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[2012] ZALCD 20
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Apollo Tyres South Africa (Pty) Ltd v National Union of Metal Workers of South Africa (NUMSA) and Others (D68/12) [2012] ZALCD 20 (15 February 2012)
Reportable
Of interest to other
judges
REPUBLIC
OF SOUTH AFRICA
THE LABOUR COURT OF
SOUTH AFRICA, CAPE TOWN
JUDGMENT
Case no.D68/12
In the matter between:
APOLLO TYRES SOUTH
AFRICA (PTY) LTD
.
........................................................
Applicant
and
NATIONAL UNION OF
METALWORKERS OF
SOUTH AFRICA (“NUMSA”)
.......................................................................First
Respondent
EMPLOYEES EMPLOYED AT
APOLLO TYRES
SA (PTY) LTD (DURBAN
FACTORY)
................................
Second
and Further Respondents
Heard
:
9
February 2012
Delivered
:
15
February 2012
Summary: Application
for interdict and declarator: collective agreement: What constitutes
a term and condition of employment and
a work practice.
judgment
GUSH J.
The
applicant seeks a declarator that its proposed changes to its shift
patterns at its Durban factory do not constitute a unilateral
change
to the second and further respondent’s terms and conditions of
employment. In the event that it is decided that
the change does not
constitute a unilateral change to their terms and conditions of
employment that the second and further respondents
be interdicted
from embarking on a strike until they have complied with the
provisions of section 64 of the Labour Relations
Act (the Act).
1
The application was postponed on 1 February 2012
to today to enable the respondents to file replying affidavits.
The applicant in this
matter is a manufacturer of tyres for motor vehicles and has
factories in Durban and Ladysmith, where it
manufactures bus and
truck radial tyres and earth moving vehicle specialist tyres. The
applicant employs six hundred employees
at its Durban Factory.
The Durban factory
production is designed in accordance with 24 hour 7 day week
production schedule.
In
April 2004, the applicant and the first respondent entered into an
agreement,
2
expressly deemed to be a “collective
agreement”
3
regarding the implementation of a 12-hour 3-shift
system in respect of those employees employed in the Durban
factories “truck
and radial [tyre] department”. It is
common cause that at a later stage the parties orally agreed to
extend the shift system
to the rest of the applicant’s
factory.
Despite
the fact that the parties recorded that the stated intention or
purpose of the collective agreement was ‘... for
[Apollo] to
cease operating illegally and in contravention of the Basic
Conditions of Employment Act and to implement a shift
pattern which
complies with the requirements of the Basic Conditions of Employment
Act
’
,
4
it appears that the newly shift pattern did not
achieve this purpose and the applicant was obliged to apply for
ministerial determinations
in accordance with the Basic Conditions
of Employment Act (BCEA), which were granted, the last of which
expired on 30 June 2011.
Shortly after the expiry
of the last determination, the applicant commenced a consultation
process with the first respondent with
a view to amending the shift
patterns set out in the agreement of 2004. The applicant in its
papers was at pains to describe
the proposed changes as ‘an
amendment to shift rotations’ whilst the respondents were
equally adamant that the changes
amounted to a substantive change to
shift patterns. The relevance of their respective averments related
to the issue as to whether
the changes constituted a unilateral
change to the second and further respondents terms and conditions of
employment as opposed
to a change in the applicant’s work
practices thereby falling within the applicant’s managerial
prerogative.
I am not persuaded that
there is any merit in the distinction the parties wish to draw from
the terminology or that these terms
are relevant to the
determination of this dispute. The crux of the issue to be decided
is simply this: Do the applicant’s
proposed changes to a shift
system (to use a neutral term) constitute a unilateral change to
terms and conditions of employment
or does it fall within the realms
of a work practice and accordingly fall with management’s
prerogative to effect the change.
Accordingly this matter will not
be determined by the details of the proposed changes but whether in
the specific circumstances
of this matter the shift pattern recorded
in the collective agreement constitutes a term and condition of
employment.
In similar vein, the
respondents made much of the applicant’s decision not to
continue applying for ministerial determinations
but to endeavour to
reach consensus on the proposed changes. The mere fact that the
applicant elected not to continue applying,
whether the application
would have been successful or not, does not in any way assist in
deciding whether the shift patterns
are a term and condition of
employment.
In its founding
affidavit the applicant referred to and annexed correspondence and
documentation relating to the consultation
process which preceded
tha descision to implement the changes to the shift pattern. These
documents record the reasons the applicant
advanced for wishing to
change the shift patterns. These reasons are the following:
9.1 Compliance with the
BCEA;
9.2 Achieve the objects
of the BCEA and Occupational Health and Safety Act;
9.3 Uncertainty regarding
the continued granting of determinations;
9.4 Excessive overtime
with regard to training;
9.5 Adverse effect on
business and future productivity;
9.6 Negative impact on
Durban factory profitability; and
9.7 Low productivity/less
efficient processes
Surprisingly the
applicant did not attach to its papers a copy of the 2004 collective
agreement. The agreement was attached to
the respondents’
papers.
The parties were unable
to reach consensus on the proposed changes during the consultation
process and the applicant gave notice
that it intended implementing
the changes with effect from 1 February 2012.
In reply, the
respondents advised the applicant that they regarded the proposed
changes as constituting a unilateral change to
terms and conditions
of employment and that they would tender their services in
compliance with the existing shift pattern if
the change was
implemented.
In
addition the respondents referred a dispute regarding the proposed
changes to the relevant bargaining council as a dispute
concerning a
unilateral change to terms and conditions of employment and had
requested that the applicant comply with section
64(4) of the LRA.
At the time that the application was heard no certificate in terms
of section 64(1)(a) had been issued and
a period of 30 days from the
date of the referral had not elapsed. Counsel for the respondents
noted however that the respondents
had amended their referral to
include a mutual interest dispute in the alternative.
5
The respondents relied
on the collective agreement and the extension thereof as the basis
upon which the shift patterns had been
agreed contractually to
constitute part of the second and further respondents’ terms
and conditions of employment.
It is
necessary however at the outset to consider whether a change to
shift patterns constitutes a unilateral change to terms
and
conditions of employment and what constitutes the exercise of the
applicants managerial prerogative. The issue of what falls
within
the managerial prerogative to change and what constitutes a change
to terms and conditions of employment has been dealt
with
extensively in our courts.
6
In
two recent
decisions of this Court,
7
the Court has accepted that a change to shift
systems does not in itself a unilateral change to an employee’s
terms and
conditions of employment but merely a change to the
employer’s work practice. In both matters, the court held that
in the
absence of a contractual right to work the previously agreed
shift pattern the regulation of shift times constituted a work
practice
and fell within management’s prerogative to change.
The respondents argued
that the collective agreement had established this contractual right
to work the agreed shift patterns
change and accordingly they formed
part of the second and further respondents’ terms and
conditions of employment.
Whilst conceding that
the agreement specifically refers only to employees in the
applicant’s “truck and radial [tyre]
department”
the respondents argued that when the shift patterns were by
agreement extended to the rest of the factory the
terms of the
agreement became terms and conditions of the employees to whom the
contact was extended. It was common cause that
the extension of the
agreement was not recorded in writing.
Collective agreements
are defined in the LRA as
‘
'collective
agreement' means a written agreement concerning terms and conditions
of employment or any other matter of mutual interest
concluded by one
or more registered trade unions, on the one hand and, on the other
hand-
one
or more employers;...
’
8
Section 23 of the LRA
regulates the Legal effect of a collective agreement:
‘
(1)
A collective agreement binds-
(a)
the parties to the collective agreement;
(b)
each party to the collective agreement and the members of every other
party to the collective agreement, in so far as the provisions
are
applicable between them;
(c)
the members of a registered trade union and the employers who are
members of a registered employers' organisation that are party
to the
collective agreement if the collective agreement regulates-
(i)
terms and conditions of employment; or
(ii)
the conduct of the employers in relation to their employees or the
conduct of the employees in relation to their employers;
(d)
employees who are not members of the registered trade union or trade
unions party to the agreement if-
(i)
the employees are identified in the agreement;
(ii)
the agreement expressly binds the employees; and
(iii)
that trade union or those trade unions have as their members the
majority of employees employed by the employer in the workplace.
(2)
A collective agreement binds for the whole period of the collective
agreement every person bound in terms of subsection (1)
(c) who was a
member at the time it became binding, or who becomes a member after
it became binding, whether or not that person
continues to be a
member of the registered trade union or registered employers'
organisation for the duration of the collective
agreement.
(3)
Where applicable, a collective agreement varies any contract of
employment between an employee and employer who are both bound
by the
collective agreement.’
Considering
these provisions of the LRA, the first question to be answered is
whether the collective agreement which was orally
extended to the
remaining employees satisfies the requirement that a collective
agreement must be in writing. The second issue
is whether the
agreement ‘regulates terms and conditions of employment’
9
and therefore satisfies section 23 (3) and
whether the applicant is entitled to change the shift patterns in
accordance with the
agreement..
Regarding the first
question, I am of the view that the extended agreement is not a
collective agreement in respect of those of
the second and further
respondents other than those employed in the applicant’s
“truck and radial [tyre] department”.
The agreement in
so far as they are concerned is not a collective agreement in that
it is not a written agreement and accordingly
does not alter their
terms and conditions of employment. The determination of their shift
patterns remains within the applicant’s
prerogative as a work
practice. However even if I am wrong in this, the collective
agreement, for the reasons set out below contractually
entitles the
applicant, after consulatation, to ‘discontinue or modify’
the shift pattern to ‘achieve its operational
requirements’,
and these employees are in the same position as are the employees in
the applicant’s “truck
and radial [tyre] department”..
Secondly, as regard the
effect of the collective agreement on the terms and conditions of
the employees in the applicant’s
“truck and radial
[tyre] department”, it is clear from the wording thereof that
it was always the intention of the
parties that it should regulate
their terms and conditions of their employment.
It is however necessary
to consider the extent to which the agreement, which regulates the
terms and conditions of employment
of the employees employed in the
applicant’s “truck and radial [tyre] department”,
allows the applicant to
change the shift patterns after
consultation, specifically given the provisions of clause 12 of the
agreement.
This clause reads as
follows:
‘
Operational
Requirements
In
the event that demand for product declines, or that the 12-hour
3-shift system proves not to be cost effective, after consultation
between the parties, Dunlop [applicant] will discontinue or modify
the 3-shift system to achieve its operational requirements’
10
The
term operational requirements is a term of art defined in the LRA as
follows: 'operational requirements' means requirements
based on the
economic, technological, structural or similar needs of an
employer
;”
11
Having regard to the
reasons advanced by the applicant for wanting to change the shift
patterns it is clear that they fall squarely
within the definition.
Of operational requirements. This being so the applicant was
required merely to consult prior to deciding
to ‘discontinue
or modify’ the shift system. This it has done.
It is clear that unless
specifically entrenched contractually, the right to regulate shift
patterns is the prerogative of the
employer. In light of the
specific wording of clause 12 of the collective agreement, I am of
the view that it does no more than
entrench in the respondents’
terms and condition of employment the applicant’s right to
regulate shift patterns.
The agreement specifically records the
applicant’s contractual right to, after consultation, to
‘discontinue or modify’
the shift system in order to
‘achieve its operational requirements’. It is trite that
consultation does not as a
prerequisite require that the parties
will agree. It simply requires that the applicant in this matter
engage the respondents
in consultation before it changes the shift
pattern.
I am
therefore of the view that whilst the shift patterns which are the
subject of the collective agreement are terms and conditions
of
employment in respect of the employees in the applicant’s
“truck and radial [tyre] department” so too does
the
collective agreement regulate the applicant’s right to
discontinue or modify these shift patterns to achieve its
operational requirements.
12
.
The import of this clause of the agreement is no more than a
recordal of the applicant’s right to change shift patterns,
which are terms and conditions of employment, after consultation.
In the circumstances, I
am satisfied that in respect of those respondents other than those
employed in the applicant’s “truck
and radial [tyre]
department” the new shift patterns do not constitute a change
to their terms and conditions of employment
and that the applicant
was entitled to change the shift patterns. Regarding those
respondents employed in the “truck and
radial [tyre]
department” the applicant, by virtue of clause 12 of the
collective agreement, was entitled to change the
shift patterns
despite the fact that they constituted terms and conditions of
employment..
Accordingly, the second
and further respondents may not rely on the provisions of section
64(4) of the LRA and are required to
tender their services in
accordance with new shift patterns.
This does not however
preclude the respondents pursuing the dispute regarding the
imposition of the new shift patterns as a dispute
of interest in
accordance with the provisions of section 64(1) of the LRA.
As regards costs it is
just and equitable that no order be made regarding costs.
I make the following
order:
The new shift patterns
set out in the annexure A to the applicant’s application do
not constitute a change to the terms
and conditions of those of the
second and further respondents who are not employed in the
applicant’s truck and radial
[tyre] department;
34.2 Regarding those of
the second and further respondents who are mployed in the applicant’s
truck and radial [tyre] department
the applicant’s change to
the shift patterns was in accordance with the provisions of the
collective agreement regulating
their terms and conditions of
employment;
34.3 The second and
further respondents are interdicted from continuing with or
participating in a strike concerning the implementation
of the new
shift patterns and are directed to tender their services in
accordance with the new shift pattern unless and until they
have
complied with the provision of section 64(1) of the labour Relations
Act.
34.4 There is no order as
to costs.
_______________________
D H Gush
Judge
APPEARANCES
FOR THE APPLICANT: Mr D
Farrell
Farrell Inc Attorneys
FOR THE FIRST AND FURTHER
RESPONDENTS Adv P Schuman
Instructed by Brett
Purdon Attorneys
1
Act
66 of 1995.
2
See
annexure AA to the respondent’s answering affidavit page 179
of the indexed pleadings
3
Clause
1.2 of the agreement page 179 of the indexed pleadings.
4
Clause
1.3 of the agreement page 179 of the indexed pleadings.
5
See
section 64 (1) and 64 (4) of the LRA.
6
See
A Mauchle (Pty) Ltd t/a Precision Tools v National Union of Metal
Workers of SA and Others
(1995) 16 ILJ 349 (LAC);
SA
Police Union v National Commissioner of the SA Police Service
2005 (26) ILJ 2403 (LC) and
National
Union of Metalworkers of SA on behalf of its Members v Lumex Clipsal
(Pty) Ltd
(2001) 22 ILJ 714 (LC).
7
Johannesburg
Metropolitan Bus Services (Pty) Ltd v SA Municipal Workers Union and
Others
(2011) 32 ILJ 1107 (LC) and
Ram Transport SA (Pty) Ltd
v SA Transport and Allied Workers Union and Others
(2011) 32 ILJ
1722 (LC).
8
Section
213 of the LRA.
9
Section
23 (1) (c) (i).
10
Page
182 0f the indexed pleadings.
11
Section
213 of the LRA
12
See
Section 23 (3) ‘a
collective agreement
varies any contract of employment between an employee and employer
who are both bound by the collective agreement”.