IN THE LABOUR APPEAL COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG

   LAC CASE NO:  JA25/2007
 
In the matter between:
 
HENDOR STEEL SUPPLIES				Appellant
(A division of Argent Steel Group (Pty) Ltd 
 Formerly named Marschalk Beleggings (Pty) Ltd)
and
 
NATIONAL UNION OF METAL WORKERS OF	First Respondent
SOUTH AFRICA 	

MOSES FOHLISA & 41 OTHERS	Second and Further Respondents						 
_____________________________________________________________
 
JUDGMENT
______________________________________________________________
 
DAVIS, JA.

[1]	This is an appeal against the judgment and order of Cele AJ delivered on 16 April 2007, in which the learned acting judge found that the dismissal of the second and further respondents was unfair and ordered appellant to reinstate the second and further respondents with effect from 1 January 2007 in the same or not less favorable positions as they had held at the time of their dismissal. There was no order as to costs.

	Factual Matrix
[2]	 There is no material dispute concerning the underlying matrix of facts. They can be set out as follows:

2.1	Appellant builds underground scraping equipment for the gold and platinum mining industry. Flat metal plate is cut into various sizes and shapes and put together as a scraping unit, mostly through the process of welding. The scraping device is used in mines to remove blasted ore and eventually have it brought to the surface for processing.

2.2	Appellant employs approximately eight employees who operated both on a day and night shift.

2.3	When a foreman, by the name of Dries du Plessis failed to ensure adequate performance from the night shift for which he was responsible, he was replaced by Corrie De Bruyn.

2.4	Soon after De Bruyn’s employment, appellant received a letter purportedly emanating from the “Hendor Mining workers” complaining about Mr De Bruyn, previously a boilermaker, who was  alleged to be “victimizing” employees.

2.5	On 4 September 2002 the shop stewards of first respondent (NUMSA) again raised a complaint about Mr De Bruyn, requesting management of the company to speak to De Bruyn “about his strong attitude”.

2.6	The complaint was that De Bruyn had been putting the employees on the night shift under increased pressure and they regarded his attitude as being “strong” as far as getting the job done was concerned.
	
2.7	On 3 October 2002 there was a work stoppage on the night shift. Employees on the shift complained that De Bruyn had made racist remarks. As a consequence, De Bruyn was suspended pending a disciplinary enquiry.

2.8	The charge against him was formulated as follows: “from time-to time passed comments about union matters and used derogatory language which eventually led to work stoppage on night shift 3 October 2002”. It was chaired by Mr Leon Steenkamp, the Labour Relations Officer for the group of companies to which appellant belongs. After listening to the evidence in the disciplinary enquiry Steenkamp recommended to Mr Mark Daniel, the managing director of appellant, that he issue a final written warning to De Bruyn. Steenkamp did not find, on the available evidence, that De Bruyn had made the racist statements as alleged.

2.9	When the decision was communicated to the shop stewards they were angered. Shortly thereafter, a strike began at appellant’s factory. An ultimatum was issued on 15 October 2002 for the employees to return to work. When there was non compliance with the ultimatum, the striking employees were dismissed.

2.10	On 17 October 2002 Daniel met NUMSA’s local organizer Mr Jacob Xilongo for the purposes of discussing the dismissals. At the meeting an agreement was concluded. Mr Xilongo recorded the terms of the agreement in a handwritten letter.

2.11	In terms of this agreement, the employees, who had been dismissed for participation in the industrial action, were reinstated on the basis as set out in a standard document which each employee was required to sign. This standard form agreement, dated 17 October, provided:

	“I,……..clock……….accept reinstatement in my old position in the company.
	I accept a final written warning valid for twelve months for participation in an unprotected work stoppage.
	I furthermore accept to report to Mr Corrie de Bruyn.

	SIGNATURE
	……………………………
	WITNESS
	……………………………

2.12	On 29 October, less than two weeks later, a further meeting was held between the shop stewards of first respondent and appellant. At that meeting the shop stewards made the demand that De Bruyn be dismissed or removed. Appellant’s attitude was that the issues surrounding De Bruyn had been settled.

2.13	On 12 November 2002 first respondent requested that appellant furnish it with the record of the disciplinary proceedings concerning De Bruyn.

2.14	On 26 November 2002 appellant replied to the letter. Daniel stated that he had listened to the tape recording and was satisfied that there were no grounds to support the allegation that some employees were racially abused. Appellant was not prepared to furnish first respondent with the record of the proceedings as De Bruyn was not a member of first respondent and appellant would not agree to the involvement of first respondent in the disciplinary proceedings against De Bruyn.

2.15	On 2 December 2002 first respondent wrote to appellant stating that the refusal to provide the record made it impossible for it to verify the members’ statements about what had been said at the enquiry.

2.16	On 26 February 2003, after a request by first respondent for a response to the letter of 2 December 2002 made on 11 February 2003, first respondent referred a ‘mutual interest dispute’ to the CCMA. The dispute is recorded as having arisen on 14 October 2002 and the outcome sought by the Union was that the appellant meet first respondent members’ demand by removing De Bruyn.

2.17	On 22 April 2003 the parties met for conciliation under the auspices of the CCMA. At the meeting appellant indicated that it was prepared to provide Mr Xilongo with an opportunity to listen to exerpts of the recording of the disciplinary enquiry.

2.18	On 5 May 2003 the parties again met. Appellant played an excerpt of the hearing from the beginning of the tape to the end of the questions to the three witnesses who testified against De Bruyn.

2.19	On 7 May 2003 the CCMA issued a certificate of non-resolution of the dispute.

2.20	On 12 May 2003 appellant’s attorney, Mr Bleazard wrote to first respondent recording that the dispute concerning Mr De Bruyn had been resolved by the agreement reached on 17 October 2002 and that any strike in respect of that issue would be illegal and not protected in terms of the Labour Relations Act, 1995 (‘LRA’).

2.21	On 19 May 2003 first respondent replied to Bleazard’s letter stating that it had decided “not to respond or react to the content of the letter…except to say that it [is] not worth our [response]”. First respondent recorded their belief that the strike action would be legal and that their members would not be prevented from embarking on a strike.

2.22	On 20 June 2003 first respondent issued a strike notice. The issue in dispute was described as ‘the refusal by the company to remove or dismiss Mr De Bruyn for having called some employees “kaffirs, Baboons and Bobbejaans” ’. It was indicated that the strike action would continue until such time as the appellant complied with the demand.

2.23	On 24 June 2003 the appellant’s attorneys wrote to first respondent recording that the underlying dispute had been resolved in terms of the agreement of 17 October and that, the members were on a final written warning. It was recorded that if the employees embarked upon a strike starting on the following day, 25 June 2003, the strike would be illegal and that they ran the risk of being dismissed.

2.24	On 25 June 2003 the strike by the individual respondents began. On 1 July 2003 appellant issued a notice to all employees advising them that their strike was illegal and unprocedural. They were given the ultimatum that, unless they reported for duty at the commencement of the day shift on Friday 4 July 2003, they would be dismissed. They were invited to make represenations to appellant prior to 4 July as to why they should not be dismissed.

2.25	On the evening of 3 July 2003, the day before the ultimatum was to expire, an urgent application was served on appellant by the Union. In it first respondent sought an order declaring the intended dismissal to be unlawful and interdicting appellant from carrying out dismissals.

2.26	On the following day the Court made an order by consent, in terms of which the appellant would not dismiss the striking workers pending the date of the hearing of the matter by the Labour Court on 1 August 2003. Periods for the filing of affidavits were then set.

2.27	On 1 August 2003 the application was heard by Jammy AJ. On 13 August 2003, first respondent’s application to interdict the appellant from dismissing the employees was dismissed.

2.28	On the same date first respondent wrote to appellant. It referred to the judgment recording that a decision had been taken by first respondent and its members to call off the strike action with immediate effect and recording that first respondent reserved its right to appeal against the judgment.	

2.29	Appellant responded on the same day stating that it was entitled to terminate the employment of the employees. However, appellant stated that it intended to give the employees a further opportunity to make representations as to why they should not be dismissed on 18 August 2003 at 9:00am.

2.30	On 18 August 2003 representations were made by Mr Xilongo. After considering the representations, appellant dismissed those employees who had participated in the strike, issuing both a letter to first respondent explaining the basis for the decision as well as dismissal letters to each employee.

2.31	On 8 October 2003, Jammy AJ heard an application for leave to appeal by first respondent. The application for leave was dismissed.

	Judgment of Court a quo
[3]	The key findings of the Court a quo can be summarised thus:
3.1	The disciplinary enquiry of De Bruyn was a “sham” and had the consequence that it left the employees dissatisfied, bitter and disgruntled and, further, incapacitated appellant from being able to take any further disciplinary action against De Bruyn.

3.2	Consequent upon this finding, was the further finding that until 17 October 2002, the demand by the employees to have De Bruyn dismissed or removed was legitimate.

3.3	The agreement concluded on 17 October 2002 was oral, not in writing, and was therefore not a collective agreement, as defined in the LRA.

3.4	When the employees accepted as a condition of their reinstatement that they would report to Mr De Bruyn, they were, by implication, abandoning their demand to have him dismissed or removed on the same grounds.

3.5	The subsequent belief of the employees was unreasonable, even though, on probabilities, it was genuinely held.

3.6	The final question, the court considered, was whether appellant was “forced” to dismiss the employees in order to keep its business going. In this context, the court considered a number of factors which played a role in appellant’s decision to dismiss. They were:
	
3.6.1	Appellant was entitled to take into account the fact that the strike had taken about seven weeks.

3.6.2	During that period of time first respondent and employees attempted to articulate their concerns, notwithstanding their misdirection in that regard.

3.6.3	Appellant had the opportunity of exercising a degree of flexibility in co-operating with first respondent in finding a peaceful manner to resolve the impasse. However, appellant chose a “somewhat legalistic and technical response”.

3.6.4	There was no evidence of the strikers having committed any acts of misconduct during the strike.

3.6.5	The employees tendered their services as soon as they came to the realization that their interdict application was dismissed.

3.7	A consideration of these factors led the Court to the conclusion that the dismissal of second and further repondents was based upon an unsound rationale decision and was therefore unfair.

3.8	The Court did not advance any reasons as to why it awarded the relief of reinstatement with effect from 1 January 2007.

Appellants case
[4]	Mr Redding, who appeared on behalf of appellant, submitted that, upon a proper analysis of the dispute before the Court, the primary question was whether dismissal of the individual respondents was fair. In this regard the starting point was section 68(5) of the LRA which provides that participation in a strike that does not comply with the provisions of Chapter IV may constitute a fair reason for dismissal; that is an unprotected strike.

[5]	Accordingly, submitted Mr Redding, the first important issue to consider was whether the strike in which the dismissed employees participated was protected. A strike will not be a protected strike if it does not comply with the provisions of Chapter IV of the LRA.
[6]	Mr Redding submitted that there were three reasons why the strike had failed to comply with Chapter IV:

6.1	Abandonment. He contended that as the court a quo correctly found, it was a condition of the employees’ reinstatement that they agree to continue to work with Mr De Bruyn. The necessary implication of this agreement was that individual respondents abandoned their demand that Mr De Bruyn be removed or dismissed. He contended that it had already been held by the Labour Court that employees may abandon their rights to continue to strike over an issue (and thereby lose their right to strike). PSA of South Africa v Minister of Justice (2001) 22 ILJ 2303 (LC) at 2315 - 2319
6.2	The demand in the strike notice that De Bruyn be dismissed was unlawful and/or unreasonable. The employer could only carry out such dismissal if it acted unfairly or grossly unreasonably.

6.2.2	The demand for dismissal or removal did not contemplate any additional hearing for Mr De Bruyn. It was never suggested at the time by first respondent that there should be a new hearing or a reopened hearing. The witness on behalf of the respondents, Mr Xilongo, could not explain why that demand had not been made.

6.2.3	In any event, since De Bruyn had been subjected to a disciplinary enquiry and given a final warning, it would have been unfair to subject him to a second enquiry on the same issues (i.e. double jeopardy).

6.2.4	Furthermore, there was insufficient evidence to warrant De Bruyn’s dismissal. Far from there being clear evidence that De Bruyn had said the words alleged, only one of six witnesses stated that Du Bruyn used racist language. However, this witness’s evidence was unreliable because it was uncorroborated, contradictory and improbable. The witness said that the statement was made “after tea time” on the night shift; but the statement was made at the time De Bruyn requested the employee (“Jimmy”) to work somewhere else which would have been at the start of the shift; however, Jimmy did not know why De Bruyn would have approached him to do the job only after tea time, instead of the appropriate time which was the beginning of the shift; and finally, he stated “he is not clear about the time”.

6.2.5	In summary, the “removal" of De Bruyn was an illegitimate demand. Appellant could not remove him or transfer him to another employer without his consent. To do so would have been an unlawful breach of his contract of employment.

6.3	A collective agreement of 17 October 2002 regulated the issue in dispute. The letter from first respondent expressly purported to confirm the positions of all the employees who have participated in the earlier industrial action and the management’s agreement to reinstate them, subject to the conditions recorded in the individual letters. That constituted a collective agreement that, by virtue of the conduct of the individual respondents, had been breached.

Evaluation
[7]	Given the approach that I intend to adopt , I shall assume, for the purpose of deciding this dispute that a collective agreement had been concluded and that the strike was unprotected. The question remains: even if the strike was unprotected, was dismissal the appropriate sanction in this case?

[8]	Mr Redding correctly conceded that an unprotected strike did not automatically justify dismissal as the only appropriate sanction. Dismissal is manifestly the sanction of the last resort. WG Doney (Pty) Ltd v National Union of Mineworkers of SA (1999) 20 ILJ 2017 (SCA) at par 18. Hence there is a need to examine the arguments of both parties as to the matter and conduct of the strike to test whether dismissal was proportional to the misconduct. As noted above, appellants held the view that a seven week strike could have been avoided if the second and further respondents had honoured the agreement which they concluded on 17 October 2003. Mr Redding submitted that this agreement expressly settled the dispute which had given rise to the earlier strike. In particular the striking employees had signed a document that contained the following phrase “I further accept to report to Mr Corrie De Bruyn”. The strike which triggered the dismissal concerned the continued position of Du Bruyn; the very issue which had been covered by the agreements; hence the strike could not be protected.

[9]	Mr Van der Riet, who appeared on behalf of respondents, contested the contention that the agreement covered the dispute over which the strike had taken place. In his submission, respondents were never asked to agree to abandon their grievance and their right to process a dispute to resolve their grievance. They were simply asked to agree to report to De Bruyn when they are reinstated into their old positions in the company. He further submitted that it could not be contended that, by agreeing to report to De Bruyn, the individual respondents had abandoned their grievance and their right to process a dispute using lawful channels to resolve their grievance.

[10]	In my view, as indicated already, there is no need to decide the issue as to the nature of the agreements and the further question as to whether the strike was protected. Assuming in favour of appellants on both of these questions, it remains clear that second and further respondents genuinely believed the strike to be protected. The managing director of the appellant, Mr Daniel, conceded as much as is evident from the following passage of evidence when Daniel was under cross-examination: “And you understood that it was their belief that they were going on a protected strike --- Absolutely. I knew that they believed that it was protected, but that was not my view.”

[11]	Appellant knew that Du Bruyn’s supervision posed a problem. He had pleaded guilty at the enquiry to using derogatory language. At least one employee testified that he had used racist language. The following passage of cross examination of Daniel is illustrative of the risk  appellant must have known was inherent in maintaining the employ of an offensive supervisor: “You did not think they [inaudible] with the fact that he had said “kaffir” coupled with the fact that he had admitted guilt with conditions; that dismissal might be the appropriate remedy?---No. And you did not think that knowing all of this when you issued a final written warning your work force might have found this somewhat offensive and somewhat provocative, did you?---I thought that they might. You were aware that they may well find it provocative and why were you aware of that because they had already striked over the issue and because you have been told that they would strike over the issue?--- Correct. And that did not particularly perturb you, did it? ---No”.

[12]	Much was made by the appellant of the loss of production caused by the strike, a submission that was however disputed by respondents. What is clear, however, is that the strike began on 25 June 2003. On 4 July 2003 an application was launched by respondents in the wake of a threat that they would be dismissed. That application was postponed by agreement between the parties to allow for the filing of further papers. Thus, the hearing only took place on 1 August 2003, an indication that appellant was not as anxious for so speedy a resolution which would have surely been the case if it demanded that the hearing take place much earlier. On the day on which respondents received an adverse judgment, 13 August 2003, all individual respondents returned to work.  

[13]	When all these facts are taken into account, a picture emerges of employees who were understandably aggrieved by the continued presence of De Bruyn an authoritarian and of the very least an intolerant supervisor. They held a bona fide belief that their strike was protected. Once Jammy AJ found against them they returned immediately to work.

[13]	Further, appellant’s arguments are to the contrary, appellant was prepared to agree to a lengthy postponement of the very application which outcome ended the strike. Their conduct hardly supported its arguments about the damage caused by the length of the strike. As subsequent conduct of the respondents revealed, the strike would have been greatly shortened if the application before Jammy AJ had been heard earlier.

[14]	In summary, the use of the most extreme sanction, dismissal in this case was manifestly disproportionate to the ‘misconduct’ of the second and further respondents, for the reasons that have been outlined.

[15]	I have refrained from deciding the question whether the strike was protected.  Rather I have approached the matter on the assumption that the strike was unprotected. The reason for this approach is connected with the relief granted by the Court a quo after it had found that the dismissal was substantively unfair together with the fact that the respondents did not note a cross-appeal against the extent of retrospectivity of the operation of the reinstatement order that the Court a quo granted.

[16]	After the Court a quo had found that the dismissal was substantively unfair, it ordered the appellant to reinstate the second and further respondents with about three and a half months’ retrospectivity in the operation of the reinstatement order. That was on the 16th April 2007. The second and further respondents had been dismissed in August 2003. This means that between the date of their dismissal and 1 January 2007, which is the date from which the reinstatement order was to operate, there is a period of about three years and four and a half months in respect of which the second and further respondents did not recover any backpay. It is arguable that such “punishment” – against workers whose union did not disregard statutory procedures and throughout bona fide and reasonably believed that the strike was protected and who approached the Court to get a ruling and immediately went back to work after the Court had given judgment against them – may have been excessive. However, as there was no cross-appeal on the extent of the retrospectivity of the operation of the reinstatement order, it is not open for this Court to decide this issue.  In the light thereof, deciding whether the strike was protected will not make any practical difference to the order that must be given by this Court . That being the case, and, as I have found that there is no proper basis for interfering with the Court a quo’s finding that the dismissal was substantively unfair, it follows that the appeal stands to be dismissed.

[15]	For these reasons, the appeal is dismissed with costs.

___________________
DAVIS JA
I agree
__________________
ZONDO JP
I agree  
____________________
LEEUW JA

Appearances
For the appellant		:A I S Redding SC
Instructed by			:Brian Bleazard Attorneys
For the respondents		:J G Van Der Riet SC
Instructed by			:Ruth Edmonds Attorneys
Date of hearing		:21 May 2009

Date of judgment		:19 June 2009