Brief Summary

Labour Law — Lockout — Legality of lockout against non-striking employees — Bus companies issued lockout notices in response to a national strike by other unions, targeting employees of a trade union not participating in the strike — Court considered whether a lockout can lawfully apply to employees not engaged in the strike — Held that a lockout must be directed at employees with a demand, and cannot be imposed on those not resisting or involved in a dispute — Lockout declared unlawful and interdict granted against the employers.

Comprehensive Summary

Summary of Judgment

1. Introduction

The proceedings consisted of two urgent applications brought in the Labour Court, Johannesburg, seeking interdictory relief in respect of lockouts instituted (or threatened) by two bus companies. The applications were argued together and determined in a single judgment.

The applicant was the Transport and Allied Workers Union of South Africa (TAWUSA), acting on behalf of its members employed by the respondents. The respondents were Algoa Bus Company (Pty) Ltd (in case no J835/13) and Putco Limited (in case no J837/13).

The procedural history relevant to the judgment was that each respondent issued a lockout notice in April 2013 in the context of wage negotiations and an impending national strike called by other unions (SATAWU and TOWU). TAWUSA’s members, however, were not called out by TAWUSA and, on TAWUSA’s version accepted by the court, tendered services and did not strike. The union then launched urgent applications (on 22 April 2013 against Algoa and on 23 April 2013 against Putco). Urgency became common cause at the hearing on 25 April 2013.

The general subject-matter of the dispute was whether the respondents could, under the Labour Relations Act 66 of 1995 (LRA), lawfully implement a lockout against employees who were not on strike and whose union was not a party to the bargaining council dispute that had triggered the strike notice by other unions.

2. Material Facts

In relation to Algoa Bus Company, the material chronology began on 17 April 2013, when Algoa issued a written Notice of Lockout addressed to TAWUSA. The notice stated that the lockout was in response to a strike notice issued by SATAWU and TOWU, with the strike and lockout both to commence on 19 April 2013. The notice communicated an intention to lock out “all affected employees”, and it was common cause on the papers that TAWUSA members were treated as falling within that category.

TAWUSA’s branch organiser indicated on 17 April 2013 that TAWUSA’s members would not strike and that any lockout against them would be unlawful. On 19 April 2013, TAWUSA’s General Secretary addressed a letter to bus companies (including Algoa) stating that TAWUSA members were not on strike, tendering services, and asserting that the lockout would be unlawful. Algoa disputed receipt of this letter and contended that it appeared that TAWUSA members were supporting the strike. The court treated the central objective fact as being that Algoa had issued a lockout notice directed at TAWUSA and had, on that basis, taken steps to exclude those employees from work.

In relation to Putco, TAWUSA’s General Secretary wrote on 18 April 2013 advising Putco that TAWUSA members would not participate in the strike called by SATAWU and TOWU and would report for duty, and he proposed a meeting. On 19 April 2013, TAWUSA sent a further letter stating that its members were not on strike and tendering services. On the same day, Putco issued a notice of intention to lock out “all employees in the bargaining unit” in response to the strike notice, describing the lockout as supporting the employer’s wage proposals in the bargaining council negotiations. Putco, through Malherbe, responded asserting that the lockout was lawful and that TAWUSA’s General Secretary should desist from misleading members. The court treated this response, in context, as a rejection of the tender of services.

A factual dispute arose in Putco’s papers in which Putco alleged that certain shop stewards had stated that they would support the strike (for reasons said to relate to money and, in some accounts, safety). Those shop stewards denied the allegation. Putco also suggested that TAWUSA members did not report for duty. The court concluded that this did not create a genuine, irresoluble dispute of fact on the papers and, in any event, that Putco bore an onus to establish that TAWUSA members were on strike to justify the lockout on that basis. The court ultimately found on the objective facts that TAWUSA members were not on strike in either matter.

A further common and material fact across both matters was that TAWUSA did not issue a strike notice for its members and was not party to the bargaining council referred to in argument, while the lockout notices were issued in reaction to strike notices by other unions.

3. Legal Issues

The central legal question was whether, under the LRA, an employer faced with a strike called by one or two unions may lawfully institute a lockout against all employees, including employees who are not on strike and who were not called to strike by their own union.

A subsidiary issue concerned the proper interpretation and application of the definition of “lockout” in section 213 of the LRA, and the procedural framework for lockouts in section 64, to determine whether a lockout may be directed at employees who are not party to the dispute and who have not resisted any employer demand.

There was also an application-of-law-to-fact dispute concerning whether TAWUSA members were, as a matter of fact, participating in or supporting the strike such that they could be treated as strikers for purposes of the lockout. The court treated this as resolvable on the papers and, where necessary, by reference to objective facts and the applicable approach to disputes of fact in motion proceedings.

Finally, there was an issue as to whether a purported common-law right of the employer to refuse entry to premises could justify exclusion where the court found the lockout unlawful, considered in light of constitutional and statutory labour rights.

4. Court’s Reasoning

The court’s reasoning began from the premise that the legality of a lockout must be assessed primarily with reference to the LRA, rather than by debating categorisations such as “defensive” and “offensive” lockouts. In this regard, the judgment relied on the approach in Technikon SA v NUTESA (2001) 22 ILJ 427 (LAC) that the true inquiry is whether the conduct is permissible under the Act.

Turning to section 213 of the LRA, the court emphasised that a lockout is an exclusion of employees “for the purpose of compelling the employees to accept a demand” concerning a matter of mutual interest. Although the definition does not expressly confine lockouts to striking employees, the court considered that the wording (“those employees”) and the logic of compulsion implied specificity: the lockout must be directed at employees who are resisting a demand or presenting a counter-position such that compulsion serves a statutory purpose. The court reasoned that it is illogical to compel employees who are not resisting and who have no relevant demand in issue.

The court further reasoned that a lockout must have a coherent purpose consistent with the statutory definition: the employer must have a demand directed to the employees being excluded, and the exclusion must be aimed at compelling acceptance of that demand. An exclusion without that statutory purpose would fall outside the definition and would therefore be unlawful.

The statutory scheme in section 64 was then treated as supporting the same conclusion. The court focused on section 64(1)(c), which requires notice of a proposed lockout to be given to any trade union “that is a party to the dispute” (or, if none, to the employees), and, in some instances, to the council. The court interpreted this as presupposing that a lockout notice is directed to a union (or employees) that are in fact party to the dispute, and that it serves no statutory purpose to issue lockout notice to a non-party.

The court also considered section 64(3)(d), which contemplates lockouts in response to a strike that does not conform to the chapter (with altered procedural requirements). This was treated as indicative of the lockout’s role as a counter-measure to a strike in circumstances where employees have a demand; it further supported the conclusion that employees with no demand cannot coherently be subjected to a counter-demand through a lockout.

On the alleged factual disputes (particularly in Putco), the court considered whether there was a genuine dispute of fact preventing final relief on motion. It concluded that the disputes were resolvable on the papers, including by reference to objective facts such as the issuance of lockout notices and the union’s written communications tendering services and disavowing participation in the strike. The court rejected the respondents’ attempt to characterise TAWUSA members as strikers, noting the incompatibility between written tender of services and the respondents’ later allegations that employees were striking, and treating as opportunistic any inference that employees were supporting a strike when the employer had taken steps to exclude them.

In dealing with the respondents’ principal submission that TAWUSA members could be locked out because they had a material interest in the wage dispute (a form of “piggybacking”), the court accepted that employees may, in certain circumstances, piggyback in the strike context (with reference to SATAWU v Moloto NO [2012] 12 BLLR 1193 (CC)), but held that this did not justify extending a lockout to non-strikers. The court distinguished the strike as a right and the lockout as recourse, and held that extending lockouts to employees who had not joined the strike and had not resisted a demand would stretch the statutory definition beyond what the legislature intended. The court also considered analogies sought from Tiger Wheels Babelegi (Pty) Ltd t/a TSW International v NUMSA and Others [2007] ZALC 43; [2007] 1 BLLR 66 (LC) and Plastic Convertors Association of SA v AECMSA and Others [2011] 11 BLLR 1095 (LC), but did not accept that parity reasoning could properly be employed to equate strike principles with lockout principles in the manner proposed.

The court also applied the principle that a lockout must be accompanied by an express demand, relying on Sappi Fine Papers (Pty) Ltd v Pienaar NO and Others (1994) 15 ILJ 137 (LAC) and SACCAWU and Others v 3M SA (Pty) Ltd (2000) 21 ILJ 1657 (LC). Although the notices superficially referred to acceptance of wage proposals, the court found it opaque what actions were expected of TAWUSA members to secure lifting of the lockout, particularly given that the wage offer was made in a bargaining council where TAWUSA was not a member. The court rejected the submission that TAWUSA should simply “accept the offer”, reasoning (with reference to basic contractual principles and Wasmuth v Jacobs [1987] 3 SA 629 (W)) that one cannot accept an offer not made to one in the relevant forum.

On relief, the court rejected the respondents’ contention that an interdict was inappropriate because the court cannot compel a company to open its doors; it held that the relief sought aligned with section 68(1)(a) of the LRA (which empowers the court to grant interdictory relief in respect of strikes and lockouts that do not comply with the Act).

Finally, the court rejected the reliance on a common-law right to refuse entry, reasoning that employees have a constitutional right to fair labour practices under section 23 of the Constitution and that courts are enjoined by section 39(2) to develop common law in accordance with the Bill of Rights. On the court’s findings that the lockouts were unlawful, the asserted common-law right did not avail the respondents.

5. Outcome and Relief

The Labour Court heard both matters as urgent and granted final interdictory relief.

The respondents, Algoa Bus Company (Pty) Ltd and Putco Limited, were interdicted and restrained from continuing to lock out TAWUSA’s members in their employ.

Costs were awarded against the respondents. The court held that costs should follow the result and ordered the respondents to pay the applicant’s costs in both matters.

Cases Cited

Technikon SA v National Union of Technikon Employees of South Africa (NUTESA) (2001) 22 ILJ 427 (LAC).

Public Servants Association v Minister of Justice and Constitutional Development and Others [2001] 22 ILJ 2303 (LC).

Construction & Allied Workers Union and Others v Modern Concrete Works [1999] 10 BLLR 1020 (LC).

Sappi Fine Papers (Pty) Ltd v Pienaar NO and Others (1994) 15 ILJ 137 (LAC).

South African Commercial Catering and Allied Workers Union and Others v 3M SA (Pty) Ltd (2000) 21 ILJ 1657 (LC).

Wasmuth v Jacobs [1987] 3 SA 629 (W).

South African Transport and Allied Workers Union v Moloto NO and Another [2012] 12 BLLR 1193 (CC).

Tiger Wheels Babelegi (Pty) Ltd t/a TSW International v National Union of Metalworkers of South Africa and Others [2007] ZALC 43; [2007] 1 BLLR 66 (LC).

Plastic Convertors Association of South Africa v Association of Engineering and Mining Contractors of South Africa and Others [2011] 11 BLLR 1095 (LC).

Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A).

Legislation Cited

Labour Relations Act 66 of 1995, section 32.

Labour Relations Act 66 of 1995, section 64.

Labour Relations Act 66 of 1995, section 66.

Labour Relations Act 66 of 1995, section 68.

Labour Relations Act 66 of 1995, section 213.

Constitution of the Republic of South Africa, 1996, section 23.

Constitution of the Republic of South Africa, 1996, section 39(2).

Rules of Court Cited

No rules of court were cited in the judgment as such. The judgment referred to the Plascon-Evans approach to factual disputes in motion proceedings.

Held

The court held that, on the facts before it, TAWUSA’s members were not on strike, had tendered services, and were not shown to be party to the dispute that gave rise to the strike notices issued by SATAWU and TOWU.

The court held that a lockout, properly construed under the LRA, must be directed at employees against whom the employer has a demand and whom the employer seeks to compel to accept that demand. It is not permissible, on the court’s interpretation of the statutory definition and section 64, to lock out employees who are not resisting a demand and who are not party to the dispute.

The court therefore held that the respondents’ lockouts against TAWUSA members were unlawful, and it granted an interdict restraining the continuation of those lockouts, with costs against the respondents.

LEGAL PRINCIPLES

A lockout under section 213 of the LRA entails the exclusion of employees for the purpose of compelling acceptance of an employer demand in respect of a matter of mutual interest; compulsion presupposes that the targeted employees are resisting a demand or are otherwise properly the subject of the demand.

The purpose of the exclusion is integral to whether the conduct qualifies as a lockout under the LRA; an exclusion lacking a coherent statutory purpose (compelling acceptance of a demand by the excluded employees) falls outside the statutory definition and is unlawful.

Under section 64(1)(c) of the LRA, lockout notice is directed to a trade union that is a party to the dispute (or to employees where there is no such union), which supports an interpretation that lockouts are not aimed at employees or unions who are not party to the dispute.

A lockout must be accompanied by an express demand that informs the excluded employees of what is required for the lockout to be lifted; absent such a demand, the exclusion is not a lockout as contemplated by the LRA.

Where a lockout is found unlawful under the LRA, reliance on a common-law right to refuse access to premises does not displace statutory and constitutional protections, including the right to fair labour practices in section 23 of the Constitution and the interpretive injunction in section 39(2).

Transport and Allied Workers Union of South Africa obo Members v Algoa Bus Company (Pty) Ltd and Putco Ltd (J835/13; J 837/13) [2013] ZALCJHB 187; [2013] 8 BLLR 823 (LC); (2013) 34 ILJ 2949 (LC) (3 May 2013)