Afrox Ltd v SACWU and Others 2 (1997) 18 ILJ 406 (LC)

Afrox Ltd v SACWU and Others 2 (1997) 18 ILJ 406 (LC)

IN THE LABOUR COURT
HELD IN JOHANNESBURG

February 25, 1997

Before LANDMAN AJ

JUDGMENT

LANDMAN AJ:

Two applications come before me by way of urgency. The first is brought by Afrox Ltd against the SA Chemical Workers Union and others. The second is a counter-application (and an answer to the first application) brought by the SA Chemical Workers Union and others against Afrox Ltd. This judgment deals with both these applications and for convenience I shall simply refer to Afrox Ltd as the applicant and to the SA Chemical Workers Union and others as the respondent.

The first application: Termination of the strike

The applicant seeks an order in the following terms:

'Authorizing the applicants to bring the application as a matter of urgency and dispensing with the normal periods, forms and services provided by the rules of this honourable court.

That a rule nisi do [issue] calling upon the respondents, referred to in annexures A.1 to A.18 to the founding affidavit (individual respondents), to show cause, on a date and time to be determined by this honourable court, why an order should not be granted interdicting and restraining the respondents from:

2.1. participating in any strike action or conduct in contemplation of or furtherance of any strike action or encouraging or advocating the other persons either conducting in the strike action and or participating in strike action in relation to a dispute declared by the first respondent on 28 October 1996 regarding the parties' failure to reach a settlement on the implementation of a staggered shift;

2.2. instigating or encouraging any of the individual respondents or any other person employed by the applicant and its premises defined in the founding affidavit from participating in any strike action in relation to a dispute declared by the respondents on 28 October 1996 regarding the parties failure to reach a settlement on the implementation of a staggered shift.

Ordering that para 2.1, alternatively 2.2, operate as an interim order pending the return day of this application.'

The other relief claimed goes to the service and costs.

The facts

I do not intend setting out the facts in full. Mr Loxton SC, with him Mr Franklin, relied on a narrow set of facts as did Ms Joubert who appeared for the respondents although in her application other facts are relevant.

In the founding affidavit the following was said:

'Applicant contends that the strike action engaged in by the individual respondents does not fall within the definition of strike action in the LRA since there is no longer a grievance or dispute in respect of a matter of mutual interest.

In order to place the applicant's contention in its proper context and to understand the basis upon which applicant makes this contention, it is necessary briefly to detail the background to the dispute.

The applicant is a manufacturer and supplier of industrial and medicinal gases - oxygen, nitrogen, argon, carbon dioxide and methanol as well as gas equipment. The applicant's customers include various hospitals, clinics and nursing homes where the gases are applied for use in operations conducted at these institutions and the like. These customers deal with life-threatening situations on a daily basis. The use of the products supplied by the applicant to these customers forms an integral and crucial part of the operations conducted by the clinics and hospitals. The applicant also supplies and delivers gases to large industrial corporations and mining institutions which operate continuous production processes. In many cases the supply contracts with the large companies include provisions penalizing the applicant in the event of a failure to deliver gas timeously or at all.

The gases manufactured by the applicant are transported by means of specialized chemical bulk tankers. They are distributed to approximately 700 customers in each province of the country.

Given the specialized nature of the functions related to the transport of hazardous chemical substances, the drivers who undertake these deliveries perform a specialized function which requires specialized training. The drivers are grouped into three teams each reporting to the superintendent. Two teams work a day shift while the third works a night shift and the teams rotate within three-week cycles. Each team contains a few drivers who work a staggered shift system, ie five consecutive days starting on different days of the week. Those drivers working a staggered shift system are obliged to work the staggered shifts in terms of a contractual arrangement with the applicant. It is the applicant's policy to release the longer serving drivers who are contractually bound to work staggered shifts when new drivers join the applicant. As new drivers are signed on, the longer serving staggered shift employees revert to normal shifts as described above.

A dispute exists between the applicant and the first respondent, and its members, arising out of the refusal of the applicant's employees, employed at its Pretoria West site to work staggered shifts. As a consequence of the dispute, those of the first respondent's members employed at the Pretoria West site embarked on industrial action on or about 10 January 1997 in pursuit of their demands in relation to the dispute.

The dispute between the applicant and the first respondent and those of its members employed at the Pretoria West site has ended in the retrenchment of first respondent's members at Pretoria West on 14 February 1997 and the abandonment by the applicant of attempts to deliver itself the bulk gases required by its customers. Applicant has contracted out that work previously performed by the first respondent's members formerly employed at its Pretoria West site. In consequence of the retrenchment and applicant's decision to contract out the work, applicant no longer insists on the working of staggered shifts of any of its employees, more particularly any of the first respondent's members. The contractors themselves are not required to work a staggered shift but are still able to perform the work required by applicant because-

they operate a double manning system which entails two drivers in one truck alternating en route;

the drivers, unlike applicant's system, are not required to return to applicant's site to effect a change of shift as the change takes place en route;

the contractors accordingly operate a continuous shift 24 hours a day and seven days a week;

the contractors are also able to operate on a lower cost structure.

In the circumstances it is submitted that the pursuit of industrial action by first respondent's members at the various sites around the country would not be functional to collective bargaining as applicant is entitled to dismiss its employees for operational requirements subject to a proper and fair consultative procedure being followed. Applicant submits that such a proper and fair consultative procedure had indeed been followed over an extensive period of time and that in the absence of any unfair conduct on the part of the applicant during the consultative process it is respectfully submitted that the dispute ceases to exist particularly in circumstances where-

applicant no longer insists that staggered shifts be worked either by any of its employees or the contractors;

the continuation of strike action by first respondent's members at applicant's various sites cannot compel applicant to meet their demands, namely the abandonment of the staggered shift system.'

The termination of a strike

It is common cause that the strike being conducted by the individual respondents is a protected one in terms of s 67 of the Labour Relations Act 66 of 1995 (hereafter the LRA). This was confirmed in the judgment of Zondo AJ delivered on 17 February 1997 in a matter involving the same parties.

A protected strike is one which complies with the provisions of chapter IV of the LRA. It is protected in several senses. In the first place s 67(2) provides that-

'a person does not commit a delict or a breach of contract by taking part in-

a protected strike or a protected lock-out; or

any conduct in contemplation or in furtherance of a protected strike or a protected lock-out'.

In addition and probably ex abundata cautela the legislature has opted for a belt and braces approach. Not only do the protected strikers not commit breaches of contract nor delicts, the strikers also enjoy immunity from the institution of civil legal proceedings. Section 67(6) reads as follows:

'Civil legal proceedings may not be instituted against any person for-

participating in a protected strike or a protected lock-out; or

any conduct in contemplation or in furtherance of a protected strike or a protected lock-out.'

There is an exception but that is not at present relevant.

The reference to civil legal proceedings is, in my opinion, a reference to civil legal proceedings in the High Courts and other courts of law of this country and to proceedings in the Labour Court.

A strike which is a protected one is beyond the jurisdiction of this court and every other court of law. The clear intention is to leave it to the economic muscle of the parties involved. The general rule is that the courts are to refrain from intervening in a protected strike and from influencing the outcome of the powerplay inherent in a strike.

Mr Loxton did not ask this court to interfere in a protected strike. He submitted that a protected strike could only be protected whilst a strike as defined was in existence. A strike he argued could terminate or be terminated. He submitted that the strike in question had terminated when the applicant acceded to the grievance of the union and its members.

A strike is defined in s 213 as meaning-

'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 and employee, and every reference to 'work' in this definition includes overtime work, whether it is voluntary or compulsory'.

A dispute is also defined and it means 'an alleged dispute'. The phase 'issue in dispute' is itself defined in s 213 as meaning 'in relation to a strike or lock-out, . . . the demand, the grievance, or the dispute that forms the subject matter of the strike or lock-out'. For one instance where this phrase is used see s 64(1) of the LRA.

A strike can terminate in various ways. One way for a strike to terminate is where the strikers abandon the strike. This normally takes the place of an unconditional return to work. Another possible way, for there are probably other ways (cf 'Some Aspects of the Termination of a Dismissal Lock-out' 1994 Contemporary Labour Law 79--83) is by the disappearance of the substratum. If the casus belli is removed, for example, by the employer's conceding to the demands of the strikers or by removing the grievance or by resolving the dispute then the foundations of the strike fall away. The strike is no longer functional; it has no purpose and it terminates. When the strike terminates so does its protection. It is not in the interests of labour peace for a strike action to be continued in such circumstances even in the case of a protected strike. See s 1 of the LRA.

In the present case the applicant says it has conceded to the demands of the strikers concerning staggered shifts. The applicant says that it consulted with the union about this matter and the possibility of dismissal for operations requirements and that it has in fact implemented a decision to retrench the employees concerned. It has terminated the services of its employees who are affected by the staggered shifts. This aspect is challenged by the respondents and I will return to it presently.

Assuming that this position is correct then it becomes necessary to observe that a strike by employees who are aggrieved by a dismissal for operational and indeed on the other grounds specified in chapter VII is impermissible. This is so because s 65(1) provides:

'No person may take part in a strike or a lock-out or in any conduct in contemplation or furtherance of a strike or a lock-out if -...

c. the issue in dispute is one that a party has the right to refer to arbitration or to the Labour Court in terms of this Act.'

Disputes concerning an alleged unfair dismissal based on operational requirements must be referred, in this case, to the Commission for Conciliation, Mediation and Arbitration (the CCMA) and if the CCMA cannot conciliate the dispute it must be referred to the Labour Court. See s 191(5)(b)(ii) of the LRA which reads:

'If a council or a commissioner has certified that the dispute remains unresolved, or if 30 days have expired since the council or the Commission received the referral and the dispute remains unresolved -...

b. the employee may refer the dispute to the Labour Court for adjudication if the employee has alleged that the reason for dismissal is -...

ii. ; based on the employer's operational requirements.'

Although it is clear from the definition of a strike that dismissed employees may continue with a strike neither they nor their fellow-workers may strike with the purpose of securing their reinstatement or re-employment or for the payment of any compensation to them. Their only remedy is one of adjudication although they are also entitled, but not required, to arbitrate the dispute.

It follows from this that although a protected strike, where the substratum has not fallen away, can be continued, it may only be pursued in respect of the 'issue in dispute' and it cannot be pursued in support of any other demand including a demand relating to a dismissal for operational or other reasons. It is therefore important to permit a protected strike to flourish, unless there has been a failure of the substratum, but at the same time it is important to ensure that the other object of the LRA is promoted, namely that disputes about arbitrable or adjudicable matters are not advanced by powerplay in the form of strikes and conduct in furtherance of strikes.

Application to the facts

I have set out above the law as I understand it. It now remains to apply the law to the facts of the case. These are the facts which are common cause and the facts set out by the applicant which the respondents have not challenged or cannot challenge.

In my view the respondents cannot challenge the fact that the nature of dispute between the applicant and respondent has changed from one in connection with staggered shifts regarding the delivery of gas to customers to one about outsourcing and its implications for the job security of some members of the union.

The union wrote to the applicant on 12 February 1997 saying:

'Please be informed that we are in dispute with yourselves for failure to reach a settlement on contracting out with us.

We still and will not accept that you contract out our members' jobs without securing their employment. Any contractor you want to give this job, to take the job and the owners of the job.

The dispute is declared in terms of the agreed procedures unless you can agree with us that we waive the agreed procedures and go straight to the CCMA.

We [propose] that the company makes full disclosure to enable the parties to resolve the dispute amicably.'

In a subsequent referral to the CCMA the respondent says:

'The dispute is about:

The refusal to change their normal shift to a staggered shift that will make them to work Saturday and Sunday as normal days. Management forced their staggered shift on the workers even after workers proposed alternatives to staggered shifts.

We would like to bring the following special features of this dispute under the attention of the Commission:

The company wants to contract out transport distribution business to private contractors and retrench the current employees. This is done after the employees embarked on the legal strike in refusal to change their working hours to staggered shift.

The outcome we would like:

The company must not give the business to anyone else except its current employees by selling their trucks to the employees and negotiate with the banks on their behalves together with the workers' union. If the above is not accepted the company to keep the business and allow employees to work their non-staggered shift hours.'

The implication of these communications is clear. The union accepts that the employer has dropped its stance regarding staggered shifts and has conceded that it cannot continue with this policy. This is what the respondents wanted. They did not however want the further steps taken by the applicant, namely to consider outsourcing with a resultant loss of jobs. That is however for the moment besides the point. The point is that the respondents have accepted that the employer has conceded their demands and is no longer persisting in having its employees work a staggered shift.

In my view the applicant has established a clear right and has met the other requirements for a final interdict. See Erasmus Jones & Buckle The Civil Practice of the Magistrates' Court in SA at 92:

'There are three requisites for the grant of a final interdict:

a clear right on the part of the applicant;

an injury actually committed or reasonably apprehended;

the absence of any other satisfactory remedy available to the applicant.'

The second application: The retrenchment

It was agreed between the parties to the second application that the applicant was entitled to time to reply to the allegations made regarding the relief sought in this application. It was agreed that the applicant would file its answering affidavits by close of business on 28 February 1997, the respondent [could] reply by close of business on 3 March 1997 and the matter would be postponed to Thursday 6 March 1997 at 10:00 for hearing as an urgent application.

In the meantime I was urged by Ms Joubert to grant an interim interdict restraining the applicant from retrenching the individual respondents concerned or to reverse the consequences of the retrenchment. The relief was sought on the basis that the applicant had failed to engage in bona fide and proper consultations with the union in regard to the retrenchment of the affected employees. I will for purposes of the application for interim relief assume that this is the case.

An application for an interim interdict will be granted in accordance with the well-known principles. These are conveniently set out in Spur Steak Ranches Ltd v Saddles Steak Ranch 1996 (3) SA 706 (C) at 714B--C and can be summarized as follows:

a clear right or a right prima facie established though open to some doubt;
a well-grounded apprehension of irreparable harm if the interim relief is not granted and the ultimate relief is granted;
a balance of convenience in the favour of the granting of interim relief; and
the absence of any other satisfactory remedy.

Section 191(1) of the LRA requires a party who is aggrieved by a dismissal on the grounds of operational requirements to refer the dispute to a bargaining council, statutory council or, as in the instant case, to the CCMA so that an attempt may be made to conciliate the dispute. If conciliation fails, the dispute may be referred to the Labour Court for adjudication.

In my view the Labour Court has the necessary jurisdiction, in terms of its inherent powers, to grant relief in connection with a dispute which may be referred to the Labour Court in due course even though the dispute is still being processed through the conciliation process. This jurisdiction may be exercised in the case of urgency and an interdict may be granted if the requirements for an interim interdict are made out. See the observations regarding urgent interim relief in the Labour Court by Annali Basson & Elize Strydom 'The Labour Relations Act 66 of 1995: The Resolution of Disputes about Alleged Unfair Dismissals' 1996 SA Mercantile Law Journal vol 8 no 1 1--25 especially at 23.

In the present case one of the requirements for an urgent interdict is not made out. This relates to the requirement that there be irreparable harm to the supplicants. If the individual respondents have been dismissed for operational requirements or unfairly retrenched, to use a convenient shorthand form, then their case will be dealt with by an attempt at conciliation and if that is unsuccessful the respondents could be in court before the end of March. When the Labour Court hears the matter it will be able to remedy the matter in the ways prescribed by the LRA. An order for reinstatement or re-employment is the primary remedy and should that prove inappropriate, an order for compensation can be granted. See s 193 of the LRA. If the retrenchment is upheld the individual respondents will be entitled to severance pay. See s 196 of the LRA. If the application fails but there has been a breach of the procedure which the LRA and the Code of Good Practice requires the individual respondents will be paid their remuneration up until the last day of the hearing of their matter by this court. The individual respondents in this case have not shown that they will suffer irreparable harm.

An interdict is a remedy which lies within the discretion of the court. In my view it would not be expedient to grant an interim interdict to the respondents. The relief sought on an interim basis in the second application is accordingly refused.

Costs

Mr Loxton sought an order for costs, including the costs of two counsel, in respect of the first application. Ms Joubert was opposed to an order of costs in the event of the applicant's being successful. Although the applicant has been successful in regard to the application for a final interdict it does not follow that costs should follow the result. The considerations set out in National Union of Mineworkers v East Rand Gold & Uranium Co Ltd 1992 (1) SA 700 (A); (1991) 12 ILJ 1221 (A) which is based on a provision similar to that of s 162(1) of the LRA weigh heavily with me. The applicant and the respondent are involved in an ongoing relationship and it seems to me that a costs order would simply prove to be an unnecessary obstacle in the way of continuing this relationship. I have therefore decided that each party should bear its own costs and for this reason I intend to make no order for costs.

The order

In the premises the following order is made:

As regards the first application:

The applicant is authorized to bring the application as a matter of urgency and the normal periods, forms and services provided by the rules of this court are dispensed with.

An order is granted interdicting and restraining the respondents, referred to in annexures A1 to A18 to the founding affidavit from-

2.1. participating in any strike action or conduct in contemplation of or in furtherance of any strike action or encouraging or advocating that other persons either conduct any strike action and/or participate in any strike action in relation to a dispute declared by first respondent on 28 October 1996 regarding the parties' failure to 'reach a settlement on the implementation of a staggered shift';

2.2. instigating or encouraging any of the individual respondents or any other person employed by the applicant at its premises defined in the founding affidavit from participating in any strike action in relation to a dispute declared by first respondent on 28 October 1996 regarding the parties' failure to 'reach a settlement on the implementation of a staggered shift'.

The order made in terms of para 2 above will come into effect at 08:00 on 26 February 1997 so that the individual respondents concerned may be advised that the protected strike has terminated and to enable them to tender their services before the protection is lifted.

No order is made as to costs.

B. As regards the second application:

Prayer 3 of the notice of motion is refused.

The applicant must file its answering affidavits by close of business on 28 February 1997, the respondent may reply by close of business on 3 March 1997 and the matter is postponed to Thursday 6 March 1997 at 10:00 for hearing as an urgent application.

The respondent is to paginate the papers.

Costs are to be costs in the cause.

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Applicant's Attorneys: Webber Wentzel Bowers, Johannesburg.

Respondents' Attorneys: Mlambo & Modise, Johannesburg.