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[2012] ZALCD 25
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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 25 (15 February 2012)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
Reportable
Of
interest to other judges
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.
[1]
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.
[2]
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.
[3]
The
Durban factory production is designed in accordance with 24 hour 7
day week production schedule.
[4]
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.
[5]
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.
[6]
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.
[7]
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.
[8]
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.
[9]
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
[10]
Surprisingly
the applicant did not attach to its papers a copy of the 2004
collective agreement. The agreement was attached to the
respondents’
papers.
[11]
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.
[12]
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.
[13]
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]
[14]
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.
[15]
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]
[16]
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.
[17]
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.
[18]
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.
[19]
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-
(a)
one
or more employers;...
’
[8]
[20]
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.’
[21]
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..
[22]
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”..
[23]
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.
[24]
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.
[25]
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]
[26]
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]
[27]
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.
[28]
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.
[29]
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.
[30]
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..
[31]
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.
[32]
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.
[33]
As
regards costs it is just and equitable that no order be made
regarding costs.
[34]
I
make the following order:
34.1
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”.