Scaw South Africa (Pty) Ltd v NUMSA obo Members and Others (J 296/2023) [2023] ZALCJHB 39 (9 March 2023)

THE LABOUR COUR OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case No: J 296/2023

In the matter between:

SCAW SOUTH AFRICA (PTY) LTD Applicant

and

NATIONAL UNION OF METALWORKERS

OF SOUTH AFRICA First Respondent

THE INDIVIDUAL WHOSE NAMES APPEAR

LISTED IN ANNEXURE “A” Second to Further Respondents

Heard: 08 March 2023

Delivered: 09 March 2023

(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 SAFLI. The date on which the judgment is delivered is deemed to be 09 March 2023.)

JUDGMENT

VAN NIEKERK, J

[1] The applicant seeks a final order declaring an unprotected a strike called by the first respondent (the union) and in which the second to further respondents (the employees) are currently participating.

[2] The material facts are not in dispute. In 2017, the applicant and the union concluded what they referred to as the ‘Founding Agreement’ (the collective agreement).

[3] During September 2022, the union referred a dispute to the bargaining council, incorporating some 32 discrete demands. That dispute was referred as against the applicant, and no other legal entity. On 7 October 2022, the presiding commissioner was requested to conduct a fact-finding exercise, which culminated in an advisory arbitration award. The recommendation made was that the applicant and the union should be bound by the process agreed to in the collective agreement, and given that 30 days had expired from the date of the referral, the union may decide on the course of action that it wishes to take. After receipt of the advisory award, the union agreed to the mediation process contemplated in the collective agreement. An independent mediator was accordingly appointed. At the first meeting of the mediation, held on 31 January 2023, the union tabled the 32 demands that had been the subject of the referral to the bargaining council. The applicant once again raised a jurisdictional point, contending that the mediation process applied only to Scaw SA (Pty) Ltd, and that in so far as the union contended that the process applied to other entities that in the period after the conclusion of the collective agreement had been ‘corporatised’. The parties referred in this context to a number of legal entities which had previously constituted divisions of Scaw SA (Pty) Ltd, but which had been constituted as separate legal entities into which the business of the previously established divisions had been

transferred. The applicant accepts that the transfer was subject to the provisions of section 197 of the LRA and in particular, the applicant accepts that consequent on the transaction, the separate legal entities remain bound by the collective agreement.

[4] Without wishing to do any disservice to the complex factual matrix generated by the 32 demands made by the union and the applicant’s response that none of them give rise to a right to strike, for present purposes at least, the issue in dispute can be distilled into terms that are capable of expression in relatively simple terms. On the one hand, the applicant contends that the mediation meetings convened pursuant to the terms of the collective agreement are to be conducted only in respect of the applicant, to the exclusion of the transferred entities. On the other hand, the union contends that the collective agreement was intended to establish procedures for engagement at what it termed ‘group level’, and that the mediation process established by the collective agreement extends not only to the applicant, but also the transferred entities. What followed the first mediation meeting was a letter addressed by the union’s legal department to the applicant on 21 February 2023. In the letter, the dispute is summarised in the following terms:

On 15 September 2022, NUMSA referred a dispute of mutual interest to the MEIBC (the dispute). The dispute consolidated 32 separate disputes. Some of the disputes related only to Scaw SA while others are common to all its divisions. This is easy enough to determine. Nevertheless, for the sake of clarity, all the disputes are common, except those numbered 7 and 9, which relate only to Scaw SA…

Although the dispute refers to the employer as Scaw Metals, it is clear that it relates to all entities or divisions within the Scaw Group. This was clearly our intention. For this reason, we refer the dispute to every possible division, entity or workplace known to us…

When the union concluded the founding agreement, it did so in the good faith belief that we would negotiate terms and conditions of employment across all divisions of the group. This is been the practice for several years, and earlier collective agreements applied to a division or entities of Scaw….

Your submission that the founding agreement only binds Scaw SA indicates a clear and unequivocal intention to repudiate the founding agreement. Your conduct undermines the very substance and value of the agreement and amounts to a denial of the existence of the agreement itself. You are aware that we will never negotiate separately. The very term ‘union’ implies unity and that is what we stand for. Your conduct is regrettable and clearly designed to frustrate collective bargaining and effective dispute resolution…

Accordingly, we will no longer participate in the mediation process, nor will we engaged with you on the aforementioned disputes at the Bargaining Forum.

[5] The applicant disputes that it repudiated the collective agreement, and that the union was entitled to cancel the agreement. In essence, the applicant contends that in the absence of any repudiation, the collective agreement stands and the union is obliged to exhaust the dispute resolution process established by the agreement (and in particular, the obligation to attend four mediation meetings) before any strike notice can be issued.

[6] Fundamentally, the dispute between the parties is a dispute within a dispute. The issue is the identity of the parties who are required to participate in the mediation process. But for present purposes, as the brief summary of the parties’ respective positions reflects, the first question to be decided is whether the collective agreement remains extant. If so, then the union remains bound by the dispute resolution procedure established by the agreement, and its exercise of the right to strike is premature. If the agreement has been validly terminated by the union on account of a material breach (or repudiation) of its terms by the applicant, then the dispute resolution procedure established by the agreement is no more, and the union is entitled to exercise the right to strike.

[7] The requirements for repudiation are a well-established. If a party to an agreement engages in conduct that fairly interpreted exhibits a deliberate and unequivocal intention no longer to be bound by the terms of the agreement, that party can be said to have repudiated the agreement. Where that happens, the other party to the contract may elect either to accept the repudiation and rescind the contract. If the aggrieved party does so, the contract comes to an end on communication of acceptance of repudiation and decision to the party who has repudiated (see Nash v Golden Dumps (Pty) Ltd 1985 (3) SA 1 (A); Spies v MI-C3 Holdings SA (Pty) Ltd (2011) 32 ILJ 149 (LC)). In Data Color International (Pty) Ltd v Inter Market (Pty) Ltd 2001 SA 284 (SCA), the court said the following, at paragraph 16 of the judgment:

…repudiation is accordingly not a matter of intention; it is a matter of perception. The perception is that of a reasonable person placed in the position of the aggrieved party. The test is whether such notional reasonable person would conclude that proper performance (in accordance with the true interpretation of the agreement) will not be forthcoming.

The union bears the onus to prove that the applicant has repudiated the collective agreement. In doing so, it is incumbent on the union to demonstrate that first, the applicant has created or evinces any attention to no longer be bound by the collective agreement; and secondly, that this creation of perception is one to be held by a reasonable person in the union’s shoes.

[8] As I have indicated, the applicant specifically regards itself as bound by the terms of the collective agreement. In my view, the evidence does not disclose that the applicant ever indicated that it no longer wished to be bound by the collective agreement. The applicant has done no more than indicate that it cannot negotiate on behalf of the transferred entities, which historically comprised its divisions, and that the union’s demands should be limited to mutual interest demands that concern only the applicant. Further, and in any event, so the applicant submits, the 7.11 referral form cited only the applicant as a respondent party. A difference in opinion between the applicant and the union as to who should be at the mediation table does not constitute an unequivocal intention to repudiate the collective agreement. In short, there is nothing that the applicant has said or done that discloses any such intention.

[9] While it is clear that the collective agreement was intended to establish a group bargaining forum, it is not in dispute that since the conclusion of the agreement, and in particular since September 2021, significant changes to the applicant’s corporate structure has been effected. What consequences these changes have for the collective agreement is not for me to decide, but it seems to me that whether the applicant is justified in contending that the terms of the collective agreement do not oblige it to negotiate on behalf of the transferred entities, is quintessentially a dispute that concerns the application and interpretation of the collective agreement. The dispute of this nature is required to be determined in terms of clause 10.1 of the agreement.

[10] Section 65(1)(a) provides that no person may take part in a strike or lockout that is business bound by collective agreement that prohibits a strike or lockout in respect of the issue in dispute. As I have observed, the collective agreement requires the applicant and the union to have at least four mediations. If those fail, the mediator must be requested to issue an advisory arbitration award. It is common cause that the union withdrew from the first mediation meeting, for the reasons reflected in the correspondence recorded above. In these circumstances, the strike was called in breach of the provisions of the collective agreement, and the applicant is entitled to the final order that it seeks.

[11] In relation to costs, both parties accept that the requirements of the law and fairness referred to in section 162 of the LRA are best served by there being no order as to costs.

I make the following order:

1. The strike called by the first respondent at the applicant’s premises in Germiston, Gauteng, is unprotected.

2. The first respondent is interdicted from encouraging, inciting, adding or debating the second to further respondents from continuing with their unprotected strike.

3. The first respondent is directed to take all reasonable steps to ensure that the second to further respondents’ cease and desist from continuing their unprotected strike action.

André van Niekerk

Judge of the Labour Court of South Africa

Appearances:

For the applicant:

Adv V Mndebele

Instructed by:

Wilken Incorporated

For the respondent: Reynaud Daniels, Cheadle Thompson

& Haysom Inc