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[2020] ZALCJHB 129
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Macsteel Service Centres SA (Pty) Ltd v National Union of Metal Workers of South Africa and Others (J483/20) [2020] ZALCJHB 129; [2020] 8 BLLR 772 (LC) ; (2020) 41 ILJ 2670 (LC) (3 June 2020)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
reportable
Case
no: J483 /20
MACSTEEL
SERVICE CENTRES SA (PTY) LTD
Applicant
and
NATIONAL
UNION OF METAL WORKERS
OF
SOUTH AFRICA
THE
PERSONS LISTED IN ANNEXURE “A”
First
Respondent
Second
to further Respondents
Heard:
29 May 2020
Delivered:
3 June 2020
In
view of the measures implemented as a result of the Covid-19
outbreak, this judgment was handed down electronically by circulation
to the parties' representatives by email. The date for hand-down is
deemed to be 3 June 2020.
JUDGMENT
PRINSLOO,
J
Introduction
[1]
The Applicant approached this Court on an
urgent basis seeking an order declaring the strike action by the
Respondents unprotected.
[2]
The Respondents filed an answering
affidavit, to which the Applicant filed a reply. The Applicant seeks
an interim order, with a
return date. As all the papers are before
me, the matter will be finally determined.
The Covid-19 pandemic
[3]
Before I deal with
the merits of this application, it is necessary to set out the milieu
within which this application came before
Court.
[4]
On
15 March 2020, the coronavirus pandemic was declared a national
disaster in the Republic of South Africa and the government announced
a package of extraordinary measures to combat this grave public
health emergency. On 23 March 2020,
[1]
President
Cyril Ramaphosa (the President) announced a nationwide lockdown for
21 days with effect from midnight on 26 March 2020,
which was to be
enacted in terms of the Disaster Management Act
[2]
.
The three- week lockdown entailed that all South Africans were
required to stay at home, except a handful of categories of workers
who were regarded as necessary and essential in the response to the
pandemic.
[5]
The President made it
clear that South Africa found itself confronted not only by a virus
that has infected millions of people across
the globe, but also by
the prospects of a very deep economic recession that will cause
businesses to close and that will result
in many people losing their
jobs. As a first phase of the government’s economic response,
measures were announced and these
interventions included support for
persons whose livelihoods would be affected.
[6]
The President
announced that there would be a special dispensation for companies
that are in distress because of Covid-19 and stated
that through this
proposal, employees would receive wage payment through the Temporary
Employee Relief Scheme (TERS), which would
enable companies to pay
employees during this period and avoid retrenchments.
[7]
The President called on companies to take
care of their workers during this period and called on all South
Africans to act in the
interest of the nation and not in their own
selfish interests. He gave the assurance that lives and livelihoods
are prioritised
and that the measures he announced would be used to
protect people from the economic consequences of this pandemic.
[8]
On 26 March
2020, the Minister of Employment and Labour issued a Directive that
set out the requirements for the newly established
Covid-19 TERS
benefits. These benefits were provisioned to alleviate the economic
impact of the national pandemic by assisting
employers to pay their
employees during the closure of their businesses. The said Minister
subsequently published amendments to
the Covid-19 TERS directives, of
which the latest amendments were effective from 26 May 2020.
[9]
On
9 April 2020,
[3]
the President
announced that the National Coronavirus Command Council decided to
extend the nationwide lockdown by a further two
weeks beyond the
initial 21 days and the lockdown measures remained in force until the
end of April 2020. The President made it
clear that the aim was to
prevent massive loss of life as well as to prevent the economy from
collapsing and in pursuing a path
that both saves lives and protects
livelihoods, government adopted a strategy that was made up of three
parts, the second of which
was a comprehensive package of economic
support measures to assist businesses and individuals affected by the
pandemic.
[10]
The President announced that additional
extraordinary measures would be put in place in the coming weeks and
months to absorb the
sudden loss of income to both businesses and
individuals. He stated that cabinet would be developing a
comprehensive package of
urgent economic measures to respond to the
immediate crisis and to the severe economic challenges that we must
confront in the
months ahead.
[11]
On
21 April 2020,
[4]
the President
announced economic and social measures in response to the Covid-19
epidemic. He confirmed that the coronavirus pandemic
has damaged the
economy, it resulted in sudden loss of income for businesses and
individuals and that it was to continue in months
to come. The
President announced the second phase of government’s economic
response to stabilise the economy, to address
the extreme decline in
supply and demand and to protect jobs. As part of this phase, the
President announced a massive social relief
and economic support
package of R 500 billion, which included support for companies and
workers.
[12]
On
23 April 2020,
[5]
the President
announced that the nationwide lockdown could not be sustained
indefinitely as people need to earn a living, companies
need to be
able to produce and trade, they need to generate revenue and keep
their employees in employment. A gradual and phased
recovery of
economic activity was announced to commence after 30 April 2020 when
the lockdown restrictions were eased gradually.
The President
announced that as from 1 May 2020 the country would operate on level
4 alert, which allowed some businesses to resume
operations under
specific conditions, including that they would not be able to return
to full production and the workforce would
only be able to return in
limited batches. The President called upon South Africans to make
sacrifices and to endure hardship and
difficulty so that we can enjoy
freedom and prosperity into the future.
[13]
On
13 May 2020,
[6]
the President
announced that by the end of May 2020 most of the country would be
placed on level 3 alert and this was confirmed
on 24 May 2020
[7]
.
South Africa indeed moved to level 3 alert on 1 June 2020, and the
restrictions that were in place, were relaxed significantly.
[14]
It
has been said over and over that the Covid-19 crisis presents an
unprecedented challenge, unmatched since the Spanish Flu and
the
Great Depression. It has depressed global economies and a material
shrinkage in global trade is expected. Covid-19 landed on
our shores
at a time when our economy was already under tremendous strain.
[15]
In this context, the
Applicant had to close its operations entirely for the lockdown
period from 26 March 2020 until 30 April 2020
and during May 2020 it
resumed 50% of its business operations.
Background facts
[16]
The nationwide
lockdown commenced at midnight on 26 March 2020 and as the Applicant
is not an essential service, it ceased all operations
as from 27
March 2020. This caused a serious economic blow for the Applicant as
it suffered a total loss of business and turnover.
[17]
During the initial
period of the lockdown, the Applicant placed all its employees on
special leave and paid the employees their
full salaries and benefits
for March and April 2020. The Applicant did not require its employees
to take their annual leave during
this period and their leave credits
remain intact, nor did the Applicant apply the principle of ‘no
work no pay’.
[18]
The Applicant’s
case is that it did not anticipate that the three-week lockdown
period would be extended and when that happened,
it sent a
communication to its employees on 16 April 2020. The same
communication was sent to the First Respondent (NUMSA) on 17
April
2020. In the said communication, the Applicant indicated that the
Covid-19 epidemic had a devastating impact in that the
Applicant
suffered a total loss of business and turnover and that it would
suffer substantial losses in 2020. The Applicant stated
that its cash
reserves and monthly cash flow must be managed carefully as the
Applicant expected a substantial cash shortfall at
the end of May
2020. As a result, the Applicant announced emergency measures that
would come into effect from 1 May 2020 namely:
18.1
All employees will be required to take a
20% reduction in salary, initially for three months (May, June and
July 2020) and this
will be reviewed on an ongoing basis;
18.2
Commission earners will be required to take
a 20% reduction on their basic pay, initially for three months (May,
June and July 2020)
and this will be reviewed on an ongoing basis;
18.3
The Applicant will not be in a position to
pay any salary increases to employees in July 2020;
18.4
No salary increases will be awarded to any
employee who is promoted for the remainder of 2020;
18.5
Acting allowances will be paid to those
qualifying individuals where applicable, but they will be required to
take a 20% reduction
in salary, initially for three months (May, June
and July 2020) and this will be reviewed on an ongoing basis;
18.6
The Applicant will not be in a position to
pay any bonuses / incentives to non-scheduled employees for the
remainder of 2020 and
this will be reviewed on an ongoing basis;
18.7
The Applicant reserved its rights in
relation to the MEIBC’s Exemption Policy with regard to the
leave enhancement pay in
relation to scheduled employees as the
Applicant will not be able to afford the December payment.
[19]
It was made clear in
the letter that these are extreme measures which will have a negative
impact on all employees, but that those
are measures aimed at
preserving jobs and that the unprecedented times require of everyone
to make sacrifices that would ensure
the sustainability of the
Applicant and the protection of livelihoods.
[20]
The Applicant was
able to resume operations during level 4 alert with effect from 1 May
2020, but its operations could only be scaled
up to 50%. This meant
that approximately 1 458 employees could not return to work
until such a time as the lockdown was eased
further.
[21]
NUMSA has 1 247
members and it represents approximately 41% of the Applicant’s
workforce. NUMSA’s members rejected
the proposed emergency
measures and on 13 May 2020 a meeting was held between the Applicant
and NUMSA. During the meeting,
the NUMSA representatives
indicated that their members were not in agreement with the 20%
salary reduction for all employees and
that they did not have a
mandate from their members. The Applicant pointed out that the effect
and consequence of level 4 alert
was that it was impossible for all
employees to return to work and to tender their services as the
Applicant could only operate
at 50%.
[22]
The Applicant’s
case is that the Covid-19 pandemic is an extraordinary event, which
was unforeseen and out of the control
of the Applicant or its
employees. As part of assisting employees whilst at the same time
balancing the responsibility to ensure
the continued operation of the
Applicant post the lockdown period and the Covid-19 pandemic, the
Applicant decided to implement
the salary reduction for May, June and
July 2020.
[23]
On 18 May 2020, the
Applicant sent a communication to its employees, in which it recorded
that it would implement the measures set
out in the letter of 16
April 2020. It was stated that the Applicant was operating at 50% of
normal capacity and it remained impossible
for the Applicant to
generate the required revenue to cover all the costs of running the
business. Rather than not paying employees
who are unable to return
to work, the Applicant considered how to best assist its employees
and at the same time ensure the sustainability
and survival of the
Applicant post the lockdown and Covid-19 pandemic, until such time it
can resume full operations. The intention
was to treat all staff the
same, notwithstanding the fact that some could not return to work.
[24]
In the aforesaid
letter, the Applicant indicated that the Department of Employment and
Labour (The Department) recognised that many
companies would be in
financial distress as a result of the Covid-19 pandemic and that it
had made provision for special relief
for employers who are unable to
pay salaries. The Applicant gave the undertaking that it has and will
continue to apply for the
Covid-19 TERS benefits on reduced earnings
and as soon as the Applicant received the relief money from the
Department, it would
be transferred directly to the employees.
[25]
The Applicant
recognised the fact that the reduction in salaries will have a
serious impact on its employees and their families.
[26]
On 21 May 2020, NUMSA
addressed a letter to the Applicant stating that the Applicant’s
unilateral decision to implement a
20% salary reduction,
notwithstanding the fact that NUMSA and other employees objected, was
unlawful.
[27]
The Applicant
responded to NUMSA on 22 May 2020, confirming that the decision to
implement the salary reduction for May, June and
July 2020 was taken
to balance the interest of employees and ensuring the continued
operation of the Applicant post lockdown and
the Covid-19 pandemic
until such a time that it can resume full operations. The Applicant
further undertook to apply monthly for
the TERS benefit on reduced
earnings.
[28]
The Applicant further
invited NUMSA to a meeting to discuss the issues of leave enhancement
pay, incentives, bonuses and salary
increases.
[29]
Instead of engaging
the Applicant further, NUMSA referred a dispute to the MEIBC and the
referral was served on the Applicant on
25 May 2020. The nature of
the dispute is classified as ‘unilateral change to terms and
conditions of employment’ and
the outcome required is for the
status quo
to remain
in respect of all the terms and conditions of employment. NUMSA
identified four issues in dispute to wit:
‘
1.
Employer reduced all salaries by 20% for the months of May, June and
July 2020;
2.
Intend to suspend the payment of bonuses and incentives to
non-scheduled employees;
3.
Intend not to make payments for leave enhancement pay during December
2020;
4.
Amend the pension / provident fund rules to allow for a contribution
holiday.
‘
[30]
In argument, Mr
Daniels for the Respondents indicated that paragraph 4 of the issues
in dispute has been abandoned and is no longer
part of the issues in
dispute and it is therefore not relevant for purposes of this
judgment.
[31]
In
requiring an outcome for the
status
quo
to
remain, NUMSA invoked the provisions of section 64(4)(a) and / or
64(4)(b) of the Labour Relations Act
[8]
(LRA).
[32]
On 25 May 2020, the
Applicant’s attorneys addressed a letter to NUMSA, stating
inter alia,
that
salary reduction for May, June and July 2020 was implemented in order
to address the devastating financial impact which the
lockdown has
had on the Applicant’s business and as a means to avoid more
drastic measures such as a section 189 of the LRA
retrenchment
process or temporary layoff or short time in respect of employees who
cannot return to work.
[33]
It was re-iterated
that the Applicant was committed to apply for the Covid-19TERS
benefits but that it could only do so for May
2020 when the
application process for May 2020 is open. When the matter was argued,
it was confirmed that the Applicant had indeed
submitted its
application for the TERS benefits. It was stated that as soon as the
Applicant receives the Covid-19 TERS benefits,
it will top up
employees’ salaries with the funds it may receive from the
Department. This means that employees’ salaries
would be topped
up with the Covid-19 TERS benefit as soon as it is paid and based on
the salary scale of the UIF benefits, employees
are likely to receive
100% of their full remuneration for May 2020.
[34]
On 25 May 2020, NUMSA demanded a written
undertaking from the Applicant that it would refrain from
unilaterally implementing changes
in the terms and conditions of
employment. Absent such a written undertaking, notice was given in
terms of sections 64(4) and (5)
of the LRA that NUMSA’s members
would embark on strike action in support of their demand that the
Applicant refrain from
unilaterally changing conditions of service.
[35]
On 26 May 2020, the Applicant responded to
NUMSA and stated that the strike would be unprotected as the
Applicant has not failed
to comply with section 64(4) and (5) of the
LRA and therefore the provisions of section 64(3)(e) of the LRA do
not apply and NUMSA
has to comply with the provisions of section
64(1). In the same letter NUMSA was given notice of a defensive
lock-out in response
to the strike action.
[36]
In the letter, NUMSA was requested
inter
alia,
to agree that the Applicant make
payment of 80% of the employees’ remuneration for May, June and
July 2020 and that the Applicant
would apply timeously for the
Covid-19 TERS benefits each month in order to top up the employees’
remuneration to 100% once
the benefits have been paid to the
Applicant.
[37]
The strike action commenced as per the
strike notice and on 29 May 2020 the Applicant approached this Court
on an urgent basis for
relief.
The relief sought
[38]
The Applicant seeks an order declaring the
strike action that commenced on 28 May 2020 unprotected and for this
Court to order the
striking employees to return to work.
[39]
This Court is not inclined to order
employees to return to work in the event that the strike action is
declared unlawful. If the
strike action is unlawful, the Applicant
has other remedies available to get its employees back to work and a
Court order to that
effect is not necessary.
[40]
Effectively, the only relief sought is for
a declarator that the strike action is unprotected.
The Applicant’s
case
[41]
The Applicant’s case is that the
strike action is unprotected for the following reasons:
[42]
In the referral to the MEIBC, NUMSA made
four demands and in respect of the first issue relating to the 20%
reduction of all salaries
during May, June and July 2020, the
Applicant’s case is that no such change is being implemented as
the Covid-19 TERS benefit
will be applied for. NUMSA’s members
are not being subjected to a salary reduction, but rather a temporary
re-arrangement
of how they are paid.
[43]
In respect of the remainder of the demands,
the Applicant’s case is that they relate to events which have
not yet taken place
or been decided upon by the Applicant.
[44]
Section 64(3)(e) of the LRA provides that
the requirements of section 64(1) do not apply to a strike if the
employer fails to comply
with the requirements of section 64(4) and
(5), but the Applicant has complied with the requirements of section
64(4) of the LRA
and thus the strike action, without complying with
section 64(1), would be unprotected.
[45]
In short: The Applicant’s case is
that it has given an undertaking to apply for the Covid-19 TERS
benefits for May 2020 and
in giving such undertaking, the Applicant
has complied with the requirements of section 64(4) of the LRA. There
is no change to
the terms and conditions of employment and at best
for the Respondents there is a dispute about the payment date of
employees and
that is not a dispute covered by section 64(3) of the
LRA.
The Respondents’
case
[46]
The
Respondent takes issue with the Applicant’s undertaking to
apply for the Covid-19 TERS benefit for a number of reasons.
Firstly,
the Applicant vacillates between two scenarios namely:
i.
The employees will receive their full
remuneration if and when the TERS benefits are received;
ii.
Based on the salary scale, it was most
likely that most of the employees will be paid their full
remuneration.
[47]
The Respondents
submitted that TERS benefits are calculated on a sliding scale
provided by the Unemployment Insurance Fund (UIF)
and an employee
will receive remuneration up to a maximum amount, determined by the
UIF. The Applicant does not guarantee that
employees who are working
on a full time basis during the months of May, June and July 2020
will receive the full amount of their
salary due to them.
[48]
The Applicant’s
‘undertaking’ is that the TERS benefit will probably
ensure that employees are paid their full
salaries, but the Applicant
cannot state that its application would be successful or what amount
of monies would be received if
the application is successful.
[49]
The Respondent’s
case is further that the TERS benefits are designed to remunerate
employees who are unable to work during
the national state of
disaster and it does not make provision for employees who work on a
full time basis, therefore it is unlikely
that the Applicant would
receive any monies for employees who are working on a full time
basis.
[50]
The Respondents
further submitted that the employees’ contracts of employment
refer to and incorporated the conditions of
employment in the MEIBC
Main Agreement. The Main Agreement provides for the payment of
salaries and the date of payment cannot
be unilaterally altered by
the Applicant. The Applicant’s conduct in changing the payment
date to the date when it receives
the TERS money, is a unilateral
change in terms and conditions of employment.
[51]
In short: The
Applicant unilaterally reduced the salaries of all its employees by
20% for May, June and July 2020, it has not paid
salary increases to
scheduled employees and advised that it would not pay acting
allowances or increases to promoted employees,
incentive bonusses or
leave enhancement pay. According to the Respondents, all of the
aforesaid constituted a unilateral change
to terms and conditions of
employment.
Analysis
[52]
In my view, the crux of this matter is the
payment of employees’ salaries for May, June and July 2020.
[53]
I accept that the other issues, as set out
supra,
are
also issues in dispute and that they form part of the basis or the
trigger for the current strike action. I also accept the
Applicant’s
position that incentives, bonuses and leave enhancement pay are not
due and payable at this time and would only
become due and payable at
the end of the year and in the meantime the Applicant is entitled to
apply for exemption from these provisions
of the Main Agreement.
[54]
However, and for purposes of this judgment
I will focus on the main bone of contention namely the payment of the
employees’
salaries for May, June and July 2020.
[55]
It is common cause that the Applicant has
paid its employees their full remuneration for March and April 2020,
notwithstanding the
fact that the Applicant’s operations shut
down from 27 March until 30 April 2020. This conduct of the Applicant
is commendable
and gave effect to the President’s plea to
employers to look after their employees during the difficult time of
the nationwide
lockdown and the Covid-19 pandemic.
[56]
The Applicant’s employees were fully
paid for a period of five weeks when they rendered no services and
for which period the
Applicant could have implemented the ‘no
work no pay’ principle, but decided not to do so in order to
assist its employees.
[57]
It is understandable that the Applicant is
facing financial challenges, as are many other employers in this
country, who were unable
to operate their businesses or produce or
sell anything to generate revenue to cover expenses, including
salaries of employees
for a period of at least five weeks.
[58]
The Covid-19 pandemic has hit the world and
South Africa without much warning and there was not much time between
the declaration
of the state of disaster and the announcement of the
lockdown for companies to plan or to budget for the most unforeseen
event,
which transpired to hit even harder and with more brutal force
than what was initially expected or anticipated.
[59]
As from 1 May 2020, the country moved to
level 4 and during the period 1 – 31 May 2020 the Applicant was
allowed to operate
at 50%. This would have enabled the Applicant to
start operations, but with a 50% limitation on operations and half of
its workforce
still at home, the Applicant would not have been able
to do any better than to limp back to business.
[60]
Once again, the Applicant decided to pay
its entire workforce, including the employees who had to stay at home
due to the level
4 lockdown and not to apply the ‘no work no
pay’ principle to them. This however, went hand in hand with
the decision
to implement as 20% reduction in salaries for all
employees, which triggered the current strike action and caused the
parties to
end up before this Court.
[61]
A strike initiated in terms of section
64(3)(e) of the LRA can only take place if there is a unilateral
change in the terms and
conditions of employment rather than a
dispute of right and only when the employer has failed to comply with
the request not to
implement the unilateral change.
[62]
There are two issues that call for
consideration. Firstly, whether there was a unilateral change in
terms and conditions of employment
and secondly whether the Applicant
restored the
status quo.
Was there a change in
terms and conditions of employment
[63]
It is evident from the communication sent
by the Applicant to its employees during April and May 2020 that the
Covid-19 pandemic
and lockdown had a devastating impact on the
Applicant and due to the difficulties faced by the Applicant,
emergency measures would
come into effect from 1 May 2020,
inter
alia,
that all employees would be
required to take a 20% reduction in salary for May, June and July
2020. The intention was clearly to
pay all employees, even those who
did not return to work and to ensure that the impact of the measures
would be the same and that
one group of employees was not treated
more favourably than any other group.
[64]
Even in the letter written by the
Applicant’s attorneys it was made clear that a 20% salary
reduction for May, June and July
2020 was part of the emergency
measures which the Applicant had decided to implement in order to
manage its cash reserves and monthly
cash flow.
[65]
The Applicant’s case is that it has
given an undertaking to apply for the Covid-19 TERS benefits for May
2020 and in giving
this undertaking, the Applicant has complied with
the requirements of section 64(4) of the LRA and there is no change
to the terms
and conditions of employment.
[66]
The Respondents’ answer to this is
that the Applicant’s undertaking that if and when it received
the TERS monies, it
would top up the employees’ salaries, is
not sufficient to stop the strike action as there is no guarantee
that the employees
would be paid 100% of their salaries, regardless
of the outcome of the application for the TERS benefits.
[67]
The Applicant
submitted that the question is whether the act of utilising the
Covid-19 TERS benefit constitutes a unilateral change
to terms and
conditions of employment where there is no version proffered by the
striking employees that they will not receive
their salaries. The
Applicant’s case is that it is not and as such NUMSA and its
members may not embark on strike action.
[68]
The
Applicant further submitted that NUMSA’s complaint is that it
wants to ensure that its members are not short paid and
the
possibility of short payment is not a unilateral change in terms and
conditions of employment. This was confirmed in
Sun
lnternational Ltd and Another v South African Commercial Catering and
Allied Workers and Others
[9]
where
it was held that:
'For the sake of
completeness, though the merits on the protected nature of the strike
are no longer in issue and even though it
may be obiter, I am
satisfied that the strike would still not have been protected in any
event, because the real reason for the
strike concerned alleged short
payments arising from the introduction of the new biometric system.
Although the union denied that
the dispute concerned short payments,
the union never disputed the veracity of the exchanges between the
Group Human Resources
officer and the Deputy President of the union
which confirmed that rectification of alleged short payments arising
from the Kronos
system was the reason for the strike.’
[69]
In my view the
question is whether the
20% salary
reduction for May, June and July 2020
implemented
by the Applicant constitutes a unilateral change in terms and
conditions of employment or whether that is simply an
issue of
potential short payment of salary.
[70]
In
Staff
Association of the Motor and Related Industries (SAMRI) v Toyota of
SA Motors (Pty) Ltd
[10]
the Court held that section 64(4) and (5) of the LRA is aimed at
limiting the managerial prerogative to vary terms and conditions
of
employment and / or policies unilaterally and found that:
‘
To
be successful under s 64(4) the employee has to show firstly
unilateral changes were effected to the terms and conditions of
the
employment contract and secondly that there was no consent to the
unilateral changes.’
[71]
As
to what forms part of the terms and conditions of employment, the
Court held that
[11]
any
variation to an employee’s salary, irrespective of whether it
is increased or decreased, amounts to a change in terms
and
conditions of employment and cannot be effected unilaterally. Salary
is a
quid
pro quo
for
work rendered and any change that has the effect of affecting an
employee’s salary or remuneration package, constitutes
a change
to terms and conditions of employment.
[72]
In casu,
the
Applicant announced and implemented a 20% reduction in the salaries
of its employees. It is undisputed that NUMSA did not agree
to this
reduction.
[73]
I cannot but find
that the 20% reduction in the salaries of its employees across the
board constitutes a unilateral change to terms
and conditions of
employment.
[74]
I do not believe that it is for the urgent
Court to engage in an investigation or to make a finding as to the
reasons why the reduction
in the employees’ salaries was
implemented. The reasons may be well founded and completely
reasonable but those would be
best aired during conciliation, as the
dispute has been referred to the bargaining council and is still
pending.
Did the Applicant
restore the
status quo
[75]
The Applicant’s case is that it has
given an undertaking to apply for the Covid-19 TERS benefits for May
2020 and in giving
this undertaking, it has complied with the
requirements of section 64(4) of the LRA.
[76]
In my view, the
undertaking that the Applicant gave to apply for the TERS benefits is
not sufficient to rescue the Applicant in
terms of section 64(4) of
the LRA.
I say so for a number of
reasons.
[77]
During argument, it became clear to me that
this was the crux of the case and I asked Mr Daniels if the strike
action would end
in the event that the Applicant was to give an
undertaking to the effect that it would pay 80% of the employees’
salaries
on the due date and that the outstanding 20% would be paid
later and as soon as the Applicant received the TERS monies from the
Department. In the event that the TERS monies would not cover the
full 20%, the Applicant would pay the shortfall to the effect
that
the employees are paid 100% of their salaries. Mr Daniels indicated
that it would satisfy the Respondents and that the strike
action
would be called off if such an undertaking were to be given.
[78]
I canvassed the same issue with Mr Lennox,
who requested an opportunity to obtain an instruction. The matter
stood down and Mr Lennox
subsequently submitted that his instruction
was that the Applicant was unable to give an undertaking as aforesaid
and that in the
event that the TERS application is not successful or
the monies received not sufficient to cover 20% of the employees’
salaries,
the Applicant would revert to other measures such as short
time, layoff or retrenchment.
[79]
This accords with the position that the
Applicant adopted in this application namely that based on the
employees’ salary scale
and the sliding scale provided by UIF,
it was most likely that most of the employees will be paid their full
remuneration. This
is based on an assumption that the Applicant’s
TERS application would succeed and that it would fully cover the
outstanding
20% of the employees’ salaries.
[80]
In the event that the TERS application does
not succeed or if the TERS monies are insufficient to top up the
employees’ salaries,
the Applicant is not prepared to give an
undertaking that the employees who worked full time for May, June and
July 2020 would
be paid 100% of their salaries. Mr Lennox indicated
that should the TERS application fail or not cover the outstanding
percentage
of salaries, the Applicant intends to resort to other
measures such as retrenchment, layoff etcetera. In short: the
Applicant is
prepared to pay 80% of the employees’ salaries and
if the 20% shortfall is not covered by the TERS benefits it had
applied
for, the Applicant will resort to other remedies, which do
not include payment of the shortfall and the unilateral reduction in
the employees’ remuneration would be implemented.
[81]
Another factor central to the Respondents’
case which cannot be ignored, is the fact that the Applicant failed
to distinguish
between
employees who are working and those who are not in applying the
salary reduction to all its employees. The Respondent submitted
that
the employees who are working on a full time basis during May, June
and July 2020 are entitled to their full salaries. The
salary
reduction should have been applied only to the employees who are not
working.
[82]
In my view, there is merit in this issue.
Notwithstanding the Applicant’s best intentions not to
prejudice any of its employees
and to treat them the same, the
reality is that they are not in the same position. The reality in law
is that the employees who
rendered no service, albeit to no fault of
their own or due to circumstances outside their employer’s
control, like the global
Covid-19 pandemic and national state of
disaster, are not entitled to remuneration and the Applicant could
have implemented the
principle of ‘no work no pay’.
[83]
The converse is however also true. Where
employees rendered their full time services, they are entitled to
their full salaries and
any reduction in their salaries, even for a
sound reason to protect the greater good of all employees, would
constitute a unilateral
change in terms and conditions.
[84]
Insofar as the Applicant is not prepared to
guarantee that the employees who worked full time would receive their
full salaries,
regardless of the outcome of the application for the
TERS benefits, the Applicant has not restored the terms and
conditions of
employment, as contemplated in section 64(4) of the
LRA.
[85]
Had the Applicant provided an undertaking
that it would pay its employees 80% of their salaries on the due date
and that it would
top up the shortfall as soon as the TERS monies
were received from the Department, but in the event that the TERS
monies did not
cover the entire salary, the Applicant would cover
that shortfall to ensure that employees who worked during the
relevant periods,
will be paid their full salaries, the outcome of
this application would in all probability be different.
Obiter
[86]
The circumstances which employers and
employees currently find themselves in are unprecedented, distressing
and uncertain. Answers
are not to be found in precedents, no map
exists to show direction and only time will tell the full extent of
the disruption and
devastation which the economy and all who play a
part in it, will suffer.
[87]
In my view, the best answers and solutions
would be found in applying common sense and seeking common ground to
find a solution
in a time when problems and challenges overshadow
answers and solutions. It is unfortunately true that common sense is
not a flower
that grows in every garden.
[88]
The Applicant conveyed its displeasure
about the fact that NUMSA has called out its members on strike,
notwithstanding the possibility
that their salaries would be fully
paid by way of the TERS benefit and it expressed its view that NUMSA
has no appreciation for
the efforts made by the Applicant to pay its
employees in circumstances where there was no obligation to do so.
The Applicant’s
observations in this regard are not without
merit. The reality is that NUMSA’s members would, for the
duration of the strike,
forsake their wages, which the Applicant
ironically had been at pains to pay during difficult times.
[89]
In casu,
the
strike action could have been avoided, had the parties applied a
pinch of common sense and engaged each other more constructively.
Costs
[90]
The last issue to be
decided is the issue of costs.
[91]
Insofar as costs are concerned, this Court
has a broad discretion in terms of section 162 of the LRA to make
orders for costs according
to the requirements of the law and
fairness.
[92]
In view of the specific facts of this case
as well as the ongoing collective bargaining relationship between the
Applicant and NUMSA,
the interest of justice will be best served by
making no order as to costs.
[93]
In the premises I make the following order:
Order:
1.
The application is
dismissed;
2.
There is no order as
to costs.
__________________
Connie
Prinsloo
Judge
of the Labour Court of South Africa
Appearances:
Applicant:
Advocate M Lennox
Instructed by:
Fasken Attorneys
Respondents:
Mr R Daniels of Cheadle Thompson & Haysom Inc Attorneys
[1]
Statement
by President Cyril Ramaphosa on escalation of measures to combat
Covid-19 epidemic, Union Buildings, Tshwane, 23 March
2020.
[2]
Act
57 of 2002.
[3]
Message
by President Cyril Ramaphosa on Covid-19 epidemic, 9 April 2020.
[4]
Statement
by President Cyril Ramaphosa on further economic and social in
response to the Covid-19 epidemic, Union Buildings, Tshwane,
21
April 2020.
[5]
Statement
by President Cyril Ramaphosa on South Africa’s response to the
Coronavirus pandemic, Union Buildings, Tshwane,
23 April 2020.
[6]
Statement
by President Cyril Ramaphosa on South Africa’s response to the
Coronavirus pandemic, Union Buildings, Tshwane,
13 May 2020.
[7]
Address
by President Cyril Ramaphosa on South Africa’s response to the
Coronavirus pandemic, Union Buildings, Tshwane, 24
May 2020.
[8]
Act
66 of 1995 as amended.
[9]
[2018]
6 BLLR 624
(LC) at para 3.
[10]
(1997)
18 ILJ 374 (LC) at para A-B on p 379.
[11]
At
para A-B on p 378.