VIC & DUP/JOHANNESBURG/LKS
IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
DATE: 23 July 1999 CASE NO. J2805/99
In the matter between:
SAMANCOR LTD First Applicant
MANGANESE METAL CO. (PTY) LTD Second Applicant
and
NATIONAL UNION OF METAL WORKERS
OF SOUTH AFRICA Respondents
J U D G M E N T
LANDMAN J :
1.The Constitution of the Republic of South Africa of 1996
recognises and protects the right of employees to strike.
See section 23(2)(c) of the Constitution. The right to
strike embraces the right to embark on a secondary strike.
2.When, where and in what manner employees may strike is
dealt with in other laws. In this case the right to embark
upon a secondary strike is regulated by the Labour Relations
Act, No. 66 of 1995. The Act not only regulates these
matters but, more importantly, it contains limitations on the
right to strike including the right to embark on a secondary
strike. These limitations which are set out in the Labour
Relations Act must comply with section 36 of the Constitution
which deals with the limitation of rights in the Bill of
Rights.
3./..
3.In this case it was not contended that the Labour Relations
Act was unconstitutional in any respect. It is therefore
unnecessary to traverse the provisions of the limitation
clause save to state that the limitations may not have the
effect of negating the right to embark on secondary action in
the form of a strike.
4.Employees, or their trade union, who have embarked on a
primary strike may decide to engage in secondary action in
order to further pressurise the primary employer. The Labour
Relations Act provides that employees may not engage in a
secondary strike unless certain conditions are met. See
section 66 of the Act. It is unnecessary, in this judgment,
to deal with the way in which secondary strikes are regulated
and the way in which section 66(1) is phrased. Prima facie
it appears to negate the right to a strike. But having
prohibited the right to strike, it sets out certain
conditions, which if met, entitle the employees to strike. I
do not propose to deal with the prohibition any further
because, read positively, the employees are entitled to
engage in a secondary strike if the following conditions are
met:
1.The primary strike complies with sections 64 and 65 of the
Labour Relations Act;
2.The employer of the employees taking part in the secondary
strike (and where appropriate the employers organisation of
which that employer is a member) has received written notice
of the proposed secondary strike at least seven days prior to
its commencement;
3./..
3.The nature and extent of the secondary strike is reasonable
in relation to the possible direct or indirect effect that
the secondary strike may have on the business of the primary
employer.
5.Clearly the employees or their union are enjoined to
consider these conditions, particularly those set out in
section 66(2) which relate to the reasonableness or
proportionality of the secondary strike, before embarking on
such a strike. Section 66(2)(c) must be read with section
66(3). Section 66(3) provides that subject to section 68(2)
and (3) a secondary employer may apply to the Labour Court
for an interdict to prohibit or limit a secondary strike that
contravenes subsection (2). These subsections therefore
require the strikers mero motu to consider whether they are
entitled to engage in secondary strike action and, if so,
whether their action should be limited in any respect. If
the strikers must limit their action then the strikers must
decide to what extent it must be limited and act in
compliance with their insight. If they do not do so, or, if
the secondary employer believes that the strike falls foul of
section 66(2), the employer may apply in terms of section
66(3) for an interdict to limit or prohibit the secondary
strike. If an interdict is sought, the onus rests on the
secondary employer, even on the return day, to prove that the
interdict should be granted. The employer must show that the
conditions for embarking on a secondary strike have not been
met. The employer would therefore also have to show that, as
in this case, the secondary strike is unreasonable or not
proportional.
6./..
6.The union would have to rebut any prima facie case that the
employer may make out and may have to justify its decision to
have embarked on the secondary strike. Evidence about the
considerations which it took into account in making the
decision to embark on the sympathy action will obviously be
relevant but of course other evidence may be admitted to
bolster its case.
7.In this particular matter my brother, Mlambo J, issued a
rule nisi on 19 July 1999 interdicting the respondents, NUMSA
and its members employed at certain plants operated by
Samancor Ltd (the first applicant), and Manganese Metal Co.
(Pty) Ltd (the second applicant) from embarking on or
carrying on with a secondary strike in support of the primary
strike which NUMSA and its members had instituted against
Columbus Steel, Joint Venture. The rule nisi did not deal
with allegations of unlawful and violent conduct, although
this had been prayed for in the application. This aspect was
taken care of by means of an agreement entered into between
the parties which was recorded by the court.
8.The respondents have anticipated the return day, as they
were permitted to do. Mr Kennedy, who appeared on the return
day on behalf of the applicants, moved for the following
relief:
(a)The confirmation of the rule, alternatively for the
extension of the rule until the CCMA has reported in terms of
section 66(5) of the Act.
(b)That the agreement regarding the commission of unlawful
acts be made an order of court.
(c)Costs.
In/..
In moving for the relief which I have set out in paragraph
(a), Mr Kennedy dealt with only two attacks by the respondent
on the rule. He expressly reserved his rights to deal with a
third matter, namely that the strike in question was not a
secondary strike. I am therefore not called upon to deal
with the third question and I refrain from doing so.
9.Mr Kennedy's first submission was that the primary strike
was itself unprotected and that a fortiori the secondary
strike was unprotected. See also section 66(2)(a) of the
Act. The basis for his submission was that NUMSA had
referred a dispute to the CCMA for the purposes of its strike
with Columbus on four issues, one of which was impermissible.
The impermissible issue related to the issue of outsourcing
and the continued job security of its members. At the
eleventh hour NUMSA recognised that it was impermissible to
strike about the issue of outsourcing and continued job
security. It abandoned this demand at the commencement of
the application for the interim interdict. This, of course,
took place after notice had been given of the primary strike
and after the institution of the secondary strike.
10.In my opinion there is no substance in this submission.
In the matter of Ceramic Industries Ltd t/a Beta Sanitaryware
v National Construction Building and Allied Workers Union and
others (1997) 18 ILJ 716 (LC) at 726 this same argument was
raised by Mr Pretorius. I stated:
"Mr Pretorius argued that if I came to the conclusion that
one of the three disputes was
permissible/..
permissible and not hit by the limitation on the right to
strike, then I should find that the strike is wholly
impermissible until the respondents had abandoned the
impermissible dispute."
I found this argument to be a good one in that case and it
appears to me that it is a good one in this case. Although
the case to which I have referred was overturned on appeal in
Ceramic Industries Ltd t/a Beta Sanitaryware v National
Construction Building and Allied Workers Union (2) (1997) 18
ILJ 671 (LAC) it was not overturned on this point. If it is
possible to distinguish between the permissible and
impermissible demands then, once the impermissible demands
have been abandoned, the primary strike is a protected one.
Accordingly I find that there is no substance in this point.
11.Mr Kennedy's second submission was that the secondary
strike did not meet the requirements of reasonableness or
proportionality as set out in section 66(2)(c) of the Act.
Before dealing with this submission it is necessary to set
out briefly the pertinent facts as they appear in the papers.
12.The first applicant is Samancor Ltd, a public company with
limited liability. The second applicant is Manganese Metal
Co (Pty) Ltd which, on the applicants' version, is held, by
way of a majority shareholding, by Samancor Ltd. On the
union's version it is virtually a wholly owned subsidiary of
Samancor and for purposes of the determination of a final
interdict I must assume that the union's version is correct.
The/..
13.The first applicant divides its business into two
divisions: the chrome division and the manganese division.
The chrome division consists of two mines concerned with the
mining of chrome ore, namely Eastern Chrome Mines at
Steelpoort and Western Chrome Mines near Rustenburg. The
chrome ore mined at these mines is then converted into chrome
alloy at one of four works within the chrome division. These
works are Ferro Metals (situated at Witbank), Ferro Chrome
(situated at Middelburg), Palmiet Ferro Chrome (situated at
Krugersdorp) and Tubatsi Ferro Chrome (situated at
Steelpoort).
14.The manganese division consists of mines in the Hozatel
area of the Northern Cape where manganese ore is mined. This
ore is then converted to manganese alloy at one of three
works. The first of these works, namely Metal Alloy, is
situated at Meyerton. The other two works forms part of the
second applicant and are situated at Nelspruit and
Krugersdorp.
15.This application concerns the following operations where
the secondary strike was instituted, namely Ferro Metals,
Ferro Chrome, Palmiet Ferro Chrome, Metal Alloys, MMC
Krugersdorp and MMC Nelspruit.
16.The primary activity of the first applicant's business is
the mining of chrome and manganese ores at the mines which
have been set out above and their conversion into chrome
alloys and manganese alloys respectively. Approximately 80%
of the total chrome ore mined by the first applicant is
converted into ferro chrome by the first applicant itself at
its four chrome works. The chrome alloys produced are then
provided to customers
for/..
for use in the production of stainless steel. Approximately
80% of the total chrome alloys produced by the first
applicant are sold to foreign customers in terms of long term
contracts and joint venture partnerships who utilise the
chrome alloys in the production of stainless steel.
Approximately 80% of the production of chrome alloy produced
at Ferro Chrome is sold to Columbus Steel JV; the only
stainless steel plant in South Africa. Approximately 45% of
the manganese ore mined at the first applicant's manganese
mines is exported while approximately 10% is sold locally.
The remaining 45% is converted into manganese alloys at Metal
Alloy and the manganese alloys sold to customers overseas
(approximately 85%) and in South Africa (approximately 15%).
These manganese alloys are used in the production of steel.
17.The works of Manganese Metal at Nelspruit and Krugersdorp
also convert manganese ore into manganese alloys but utilise
a different process to produce manganese alloys of a higher
quality. These are used for more special applications.
18.Apart from the various operations which are set out above,
the applicants have interests in various other operations
linked to the production of chrome and manganese alloys. Of
relevance here is the interest in Columbus Steel JV. This is
a partnership between the first applicant, the Industrial
Development Corporation Ltd and Highveld Steel and Vanadium
Corporation Ltd. The first applicant has a 331/3% share in
this joint venture. It is said that the first applicant has
no control in the daily management of Columbus.
19./..
19.The applicants say that the strike at its operations,
which I have set out above, will lead to a loss in production
of approximately 4 200 tons per day during the period of the
strike. This represents a loss in revenue amounting to
approximately R3,5 million per day. In addition, there are
other repercussions which relate inter alia to contractual
obligations, the disruptions caused by the strike, loss of
production, stoppage of productions, the problem of slag in
the furnaces, etcetera.
20.The applicants deal with the possible direct or indirect
effect of the secondary strike on the business of Columbus.
The applicants say their ability to avoid and minimise
disruptions that flow from the secondary strikes are minimal.
Although the first applicant has a 331/3% share in Columbus,
it does not have a controlling interest. It can therefore
not force Columbus' management to comply with the demands
made by NUMSA. It says it made enquiries with Columbus in
this regard and the following facts are relevant: Columbus
is making a loss and has done so since its establishment. In
addition, because of the fact that Columbus is currently
undergoing a shutdown for maintenance purposes and is
operating minimally, the loss of production caused by the
strike is not severe. NUMSA's representativity is
approximately 25% of the Columbus workforce. The other
employees at Columbus are not in dispute with Columbus and
have been prepared to tender their services to man the
furnaces and other plants that are not subject to the shut
down. The effect of the secondary strike will be to prevent
approximately/..
approximately 20% of the Samancor's chrome alloy production
reaching Columbus. Much of this is not needed by Columbus at
this stage due to the shutdown and the curtailment of
operations.
21.It will also, however, lead to the loss of the other 80%
of the production with huge potential losses. Manganese
production will also be lost.
22.In its answering affidavit the respondents make the
following points:
1.During the 1996 wage negotiations between Columbus and
NUMSA, after deadlock had been reached, an intended strike by
the union members employed at Columbus had been interdicted.
Ms Ditshwe and Mr Jort, both of whom were representatives of
Samancor Ltd, participated in the negotiations and assisted
in the settlement of the dispute which led to the conclusion
of a twoyear agreement which was extended subsequently to
1999.
2.NUMSA affirm that the purpose of its secondary strike is
inter alia to pressurise the applicants to intervene in the
Columbus strike in order to persuade or pressurise Columbus
management to settle the dispute.
3.NUMSA admits that the secondary strike has the potential to
cause huge losses to the applicants but that is why the union
members are embarking on a secondary strike. The union
reasonably believes that as a result of the secondary strike
the applicants will pressurise Columbus to settle the primary
strike. This has been the experience of the union in the
past, notably in 1996 (this may
have/..
have been 1997). In addition, although not a majority
shareholder, Samancor is a major shareholder in Columbus.
Samancor has led the union to believe that it has assisted
Columbus to survive over the past few years. Losses suffered
as a result of the primary strike will be felt by Samancor
and financial statements are annexed.
23.I should also refer to a supplementary replying affidavit
filed by Mr Prinsloo, the General Manager: Human Resources
of Columbus JV. He says the following:
"All the chrome utilised by Columbus is ordinarily supplied
by Middelburg Ferro Chrome. The cessation of supply from
Ferro Chrome will however not have a material impact on the
operations of Columbus. Production and delivery of stainless
steel to customers has not been affected by the strike".
He sets out the various reasons why it is so. He continues
to say that:
"It appears that full operations will resume on Monday, 26
July. Should Ferro Chrome be unable to supply product to
Columbus, Columbus will be able to utilise stockpiles of
Ferro Chrome alloy received from the first applicant to
maintain full production. It is estimated that the
stockpiles will last approximately four days. Thereafter
supplies may be obtained from alternative sources".
He concludes by saying:
"Because a relatively small percentage of the workforce is on
strike, Columbus will be able to
maintain/..
maintain full production with the available manpower on 26
July 1999 and thereafter".
He also points out that the day to day operational control of
Columbus is regulated by a management committee consisting of
nine general managers and these are all fulltime Columbus
employees who have no direct affiliation to Samancor.
24.I proceed to the task of determining whether the strike by
the respondents, when it was instituted, for that is the
relevant time, complied with section 66(2)(c) regarding
reasonableness and proportionality. In doing so I am mindful
that not only do I have to determine whether the necessary
ingredients for the experiment, as it were, are present but I
must make a determination, a judgment, of the possible
outcome of those ingredients in action. This is akin to a
chemical process which takes place within its own peculiar
circumstances. It may be impossible to predict with anything
reaching certainty what the outcome will be. Fortunately I
am not required to judge the probable outcome. The object of
the exercise set out in section 66(2)(c), involves a
determination of the possible outcomes as opposed to the
probable results.
25.The Legislature intended the respondents to have
contemplated this prior to embarking on secondary action. I
must now perform this exercise at the moment that the
interdict is sought but, of course, with reference to the
time that the secondary strike was instituted.
26./..
26.The Labour Relations Act provides that this court may be
assisted in this task by means of a report prepared by the
CCMA. Section 66(4) provides that any person who is a party
to proceedings in the Labour Court may request the Commission
to conduct an urgent investigation to assist the court to
determine whether the requirements of subsection (2)(c) have
been met. On receipt of a request the Commission must
appoint a suitably qualified person to conduct the
investigation and then submit a report to the Labour Court as
soon as possible. The Labour Court must take into account
the Commission's report before making its order. I have been
told that the CCMA may be in a position to commence working
on such a report on Wednesday or Thursday next week.
27.Mr Bruinders, who appeared on behalf of the respondents,
submitted that I need not wait for this report. He was
prepared to argue on the basis of the material before me. Mr
Kennedy also took this approach and submitted that I can
decide the matter on the papers. However, if I was in doubt,
then he submitted that I should extend the rule and wait
until the report is delivered. In the circumstances I have
decided to decide the matter on the material presently before
me.
28.The respondents intended to pressurise Columbus by putting
pressure on Samancor and Manganese Metals in turn to pressure
and influence Columbus in its collective bargaining with the
NUMSA employees who are on strike. This, of course, is
permissible. The
respondents/..
respondents intended to inflict harm on the applicants.
This, too, is permissible subject to reasonableness and
proportionality as explained in section 66(2)(c) of the Act.
29.The two applicants appear to do business together. It
appears that some of their plants are conducted jointly or
fall within the scope of management of the first applicant,
Samancor. However, Manganese Metals does not seem to play
any significant role in the provision of chrome: the mineral
which underpins the operations of the primary employer,
Columbus. It is therefore not clear to me that the strike at
the plant of Manganese Metal could possibly have any direct
or indirect effect on the business of Columbus. Even
accepting that Manganese Metal is a wholly owned subsidiary
of Samancor, it merely establishes a nexus between it and
Columbus. But a mere nexus which does not have an effect on
the primary employer's business is insufficient to permit a
secondary strike.
30.As far as Samancor is concerned, it provides at least 80%
of the chrome required by Columbus from its plant in
Middelburg. At present Columbus is engaged in a shutdown or
a maintenance programme which has the effect that its
furnaces are inoperative or at least one of them is
inoperative. It will recommence its operations on Monday, 26
July. It has four days worth of stock. Samancor is a
partner in the joint venture with Columbus Stainless Steel.
It has a stake in the outcome of the strike, for any further
losses which Columbus may suffer will be debited,
proportionally, to its/..
its account. It is therefore in a position to influence the
business of Columbus if spurred on by a secondary strike at
its plant and mines. The fact that it may have no say in the
day to day running of Columbus is not especially pertinent.
The strike is not about the day to day operations of
Samancor. It is about the wages paid to its NUMSA employees.
This is a matter of capital funding in which Samancor has a
real and substantial interest and thus an incentive to use
its influence on the collective bargaining process between
Columbus and its NUMSA employees.
31.Now that I have found that the secondary strike has a
possible direct or indirect effect on the business of
Columbus, I must consider whether the nature and extent of
the strike at the applicants' plants and mines is reasonable
in relation to the effects of the strike at Columbus and on
Columbus' business. I do not think that it is necessary to
weigh up the damage inflicted to the applicants against the
effect of the strike on the business at Columbus but of
course I do not ignore it. It seems to me that section 66(2)
(c) requires me to concentrate on the nature and extent of
the strike, that is the withholding of labour, its timing and
other ramifications in relation to the effects which it may
have on the business of Columbus. It seems to me that it
would have been reasonable for the respondents to have
targeted only the chrome ore mines and chrome or ferro alloy
producing plants which belong to Samancor. In so far as
Manganese Metal is concerned, the secondary strike at its
mines and plants will not have
a/..
a possible effect on the business of Columbus. It is
therefore clear to me that an interdict should be granted in
regard to the operations of Manganese Metal.
32.I have indicated above that the secondary strike should be
limited as regards Samancor in regard to its chrome mines and
its alloy plants. I, therefore, propose at this stage to
allow the parties the opportunity of submitting
representations in regard to a suitable order which this
court should make which permits a secondary strike at various
mines and branches of Samancor but limited to the extent that
I have set out above.
34.I pass on to deal with the question of the agreement. The
agreement relating to the commission or noncommission of
unlawful acts resolved a dispute between the parties which
was alive at the time an application was lodged for interim
relief. That issue was settled by agreement. Even if that
agreement has been breached, it is not an issue which is
alive before me today. I cannot make that agreement an order
of court. The parties expressly provided that the court
should merely record its existence. In the circumstances I
am unable to accede to Mr Kennedy's request to make the
agreement an order of court.
34.Finally, on the issue of costs, both parties have been
partially successful on this return day and it seems to me
that having regard to the relationship between them that
costs should fall where they lie and that I should make no
order as to costs.
36./..
35.Consequently at this stage I adjourn to allow the parties
an opportunity to draft either jointly or separately the
order which I have referred to above and to supply me with it
in chambers. After considering those representations I will
then issue the order in this matter.
POSTEA
The parties jointly presented a draft order. In consequence
the following order was granted:
1.In relation to the second applicant, a final order is
granted:
a.Declaring the proposed secondary strike by the respondents
to be unprotected.
b.Interdicting and restraining the second to further
respondents from participating in, promoting or inciting the
strike or industrial action against the second applicant.
c.Interdicting and restraining the first respondent from
instigating or promoting the strike or industrial action
against the second applicant.
2.In relation to the first applicant, a final order is
granted in respect of the first applicant's metal alloy
works:
a.Declaring the proposed secondary strike by the respondents
to be unprotected and unlawful.
b.
b.Interdicting and restraining the second to further
respondents from participating in, promoting or inciting the
strike or industrial action against the first applicant's
metal alloy works.
c.Interdicting and restraining the first respondent from
instigating or promoting the strike or industrial action
against the first applicant's metal alloy works.
3.In relation to the first applicant, a final order is
granted in respect of the first applicant's Ferro Chrome,
Ferro Metals and Palmiet works declaring the proposed
secondary strike by the respondents to be protected. A
limitation on this protection is however imposed, in that the
secondary strike shall only take place every Monday and
Tuesday for the duration that the primary dispute is
unresolved.
4.The agreement made between the parties on 19 July 1999 is
recorded.
5.It is recorded that the parties have agreed to meet over
the weekend of 24 and 25 July 1999 for the purpose of
agreeing on picketing rules.
6.No order is made as to costs.
DATED AT JOHANNESBURG ON THIS ...... DAY OF AUGUST 1999
JUDGE A A LANDMAN
ON BEHALF OF APPLICANTS:ADV P M KENNEDY
Instructed by:Brink, Cohen & Le Roux and Roodt
ON BEHALF OF RESPONDENTS:ADV T J BRUINDERS
Instructed by:Ruth Edmonds
DATE OF HEARING:22 JULY 1999
DATE OF JUDGMENT:23 JULY 1999