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[2014] ZALCJHB 159
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Vanachem Vanadium Products (Pty) Ltd v National Union Of Metalworkers Of SA and Others (J658/14) [2014] ZALCJHB 159; [2014] 9 BLLR 923 (LC); (2014) 35 ILJ 3241 (LC) (12 May 2014)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
REPORTABLE
CASE
NO J 658 /14
In
the matter between:
VANACHEM
VANADIUM PRODUCTS (PTY)
LTD APPLICANT
and
NATIONAL
UNION OF METALWORKERS OF SA 1
ST
RESPONDENT
THE
EMPLOYEES LISTED IN ANNEXURE A
2
ND
TO FURTHER RESPONDENTS
Date
heard: 9 May 2014
Judgment
delivered: 12 May 2014
Summary:
Application to interdict strike on basis
inter alia
that union’s demands do not concern matters of mutual interest.
Meaning of phrase ‘matters of mutual interest’
in
definition of ‘strike’ in s 213 of LRA. Role of court in
assessment of what are contended to be demands that do
not concern
matters of mutual interest.
JUDGMENT
VAN
NIEKERK J
Introduction
[1]
This is an urgent application in which the applicant seeks to
interdict a strike called by the first respondent (the union).
The
matter initially served before this court on 27 March 2014 when by
agreement, the application was postponed to 9 May 2014 in
order to
permit an exchange of affidavits. In essence, the applicant contends
that the demands made by the union on behalf of its
members are not
demands in support of which a protected strike can be called and that
the intended strike action is accordingly
and protected. The
application raises an issue of importance and some complexity. It has
been difficult within the time constraints
dictated by urgency to
prepare as complete a judgment as I would have liked, but these are
my brief reasons for the conclusion
to which I have come.
The
facts
[2]
The material facts are not in dispute. The union represents the
majority of the applicant’s employees. On 5 December 2012,
the
applicant and the union concluded what has been referred to as the
strike settlement agreement. In clause 1, the parties agreed
that all
conditions of employment contained in annexure A to the agreement
would be determined and based on the terms and conditions
of the
MEIBC main agreement. (The MEIBC is the bargaining council for the
metal and engineering industry, and serves generally
to regulate
terms and conditions of employment in the industry.)
[3]
Clause 37 (1) of the main agreement in effect establishes the
bargaining council as ‘
the sole forum for negotiating
matters contained in the Main Agreement’
. In
CBI
Electrical African Cables (Pty) Ltd v NUMSA & others
(J336/14)
Lagrange J recently held that the exclusivity of central bargaining
reflected in clause 37 (1) extends only to those matters
contained in
the main agreement; it is not a general prohibition against
collective bargaining at that level, nor is it a bar to
union demands
to negotiate matters not contained in the main agreement at plant
level. What matters is whether the demand in question
is sufficiently
closely related to an issue regulated by the main agreement to
preclude plant level bargaining over it. In other
words, the
main agreement does not provide that the bargaining council is a
single forum for bargaining all matters affecting
terms and
conditions of employment – the exclusivity of bargaining at
central level is specifically limited to those matters
“contained
in the main agreement”.
[4]
The strike settlement agreement concluded between the parties in
December 2012 provides amongst other things, the following:
‘
1.1 Linkage with
the Main Agreement
The parties agree that
variation of all conditions of employment contained in Annexure A
shall be determined and be based on the
terms and conditions of the
signed MEIBC Main Agreement Settlement Agreement.
The above linkages shall
binding on the parties and remain in force until such time that the
parties to the MEIBC have concluded
the process of establishing the
House Agreement Chamber which shall facilitate the incorporation of
the House Agreements into the
Main Agreement. ’
It
is common cause that the bargaining council has not yet established a
House Agreement Chamber.
[5]
In May 2013, the union submitted a number of demands to the
applicant. The applicant’s refusal to accede to these demands
became the subject of a referral of a dispute to the bargaining
council. On 30 January 2014, the bargaining council issued a
certificate
of outcome to the effect that the dispute remained
unresolved.
[6]
There are five demands that the applicant seeks to impugn in these
proceedings. (There does not appear to be any dispute in
relation to
a sixth demand referred to in the papers, in terms of which the union
seeks preference for retrenched employees in
the event of future
employment opportunities.) The demands are as follows:
(a). The ‘insourcing’
of jobs previously outsourced (The demand is expressed in the
following terms: ‘We propose
the employer in source or
permanent jobs in the company e.g. HRM, House Keeping, Security and
others’)
(b). That the employer
‘should provide transport from and to work or home and pay it
100%’.
(c). The appointment of
full-time shop stewards (one full-time shop steward, one full-time
health and safety shop steward and 30
days’ time off per shop
steward per annum with unlimited time off for trade union office
bearers).
(d). Payment of a risk
allowances, being a heat allowance, chemical allowance and dust
allowance.
(e). That the employer
should train not less than five artisans per term.
[7]
The basis on which the interdict sought can be simply stated.
Although the founding affidavit seeks to make out a case that
the
demands are unfair and unreasonable, the applicant submitted that the
disputes were regulated by the main agreement and strike
settlement
agreement and thus not capable of being the subject of protected
strike action, and/or that the subject of the demands
did not
constitute ‘matters of mutual interest’ for the purposes
of the definition of a ‘strike’ in the
LRA. The
definition of “strike” in section 213 of the LRA reads as
follows:
‘
strike’
means the partial or complete concerted refusal to work, or the
retardation or obstruction of work, by persons who
are or have been
employed by the same employer or by different employers, for the
purpose of remedying a grievance or resolving
a dispute in respect of
any matter of mutual interest between employer and employee …’
[8]
Section 65 (1) of the Act provides:
‘
No person may take
part in a strike or a lockout or in any conduct in contemplation or
furtherance of a strike or lockout if –
(a) that person is bound
by a collective agreement to that prohibits a strike or lockout in
respect of the issue in dispute’
[9]
The founding affidavit foreshadowed a case to the effect that the
union’s demands were unfair, unreasonable and not conducive
to
functional collective bargaining. In argument, the focus was somewhat
different. In broad terms, the applicant contends that
the demands
reflected in (a) and (c) in paragraph 6 above do not concern matters
of mutual interest, and that those reflected in
(b), (d) and (e) are
matters that are regulated by collective agreement, in particular,
the main agreement read together with the
strike settlement
agreement.
Analysis
[10]
The phrase ‘matters of mutual interest’ is not defined in
the LRA. In the 1956 Act, the same phrase appeared in
s 24(1), which
listed those matters which could lawfully be included in an
industrial council agreement. The phrase appeared as
a catch-all at
the end of a list of some 27 specified topics, and provided that
industrial council agreements could include ‘
any other
matter whatsoever of mutual interest to employers and employees’
.
But the phrase has a much longer pedigree. An interpretation adopted
more than 70 years ago under the 1937 Industrial Conciliation
Act
remains influential, and is of particular significance to the present
matter. In
Rand Tyres & Accessories v Industrial Council for
the Motor Industry (Transvaal)
1941 TPD 108
at 115, the court
held:
‘
Whatever can be
fairly and reasonably regarded as calculated to promote the
well-being of the trade concerned
, must be of mutual interest to
them; and there can be no justification for restricting in any way
the powers which the Legislature
has been the greatest pains to frame
in the widest possible language (own emphasis).’
[11]
This interpretation, and especially the reference to the well-being
of the trade, must necessarily be viewed in its context,
i.e. a
definition of competent bargaining topics for industrial councils. In
terms of the labour legislation that applied in South
Africa for most
of the 20
th
century, industries were conceived of as a
class of productive work or manufacture; a collective enterprise in
which employers
and employees were associated (see
R v Sidersky
1928 TPD 109).
In this sense, ‘matters of mutual interest’
means no more than what is of mutual advantage or benefit to
employers
and employees, and therefore for the industry as a whole.
[12]
Unlike all of its predecessors, the LRA does not employ the term
‘matters of mutual interest’ in relation to the
competencies of sectoral level councils (renamed ‘bargaining
councils’). It is employed in a very different context,
ultimately to define the scope of collective bargaining under the
Act, the statutory dispute resolution system, and the scope of
legitimate industrial action. This much is apparent from the use of
the term in the statute. ‘Collective agreements’
are
defined in s 213 to mean written agreements ‘
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
…’.
In s 134, the Act provides generally that disputes about matters of
mutual interest may be referred to the CCMA.
The same formulation is
to be found in s 51, in relation to disputes about matters of mutual
interest that arise with the registered
scope of the bargaining
council. I have already mentioned the definition of ‘strike’
in s 213, which refers to concerted
refusals to work for the purpose
of remedying a dispute in respect of any matter of mutual interest.
[13]
Initially at least, this court afforded a wide definition to the term
‘matters of mutual interest.’ In
De Beers Consolidated
Mines Ltd v CCMA & others
[200]
5 BLLR 578
(LC), Pillay J
noted that the term ‘matters of mutual interest’ is not
defined in the Act and must therefore be interpreted
literally to
mean any issue concerning employment. In
Ceramic Industries Ltd
t/a Betta Sanitary Ware v National Construction Building and Allied
Workers Union & others
(1997) 18
ILJ
716 (LC), the
court referred to the interpretation in the
Rand Tyres
judgment and appeared to place some emphasis on matters of mutual
interest as matters calculated to promote the well-being of the
trade
concerned. The notion of mutual interest as relating to the
well-being of the enterprise found its strongest expression in
Itumele Bus Lines (Pty) Ltd t/a Interstate Bus Lines v Transport &
Allied Workers Union of SA & others
(2009) 30
ILJ
1099
(LC). In that case, Nel AJ held that a demand by a trade union for an
equity shareholding in the applicant concerned the matter
of mutual
interest as contemplated by the LRA. The court stated, at paragraph
45 of the judgment:
‘
I believe a more
appropriate approach to this particular question would be to consider
whether a demand is one which may create
new employment conditions or
conditions of employment… I believe that in determining
whether the matter is one of mutual
interest between employer and
employee, one will consider whether a demand may possibly create new
rights and obligations as between
employer and employee. Will these
new rights be in the interests of both parties and for the common
good of the enterprise?’
[14]
It is largely on this basis that the applicant contends in these
proceedings that in order for a matter to be a matter of mutual
interest, it must necessarily have the following characteristics:
(a) it must
relate to the employment relationship between the employer and
employee
(b) it must create
new, or destroy existing rights in the employment relationship; and
(c) it must be a
matter in the interest of both employer and employee, and must
concern the common good of the enterprise.
[15]
The applicant submits that this approach and in particular, the
application of (c) above, places the interests of the enterprise
as
separate (though contingent) and additional to the interests of both
employer and employee. ‘Mutual interest’ on
this basis
must necessarily account for the well-being of the enterprise.
[16]
In my view, this approach is fundamentally flawed. First, as far as
the proposition contained in (b) in paragraph 14 is concerned,
the
applicant confuses disputes about matters of mutual interest and
interest disputes. (As did the court, with respect, in the
Itumele
Bus Lines
decision.) It is clear from the statutory framework
that all interest disputes (broadly, disputes about the creation of
new rights)
and rights disputes (broadly, disputes about the
interpretation and application of existing rights) are subsets in the
broader
category of disputes about matters of mutual interest. In
other words, all interest disputes constitute disputes about matters
of mutual interest, but not all disputes about matters of mutual
interest are interest disputes.
[17]
The proposition in (c), that is relating to the common good of the
enterprise is drawn ultimately from the
Rand Tyres
judgment.
It should be recalled that that judgment concerned no more than a
list of legitimate bargaining topics for industrial
councils, with
‘matters of mutual interest’ being a catch-all, thus
serving an expansive rather than a restrictive
purpose. ‘Mutual
interest’ in this sense may well refer to the well-being of the
industry, given the purpose for which
the term was employed. But the
use of the term ‘mutual interest’ in the LRA is very
different – it ultimately
serves to define the legitimate scope
of matters that may form the subject of collective agreements,
matters which may be
referred to the statutory dispute resolution
mechanisms, and matters which may legitimately form the subject of a
strike or lock-out.
In this sense, ‘matters of mutual interest’
serves to distinguish those disputes that concern the socio-economic
interests
of workers (see s 77, which permits protest action in
support of such disputes) and what might be termed purely political
disputes,
for which the LRA does not afford any right to strike or
lock-out. It is not necessary for present purposes to define the term
‘matters of mutual interest’ with any precision, but it
seems to me that it requires, in broad terms, no more than that
the
issue that is the subject of any term of any collective agreement,
referral for conciliation or the subject of any strike or
lock-out be
work-related, or as the court put it in the
De Beers
decision
(supra), it must concern the employment relationship.
[18]
This interpretation is sustained by statutory imperatives in relation
to the interpretation of the LRA and in particular, those
of its
provisions that concern fundamental rights. The interpretation of
‘matters of mutual interest’ for which the
applicant
contends ignores entirely the provisions of the Constitution and the
statutory injunction contained in section 3 of the
LRA that any
person applying the Act must interpret its provisions to give effect
to its primary objects, in compliance with the
Constitution and in
compliance with public international law obligations. The
Constitutional Court has held on a number of occasions
(see, for
example,
NUMSA v Bader Bop (Pty) Ltd
[2002] ZACC 30
;
[2003] 2 BLLR 103
(CC))
that where the Act is capable of an interpretation does not limit
fundamental rights, that interpretation should be preferred.
The
right to strike is a fundamental right. In
Bader Bop
, the
court said the following, at paragraph 13 of the judgment:
‘
This case concerns
the right to strike. That right is both of historical and
contemporaneous significance. In the first place, it
is of importance
for the dignity of workers who in our constitutional order may not be
treated as coerced employees. Secondly,
it is through industrial
action that workers are able to assert bargaining power in industrial
relations. The right to strike is
an important component of a
successful collective bargaining system. In interpreting the right in
s 23, therefore, the importance
of those rights in promoting a fear
working environment must be understood.”
It
is well-established that the provisions of the Act (and in
particular, sections 64 and 65, which impose limitations on the right
to strike) must be interpreted and applied in a manner which gives
best effect to the primary objects of the LRA and its defined
purposes. It is equally well-established that where any provision of
the LRA is capable of mutually contradictory interpretations,
the
court should adopt an interpretation that promotes the purposes of
the Act, in this instance, orderly collective bargaining
and the
effective resolution of labour disputes. Given that a necessary
element of any strike must be the purpose of remedying
a grievance or
resolving a dispute in respect of any matter of mutual interest
between employer and employee, the definition afforded
to the term
‘mutual interest’, in effect, defines the scope of the
right to strike. The broader the interpretation,
the broader the
scope of legitimate strike action. Conversely, were a narrow
interpretation to be afforded the term, the scope
of right to strike
would be accordingly attenuated. For present purposes, an
interpretation that gives effect to the Bill of Rights
and to the
purposes of the LRA requires that ‘matters of mutual interest’
would serve to exclude those matters
that are purely political in
nature, or which more properly concern the socio- economic interests
of workers.
[19]
But there is a more fundamental reason why the interpretation of the
term ‘matters of mutual interest’ proffered
by the
applicant cannot be sustained. What the applicant seeks to do, by
extrapolating the reference to the common good in the
Rand Tyres
decision into the term ‘matters of mutual interest,’ is
to subject every demand made in the collective bargaining process
by
trade union (and indeed, by any employer or employers’
organisation) to utilitarian analysis. It would require the court
to
apply a form of Bentham’s felicific calculus, to determine what
might constitute the greatest good for the greatest number.
What this
approach overlooks, at a basic level, is that the LRA acknowledges
that the interests of parties to an employment relationship
more
often than not stand in conflict, and that the preferred mechanism to
reconcile competing interests is the process of collective
bargaining. In a voluntarist system such as that established by the
LRA, the courts have no role in determining the merits of any
demand
made during the bargaining process, nor are they empowered to make
any value judgment as to whether a demand promotes or
secures the
common good of the enterprise. The court is empowered to intervene if
and only if a demand made in support of a strike
or lock-out if any
industrial action does not comply with the substantive and procedural
limitations established by the Act. In
other words, the court is
concerned only with the lawfulness of demands in a strict sense, and
can make no judgment as to their
merits or consequences.
[20]
With that background, I turn to each of the demands made by the
union. The demand for insourcing, as I understand it, is directed
at
various functions that the applicant’s contract without and
which are currently performed by subcontractors. The demand
made by
the union simply seeks to reverse the process of outsourcing and to
reinstate those services previously provided on an
in-house basis, on
that basis. What the union seeks in effect is that those jobs that
have been the subject of outsourcing arrangements
be reincorporated
into the applicant’s establishment. I fail to appreciate on
what basis the applicant contends that this
is an issue that is no
material bearing on the applicant and its employees, or that it is a
drastic and unjustifiable intrusion
into the applicant’s
managerial prerogative to operate by the most cost-effective means.
It is clearly a matter that is work-related,
and therefore a matter
of mutual interest. There is accordingly no basis on which the
union’s demand may be declared unlawful
and struck out.
[21] The demand for
transport costs is one that would require the applicant to meet the
actual costs of travelling incurred by employees
to and from work on
a daily basis. It is not disputed that in 2002, the union and the
applicant’s predecessor agreed to include
an amount of R350 per
month in all employers remuneration include of transport costs. As a
consequence, the bus service then provided
was terminated. Since
then, the allowance has been increased and remains an element of the
employees’ remuneration packages.
In these circumstances, in my
view, the union is precluded in terms of the provisions of clause 1
of the strike settlement agreement
from raising the issue of payment
for transport costs at plant level. Further, the main agreement
provides in clause 17 (1) for
the payment of an allowance to
employees who “by reason of their employment are normally
required to work in various sites
but are not required to live away
from their usual place in of residence.’ Since the main
agreement regulates the payment
of a travelling and subsistence
allowance, in my view, the demand in question is sufficiently closely
related to an issue regulated
by the main agreement. The union is
therefore precluded from striking in support of its demand for the
payment of travelling costs.
[22]
In so far as the demand for the appointment of shop stewards is
concerned, the applicant contends that the demand is unreasonable,
financially unsustainable and not functional to collective
bargaining. For the reasons stated above, these are not relevant
considerations.
The applicant also contends that the demand is one
that is required in terms of the Act to be referred to the CCMA, and
ultimately
to be resolved in terms of s 22 of the LRA. The
appointment of full-time shop stewards and health and safety stewards
and increased
time off is not a matter contained in the main
agreement. This court has previously recognised the legitimacy of a
strike called
in support of a demand for the appointment of full-time
shop stewards. In
Digistics (Pty) Ltd v SA Transport and Allied
Workers Union & others
(2010) 31
ILJ
2896 (LC), this
court held that those provisions of the LRA regulating organisational
rights (sections 12 to 16) do not provide
for the appointment of paid
full-time shop stewards and that this is therefore not a matter in
respect of which part A of chapter
III of the Act applies. This
approach was recently upheld by Prinsloo AJ in
Scaw South Africa
(Pty) Ltd v NUMSA & others
(J911/2013, 28 May 2013). I see no
reason to depart from these decisions. In short, s 65 does not
preclude the union from raising
a demand for the appointment of
full-time shop stewards or from striking in support of a demand.
[23]
The demand for the payment of risk allowances in the form of heat,
chemical and dust allowances does not relate to any matters
that are
dealt with either in the main agreement or the strike settlement
agreement. While the main agreement makes provision for
certain
allowances, including travel and subsistence allowances and
allowances for abnormally dirty work, there is no specific
provision
relating to the allowances that are the subject of the union’s
demand, nor are these allowances reflected in annexure
A to the
strike settlement agreement. The demands clearly concern a matter of
mutual interest and in these circumstances there
is no bar to the
union raising these demands or calling a strike in support of them.
[24]
In relation to the union’s demand for the training of artisans,
this is similarly not a matter that is regulated by the
main
agreement or the strike settlement agreement. It is clearly a matter
of mutual interest and therefore a matter that may form
the subject
of a protected strike.
[25]
I now turn to that part of the notice of motion in which the
applicant seeks to interdict unlawful conduct in support of strike
action by the second to further respondents and in particular, the
blocking of entrance and exit gates at the applicant’s
premises, preventing employees who wish to continue work from
tendering their services, damaging and destroying property, and the
like. In the founding affidavit, the deponent expresses the view that
it is anticipated that any strike would involve violence,
misconduct
and intimidation, and that the second to further respondents will
block the roads leading to the applicant’s premises.
There is
no evidence in the affidavit to the effect that such misconduct has
occurred, or has been threatened. That it has occurred
in the past is
to be deplored, and the union must take responsibility for its own
conduct and omissions, and for the actions of
its members. But the
submissions regarding violence are ultimately speculative. In my
view, there is an insufficient factual basis
laid in respect of any
actual or anticipated acts of misconduct by the second further
respondents to warrant an order at this point.
[26]
Finally, in relation to costs, this court has a broad discretion in
terms of s 162 of the Act to make orders for costs according
to the
requirements of the law and fairness. This court’s has
customarily declined to make orders for costs in circumstances
where
the parties to a collective bargaining relationship are before the
court, and where an order for costs has the potential
to prejudice
that relationship. I see no reason in the present instance to depart
from that approach and I therefore do not intend
to make any order as
to costs.
For
the above reasons, I make the following order:
1. The
first respondent is not entitled to call for strike action in support
of its demand for the payment of
transport costs, and any strike
action in support of that demand by the second to further respondents
would constitute an unprotected
strike.
2. In
respect of the balance of the relief sought in the notice of motion,
the application is dismissed.
ANDRE
VAN NIEKERK
JUDGE
OF THE LABOUR COURT
REPRESENTATION
FOR
THE APPLICANT: Adv L Hollander, with him Adv D Lundström,
instructed by Cowen Harper Attorneys
FOR
THE RESPONDENTS: Ms Ruth Edmonds, Ruth Edmonds Attorneys