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Worklaw subscribers receive a monthly newsletter containing commentary on the latest labour law cases and trends. Due to the current wave of strike activity and the high number of strike related helpline queries we have recently received, we have decided to move away from our standard newsletter format and devote this month’s newsletter to strike related topics.
This public newsletter is a free edited version of the Worklaw subscriber newsletter.
During the strike: leave, public holidays, and benefits
It has been said that the constitutional right to strike is unique in that it is a right to inflict harm. Not surprisingly there are heated views about this right and its impact on the economy. Regardless of our views, a strike has practical implications. The current strike season has prompted several difficult queries from Worklaw subscribers about the employer’s obligations during a strike.
We thought it would be useful to set out what we understand the law to be on questions such as the following:
- Is it correct to say that a strike ‘suspends’ the employment relationship?
- If the rule is ‘no work, no pay’, does this extend to benefits?
- If there is a public holiday during a strike, must an employer pay for this in terms of s 18 of the BCEA?
- Can an employee apply for annual leave during a strike?
- Does leave accrue during a strike?
- Can an employee claim sick leave during a strike?
- Can an employer reward non-strikers for their loyalty during the strike?
- Can an employer withhold a bonus because of the strike?
- Can an employer assume that all union members are out on strike?
- When a union gives notice to strike, who does this cover?
1. Is it correct to say that a strike ‘suspends’ the employment relationship?There are however two arbitration awards which have held that employers are obliged to pay for public holidays which fall during the strike period, one a very recent award in the clothing sector. (Food & Allied Workers Union and African Products (Pty) Ltd (1990) 11 ILJ 882 (ARB); SACTWU obo members and NCMA & another (ARB) Case no U/23/2267/3/11 National Bargaining Council for the Clothing and Manufacturing Industry Date of award: 7 July 2011).
There was a time in our law (pre 1985) when a strike was seen as a breach of the contract of employment which entitled the employer to end the contract. But the constitutional right to strike and the 1995 LRA protects strikers from dismissal where the strike is in accordance with s 64 of the LRA. Accepting that the employment relationship continues after the strike, what aspects of it survive during the strike?
The fact that the employer retains the right to discipline a striker for misconduct which is committed during the strike tells us that the striker is still in an on-going employment relationship – s/he retains a duty to comply with the disciplinary code even when on strike. Similarly, other duties of employees – apart from those relating to work – continue. For example, the duty not to compete with the employer continues during the strike. In our view the employment relationship is not suspended during a strike. It is only the obligation to render services and the reciprocal obligation to pay for those services which are suspended.
2. If the rule is ‘no work, no pay’, does this extend to benefits?
The LRA, in s 67(3), makes it clear that an employer is not obliged to remunerate an employee who is striking. This is the ‘no work, no pay’ rule.
Section 67(3) does make one exception: where an employee’s remuneration includes payment in kind in the form of accommodation, food and other basic amenities of life, the employer, at the request of the employee, must not discontinue payment in kind. The Act provides that at the end of the strike, the employer can however recover the monetary value by way of civil proceedings in the Labour Court. Not a very suitable remedy, having to sue your own employees who have just returned from a strike, and we are not aware of any employer ever having gone this route.
During a strike the employer is only relieved of its obligation to ‘renumerate’ employees. ‘Benefits’ have usually been regarded as not forming part of the employee’s remuneration, and consequently normally remain unaffected by a strike. A ‘benefit’ has been described as a supplementary advantage conferred on an employee not directly linked to the rate of pay, such as pension, medical aid, housing and insurance subsidies, ie they have a monetary value for the employee and are a cost for the employer. But in an era of cost-to-company packages, it is often difficult to say what is remuneration and what is a benefit.
In SAMWU v City of Cape Town & others (2010) 31 ILJ 724 (LC) it was held that it is not an unfair labour practice for an employer to apply a policy of ‘no work, no pay, no benefits’ because there is no difference to withholding the pro rata share of contributions in respect of benefits to the withholding of remuneration during a strike. This judgement – which, regrettably in our view, does not set out its reasons clearly - blurs the line between remuneration and benefits and seems to sanction a broader approach to that which is suggested above.
Could this approach be challenged? Some have suggested that withholding benefits (possibly jeopardizing whether a striker remains covered by medical aid, or whether there is a default on the mortgage) is a form of discrimination. They say this because s 5(1) of the LRA confirms that no person may discriminate against an employee for exercising a right under the Act (which would include the right to strike). Section 5(2)(c)(vi) provides that no person may prejudice an employee for exercising a right under the LRA. On the other hand, a possible response is that the lost benefits are not ‘rights’ under the LRA, and refusing to pay benefits is no more discrimination than not paying wages to strikers.
On broad policy grounds it seems to us that where benefits are clearly separate from remuneration, then to withhold contributions to a medical aid fund or a mortgage is a form of power that goes far beyond the balance inherent in the ‘no work, no pay’ formula. It allows employers potentially to punish strikers in a way that impacts on access to medical treatment for children or perhaps even the loss of a house. While the SAMWU case does sanction withholding of benefits, our view is that this should be approached with great caution.
3. If there is a public holiday during a strike, must an employer pay for this in terms of s 18 of the BCEA?
Section 18(2)(a) of the BCEA says that if a public holiday falls on a day on which an employee would ordinarily work, an employer must pay an employee who does not work on the public holiday at least the wage that the employee would ordinarily have received for work on that day.
In understanding this section, the focus is on the word ‘ordinarily’. It has been argued that “ordinarily” must be interpreted to mean those days that the employees are legally required and/or expected to be at work, excluding days when the employees were specifically excused from working eg protected strikes.
Another somewhat dated award (Nampak Products Ltd t/a Nampak Corrugated Containers (Western Province) and PPWAWU (1992) 13 ILJ 1292 (ARB)) held that striking employees do not fall within the definition of 'employee' contained in the BCEA 3 of 1983 and accordingly the obligations on employers contained in that legislation do not obtain for the period of strike action. Although this case was decided under the previous BCEA, the current Act’s definition of employee is similar: ‘any person… who works for another person or for the State and who receives, or is entitled to receive, any remuneration’. So the argument is that because a striker does not receive or is entitled to receive remuneration during the period of the strike, the striker ceases to be an employee for the purposes of the BCEA for the duration of the strike.
Our view is that this argument, although possible, creates an absurdity. The striker, who remains an employee under the LRA during a strike, cannot become a non-employee under the BCEA.
Returning to s 18(2) of the BCEA, the word ‘ordinarily’ (in the sentence “if a public holiday falls on a day on which an employee would ordinarily work”) should be interpreted to mean that if a strike was not in progress, the employees would ordinarily have been at work and so must be paid for the day. This is in accordance with s 5 of the Public Holidays Act which provides that every employee is entitled to the minimum number of public holidays provided in the Act and must be paid for those days.
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