Arcelormittal South Africa Limited v National Union of Metalworkers of South Africa obo Members and Others (J1343/21) [2021] ZALCJHB 433 (8 November 2021)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case No: J1343/21

In the matter between:

ARCELORMITTAL SOUTH AFRICA LIMITED Applicant

and

NATIONAL UNION OF METALWORKERS

OF SOUTH AFRICA OBO MEMBERS First Respondent

SOLIDARITY Second

Respondent

INDIVIDUALS LISTED IN ANNEXURE “A” Third

to Further Respondents

Heard: 02 November 2021 (via virtual proceedings)

Delivered: This judgment was handed down electronically by circulation to the parties' legal representatives by email, publication on the Labour

Court’s website and released to SAFLII. The date and time for hand-down is deemed to be 10h00 on 08 November 2021.

Summary: Urgent application – strike is unprotected because of noncompliance with the binding provisions of the collective Agreement.

JUDGMENT

NKUTHA-NKONTWANA, J

Introduction

[1] Once bitten, twice shy? Not so in the present instance. What serves before me is, inter alia, an issue that this Court, per Tlhotlhalemaje J, had previously dealt with a year ago in a matter involving the same parties in

Arcelormittal South Africa Limited v National Union of Metal Workers of South Africa and Others.[1] Similarly, in that matter the applicant (AMSA) sought an order interdicting an unprotected strike by members of the first respondent (NUMSA) because NUMSA failed to comply with the internal dispute resolution procedure agreed to in terms of the Recognition Agreement, a collective agreement in terms of section 213 of the Labour Relations Act[2] (LRA).

Background

[2] In May 2018, the parties concluded a three-year Collective Labour Agreement (CLA) up to 31 March 2021on wages and terms and conditions

of employment. AMSA beached the CLA by failing to pay the agreed 7% increase for the period 1 April 2020 to 31 March 2021. That led to the unprotected strike. On 16 November 2020, Arcelormittal approached this Court on urgent basis for an order interdicting the unprotected strike. That is the matter that served before Tlhotlhalemaje J and he accordingly interdicted the strike.

[3] At the same time, the striking employees were charged en masse and found guilty in absentia since they did not attend the disciplinary

enquiry. On 18 November 2020, the parties sought the intervention of the Commission for Conciliation Mediation and Arbitration (CCMA) in terms of section 150 of the LRA. On 20 November 2020, AMSA, NUMSA, the second respondent (Solidarity) reached an agreement to vary the 2018 CLA by increasing wages by 5% for the bargaining unit with effect from 1 November 2020. It is not in dispute that the section 150 Intervention Agreement did not deal with the wages for the period between 1 April 2021 and 31 March 2022.

[4] On 9 December 2020, AMSA sent an email to NUMSA and Solidarity wherein it attached an amended CLA as a proposal to settle 2021 wages.

Solidarity signed the amended CLA but NUMSA didn’t. Mr Sedick Achmat (Mr Achmat), AMSA’s Chief Human Resources Officer,

asserts that on 15 December 2020 he had a discussion with Mr Kabelo Ramakhathali (Mr Ramakhathali) of NUMSA who confirmed receipt of the amended CLA. On 17 December 2020, Mr Achmat sent the letter dated 16 December 2020 to Mr Ramakhathali and I deem it expedient to record its contents unabridged:

‘BARGAINING UNIT SALARY INCREASES

…

We refer to the agreement concluded under the auspices of the CCMA on 20 November 2020. The consequences of this agreement are the following:

· The increase agreed upon for 2020 is 5 % Implemented from 1 November 2020 (this is a variation from the 7% increase that should have been awarded from 1 April 2020), subject further to a maximum increase of 2 % from 1 April 2021.

· The current agreement will be extended to 31 March 2022 from 31 March 2021.

· The actual guaranteed pay of employees (excluding the equalisation allowance and the protection allowance) in the Scheduled Position shall increase from 1 November 2020 to 31 March 2021 by 5 percent across the board.

· The actual guaranteed pay of employees (excluding the equalisation allowance and the protection allowance) in the Scheduled Positions shall increase from 1 April 2021 to 31 March 2022 by 2 percent across the board.

· The maximum amount of the medical aid subsidy shall increase by 5 % from

1 November 2020 and may increase by 2% from 1 April 2021 for all employees (this is the variation from 7% increase in the maximum

amount of the medical aid subsidy that should have been implemented in April 2020).

· For avoidance of doubt the Parties agree that they shall not bargain on salaries and terms and conditions of employment for the period 1 April 2021 to 31 March 2022.

Solidarity has confirmed the understanding. Based on this, the salary increase will be implemented. Please note that AMSA will implement this in the understanding that it was what has been agreed to between the parties and we will proceed to do so in good faith even though we have not received the signed amendment yet.’[3]

[5] NUMSA did not respond to the above correspondence. It would seem that AMSA went ahead and implemented some of the above terms and that was never questioned by NUMSA and its members. It is, therefore, AMSA’s contention that the letter of 17 December 2020 constitutes an agreement between the parties deferring the wage negotiations the period between 01 April 2021 and 31 March 2022.

[6] Notwithstanding the above, on 03 May 2021, NUMSA sent its wage demands to AMSA for the period between 1 April 2021 and 31 March 2022 with suggested dates for renegotiating the CLA. On 5 May 2021, AMSA responded and pointed NUMSA to the letter of 17 December 2020 which it contends settled the issue of the wage increase for the period between 1 April 2021 and 31 March 2022. On 07 May 2021, NUMSA responded to AMSA’s letter and refuted AMSA’s contention that it had agreed to the 2% wage increase which included the 2021/2022 period and demanded that the 2021/2022 wage negotiations be commenced with without further delay.

[7] On 10 May 2021, AMSA arranged a meeting with NUMSA but the parties failed to resolve the dispute. On 21 May 2021, NUMSA referred a refusal to barging dispute to the Metal and Engineering Bargaining Council (MEIBC). On 25 May 2021, a further dispute meeting was held between AMSA and NUMSA with no success. On 26 May 2021, AMSA issued a notice to employees stating that it would affect the 2% wage increase for 2021/2022.

[8] On 18 June 2021, the refusal to bargain disputed was conciliated by the MEIBC, with no success. AMSA, on the other hand, instituted action proceedings in this Court under case number J611/21 seeking a declaratory relief that the parties had agreed to settle wages for 2021/2022 per the letter dated 16 December 2020. That matter is opposed and still pending.

[9] On 14 October 2021, the MEIBC issued the advisory award wherein it was found that NUMSA failed to follow the dispute resolution procedure in terms of clauses 5 and 6 of the Recognition Agreement. NUMSA was accordingly advised to do so, a proposal that NUMSA never entertained. On 27 October 2021, NUMSA served AMSA with a strike notice. The strike was intended to commence on 3 November 2021. AMSA according approached this Court by way of urgency seeking for an order interdicting the intended strike on the following grounds:

9.1 NUMSA and the third respondents failed to comply with the Recognition Agreement; alternatively

9.2 There is a pending dispute instituted under case number J611/21.

Non-compliance with Recognition agreement

[10] NUMSA and the third to further respondents (respondent employees) proffered a bear denial that they failed to exhaust the dispute resolution procedure in terms of the Recognition Agreement. Their counsel, Mr Seery, submitted that, to the extent that there was substantial compliance with the Recognition Agreement and full compliance with section 64 of the LRA, the strike is protected. To fortify this submission, he relied on the decision of the Labour Appeal Court in BMW South Africa (Pty) Ltd v NUMSA obo Members[4] per Landman AJA, as he then was, which endorsed Fair Foods (Pty) Ltd v FAWU and Others[5] that non-compliance with procedure in the collective agreement would not render a strike unprotected if there was compliance with section 64(1) of the LRA. Mr Seery’s submission that the judgment by Landman AJA is the majority is patently inaccurate.

[11] While the majority court, per Waglay DJP, as he then was, and Jappie JA concurring, agreed with the proposed order of Landman AJA, it pertinently disagreed with his findings on the binding nature of the collective agreement and stated that:

[8] …It is common cause between parties that the clause sets out the procedure which the parties need to follow in dealing with the demand. The appellant however argued that, the procedure set out in clause A8.3 was but the only way that the respondent was entitled to proceed in addressing its demand. I agree. Parties by way of a collective agreement set out certain procedural steps which they will follow in dealing with their demands, grievances, concerns etc. In this respect appellant is correct to submit that the respondent was obliged to follow clause 8.3 in having its demand addressed.

[9] The respondent on the other hand argues that it is not obliged to comply with the procedure set out in clause 8.3 because its demand is one of mutual interest and it is entitled to embark on a strike in support of its demand as long as it does so in compliance with the provisions of the Labour Relations Act no 66 of 1995 (as amended) (“the Act)”. I disagree. Where parties have concluded an agreement which does not deny any of the parties to the agreement the rights and obligations provided in the Act, I see no reason why that agreement cannot be enforced. In fact the Act seeks to promote collective bargaining, particularly at the sectoral level and gives primacy to collective agreements.

[10] A collective agreement concluded between the parties is binding between them. It is a contract that sets the agreed terms between them and as long as what is agreed upon is not in conflict with the applicable legislation or contra bones mores it is binding and enforceable between them.’ (Emphasis added)

[12] The majority judgement of the LAC in BMW obviously overruled County Fair Foods which was expressly relied on by the minority judgment.[6] In any event, as correctly submitted by Mr Boda, AMSA’s counsel, that, unlike in the BMW matter, AMSA did not displayed any insouciance but consistently insisted that NUMSA should comply with the dispute resolution procedure in terms of Annexure C to the Recognition Agreement.

[13] In Cusa v Tao Ying Metal Industries and Others,[7] referred to with approval by Tlhotlhalemaje J in Arcelormittal I[8], the Constitutional Court stated that ‘the concomitant of the right to engage in collective bargaining is the right to insist on compliance with the provisions of the collective agreement which is the product of the collective bargaining process, whilst the enforcement of collective agreements is vital to industrial peace’.

[14] In the present case, there is no evidence that NUMSA complied with clause 5.1, that provides that the parties can agree to refer a dispute to private mediation or the MEIBC for conciliation, and that the process to be followed may either be agreed if deadlock is reached at the negotiations or at a dispute meeting. While clause 5.3 states that, if the parties are unable to resolve the dispute at a dispute meeting, they will attempt to agree in writing on the process to be followed.

[15] In Arcelormittal I Tlhotlhalemaje J stated that:

[38] In the light of the agreed dispute resolution provisions not having been followed in the manner prescribed, (i.e., absence of a dispute meeting held or an agreement in writing on what process was to be followed prior to the referral), it cannot be correct as submitted on behalf of NUMSA, that these provisions were substantially complied with. Any comparisons made with the decision in Phopho in regards to whether there was substantial compliance with the dispute resolution provisions ought to be looked at within the context of the facts of that case. Unlike in this case, the issue in Phopho was whether there was compliance with the provisions of Section 36(2)(c) of the South African Police Service Act[12]. Thus, even if collective agreements are a form of subordinate legislation, given their self-regulatory nature and purpose, it is doubted that substantial compliance with such agreements can be placed on par with such compliance when it comes to statutory provisions.

[39] …

[40] In the light of the objectives and reasoning behind these internal dispute resolution processes agreed to, it is my view that to insist that NUMSA ought to have strictly complied with those provisions, cannot be said to result in an intrusion on its members’ right to strike, nor can it be viewed as additional limitations to those contained in section 65 of the LRA. The procedures agreed upon are the parties’ self-imposed limitations which they deemed necessary for the effective regulation of their relationship, inclusive of the right to strike….’ (Emphasis Added)

[16] I have no reasons to depart from the above findings which I fully endorse. NUMSA ought to have known better this time around that it is bound by the Recognition Agreement. Moreover, its non-compliance is also addressed in the advisory award.

Conclusion

[17] In the circumstances, the strike by NUMSA and the third to further respondents is unprotected for the reason that they have not fully complied with the dispute resolution procedure in terms of the Recognition Agreement. Pending full compliance with the provisions of the Recognition Agreement, the third to further respondents are interdicted from participating in a strike in respect of dispute pertaining to the refusal to bargain.

[18] In light of the conclusion I have arrived at above, I deem it superfluous to deal with the alternative relief sought by AMSA.

[19] When it comes to the issue of urgency, I accept that this matter is urgent and I have dealt with it as such. Also, non-compliance with the 48-hour notice period in terms of section 68(2) of the LRA is condoned.

Costs

[20] Turning to the issue of costs, the circumstances of this case dictate that each party should pay its own costs, especially since there is a persisting collective bargaining relationship between the parties.

[21] In the circumstances, I make the following order.

Order

1. Arcelormittal South Africa Limited’s non-compliance with the forms and service contemplated in the Rules of the Proceedings in the Labour Court is condoned and this matter is dealt with as one of urgency in terms of Rule 8.

2. The applicant’s, Arcelormittal South Africa Limited, non-compliance with the 48-hour notice period in terms of section 68(2) of the LRA is condoned.

3. The strike by the first respondent, National Union of Metalworkers of South Africa (NUMSA) and the third to further respondents, respondent employees, which was set to commence on 3 November 2021 is declared unprotected and unlawful.

4. The third to further respondents are interdicted and restrained from embarking on, promoting or encouraging the intended strike or any other conduct in pursuit of the intended strike or any intended conduct in furtherance, or in contemplation of such strike up until and subject to full compliance with the dispute resolution procedure in terms of the Recognition Agreement.

5. There is no order as to costs.

P Nkutha-Nkontwana

Judge of the Labour Court of South Africa

Appearances:

For the applicant: Advocate

FA Boda SC

Instructed by: Cliffe

Dekker Hofmeyr Inc.

For the first and third respondents: Advocate TE Seery

Instructed by: Cheadle

Thomson & Haysom Inc.

[1] [2020] ZALCJHB 244; [2021] 4 BLLR 407 (LC); (2021) 42 ILJ 1099(LC) (Arcelormittal I).

[2] Act 66 of 1996, as amended.

[3] See: Annexure ‘SA6’ to the Founding Affidavit, pages 108 -109.

[4] [2011] ZALAC 24; [2012] 3 BLLR 274 (LAC); (2012) 33 ILJ 140 (LAC) (BMW).

[5] [2001] 5 BLLR 494 (LAC) at para 16 and 20.

[6] See: Wallenius Wilhelmsen Logistics Vehicle Services v National Union of Metalworkers of SA & Others (2019) 40 ILJ 1254 (LAC) at paras 27-28; Transnet SOC Ltd v SA Transport & Allied Workers Union (2013) 34 ILJ 1281 (LC) at para 26-27.

[7] [2008] ZACC 15; 2009 (2) SA 204 (CC) at para 55 and 56.

[8] See: Arcelormittal I, supra n 1 at para 19 & 39.