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[2015] ZALCPE 31
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Algoa Bus Company (Pty) Limited v Transport Action Retail and General Workers Union (Thor Targwu) and Others (P368/13) [2015] ZALCPE 31; [2015] 9 BLLR 952 (LC); (2015) 36 ILJ 2292 (LC) (7 May 2015)
THE LABOUR COURT OF
SOUTH AFRICA,
IN PORT ELIZABETH
CASE NO: P368/13
DATE: 07 MAY 2015
Of Interest to Other
Judges
In the matter between:
ALGOA BUS COMPANY (PTY)
LIMITED
..........................................................................
Applicant
And
TRANSPORT ACTION RETAIL AND GENERAL
WORKERS UNION (THOR
TARGWU)
...................................................................
First
Respondent
THE PERSONS REFERRED TO IN SCHEDULE
“
1” TO THE NOTICE OF
APPLICATION
.......................................................
Further
Respondents
Heard: 07 May 2015
Delivered: 07 May 2015
Summary:
(Section 68(1)(b) of
the LRA – compensation for losses sustained in an unprotected
strike – application of principles
– losses sustained
after interdict and notice of intention to claim damages used as
basis for order)
REASONS FOR JUDGMENT
Order
[1] On 7 May 2015 the following order
was handed down in this matter:
“1.That the first and further
respondents are jointly and severally liable to pay the applicant the
sum of R1 406 285.33 (“the
Capital Sum”) in accordance
with para 2 – 4 below.
2.Subject to para 3, the Capital Sum
shall be paid in monthly instalments as follows:
2.1 the first respondent shall pay at
least R5,280.00 per month;
2.2 the further respondents shall have
R214,50.00 deducted from their salaries per month which deductions
are authorised in terms
of
section 34(1)(b)
of the
Basic Conditions
of Employment Act 75 of 1997
.
3. Any failure or refusal of one or
more of the respondents to make payment of the minimum monthly
instalments referred to in para
2:
3.1 shall entitle the applicant to
recover that unpaid portion of the Capital Sum from any one of and/or
the other respondents ;
and
3.2 shall not, until such time as the
entire Capital Sum has been paid, constitute grounds for any one of
and/or the other respondents
refusing to continue to pay the minimum
monthly instalments referred to in para 2.
4. Payment of the minimum monthly
instalments referred to in para 2 shall commence on 7 June 2015 and
thereafter be paid consecutively
on the 7th day of each succeeding
month, until the entire Capital Sum has been paid.
5. Directing the first respondent to
pay the costs of this application including the wasted costs in
relation to the proceedings
which had to be postponed on 16 April
2014 as a result of the first and further respondents not being ready
to proceed on this
day.”
Reasons for the judgment are set out
below
Reasons
[2] This is an application in terms of
s 68(1)(b)
of the Labour Relations Acc, 66 of 1995 (‘the LRA’)
concerning a claim for compensation for economic loss sustained
as a
result of an unprotected strike embarked on by the respondent union
and its members, who are employed as drivers by the applicant.
The
respondents did file an answering affidavit and were represented by
an attorney until a few of weeks before the hearing. However,
the
respondents did not instruct new attorneys nor did they request a
postponement of the matter. The general secretary of the
union, Mrs E
P N Kovu, did attend Court and made some representations about the
union’s apparently parlous financial situation.
However she did
not wish to appear as a representative of the respondent at the
hearing, so the matter proceeded on the basis that
the respondents’
representations were confined to what was set out in their answering
affidavit and without further oral
submissions on their behalf.
[3] Accordingly, the matter was decided
on the affidavits, which contained sufficient detail to decide the
matter, and there had
been no request to refer matters to oral
evidence.
[4]
S 68(1)(b)
sets out the following
considerations governing the determination of payment of
compensation, which are examined briefly thereafter.
“(1) In the case of any strike or
lock-out, or any conduct in contemplation or in furtherance of a
strike or lock-out, that
does not comply with the provisions of this
Chapter, the Labour Court has exclusive jurisdiction-
…
(b) to order the payment of just and
equitable compensation for any loss attributable to the strike or
lock-out, or conduct, having
regard to-
(i) whether-
(aa) attempts were made to comply with
the provisions of this Chapter and the extent of those attempts;
(bb) the strike or lock-out or conduct
was premeditated;
(cc) the strike or lock-out or conduct
was in response to unjustified conduct by another party to the
dispute; and
(dd) there was compliance with an order
granted in terms of paragraph (a);
(ii) the interests of orderly
collective bargaining;
(iii) the duration of the strike or
lock-out or conduct; and
(iv) the financial position of the
employer, trade union or employees respectively.”
[5] There was no material dispute that:
5.1 the respondents had embarked on an
unprotected strike commencing on midday on 23 January and ending on
30 January 2013, and
5.2 on 25 January 2013, the strike was
interdicted.
[6] The respondents were not in a
position to dispute the losses detailed in the affidavits, and there
is no reason to doubt the
reliability of the evidence relating to
lost sales’ revenue and loss of government transport subsidies
during the period
of the strike. Buses damaged in the course of the
strike were not factored into the losses sustained, because the
applicant had
successfully claimed insurance for that damage. The
only material challenge by the respondents to the figures provided by
the applicant
was to suggest that the comparison of the figures for
January 2013 with the figures for a normal month like November 2012,
was
inappropriate as the proper comparator would have been the data
for January 2012. However, the applicant pointed out that if it
had
used that data, the projected loss would have been an even greater
amount. There was no reason to suppose that the losses were
due to
anything other than the consequences of the strike.
[7] The evidence available also showed,
on a balance of probabilities, that the union did little if anything
to discourage its members
from participating in the strike or to
distance itself from the strike. Broad allegations of attempts to
persuade strikers to return
to work were made but are so lacking in
any specificity as to be of no evidentiary value at all. More
particularly, even if I accept
that initially, the union might not
have been fully aware of the strike, there can be no doubt that it
was fully apprised of the
situation by 24 January 2013. By 25 January
2013 when the interdict was granted, there could have been no more
doubt in the mind
of the union officials that the strike was in
progress and was unprotected. Immediately after the interdict was
obtained, the applicant
also pointedly drew the respondents’
attention to the fact that a damages claim for losses sustained
during the strike could
be made. That ought to have limited any one
reading that letter to the fact that the applicant would not
necessarily confine itself
simply to having the strike declared
unprotected or taking disciplinary action, but that it might seek to
recover any financial
losses.
[8] The strike was not a spontaneous
event which just began in response to some action by the applicant on
23 January 2013. In essence,
it was a response to disciplinary action
pending against certain members who were subsequently dismissed. In
any event, even if
it had been spontaneous, there was no effort by
the union to restore labour peace except on the basis that the
strikers’
demands in relation to the suspended members should
be conceded to. The disciplinary action in the circumstances was
legitimate
and that process should have run its course without the
pressure of industrial action. Consequently, I do not think there is
a
case to be made that the strike was in response to unjustified
conduct by the applicant. The strike also served no collective
bargaining
purpose.
[9] Importantly, once the Court order
was obtained interdicting the strike, it was not adhered to. All in
all, the strike endured
for seven and a half days, a significant
period within which the respondents had an opportunity to reflect on
their actions. After
the interdict was handed down on 25 January
2013, there could have been no doubt left about the status of the
strike and the interdict
ought to have made it easier for the union
to persuade members to end the strike, especially when it was coupled
with the applicant
notifying the union of its intention to claim
damages.
[10] The union provided unconfirmed
financial statements for 2011 and 2012, marked “for discussion
purposes only” as
evidence of its poor financial condition.
Undoubtedly, if those unofficial documents were an accurate
reflection of the union’s
financial position at that time, the
union was barely scraping by. Although it is not part of the evidence
presented by the union
in these proceedings, the comments of the
general secretary from the bar when she was explaining her attendance
at the proceedings,
suggest the situation is even worse presently.
However, the fact that an award of compensation against the union
might cause it
further financial damage is not in and of itself a
reason for not granting relief. In my mind, an important question
that has to
be considered is whether the effect of a particular award
of compensation against a union is likely to seriously compromise its
ability to function, bearing in mind that it will usually have
responsibilities to members in other workplaces, whose right to
effective representation by, and participation in the affairs of, a
functioning union ought not to be seriously compromised by
the
unlawful conduct of a section of the membership or of a local
organiser. However, this does not mean a union can expect to
remain
immune from the financial consequences of reckless conduct by its
members or office bearers.
[11] In this instance, even on the
union’s version, it is apparent that it was already in a
financially perilous situation
and that an order of compensation
against it, though adding to its financial woes, would just be one
more additional burden. There
was also no credible evidence of how
the order of compensation would affect its collective bargaining
capability. A related factor
to consider in this regard is whether
the imposition of an award of compensation can be ameliorated by
making it repayable on extended
terms, which is what I have done in
this case. Notwithstanding the unconfirmed financial reports it
produced, the union did not
dispute the applicant’s contention
that it had a membership that ought to have yielded subscription
income of just over approximately
R 100,000 – 00 per month.
Further, there is nothing to suggest the union could not raise a
small special temporary levy from
all members to cover the
extraordinary expenditure.
[12] In relation to the union’s
members, the amount they are required to pay monthly in recompense is
equally apportioned
between them and will amount to less than 3 % of
their remuneration. This amount will also be reduced in accordance
with any contribution
made by the union. Considering their actions
such as their failure to follow any procedures, their persistence
with the strike
and failure to heed the Court’s order, the
financial burden of the installment payments is not unduly
burdensome.
[13] The nature of the applicant’s
business meant that financial impact of the strike on it was direct:
it lost fares and
subsidies for the duration of the action. There was
no way these could be recovered by expedients like working in
additional hours
on the workers’ return to work. The demand for
transport for those days was not one that would accumulate and could
be satisfied
on a deferred basis later. The scope for the employer to
mitigate its damages seems to have been non-existent. Overall, the
loss
of just over a week’s income would have amounted to
approximately 2 % or more of its yearly income.
[14] I have already mentioned the
duration of the strike above. Taking into account the factors
discussed above which are set out
in
s 68(1)(b)
of the LRA, even if I
make allowance for the strikers’ actions until 25 January 2013
as being misguided and ill-informed,
their defiance of the Court
order and indifference to a prospective damages claim after that
date makes it difficult to see why
they should not bear the full
costs of damages suffered for the remainder of the strike.
Accordingly, I ordered payment of damages
based on the losses
sustained over five of the seven and a half days duration of the
strike, or two-thirds of what the applicant
sought.
R LAGRANGE, J
Judge of the Labour Court
Appearance
For the Applicant: J G Grogan SC
Instructed by: Chris Baker and
Associates
For the Respondents: None