Brief Summary

Dismissal — Procedurally unfair dismissal — Employees dismissed for participating in an unprotected strike — Employer's failure to hold a disciplinary hearing prior to dismissal — Dismissals found to be procedurally unfair, but compensation denied due to employees' prolonged non-compliance with ultimatums and court orders — Fairness of dismissal assessed in light of employees' actions during the strike.

Comprehensive Summary

Summary of Judgment

Introduction

The proceedings were an unfair dismissal dispute adjudicated in the Labour Court. The applicants were the National Transport Movement (NTM) acting on behalf of Shadrack Molema and 224 other employees (225 employees in total), and the respondent was Botselo Holdings (Pty) Ltd (the employer company).

The dispute arose from the employees’ dismissal in March 2016 following their participation in a strike that was found to be unprotected. The matter came before the Labour Court for determination of the fairness of the dismissals, including both substantive and procedural fairness, together with ancillary issues such as the date of dismissal, consistency, alleged reasons for not returning to work after ultimatums and interdicts, and the appropriate remedy.

The general subject-matter concerned the consequences, in dismissal law, of participation in an unprotected strike, particularly whether repeated non-compliance with ultimatums and court orders entitled the employer to dismiss without convening a disciplinary hearing (or otherwise providing an opportunity to be heard), and what remedy should follow where procedural unfairness is established but substantive fairness is upheld.

Material Facts

The employer operated in the farming and maize milling industry in Delareyville and employed approximately 370 employees at the time. Prior to 2016, it had not experienced industrial action. During mid-2015 the union sought organisational rights, and a meeting took place on 29 July 2015 in which the parties contemplated that a recognition agreement would be concluded if the union reached a specified level of representation. A recognition agreement was ultimately concluded on 25 January 2016.

On 18 December 2015, before the recognition agreement was concluded, the union submitted a written wage and benefits proposal and proposed a negotiation meeting. On 6 January 2016, the union referred a refusal to bargain dispute to the CCMA. That dispute was conciliated on 29 January 2016 and an advisory award was issued on 8 February 2016, which indicated (as summarised by the court) that the matter was prematurely referred and should be resolved in terms of the recognition agreement; the CCMA file was directed to be closed.

On 8 March 2016 the union notified the employer of an intention to commence strike action on 14 March 2016 in response to the alleged refusal to meet wage demands. The employer warned on 9 March 2016 that any strike action would be unprotected and that it would seek interdictory relief.

The strike commenced on 14 March 2016. The employer communicated that the strike was unprotected and issued a series of ultimatums. The employer launched urgent Labour Court proceedings to interdict the strike. On 18 March 2016, La Grange J issued a final order declaring the strike unprotected and interdicting further strike action. The union’s leadership communicated on the same day that it was calling off the strike and would do everything in its power to ensure members returned to work; however, the employees did not return to work and the union served a notice of appeal on 19 March 2016. (Leave to appeal was later refused on 5 October 2016, as recorded in a footnote.)

The employer sought leave to execute and enforce the order. On 24 March 2016, Steenkamp J granted the application and ordered the union to direct its members not to participate or continue participating in the unprotected strike, and interdicted the union’s members from participating in the unprotected strike. Notwithstanding this, the employees did not return to work.

On 24 March 2016, the employer issued a further ultimatum calling on employees to report for duty on Saturday 26 March 2016 at 07h00, attaching the 24 March court order and stating in explicit terms that employees who proceeded with the strike would be dismissed. The employees did not return to work on 26 March 2016, and (as recorded in the pre-trial minute and accepted by the court) they gathered at the company gates and no production took place.

A dispute existed about the date of dismissal. The union contended that the employees were dismissed on 25 March 2016, relying mainly on the date reflected on the dismissal letter. The employer’s evidence was that dismissals were effected on 26 March 2016, after the ultimatum deadline, and that the letter’s date and filename issues were explainable by template use and document administration rather than an earlier termination. The court also noted that the union led only one witness on this aspect and did not call other available witnesses to corroborate the asserted earlier dismissal date.

It was common cause that the employees were dismissed for participation in the unprotected strike and that no pre-dismissal disciplinary hearing was convened. After dismissal, the employer provided an appeal process largely on paper and invited individual employees to submit written appeal grounds and mitigation. Five employees who submitted individual appeals were reinstated; the remainder did not pursue individual appeals beyond the mass appeal.

The employer’s evidence (accepted as part of the context for remedy) was that it suffered losses of approximately R2.9 million during the strike period.

Legal Issues

The court was required to determine, on the basis of the pleaded and pre-trial issues, the following central questions.

The first was a factual determination: whether the dismissals occurred on 25 March 2016 (as the union alleged) or on 26 March 2016 (as the employer alleged), which also implicated whether the employees were dismissed before the ultimatum deadline.

The second was an application of law to fact: whether the dismissals were procedurally fair, particularly whether the employer was permitted to dismiss employees participating in an unprotected strike without convening a disciplinary hearing or otherwise affording an opportunity to be heard, in circumstances where multiple ultimatums and two Labour Court interdict orders had been ignored.

The third was a further application of law to fact: whether the dismissals were substantively fair, assessed in terms of the statutory and Code guidelines applicable to dismissals for misconduct arising from participation in unprotected strike action, and having regard to factors such as seriousness of the contravention, attempts to comply with the LRA, and whether the strike responded to unjustified employer conduct.

The fourth issue involved an evaluative enquiry into remedy, namely whether, despite procedural unfairness, the employees should receive compensation, which required a value judgment grounded in statutory discretion and fairness considerations.

A costs issue also arose, involving the Labour Court’s discretionary approach to costs, rather than an automatic “costs follow the result” approach.

Court’s Reasoning

On the date of dismissal, the court preferred the employer’s version that dismissals occurred on 26 March 2016. It relied on the employer witnesses’ evidence explaining that the dismissal letter was drafted on the morning of 26 March in anticipation of non-compliance, and that it was actually handed out at about 11h00 on 26 March when employees remained on strike and the entrance was barricaded. The court treated the union’s reliance on the letter’s date as opportunistic when measured against the email transmission time and the explanation that a template filename was reused.

The court also considered the pre-trial minute, which recorded as common cause that the employees refused to work on 26 March and gathered at the gates, with no production on that day. It further drew an adverse inference from the union’s failure to call other readily available witnesses to corroborate the earlier dismissal date, in line with authority on adverse inference where available witnesses are not called. The evidence of the union’s single witness, a shop steward, was found unreliable on several aspects, including his asserted lack of knowledge of ultimatums and court orders and his account of the legality of the strike.

On procedural fairness, the court held that the dismissals were procedurally unfair because the employees were dismissed without a disciplinary hearing and without the employer at least attempting to provide an opportunity for representations before taking the final decision to dismiss. The court applied Item 6(2) of the Code of Good Practice: Dismissal (Schedule 8 to the LRA), as well as case law emphasising that an ultimatum serves a different purpose from a hearing and does not replace the audi alteram partem requirement.

The court accepted that the employer had issued multiple ultimatums and had engaged with the union in communicating the unprotected nature of the strike and the consequences. However, it concluded that the employer’s stated reason for not convening a disciplinary hearing—namely that employees refused to accept documents, walked away, and tore up or threw documents—did not justify the complete absence of an attempt to hold a hearing or solicit representations. The court reasoned that the circumstances, while tense and involving police presence, were not shown to be of such an exceptional nature that the employer could not reasonably consider a collective hearing or an attenuated form of audi, such as written representations by the union before dismissal.

The court also addressed whether the post-dismissal appeal procedure cured the procedural defect. It held that it did not, emphasising that the appeal chairperson was not a consensual appointee and that an appeal requires employees to overturn an existing dismissal decision rather than answer a case at first instance. The court placed weight on the fact that the final ultimatum communicated a pre-determined sanction of dismissal, making the need for an opportunity to make representations before implementation more compelling. It further observed that the employer’s own internal policy contemplated termination once the ultimatum deadline expired, which aligned with the employer’s decision to dispense with a hearing.

On substantive fairness, the court held that dismissal was substantively fair. It applied the approach that substantive fairness in strike dismissals must be assessed with reference to Item 6(1) and (2) of the Code (addressing unprotected strike participation as misconduct and listing relevant factors) and also Item 7 (general misconduct guidelines), noting that illegality of a strike is not automatically decisive and that dismissal must still be justified as an appropriate sanction.

In evaluating Item 6, the court considered the contravention of the LRA to be extremely serious, particularly because the wage demand dispute was not shown to have been conciliated as required, and because the union and employees persisted despite two court orders. The court also found that the union acted contrary to the recognition agreement’s dispute procedure, which required a written dispute declaration and a dispute meeting before industrial action. The court found no unjustified conduct by the employer that explained or justified the strike; the employer had concluded a recognition agreement regulating bargaining, and the union was required to comply with that agreement and the LRA.

In assessing Item 7, the court considered the statutory prohibition on unprotected strike participation, and the employer’s policy regulating strikes, as valid standards. It held that dismissal was an appropriate sanction in the circumstances. On consistency, the court noted the employer had not previously faced industrial action, limiting the scope for a broader consistency comparison, and the reinstatement of five employees was linked to individual appeals rather than arbitrary differentiation.

On compensation, the court treated the enquiry as a value judgment based on fairness, taking into account the interests of both parties and the circumstances. Although it found a procedural defect, it concluded that fairness was better served by denying compensation. Central to that conclusion were the duration and persistence of the unprotected strike, repeated disregard of ultimatums and two court orders, and the employer’s significant losses, as well as the employer’s later appeal opportunity and reinstatement of five employees. The court also took into account the manner in which the union conducted the case, including reliance on the mistaken dismissal date argument and the limited and unsatisfactory evidence presented.

On costs, the court adopted the Labour Court’s established discretionary approach and declined to grant a costs order. It reasoned that its refusal of compensation already reflected disapproval of the union and employees’ conduct, and it was not inclined to add a costs order.

Outcome and Relief

The court found that the dismissals of the individual applicants were substantively fair but procedurally unfair.

The court refused to award any compensation to the employees despite the procedural unfairness.

No order as to costs was made.

Cases Cited

Heath v A & N Paneelkloppers [2015] 36 ILJ 1301 (LC).

Absa Investment Management Services (Pty) Ltd v Crowhurst [2006] 27 ILJ 107 (LAC).

Modise and Others v Steve’s Spar Blackheath [2000] 5 BLLR 496 (LAC).

Karras t/a Floraline v South African State and Allied Workers Union and Others [2001] 1 BLLR 1 (LAC).

National Union of Metalworkers of South Africa and Others v I G Tooling and Light Engineering (Pty) Ltd (JS763/06) [2018] ZALCJHB 181 (15 May 2018).

National Union of Metalworkers of South Africa (NUMSA) v CBI Electric African Cables [2014] 1 BLLR 31 (LAC).

National Union of Mineworkers of SA v Tek Corporation Ltd and Others (1991) 12 ILJ 577 (LAC).

South African Revenue Services v Commission for Conciliation, Mediation and Arbitration and Others [2017] 1 BLLR 8 (CC).

Kemp t/a Centralmed v Rawlins [2009] 30 ILJ 2677 (LAC).

Sibongile Zungu v Premier of the Province of KwaZulu-Natal and Others [2018] ZACC 1.

Legislation Cited

Labour Relations Act 66 of 1995, including sections 64(1)(a), 68(5), 188(1)(b), 193(1)(c), and 194(1).

Code of Good Practice: Dismissal (Schedule 8 to the Labour Relations Act 66 of 1995), including Item 6 (Dismissal and industrial action) and Item 7 (Guidelines in cases of dismissal for misconduct).

Termination of Employment Convention, 1982 (ILO Convention No 158), Article 7.

Rules of Court Cited

No specific rules of court were cited in the judgment text.

Held

The Labour Court held that the employees were dismissed on 26 March 2016 pursuant to the final ultimatum deadline, and not on 25 March 2016.

It held that participation in the strike constituted misconduct and that, on the facts, dismissal was an appropriate sanction; accordingly, the dismissals were substantively fair.

It held that, notwithstanding repeated non-compliance with ultimatums and two Labour Court interdict orders, the employer was not entitled to dismiss without convening a disciplinary hearing or at least attempting to provide a pre-dismissal opportunity for representations; accordingly, the dismissals were procedurally unfair.

It held that the procedural unfairness did not warrant compensation in the circumstances, and that fairness was better served by denying compensation, with no costs order.

LEGAL PRINCIPLES

A strike that does not comply with the provisions of Chapter IV of the Labour Relations Act constitutes misconduct, but illegality of the strike does not automatically render dismissal fair; the employer bears the onus of proving substantive fairness assessed in accordance with Item 6 of the Code (strike-dismissal factors) and Item 7 (general misconduct fairness considerations).

In dismissals for participation in unprotected strike action, ultimatums serve an important function in conveying consequences and allowing reflection, but they do not in themselves displace the requirement of audi alteram partem. A fair opportunity to make representations before dismissal remains required unless, on the facts, the employer cannot reasonably be expected to provide it.

A post-dismissal appeal process does not necessarily cure the absence of a pre-dismissal hearing. Whether it cures the defect depends on the circumstances, including whether there was a sound justification for dispensing with pre-dismissal audi and whether the post-dismissal process genuinely affords a fair opportunity equivalent to what was denied.

Where procedural unfairness is established but the dismissal is substantively fair, the question of compensation requires an evaluative fairness inquiry taking account of all relevant circumstances; fairness may, in appropriate cases, be better served by refusing compensation, particularly where employees’ misconduct and disregard of lawful processes are serious.

NTM obo Molema and Others v Botselo Holdings (Pty) Ltd (J1006/2016) [2019] ZALCJHB 347; (2020) 41 ILJ 701 (LC) (29 November 2019)