
agreement with the employees.
The employees are entitled to demand
that the appellant shall not apply wage discrepancies and wage
reductions unilaterally and
such demand is not a demand that seeks to
increase their wages but to undo the appellant’s unilateral
implementation of a
change in wage rates and reduction in wages’.
6
The LAC took cognisance of the argument by the union’s counsel
that the ‘demand for wage parity is not a demand for
an amount
of money but requires the appellant to adjust wages so as to arrive
at a uniform level of remuneration for employees
performing the same
work albeit on different contracts’
7
.
On this basis it held that the demands of “wage discrepancy”
and “wage cut” do not fall within the purview
of clause
50 (1) and/or (3) of the collective agreement and do not therefore
constitute issues in respect of which the union
is prohibited from
calling upon its members to strike.
Turning to the coupling demand,the LAC found that since it was a
demand for payment of an extra R500 per week for performing
coupling
tasks, which they had always performed, it was an issue which fell
within the ambit of clause 50(1) and (3) as it is
‘an issue
that is connected and related to substantive issues because it
involves costs and affects the employees’
wage packets’.
This demand was therefore hit by the prohibition in section 65(1) of
the Act. The provident fund demand
was disposed of by finding that
it was factually incorrect that the respondent had acted
unilaterally,
8
and the court held that the strike would be protected if the demands
related to coupling and the provident fund were severed
from the
other two demands.
The LAC’s conclusion on the other two demands was as follows:
‘
In the
circumstances I am of the view that the first respondent’s
demands that the appellant implement a system of wage parity
for the
drivers irrespective of which contract they service and that there be
no reduction in salary without there being an agreement
to that
effect are demands which fall outside the ambit of clause 50(1) and
(3) of the main collective agreement and as such the
first respondent
is not prohibited in terms of s 65(1) (a) and (3) (a) (i) of the LRA
from calling upon its members to strike in
respect of those
demands’.
9
The LAC clearly understood both the wage discrepancy and wage cut
demand to relate to the restoration of the position of wages
of the
Shell 7 prior to the unilateral alteration. It did not consider this
to fall within the prohibition in clauses 50(1) and
(3) as these
were not demands for an actual increase but for an adjustment of
wages to achieve parity among drivers on different
client contracts
and a prevention of further unilateral reduction of wages as with
the Shell 7. The strike in relation to these
two demands therefore,
seen as demands relating to implementing a system of wage parity and
no further unilateral reductions
in salary, was therefore
permissible.
Given the clear conclusion and reasoning of the LAC I cannot agree
with applicants’ counsel that what the LAC did was to
afford a
purposive interpretation to the “wage cut” and “wage
discrepancy” demands in the context of
the collective
agreement, and that it is one which gives effect to the fundament
right to strike entrenched in the Constitution,
which was reinforced
recently by the Constitutional Court in
South African Transport
and Allied Workers’ Union (SATAWU) obo Dumisani Jama and 62
others v Lebogang Michael Moloto N.O
and Jerry Sekete Koka N.O
(CCT 128/11
[2012] ZACC 19)
(
SATAWU)
. The LAC judgment, he
submitted, similarly gave effect to the right to strike and amounted
to effectively disallowing ‘an
island of managerial
prerogative in a sea of collective bargaining’.
In this regard, Mr Wilke submitted that it is apparent that what the
LAC did was to determine the primary purpose of the strike
demand
and conclude that weighed in its proper context it constituted a
legitimate demand. There is no doubt therefore, counsel
submitted,
that the LAC understood the primary purpose of the wage cut demand
as being to undo the respondent’s unilateral
conduct in
respect of the Shell 7. It was not to procure an increase for the
Shell 7 although the LAC understood that the wage
cut of the Shell 7
had compounded wage discrepancies as it had introduced yet another
element of disparity. He submitted that
it was clear that the LAC
did not view the two demands as relating to the same dispute, but
clearly viewed them as discrete demands
relating to separate and
distinct disputes and hence concluded that they were severable. The
LAC therefore envisaged, in relation
to the wage discrepancy demand,
that although the purpose of the demand was not to procure a wage
increase for the union’s
members, it would of necessity have
required an agreement at plant level at the conclusion of a
successful strike that would
have ‘involved costs and affected
the wage packets of employees’. This submission envisages that
the LAC contemplated
that the collective agreement clauses would
then be rendered redundant. He argued that the court thus left the
meaning to the
term “adjust” to be determined by the
industrial power play between the parties. In this context, counsel
submitted
that the evidence of Nico Badenhorst that the respondent
was unable to achieve wage parity because of the constraints of the
collective agreement was contrary to the LAC judgment.
Mr Wilke submitted that
in casu
it was common cause that the
respondent paid most of its employees in excess of bargaining
council minimum wage rates, and did
so unilaterally. It was
furthermore Badenhorst’s evidence that the wage disparity was
a direct result of this conduct as
the respondent determined wages
on each of its contracts and that these were not negotiated at the
bargaining council and were
in excess of the bargaining council
minimums. It therefore t took the view that the main agreement (and
Chapter IV of Act) should
be interpreted so as to exclude actual
wages from collective bargaining and from the right to strike. He
submitted that the respondent’s
contention therefore that the
strike was unprotected because it concerned issues that were not
negotiated at plant level in terms
of the main agreement flies in
the face of the Constitutional Court’s re-endorsement of the
protection of the right to
strike.
As submitted by Mr Redding however, the Constitutional Court
decision in
SATAWU
(
supra
) is distinguishable on the
facts from this matter in that it relates to the issue of whether
the provisions of section 64(1)(b)
of the Act obliges every employee
who intends to embark on a strike to notify his or her employer of
that intention personally
or through a representative for that
strike action to be protected, in circumstances where the individual
is not a member of
the union which had given notice on behalf of its
members. The Court held (per Maya AJ) that a single notice by the
union was
competent, and that ‘to hold otherwise would place a
greater restriction on the right to strike of non-unionised
employees
and minority union employees.’
10
I agree with Mr Redding that the significance of this decision is
somewhat limited in the present context, where the parties
have
voluntarily agreed on a limitation on the right to strike. This is
an acceptable and self-imposed limitation made freely
in collective
bargaining, which asserts the primacy of bargaining on substantive
issues that affect wages at sectoral level.
It is trite that such an
arrangement is a legitimate constraint on the right to strike and
has been accepted as such by the Labour
Court.
This was the clear import of Badenhorst’s evidence moreover.
He testified that the concept of single-tier centralised sectoral
bargaining, which was the rationale for clause 50, was decided upon
by unions and employers in 1996. Badenhorst was involved
in
establishing the NBCRFI and has represented the Road Freight
Employers Association for over 12 years. The decision was to
prevent
two-tier bargaining and specifically to prohibit bargaining at plant
level on wages and terms and conditions of employment,
i.e.
substantive issues. This policy decision was approved by the then
Minister of Labour, Mr Tito Mboweni and incorporated into
the
bargaining council constitution and main agreement. Badenhorst also
pointed out that unlike other industries (example Steel
and
Engineering, Furniture Manufacturing), the NBCRFI was able to
negotiate on minimum wages and actual wage increases, as well
as on
wage parity.
Even though counsel may disagree on the principles of whether an
agreement to bargaining collectively on wages constitutes a
justified limitation on the right to strike, this is not the issue
before this Court. It is necessary to determine the nature
of the
demands that eventually featured when the strike commenced as this
is central to determining its status.It is common cause
that
although there were initially four demands the eventual strike was
in support of two issues - the “wage cut”and
“wage
discrepancies”.In the meetings of 21 and 25 August2010
(subsequent to the LAC judgment) the union reiterated
in respect of
the “wage cut” issue that those employees who had their
wages changed since February 2009 should have
their wages restored
irrespective of whether this had been occasioned by a unilateral
change to their terms and conditions of
employment. In regard to the
“wage discrepancy” issue the demand was that there
should be no discrepancies in the
wages of employees on different
contracts and that this should be achieved by bringing those
employees on a lower rate of pay
up to the highest rate. The
respondent, correctly in my view, formed the view that these demands
differed substantially from
the demands as understood by the LAC and
therefore sought the second interdict which was granted by Basson J.
The respondent again sought clarity in its letter of 28 October 2010
which informed the first applicant that the strike was only
legal in
relation to the Shell 7 wage cut demand as well as “weighted
average wages” in terms of the LACjudgment.
The respondent
made it clear in the 28 October meeting that the only basis on which
an adjustment could take place that did not
increase actual costs
was that certain employees would have to take a wage cut. It is
clear that the union was opposed to any
wages being reduced and its
demand was that all employees should be moved up to the higher
rate.This was made clear in the 29
October meeting when Mankge is
recorded as having made the following statements :
‘
It is illegal that the Company reduce
employee’s rates without any reasons’;
‘
In essence there should not be any
reduction on rates’.
‘
In wage discrepancies, e.g. 20-40
[everyone should be paid equally]’.
It was made clear to the union that this formulation of the demands
rendered the strike illegal. Badenhorst testified that at
this
meeting the union was adamant that there would be no reduction in
wages but that wages should be equal for all employees
on the same
contracts. The respondent’s representatives indicated that it
would be impossible to achieve wage parity which
did not have an
additional cost to the respondent unless some employees agreed to a
cut in wages.
Badenhorst testified that at the meetings with the union the
respondent struggled to establish what the demands were and how
they
could be accommodated in the context of the prohibition on plant
level bargaining. Insofar as the union made it clear its’
method for eliminating disparities was that the lower paid employees
should be paid the same as higher paid employees, the respondent
suggested that this could be agreed as a phased in process but this
was rejected as being too prolonged. The union’s proposals
involved an increase either way which involved and on-cost and was
therefore prohibited at plant level. Badenhorst said that
they
specifically tried to discuss a way to achieve parity without
involving an on-cost to the respondent, for example through
establishing a mean wage and increasing the bottom end earners to
that mean and reducing the higher rates as well.. However,
the union
made it clear at the meeting of 29 October that they would not
accept a reduction in any employee’s wage as this
would be
illegal and would cause economic hardship to those already on a
higher rate.
It was put to Badenhorst in cross-examination that at a meeting
between the parties on 1 November 2010 the demand was for all
the
drivers to be put on a wage of R38.00 per hour. His evidence was
that this proposal “rings a bell” but that he
had
pointed out to the union that it was still a proposal for an
increase and meant an on-cost for the respondent and had an
effect
on wage packages and should therefore be made at the bargaining
council. The only witness for the union, the second applicant
Wellington Ngedle, agreed that the demand was for a minimum of
R38.00 and conceded in cross–examination that this would
have
involved an on-cost for the respondent but testified that since it
had created the inequality in the first place it had
to bear the
costs of remedying it.
Badenhorst agreed that there were historical discrepancies in the
industry. He testified that the parties had been engaged in
a
process of negotiating the elimination of wage disparities in the
industry. His evidence was that the elimination of wage disparities
was not capable of being determined at company level.The main
agreement prevents any negotiation on “costs and wage packets”
at company level, and for this reason the issue of parity at company
level was incapable of being a lawful and valid demand.
The union
understood this very well as Madolo had been party to the parity
discussions on behalf of SATAWU as well as the establishment
of the
bargaining council in 1995 and 1996. His evidence to this effect was
not disputed by the union and although Madolo was
present throughout
the proceedings he did not testify.
The respondent’sattitude, reiterated in the ultimatums issued,
that the union’s formulation of its demand for wage
discrepancies and wage cuts constituted a demand for a wage increase
which could only be made by the bargaining council through
centralised collective bargaining, was therefore correct.
Mr Wilke submitted however that the evidence of Ngedle was clearly
that at all times the union had demanded an “adjustment”
not an increase in order to eradicate the discrepancies in
remuneration paid to the Shell 7 and that this complied with the LAC
order. He testified that the union did not dispute the minutes of
the meetings but that the union’s demands during the
meetings
was always to “sort out” the wage cut and discrepancies
in relation to the Shell 7. Furthermore, Ngedle
testified that the
respondent made no suggestions for resolving the issues that gave
rise to the strike. The union had suggested
a compromise at the 1
November meeting in terms of which some wages would have been raised
and others reduced in order to achieve
parity at a rate of R38.00,
but that the respondent rejected this as it would cost more money.
This however does not appear to
be a correct reflection of the
minutes recording the union’s demands, and it was made clear
that the union would not countenance
any wage reductions to achieve
parity.
I agree therefore with Mr Redding’s submission that
notwithstanding the LAC judgment and the second Labour Court
interdict,
the union’s demand was for an effective wage
increase and that this was a substantive issue reserved for sectoral
bargaining
through the bargaining council. This is apparent from all
the evidence including the minutes of the meetings in October, the
evidence of the 1 November meeting and the fact that the union at no
stage denied the statements in the ultimatums that it was
striking
in support of a demand for a wage increase.The applicants’
witness however disingenuously sought to suggest that
the demand was
for wage parity by way of adjustment to a fixed ratewhich would
encompass both reductions and increases in wages.It
is clear from
the documentary evidence and the respondent’s evidence that
this was not the case. The union was clearly
not articulating a
demand that wage parity as a principle should be adopted or that it
should involve bringing all employees
up or down to a single rate,
it was making a real demand that wage parity should be achieved by
increasing the wages of the lowest
paid employees to the highest
paid rates. This was a clear demand for a wageincrease.It was
clearly expressed in the demand in
the 1 November meeting that the
wages of drivers should be increased to R38.00 per hour. Therefore,
notwithstanding the attempt
to portray the demand as being
ostensibly for an adjustment, when the issue was pursued with the
union it became clear that it
was a demand for an actual wage
increase for all employees. This is also apparent from the fact
thatdespite the respondent’s
capitulation to the demand in
respect of the unilateral reduction of the Shell 7 salaries, the
union persisted with its demand.
This is on its own an indication
that the demands as understood by the LAC became extended to include
actual parity through wage
increases.
For these reasons the strikewas unprotected and the dismissals were
not automatically unfair in terms of section 187(1) (a).
Were the dismissals procedurally and substantively unfair?
Mr Wilkes submitted that in the event the strike is found to have
been unprotected, then the applicants submit that the dismissals
were unfair in terms of section 188 for the following reasons :
The LAC made it clear that the strike was in response to
unjustified conduct by the respondent which resulted in wage
disparity
and unilateral wage reductions in respect of the Shell 7;
The applicants had no obligation to make representations in
response to the respondent’s invitation to do so, and the
employees had in fact not read the ultimatums as was confirmed by
the evidence of Ngedle;
The respondent was required to conduct disciplinary enquiries but
failed to do so;
Dismissal was not an appropriate sanction for the alleged
misconduct in that Badenhorst testified that the primary purpose
of
the dismissal was toend the strike. The strike did not damage the
relationship of trust as a number of employees were re-employed.
Also the applicants believed that the strike was protected in view
of the LAC decision.
Mr Redding submitted that it is clear from the submissions dealt
with above that the strike was a serious contravention of the
Act
and had serious consequences for the respondent. The applicants
could have been under no misapprehension, after the LAC decision,
that they could not make a demand in relation to wage parity or
discrepancies which had cost implications for the respondent.
Nevertheless the union was intransigent in its demand and I accept
the evidence of the respondent that impasse was reached with
no
realistic prospect of resolution. The strike lasted almost six days,
the respondent issued four ultimatums and the evidence
of Badenhorst
that the respondent sustained a loss of over R3 million as well as
reputational damage was not disputed. The respondent
was left with
no reasonable alternative other than to dismiss. Its invitation to
the union and employees to make representations
as to reasons why
they should not be dismissed was ignored.
In regard to the attempts made to comply with the Act there is no
issue about the union’s compliance with the procedural
formalities for a protected strike. Mr Redding submitted that it
failed to recognise the terms of the main agreement and accordingly
made itself guilty of infringing section 65 of the Act. He submitted
further that the respondent complied with all the requirements
in
the Code – it contacted the union; issued ultimatums in clear
and unambiguous terms and allowed more than sufficient
time for
employees to reflect and respond. The final ultimatum made it clear
that dismissal could follow as a consequence of
continued strike
action. It provided an opportunity to the union and the employees to
make representations as to why dismissals
would not be appropriate.
Mr Redding correctly submitted that the respondent was required to
do no more than this to comply with
audi alteram partem
following
the
ratio decidendi
of
Mzeku and Others v Volkswagen (Pty)
Ltd and Others
11
and
Modise and Others v Steve’s Spar, Blackheath.
12
There was on the evidence, as Mr Redding submitted no unjustified
conduct by the respondent which led to the strike. I agree
with his
submission that on the contrary, the respondent showed remarkable
forbearance not only in repeatedly meeting with the
union to
determine the demand but furthermore in issuing four ultimatums,
holding extensive meetings with the union and waiting
for a period
of six days before resorting to dismissals.
As Mr Redding submitted, the difficulty was that there was a
standoff when the respondent sought to enforce the main agreement
to
prevent the collective bargaining process from being undermined and
the applicants were equally adamant that they were entitled
to
strike. After six days when impasse was reached it was clear that
there was no prospect of resolution and given that the respondent’s
interpretation was manifestly correct it had no reasonable
alternative other than to dismiss. It had suffered extensive losses
at this stage. The dismissals were therefore justified in that the
employees participated in an unlawful and unprotected strike
for a
period of six days without any reasonable prospect of the dispute
being resolved through negotiation with the first applicant.
Order
In the premises, I make the following order :
The applicants’ claim is dismissed with costs.
_______________________
Bhoola J
Judge of the Labour Court of South Africa
APPEARANCES
FOR THE APPLICANTS: F J Wilke
Instructed by Rueben Masinga Attorneys
Johannesburg.
FOR THE RESPONDENT: A. Redding SC
Instructed by Glyn Marais Attorneys
Johannesburg.
1
Unitrans
Fuel & Chemical (Pty) Ltd v Transport & Allied Workers’
Union of SA and Another
(2010) 31
ILJ
2854 (LAC) at para
28.
2
Unitrans
Fuel & Chemical (Pty) Ltd v Transport & Allied Workers’
Union of SA and Another
(2010) 31
ILJ
2854 (LAC) at para
17.
3
Unitrans
Fuel & Chemical (Pty) Ltd v Transport & Allied Workers’
Union of SA and Another
at para 17.
4
My
emphasis.
5
Unitrans
Fuel & Chemical (Pty) Ltd v Transport & Allied Workers’
Union of SA and Another
at para 18.
6
Unitrans
Fuel & Chemical (Pty) Ltd v Transport & Allied Workers’
Union of SA and Another
at para 19.
7
Unitrans
Fuel & Chemical (Pty) Ltd v Transport & Allied Workers’
Union of SA and Another
at para 20.
8
Unitrans
Fuel & Chemical (Pty) Ltd v Transport & Allied Workers’
Union of SA and Another
at para 24.
9
Unitrans
Fuel & Chemical (Pty) Ltd v Transport & Allied Workers’
Union of SA and Another
at para 25.
10
SATAWU
at para 92.
11
2001
(4) SA 1009
(LAC).
12
2001
(2) SA 406
(LAC).