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[2015] ZALCCT 48
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ICHAWU and Others v CCMA And Others (C 308/13) [2015] ZALCCT 48; [2015] 9 BLLR 958 (LC); (2015) 36 ILJ 3086 (LC) (29 July 2015)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
Case
No: C 308/13
DATE:
29 JULY 2015
Reportable
In
the matter between:
ICHAWU
...........................................................................................................................
First
Applicant
MANQUNYANA,
Zimakhaya
...............................................................
Second
and further applicants
and
8 others
And
CCMA
............................................................................................................................
First
Respondent
Commisioner
Anele
Mgubasi
...................................................................................
Second
Respondent
Suid-Kaap
Stene Electroplating And Powdercoating
CC
.......................................
Third
Respondent
Heard:
17 June 2015
Delivered:
29 July 2015
Summary:
Review – dismissal for gross insubordination. Employer imposed
unilateral change to terms and conditions of employment.
Union
referred dispute to CCMA in terms of LRA s 64(4). Employer did not
restore status quo in terms of s 64(5). Employees refused
to work in
terms of new conditions. Such refusal not gross insubordination.
Award that dismissal was fair reviewed and set aside.
Judgment
STEENKAMP
J
Introduction
[1]
An employer imposes unilateral changes to
terms and conditions of employment on its workers. The workers refuse
to comply. Does
that constitute gross insubordination?
[2]
The
Court had to consider this question in the context of a review
application. The arbitrator had decided that the workers refused
a
valid instruction; that it constituted misconduct; and that their
dismissal was fair. The trade union, ICHAWU
[1]
,
seeks to have that award reviewed and set aside.
Condonation
[3]
The applicants seek condonation for the
late filing of their review application and supplementary affidavit
delivered in terms of
rule 7A(8).
[4]
The review application was served, but not
filed, in time. It was one day late. It is an inconsequential delay
and the explanation
is satisfactory. And given my view on the merits,
it is in the interests of justice that condonation be granted. There
is also
no prejudice to the respondents occasioned by the late
delivery of the supplementary affidavit.
Background
facts
[5]
The nine individual applicants worked for
the third respondent, Suid-Kaap Stene cc, in Mossel Bay. The company
experienced financial
difficulties. It wanted to introduce short
time.
[6]
The
union consulted with the workers and the trade union. (It refused to
consult with the union organiser, Mr Dale Fish, but nothing
much
turns on this). The arbitrator notes in her award that “no
agreement was reached”. The company introduced a new
roster
unilaterally. The union referred a dispute to the CCMA in terms of s
64(4) of the LRA
[2]
, requiring
the employer to restore its members’ terms and conditions of
employment. The company did not comply. Instead,
it instructed the
workers to report for duty in terms of the new roster. They refused.
The employer issued them with three written
warnings over the period
of a week for “disrespect” and “failure to follow a
reasonable instruction”. It
then dismissed eight of the workers
on 13 November 2012 and the ninth, Zamikhaya Manqunyana, a
shopsteward, on 12 December 2012.
[7]
The applicants referred an unfair dismissal
dispute to the CCMA. The arbitrator (the second respondent) found
that their dismissal
was fair.
The
arbitration award
[8]
The arbitrator set out the background as
summarised above. She noted that, in terms of the new roster, the
workers would work four
days a week instead of five.
[9]
The employer was represented by Mr Willem
Stephanus Conradie, an official of an employers’ organisation,
NEASA. He emphasised
that the employer did not intend to retrench
anyone but only to introduce short-time.
[10]
The chairperson of the disciplinary
hearing, André
de Jager, testified
that the workers were dismissed for “gross disrespect”
and “refusal to work”. According
to him, Zamikhaya
Manqunyana, the shop steward, “made it clear that they would
not comply with the instruction to work according
to the new roster
and allocated teams.”
[11]
The owner or managing member of the
company, Louis Welman, testified that he informed the applicants of
his intention to introduce
short-time as an alternative to
retrenchment, given the company’s financial difficulties. He
drew up a roster and divided
the workforce into two teams. The
workers were meant to work four days per week instead of five. They
did not report for duty in
accordance with the new timetable. He
issued written warnings on 25 October 2013; and final written
warnings on 26 October and
9 November respectively. A disciplinary
hearing followed and eight of the applicants were dismissed on 13
November. The shop steward,
Manqunyana, was dismissed on 12 December.
[12]
Manqunyana testified for the applicants. He
represented the other eight applicants at the disciplinary hearing.
Two of the individual
applicants also testified. They confirmed that
they refused to work short-time.
[13]
The arbitrator summarised the definition of
“insubordination” as the wilful refusal to obey a
reasonable and lawful
instruction. She concluded:
“
Every
employee not only has the duty to come to work and be on time and
otherwise, to do what he/she is told, within the parameters
of what
is accepted as being a reasonable and lawful instruction, because
this really is at the heart of insubordination.”
[14]
The arbitrator accepted that there were
“unresolved mutual interest matters” between the union
and the company –
apparently a reference to the dispute that
the union had referred to the CCMA in terms of s 64(4) of the LRA.
She also noted that
“the union did not agree with the
implementation of short-time and new operative changes [in] the
employees’ respective
rosters / time table”. Yet she
concluded that Welman gave a “valid instruction” to work
in accordance with the
new roster; that the workers refused to do so;
and that “such refusal constitutes misconduct.” She also
accepted that
the company had followed a corrective approach to
discipline, having issued a written warning and two final written
warnings for
refusal to obey a reasonable instruction. She further
found that “consultation was done” prior to the
disciplinary
process; that the applicants “did not learn from
the consultations and the warnings which were issued for failure to
work
/ comply with an instruction”; and that the fact that the
parties did not agree on matters discussed “does not mean
consultation had not taken place”.
[15]
The arbitrator concluded:
“
Having
found the applicants guilty of the allegation, I must determine
whether the dismissal was justified.”
After
having referred to the “rule that had been breached” and
the reasons the employer dismissed the workers, the arbitrator
concluded:
“
I
see no reason to interfere with the sanction of dismissal.”
Review
grounds
[16]
The union contends that the arbitrator
misconceived the enquiry by not considering whether the instruction
was reasonable, given
her acceptance that the parties had not agreed
to a change in their terms and conditions of employment.
Evaluation
/ Analysis
[17]
The pertinent question is whether the
workers wilfully refused to obey a reasonable and lawful instruction.
It is common cause that
they refused to work in terms of the new
roster; but was the instruction to do so a reasonable one?
[18]
Although neither party raised it at
arbitration or in these proceedings, I asked the legal
representatives to present me with further
argument on the question
whether the fact that the legislature provides specific remedies for
workers faced with a unilateral change
to terms and conditions of
employment, was relevant to the facts of this case.
[19]
It must be borne in mind that the union did
refer a dispute to the CCMA in terms of s 64(4) of the LRA; yet, when
the employer refused
to comply in terms of s 64(5), the union did not
call its members out on strike. Neither did the applicants approach
this Court
for an interdict in terms of s 64(3)(e).
[20]
Sections 64 (4) and (5) state that:
“
(4)
Any employee who or any trade union that refers a dispute about a
unilateral change to terms and conditions of employment to
a Council
or the Commission in terms of sub-section (1) (a) may, in the
referral, and for the period referred to in sub-section
(1)(a) –
(a)
require the employer not to implement unilaterally the change to
terms and conditions of employment; or
(b)
if the employer has already implemented the change unilaterally,
require the employer to restore the terms and conditions of
employment that applied before the change.
(5)
The employer must comply with the requirement in terms of sub-section
(4) within 48 hours of service of the referral on the
employer.”
[21]
The
learned authors of
Labour
Relations Law: a Comprehensive Guide
[3]
have the following to say:
“
An
employee or trade union referring a dispute concerning a unilateral
change to terms and conditions of employment to conciliation
may, in
the referral notice, require the employer not to implement the
change, or if it has already done so, to restore the previous
terms
and conditions of employment for the period of the conciliation
proceedings [s64(4)]. If the employer fails to comply
within 48
hours, the employees concerned may strike without observing the
statutory conciliation and notice requirements [s64(3)(e)].
In
addition they, or their trade union, may seek an interdict in the
Labour Court to enforce compliance with the notice [s158(1)(b)
read
with s64(5)].”
[22]
The trade union in this case did not
strike, nor did they seek an interdict. But are those the only
options available to it and
its members?
[23]
Faced
with a refusal to accept a change in terms and conditions of
employment, the employer has other remedies available to it.
The most
obvious one is a lock-out. But it could also implement the change
unilaterally. As the Constitutional Court pointed out
in the
Certification
case:
[4]
“
A
related argument was that the principle of equality requires that, if
the right to strike is included in the NT, so should the
right to
lock out be included. This argument is based on the proposition that
the right of employers to lock out is the necessary
equivalent of the
right of workers to strike and that therefore, in order to treat
workers and employers equally, both should be
recognised in the NT.
That proposition cannot be accepted. Collective bargaining is based
on the recognition of the fact that employers
enjoy greater social
and economic power than individual workers. Workers therefore need to
act in concert to provide them collectively
with sufficient power to
bargain effectively with employers. Workers exercise collective power
primarily through the mechanism
of strike action. In theory,
employers, on the other hand, may exercise power against workers
through a range of weapons, such
as dismissal, the employment of
alternative or replacement labour,
the
unilateral implementation of new terms and conditions of employment
,
and the exclusion of workers from the workplace (the last of these
being generally called a lockout).The importance of the right
to
strike for workers has led to it being far more frequently
entrenched in constitutions as a fundamental right than is
the right
to lock out. The argument that it is necessary in order to maintain
equality to entrench the right to lock out once the
right to strike
has been included, cannot be sustained, because the right to strike
and the right to lock out are not always and
necessarily equivalent“.
[24]
Should the employer use its weapon to
implement changes unilaterally, the legislature has provided a shield
for workers “to
provide them collectively with sufficient power
to bargain effectively with employers”. It appears from the
wording of section
64 that, if the employer does not comply with
restoring conditions, the employees
may
strike or, alternatively, they may seek an interdict in the Labour
Court. Those are the primary remedies legislated for, given
the power
imbalance between workers and employer. But it does not indicate that
these are the only options available.
[25]
It
seems to me that there remains another option available to the
employees should they not agree to the unilateral change to their
terms and conditions, and that is to simply resist the change and to
tender their services in terms of their existing terms. The
employer’s recourse is to lock them out until they agree to the
change. Alternatively, should the company require the change
for
operational reasons (as in this case), the employer could embark on a
consultation process in terms of s 189 of the LRA and
offer
short-time as an alternative to retrenchment. Absent agreement, the
employer would in these circumstances be entitled to
dismiss, and the
dismissal will probably be for a fair reason.
[5]
But the employer in this case did neither.
[26]
The applicants did in fact refer a dispute
in terms of s 64(4) to the CCMA on 2 November 2012 regarding a
unilateral change to terms
and conditions of employment. And they
required the employer to “restore the conditions to its
original position with retrospective
effect” in compliance with
section 64(4)(b) of the Act. In terms of section 64(5) the employer
had to comply with the requirement
to restore the terms and
conditions of employment that applied before the change within 48
hours of the service of the referral.
It did not do so.
Instructing the employees to work in accordance with the new terms
and conditions in those circumstances could
not be a reasonable
instruction; and conversely, the workers’ refusal to comply
could not amount to insubordination.
Conclusion
[27]
The arbitrator misconceived the nature of
the inquiry. She mistakenly found that, even though the parties had
not agreed to a change
to terms and conditions of employment, the
fact that the employer had consulted the employees was sufficient.
She disregarded the
fact that the employer unilaterally imposed new
terms and conditions of employment, thus making the instruction to
comply unreasonable.
[28]
The arbitrator also used the wrong test
with regard to sanction. She merely found “no reason to
interfere with the sanction
of dismissal”, thus showing undue
deference to the employer, rather than applying her own sense of
fairness.
[29]
These misdirections led to a conclusion
that was, in my view, so unreasonable that no other arbitrator could
have come to the same
conclusion, given the same set of factual
circumstances. The award must be reviewed and set aside.
Appropriate
relief
[30]
It would lead to unnecessary costs and
further delays for the matter to be remitted to the CCMA for a fresh
arbitration. All the
facts are before the Court in the form of a
transcript of the arbitration proceedings. The Court is in a position
to substitute
its findings for that of the commissioner.
[31]
In my view, the dismissal of the applicants
was not for a fair reason. The primary remedy is reinstatement. But
the applicants no
longer of 12 seek reinstatement. Instead, they have
asked for the maximum compensation permissible in terms of s 194(1),
i.e. the
equivalent of 12 months’ remuneration.
[32]
The workers were dismissed and the
arbitration award was handed down more than two years ago. I deem it
just and equitable to award
them compensation equivalent to 12
months’ remuneration.
Costs
[33]
The employer had an arbitration award in
its favour. It had little choice but to defend it. There is no
evidence before the Court
as to whether there is an ongoing
relationship between the trade union and the employer. It appears
that that relationship has
not always been a happy one. They may have
to foster a new and better relationship. It is common cause that the
employer was in
financial difficulty. In all these circumstances,
taking into account the requirements of law and fairness, I do not
consider a
costs award to be appropriate.
Order
[34]
The arbitration award is reviewed and set
aside. It is replaced with an order in the following terms:
34.1
The arbitration award of 11 February 2013
under case number WEGE 2616-12 is reviewed and set aside.
34.2
The award is replaced with one in the
following terms:
34.2.1
“
The dismissal of the individual
applicants was not for a fair reason.
34.2.2
The respondent, Suid-Kaap Stene cc, is
ordered to pay each of the individual applicants compensation
equivalent to 12 months’
remuneration calculated at their rate
of remuneration on the date of dismissal.”
Steenkamp
J
APPEARANCES
APPLICANTS:
Glen Kirby-Hirst of MacGregor Erasmus, Durban.
THIRD
RESPONDENT: Rize Claassen of Maserumule Inc, Cape Town.
[1]
The
first applicant, representing its members (the second and further
applicants.
[2]
Labour
Relations Act 66 of 1995
.
[3]
Du Toit et al,
Labour
Relations Law: A Comprehensive Guide
(6ed 2015, LexisNexis) at 347.
[4]
Certification
of the Constitution of the Republic of South Africa
1996 (4) SA 744
(CC);
1996 (10) BCLR 1253
(CC) at para 66 (my
emphasis).
[5]
NUMSA
v Fry’s Metals (Pty) Ltd
[2005] 5 BLLR 430
(SCA);
Mazista
Tiles (Pty) Ltd v NUMSA
(2004)
25
ILJ
2156 (LAC) para 48;
NUM
v Mazista Tiles (Pty) Ltd
(2006) 27
ILJ
471 (SCA).