AMCU obo Rantho and Others v SAMANCOR Western Chrome Mines (JA62/19) [2020] ZALAC 46; (2020) 41 ILJ 2771 (LAC) (1 October 2020)
Where illegally striking employees obey an ultimatum and return to work within the stipulated time, the employer will not be entitled to dismiss them. An ultimatum by the employer is a waiver of the right to dismiss for the period of its duration.
Facts:
During May 2013, AMCU members participated in an unprotected strike. Samancor issued a final written warning (valid for 12 months) to these striking employees, including the individual appellants.
On 25 November 2013, AMCU members again participated in an unprotected strike. The employer issued an ultimatum to return to work, which was substantially complied with. Despite this, on 13 December 2013, Samancor dismissed all the employees who participated in this unprotected strike. AMCU lodged an internal appeal against the dismissal of its members. Prior to the commencement of the internal appeal, Samancor and AMCU concluded a settlement agreement, in terms of which Samancor agreed to reinstate all AMCU members who had not participated in the strike of 25 November 2013 or who were not on a final written warning for having participated in the earlier strike in May 2013. Those employees who were on a final written warning and were not reinstated, lodged a dispute claiming unfair dismissal.
The Labour Court found that the dismissal of 159 AMCU members for participating in an unprotected strike was substantively and procedurally fair. The Labour Court did not allow them to challenge the validity of their previous final written warnings for participating in an unprotected strike in May 2013.
On appeal at the LAC, emphasis was placed on Item 6(2) of the Dismissal Code of Good Practice which provides that prior to a dismissal of employees for their participation in unprotected strike action, 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.
The Labour Appeal Court had to consider whether an employer is entitled to dismiss employees that comply with the terms of an ultimatum or whether such compliance constitutes a waiver of the right to dismiss. The court held that it is well-established in our law that where illegally striking employees obey an ultimatum and return to work within the stipulated time, the employer will not be entitled to dismiss them. To hold otherwise would render the purpose of an ultimatum nugatory. An ultimatum by the employer is a waiver of the right to dismiss for the period of its duration.
Because there was compliance with the ultimatum, the threatened dismissal could not be triggered. The LAC ordered the reinstatement of the dismissed employees.
We have concerns about the extent to which this judgment may lead to repeated unprocedural strike action by employees with no threat of dismissal, provided they on each occasion comply with the required ultimatum. In that event, we think the precise wording of an ultimatum may be important, to preserve the right to dismiss despite a return to work before the expiry of that ultimatum.
Extract from the judgment:
Murphy AJA:
[24] Item 6 of Schedule 8 of the Labour Relations Act ("the LRA") offers clear guidance regarding the purpose and implications of an employer issuing an ultimatum during an unprotected strike. While making it clear that participation in a strike that does not comply with the provisions of the LRA is misconduct, Item 6 recognises that such conduct does not always deserve dismissal. The substantive fairness of a dismissal for participation in an unprotected strike must be determined in light of the facts, including the seriousness of the contravention, attempts made to comply with the LRA, and whether or not the strike was in response to unjustified conduct by the employer. Item 6(2) aims at avoiding precipitate dismissals by means of cooling-off measures. It provides in relevant part: 'Prior to a 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.'
[25] The object of an ultimatum is to give striking employees the opportunity to reconsider their action. It must, therefore, be clear and unambiguous and give the employees sufficient time to reflect. The ultimata issued by Samancor were not entirely clear but indicated that dismissal would only follow after noncompliance with a final ultimatum to be issued after unjustified noncompliance with the preliminary ultimatum. Samancor also reserved its right to take disciplinary action against the employees for participating in unprotected strike action and for their conduct during the strike.
[26] It is well-established in our law that where illegally striking employees obey an ultimatum and return to work within the stipulated time, the employer will not be entitled to dismiss them. To hold otherwise would render the purpose of an ultimatum nugatory. Strikes are functional to the social good of collective bargaining. Thus, the right to strike is constitutionally enshrined as a legitimate means of advancing orderly collective bargaining. A precipitate strike subverts the process by undermining the opportunity for resolution of the collective dispute by negotiation. The misconduct present in participation in an unprocedural strike is the subversion of the process. The purpose of an ultimatum is to put the negotiation process back on track and to end the precipitous action. If it achieves that purpose, dismissal normally should not follow because that too would be precipitate action undermining legitimate and orderly collective bargaining.
[27] For those reasons, our law regards an ultimatum by the employer as a waiver of the right to dismiss for the period of its duration. A party who has once approbated (waived a right arising under the contract, including the right to terminate it) cannot thereafter reprobate (seek to enforce that right). If the employees refuse to return to work, the waiver implicit in the ultimatum will lapse. But if they comply with the ultimatum, the employer is ordinarily precluded from dismissing the employees for the act of striking, but not necessarily for other misconduct committed during the strike. Where an employer after issuing an ultimatum wishes to reverse or amend the terms of the waiver prior to it expiring, it may do so in appropriate circumstances provided it has a good reason and gives the striking workers timeous notice of the change to prevent them from being unfairly prejudiced thereby.
[28] Samancor did not reverse or amend its waiver in this case. The ultimatum specified that dismissal would only follow if after the preliminary deadline the employees did not justify their refusal to return to work or did not heed a final ultimatum, which seemingly would only have been issued after the deadline to submit reasons for not returning to work - set in the ultimatum at 10h00 on 26 November 2013. The employees did not submit reasons for not returning to work and no final ultimatum was issued because they all complied with the preliminary ultimatum.
[29] However, in the ultimatum the employer expressly reserved the right to take "disciplinary action" both for participation in the strike and for other misconduct committed during the strike. This provision introduced a measure of ambiguity which should be interpreted restrictively so as to advance the constitutional rights of the employees. Had the employer wanted to reserve to itself the right to dismiss the workers, even if they returned to work, it would have done better to have worded the ultimatum differently. But, in any event, a reservation of the right to dismiss would impermissibly undercut the purpose of an ultimatum. There would be little incentive for employees to obey an ultimatum and end an illegitimate power play if its terms permitted dismissal despite compliance. The aim of an ultimatum is to afford a last chance before resorting to the ultimate sanction. Hence, at best for Samancor, the reservation in the ultimatum of the right to pursue disciplinary action for participation in the strike must be construed as permitting disciplinary action short of dismissal.
[30] In the result, the dismissals of the individual appellants and the second appellant were substantively unfair because Samancor had waived its right to dismiss them if they complied with the ultimatum. They did comply and dismissal was accordingly an inappropriate sanction in the circumstances.
[31] There is insufficient evidence to conclude that reinstatement would be intolerable or impracticable, therefore in terms of section 193(2) of the LRA the individual appellants are entitled to reinstatement. However, this is a case where reinstatement to the date of dismissal would be inappropriate.
[32] The primary demand of the striking workers related to a dispute about the bargaining unit. Demands of this kind must be dealt with in sensitive manner, especially in the context of the trade union rivalry bedevilling the mining industry in our country. The legislature has devised a particular process to ensure that disputes about bargaining units are managed and resolved on the basis of comprehensive information and in accordance with legitimate principles. To that end, section 64(2) of the LRA, in addition to requiring prior conciliation before industrial action, obliges the employees or employer, as the case may be, to refer a dispute about bargaining units to advisory arbitration as contemplated in section 135(3)(c) of the LRA.
[33] The determination of bargaining units is often a difficult matter requiring meticulous consideration of interlocking factors such as methods of pay, seniority, convenience etc. The pre-condition of advisory arbitration aims at affording the parties an opportunity to ventilate the issues in front of an independent party, culminating in a recommendation hopefully narrowing the dispute (and possibly settling it) prior to industrial action. In embarking on and participating in two wildcat strikes circumventing these processes, the individual appellants resorted to precipitate and illegitimate power plays that led to violence and most likely added needlessly to inter-union rivalry, tension and disharmony at the workplace. As the Labour Court pointed out, this unnecessary and harmful friction could have been avoided, or at least minimised, by procedural conduct. The message must be brought home to employees that destabilising conduct of this kind will not be tolerated. Therefore, reinstatement in this case should be of limited retrospective effect.
[43] Orders 4, 5 and 6 of the orders of the Labour Court are set aside and substituted as follows:
43.1.1. The dismissals of the individual appellants represented by AMCU and the second appellant were substantively unfair.
43.1.2. The respondent is ordered to reinstate the individual appellants represented by AMCU with effect from 1 June 2020.