County Fair Foods (Epping), a division of Astral Operations Ltd v Food and Allied Workers' Union and Others (CA02/2017) [2018] ZALAC 9 (11 May 2018)

Principle:

There may exist valid grounds in a particular case to distinguish the conduct of one striking employee from another, even though they have engaged in similar misconduct.

Facts:

County Fair informed staff that annual discretionary bonuses would not be paid due to its financial position. In response, on 15 December 2010, more than 200 employees embarked on an unprotected strike. Three ultimatums were issued to employees. 64 employees returned to work on 15 December 2010 and 58 employees returned on 17 December 2010. All signed a 'comeback' document, which included an undertaking that they would desist from such action in future, and received a final written warning for their conduct.

A group of employees (the second respondents) failed to comply with the final ultimatum to return to work on 17 December 2010, despite it being extended to provide additional time for them to do so. County Fair then instituted a lock out. The second respondents returned to work on Monday 20 December 2010, signed the comeback document but were suspended from duty pending disciplinary hearings at which they were found to have committed misconduct and were dismissed.

The Labour Court found the dismissals unfair on the basis that the sanction was harsh, since the employees had only remained on strike for an extra 1 1/2 days. County Fair was ordered to reinstate the respondents on a final warning with 6 months' back pay.

On appeal to the LAC it was held that the group of employees' failure to adhere to the final ultimatum distinguished them from their fellow employees who had returned to work in response to the ultimatum. In such circumstances, the dismissal of the respondent employees was fair.

The LAC said that our courts have repeatedly stated that fairness generally requires that like cases should be treated alike and that disciplinary consistency is the hallmark of progressive labour relations. While discipline should be neither capricious nor selective, this applies within reasonable bounds and subject to the proper and diligent exercise of discretion in each individual case, with fairness remaining a value judgment. There may exist valid grounds in a particular case to distinguish the conduct of one employee from another, even though they have engaged in similar conduct.

The LAC held that the Labour Court did not have appropriate regard to the fact that-

  • the unprotected strike action was embarked upon in a critical business period;
  • the final ultimatum had been issued calling on the respondent employees to return to work;
  • the final ultimatum had been extended to provide the respondent employees with additional time within which to comply with it;
  • the final ultimatum was ignored by the respondent employees with no bona fide reason given to explain why this was so;
  • no remorse was shown for this conduct by the respondent employees;
  • and to the conduct of the respondent employees at the disciplinary hearing.

Treating employees differently is a precarious task - in many cases inconsistency has resulted in a finding of unfairness. But this case reminds us that there may be valid grounds in a particular case to distinguish the conduct of one employee from another, even though they have engaged in similar misconduct.

Extract from the judgment:

Savage AJA:

[11]   The Labour Court accepted that in participating in an unprotected strike, the employees had made no attempt to comply with the Labour Relations Act 66 of 1995 (the LRA). The Court took account of the short duration of the strike and its peaceful nature. It found there to be no arbitrary distinction between the striking employees who received a final warning and those who were dismissed. However, the dismissal of the respondent employees, who had continued to strike for 1 1/2 days more than their fellow employees, was found to be too harsh and unfair when the company was satisfied it could continue working with those employees who had returned to work. The Court found that while some distinction between the different groups of striking employees was appropriate and although the ultimata given had been clear, the respondent employees' conduct was not so egregious that it warranted dismissal when after reconsidering their actions over the weekend they had returned to work. The respondent employees were therefore reinstated with a final written warning and, given their defiance of the ultimatum given and the five-year delay in the hearing of the matter, back pay was limited to six months. No order of costs was made.

Submissions on appeal

[12]   The appellant takes issue on appeal with the judgment of the Labour Court on the basis that having regard to the seriousness of the misconduct committed, the Court erred in failing to find that valid reason existed for differentiating between the conduct of the employees who acted in accordance with the terms of the final ultimatum and those who had not. The fact that the unprotected strike was embarked upon in bad faith during a critical business production cycle indicated that it was a form of economic sabotage aimed to "wreak havoc" on the appellant's ability to meet its festive season orders. No reason was advanced by the respondents as to why the law had not been complied with given that two months' notice had been to employees of the bonus decision, which gave employees ample opportunity to pursue a grievance or take any other lawful collective action. Since there was no reason why the provisions of sections 64 and 65 were not complied with, employees lost the protection with which they could have clothed themselves and opened them up to the sanction of dismissal.

[13]   Furthermore, it was argued that the untruthful contentions advanced by employees at the disciplinary enquiry undermined the trust relationship with the appellant as an employer. These included that employees seldom read company notices, when this was not so; that there was uncertainty regarding the payment of the bonus on 15 December 2010, when there was not; that they were unaware that the strike was unprotected or illegal, when two managers had informed them of this; the claim that no ultimatum had been given, when it had; and that in response to the 17 December 2010 ultimatum, they had indicated that they would return to work that day, when they did not and instead elected to remain on strike. With reference to cases such as Mndebele and Others v Xstrata SA (Pty) Ltd t/a Xstrata Alloys (Mndebele) and NUMSA and Others v WG Davey (Pty) Ltd, it was argued that there was no bona fide reason advanced as to why the final ultimatum was ignored. As a result, given the nature and seriousness of the employees' misconduct, the sanction of dismissal for the respondent employees who did not comply with the final ultimatum was fair. Even if their dismissals were unfair, a reinstatement order, it was argued, was inappropriate in that it was reasonably impracticable given the unchallenged evidence of deteriorating conditions in the industry.

[14]   The respondents oppose the appeal on the basis that the appellant offers no compelling reason as to why the judgment of the Labour Court was wrong. In WG Davey (Pty) Ltd v NUMSA and Others, the Supreme Court of Appeal found that it was incumbent on the Court to determine whether in the circumstances of that matter the dismissals pursuant to a fair ultimatum were fair. Although the appellant's case was that even though they were not able to obtain enough temporary workers on 15 December 2010 and 16 December 2010, production was virtually unaffected by the absence of the remaining strikers on 17 December 2010. The facts are therefore similar to those in NUMSA v Boart MSA (Pty) Ltd, in which this Court found that since no irreparable harm was proved given the employment of temporary workers, the dismissals were unfair and the employees reinstated.

[15]   The sanction of dismissal was not fair on the facts of this matter, it was argued, further when the delay in the return of the respondent employees could be given effect by not making the reinstatement order retrospective to the date of dismissal. Furthermore, regard should be had to the fact that the lock-out became effective after 08h00 on 17 December 2010 when the ultimatum expired and the gates were locked. Since in terms of s193(2) of the LRA reinstatement was appropriate, any changing circumstances at the appellant's business after the dismissal of the respondent employees does not justify it being found to be reasonably impractical to reinstate the employees. For these reasons, it was contended that the order of the Labour Court should remain in place with the appeal to be dismissed.

Evaluation

[16]   Section 68(5) of the LRA requires that the Code of Good Practice be considered in determining whether a fair reason for dismissal exists for participation in an unprotected strike. Both item 6 and item 7 of the Code are to be considered in making such determination. Item 6(1) recognises that participation in an unprotected strike constitutes misconduct but that -

'...like any other act of misconduct, it does not always deserve dismissal. The substantive fairness of dismissal in these circumstances must be determined in the light of the facts of the case, including -
  1. the seriousness of the contravention of this Act;
  2. attempts made to comply with this Act; and
  3. whether or not the strike was in response to unjustified conduct by the employer.'

[17]   Item 7 provides guidelines which should be considered when determining whether a dismissal for misconduct is unfair, being -

  1. 'whether or not the employee contravened a rule or standard regulating conduct in, or of relevance to, the workplace; and
  2. if a rule or standard was contravened, whether or not -

    1. the rule was a valid or reasonable rule or standard;
    2. the employee was aware, or could reasonably be expected to have been aware, of the rule or standard;
    3. the rule or standard has been consistently applied by the employer; and
    4. dismissal with an appropriate sanction for the contravention of the rule or standard.'

[18]   The three ultimata given to employees cautioned them to halt the unprotected strike they had embarked upon and return to work, failing which they would risk dismissal. There is no dispute that these ultimata complied with item 6(2) of Schedule 8 of the LRA in that in clear language the striking employees were informed of the consequences of their failure to heed the warning and given an appropriate opportunity to reflect on their conduct and to desist from it. Following the first ultimatum, 64 employees returned to work. Thereafter, in response to the final ultimatum issued, a further 58 employees resumed their work. All of these employees undertook in writing not to engage in further unprotected strike action and accepted receipt of a final written warning for their conduct.

[19]   There is no dispute that the final ultimatum on 17 December 2010 was extended for a further 30 minutes so as to provide still a further opportunity for the respondent employees to comply with its terms; and that the respondent employees did not adhere to the terms of the extended final ultimatum. After the expiry of the final ultimatum, at 08h35 on 17 December 2010, the appellant instituted a lock-out, the demands of which were that:

  1. 'All County Fair Foods employees currently partaking in any industrial action immediately and unconditionally cease its strike action;
  2. All County Fair Foods employees unconditionally accept the company's decision not to make payable any discretionary performance bonuses during this financial year and as accordingly communicated to all affected County Fair Foods employees;
  3. The parties mutually agree to a collective agreement clearly stipulating such mutually agreed terms as referred herein above prior to such employees returning to normal duty.'

[20]   The lock-out notice stated further that:
'For the duration of the lockout no person who refuses to submit to the above-mentioned terms and conditions will be permitted to tender their services nor will they receive any remuneration for the full duration of such industrial action from the company...'

[21]   There is no suggestion made by the respondents that the lock-out prevented the return of the respondent employees to work. When the respondent employees did return to work on Monday 20 December 2010, the first working day following 17 December 2010, they undertook in writing to cease any further unprotected industrial action and agreed to receive a final written warning for their conduct. Although by doing so, the impasse between the appellant and the respondents was resolved, the issue of a lock-out notice and even the partial compliance by the respondent employees with certain of the lock-out demands, did not prevent the appellant from taking disciplinary action against those employees who had breached workplace discipline by embarking on the unprotected strike and failing to comply with a final ultimatum to return to work.

[22]   It has repeatedly been stated by our courts that engaging in an illegal strike constitutes serious and unacceptable misconduct by workers in respect of which an employer is entitled to take disciplinary action. Dismissal has been found to be an appropriate sanction where an unprotected strike was planned to create maximum pressure and undermine the authority of the employer; and where there has not been compliance with an ultimatum given to return to work, even when the ultimatum was not one in a conventional sense and where the strike has been of a short duration.

[23]   In this matter the unprotected strike was embarked upon deliberately during the peak end of the year production season with no attempt made to comply with the LRA. It was not in response to unjustified conduct by the appellant and less disruptive methods were clearly available to the employees to resolve their dissatisfaction with the bonus issue.

[24]   The conduct of the respondent employees in failing to adhere to the terms of the final ultimatum given to them, distinguished them from their fellow employees who returned to work. Consequently, their conduct could on the facts clearly be differentiated from that of other striking employees, in the same manner as it was in NUMSA and Others v CBI Electric Cables.

[25]   Our courts have repeatedly stated that fairness generally requires that like cases should be treated alike and that disciplinary consistency is the hallmark of progressive labour relations. While discipline should be neither capricious nor selective, this applies within reasonable bounds and subject to the proper and diligent exercise of discretion in each individual case with fairness remaining a value judgment. There may exist valid grounds in a particular case to distinguish the conduct of one employee from another, albeit that they have engaged in the similar conduct, having regard to the material facts applicable.

[26]   The appellant was neither capricious nor selective in its approach to the misconduct committed by the respondent employees. The collective activity of the respondents could, unlike in CEPPWAWU v Metrofile, be legitimately differentiated from the employees who complied with the final and earlier ultimata. The striking workers were, therefore, not all on the same footing given the respondent employees' failure to comply with the final ultimatum given to them. As much was not in dispute. This constituted a material distinguishing feature between the different groups of strikers which provided a legitimate factual basis which permitted the appellant to differentiate between the conduct of the respondent employees and that of those striking workers who had complied with the ultimata issued.

[27]   As was stated in Sidumoand Another v Rustenburg Platinum Mines Ltd and Others in determining whether a dismissal is fair or not does the decision-maker is "...not given the power to consider afresh what he or she would do, but simply to decide whether what the employer did was fair". Deciding this does not require the decision-maker "...to defer to the decision of the employer. What is required is that he or she must consider all relevant circumstances."

[28]   In determining the appropriateness of a dismissal as a sanction, consideration must be given to the applicable circumstances and whether a less severe form of discipline would have been more appropriate, since dismissal is the most severe sanction available. In National Education, Health and Allied Workers Union ("NEHAWU") v University of Cape Town and Others, the Constitutional Court recognised that -

'...the focus of section 23(1) is, broadly speaking, the relationship between the worker and the employer and the continuation of that relationship on terms that are fair to both. In giving content to that right, it is important to bear in mind the tension between the interests of the workers and the interests of the employers which is inherent in labour relations. Care must therefore be taken to accommodate, where possible, these interests so as to arrive at the balance required by the concept of fair labour practices. It is in this context that the LRA must be construed.'

[29]   While the appellant suffered economic harm as a result of the strike, the evidence showed that this harm was chiefly experienced for the first 1 1/2 days after commencement of the strike and was therefore attributable to the conduct of all striking employees and not the respondent employees alone. However, in concluding that dismissal was too harsh a sanction to be imposed on the respondent employees, in my view the Labour Court did not have appropriate regard to the fact that the unprotected strike action was embarked upon in a critical business period; the final ultimatum had been issued calling on the respondent employees to return to work; the final ultimatum had been extended to provide the respondent employees with additional time within which to comply with it; the final ultimatum was ignored by the respondent employees with no bona fidereason put up to explain why this was so; that no remorse was shown for this conduct by the respondent employees; and to the conduct of the respondent employees at the disciplinary hearing.

[30]   The facts showed that the respondents displayed a blatant disregard for the authority of the appellant as employer without regard to the consequences of their actions on either the business of the employer or the employment relationship. The fact that the strike had continued for a further 1 1/2 days was not a sufficiently material fact to warrant weighing considerations of fairness in favour of the respondents or to justify a finding that the dismissal of the second respondents was unfair when regard was had to the totality of factors placed before the Labour Court. Having regard to all such factors, the sanction of dismissal imposed on the respondent employees by the appellant was, in my mind, fair given their decision to embark on unprotected strike action at a critical business period and their persistent refusal, without bona fide reason provided, to comply with the repeated ultimata given to them to return to work.

[31]   It follows for these reasons that the appeal must succeed. There is no reason in law or fairness why costs should not follow the result.

Order

[32]   In the result, the following order is made:

  1. The appeal succeeds with costs.
  2. The order of the Labour Court is set aside and substituted as follows:

    1. 'The dismissal of the applicants was fair.'