South African Commercial Catering and Allied Workers Union (SACCAWU) obo Members v Southern Sun Hotel Interests (Pty) Ltd (J887/21) [2021] ZALCJHB 259 (26 August 2021)

IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case No: J887/21

In the matter between:

SOUTH AFRICAN COMMERCIAL CATERING

AND ALLIED WORKERS UNION (SACCAWU) OBO

ITS MEMBERS Applicant

and

SOUTHERN SUN HOTEL INTERESTS (PTY) LTD Respondent

Heard: 05 August 2021 [Virtually]

Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives by email, publication on the Labour Court website and release to SAFLII. The date and time for handing-down is deemed to be 10h00 on 26 August 2021.

JUDGMENT

BALOYI, AJ

Introduction

[1] The lock-out action embarked upon by the respondent is at the center of this application. The applicant, South African Commercial Catering and Allied Workers Union (SACCAWU) acting on behalf of its members approached this Court on urgent basis seeking the following order:

“1. Condoning the applicant’s non-compliance with the Rules of the above Honourable Court relating to time periods and service of pleadings and dealing with the application on an urgent basis in terms of Rule 8 of the Labour Court Rules.

2. Declaring the lock-out instituted by the respondent to be unprotected and unlawful in terms of section 68 (1)(a)(ii) of the Labour Relations Act 66 of 1995, as amended (“LRA”).

3. Interdicting and restraining the respondent from locking out the applicant’s members or engaging in any conduct in furtherance of a lock-out which does not comply with the provisions of Chapter IV of the LRA.

4. Ordering the respondent to remunerate the applicant’s members for the duration of the unlawful and unprotected lock-out in accordance with their contracts of employment and terms and conditions of employment.

5. Costs of the application insofar as it is opposed.

6. Further and/or alternative relief.”

[2] The respondent opposes the application. The urgency of the application is not in dispute. The bulk of the facts of the matter is also not in dispute. With the relevant material placed before this Court, I am satisfied that the matter is indeed urgent.

Factual background

[3] The relationship between SACCAWU and the respondent dates back to 03 November 1993 when a recognition agreement was concluded. During such relationship the parties concluded various collective agreements one of which was concluded on 13 March 2020. The parties refer to it as substantive agreement. For the sake of convenience here, it is referred to as ‘collective agreement or 13 March 2020 agreement’. Although it was concluded to regulate various conditions of employment for a period between 01 April 2020 and 31 March 2021, the parties also loosely referred to it as ‘wage agreement 2020-2021’.

[4] Relevant to this application is the 5,5% increase on the employees’ wages effective 01 April 2020. The said increase was according to the agreement supposed to be implemented throughout the period of its operation. With regard to further periods post the expiry of the collective agreement, the parties were to re-negotiate the conditions of employment, once agreed to, a new collective agreement would be concluded.

[5] Since the expiry of the 13 March 2020 agreement at the end of March 2021, the respondent’s intentions not to re-negotiate the terms and conditions of employment for the next financial period remained intact. The respondent’s first blow came through the respondent’s written termination of the recognition agreement dated 31 October 2020.

[6] With the recognition agreement terminated, a channel for renegotiation of terms and conditions of employment for a period beyond 31 March 2021 was as result closed. Of extreme importance to this application is that the respondent did not implement the 5,5% increase as stipulated in the collective agreement for the relevant period. The respondent’s demand that the employees must agree to forgo the 5.5% increase to their wages that was outstanding since April 2020 was indicative of the fact that the employees are to face another financial period without increase. This is in view of what the employees were required

to sign, that is, to agree to non-implementation of the 13 March 2020 collective agreement. In other words, by agreeing to the

non-implementation of the increase the effect thereof is that their respective wage rate is to remain the same as it was prior to 01 April 2020. The employees were required to accept the demand by 21 May 2021.

[7] SACCAWU reacted through a letter dated 15 May 2021 which in essence conveys its disagreement with the respondent’s approach. The main reason behind SACCAWU’s different view is that no evidence was brought to the fore to demonstrate that respondent was unable to implement the collective agreement. SACCAWU further intimated that the conduct of the respondent undermines the legal effect of collective bargaining. Any lock-out to be embarked upon would be in contravention of section 65 (3)(a)(i) of the Labour Relations Act and therefore unprotected and unlawful.

[8] What followed was the respondent’s referral of the dispute of mutual interest to the CCMA 27 May 2021 with the facts summarized as follows:

“The employer is referring this mutual interest dispute in terms of section 134 and 64 of the LRA. The employer and SACCAWU on behalf of its members concluded a Substantive Agreement on 13 March 2020 in terms of which

the employer would implement a 5.5% remuneration increase. However, due to the employer’s financial constraints, which were

exacerbated by the coronavirus pandemic and the national lockdown, the employer was not and had not been able to give effect to the terms of the Substantive Agreement.

Accordingly, the employer wants the employees listed in Annexure A to agree to accept a 5.5% reduction in their remuneration, and to agree that such reduction in their remuneration will be back dated to 01 April 2020. The effect of the employees agreeing to the employer’s demand will be that the employees will forego their entitlement to the 5.5% increase, with effect from 01 April 2020, in terms of the Substantive Agreement. The employees will not be paid such increases for past periods and will continue to be paid at their rate of remuneration that they received in March 2020. The employer sent a letter to its employees communicating this. Copy of this letter is attached as

Annexure B.

The employees in this dispute have refused to accept the reduction in their salary, accordingly, the employer seeks to exercise its rights in terms of section 64.”

[9] The conciliation of the dispute was confronted with a point in limine raised by SACCAWU to the effect that the CCMA lacked jurisdiction to conciliate the dispute. The main issue being that it was not a mutual interest dispute but a right dispute founded on the collective agreement of 13 March 2020. Strong emphasis in support of the preliminary point were placed on section 65(3)(a)(i) of the Labour Relations Act[1].

[10] In response to the preliminary point the respondent denied that it acted in an attempt to transform the right dispute to mutual interest dispute. Furthermore, nothing in the collective agreement precluding the respondent from making a demand that employees forgo the increase and locking them out in terms of section 64 in the event of refusal. The issue in dispute is the demand made to the employees to agree to and accept a reduction in their remuneration of 5,5% back dated to 01 April 2020.

[11] It bears mention that SACCAWU had already referred an interpretation of the collective agreement dispute in September 2020 stemming from the respondent’s failure to implement the 5,5% increase. The dispute was still to be arbitrated when an attempt to conciliate the mutual interest dispute was made. The parties are ad idem that the employees have recourse to claiming the unpaid increase in terms of section 77 of the Basic Conditions of Employment Act as terms and conditions of employment in the collective agreement had a bearing in the individual employees’ contracts of employment.

[12] The Conciliating Commissioner handed down a ruling on 01 July 2021. He ruled that the CCMA had jurisdiction to conciliate the mutual interest dispute and further noted that the period of 30 days from the date of referral had expired. In his observation, the respondent was more in favour of power play which he apparently discouraged. The dispute remained unresolved as the last conciliation process that took place on 23 July 2021 yielded no resolution of the dispute. On 27 July 2021 the respondent issued notice of lock-out effective 30 July 2021 in order to compel the employees to accept a long standing demand that the employee must forgo the 5,5% increase.

The arguments

[13] Now before this Court the applicant is seeking an order as stated above. Whether the lock-out is protected or not, is determinable through a correct identification of the issue in dispute. The applicant relies on limitations set out in section 65(3)(a)(i) to conclude that the lock-out is unprotected. The upshot of this being that the issue in dispute is the one that is regulated by a collective agreement binding on the parties to such an agreement. According to the applicant, the issue in dispute is the remuneration that employees should have received for the period between 1 April 2020 and 31 March 2021. This is the very period within which the respondent has declared its intentions not to pay such increase contrary to the terms of the collective agreement.

[14] The respondent’s point of departure in opposition of this application is that section 65(3)(a)(i) and other Chapter IV limitations do not apply in this matter. The issue in dispute according to the respondent is about the demand for reduction in remuneration. In the absence of a peace clause in the collective agreement there is no bar to any of the parties to making further demands or embarking on industrial action. Over and above, the lock-out complies with the provisions of section 64.

Evaluation

[15] Relevant to this matter, is the effect of a collective agreement in terms of section 23(1)(a)-(c) of the Labour Relations Act that it binds the parties to the collective agreement if such collective agreement regulates the terms and conditions of employment. It is not in dispute that the 13 March 2020 collective agreement had a similar impact on the relationship between the employees and the respondent. Its effect was intended to be applicable for the period between 01 April 2020 and 31 March 2021. The absence of a new collective agreement after its expiry with the recognition agreement being cancelled, translated to the parties reverting to a default position regarding regulation of the employees' terms and conditions of employment drawn from the individual contracts of employment.

[16] It remains indisputable that the respondent’s demand is aimed at securing the employee’s agreement to indemnifying it from any liability arising out of an increase as provided for in the collective agreement for the period of its applicability. On the other hand, the respondent views it as a completely new demand. Without any doubt, the respondent’s views are at odds with that of the applicant regarding what the issue in dispute is. In Coin Security Group (Pty)Ltd v Adams & Others[2] the Labour Appeal Court emphasized that it is the Court’s duty to ascertain the true or real issue in dispute, in doing so, the substance of the dispute has to be given consideration over the form. In essence the characterization of the dispute by a party cannot necessarily be conclusive.

[17] The Court in Air Chefs Soc Ltd v National Union of Metalworkers of SA & Others on the very subject of ascertaining the issue in dispute gave consideration to the following at paragraph 14:

“[14] In establishing the true nature of the dispute, this Court must look at the substance of the dispute and not the form in which it is presented, as the characterization of a dispute by a party is not necessarily conclusive. Furthermore, the Court must examine the conduct of the parties leading to the dispute; the nature of the referral and the outcome sought; the contents of the strike

notice, the demands made by the union, the negotiations between the parties, the preceding state of facts and negotiations; and the pleadings”

[18] The facts of this matter reveal what the respondent intends to achieve in retrospect, limited to the period of the application of the 13 March 2020 collective agreement, nothing further. The very increase which the respondent wishes to avoid is founded on the collective agreement. The respondent in its own words finds this to be a liability that it cannot meet due to the nose dive which the hospitality industry has taken since the out-break of the covid 19 pandemic. This demand is raised based on what is in fact the backbone of the collective agreement concerning the increase in question. Under these circumstances, I find it difficult to accept that the respondent’s demand is new or raises new issues.

[19] What the respondent terms a new demand is in fact a disguise aimed at escaping its obligations in terms of the collective agreement. The respondent has indeed complied with the requisite processes set out in section 64. This should ordinarily form a basis for a lock-out to be protected. With the collective agreement in place for the period of the increase forming subject matter of the lock-out, the very lock out certainly lost protection in view of section 65(3)(a)(i) limitations. These limitations are in fact applicable in this matter as the issue in dispute is in fact the one regulated in terms of the collective agreement. A clear right is thus established. The case is therefore made to necessitate the granting of the order declaring the lock-out unprotected and unlawful. Consequently, the respondent is bound to be interdicted and restrained from continuing with such lock-out or engaging in any conduct in furtherance of the lock-out.

[20] A claim for an order directing the respondent to remunerate the applicant was not pursued. This may for a simple reason be that the employees have a recourse under section 77 of Basic Conditions of Employment Act. Furthermore, the arbitration stemming from the very issue is still pending. Making an order on this claim will thus not be appropriate.

[21] Regarding costs, the parties were very clear on this aspect. They do not seek a cost order against each other. I am constrained to presume that they still value their relationship.

Order

1. The applicant’s non-compliance with the Rules of this Court relating to time periods and service of pleadings and dealing with the application on an urgent basis in terms of Rule 8 is condoned.

2. The lock-out instituted by the respondent is declared unprotected and unlawful in terms of section 68(1)(a)(ii) of the Labour Relations Act 66 of 1995.

3. The respondent is interdicted and restrained from locking out the applicant’s members or engaging in any conduct in furtherance of a lock-out which does not comply with the provisions of Chapter IV of the LRA.

4. There is no order as to cost.

M Baloyi

Acting Judge of the Labour Court of South Africa

Appearances

For the Applicant: Adv. C Orr SC

Instructed by: Haffegee

Roskam Savage Attorneys

For the Respondent: Adv. A Redding SC

Instructed by: ENS

Africa

[1] “(3) subject to a collective agreement, no person may take part in a strike or a lock-out or in any conduct in contemplation or

furtherance of a strike or lock-out- (a) if that person is bound by- (i) any arbitration award or collective agreement that regulates the issue in dispute.”

[1] “(3) subject to a collective agreement, no person may take part in a strike or a lock-out or in any conduct in contemplation or

furtherance of a strike or lock-out-

(a) if that person is bound by-

(i) any arbitration award or collective agreement that regulates the issue in dispute.”

[2] (2000) ILJ 924 (LAC) at paragraph 16