South African Airways (Pty) Ltd v South African Transport Allied Workers Union and Others (J120/06) [2006] ZALC 34; [2006] 7 BLLR 688 (LC); (2006) 27 ILJ 1034 (LC) (7 February 2006)

IN THE LABOUR COURT OF SOUTH AFRICA

HELD AT BRAAMFONTEIN

CASE NO: J120/06

In the matter between

SOUTH AFRICAN AIRWAYS (PTY) LTD Applicant

and

SOUTH AFRICAN TRANSPORT ALLIED

WORKERS UNION AND OTHERS Respondents

J U D G M E N T

REVELAS, J:

[1] The applicant sought urgent relief against the first respondent, a trade union, and the second to further respondents, its employees. The individual employees or respondents were identified in a list which was attached to the Notice of Motion as Annexure “A”. The relief sought, is an interdict against the participation by the respondents in the countrywide Transnet strike.

[2] The application was brought on 30 January 2006. The parties then agreed that the application for final relief should be heard on 2 February 2006. The urgency of the application is no longer an issue before me. [3] The applicant's argument was mainly that it has no dispute with its employees who are members of the first respondent. It argued that the procedural prerequisites for engaging in a protected strike were not adhered to in that: 1. No dispute was referred to the Commission for Conciliation, Mediation and Arbitration ("CCMA") nor was the applicant party to a conciliation process. 2. No certificate of non-resolution of the dispute was issued in respect of the applicant and no strike notice was delivered to the applicant. 3. The strike would be unprotected because it does not seek to remedy a grievance or resolve a dispute that relates to a matter of mutual interest. [4] For a proper understanding of the above argument, and that of the respondents who oppose this application, it is necessary to give the background of the parties and the nature of the strike intended to be embarked upon. [5] The applicant is the South African Airways (Pty) Ltd, the largest airline carrier within South Africa, conducting the business of air transportation of passengers, as well as cargo services on a variety of routes in and outside the country. Its trade name, "South African Airways" was previously owned by Transnet, who conducted the applicant's business then. During 1997 the applicant was registered as a private company and the trade name "South African Airways" was transferred to the applicant in terms of an agreement. All the employees in the South African Airways division of Transnet were then transferred to the applicant in terms of section 197 of the Labour Relations Act 66 of 1996, as amended. When the applicant was incorporated, Transnet was the sole shareholder of the applicant. The applicant has stressed in this matter that Swiss Air also at some stage also owned 20% of the shares, and that some of the applicant's staff also have shares in the applicant. These facts were placed before me, with the purpose of rebutting the union's position, that the applicant's employees would embark on a strike, as Transnet Ltd has the largest, if not sole shareholding, in the applicant. [6] The first respondent, the union, is the South African Transport and Allied Workers Union ("SATAWU"). It is a member of the Transnet Bargaining Council ("TBC"). Throughout 2005 SATAWU engaged in discussions with Transnet and various other unions, such as United Association of South Africa ("UASA"), United Transport and Allied Trade Union ("UTATU") and South African Railways and Harbours Workers Union ("SARWU"). The topic was Transnet's proposal to transform Transnet by, inter alia, transferring non-core businesses to either the Government, or selling them privately. [7] The applicant is not a member of the Transnet Bargaining Council, nor has it ever been party to a collective agreement concluded between Transnet and any other of the representative unions who are also members of the aforesaid Bargaining Council. The applicant's incorporation and the transfer of business from Transnet to the applicant, did not have as a result that any of the other applicant's employees fell under the auspices of the Transnet Bargaining Council. In the past all disputes between the applicant and its employees have been referred to the CCMA, and that would include the strike action of the applicant's cabin crew and ground staff in July last year. The applicant attached the Transnet Bargaining Council's constitution to its founding papers. The first respondent directed my attention to several of the paragraphs contained in the constitution to show the whole purpose of their dispute with Transnet, and why the applicants should be involved in this process. [8] During August 2005 the other representative unions I refer to hereinafter, together with the first respondent, referred a dispute to the Transnet Bargaining Council pertaining to the restructuring of Transnet. It was termed "The Transnet restructuring dispute" in this application. A copy of the referral of the dispute by the first respondent and UASA and UTATU was also before me as annexures. In the referral, the employer party is described as "Transnet". The dispute which was referred is described in this document as "restructuring - unilateral changes/decision on the restructuring of/disposal of Transnet business units and disposal terms/period by Transnet". The dispute was classified as a "national dispute” pertaining to "all regions" of the Bargaining Council in question. The applicant was not cited as an employer party in this referral. In the form where the desired outcome is to be completed, the following request was made by the unions: "Change the decision taken on the identified business units and the disposal type. Consult and agree to the submission made by labour". And then further under the heading "Special Features/Additional Information", the first respondent recorded that: "Times have been set by Transnet on the disposal of BU's and Transnet disagree with labour's position on the disposal of the same". [9] On 1 December 2005 a certificate of outcome pertaining to the Transnet restructuring dispute was issued by the Transnet Bargaining Council. A copy of that certificate was also part of the papers before me. The certificate was issued in respect of SATAWU, UASA, UTATU and SARWU on behalf of their members. The only employer party recorded in that certificate was Transnet Ltd and the certificate records the dispute as pertaining to one of “mutual interests” relating to the alleged restructuring and disposal of business units and the imposition of a unilateral time scale. The same certificate also recorded that the dispute as between those parties remained unresolved and that the unions in question may call upon their members to engage in strike action. [10] The notice for strike action, as required by the Act, was delivered to the Transnet Bargaining Council on 27 January 2006. The notice announced that the first respondent, UASU, UTATU and SARWU intended participating in strike action, as from 30 January in Kwa-Zulu Natal region. The applicant received no such notice and it also did not receive any notice of a secondary strike. During the course of Friday the applicant's human resources manager, who is also the deponent to the founding papers in this application, became aware of a rumour that the employees of the applicant who were members of the union would be called upon to participate in the strike action pertaining to the Transnet restructuring dispute. The applicant maintained that it is no party to this dispute, and therefore that any strike action embarked upon would be unprotected. Attempts to dissuade the Union from embarking on a strike at the applicant, were to no avail. [11] Several passages in the Transnet Restructuring Committee's constitution was, as I have said, brought to my attention, and the first respondent's representative attempted thereby to demonstrate why the dispute in question relates to the applicant as well. [12] The first respondent made the submission that Labour had also made proposals, and had engaged in discussions concerning the future of the applicant. At a meeting held on 21 October 2004, Labour presented its proposals to Transnet. It was argued that it was clear from those documents, that the fate of the applicant fell within the ambit of the Transnet Restructuring Committee's constitution. (my emphasis). [13] Extracts of the Transnet annual report presentation 2004/2005 were also relied upon by the respondents in support of their contention that the fate of the applicant fell within the ambit of the TRC Constitution. The Transnet annual report presentation includes a reference to the applicant's unbundling. There is also, significantly, a proposal that the applicant be transferred to the Government. [14] It is very clear therefore that there is a nexus between the applicant and Transnet’s business activities and that the interests of their employees would in many respects overlap. However, one must carefully scrutinize the identities of the parties in this application. The rather lengthy summary of the history of the applicant referred to above in this judgment, was given precisely for that purpose. [15] The union argued that the proposed industrial action is aimed at putting an end to the unilateral decision-making by Transnet. These decisions would have a direct impact on the terms and conditions of employees and their job security. The union stressed that Labour had proposed that if a business unit (e.g. the applicant) is transferred, there should be no job losses for a guaranteed period of three years. Once again, these were all matters of mutual interest, which could, if changed, have an impact on all employees in all the various business units, including the applicant. [16] The union argued that the dispute which was referred to the Bargaining Council, lay directly against Transnet and indirectly against its various business units and subsidiaries in the context of a restructuring process. Therefore it lay against the applicant. It further argued that the suggestion that all the unions were obliged to refer individual disputes against all of the various business units, would make a mockery of the TRC process. It was also contended that it would be most impractical to have to refer the same dispute to various Bargaining Councils, including the CCMA. The process of restructuring was being driven and directed by Transnet. The applicant, it says, does not play any independent role in that process. [17] It may be so, that the applicant would play no independent role in the process, and that whatever takes place within it, would be dominated and influenced by the decisions of Transnet. Yet to punish the applicant with strike action in circumstances where the Labour Relations Act clearly has not been complied with, would be most unfair. It would be unfair in that the applicant has no say in Transnet’s decision making. It is not in a position to alleviate the effects of such a strike by negotiating and coming to agreements with its employees and the Union. It is simply not a party to the dispute with Transnet. The respondents wish it to endure the strike for as long as it takes. [18] The argument that it would be impractical to refer the same dispute to various Bargaining Councils and the CCMA is not a sound one. Inconvenience does not confer the right to strike where quite patently the basic requirements set by the Act have not been met. [19] The applicant is not Transnet, whatever the shareholding position is. The mere fact that Transnet holds the shareholding in the applicant, does not render it an employer party in respect of the applicant's employees for purposes of strike action. A finding to the contrary, will have absurd results. An employer that employs particular employees, as well as the legal entity that holds the controlling shares in that employer, will then both be employer parties in terms of the Labour Relations Act. As counsel for the applicant argued, the absurdity would escalate because the controlling shareholder in that holding company, may then be held to be a further different entity. [20] In this case, the Government is the sole shareholder in Transnet. This raises a further question and that is whether the Government is not ultimately the employer of the applicant's employees. Such an argument would disregard all legal principles if in respect of separate legal entities an approach is favoured whereby the ultimate shareholder should be sought out and held responsible for any activities of a company and its employees. [21] If the first respondent wanted to involve the applicant, it should at least have declared some form of dispute with it. It has not. The first respondent ought to have separately engaged the applicant in discussions regarding all of the issues pertaining to the alleged dispute of mutual interest. Had it done so, the appropriate mechanism through which to engage in such discussions about mutual interest, would have been the applicant's bargaining forum. Only Transnet has been engaged in such discussions and not the applicant. [22] The first respondent ought to have referred a dispute citing the applicant as an employer. This may seem like an artificial argument but it is not. The Act requires such a referral and that would precipitate a conciliation process which has not been done in this matter. The applicant’s inability to participate in the conciliation of a dispute, prior to the strike it has to endure, is not conducive to fair collective bargaining. That point has been made. [23] Any dispute pertaining to the applicant ought to have been referred to the CCMA, and not the Transnet Bargaining Council. Should this route seem impractical to the first respondent in relation to the Transnet dispute, then the applicant should be engaged in collective bargaining to include the application in a collective agreement, so that further disputes should be referred to a different Bargaining Council. Currently, the appropriate forum to refer a dispute to is the CCMA. [24] In my view, and for the aforesaid reasons, the strike action intended by the second to further respondents will be unprotected. In view of attempts made by the applicant to dissuade the first respondent to embark on a strike, being unsuccessful, there is no reason why the first respondent should not pay the costs of this application. [25] In the circumstances I have made the following order: 1. A refusal by the second to further respondents to report for duty as from date of this order constitutes an unprotected strike. 2. The second to further respondents are interdicted from participating in an unprotected strike as envisaged in paragraph 1 above. 3. The first respondent is interdicted from promoting such an unprotected strike by any of the second to further respondents. The first respondent is to pay the costs of this application. ____________________ Judge Elna Revelas Judge of the Labour Court On behalf of the applicant: Advocate W La Grange, instructed by Deneys Reitz Attorneys On behalf of the respondents: Advocate W Hutchinson, instructed by Fluxsmans Attorneys Date of hearing: 02 February 2006 Date of judgment: 07 February 2006

[2] The application was brought on 30 January 2006. The parties then agreed that the application for final relief should be heard on 2 February 2006. The urgency of the application is no longer an issue before me.

[3] The applicant's argument was mainly that it has no dispute with its employees who are members of the first respondent. It argued that the procedural prerequisites for engaging in a protected strike were not adhered to in that:

1. No dispute was referred to the Commission for Conciliation, Mediation and Arbitration ("CCMA") nor was the applicant party to a conciliation process.

2. No certificate of non-resolution of the dispute was issued in respect of the applicant and no strike notice was delivered to the applicant.

3. The strike would be unprotected because it does not seek to remedy a grievance or resolve a dispute that relates to a matter of mutual interest.

[4] For a proper understanding of the above argument, and that of the respondents who oppose this application, it is necessary to give the background of the parties and the nature of the strike intended to be embarked upon.

[5] The applicant is the South African Airways (Pty) Ltd, the largest airline carrier within South Africa, conducting the business of air transportation of passengers, as well as cargo services on a variety of routes in and outside the country. Its trade name, "South African Airways" was previously owned by Transnet, who conducted the applicant's business then. During 1997 the applicant was registered as a private company and the trade name "South African Airways" was transferred to the applicant in terms of an agreement. All the employees in the South African Airways division of Transnet were then transferred to the applicant in terms of section 197 of the Labour Relations Act 66 of 1996, as amended. When the applicant was incorporated, Transnet was the sole shareholder of the applicant. The applicant has stressed in this matter that Swiss Air also at some stage also owned 20% of the shares, and that some of the applicant's staff also have shares in the applicant. These facts were placed before me, with the purpose of rebutting the union's position, that the applicant's employees would embark on a strike, as Transnet Ltd has the largest, if not sole shareholding, in the applicant.

[6] The first respondent, the union, is the South African Transport and Allied Workers Union ("SATAWU"). It is a member of the Transnet Bargaining Council ("TBC"). Throughout 2005 SATAWU engaged in discussions with Transnet and various other unions, such as United Association of South Africa ("UASA"), United Transport and Allied Trade Union ("UTATU") and South African Railways and Harbours Workers Union ("SARWU"). The topic was Transnet's proposal to transform Transnet by, inter alia, transferring non-core businesses to either the Government, or selling them privately.

[7] The applicant is not a member of the Transnet Bargaining Council, nor has it ever been party to a collective agreement concluded between Transnet and any other of the representative unions who are also members of the aforesaid Bargaining Council. The applicant's incorporation and the transfer of business from Transnet to the applicant, did not have as a result that any of the other applicant's employees fell under the auspices of the Transnet Bargaining Council. In the past all disputes between the applicant and its employees have been referred to the CCMA, and that would include the strike action of the applicant's cabin crew and ground staff in July last year. The applicant attached the Transnet Bargaining Council's constitution to its founding papers. The first respondent directed my attention to several of the paragraphs contained in the constitution to show the whole purpose of their dispute with Transnet, and why the applicants should be involved in this process.

[8] During August 2005 the other representative unions I refer to hereinafter, together with the first respondent, referred a dispute to the Transnet Bargaining Council pertaining to the restructuring of Transnet. It was termed "The Transnet restructuring dispute" in this application. A copy of the referral of the dispute by the first respondent and UASA and UTATU was also before me as annexures. In the referral, the employer party is described as "Transnet". The dispute which was referred is described in this document as "restructuring - unilateral changes/decision on the restructuring of/disposal of Transnet business units and disposal terms/period by Transnet". The dispute was classified as a "national dispute” pertaining to "all regions" of the Bargaining Council in question. The applicant was not cited as an employer party in this referral. In the form where the desired outcome is to be completed, the following request was made by the unions:

"Change the decision taken on the identified business units and the disposal type. Consult and agree to the submission made by labour".

And then further under the heading "Special Features/Additional Information", the first respondent recorded that:

"Times have been set by Transnet on the disposal of BU's and Transnet disagree with labour's position on the disposal of the same".

[9] On 1 December 2005 a certificate of outcome pertaining to the Transnet restructuring dispute was issued by the Transnet Bargaining Council. A copy of that certificate was also part of the papers before me. The certificate was issued in respect of SATAWU, UASA, UTATU and SARWU on behalf of their members. The only employer party recorded in that certificate was Transnet Ltd and the certificate records the dispute as pertaining to one of “mutual interests” relating to the alleged restructuring and disposal of business units and the imposition of a unilateral time scale. The same certificate also recorded that the dispute as between those parties remained unresolved and that the unions in question may call upon their members to engage in strike action.

[10] The notice for strike action, as required by the Act, was delivered to the Transnet Bargaining Council on 27 January 2006. The notice announced that the first respondent, UASU, UTATU and SARWU intended participating in strike action, as from 30 January in Kwa-Zulu Natal region. The applicant received no such notice and it also did not receive any notice of a secondary strike. During the course of Friday the applicant's human resources manager, who is also the deponent to the founding papers in this application, became aware of a rumour that the employees of the applicant who were members of the union would be called upon to participate in the strike action pertaining to the Transnet restructuring dispute. The applicant maintained that it is no party to this dispute, and therefore that any strike action embarked upon would be unprotected. Attempts to dissuade the Union from embarking on a strike at the applicant, were to no avail.

[11] Several passages in the Transnet Restructuring Committee's constitution was, as I have said, brought to my attention, and the first respondent's representative attempted thereby to demonstrate why the dispute in question relates to the applicant as well.

[12] The first respondent made the submission that Labour had also made proposals, and had engaged in discussions concerning the future of the applicant. At a meeting held on 21 October 2004, Labour presented its proposals to Transnet. It was argued that it was clear from those documents, that the fate of the applicant fell within the ambit of the Transnet Restructuring Committee's constitution. (my emphasis).

[13] Extracts of the Transnet annual report presentation 2004/2005 were also relied upon by the respondents in support of their contention that the fate of the applicant fell within the ambit of the TRC Constitution. The Transnet annual report presentation includes a reference to the applicant's unbundling. There is also, significantly, a proposal that the applicant be transferred to the Government.

[14] It is very clear therefore that there is a nexus between the applicant and Transnet’s business activities and that the interests of their employees would in many respects overlap. However, one must carefully scrutinize the identities of the parties in this application. The rather lengthy summary of the history of the applicant referred to above in this judgment, was given precisely for that purpose.

[15] The union argued that the proposed industrial action is aimed at putting an end to the unilateral decision-making by Transnet. These decisions would have a direct impact on the terms and conditions of employees and their job security. The union stressed that Labour had proposed that if a business unit (e.g. the applicant) is transferred, there should be no job losses for a guaranteed period of three years. Once again, these were all matters of mutual interest, which could, if changed, have an impact on all employees in all the various business units, including the applicant.

[16] The union argued that the dispute which was referred to the Bargaining Council, lay directly against Transnet and indirectly against its various business units and subsidiaries in the context of a restructuring process. Therefore it lay against the applicant. It further argued that the suggestion that all the unions were obliged to refer individual disputes against all of the various business units, would make a mockery of the TRC process. It was also contended that it would be most impractical to have to refer the same dispute to various Bargaining Councils, including the CCMA. The process of restructuring was being driven and directed by Transnet. The applicant, it says, does not play any independent role in that process.

[17] It may be so, that the applicant would play no independent role in the process, and that whatever takes place within it, would be dominated and influenced by the decisions of Transnet. Yet to punish the applicant with strike action in circumstances where the Labour Relations Act clearly has not been complied with, would be most unfair. It would be unfair in that the applicant has no say in Transnet’s decision making. It is not in a position to alleviate the effects of such a strike by negotiating and coming to agreements with its employees and the Union. It is simply not a party to the dispute with Transnet. The respondents wish it to endure the strike for as long as it takes.

[18] The argument that it would be impractical to refer the same dispute to various Bargaining Councils and the CCMA is not a sound one. Inconvenience does not confer the right to strike where quite patently the basic requirements set by the Act have not been met.

[19] The applicant is not Transnet, whatever the shareholding position is. The mere fact that Transnet holds the shareholding in the applicant, does not render it an employer party in respect of the applicant's employees for purposes of strike action. A finding to the contrary, will have absurd results. An employer that employs particular employees, as well as the legal entity that holds the controlling shares in that employer, will then both be employer parties in terms of the Labour Relations Act. As counsel for the applicant argued, the absurdity would escalate because the controlling shareholder in that holding company, may then be held to be a further different entity.

[20] In this case, the Government is the sole shareholder in Transnet. This raises a further question and that is whether the Government is not ultimately the employer of the applicant's employees. Such an argument would disregard all legal principles if in respect of separate legal entities an approach is favoured whereby the ultimate shareholder should be sought out and held responsible for any activities of a company and its employees.

[21] If the first respondent wanted to involve the applicant, it should at least have declared some form of dispute with it. It has not. The first respondent ought to have separately engaged the applicant in discussions regarding all of the issues pertaining to the alleged dispute of mutual interest. Had it done so, the appropriate mechanism through which to engage in such discussions about mutual interest, would have been the applicant's bargaining forum. Only Transnet has been engaged in such discussions and not the applicant.

[22] The first respondent ought to have referred a dispute citing the applicant as an employer. This may seem like an artificial argument but it is not. The Act requires such a referral and that would precipitate a conciliation process which has not been done in this matter. The applicant’s inability to participate in the conciliation of a dispute, prior to the strike it has to endure, is not conducive to fair collective bargaining. That point has been made.

[23] Any dispute pertaining to the applicant ought to have been referred to the CCMA, and not the Transnet Bargaining Council. Should this route seem impractical to the first respondent in relation to the Transnet dispute, then the applicant should be engaged in collective bargaining to include the application in a collective agreement, so that further disputes should be referred to a different Bargaining Council. Currently, the appropriate forum to refer a dispute to is the CCMA.

[24] In my view, and for the aforesaid reasons, the strike action intended by the second to further respondents will be unprotected. In view of attempts made by the applicant to dissuade the first respondent to embark on a strike, being unsuccessful, there is no reason why the first respondent should not pay the costs of this application.

[25] In the circumstances I have made the following order:

1. A refusal by the second to further respondents to report for duty as from date of this order constitutes an unprotected strike.

2. The second to further respondents are interdicted from participating in an unprotected strike as envisaged in paragraph 1 above.

3. The first respondent is interdicted from promoting such an unprotected strike by any of the second to further respondents.

The first respondent is to pay the costs of this application.

____________________

Judge Elna Revelas

Judge of the Labour Court

On behalf of the applicant:

Advocate W La Grange, instructed by Deneys Reitz Attorneys

On behalf of the respondents:

Advocate W Hutchinson, instructed by Fluxsmans Attorneys

Date of hearing: 02 February 2006

Date of judgment: 07 February 2006