Unprotected Strikes: Remedies Available To Employers

21 October 2009 Author: Hermann Nieuwoudt

Introduction - Definition Of Strike

Section 213 of the Labour Relations Act (the “LRA”) defines a “strike” as:

“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.”

The Labour Court has held that a work stoppage which is not aimed at remedying a dispute or grievance does not fall within the definition of a strike. However, it is not correct to require that employees have to express a demand for the stoppage to constitute a strike. It is sufficient that the stoppage relates to a dispute or a grievance. See TSI Holdings (Pty) Ltd & others v NUMSA & others.

Protected And Unprotected Strikes

There is a broad distinction between strikes that comply with section 64 of the LRA and those that do not. Those that do comply are known as “protected strikes” while those that do not comply are known as “unprotected strikes”. If a strike is protected, a striker is protected from any civil action an employer may wish to institute and the striker may not be dismissed for striking. An unprotected strike constitutes a breach of contract for which the employees may be dismissed, interdicted or sued for compensation by the employer.

In order for a strike to be protected, the employees must comply with section 64 of the LRA unless different procedures are provided for in a collective agreement which is binding on employees.

Section 64(1)(a) provides that the dispute must be referred by the employees or union to the Commission for Conciliation, Mediation and Arbitration (the “CCMA”). A certificate of outcome must then be issued which provides that the dispute remains unresolved, or 30 days must have lapsed from the day on which the dispute was referred. The Labour Court is not bound by the CCMA’s categorisation of the dispute on the certificate as one of right or interest. If the dispute is in fact one of mutual interest, the employees may go on strike.

Section 64(1)(b) provides that the union must give the employer at least 48 hours written notice of the commencement of the strike. The notice must specify the exact time of the commencement of the strike. In Ceramic Industries Ltd t/a Betta Sanitary Ware v National Construction Building & Allied Workers Union (2), Froneman DJP stated:

“In summary: The provisions of s 64(1)(b) need to be interpreted and applied in a manner which gives best effect to the primary objects of the Act and its own specific purpose. That needs to be done within the constraints of the language used in the section. One of the primary objects of the Act is to promote orderly collective bargaining. Section 64(1)(b) gives expression to this object by requiring written notice of the commencement of the proposed strike. The section’s specific purpose is to give an employer advance warning of the proposed strike so that an employer may prepare for the power-play that will follow. That specific purpose is defeated if the employer is not informed in the written notice in exact terms when the proposed strike will commence. In the present case, the notice is defective for that reason. The provisions of s 64(1)(b) were not complied with. The proposed strike would thus have been unlawful and should, accordingly, have been interdicted.”

The strike notice need not record the issue in dispute though the Courts have held that where the employer does not know what the reason for the strike is (where there are, for example, multiple referrals), the strike may be interdicted on the basis of non-compliance with section 64(1)(b). Strikers do not waive their right to strike if they do not commence with the strike on the date specified in the strike notice, or if they suspend the strike.

The requirements of section 64(1), i.e. the referral of the dispute to the CCMA and the giving of notice need not be complied with in the following circumstances:

  1. Where the parties to the dispute are members of a Bargaining Council and the dispute has been dealt with by that council in accordance with its constitution;
  2. The strike conforms to the procedure in the collective agreement;
  3. The employees strike in response to a lock-out by their employer that does not comply with the provisions of the LRA;
  4. The employer locks out the employees in response to their taking part in a strike that does not comply with the provisions of the LRA;
  5. The employer fails to comply with the “status quo” notice issued by an employee or trade union.

The first two categories apply where the parties have chosen to regulate their dispute through collectively agreed procedures. Failure to comply with the procedures set out in the agreement does, however, not result in the strike being unprotected provided the statutory requirements are complied with.

In circumstances where a dispute relating to a unilateral change to terms and conditions is referred to the CCMA, the referral may require the employer not to unilaterally implement the changes or, if it has already done so, restore the previous terms and conditions for the period of the conciliation proceedings. If the employer does not comply within 48 hours, the employees may go on strike without observing the statutory requirements. They may also seek an interdict to enforce compliance.

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Procedural Fairness

The Code of Good Practice on Dismissal (the “Code”) provides employers with a guide on how to deal with employees who participate in unprotected strike action.

An employer who is subjected to an unprotected strike should, at the earliest opportunity, request a trade union official to speak to the strikers. The official should be requested to inform the strikers that they are liable to be dismissed and to persuade them to return to work.

The employer should also issue an ultimatum to employees that should state in clear and unambiguous terms what is required of them and what sanction will be imposed if they do not comply with the ultimatum. The purpose of the ultimatum is to warn the employees that time is running out and that, unless they desist from their conduct within a specified time, certain consequences will follow. An ultimatum is essentially a warning prior to dismissal. In NUM & others v Billard Contractors CC & another the Labour Court required that a hearing must be held before an ultimatum is issued. Material to this hearing is whether the strikers are engaged in an unprotected strike and, if so, whether it would be fair to dismiss strikers who might fail to comply with the ultimatum. This hearing need not be a full hearing, inviting employees to submit written representations may suffice.

The employees must be provided with sufficient time to reflect on and respond to the ultimatum either by complying with it or rejecting it.

The Code does not provide any guidance on circumstances that may justify the decision to issue an ultimatum. An ultimatum issued within minutes of the commencement of a strike may be deemed unreasonable if the strike was a spontaneous reaction to a justifiable grievance and would probably not have lasted too long.

It is of course very important that the strikers understand the ultimatum and the consequences of not complying with the ultimatum. It should be in writing and must be in a language which the employees understand. The employer may be required in certain circumstances to explain the ultimatum to employees.

The time given to the employees to comply with the ultimatum must be reasonable. The courts have held that an ultimatum should afford the strikers “a proper opportunity of obtaining advice and taking a rational decision of what course of action to follow” and to allow both parties to “cool off”.

Employees must again be afforded the right to be heard before they are dismissed. This hearing will primarily determine if the employees continued to participate in the strike after receipt of the ultimatum.

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Substantive Fairness

The Code provides that participation in an unprotected strike constitutes misconduct. However, just as all dismissals, a dismissal for participating in unprotected strike action must be substantively fair. The following factors should be considered:

  1. the seriousness of the contravention of the LRA;
  2. attempts made to comply with the LRA;
  3. whether or not the strike was in response to unjustified conduct by the employer.

Employers should however be mindful of the fact that the courts are reluctant to uphold the mass dismissals of strikers. In a number of cases, the employees were reinstated without retrospective effect.

In Performing Arts Council of the Transvaal v Paper Printing Wood & Allied Workers Union & others the employees embarked on an illegal strike pertaining to a recognition dispute. It appears as if the strike lasted for approximately 1¼ hours and there was no damage to property. The Industrial Court had reinstated the employees retrospectively for a period of six months. The Appellate Division set out the factors which ought to be considered in matters of this nature:

  1. The illegal and unacceptable conduct of the employees which clearly constituted an unfair labour practice on their part, and also a breach of their employment contracts.
  2. The overhasty dismissal of the employees which I have already held also constituted an unfair labour practice.
  3. The substantial length of service of the majority of the employees.
  4. The short duration of the strike at the time of the unfair dismissal.
  5. The absence of prior improper conduct by the employees.
  6. The likelihood that if a fair and reasonable ultimatum had been given to the employees the strike would have been of very short duration.

and expressed the view that the Industrial Court should have marked its disapproval of the misconduct of the employees by refusing them any back pay.

In NUMSA & others v Atlantis Forge (Pty) Ltd the employees had embarked on an unprotected strike that lasted for approximately 1¾ hour due to a problem with the payment of bonuses. They were not unruly and went back to work when told to do so by a union official. The Labour Court stated that dismissal for all the employees may very well have been justified, but reinstated the employees without retrospective effect.

In FAWU & others v Rainbow Chicken Farms the employees stayed away on a religious day, having tendered to work in on a Saturday. The court reinstated them, but decline to do so with retrospective effect because they had given short notice of their intention to stay away and had challenged the Respondent’s authority.

In NUMSA & others v The Benicon Group, a matter which dealt with a stay away, the Labour Appeal Court declined to reinstate with retrospective effect, inter alia due to the fact that the stay away did in fact constitute misconduct.

In National Union of Metalworkers of SA & others v Fibre Flair CC t/a Kango Canopies the employees embarked on a 35 minute march as part of a national demonstration. Employees on a final written warning were dismissed. The Labour Court reinstated the employees but declined to make the order retrospective as a mark of its disapproval of the misconduct of the employees. The Labour Appeal Court declined to make the reinstatement retrospective on appeal.

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Compensation

Where a strike is unprotected, the Labour Court may, in addition to granting an interdict, order the payment of “just and equitable” compensation for any loss attributable to an unprotected strike.

In the Labour Law – A Comprehensive Guide , the learned authors say the following:

“The effect of section 68(1) is to create a sui generis cause of action. Unlike the position at common law, plaintiffs are not entitled to the full measure of their damages, subject to mitigation, but only to compensation that is ‘just and equitable’.”

When determining what “just and equitable” compensation is, the court must consider the following:

  1. Whether and to what extent attempts were made to comply with the provisions of the LRA;
  2. Whether the strike was premeditated;
  3. Whether the strike was in response to unjustified conduct by another party to the dispute;
  4. Whether there was compliance with the order restraining the strike;
  5. The interests of orderly collective bargaining;
  6. The duration of the strike;
  7. The financial position of the employer, the employees and the trade union.

There are only two reported judgments that deal with the issue of compensation, namely Rustenburg Platinum Mines Limited v Mouthpiece Worker’s Union and Mangaung Local Authority v SA Municipal Worker’s Union. In the latter case the court visited the trade union with liability on the following basis:

“I am of the view that where a trade union has a collective bargaining relationship with an employer, and its members embark on unprotected strike union (sic) and the trade union becomes aware of such unprotected strike and is requested to intervene but fails to do so without just cause, such trade union is liable in terms of S68(1)(b) of the Act to compensate the employer who suffers losses due to such an unprotected strike.”

In Manguang compensation of R25 000 was ordered when the Applicant claimed in excess of R270 000. Although some of the claim related to conduct during the strike, and was disallowed, the quantum was based on a robust approach, sending a message to union and its members that unprotected strikes would not be tolerated, and taking into account that the funds of other members of the trade union would probably be applied to pay the amount.

The following factors will support a high award of compensation:

  1. If there was no attempt to comply with the provisions of Chapter 4 of the LRA;
  2. If the strike was premeditated;
  3. Where there was no unjustified conduct by the employer;
  4. If an interdict was obtained and the employees did not comply with the terms thereof;
  5. If the duration of the strike was relatively long;
  6. If the union actively supported the strike.
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Conclusion

Employers do have remedies in the face of unprotected strikes, but there are no ready made solutions. Employers should accordingly think carefully before deciding on a course of action, make sure that they weigh up the risk of a given strategy against the advantages thereof, and never rush to dismiss.

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