SACCAWU obo Mokebe and Others v Pick'n Pay Retailers (JA36/16) [2017] ZALAC 55 (26 September 2017)

Principle:

An ultimatum is as much a means of avoiding a dismissal as a prerequisite to affecting one. It has a bearing not only on the procedural fairness of a dismissal, but also on the substantive fairness because it is aimed at avoiding a dismissal.

Facts:

The employees, who were members of SACCAWU, were all employed as so-called variable time employees (VTEs) at Pick 'n Pay's Woodmead store. At the time, SACCAWU and the Company were engaged in wage negotiations at a national level. A wage dispute was referred to the CCMA, but conciliation was unsuccessful. Following further unsuccessful mediation, the Union issued a strike notice informing the Company that a protected strike would commence at 7pm on 24 September 2010.

On 24 September, a public holiday, employees at the Woodmead store who were scheduled to work until the closure of the store at 4pm (and in some cases until 4,30pm to service remaining customers post closure), commenced their strike somewhere around 3pm. The strike at that time was accordingly unprotected, taking place before the strike notice period had expired at 7pm. There appears to have been confusion about the time the strike was meant to start. The Union's regional chairperson gave evidence that at a local shop stewards' meeting, they had been told the strike was to start at 3pm, although strike pamphlets were distributed at the stores mistakenly showing the starting time as 4pm. Whilst the Union had intended giving the Company the required 48 hour strike notice at 3pm on 22 September, it delayed this by a few hours in a last ditch attempt to settle the wage dispute - hence the notice was only given at 7pm, making the strike protected only from 7pm on 24 September.

Union attempts to advise its members at the Woodmead store of the changed strike times were apparently unsuccessful due to the shopstewards' phone not being in working order. Management gave evidence that they had met with the shopstewards and displayed copies of the strike notice at the premises, which clearly showed the commencement time for the strike as 7pm. Management also warned employees and supervisors that the strike would only be protected from 7pm and that they were already on final warnings for previous unprotected industrial action, but they responded by saying they had been told by the Union that if they went on strike from 3pm "nothing would happen to them".

The strike duly commenced at 3pm, and whilst replacement TES workers were brought in from 4pm, the Company estimated that it lost in the region of R190 000 as a result of customers abandoning their trolleys at till points due to delays caused by the unprotected strike.

The LC found the dismissals of the 61 employees for engaging in unprotected strike action to be substantively and procedurally fair. In summary, the LC's decision was based on the view that employees participated in the unprotected strike from 3pm "in deliberate defiance of management" as opposed to this being an innocent error, and that the Union and employees had deliberately attempted to mislead the court with an untrue defence.

The LC found that employees, already on a final warning for similar misconduct, had set themselves on a "deliberate collision course with management", and had commenced the strike at the time when they knew the employer was vulnerable. They had been repeatedly warned not to strike and about the consequences of their actions. Although taking into account the short duration of the unprotected strike, the LC concluded that the aggravating factors simply outweighed the mitigating factors.

The LAC did not believe that the unprotected strike was deserving of dismissal, despite the employer's arguments that the employees -

  • were already on a final warning for similar misconduct;
  • deliberately went on strike on the last and busiest trading hour of a public holiday;
  • deliberately defied management's instructions to return to work;
  • deliberately attempted to mislead the LC with their defence; and
  • showed no remorse for their misconduct, thereby rendering the employment relationship intolerable.

The LAC concluded that employees had not deliberately embarked on a collision course with management, and referred to the evidence that employees believed they were entitled to strike based on assurances given to them by the Union. The LAC found that dismissal was too harsh a sanction, and that the dismissals were procedurally and substantively unfair. In summary, these conclusions were based on the following:

Lack of an ultimatum

The LAC found that whilst management attempted to dissuade employees from striking before 7pm, they did not issue them with an ultimatum as required by clause 6(2) of the Dismissal Code. This was despite the Company having strike guidelines in place for handling unprotected strike action, and which contained a 'pro forma' ultimatum that could have been used. The LAC said it was particularly important for management to have issued an ultimatum in the circumstances, given that employees believed their strike was protected. The purpose of an ultimatum is to enable employees to reflect on the consequences of their actions and if necessary obtain advice, and the LAC submitted that it was unlikely employees would have proceeded with an unprotected strike had they received the required ultimatum.

Failure to provide a hearing

Following the unprotected strike action, management gave employees written notice of disciplinary proceedings to be taken against them, and undertook to provide each of them with an opportunity to submit written representations, in the event that it was not persuaded by the union that the sanction of dismissal was inappropriate. Yet, despite providing this undertaking, management did not do this and only held a disciplinary hearing in which union officials and shop stewards were permitted to participate.

The LAC said that whilst collective hearings may be utilised in a strike context where appropriate, individual hearings in the context of this case would have given management the opportunity to find out each employee's understanding of the time the protected strike was due to start and whether they were knowingly complicit in a scheme to cause damage to the company. The LAC found that management's failure to adhere to the process that it had undertaken to follow in the disciplinary notice issued to employees, rendered each employee's dismissal procedurally unfair.

Inconsistency

The LAC found that the Company had been inconsistent in how it dealt with the industrial action concerned.

The final warnings previously issued to these employees effectively led to them being dismissed for the subsequent offence. Employees who were not on final warnings, were not dismissed and were issued with written warnings. But the LAC found that the previous action "differed materially" from the subsequent industrial action, in that it involved participation in a march from the canteen to the manager's office during time set aside for a weekly union meeting. As such, the LAC said it was unfair to impose "the next level of discipline" (being dismissal) for the subsequent offence of a different nature, and employees' action had only deserved a written warning (ie the same sanction that other employees not on final warnings were given). Importantly, employees at other Pick 'n Pay stores who also participated in the unprotected strike whilst on previous warnings for industrial action were not dismissed, and were issued with (further) written warnings.

On the basis of the above, the LAC referred to the need for consistency in terms of clause 3(6) of the Dismissal Code and concluded that the Company was inconsistent in both the historical and contemporaneous treatment of employees. The LAC concluded that it was "absurd" to conclude that the trust relationship with the dismissed employees had broken down, when other employees had been given a written warning for the same misconduct.

For all the above reasons, the LAC found the dismissals to be procedurally and substantively unfair and ordered the employees' retrospective reinstatement to their date of dismissal.

It has to date taken 7 years for our judicial system to deal with this matter, and it took the LAC 18 months from date of hearing to give its judgment. Taking the new national minimum wage as an example (we guess the employees were earning way above this), the backpay resulting from the retrospective reinstatement order will exceed R17 million. Aside from the merits of the court proceedings, we question whether this can in any way be fair, given the prohibitive costs that appear to have resulted from the court's delays.

We think the court in this matter was determined to find that participation in an unprotected strike for approximately an hour, in circumstances in which employees may have thought that their strike was protected, was not deserving of dismissal. That aside, we think there are important learnings from the court's justification of its decision. Firstly, employers who fail to follow their own guidelines or rules, or who do not comply with undertakings they have given, can expect little sympathy from the courts.

This judgment again shows the importance of an ultimatum, both as a step in attempting to prevent a dismissal, and failing that, in making any subsequent dismissal fair. This judgment also shows that a 'one size fits all' approach to procedural fairness for collective dismissals is problematic, and where circumstances require it, individual representations on behalf of the affected employees will be required in order for the procedure to be fair.

Another learning: when the fairness of a dismissal is coupled with a previous final warning, the courts may investigate the fairness of that warning even though it may have been given a considerable time before, and also consider the extent to which the offences are sufficiently linked to justify the previous warning being taken into consideration.

Extract from the judgment:

(Kathree-Setiloane AJA)

[39]   The Labour Court then went on to find that the employees had set themselves on a collision course with management, by knowingly being party to a scheme aimed at exacting damage on the company by embarking on the strike at 15h00 on 24 September 2010. This finding is not sustainable on the evidence. On the probabilities, the employees would have been aware that the strike was originally called for 7pm, as the strike notice was brought to their attention when it was placed on the notice boards, and they were reminded of this by the employer's representatives. However, it is clear, on the company's own version, that the employees believed that they were allowed to strike at 15h00 on the basis of certain assurances that they had received from the union representatives.

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[41]   The Labour Court found correctly so, in this regard, that the employees had received an instruction from the union to embark on the strike at 15h00. I, however, disagree with its finding that the employees set themselves on a collision course with management by knowingly being party to a scheme aimed at exacting damage to the company. The strike called for 15h00, by the union, was a national strike and not a store specific one. This calls into question the contention that the employees (at the Woodmead Store) were knowingly party to a scheme aimed at exacting damage to the company.

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Ultimatum

[43]   The company's representatives attempted to dissuade the employees at the Woodmead store from striking before 19h00, but were unsuccessful in doing. However, what they did not do was to issue the employees with an ultimatum once it became clear to them that the strike was to begin at either 15h00 or 16h00. Item 6(2) of the Code provides that:

'Prior to dismissal the employer should, at the earliest opportunity, contact a trade union official to discuss the course of action it intends to adopt. The employer should issue an ultimatum in clear and unambiguous terms that should state what is required of the employees and what sanction will be imposed if they do not comply with the ultimatum. The employees should be allowed sufficient time to reflect on the ultimatum and respond to it, either by complying with it or rejecting it. If the employer cannot reasonably be expected to extend these steps to the employees in question, the employer may dispense with them.'

[44]   It was contended on behalf of the company that it could not reasonably have been expected to issue an ultimatum to the staff as it was given short notice that the strike would begin at 3pm. There is no merit in this contention as the company had strike guidelines in place for handling unprotected industrial action. These guidelines have, as annexure B, a pro forma ultimatum which is to be issued to employees in a strike situation, where it was "not possible to engage the shop stewards and/or address the employees personally". The pro forma contains the body of the ultimatum in it, and only requires the time, date and store name to be inserted in the spaces provided.

[45]   The company was aware from 12h30 on 24 September 2010 that the strike may commence at 15h00. In anticipation of this, it took steps to arrange for replacement labour but did not deem it necessary to issue an ultimatum to the employees. As such, no ultimatum was issued to the employees either before or after the strike commenced; in circumstances where a number of the employees only "punched out" much later than 15h00 including, in some cases, approximately an hour later. There was nothing, in my view, which prevented the company from issuing a written ultimatum to the strikers, which it was obliged to do in the circumstances.

[46]   The contention, advanced on behalf of the company, that there was no obligation to issue an ultimatum in circumstances where the employees were informed that the strike was unprotected, loses sight of the objective of an ultimatum, which was expressed by this Court in Modise v Steve's Spar Blackheat as follows:

'The purpose of an ultimatum is... to give the workers an opportunity to reflect on their conduct, digest issues and, if need be, seek advice before making the decision whether to heed the ultimatum or not.'

This is precisely why an ultimatum in writing is so important - the employee concerned has a document in hand setting out what is required (and the consequences of non-compliance), and can reflect on the matter in those circumstances.

[47]   The unique circumstances of the current dispute warranted the issue of a written ultimatum because the employees were seemingly of the belief that the strike was a protected one. It is unlikely, on the probabilities, that they would have proceeded to participate in the unprotected strike had they been furnished with a written ultimatum which expressly spelt out the consequences of doing so, such as no payment for the duration of the strike and disciplinary action that could result in the termination of their services.

[48]   As previously held by this Court "an ultimatum is as much a means of avoiding a dismissal as a prerequisite to affecting one". It has a bearing not only on the procedural fairness of a dismissal, but crucially also on the substantive fairness because it is aimed at avoiding a dismissal.

Failure to provide a hearing

[49]   The company failed to give the employees an opportunity to be heard before dismissing them, despite undertaking to provide each of them with an opportunity to submit a written representation, in the event that it was not persuaded by the union that the sanction of dismissal was inappropriate. Importantly, in this regard, the company issued a disciplinary notice to the employees which read:

  1. 'You participated again in unprotected industrial action on 24 September 2010, which took the form of leaving your work station collectively without authorisation at 15h00.

  2. Disciplinary enquiry proceedings will be initialised.

  3. Because of the difficulties of holding a disciplinary enquiry with all employees involved in the unprotected industrial action, which could result in your dismissal, we have decided to hold a hearing as per the following:
  4. 3.1.   The union through its office bearers and shop stewards at the store to be given the opportunity to inform us why you should not be dismissed. We have scheduled the hearing for date to follow. Please advise your shop steward of any representation that should be made.

    3.2.   Each employee involved to be given the opportunity to submit a written representation thereafter if the union cannot persuade us that dismissal is inappropriate.

  5. The outcome of the hearing with the office bearers and shop stewards will be communicated to you.'

[50]   The company held a disciplinary hearing and an appeal hearing in which only the union officials and shop stewards were permitted to participate. Contrary to the undertaking in the notice, the company failed to provide the individual employees with an opportunity to submit written representations to persuade it otherwise once the decision to dismiss them was taken. While I accept that in the context of a strike dismissal, a collective hearing may be utilised where appropriate, this does not give an employer carte blanche to use collective enquiries irrespective of the exigencies of a particular case. While in some cases collective hearings may be warranted, in others they may not. Van Rooyen's testimony in the Labour Court was that in cases of collective misconduct, the company always holds disciplinary hearings on a collective basis. This implies that the company does not tailor the process to meet the dictates of fairness based on the prevailing circumstances of a specific case.

[51]   As contended for by the appellants, this was a case where individual hearings (or at least, collective hearings in which individuals could participate) were warranted because the employees appeared to be of the mistaken view that they were entitled to go out on strike at 3 pm, on the day in question, as the strike was a protected one. In Modise and Others v Steve's Spar Blackheath, where the dismissed employees were of the similar belief because the union had taken steps to make the strike legal, this Court held that:

'The last observation relates to the conclusion that it would have been a pointless and an unnecessary exercise for the employer in G.M. Vincent to afford the strikers a hearing. My difficulty with this conclusion is that this was a case where the union had taken various steps prescribed by the old Act for making a strike legal... Indeed, it appears from the judgement of the industrial court in the same matter that, when the matter was argued in the industrial court, it was the union's case that it (and, a fortiori, the strikers) believed that the strike was legal (see NUMSA V G.M. Vincent Metal Sections (Pty) Ltd (1993) 14 ILJ 1318 (IC) at 1320J-1321A)... In those circumstances I cannot, with respect, see how it could be said that a hearing would have been a pointless and an unnecessary exercise in such a case.'

The Court went on to hold that:

'The need for the respondent to hear the appellants was arguably even stronger in this case because this was a case where, to the knowledge of the respondent, certain steps had been taken by the union which were obviously aimed at making the strike a legal strike. The respondent should have realised that, because such attempts had been made, the strikers could well have been under the impression that the strike was legal and, that, for that reason, they might have believed that they were entitled to go on strike and even to ignore any calls by the respondent that they return to work. Although the appellant's strike was illegal, they should not, in my judgement, be treated in the same way as strikers who simply flouted the Act and made no attempts whatsoever to comply with it. They deserve some sympathy. Workers must be encouraged to comply with the law. To treat them as if they fall into the same category as strikers who go on a strike without any attempt at all to make their strike legal would not be right. It would not encourage unions and workers to make whatever attempts they can to ensure that their strikes are legal.'

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[58]   Clause 3(6) of the Code of Good Practice: Dismissal ("the Code") provides:

'The employer should apply the penalty of dismissal consistently with the way in which it has been applied to the same and other employees in the past, and consistently as between two or more employees who participate in the misconduct under consideration.'

The Code envisages a consideration of the employer's historical and contemporaneous treatment of employees. In so far as the company's historical treatment of employees is concerned, it issued (ordinary) written warnings to employees at its Carlton Centre and Rosebank stores for participation in unprotected industrial action (off the floor) in May and June 2010. As concerning its contemporaneous treatment of employees, we know that the company dismissed those employees to whom it had previously issued final written warnings, but did not dismiss employees at the Rosebank and Carlton Centre stores who were already on written warnings, and who committed the same misconduct in embarking on the strike at 15h00 on 24 September 2010. It instead issued the employees at the Rosebank and Carlton Centre stores with further (ordinary) written warnings.

[59]   The company, furthermore, dismissed the employees, but did not dismiss other employees in the same store (i.e. the Woodmead Store) who committed the same misconduct in embarking on the strike at 15h00, and who were also only issued (ordinary) written warnings. This, to my mind, is a clear case of inconsistency, rendering the employees' dismissals substantively unfair.

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[64]   The argument that the trust relationship with the other employees remained intact, but it did not in relation to the dismissed employees (who committed the same misconduct) is absurd. It also contradicts the company's contention that the dismissed employees were knowingly part of the sinister scheme that the union had constructed to exact damage to the company. If there were any merit in this contention, then the other employees (at the Woodmead, Carlton Centre and Rosebank stores), who embarked on the strike at 15h00, should have also been dismissed - and not merely warned. Accordingly, I consider the employees' misconduct not to be such as to render their continued employment intolerable.