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[2019] ZALCJHB 252
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Business Unity South Africa v Congress of South African Trade Unions and Others (J1908/19) [2019] ZALCJHB 252; [2020] 1 BLLR 38 (LC); (2020) 41 ILJ 174 (LC) (1 October 2019)
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case no: J1908/19
In
the matter between:
BUSINESS
UNITY SOUTH
AFRICA Applicant
and
CONGRESS
OF SOUTH AFRICAN TRADE UNIONS First
Respondent
SOUTH
AFRICAN SOCIETY OF BANK OFFICIALS Second
Respondent
NATIONAL
ECONOMIC AND DEVELOPMENT
LABOUR
COUNCIL Third
Respondent
Date
heard: 25 September 2019
Order
Delivered: 26 September 2019
Reasons
Delivered: 1 October 2019
Summary: Urgent application in
terms of section 77(2) of the LRA. The process set out in Section 77
(1) must be read to be constrained
by a reasonable time period. A
section 77(1)(d) Notice must be issued within a reasonable time after
the completion of the requirements
of section 77(1) (c).
JUDGMENT-REASONS FOR ORDER
RABKIN-NAICKER,
J
[1] On the 25 September 2019, I handed
down the following order:
“
1.
The matter is treated as urgent.
2.
It is declared that:
2.1
The Congress of South African Trade Unions (COSATU) and the South
African Society of Bank Officials (SASBO) have failed to comply
with
the provisions of section 77(1) of the Labour Relations Act 66 of
1995 (LRA); and
2.2
Any person who takes part in the intended protest action does not
enjoy the protections afforded by section 67 of the LRA.
3.
COSATU and SASBO are interdicted and restrained from proceeding with,
encouraging or enticing employees to engage in the intended
protest
action or any conduct in contemplation or in furtherance thereof
unless and until such time as they have complied with
section 77 of
the LRA.
4.
COSATU is directed to advise its affiliates, including SASBO and
their members that its proposed protest action is unlawful and
in
breach of section 77 of the LRA.
5.
There is no order as to costs.”
[2] I set out the reasons for the
above order below.
The Factual Matrix
[3] The papers reflect certain
material facts that are undisputed. These include the following:
3.1 On the 21
st
August 2017, COSATU issued a notice to NEDLAC in terms of section
77(1)(b) of the Labour Relations Act
[1]
(LRA) on LRA Form 4.4, setting out the reasons for the intended
protest action and demanding certain policy interventions.
3.2 The reasons set out for the
intended protest contained, among others, the following:
“
4.
The main cause of the economic crisis is the post 1994 neo liberal or
trickle down economic policies which are based on the view
that
benefits derived from the liberalization of the economy, deregulation
of companies, tax and direct cash subsidies will trickle
down to the
poor through living wages, secured decent jobs, free education and
free transport. Where these policies have succeeded
they have made a
few individuals richer and the majority poor.
5.
The current wave of retrenchments is of great concern to the society
and not only trade unions. One of the consequences of trickle
down
economic policies in the labor market is that employers must be
allowed to hire and fire workers any time and for any reason
including for increasing their profits and it is this labour
flexibility that has played a major contribution in the dismissal
of
workers and increase in poverty. This philosophy is not consistent
with ubuntu, SA’s socio-economic challenges and the
need to
rectify the legacy of apartheid and colonialism…..
9.
The maintenance of high levels of profits and bonuses to executives
cannot be a fair reason for retrenchments. SA is facing a
jobs
bloodbath. In terms of the broad definition of unemployment 37% of
people are unemployed as at 2017. The rate for black Africans
is
40.9%, Coloureds 28.9%, Indians 15.8% and Whites is 8.5%. The youth
unemployment between 15 and 24 years is about 66%. It is
unacceptable
that BRICS countries unemployment is below 10%.”
3.3 The following policy interventions
were demanded by COSATU to arrest the continuing economic crisis:
“
19.1
As a
quid
pro quo
for government’s generous tax benefits and other subsidies to
private sector companies, companies must be prohibited from
retrenching employees for the sake of profits and must be required to
recreate a certain number of jobs per year and this must
be monitored
by the CCMA.
19.2
Government through Nedlac must convene an Economic and Jobs Summit
within the next three months after submission of this notice.
19.3
Issues for discussion in the summit must include the following:
a.
The review of the National Development Plan in particular the
Chapters on the Economy and Employment.
b.
The abandonment of the neo liberal trickle down economic policies.
c.
Imposition of legally enforceable obligations and targets on the
private sector to create jobs, eliminate poverty and income
and asset
inequality.
d.
Amendments to existing laws that shall restrict layoffs to insolvent
companies. A company must not be allowed to retrench workers
simply
to make profits. Government must bail out companies that are
insolvent by injecting equity capital instead of allowing these
companies to fail in the same way as government has bailed out
insolvent banks.”
3.4 Under the heading “The
nature of the protest Action” the section 77(1)(b) Notice read
as follows:
“
20.
If the above demands are not accepted, and/or if no acceptable
settlement can be reached, all employees eligible to engage in
protest action in terms of
section 77
of the
Labour Relations Act,
will
be called to involve themselves in:
20.1
Rallies, demonstrations, pickets (including, lunchtime picket),
placard demonstrations, marches and stay aways and a total
shut down
of the economy.
20.2
calls for solidarity campaigns that are aimed at shareholders,
employers, suppliers; and
20.3
Other forms of protest activity.
21.
NEDLAC will be advised of the precise nature of the protest action
and the date or dates upon which they will take place in
the
section
77(1)(d)
notice, if and when this notice is provided.”
3.5 The
Section 77
Standing Committee
of NEDLAC convened a plenary meeting with COSATU and the respondents
cited in COSATU’
s 77(1)
(b) Notice on the 15
th
September 2017. The following is recorded in a document issued by
NEDLAC entitled “NEDLAC Certificate on the
section 77(1)
(B)
Notice filed by the Congress of South African Trade Unions in respect
of the economic crisis in South Africa”.
3.6 The said ‘Certificate’
was dated the 7
th
November 2017. It records the
submissions made on behalf of COSATU and further records:
“
2.2.2
The Respondent stated the following:
2.2.2.1
It agreed that the Job Summit should be convened and that NEDLAC
should play a central role in the convening of the Job
Summit. This
process would to [sic] ensure participation by all social partners.
2.2.2.2
The demand on the prohibition of retrenchments that are motivated by
profit maximization could not be agreed upon at the
meeting.
Government therefore requested an opportunity to seek a mandate with
its principals on this matter. It would then engage
with Business
where necessary.
2.2.2.3
The Respondent undertook to revert to NEDLAC within one month.
2.2.3
The Standing Committee agreed that the Respondents be allowed time to
consult with their principals and revert to the Committee
within one
month.
2.2.4
A response has not been received from the Respondents within the
stipulated timeframe.”
3.7 The said Certificate, signed by
the executive Director of NEDLAC ends with the following statement:
“
DECLARATION
Given
these circumstances, the Standing Committee resolved that the
Respondents appeared to be no longer committed to engage on
this
notice. The Standing Committee subsequently deemed this
Section
77(1)(b)
notice filed by COSATU as having been considered in terms of
Section 77(1)
(c) of the LRA.”
3.8 On the 15
th
January
2019, COSATU issued a notice to NEDLAC in terms of
section 77(1)(d)
of the LRA which disclosed an intention to proceed with the protest
action relying on the
section 77(1)(b)
Notice served on NEDLAC on the
21
st
August 2017. The 15
th
January 2019 notice
(“the First
section 77(1)(d)
Notice”) gave notice of
COSATU’s intention to proceed with protest action on the 13
th
February 2019.
3.9 On the 5
th
February
2019, COSATU issued another notice to NEDLAC (“the Second
section 77(1)(d)
Notice”) relying on the
section 77(1)(b)
Notice served on NEDLAC in August 2017 in relation to various forms
of protests to take place on Wednesday 19
th
February 2019.
3.10 No steps were taken to stop the
protest action that took place in terms of the First and Second
section 77(1)(d)
Notices.
3.11 On the 28
th
August
2019, COSATU issued a further Notice to NEDLAC in terms of
section
77(1)(d)
(“the Third
section 77(1)(d)
Notice”) relying
again on the
section 77(1)
(b) Notice served on NEDLAC in August
2017. The third Notice
inter alia
, gave Notice of protest
action by employees in the finance sector to take place on the 27
th
September 2019.
3.12 On the 29
th
August
2019, COSATU issued another Notice to NEDLAC in terms of
section
77(1)
(d) (“the fourth
section 77(1)
(d) Notice”) in
reliance on the August 2017
section 77(1)(b)
Notice. The fourth
section 77(1)(d)
Notice stated the intention to have protest action
across all sectors of the economy on the 7
th
October 2019.
3.13 It was on receipt of the Third
and Fourth Notices that BUSA brought the urgent proceedings heard on
the 24
th
September 2019.
The Legal issues
[4]
Section 77
of the LRA provides as
follows:
“
77
Protest action to promote or defend socio-economic interests of
workers
(1)
Every employee who is not engaged in an essential service or a
maintenance service has the right to take part in protest action
if-
(a)
the protest action has been called by a registered trade union or
federation of trade unions;
(b)
the registered trade union or federation of trade unions has served a
notice on NEDLAC stating-
(i)
the reasons for the protest action; and
(ii)
the nature of the protest action;
(c)
the matter giving rise to the intended protest action has been
considered by NEDLAC or any other appropriate forum
in
which the parties concerned are able to participate in order to
resolve the matter; and
(d)
at least 14 days before the commencement of the protest action, the
registered trade union or federation of trade unions has
served a
notice on NEDLAC of its intention to proceed with the protest action.
(2)
The Labour Court has exclusive jurisdiction-
(a)
to grant any order to restrain any person from taking part in protest
action or in any conduct in contemplation or in furtherance
of
protest action that does not comply with subsection (1);
(b)
in respect of protest action that complies with subsection (1), to
grant a declaratory order contemplated by subsection (4),
after
having considered-
(i)
the nature and duration of the protest action;
(ii)
the steps taken by the registered trade union or federation of trade
unions to minimise the harm caused by the protest action;
and
(iii)
the conduct of the participants in the protest action.
(3)
A person who takes part in protest action or in any conduct in
contemplation or in furtherance of protest action that complies
with
subsection (1), enjoys the protections conferred by
section 67.
(4)
Despite the provisions of subsection (3), an employee forfeits the
protection against dismissal conferred by that subsection,
if the
employee-
(a)
takes part in protest action or any conduct in contemplation or in
furtherance of protest action in breach of an order of the
Labour
Court; or
(b)
otherwise acts in contempt of an order of the Labour Court made in
terms of this section.”
[5]
The
section 77
provisions have been considered by the Labour Appeal
Court but once, in the matter of
Business
South Africa v Congress of SA Trade Unions and Another
[2]
.The
parties before me did not take issue with the principles set out in
that case. These include that:
“
In
order to determine the proper nature and scope of the right to take
part in protest action in terms of the Act it is of course
necessary
(1) to have regard to the definition of protest action in the Act and
the further provisions regulating its exercise
in s77 of the Act; (2)
the purpose of the Act; and (3) the provisions in the Act itself
which determines its proper interpretation.”
[3]
“…
.support
for the clear distinction between a right to strike and a right to
protest action is, of course, the fact that the
Act explicitly
makes that distinction and defines the two as mutually exclusive, a
fact already referred to. This distinction is
one which finds support
in comparative international law where a differentiation is made
between industrial action underpinning
the collective bargaining
process and a work stoppage for more 'political' purposes (such as
the broad socio-economic interests
of the workers)..”
[4]
“
The
findings and recommendations of the Freedom of Association Committee
of the Governing Body of the ILO, and its Committee of
Experts, are
to the effect that the right to withhold labour in order to promote
economic and social interests legitimately falls
within the scope of
the right to freedom of association as expressed in Convention 87, a
convention which South Africa has ratified.
Where the final
Constitution recognizes both the right to freedom of association and
an independent right to strike their conclusions
do not necessarily
support the argument that the right to protest action in s77 of the
Act forms part of the constitutional right
to strike.
If
the argument that the right to protest action in s77 of the Act is
part of the statutory expression of the constitutional right
to
strike, it is fallacious to argue further that the limitation of that
right should be interpreted restrictively because of other
features
of protest action which bear on the democratic process in a wider
sense, viz the right to mobilize, demonstrate, influence
and inform
and which do not form part of the right to strike. Those features
find expression in other constitutional rights such
as freedom of
association, the right to assemble, to demonstrate, to picket, to
present petitions and freedom of expression. The
right to protest
action, therefore, appears to give expression to only one form of
those rights, viz a work stoppage to influence,
in broad terms, the
democratic
process.
It limits the right by providing procedural
requirements
for its exercise but it also provides protection benefits which might
not be the case in the ordinary exercise of the
right.
This
does not necessarily make the right itself less important than the
other labour rights but merely emphasizes its different
character.”
[5]
“
Because
of the different nature and character of the right to take part in
protest action in terms of the Act, the interpretation
and
application of that right needs to be assessed in a broader context
than the fundamental 'labour rights' which form part of
the primary
objects of the Act in terms of s1. The application and interpretation
of the latter takes place in the context of their
contribution, in
general, to collective bargaining. Collective bargaining itself is
constitutionally guaranteed. The parties to
collective bargaining are
primarily restricted to employers and employees, not the general
public. Not so in the case of
protest action. Collective
bargaining is not at stake. The extent of the right to protest action
involves the weighing up of that
right, taking not only the rights of
employees and employers into consideration, but also, importantly,
the interests of the public
at large and, in a case such as this, the
effect on the national economy…”
[6]
“…
the
nature of the right to take part in protest action is such that it
necessitates a consideration of the rights of the public
at large and
not only those of labour and business.
The
purpose for enacting s77 was therefore, to regulate the manner in
which protest action should take place. That purpose would
be
forfeited if the process did not involve that sequence.
…
.The
legislature has chosen a particular sequence, and not another, which
indicates the order in which the process should
occur.
[7]
“…
..Protest
action, as defined in the Act, potentially causes harm. The notice in
terms of s77(1)(b) implicitly contains a threat
to apply pressure,
unless the dispute is resolved at NEDLAC. If the dispute is not
resolved, the s77(1)(d) notice is then given.
The threat adds a new
dimension to any consideration of the matter giving rise to the
dispute. Even if the matter had been considered
earlier, before the
s77(1)(b) notice, the threat of action necessitates further
consideration.
If
the purpose of s77 is to regulate the exercise of the right to
protest action and that entails a number of steps to be taken
in
sequence, the further question which arises is what meaning is to be
given to the requirement that the intended protest action
must have
been 'considered . . . in order to resolve the matter in dispute'.
The actual wording of s77(1)(c) is, once again, not
particularly
helpful in determining this. It is possible to argue that the matter
in dispute can be 'considered . . . in order
to resolve the matter'
on more than one occasion, and that therefore it is open to take the
next step in the sequence, viz to serve
the s77(1)(d) notice of an
intention to proceed with the protest action at least 14 days in
advance of that protest action, at
any time after one of these
occasions where the matter was so considered. But such an
interpretation would defeat the purpose of
a regulated exercise of
the right to protest action. If protest action may be proceeded with
whilst all the parties at NEDLAC are
still committed to consider the
matter giving rise to the dispute in order to resolve it, the
purported regulation of that exercise
of the right to protest action
becomes meaningless. Why refer the matter giving rise to the dispute
to NEDLAC in order to resolve
it if protest action may take place
regardless of whether the issue has been resolved or not at NEDLAC?
The answer must be consistent
with the purpose of s77, viz the
regulated exercise of the right to protest action. This consistency
is achieved if the requirement
of 'consider . . . in order to
resolve' in s77(1)(c) is interpreted so that it is only met once it
becomes clear that any one or
more of the parties at NEDLAC is not
committed to resolve the matter in dispute any more. Only when that
is clear, may the next
step, the s77(1)(d) notice, be proceeded
with.”
[8]
[6] On the facts in the LAC case, the
majority found that section 77(1)(c) had not been complied with, i.e.
consideration of the
matter in order to resolve the dispute, before
the issuing of the section 77(1)(d) notice.
Evaluation
[7] I now turn to evaluate the various
propositions pleaded and submitted by the parties in the matter
before me.
[8] BUSA sought to establish that
section 77(1) (c) had not been complied with in this matter (as in
the matter before the LAC).
It did so principally on the basis that
only one plenary had taken place, and that it was the Government and
not BUSA who had not
returned to a further meeting with proposals.
However, this is disputed in the answering papers. The denial is
supported by the
contemporaneous minutes of the Plenary Meeting and
the content of the “certificate” issued by NEDLAC which,
on a proper
reading, reflects that the respondents to the section
77(1)(b) notice did not revert to NEDLAC within the month agreed at
the plenary,
and not just the Government respondent.
[9] In my view, therefore, given the
above and the trite principles in applications for final relief, BUSA
failed to establish that
section 77(1)(c) was not complied with. What
remained of BUSA’s case was the issue of the delay of 14 months
in the issuing
of the first section 77(1)(d) notice and the fact that
three further such notices were issued based on the referral in
August 2017.
[10] It was argued on behalf of COSATU
that, given the circumstances of the economic crisis listed in the
section 77(1)(b) referral
of August 2017 had not changed, it was open
for COSATU to rely on that notice. Further, that it would be ‘absurd’
for
this Court to read any time limitation into the steps set out in
section 77, other than that specifically spelt out i.e. that 14
days’
notice should be given of the intended protest action in terms of
section 77(1) (d). In my view, this approach cannot
be correct.
[11] The indications that the section
77 process is constrained by a reasonable time period include the
following:
11.1 The Annexure to the section
77(1)(b) notice (LRA Form 4.4) issued by COSATU in August 2017
specifies that the Job Summit it
demands must be held within a period
of three months;
11.2 The social
partners pursuant to the provisions of the National Economic
Development and Labour Council Act
[9]
(NEDLAC Act) have developed certain rules and protocols. One of these
is the Section 77 Protocol entitled “Procedure for
Considering
Notices of possible Protest Action (“the Procedure”) in
terms of Section 77 of the LRA. The Procedure is
attached to the Code
of Good Practice on Consideration of Notices of Possible Protest Act
in terms of Section 77 of the LRA.
11.3 The Procedure
contains a number of time limits. For example, the Executive Director
must convene a Plenary Meeting within 10
calendar days of receiving
the 77(1)(b) Notice.
[10]
The Committee must produce a Report within five days of the
conclusion of the process listed in clause 3 of the Code of Good
Practice.
[11]
Where a panelist is requested to assist in the resolution of the
referral by the respondent to the referral, they must so indicate
within three days of receipt of the Notice of the first meeting.
[12]
11.4 Section 77 includes terms that
the “resolution of the matter” is an objective of the
provision. Section 77(1)(
c)
is one of the jurisdictional facts
to be met before protest action may ensue and reads that “
the
matter giving rise to the intended protest action has been considered
by NEDLAC or any other appropriate forum in which the
parties
concerned are able to participate in order to resolve the matter;
..”
11.5 As referred to
above, the Protocol issued in terms of the NEDLAC Act dealing with
the section 77 Procedure refers to the right
of the parties to
request a ‘panelist to assist in resolving the matter.’
If such a panelist is appointed she is subject
to certain time
periods set out in the Procedure.
[13]
[12] It is apposite to revisit Section
1 of the LRA, which provides that:
“
The
purpose of this Act is to advance economic development, social
justice, labour peace and the democratisation of the workplace
by
fulfilling the primary objects of this Act, which are-
(a)
to give effect to and regulate the fundamental rights conferred by
section 23 of the Constitution of the Republic of South Africa,
1996;
(b)
to give effect to obligations incurred by the Republic as a member
state of the International Labour Organisation;
(c)
to provide a framework within which employees and their trade unions,
employers and employers' organisations can-
(i)
collectively bargain to determine wages, terms and conditions of
employment and other matters of mutual interest; and
(ii)
formulate industrial policy; and
(d)
to promote-
(i)
orderly collective bargaining;
(ii)
collective bargaining at sectoral level;
(iii)
employee participation in decision-making in the workplace; and
(iv)
the effective resolution of labour disputes.”
[13] The above objectives which must
guide the interpretation of section 77 of the LRA, include the
advancement of social justice,
labour peace, effective resolution of
disputes and the provision of a framework for the formulation of
industrial policy. The formulation
of industrial policy speaks
directly to the social partners comprising NEDLAC and the subject
matter of referrals under section
77. There was much made in
submission before me of the distinction between strike action and
“protest action” in terms
of section 77. There is such a
distinction. However, the work stoppages contemplated by section 77
are the result of a labour dispute
of a special type. Given my
observations in paragraph 11 above, this special type of labour
dispute cannot be immune from the principle
of the speedy resolution
of disputes. Indeed, one would expect that trade union organisations
would be the first to complain when
referrals under section 77 are
not dealt with expeditiously.
[14] I therefore find that section 77
must be read to mean that a section 77(1)(d) Notice is issued within
a reasonable period.
This was not the case in this matter. Further,
and in consequence of the same reading of the section, I do not find
that the section
contemplated the issuing of more than one such
Notice in respect of a referral in terms of section 77(1)(b). The
section 77(1)(d)
Notice must be issued within a reasonable period
dependent on the particular facts and circumstances of the process
undertaken
in terms of section 77(1)(c).
[15]
A further issue pleaded and submitted on behalf of SASBO was the
following: given that BUSA took no steps to object to the
issuing of
the First and Second Section 77(1)(d) Notices, the Court should
consider that they had waived their rights, and were
now perempted
from launching this application. This argument is misplaced. We are
concerned with objective jurisdictional facts
which must be met to
clothe Section 77 protest action with lawfulness. In the same way,
the LRA contains provisions
[14]
which are applied by this Court to determine whether a strike is
protected by the statute. If an employer does not move to interdict
a
strike relying on the provisions of the LRA, but the jurisdictional
facts for the protection of that strike have not been met,
the strike
remains unprotected in law.
[16] Having found that the
jurisdictional facts required by the section have not been met as set
out above, and the intended protests
are unlawful, the interdictory
relief sought stands to be granted. I wish, however, to make certain
general observations below.
[17] The facts before me in this
application do not simply reflect that COSATU was dilatory in
pressing its right to organize its
protests. The other social
partners could be described as supine in reaction to the issues
raised in the section 77(1)(b) referral.
Indeed, BUSA, it seems, was
only roused from its slumber on receipt of the Third and Fourth
section 77(1)(d) Notices, when major
disruption of the financial
sector was imminent. It would seem to me that a positive outcome of
this dispute would be a return
to the recognition of the importance
of the role of NEDLAC in the labour and industrial sectors. The
message of this judgment to
the social partners and their NEDLAC
structure is therefore “VUKANI! WAKE UP!”
[18] Application for leave to appeal
my order, and to oppose such application, have already been made by
the parties despite the
fact that reasons for my order were still
pending. Given the importance of the matter, I take the unusual step
of granting such
leave by means of an order that follows:
Order
1.
Leave
to appeal the order and judgment in this matter is granted.
_________________
H. Rabkin-Naicker
Judge of the Labour Court of South
Africa
Appearances:
For the Applicant: Advocate Alistair
Franklin SC with Advocate Riaz Itzkin
Instructed by: Bowman Gilfillan Inc
For the First Respondent: Advocate DI
Berger SC with Advocate Z Ngwenya
Instructed by: Cheadle Thompson &
Haysom Inc
For the Second Respondent: Advocate C
Goosen
Instructed by: BJ Erasmus Pieterse
Attorneys
[1]
Act 66 of 1995 as
amended.
[2]
(1997) 18 ILJ 474
(LAC).
[3]
Ibid at pg 477
C-D.
[4]
Ibid at pg 480 C-D
[5]
Ibid at pg 480
E-J.
[6]
Ibid at pg
481 D-F.
[7]
Ibid at pg 486
A-B.
[8]
Ibid at p486 A-H..
[9]
Act 35 of 1994.
[10]
Clause 3.1.
[11]
Clause 3.7.
[12]
Clause 4.3.
[13]
Clause 4.5.
[14]
Contained in
Chapter IV of the LRA.