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[2012] ZALCCT 54
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Ahlesa Blankets (Pty) Ltd v South African Clothing And Textiles Workers Union (SACTWU) and Others (CA5/2010) [2012] ZALCCT 54 (2 March 2012)
REPUBLIC OF SOUTH
AFRICA
IN THE LABOUR APPEAL
COURT OF SOUTH AFRICA
(HELD
AT CAPE TOWN)
CASE NO: CA 5/2010
In
the matter between:
AHLESA
BLANKETS (PTY) LTD
Appellant
versus
SOUTH
AFRICAN CLOTHING AND
TEXTILES
WORKERS UNION (SACTWU)
First
Respondent
L
M DLAZA & 53
OTHER Second
to further Respondents
Heard:
15 November 2011
Delivered:
02 March 2012
CORAM:
WAGLAY, DJP, MOLEMELA and ZONDI, ajJa
JUDGMENT
ZONDI, AJA
Introduction
[1]
This is an appeal against the judgment and order
of the Labour Court (Moshoana, AJ), delivered on 19 March 2010 in
which it found
that the dismissal of the second to further
respondents (“the employees”) was substantively unfair
and ordered the
appellant to reinstate the employees with effect from
1 December 2009, without loss of benefits. There was no order as to
costs.
[2]
The appellant challenged the findings and orders of the Court
a
quo
on various grounds.
Factual Background
[3]
It is common cause that the appellant is a vertically integrated
blanket manufacturing company. Its activities range from dyeing
of
fibres to the actual delivering of the final product.
[4]
The employees were dismissed by the appellant in June 2008 for
allegedly participating in an unprotected strike action. The
second
to further respondents are all members of the first respondent (“the
Union”). The appellant recognises the Union
as the sole
collective bargaining agent in the workplace.
[5]
The Union and the appellant are parties to, and bound by, the Main
Collective Agreement for the Textile Industry (“the
main
agreement”). Clause 19 of the agreement dealing with the
blankets sub-sector provides that an employer may introduce
short-time by giving the Union and the affected employees four hours
notice if such short-time is owing to slackness of trade.
The Main
Agreement does not impose an obligation on the appellant to consult
over the introduction of short-time.
[6]
The incorporation of this provision in the Main Agreement was
necessitated by the parties’ appreciation that the industry,
in
which the appellant operates, namely the blanket industry, is
volatile and subject to fluctuations in demand, and also seasonal
changes in demand.
[7]
In the implementation of the short-time arrangement, the appellant
adopted the view that its workforce in the dye house, spinning
and
weaving departments would be divided into two groups, so that one
half of the workforce would work for two weeks while the
other half
would take two weeks leave, after which those working would again be
replaced by those on leave for two weeks. Such
leave would be
regarded as part of the employees’ statutory leave (of 15
working days), and they would then not receive their
full quota of
leave over the festive season.
[8]
On Thursday 12, and Friday 13 June 2008, the appellant with the
involvement of the supervisory staff, communicated to the workforce
in the dye house, spinning and weaving departments which employees
would be required to work during the forthcoming two weeks,
and which
employees would be required to take paid leave.
[9]
The appellant did not conduct any operations on Monday, 16 June 2008
as it was a public holiday. During the course of 17 June
2008, some
employees in the dye house, spinning and weaving departments who were
scheduled to work refused to attend to their work
stations but
gathered in the appellant’s canteen. They were joined by some
of the employees who had been (on the appellant’s
version)
placed on leave.
[10]
Those employees who took up the position in the canteen were advised
by Mr Dan Buckle (“Buckle”), the appellant’s
human
resources manager, that their work stoppage was unprocedural and
illegal, and that they were required to return to work.
The employees
refused to return to work.
[11]
In the course of the day, the appellant issued three ultimatums to
the employees gathered in the canteen. In terms of the first
one, the
employees were informed that should they not return to work,
disciplinary action would be taken against them, which could
lead to
their dismissal. In the second and third ultimatums the employees
were told that if they failed to return to work by a
stated time ‘the
company will have no option but to summarily dismiss them’.
[12]
I may add that in the affected departments, the appellant conducts
its operations on a three shift system, namely the morning
shift
(07h00 to15h00), the afternoon shift (15h00 to 23h00) and the night
shift (23h00 to 07h00). When the employees scheduled
for the
afternoon shift (15h00 – 23h00) arrived at work, they also
failed to take up their posts and joined the other workers
in the
appellant’s canteen. At approximately 17h00 on 17 June 2008,
all the employees who had gathered in the canteen left
the
appellant’s premises.
[13]
The employees employed in the dye house, spinning and weaving
departments, and who were rostered for the night shift (23h00
to
07h00), did not arrive for work during that evening. On the next day,
18 June 2008, the appellant sent a letter to the Union
alleging that
the strike action was unprotected and recording certain events in
respect thereof. The Union was also advised that
all employees who
were scheduled for work in the dye house on 17 June 2008, and who
failed to take up their posts on that day,
were dismissed.
[14]
On 19 June 2008, the day following the dismissal, the appellant,
sought and obtained from the High Court an order interdicting
the
employees from engaging in acts of intimidation and other strike
related misconduct.
[15]
After their dismissal, all dismissed employees received a notice
inviting them to attend an appeal hearing where they could
appeal
against their dismissals.
[16]
In addition to, dismissing employees who were scheduled to work on 17
June 2008, the appellant also, on 25 June 2008, dismissed
some of the
employees employed in the raising and despatch departments, for
allegedly having absconded although they were not required
to work on
17 June2008.
[17]
Also, the appellant dismissed employees who had been required to go
on leave for the two-week period commencing on 16 June
2008 and who
allegedly failed to return from leave and commence their duties.
[18]
The appellant dismissed employees in the following categories:
18.1
Employees who participated in strike action whilst they were on duty
on 17 June 2008.
18.2
Employees in departments other than the dye house who commenced with
industrial action on 17 June 2008, and
who absconded from duty in
other departments even though they were not required to go on leave,
and did not convey to the appellant
any demand in connection with
their work stoppage.
18.3
Employees who were placed on leave for the two week period from 16
June 2008 in terms of the appellant’s
arrangements set out
above, but who failed to return from leave, and to provide any
explanation for their absence.
The Evidence
[19]
In relation to the facts which were in dispute between the parties,
the appellant presented the evidence of Buckle who emphasised
that
the blanket industry is a very flexible or seasonal business; that
the bulk of the appellant’s orders are placed normally
in
September of the year; that its peak season starts in October and
continues until May when there is a huge demand for blankets
in
preparation for winter season; and that, the period between May and
September is extremely quiet. He stated that it is for this
reason
that the appellant introduced a system in terms of which the
employees in some of its departments work short-time during
the
period when the business is slow. The short-time system is run on
split shifts basis. The employees in the affected departments
of the
appellant were divided into groups such that they would work for two
weeks and then be granted two weeks leave on a rotational
basis.
[20]
Buckle testified that when he realised that there was a need to
implement the short time system he held discussions with the
shop
stewards a week before its implementation. He informed them that in
terms of the envisaged short time system, the employees
in the
affected departments would work two weeks and get two weeks off on a
rotational basis. But the employees would be paid while
on two weeks’
lay off. This arrangement did not go down well with some of the
employees who felt that it would affect their
December leave days and
they did not want to find themselves in a situation where they would
lose their December leave pay. The
two week short-time arrangement
was first introduced by the appellant in 2006. He pointed out that
each time the appellant sought
to implement the two week short-time
arrangement it would inform the shop stewards and the parties would
then meet to determine
how it was to be implemented. He conceded
during cross-examination that not all of the employees more
especially those who came
from the Eastern Cape were happy about the
arrangement when it was introduced in 2006 because they wanted to
take their three weeks
leave in December so that they could spend
time with their families. Also, in the past alternative arrangements
were made to accommodate
those employees who were opposed to the
arrangement by giving some of them extra time off. The employees
wanted the appellant to
shut down for three weeks in December for
Christmas holidays. According to Buckle it is the appellant’s
policy only to shut
down between Christmas and New Year.
[21]
Buckle also discussed the proposed rescheduling arrangement with the
Union organiser, Mr de Bruyn and he subsequently confirmed
their
discussion by a letter dated 3 June 2008. With regard to the short
time, the letter says:
‘
The
Spinning and Weaving Department will be going onto a 3 shift, 5 day
week effective 06 June 2008.
The Dye house Department
will be going onto a 2 shift, 4 day week effective 06 June 2008...’
[22]
On 17 June 2008 when the appellant implemented the rescheduled
arrangement, the employees simply refused to carry out their
duties.
They gathered at the canteen on the appellant’s premises. When
Buckle arrived at work he held a meeting with the
shop stewards in
which he informed them that their action constituted an unprotected
strike. Buckle also informed de Bruyn of the
employees’
industrial action and requested him to intervene. He told the shop
stewards to tell the employees to return to
work otherwise he could
dismiss them. He prepared an ultimatum which he addressed to the
employees calling upon them to return
to work by 09h45 and advising
them that the appellant reserved ‘the right to take the
necessary disciplinary
action”
’ leading to their
dismissal if they failed to do so.
[23]
After the ultimatum was given to the employees, Mr de Bruyn arrived
on site. He was informed that the employees were engaged
in an
unprotected strike. De Bruyn undertook to discuss the matter with the
employees and to return to Buckle. Buckle understood
that de Bruyn
informed the employees that they were engaged in an illegal strike
and that they had to stop it, but the employees
simply ignored de
Bruyn.
[24]
On the same day, a second ultimatum was sent to the employees in
terms of which they were told that they would be summarily
dismissed
unless they returned to work by 13h45. The employees ignored this
ultimatum as well and continued with their industrial
action.
[25]
At about 15h00, Buckle sent a third ultimatum to the employees
telling them to return to work by 16h00. It was now the start
of the
second shift. The employees who should have been on the morning shift
did not do their shift. The afternoon shift employees
also did not
start their shift. They walked straight into the canteen and joined
the morning shift employees. The whole day, on
17 June 2008, the shop
stewards were moving between Buckle’s office and the canteen in
attempt to resolve the dispute.
[26]
At about 17h00, the employees marched out of the appellant’s
property. There were some, however, who returned to work
and started
their shift. Buckle remained on the premises to ascertain if the
night shift employees would report for work when the
shift began at
23h00. Whereas six employees were scheduled for the night shift on
that day only one employee reported for work.
Buckle did not issue
any ultimatum to the night shift employees as at that stage there
were no striking employees on the premises.
The shop stewards had
also left the premises. He could not have faxed the ultimatum to the
Union offices as he believed there would
be no one there to receive
it at that time of the night.
[27]
On the morning of 18 June 2008, Buckle sent a letter to de Bruyn
advising him of the dismissal of all employees identified
on the list
attached to the letter. In the letter, the appellant invited the
Union to lodge an appeal by no later than 20 June
2008 should it
intend to challenge the dismissal of the employees which it did on 18
June 2008 contending that the dismissal was
unfair both substantively
and procedurally.
[28]
Buckle included the night shift employees in the dismissal
notification although he had not served them with ultimatums. He
believed that they were aware of the industrial action and that they
had associated themselves with it by not coming to work.
[29]
During cross-examination, he testified that the decision to dismiss
the employees was taken late on 17 June 2008 and the following
day
the appellant wrote a letter to the Union confirming their dismissal.
He denied the suggestion that the strike was triggered
by the
appellant communicating confusing messages to the Union and the
employees on how short time arrangement was to be implemented.
He
stated that during the strike the appellant lost out on production.
[30]
During re-examination, Buckle explained, that he regarded the
dismissal to have taken effect in the case of the morning and
afternoon shifts, on expiry of their respective ultimatums. It is
instructive to refer to the discussion which took place between
the
Court
a quo
and Buckle regarding how the appellant had behaved
in the past in its application of the two week short-time policy. The
following
discussion took place at 122 line 12 to 124 line 8 of the
record:
‘
Court:
Mr Buckle there are a couple of issues that I want you to assist the
court, just for the court’s own understanding.
Can you explain
to me this two weeks issue what exactly was that, what was the
proposal? --- What would happen is that for the
workers not –
from our side, the company’s side first of all, that half the
staff would take two weeks leave, right.
Just take is slow. Yes?
--- And then upon their return the other half would take their two
weeks.
Yes. --- Fully
understanding the financial constraints that a lot of employees have
it is then paid for that period.
So the two weeks period
would be paid leave? --- Correct. However some of the employees
requested they only take one of the two
weeks, and some of the
employees requested the whole two weeks are unpaid.
So those that wanted one
week of the two weeks. --- They still go two weeks, one week would be
paid and one week would be unpaid.
Oh, I see. --- So the
period remains the same, that is the timing of the payment.
Yes, and other would take
two weeks unpaid? --- Unpaid.
With the request that
that money they would have received gets paid out in December to
them.
Yes. --- And each
employee then, we sent out a circular to all the employees, they then
select or elect which of the options they
would prefer.
Those three options? ---
Correct, correct.
Yes, so that was how the
company proposed the two weeks issue? --- That’s how we’ve
done it two years prior to that
we did it the same way, 2006 and 2007
we did it that way as well.
2006/2007. --- And we did
it the same way in 2009 as well.
Now you also testified
that the – when this was introduced in 2006 there some were
some employees who were complaining or
had complained about it. ---
They were not happy.
Oh, they were not happy?
---They were not happy.
Yes,
what was the source of unhappiness? --- A lot – or not a lot,
those employees, some of the employees stay far away, when
we bought
out Waverley in East London and transferred it to Atlantis the
company then decided not to – to retain some of
the staff,
original staff from Waverley and transfer them to Atlantis, so they
don’t lose their jobs in East London, so the
company had to
sort of compassion about the situation there, and it’s come of
those employees that still return to East London
once a year, they
are the ones that tended to not be happy about it
.’
[31]
Mr de Bruyn, who gave evidence for the Union, confirmed that it is
the practice in the industry for the company to implement
short time
on four hours’ notice. He, however, pointed out that in
practice the company would consult with the Union and
the shop
stewards to get its input on the issue before implementing it.
[32]
De Bruyn stated that when he met with Buckle to discuss a matter
unrelated to the short time arrangement, Buckle mentioned
to him
informally that the appellant intended to implement short-time
arrangement which he estimated to be a day or two. De Bruyn
asked
Buckle to put it down in writing so that he could convey it to the
employees. Buckle never did this. De Bruyn denied that
the two week
lay-off period featured in their discussion. He was surprised when on
Saturday, 14 June 2008 he received a telephone
call from the shop
steward enquiring whether he was aware that the appellant was going
to implement a two weeks lay-off arrangement.
The shop steward
informed him that the employees were not happy with the arrangement
and had resolved to hold a meeting on Sunday
to discuss the short
time arrangement which the appellant intended to implement. De Bruyn
is aware that the employees did hold
a meeting but to his knowledge
they had taken a decision to report for work as normal for him to
address them on the issue.
[33]
On Tuesday, 17 June 2008 at about 09h00, he received a telephone call
from Buckle advising him that the employees had gathered
in the
canteen and were on strike. Buckle asked him to come over immediately
which he did. On his arrival at the appellant’s
premises, he
held a meeting with the employees at the canteen to establish the
cause of their unhappiness. The employees reported
to him that they
were not happy about the two week short-time arrangement. He
thereafter met with Buckle. His impression was that
the employees
were willing to resume their duties if the appellant was prepared to
reduce the short time from two weeks to two
days. He conveyed the
employees’ proposal to Buckle but the latter was not prepared
to back down; the Union and the appellant
deadlocked on the issue.
The employees remained in the canteen until 17h00 during which period
the appellant sent them various
ultimatums. At about 16h00 Buckle
told him that the employees were dismissed. De Bruyn left the
appellant’s premises together
with the employees at 17h00.
[34]
On 18 June 2008, the appellant sent him a letter confirming the
dismissal of the employees who were engaged in an unprotected
strike
and extending to the employees an opportunity to appeal which he did
on their behalf. Their appeal was dismissed and the
employees
referred the matter to the Court
a quo
contending that their
dismissal was unfair both substantively and procedurally.
Proceedings in the
Court a quo
[35]
The Court
a quo
held that the employees’ dismissal was
substantively and procedurally unfair and ordered their
reinstatement. The bases for
its conclusion were that the strike was
of short duration and occurred in circumstances where the appellant’s
business was
slack which therefore did not justify the appellant’s
conduct to take a harsh decision to dismiss the employees and
secondly
the fact that there was no violence during the strike. The
Court
a quo
found that the penalty of dismissal was clearly
disproportionate to the employees’ misconduct and for that
reason it held
that the dismissal in so far as it related to the
morning and afternoon shift employees, was substantively unfair but
procedurally
fair, but in relation to the evening shift employees it
was both substantively and procedurally unfair. It ordered their
reinstatement
as there was no evidence presented to suggest that
continued employment relationship had been rendered intolerable.
[36]
The Court
a quo’s
findings are challenged on various
grounds by the appellant. The gist of its attack is that it was wrong
for the Court
a quo
to find that the employees’
dismissal was substantively and procedurally unfair in circumstances
where the employees’
conduct forming basis of their dismissal
amounted to clear challenge to the appellant’s authority which
in the instant matter
was the employees’ refusal to comply with
the ultimatums and to return to work (at least in so far as the
morning and afternoon
shifts are concerned).
[37]
The question whether the appellant was justified in dismissing the
employees for their participation in an alleged unprotected
strike
must be determined by reference to the legal framework in which the
appellant’s and the employees’ rights are
located.
The Law
[38]
Section 68 (5) of the Labour Relations Act (“the Act”)
[1]
is
a statutory provision affording a right to the employer to dismiss
employees who participate in a strike that fails to comply
with the
provisions of the Act. In determining the fairness of the dismissal
effected as a consequence of the employees’
participation in an
unprotected strike, the Act enjoins the judge who is called upon to
determine the fairness of the dismissal
to have regard to the Code of
Good Practice: Dismissal in Schedule 8 (“the code”).
[39]
Item 6 (1) and (2) of the code deals with the substantive fairness of
strike dismissals and provides as follows:
‘
6.
Dismissal and industrial action.
– (1) 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 dismissal 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; and
(c)
whether or not the strike was in response to unjustified conduct by
the employer.
(2) Prior to dismissal
the employer should, at the earliest opportunity, contact a trade
union official to discuss the course of
action it intends to adopt.
The employer should issue an ultimatum in clear and unambiguous terms
that should state what is required
of the employees and what sanction
will be imposed if they do not comply with the ultimatum. The
employees should be allowed sufficient
time to reflect on the
ultimatum and respond to it, either by complying with it or rejecting
it. If the employer cannot reasonably
be expected to extend these
steps to the employees in question, the employer may dispense with
them.’
[40]
It is also clear from the provisions of section 68 (5) that
participation in a strike that does not comply with the provisions
of
Chapter IV (strike & lock-outs) constitutes a misconduct. In
other words, a judge who is called upon to determine the fairness
of
the dismissal effected on the ground of employees’
participation in an illegal strike should consider not only item 6
of
the code but also item 7(b) which provides that any person who is
determining whether dismissal for misconduct is unfair should,
inter
alia
, consider whether dismissal was an appropriate sanction for
the contravention. See
Hendor Steel Supplies (A Division of Argent
Steel Group (Pty) Ltd formerly named Marschalk Beleggings (Pty) Ltd)
v National Union
of Mineworkers of SA and Others
(2009) 30 ILJ
2376 (LAC) at 2385C.
[41]
The determination of substantive fairness of the strike-related
dismissal must take place in two stages, first under item 6
when the
strike related enquiry takes place and secondly, under item 7 when
the nature of a rule which an employee is alleged to
have
contravened, is considered. It follows that a strike-related
dismissal which passes muster under item 6 may nevertheless fail
to
pass substantive fairness requirements under item 7.
Contentions of the
Parties
[42]
In argument before us, Mr Rautenbach, who appeared for the appellant,
submitted that the Court
a quo
in the determination of the
fairness of the dismissal only had regard to the factors in favour of
the employees and paid no attention
at all to those which were in the
appellant’s favour. He argued that the Court
a quo
failed to recognise that the employees’ refusal to comply with
the ultimatums and to return to work constituted a clear challenge
to
the employer’s authority which, he argued, amounts to gross
insubordination. He pointed out that there was a commercial
rationale
for the appellant to implement the two weeks leave policy. He
emphasised that the employees’ conduct undermined
the
appellant’s authority to take business decision. He argued that
the ultimatums were issued in clear and unambiguous terms
and gave
the employees sufficient time to reflect on their conduct.
[43]
He added that had the Court
a quo
also considered the facts
which were in favour of the appellant, it would have arrived at a
different conclusion with regard to
the fairness of the penalty. He
argued that the Court
a quo’
s failure to have regard to
the facts in favour of the appellant in its determination constituted
gross misdirection entitling this
Court to interfere with its
discretion.
[44]
Mr Whyte
,
who appeared for the employees, submitted that the
suggestion that the Court
a quo
improperly exercised its
discretion in determining the fairness of the dismissal was
incorrect. He argued that having regard to
the short duration of the
strike, absence of violence during the strike action, the slackness
of the appellant’s business
at the relevant time and the fact
that the employees had a clean disciplinary record, the penalty of
dismissal was unfair and the
Court
a quo
was correct in its
finding. He pointed out that there was no evidence to suggest that as
a consequence of the employees’
conduct relating to their
participation in the strike action the employment relationship
between the parties had become intolerable
and which would have
rendered dismissal appropriate.
[45]
I disagree with Mr Rautenbach’s contention that the Court
a
quo
failed to have regard to the facts in favour of the appellant
in its determination of the fairness of dismissal and that such
failure
constituted gross misdirection justifying this Court’s
interference. It is clear upon a proper analysis of the Court
a
quo’s
judgment that in determining the fairness of the
dismissal it considered all the facts which items 6 (1) and 7 (b)
(iv) of Schedule
8 enjoin the Court to take into account. The fact
that the Court
a quo
failed to mention in its judgment facts,
which Mr Rautenbach argues, were in the appellant’s favour,
does not mean that it
overlooked them.
[46]
In my view, it is not entirely correct to argue, that the employees
should have been dismissed in the instant matter because
their
conduct – failure to comply with the ultimatums and return to
work – constituted gross insubordination which
resulted in the
breakdown of employment relationship between the parties. It is
correct that the relationship between employer
and employee is in
essence one of trust and confidence and that, at common law, conduct
clearly inconsistent with it would entitle
an innocent party to
cancel the agreement (
Council
for Scientific & Industrial Research v Fijen
(1996) 17 ILJ 18 (A)). I think that it is important to contextualise
the misconduct relied upon by Mr Rautenbach. It occurred in
the
context of the strike
albeit
an illegal one. By its very nature a strike action whether procedural
or not whether lawful or not involves the partial or complete
concerted refusal to work unless the demands made by the striking
workers are addressed. In such circumstances to characterise
the
employees’ failure to comply with employer’s ultimatum to
return to work as gross insubordination is to completely
miss the
point. The case of
Johannes
v Polyoak Industries
[2]
on
which Mr
Rautenbach
relies is clearly distinguishable on the facts from the instant case.
In the
Polyoak
case, the insubordination which underlined the employee’s
dismissal was her refusal to comply with an instruction to fill
in a
quality checklist until her grievance was resolved by the employer.
The dismissed employee was not engaged in a strike action.
It was
simply a refusal to obey employer’s instruction.
[47]
In my view, the Court
a quo’s
findings that the
employees’ dismissal was unfair, by reason of the short
duration of the strike, absence of violence and
slackness of the
appellant’s trade, were correct and did not constitute gross
misdirection. In the circumstances, I would
dismiss the appeal.
[48]
As far as cost is concerned, Mr Whyte submitted that he would not ask
for cost in the present matter in light of the parties’
ongoing
relationship. In the circumstances, I would be disinclined to order
the losing party to pay the costs of the successful
party but would
instead order that each party pay its own costs.
The Order
[49]
In the result, the appeal is dismissed with no order as to costs.
______________
ZONDI AJA
I
agree
______________
WAGLAY
DJP
I
agree
______________
MOLEMELA
AJA
APPEARANCES:
FOR THE
APPELLANT
Adv.
N F Rautenbach
Instructed
by MZ Barday & Associates
FOR
THE RESPONDENTS
Mr J Whyte of Cheadle Thompson &
Haysom Inc.
[1]
66
of 1995.
[2]
[1998]
1 BLLR 18
(LAC).