LABOUR RELATIONS OP-ED
When is a strike not a strike, and a lockout not really a lockout?
A recent Constitutional Court case had to consider the circumstances where an employer had instituted a lockout and utilised replacement labour in response to a strike.
Whether employers could use replacement labour during a strike or lockout was hotly debated during the process that led to the enactment of the Labour Relations Act (LRA) in 1995. Trade union parties to the process tirelessly opposed the right of employers to use replacement labour, while the employers argued that they should have the right to do so.
The eventual compromise that found its way into the LRA is found in section 76. Its effect may be summarised as follows:
- An employer may take into employment any person to continue or maintain production during a protected strike, provided that the whole or part of the employer’s business has not been designated as a maintenance service;
- An employer may not take into employment any person to perform the work of any employee locked out unless the lockout is in response to a strike (our emphasis); and
- The term “taking into employment” includes engaging the services of a temporary employment service or an independent contractor.
The provisions of section 76 of the LRA were recently revisited in National Union of Metalworkers of South Africa v Trenstar (Pty) Ltd.
Facts of the case
Numsa members at the employer, Trenstar, embarked on a strike. During the strike, Numsa notified the employer that its members had decided to suspend the strike, but that suspension should not be construed as a withdrawal of the employees’ demand.
On the same day, Trenstar provided 48 hours’ notice of a lockout of all Numsa members. The lockout was due to commence the following Monday. Trenstar recorded that the lockout was in response to the Numsa members’ strike action.
Numsa disputed that the lockout was in response to a strike and argued that Trenstar was not entitled to use replacement labour during the lockout. Trenstar countered that the lockout notice was served before the strike was suspended and that, in any event, the strike was not over, it had only been suspended.
Decisions by the courts
When the matter came before the Labour Court, Numsa did not take issue with the lawfulness of the lockout but instead alleged that the lockout was not in response to a strike. The Labour Court found that the mere suspension of a strike did not disqualify the use of replacement labour. The effect of this was that Trenstar could continue using replacement labour indefinitely. An appeal to the Labour Appeal Court was dismissed.
When the matter came before the Constitutional Court, the court differentiated between two possible interpretations of a “lockout is in response to a strike”.
The first characterises a lockout concerning what caused the lockout to be implemented. For instance, if the lockout was implemented because the employees went on strike, one could argue that the lockout was in response to a strike. This interpretation accounts for strikes that are currently occurring and strikes which have come to an end.
The second interpretation involves a consideration of the word “is” in the phrase “the lockout is in response to a strike” and taking cognisance that this interpretation is in the present tense. This interpretation means that the right to use replacement labour depends on whether, at the time this replacement labour is employed, the lockout is in response to a present strike (the judgment uses the wording “the strike must still be under way at the relevant time”). This interpretation would not account for past strikes.
After considering the Constitution, case law and the norms advocated by the International Labour Organization, Judge Owen Rogers ultimately preferred the second interpretation. He found that even if notionally, Trenstar’s decision to give notice of a lockout was in response to the strike, which had lasted several weeks and was not quite over when the lockout notice was given, the right to use replacement labour no longer existed when the lockout began on the Monday morning.
Judge Rogers’ adoption of the second (narrower) interpretation, means that employers must fully understand the definition of a “strike” to determine whether there is a strike. A strike consists of two components, namely a demand and a withdrawal of labour in pursuance of that demand. Both components must be present to constitute a strike.
Judge Rogers found that there was no strike in this case because, when the employees suspended their strike, there was no longer a withdrawal of their labour, even though they still reserved the right to withdraw their labour again at a later stage in pursuit of a demand.
The use of replacement labour during a lockout will thus only be in response to a strike and, therefore, lawful when the strike is ongoing at that relevant time because there is a demand and a withdrawal of labour.
This approach raises practical business difficulties. The effect of this ruling is that replacement labour could be lawful at one moment in time (when there is a demand coupled with a withdrawal of labour) and then unlawful at the next moment (when the withdrawal of labour is temporarily suspended).
In the event of grasshopper-like strikes (where employees constantly move between striking and suspending strikes), it may be difficult for employers to ensure a constant supply of labour, especially since, in most instances, replacement labour is not always readily available at employers’ fingertips.
This risk would be mitigated if employees who have suspended their strike are required to issue a new 48-hour strike notice should they wish to lift the suspension of the strike.
However, Judge Rogers did not consider this issue and left the question open.
How this could play out practically
Should an employer institute a lockout to enforce its demand, at least in circumstances where employees have not indicated any intention to go on strike, the employer is prohibited by section 76 of the LRA from using replacement labour.
If, thereafter, the employees embark on a strike in respect of the same dispute, the employer may consider amending the lockout notice to provide that the lockout continues in response to the strike (and in furtherance of the same demands).
Depending on the particular facts at hand, this is likely to be regarded by the courts as a lockout in response to a strike, and the employer will then be able to use replacement labour. The test is, therefore, not when the strike started, but whether the lockout is in response to the strike.
The Labour Court briefly considered this in the judgment of Airline Pilots’ Association of South Africa (Alpa-Sa) v South African Airways (SOC) Limited, where SAA’s* use of replacement labour was upheld, even though it had initially instituted the lockout.
In another instance, should the employees suspend their strike and tender their services in circumstances where the lockout is already in place, the employer may continue imposing the lockout. However, that employer would not be able to use replacement labour.
The decision whether to continue or terminate the lockout will depend on the operational requirements and functioning of the business; for example, whether there are non-striking employees who have not been locked out who are prepared to do the work of the locked-out employees as well as the demand that it wishes the employees to accept.
It will be interesting to see this judgment’s impact on the power dynamics between employers and employees and the mechanisms available during collective bargaining.
The case re-emphasises the importance of what constitutes a strike, its meaning, and also sets a precedent on when employers will and will not be entitled to utilise replacement labour during industrial action. DM
*ENSafrica represented SAA in this matter.
Brian Patterson is an executive, Peter le Roux is an executive consultant and Amy Pawson is a candidate legal practitioner in the employment department of the law firm ENSafrica.