Ahlesa Blankets (Pty) Ltd v SACTWU, an unreported Labour Appeal Court judgment,(1) is a further lesson for employers not to act hastily in dismissing employees who embark on unprotected strike action.
Ahlesa Blankets (Pty) Ltd manufactures blankets in an industry that has a pronounced cyclical slowdown between May and September. The main collective agreement for the textile industry specifically allows for the introduction of short time. In June 2008 Ahlesa decided to implement short time at its Atlantis factory by dividing its workforce in the dye house and the spinning and weaving departments into two groups. One half of the workforce would work for two weeks, while the other half would take two weeks' leave, after which those working would be replaced by those on leave for two weeks. The individual employees could elect to:
- take the two weeks as paid, in lieu of paid annual leave at year end; or
- take one week's paid leave, or two weeks' unpaid leave, with the unpaid portion, as the case might be, to be paid to them in December.
Ahlesa had adopted the same short-time approach in 2006 and 2007, and did so again in 2009.
The first half of the workforce was due to commence its two working weeks on June 17 2008 at 7:00am, but instead the employees who were scheduled to work the morning shift (from 7:00am to 3:00pm) congregated in the canteen and refused to work. A union official, Mr de Bruyn, was contacted and invited to attend at Ahlesa's factory. De Bruyn arrived at the factory and was advised by Ahlesa's human resources manager, Mr Buckle, that the employees were engaged in an unprotected strike. Buckle issued an ultimatum to the employees to return to work by 9:45am, failing which Ahlesa would take the necessary disciplinary action which might lead to the employees' dismissal. The employees were unhappy about the implementation of two weeks' short time and proposed that the short time be reduced to two days. Despite De Bruyn's intervention, the employees refused to comply with the first ultimatum.
A second ultimatum was issued to the employees, demanding that they return to work by 1:45pm, failing which they would be summarily dismissed. This ultimatum was also ignored and at around 3:00pm a further ultimatum was issued, demanding that employees return to work by 4:00pm; normally, 3:00pm marked the changeover to the afternoon shift (which ran from 3:00pm to 11:00pm). The afternoon shift workers went straight to the canteen and joined the morning shift. At about 5:00pm, the morning shift employees and most of the afternoon shift employees left the factory without having done any work that day; however, some returned to their workstations to start the afternoon shift. At the beginning of the night shift (from 11:00pm to 7:00am), only one of six employees scheduled to work actually arrived at the premises. No ultimatums were issued to the night shift, as no striking employees had arrived.
On June 17 2008 certain employees of departments other than the dye house and the spinning and weaving departments, who had not been placed on short time, also embarked on a work stoppage in sympathy, but did not announce demands. On June 18 2008 Ahlesa wrote a letter to the union in which it confirmed the dismissals of all striking employees and invited the union to lodge appeals by June 20 2008 if it intended to challenge the dismissals. Later, certain employees who had been placed on the two weeks' short time from June 17 2008 onwards, but who did not return from such short time and failed to provide any explanation for their absence, were also dismissed. The appeals were unsuccessful and the union referred the employees' dismissals to the Labour Court, challenging both the substantive and procedural fairness of the dismissals.
On March 19 2010 the Labour Court found that the dismissals of the morning and afternoon shifts were procedurally fair, but substantively unfair, whereas the dismissal of the night shift was both procedurally and substantively unfair. All of the employees were reinstated, without loss of benefits, with effect from December 1 2009. In the court's reasoning, the strike had been short and had occurred in circumstances where Ahlesa's business was slack - factors which did not justify the harsh and disproportionate decision to dismiss the employees. Furthermore, the court reasoned that the fact that the strike was not accompanied by any violence mitigated the misconduct.
Ahlesa appealed on the basis that the court had been wrong to find the dismissals substantively unfair where the employee conduct that formed the basis for their dismissals amounted to a clear challenge to Ahlesa's authority - namely, the employees' refusal to comply with the ultimatums and return to work. (Ahlesa had obvious difficulties in defending the night shift dismissals on this basis.)
The Labour Appeals Court considered Section 68(5) of the Labour Relations Act 1995, which reads:
"participation in a strike that does not comply with the provisions of this chapter... may constitute a fair reason for dismissal... in determining whether or not the dismissal is fair, the Code of Good Practice: Dismissal in Schedule 8 must be taken into account."
The court found that the section gives rise to the need to take into account Items 6(1) and (2), entitled "Dismissals and industrial action", and Item 7, entitled "Guidelines in cases of dismissal for misconduct" - particularly Item 7(b)(iv), which is headed: "Whether or not dismissal was an appropriate sanction for contravention of the rule or standard." The determination of the fairness of strike dismissals must therefore follow a two-stage approach, first under Item 6 when the strike-related enquiry takes place, and subsequently under Item 7 when the appropriateness of dismissal is considered.
The Labour Appeals Court upheld the Labour Court decision, finding that by reason of the short duration of the strike, the absence of violence and the slackness of Ahlesa's trade at the time in question, the dismissals were substantively unfair. The appeal was dismissed and the Labour Court's order of retrospective reinstatement therefore stands.
An order of retrospective reinstatement (ie, with back pay), such as that issued in Ahlesa Blankets, can have a devastating impact on a business's finances and its industrial relations. An employer's response to unprotected strike action should be rational and measured; there should be no hasty decision to dismiss unprotected strikers, no matter how emotional the situation may become.
For further information on this topic please contact Alexander Rocher or Carmen Abboy at Edward Nathan Sonnenbergs by telephone (+27 11 269 7600), fax (+27 11 269 7899) or email (email@example.com or firstname.lastname@example.org).
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