National Union of Mineworkers obo Employees and Others v Commission for Conciliation Mediation and Arbitration and Others (CA 11/2007) [2011] ZALAC 7 (1 April 2011)

Principle:

(1) The unprotected nature of a strike is not a license to dismiss without a careful consideration of the surrounding circumstances. An employer should carefully apply its mind to the factors listed under Item 6(1) of the Dismissal Code of Good Practice:
(2) A strike under the LRA could include circumstances in which the employees' collective refusal to work was in response to the employer's failure to perform its obligations under the employment contract. A strike, as defined, has three key characteristics:
- There must be a requisite act or omission;
- It must be concerted; and
- It must be directed at the achievement of a specified purpose.

Facts:

Sonop Diamond Mining (Pty) Ltd conducts mining operations on a 24 hour basis throughout the year. Two weeks before the Easter public holidays on 9, 12 and 14 April 2004, it advised its employees that the plant would be closed for 5 days from Good Friday 9 April 2004 to Wednesday 14 April 2004. Employees were advised that if they did not work the nightshift of Thursday 08 April 2004 or recommence work on the nightshift of 14 April 2004, they would not be paid for the intervening Easter weekend. A number of employees did not report for these nightshifts and as a result had pay deducted for the intervening days.

Certain employees then refused to work until the money owed to them had been paid. Various attempts were made to get them to return to work, but these failed. The employees also refused to appoint representatives to negotiate with management, whilst the rest of the employees returned to work. Employees demanded immediate payment of the outstanding money, which management said was impossible as by then it was a Saturday afternoon. Following the employees' failure to comply with an ultimatum to return to work, they were suspended and charged with taking part in an illegal and unprotected strike. A collective disciplinary hearing was held, at which they were represented by the union, and which resulted in their dismissal. Their dismissal was disputed and referred to arbitration at the CCMA.

The arbitrator found that the employees had not complied with section 64 of the LRA before going on strike, and had accordingly taken part in an unprotected strike. The question then arose as to the applicable sanction for their unlawful conduct. It was not disputed that the company had wrongly deducted money that was due to the employees for the public holidays. The arbitrator found that whilst the employees had every reason to be upset over the wrongful deductions, this did not mean they were entitled to go on a wild cat strike two weeks later when they established that they did not receive the correct payment. The arbitrator noted that the employees had acted in total disregard of the provisions of the LRA, and had not been willing to appoint representatives to negotiate with the employer. The employees had been given sufficient time to reflect on an ultimatum and to respond to it. Accordingly, the arbitrator concluded that the dismissal of the striking employees had been both substantively and procedurally fair.

The employees, clearly unhappy with the arbitrator's decision, referred the matter to the Labour Court on review. The LC dismissed the review application, and this decision was referred on appeal to the LAC.

The lawyers representing the dismissed employees in the LAC proceedings, argued that as the employees' demand was not linked to a 'dispute of interest' and all they were seeking was what was legally owed to them in terms of their contracts of employment, their actions did not fall within the definition of a strike under the LRA. In support of this view, reference was made to Nkutha and Others v Fuel Gas Installations (Pty) Ltd [2000] 2 BLLR 178 (LC) in which the LC said employees are legally entitled to refuse to carry out their side of the employment contract, when this in response to an employer's failure to perform its obligations, such as paying the employees for services rendered.

The LC in that case asked the following question:
Is the collective refusal to work in response to the failure of the employer to perform its reciprocal obligations under the employment contract or is the purpose of the collective refusal to work to place pressure on the employer to remedy a grievance or to resolve a dispute?
The LC found that only in the latter case would the refusal to work constitute a strike in terms of section 213 of the Act.

The LAC rejected this view, noting that a strike, as defined, has three key characteristics:
- There must be a requisite act or omission (eg a refusal to work);
- It must be concerted; and
- It must be directed at the achievement of a specified purpose.

The LAC found on the facts of this case that all three of the above criteria had been met. Section 213 of the LRA provides that "[t]he partial or complete concerted refusal to work or the retardation or obstruction of work by persons who are or have been employed by the same employer… for the purpose of remedying a grievance" constitutes a strike. The LAC found that "the purpose of remedying a grievance" could include circumstances in which the employees' collective refusal to work was in response to the employer's failure to perform its obligations under the employment contract.

Having concluded that the employees' actions constituted an unprotected strike under the LRA, the LAC noted that the unprotected nature of the strike is not a license to dismiss without a careful consideration of the surrounding circumstances. The LAC closely scrutinized the arbitrator's reasons for deciding that the employer's decision to dismiss the strikes was fair, and came to a different conclusion.

In applying the Sidumo review test, the LAC found that a reasonable decision maker would not have decided that the dismissals were fair, for the following reasons:
- The employees' strike was directly attributable to unilateral action by the employer in unlawfully withholding wages.
- The fact that the employer might have offered to repay the amounts at some later date did not remove the legitimate anger and concern of employees who, given their circumstances, were hardly likely to have the necessary resources to sustain their basic standard of living when monies were unilaterally deducted in this fashion.
- The employees did not respond in a violent fashion; their action did not last for very long; did not cause huge losses to the employer's operation (estimated loss of between R120 000 and R180 000); and the employer admitted that the employees' action might have had a noble objective.

The LAC reinstated the dismissed employees, but only from the date of the judgement. The employees received no backpay for the 3 years they had been out of a job. This then was their effective penalty for going on strike without complying with the procedures under the LRA.

Extract from the judgment:

[12] The first question to be answered is whether appellants had participated in a strike. In terms of section 213 of the LRA a strike means:
"The partial or complete concerted refusal to work, or the retardation or obstruction of work, by persons who are or have been employed by the same employer or by different employers, for the purpose of remedying a grievance or resolving a dispute in respect of any matter of mutual interest between employer or employee."

[13] Mr Cloete, who appeared on behalf of the appellants, submitted that, as the employees had ceased work not to address a general grievance about a wage dispute or other issues of mutual interest but lawfully to enquire about wages to which they were entitled, their action could not be classified as that of a strike but rather as another form of withholding of work.

[14] In my view, this submission would lead to the rather anomalous conclusion that where workers who had refused to work in circumstances where the dispute was not a matter of mutual interest but of right, then the concerted refusal to work in such circumstances would not be classified as an unprotected strike but would not be a strike at all. Manifestly, this conclusion cannot be accepted.

[15] A strike, as defined, has three key characteristics.
1. There must be a requisite act or omission;
2. It must be concerted; and
3. It must be directed at the achievement of a specified purpose.
See Brassey, Commentary on the Labour Relations Act at A9 - 32 and the cases collected at footnote 1.

[16] In the present case, the affected employees refused to engage in their normal employment duty, which was to work on a particular shift. By refusing to observe the rules of the appellant and to carry out the instructions to continue to work in terms of the contract, they had refused to work. In this case, the action was concerted, in that a number of employees had participated in a decision to withhold their labour. As to the third requirement, there was a common purpose insofar as the employees were concerned, being to obtain redress for the third respondent's decision to withhold payment.

[17] Reference was made to the decision made by Basson J in Nkutha and Others v Fuel Gas Installations (Pty) Ltd, where the learned judge said:
"In the event, the refusal of employees to work in response to a failure on the part of the employer to perform its obligations, such as paying the employees for services rendered, is a lawful refusal in that it does not amount to a breach of contract under common law. In other words, the employees are legally entitled to refuse to carry out their side of the employment contract. In fact, it is the employer who is breaching the employment contract by unlawfully failing to perform its reciprocal obligation(s).
Having regard to these legal principles, such lawful entitlement of employees to refuse to work must, in my judgment, be distinguished from a strike where the concerted refusal to work by employees amounts to an unlawful breach of contract under common law.

In fact, a strike which amounts to unlawful breach of contract (under common law) can be branded as misconduct for the purposes of the dismissal of the strikers concerned.

In view of the foregoing, care should, in my judgment, be taken to ascertain the circumstances or facts which present themselves in every case under investigation. The question must be answered: Is the collective refusal to work in response to the failure of the employer to perform its reciprocal obligations under the employment contract or is the purpose of the collective refusal to work to place pressure on the employer to remedy a grievance or to resolve a dispute? Only in the last-mentioned instance would such concerted refusal constitute a strike in terms of section 213 of the Act."

[18] I find it difficult to accept the justification for this distinction between a collective refusal to work in response to a contractual breach by an employer and a collective refusal to work to place pressure to resolve a dispute. That is not in accordance with the section. Section 213 provides that "[t]he partial or complete concerted refusal to work or the retardation or obstruction of work by persons who are or have been employed by the same employer… for the purpose of remedying a grievance" constitutes a strike. Whether affected employees can decide to cancel the contract pursuant to a breach by the employer or sue for damages is beside the point. The key issue is to classify whether, on its own, the refusal to work for whatever reason in order to remedy a grievance falls within the scope of the Act's regulation of a strike. In my view, it manifestly does so and accordingly the dictum in Nkutha does not adequately reflect the position as encompassed in section 213.

[19] In summary, I am of the view that the refusal to work on both 24 and 26 April 2004 by the affected employees constituted a strike as defined and given that the procedures set out in section 64 of the Act were not followed, the strike stands to be classified as an unprotected strike.

The fairness of the dismissals
[20] Employees who participate in an unprotected strike can be dismissed in terms of section 68(5):
"(5) Participation in a strike that does not comply with the provisions of the Chapter, or conduct in contemplation or in furtherance of that strike, may constitute a fair reason for dismissal. In determining whether or not the dismissal is fair, the Code of Good Practice: Dismissal in Schedule 8 must be taken into account."

[21] However, the unprotected nature of this strike is not a license to dismiss without a careful consideration of the surrounding circumstances. In determining whether those workers who participated in an unprotected strike should be dismissed, a number of considerations must be part of the decision. Item 6(1) of the Code of Good Practice provides as follows:
"(1) Participation in a strike that does not comply with the provisions of Chapter IV is misconduct. However, like any other act of misconduct, it does not always deserve dismissal. The substantive fairness of dismissals in these circumstances must be determined in the light of the facts of the case, including –
(a) the seriousness of the contravention of this Act;
(b) attempts made to comply with this Act; and
(c) whether or not the strike was in response to unjustified conduct by the employer."

[22] This provision of the Code affirms earlier law where the illegality of the strike did not automatically result in the dismissal of unprotected strikers. See, for example, Betha v BTR Samcol (A Division of BTR Dunlop (Ltd), where the court held that the employer had conducted itself in bad faith, which was shown in its inflexibility to the reasonable approach by the union to the settlement of outstanding issues relating to a recognition agreement .In particular, the court found that the union was motivated by the desire to rid itself of the union. All of these factors were considered by the court to justify the strike sufficiently to entitle the dismissed employees to relief.

[23] The key question therefore is whether, in this case, dismissal was justified. The approach set out in Sidumo and Another v Rustenburg Platinum Mines Ltd and Others, holds that to review an arbitration award, the reviewing court has to come to an conclusion that the award was one that a reasonable decision maker could not have reached in the circumstances. Accordingly, it is necessary to return to the reasoning of the second respondent.

[24] The second respondent noted that which was common cause that third respondent had wrongfully deducted the money that was due to the employees and therefore had acted illegally and in breach of contract. He, further, noted that they had every reason to be distressed with this illegal decision on the part of the employer. Furthermore, he held that no evidence had been presented to the effect that the monies which had been deducted had been the outcome of any disciplinary procedure, where the relevant employees had been given the opportunity to explain their conduct in question. He further noted that the strike can be described as fairly peaceful. He further accepted that the object of the strike was to force the employer to pay back the money that had been unilaterally deducted'. Furthermore, the absence of the employees had not had a significant impact, so that only 3 x 12 hour shifts had been affected. No evidence was led that this had a major financial impact on the employer's overall operation. Indeed, it appears that the estimated loss to the third respondent was between R120 000 to R180 000.

[25] In weighing up these factors in favour of the dismissed employees, second respondent emphasised that the employees had acted in clear breach of the provisions of the LRA in striking and that, while that they might have had a noble objective, they also had alternative remedies sourced in contract or dialogue with representatives of third respondent. In addition, he placed emphasis on the fact that the various shop stewards could not offer any acceptable explanation why they themselves did not make any attempt to contact the union officials when involved in a union dispute. Furthermore, the third respondent had acknowledged its mistake and had offered to make redress at the next official payment. In addition, clear and fair ultimatums had been given by third respondent to the employees.

[26] Mr Aggenbach, who appeared on behalf of third respondent, submitted that second respondent had constructed a fair and careful award in which he had taken account of all considerations in coming to the conclusion that dismissal was a justified remedy in the circumstances of this unprotected strike. The applicable question, however, is whether second respondent reasonably weighed all of the factors in order to come to a reasoned decision. In my view, he failed to do so. The reaction of the affected employees was directly attributable to a unilateral action on the part of third respondent to withhold wages. The fact that third respondent might have offered to repay the amounts at some later date did not remove the legitimate anger and concern of employees who, given their circumstances, were hardly likely to have the necessary resources to sustain their basic standard of living when monies were unilaterally deducted in this fashion. The employees did not respond in a violent fashion. According to the findings of second respondent, their action did not last for very long; did not cause huge losses to the operation of third respondent; and, even second respondent, was constrained to admit that they might have had a noble objective. Once it is accepted that participation in an unprotected strike is not inevitably to be visited with dismissal, second respondent was bound to consider all the factors that were listed in the award both those in favour of the employers decision to dismiss and those in favour of the applicable employees.

[27] In my view, a reasonable decision maker, who arrived at a conclusion which properly took account of all of these factors, particularly those in favour of the affected employees and with knowledge of provisions of item 6(1) of the Code of Good Practice and the case law which underpins this provision to the effect that, even in the case of an unprotected strike, dismissal is not the automatic default position, would have arrived at a different result. A reasonable decision maker, given all of the circumstances of this case would have considered that an alternative to dismissal was manifestly indicated and for this reason would have decided that the employees had been unfairly dismissed.