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1992
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[1992] ZASCA 75
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National Union of Metalworkers of South Africa and Others v Macsteel (Pty) Ltd. (432/90) [1992] ZASCA 75; 1992 (3) SA 809 (AD); (1992) 13 ILJ 826 (A) (21 May 1992)
CASE NO 432/90
IN THE SUPREME COURT OF SOUTH AFRICA
(
APPELLATE
DIVISION
)
In the matter between
NATIONAL UNION OF METALWORKERS OF
SOUTH AFRICA
1
st Appellant
17 OTHERS
2nd-7th Appellants
9th-16th Appellants 18th-20th Appellants
and
MACSTEEL (PTY) LIMITED
Respondent
CORAM
: VAN HEERDEN, SMALBERGER, F H GROSSKOPF, GOLDSTONE JJA et
NICHOLAS AJA
Date Heard
: 8 May 1992
Date Delivered
: 21 May 1992
2
JUDGMENT
GOLDSTONE JA
:
The question in this appeal is whether in the circumstances of this case
a concerted refusal by employees to work voluntary overtime
constituted an
unfair labour practice in terms of the Labour Relations Act 28 of 1956 ("the
Act")
The respondent is the employer. It is Macsteel (Pty) Ltd, a substantial
steel merchant and distributor. I shall refer to it as "Macsteel".
The first
appellant is a trade union duly registered in terms of the provisions of the
Act. It is the National Union
3
of Metal Workers of South Africa to
which I shall refer as "NUMSA". There are 17 other appellants. They were all
employees of Macsteel
at various of its four plants which are situate at
Germiston and Wadeville.
Macsteel purchases large quantities of steel of from steel producers. In
turn, it sells that steel in various sizes to customers in
the engineering and
construction industries. For some years the majority of the approximately 1000
employees of Macsteel have regularly
worked overtime. That is necessary from the
point of view of Macsteel because of the fluctuating demand for steel from its
customers.
For their part, the employees welcomed the opportunity of
supplementing their wages. The working of overtime became the normal
practice.
The 1988 wage negotiations between Macsteel and NUMSA began on 5 August.
A number of meetings were held. No agreement was reached.
On 18 August 1988
a
4
further meeting was held. NUMSA
rejected the proposal
which was tabled by Macsteel. On the same
afternoon the
shop stewards addressed the employees at a report-back
meeting. It was attended by an organiser in the employ
of NUMSA. From that evening the majority of the
employees of Macsteel stopped working overtime. In
consequence thereof Macsteel could not adhere to its
production and delivery schedules and it sustained
substantial pecuniary damage.
On 24 August 1988, Macsteel sent a telex to
NUMSA. It referred to:
"a unilateral, illegal and unfair overtime ban
introduced without prior warning or
consultation."
Reference was made to prejudice caused thereby to
Macsteel. NUMSA was requested to advise Macsteel
whether it supported this "illegal strike" and in the
event that it did not, it was called upon to disassociate
itself from the strike.
5
On the same day NUMSA replied, also by
telex,
as follows:
"We are not aware of any such action taking place at any of your plants
but will endeavour to investigate the allegations.
The Union also disassociates itself from any form of illegal industrial
action, but we must point out that a joint or collective refusal
decided
individually not to work overtime does not necessarily constitute illegal
industrial action."
A further detailed complaint from Macstee1 to NUMSA met with no response
satisfactory to Macsteel. NUMSA maintained the attitude set
out in its telex of
24 August 1988.
On 16 September 1988 Macsteel obtained an urgent interim order from the
Industrial Court in which the individual employees of Macsteel
were called upon
to show cause why an order should not be granted, inter alia:
6
"declaring the overtime ban imposed
by [them] ... to constitute unfair industrial action."
After service of the order on them most of the employees resumed working
overtime. However, on 29 September 1988, the return day of
the interim order,
the Industrial Court suspended its order. The judgments delivered by the
President and Deputy President of the
Court are reported in (1989) 10 ILJ 285.
On the following day the majority of the employees again refused to work
overtime.
On 14 October 1988 agreement was reached on wages. From 17 October 1988,
the following Monday, the employees again worked overtime
as requested by
Macsteel. The dispute as to whether the refusal to work overtime constituted an
unfair labour practice was at the
instance of Macsteel referred by the
Industrial Council to the Industrial Court for determination in terms of s 46(9)
of the Act.
Originally Macsteel applied for relief against
7
NUMSA and 257 individual employees.
Later it gave notice that it would seek relief only against twenty of its
employees. The Industrial
Court ruled against Macsteel. The determination was in
the following terms:
"1. The dispute under consideration is not an academic dispute and falls
for determination by the Court;
2.
The imposition
of a collective ban by employees and/or their Union on the performance of
voluntary, non-contractual work during wage
negotiations is a legitimate
industrial relations pressure tactic which employees may exercise without any
notice to the employer,
in order to enhance their collective bargaining
power;
3.
The imposition of
such a collective overtime ban by the Applicant's employees during
August/September 1988 (with the knowledge and/or
concurrence of their Union) was
neither unlawful nor was it an unfair labour practice in the circumstances and
within the meaning
of paragraph (o), subparagraphs (ii),
(iii)
8
and (iv) of the definition of an 'unfair labour practice' in the Act; 4. The
Applicant was aware at the time that the overtime ban
was related to the wage
dispute."
No order for costs was
made.
Macsteel appealed to the Labour Appeal Court. The appeal was upheld and
the following order was made:
"Paragraphs 2, 3 and 4 of the determination
of
the Industrial Court are set aside and
substituted with the following:
(2) It is declared that the Union's conduct to introduce, instigate and
persist in an overtime ban in the circumstances of this case
was an unfair
labour practice; (3) It is declared that the failure by the second to the
seventh respondents, the ninth to the sixteenth
respondents and the eighteenth
to the twentieth respondents, to work normal overtime, in furtherance of a
collective
9
intention to persuade the applicant
to accede to their wage demands, constituted a collective overtime ban, which
was an unfair labour
practice in the circumstances of the case.'"
NUMSA was ordered to pay the costs of the appeal
including the costs of two counsel. With the leave of
the Court a
quo
NUMSA now appeals to this Court in
terms of s 17C of the Act. In terms of s 17C (l)(a)
such an appeal does not lie against "a decision on a
question of fact". In the present case, however, the
relevant facts were agreed or are not in dispute. In a
list of admissions which was placed before the Industrial
Court it was agreed, inter alia, that:
"22. The overtime practice which the applicant operates is voluntary in
nature in that when overtime is actually worked it is done
so in terms of an ad
hoc agreement reached with the individuals concerned on
10
each such occasion. 23. The normal overtime
practice upon which the applicant relies was one the effect of which was that
certain
employees worked overtime in excess of the statutory maxima laid down by
the Basic Conditions of Employment Act [3 of 1983]."
The relationship between Macsteel and NUMSA is
regulated by a recognition agreement. It makes
provision for
negotiating procedures which culminate in
the declaration of a dispute if agreement cannot be
reached. In that event:
"each party shall be free to act independently and take such lawful
action as it may decide."
NUMSA is obliged, in terms of the agreement, to use its best endeavours
to terminate any "illegal industrial action" taken by its
members. It also
undertakes not to strike or support a strike, inter alia, over a matter which is
still the subject of negotiations
in terms of
11
the aforementioned negotiating
procedures, or while the matter is still being dealt with in terms of the
procedures for the resolution
of disputes laid down by the Act.
In this Court counsel for the appellants correctly accepted
that:
1. The refusal by the majority of the employees to work overtime was
concerted action taken by them in order to place pressure on
Macsteel in the
wage negotiations;
2. NUMSA was a party to and encouraged such refusal by its members, and a
decision in relation thereto was taken at the meeting held
on 18 August 1988; 3.
The refusal by the employees to work overtime constituted a "labour practice"
for the purposes of the definition
of "unfair labour practice" in s 1 of the
Act. (It was clearly a "device, scheme or action taken in the labour field":
Marievale Consolidated Mines Ltd v President of the Industrial
12
Court and Others
1986(2) SA 485(T) at 498
A-B).
Counsel for the appellants submitted,
however,
that there was no evidence to
suggest that the refusal to
work overtime was other than the
individual decision of
each of the employees of Macsteel who in fact so
refused, ie that NUMSA did not make it obligatory for all
of the employees to refuse to work overtime. For the
purposes of this judgment I shall accept that to be
correct.
That part of the definition of "unfair labour
practice" now relevant reads as follows:
"'unfair labour practice' means any act or
omission which in an unfair manner infringes or
impairs the labour relations between an employer and an employee, and
shall include the following:
(1) any strike, lock-out or stoppage of work,
13
if the employer is not directly involved in the
dispute which gives rise to the strike, lock-out or stoppage of work;
(n) any strike, lock-out or stoppage of work in contravention of section
65;
(o) any other labour practice or change in any labour practice which has or
may have the
effect that -
(ii) the
business of any employer or class of employer is or may be unfairly affected or
disrupted thereby;
(iii) labour unrest is or may be created or promoted thereby;
(iv) the relationship between employer and employee is or may be
detrimentally affected."
It was submitted on behalf of the appellants that where employees fall
within the scope of the Basic Conditions of Employment Act,
3 of 1983 ("the
Employment Act") a refusal by them to work overtime, even where it
14
constitutes a "labour practice",
cannot as a matter of
law, constitute an "unfair labour practice". S 8(1)
thereof provides that:
"No employer shall require or permit an employee to work overtime
otherwise than in terms of an agreement concluded by him with the
employee and
provided such overtime does not exceed three hours on any day or 10 hours in any
week..." The scope and applicability
of the Employment Act are
regulated by s 1(3):
"The Mines and Works Act, 1956 (Act No 27 of 1956), the Labour Relations
Act, 1956 (Act No 28 of 1956), the Wage Act, 1957 (Act No
5 of 1957), and the
Manpower Training Act, 1981 (Act No 56 of 1981), or any matter regulated
thereunder in respect of an employee,
shall not be affected by this Act, but
this Act shall apply in respect of any such employee in so far as a provision
thereof provides
for any matter which is not regulated by or under any of the
said Acts in respect of such employee."
In other words, the provisions of the Employment Act
15
apply in all cases where the named
statutes or regulations thereunder confer no protection or advantage in favour
of employees in
respect of the matters covered by the terms of the Employment
Act: cf
R v Beerman
1948(1) SA 954(A) at 958.
In the present case no other relevant statute or regulation dealt with
overtime work by the employees of Macsteel. It was thus common
cause between the
parties that the provisions of the Employment Act applied in respect thereof. In
particular the provisions of s
8(1) were of application. It follows that
Macsteel was prohibited from requiring or permitting any of its employees to
work overtime
otherwise than in terms of an agreement or in excess of the
maximum hours laid down in s 8(1).
The effect of the order granted by the Court a
quo
, so submitted
counsel for the appellants, was to compel the employees of Macsteel to work
overtime in the
16
future and that it would be contrary
to the provisions of, s 8(1) of the Employment Act because there was no
agreement by those employees
so to work.
I do not agree. S 8(1) of the Employment Act did not confer any new
rights upon employees to whom its terms applied. At common law
an employer
cannot require an employee to work overtime otherwise than with his agreement,
express or tacit. What s 8(1) did was
to create a criminal sanction applicable
to employers who might by some means coerce employees to work overtime without
their agreement
to do so.
Any employee was thus always free to refuse to work voluntary overtime.
That freedom was not infringed by the terms of the order of
the Court a
quo
. That order does no more than declare that an "overtime ban"
introduced, instigated and persisted in by NUMSA in the circumstances
which
prevailed in August/September 1988 constituted an unfair labour practice. It did
not
17
entitle Macsteel at any time
thereafter to require or permit an employee to work
overtime otherwise than in terms of an agreement concluded by it with the
employee. Where an employee prior to the order could refuse
to work overtime so
could he refuse to do so after the order was made. What he could not fairly do
was to become a party to concerted
action with other employees to withdraw
voluntary overtime usually worked in the circumstances in which that occurred in
August/September
1988, ie inter alia, without notice to Macsteel and in order to
bring pressure to bear on it in the context of current wage negotiations.
The
right of each individual employee to refuse to work overtime was no different
after the order than it was prior thereto. By the
same token, if an employer's
withdrawal of overtime work in order to put pressure on a trade union in the
context of wage negotiations
is declared to be an unfair labour
practice
18
that would not constitute, directly
or indirectly, an order compelling the employer to offer overtime work to its
employees. In both
cases it would be the ulterior motive for the withdrawal of
overtime which justifies the categorisation of the action or conduct
as an
unfair labour practice. It follows that the order made by the Court a
quo
was not inconsistent with the provisions of s 8(1) of the Employment
Act.
In passing it should be mentioned that it does not appear from the
judgment of the Court a
quo
what was encompassed by the words "overtime
ban". Those words could be used to describe a total ban imposed by a union on
all its
members. They could also describe the position which probably occurred
in the present case where a trade union encourages its members
to withdraw
overtime without making it obligatory for them to do so. Both cases would
constitute a labour practice. In this case,
as already mentioned above, I have
assumed that the
19
overtime ban was of the
last-mentioned kind.
It was also submitted on behalf of the appellants that because under
Macsteel's overtime regime employees worked overtime in excess
of the statutory
maxima laid down in s 8(1) of the Employment Act, the refusal to continue to do
so, could not in law be categorised
as an unfair labour practice. Counsel's
argument was that Macsteel's requests to its employees to work overtime in
respect of some
or all of those employees were tainted with illegality and there
was no obligation on such employees to consider such requests. Counsel
conceded
that in the present case the refusal to work overtime was unrelated to the
illegality of the request. It was submitted,
however, that motive was irrelevant
for this purpose. It was a matter of public policy - such a request should not
be allowed to
found a cause of action in the Industrial Court. Again, I do not
agree.
20
It is not disputed that Macsteel was
unaware that it was requesting its employees to work overtime in excess of the
statutory maxima.
When this came to its knowledge it successfully applied for
appropriate exemptions in terms of s 8(2) of the Employment Act. Any
of the
employees could have agreed to work overtime for periods within the statutory
maxima. They, too, apparently were unaware of
the statutory prohibition. That
was never an issue. The only reason for refusing to work overtime was related to
the overtime ban.
In no way would the order sought from and granted by the Court
a
quo
have compelled any employee of Macsteel to work in excess of the
statutory maxima. I cannot find that any reason of public policy
prevented the
Court a
quo
from categorising the concerted action of the appellants as
an unfair labour practice.
Counsel for the appellants submitted further that, apart from the
provisions of the Employment Act, it
21
could never be unfair for employees
to refuse to work
overtime, regardless of the motive for such
refusal, when
they are under no contractual obligation to do so. In
support of this submission counsel referred to the
statement in
SA Breweries Ltd v Food and Allied Workers
Union and Others
1990(1) SA 92 (A) at 97 G-H that:
"... an employee, provided he acts individually and independently of
others, is always free to refuse to work voluntary overtime,
for whatever
reason,"
That freedom cannot be lost, he contended, merely because some other
individual simultaneously and concurrently exercises it.
This argument begs the question. The conduct now relevant was the
concerted exercise of the freedom to refuse to work overtime which
constituted a
labour practice. Whether it was unfair or not did not depend only upon the legal
rights of the employees. Indeed, if
22
one reviews the successes of workers
and their unions in
our own courts, and in those of many
foreign
jurisdictions, one will find that many of them were
achieved because employers were held unfairly to have
sought to exercise their rights or freedoms. Their
motives for so doing made their actions unfair labour
practices. The boot is now on the other foot. I
cannot find any good reason for holding that a concerted
refusal to work overtime cannot constitute an unfair
labour practice.
The final submission related to the findings
made by the Court a
quo
that
"... any action aimed at creating an advantage for the one party over the
other, disturbs the equality which the Act tries to establish,
and is therefore
unfair, if taken at a time when in terms of the Act, the parties are still to
negotiate."
"... it will be an unfair labour practice to resort to an overtime ban
before the
23
declaration of a
deadlock."
It was submitted
on behalf of the appellants
that collective bargaining in no way
shields employers
from industrial action. Reliance was placed upon
the
provisions of s 65 of the Act which permits strike
action
where the matter in dispute has been considered by
an
industrial council and a period of 30 days has
expired
after such reference, or where deadlock is reported
by
the industrial council to the Minister of
Manpower.
Impasse is not a condition precedent for a
lawful
strike. Therefore, so the submission ends,
impasse
cannot be a condition precedent for other forms
of
industrial action which fall short of a strike.
This is a
non sequitur
. The fact that a strike is lawful under the
Act does not necessarily mean that it is fair. It could be an unfair labour
practice
inter alia in terms of paragraphs (1), (m) or (o)(ii) of the
24
the definition in s 1 of the Act of
"unfair labour practice". This submission again incorrectly confuses rights or
freedoms on the
one hand with unfair labour practices on the other. In the
unfair labour practice field, legal rights will frequently be a relevant
consideration but they cannot, without more, be decisive of fairness or
unfairness.
It follows further, in my opinion, that in the passages cited above, the
Court a
quo
stated the position too widely. The fact that industrial
action is embarked upon prior to exhausting the statutory dispute resolution
mechanisms or before an impasse, also does not
ipso facto
have the
consequence that such action is an unfair labour practice. Whether a labour
practice is unfair must depend upon all the facts
and circumstances of each
case. It is unnecessary in this case to consider the circumstances in which
industrial action prior to
impasse might not be unfair and I refrain from doing
so.
25
In relation to the fairness or
unfairness of the overtime ban now in issue, the following factors appear to me
to be relevant:
1. It was instituted during the course of wage
negotiations.
2 There was no suggestion that Macsteel was
not
bargaining in good faith.
3.
An overtime
regime had been in place for some years for the mutual advantage of both
Macsteel and those of its employees who agreed
to work
overtime.
4.
To the knowledge
of NUMSA and the employees an overtime ban would seriously disrupt the business
of Macsteel, prevent it from complying
with its contractual obligations with
some of its customers and cause it substantial pecuniary
loss.
26
5. It was instituted without the declaration of a deadlock in the
negotiations.
6. It was instituted without any notice to Macsteel and so disabled Macsteel
from making timeous arrangements for alternative labour
or for alternative
delivery arrangements with its customers.
7. NUMSA disingenuously denied any knowledge of the overtime
ban.
In these circumstances I am of the
view that there were ample grounds for the Court a
quo
to hold that the
overtime ban was an unfair labour practice. It follows that there is no reason
to interfere with the order made
by it.
That brings me to the question of costs. The correct approach to costs in
labour matters which are initiated in the industrial court
and in appeals
therefrom in the Labour Appeal Court or in this Court was
27
considered recently in
National
Union of Mineworkers v East Rand Gold and Uranium Co Ltd
1992(1) SA 700(A)
at 738E-739G. Having regard to that approach, the following considerations
appear to be relevant in the present
case:
1.
Macsteel is the
successful party.
2.
Macsteel
does not seek a costs order against the individual employees who are appellants
in this Court.
3.
NUMSA, as
mentioned above, in one respect acted disingenously if not
dishonestly.
4.
With regard
to the questions of law raised by the appellants there were
bona fide
disputes between the parties.
5. The law in
relation to overtime bans in the
field of the unfair labour practice
is of
importance to many employers and many, if not
28
all, trade unions in South Africa;
6. There has been no consistency with regard to the approach to these
matters in the industrial court.
7. Macsteel initiated these proceedings at a time when the wage negotiations
had been successfully concluded and the overtime ban
had come to an end. In
other words it sought a declaration on a matter of principle.
8. There is an on-going relationship between Macsteel and
NUMSA.
9. No leave was sought from or
granted by the
Court a
quo
with regard to the order it
made
for the costs of the appeal to be paid by
NUMSA.
That order was made in terms of a
submission by counsel for both
Macsteel and
NUMSA that the successful party was entitled
to
its costs. There can therefore be no
29
suggestion that the Court a
quo
failed properly to exercise its
discretion with regard to costs. It follows also that this Court is precluded
from interfering with
the costs order made by the Court a
quo
.
In the light
these considerations no order
should be made in this Court as to
costs. The case is
one where the parties and the labour and
industrial
community would seek to have clarity on the law.
The
conduct of NUMSA which I have criticised was not
directly
relevant to the disputes between the parties and, in
my
opinion, should not materially effect the incidence
of
costs. Furthermore, NUMSA will be obliged to pay
the
costs of the proceedings before the Labour Appeal
Court
in circumstances where it probably would not have been
so
obliged had the judgment of this Court in the
National
Union of Mineworkers
case (
supra
) been
decided prior to
that appeal.
30
The appeal is
dismissed.
R J
GOLDSTONE
JUDGE OF APPEAL
VAN HEERDEN JA) SMALBERGER JA)
GROSSKOPF F H JA)
CONCUR
NICHOLAS AJA)