Bakkavor South Africa (Pty) Ltd t/a Spring Valley Foods v Labour Equity General Workers Union of South Africa (LEWUSA) and Others (J2836/2012) [2013] ZALCJHB 136 (14 May 2013)

80 Reportability

Labour Law

Brief Summary

Labour Law — Costs — Punitive costs order — Applicant sought punitive costs against respondents following interim interdict against violence and intimidation during protected strike — Serious incidents of violence and intimidation occurred despite interim order — Court held that applicant was unjustly compelled to seek urgent relief due to respondents' conduct, warranting a punitive costs order to mark the court's disapproval of such actions.

Comprehensive Summary

Summary of Judgment

1. Introduction

The proceedings concerned the return date of a rule nisi previously issued in an urgent application in the Labour Court. The original urgent relief had interdicted the employee respondents from engaging in unlawful conduct during a protected strike, including violence, intimidation, and obstruction of access to the employer’s premises, pending the establishment of picketing rules by the CCMA in terms of the Labour Relations Act 66 of 1995 (LRA).

The applicant was Bakkavor South Africa (Pty) Ltd t/a Spring Valley Foods, an employer operating a food packaging and distribution business in Bapsfontein, Gauteng. The first respondent was the Labour Equity General Workers Union of South Africa (LEWUSA), and the second to further respondents were individual employees of the applicant and members of LEWUSA, listed in annexure “A”.

Procedurally, the rule nisi had been issued by Boqwana AJ on 23 October 2012 as an interim order, with costs reserved for determination on the return date. On 23 November 2012, the rule nisi was discharged, but the applicant persisted in seeking an order that the respondents pay the costs of the urgent interdict proceedings. The judgment delivered on 14 May 2013 addressed only the issue of costs and, in particular, whether a punitive costs order was warranted.

The general subject-matter of the dispute was strike-related conduct in the context of a protected strike, and whether the respondents’ conduct justified the employer’s resort to urgent litigation such that it would be fair, under the LRA costs regime, to mulct the union and employees in costs notwithstanding later settlement of the underlying labour dispute.

2. Material Facts

The applicant operated from rural premises accessed via a gravel approach road leading to a single, boom-gated entrance. The surrounding area comprised rural farmland, which formed part of the practical context for access and egress disputes during picketing.

The parties’ collective bargaining relationship had shifted over time. FAWU had historically represented employees under a recognition agreement (and an agency shop agreement), but following a verification process FAWU lost majority status. A recognition agreement was concluded with LEWUSA on 4 April 2011. The dispute giving rise to the strike was rooted in wage negotiations.

It was common cause that wage negotiations commenced at the beginning of October 2012 and collapsed on 15 October 2012. It was also common cause that on 16 October 2012 LEWUSA gave the applicant 48 hours’ written notice of a proposed strike (commencing 17h00 on 18 October 2012) as contemplated by the LRA. The court accepted that, as a result, when the strike commenced on 18 October 2012, it was a protected strike in terms of section 67(1) of the LRA.

Before the strike commenced, the applicant provided the union with proposed picketing rules and requested agreement. The union’s representative acknowledged receipt, and the court recorded that the union maintained (correctly, in the court’s view) that the proposed rules were subject to further negotiations before final agreement could be reached. At the time the strike began, there was thus no concluded agreement on picketing rules.

The applicant relied on a series of incidents during the strike which it characterised as serious violence, intimidation, and damage to property. The court summarised incidents including obstruction of roads, attacks on transport bringing replacement labour, stone-throwing at police, barricading the entrance with objects (including burning tyres and a concrete drain pipe), and the necessity for public order policing measures (including rubber bullets) to restore access. The applicant also relied on further incidents on 22 October 2012, including brandishing sticks, “toy-toying,” and the burning of a telephone pole used to block access, with consequential damage to fixed-line communications, as well as the inability of police to ensure safe access for staff and replacement labour, leading to closure of the premises that afternoon.

The respondents’ answering version did not admit the degree of violence alleged. The union organiser stated that private security personnel allegedly brandished weapons and that employees carried sticks for self-protection. He also disputed what could reliably be inferred from video footage and contended that the employer could have followed a less urgent route by requesting the CCMA’s intervention to settle picketing rules rather than approaching court.

It was common cause that the strike and wage dispute were later settled under the auspices of a CCMA commissioner, that a settlement agreement was concluded on 24 October 2012, and that employees agreed to return to work on 29 October 2012. The respondents relied on this settlement and the absence of subsequent incidents as reasons why a costs order should not be granted.

3. Legal Issues

The central legal question was whether, after the discharge of the rule nisi and after settlement of the underlying wage dispute and picketing arrangements, the applicant was nonetheless entitled to a costs order, and specifically a punitive costs order on the scale as between attorney and client, against the union and employee respondents.

The dispute primarily concerned the application of law to fact within the Labour Court’s statutory costs framework. The court had to determine whether the respondents’ conduct (both before and in relation to the urgent proceedings) warranted a costs order under section 162 of the LRA, which requires costs determinations to be made according to the requirements of law and fairness.

A further evaluative dimension was present in the form of a discretionary/value judgment: even if an urgent application had been rendered moot by settlement, whether it remained fair to order costs where the applicant contended it was unjustly compelled to litigate due to strike-related misconduct and the union’s alleged failure to control members.

4. Court’s Reasoning

The court began by reaffirming that the strike itself was protected, because the union had provided the required 48-hour notice under the LRA. The protected status of the strike, however, did not resolve the costs question, because the urgent proceedings were aimed not at prohibiting the strike per se but at restraining alleged unlawful conduct accompanying picketing.

The court identified the correct inquiry, drawing on authority, as whether the respondents’ conduct necessitated the urgent application and whether it would be fair, having regard to all the circumstances, to require the respondents to bear the applicant’s costs. The court regarded the later settlement of the wage dispute and agreement on picketing rules as insufficient, in itself, to render the costs issue academic, because the relevant focus remained the causative conduct and whether it compelled recourse to court.

In applying section 162 of the LRA, the court treated the statutory requirement of law and fairness as conferring a broad discretion that must be exercised judicially, with specific regard to the conduct of the parties both in litigating and in the events precipitating litigation. The court accepted that Labour Court costs orders can potentially deter employees—particularly low-paid employees—from approaching the court, and that this is a relevant consideration when a genuine dispute exists and litigation conduct is reasonable. However, the court emphasised that such considerations do not excuse serious strike-related unlawfulness.

On the factual evaluation, the court was not persuaded by the respondents’ attempt to minimise the severity of the incidents. It considered it improbable that the applicant would approach court for merely “minor incidents,” and it treated the repeated involvement of the police and public order policing as supportive of the applicant’s portrayal of serious disorder. The court concluded that the applicant had been compelled to seek urgent relief due to serious acts of violence and due to the union’s failure to control its members or to stop unlawful conduct.

The court aligned its reasoning with the approach in Tsogo Sun Casinos (Pty) Ltd t/a Montecasino v Future of SA Workers Union and Others, including the proposition that the fact that employees are low-income earners is not determinative where they have participated in unlawful conduct, and that a subsequent return to work does not answer whether their conduct necessitated litigation. It further adopted the view that the continued existence of a collective bargaining relationship does not, in cases of serious misconduct, preclude a costs order where fairness supports it.

Finally, the court made an expressly evaluative determination that the seriousness and repetitiveness of the unlawful conduct, together with defiance of police instructions and the union’s failure to manage the picket, rendered the respondents’ “special circumstances” irrelevant. It considered that broader interests beyond the immediate dispute were implicated, and that the court should mark its disapproval and condemnation of the conduct by granting a punitive costs order.

5. Outcome and Relief

The court granted a punitive costs order against the first respondent (LEWUSA) and the second to further respondents (the employees). It ordered that they pay the applicant’s costs of the proceedings on the scale as between attorney and client, jointly and severally, the one paying the others to be absolved.

No further substantive relief was granted in this judgment, as the rule nisi had already been discharged on the return date, and the determination before the court was confined to costs.

Cases Cited

SA Post Office Ltd v TAS Appointment and Management Services CC and Others [2012] 6 BLLR 621 (LC).

Tsogo Sun Casinos (Pty) Ltd t/a Montecasino v Future of SA Workers Union and Others (2012) 33 ILJ 998 (LC).

Legislation Cited

Labour Relations Act 66 of 1995, section 64(1)(b).

Labour Relations Act 66 of 1995, section 67(1).

Labour Relations Act 66 of 1995, section 69(5).

Labour Relations Act 66 of 1995, section 162.

Rules of Court Cited

No specific rules of court were cited in the judgment.

Held

The Labour Court held that, notwithstanding that the strike was protected and that the underlying wage dispute and picketing arrangements were later settled, the respondents’ conduct during the strike—characterised by serious violence, intimidation, obstruction, and damage to property, coupled with the union’s failure to control its members—unjustly compelled the applicant to institute urgent interdict proceedings. Applying section 162 of the LRA, and considering law and fairness, the court held that the matter warranted a punitive response in costs to mark the court’s disapproval. The first and second to further respondents were therefore ordered to pay costs on the attorney-and-client scale, jointly and severally.

LEGAL PRINCIPLES

Section 162 of the Labour Relations Act 66 of 1995 confers a broad discretion on the Labour Court to award costs according to the requirements of law and fairness, and in exercising that discretion the court may take account of the conduct of the parties both during the events giving rise to litigation and in the litigation itself.

The fact that a strike is protected does not immunise participants or the union from adverse costs consequences where picketing is accompanied by unlawful conduct such as violence, intimidation, obstruction of access, or damage to property, and where such conduct necessitates urgent court proceedings for protection of rights.

Subsequent settlement of the underlying labour dispute, the conclusion of picketing arrangements, or an agreed return to work does not, without more, preclude a costs order. The relevant enquiry remains whether the respondents’ conduct required the applicant to approach the court and whether it is fair, having regard to all the circumstances, to award costs.

While the Labour Court recognises that costs orders can deter low-paid employees from litigating and may be avoided where genuine disputes exist and litigation conduct is reasonable, serious strike-related unlawfulness and failure by a union to control members may justify a punitive costs order to mark disapproval and deter repetition.