Employers who suffer loss as a result of the actions of their employees and supporters during the course of a protected strike are entitled, in principle at least, to sue the perpetrators of these actions (and their union) for damages in terms of our common law principles of delict, provided that the actions that give rise to the loss constitute a criminal offence. In South African Commercial Catering and Allied Workers Union v Massmart Holdings Ltd, the Labour Appeal Court ("LAC") had to consider whether section 68(1)(b) of the Labour Relations Act ("LRA") provides an employer with another remedy, namely a claim for just and equitable compensation.
In the matter, Massmart, and its subsidiaries ("Massmart") initiated a claim in the Labour Court ("LC") against the South African Commercial Catering and Allied Workers Union ("SACCAWU") for the payment of 'just and equitable compensation' in terms of section 68(1)(b) of the LRA. In particular, Massmart sought an amount of ZAR 9 383 454.57. This amount being compensation sought for losses Massmart alleges were suffered due to the illegal conduct of SACCAWU and its members during a protected strike. Massmart alleged that, during the strike, SACCAWU's members committed various offences and that their conduct;
- was not peaceful;
- did not comply with the provisions of the LRA;
- did not comply with the COVID-19 regulations in force at the time; and
- did not comply with picketing rules determined by the Commission for Conciliation, Mediation and Arbitration.
SACCAWU raised an exception to Massmart's claim on various legal grounds. Of importance for the purposes of this article, is the argument raised by SACCAWU that section 68(1)(b) only applies in the case of unprotected strikes and acts committed in the course, or furtherance, of such a strike. SACCAWU argued that where a strike is protected, an employer is limited to a common law claim for damages that must be pursued in the High Court.
Labour Court
The LC rejected this argument based on its interpretation of section 68(1)(b). It held as follows:
- Section 68(1)(b) of the LRA states that the court has jurisdiction to order the payment of just and equitable compensation for any loss attributable to an unprotected strike or conduct in support or furtherance of such a strike. The term "conduct" is not explicitly linked to an unprotected strike. Neither is it qualified as being conducted in furtherance of an unprotected strike.
- Section 67(6) of the LRA gives unions and their members immunity from any civil legal proceedings in respect of conduct in contemplation or furtherance of a protected strike. However, this does not apply to conduct in contemplation or furtherance of a protected strike, where such conduct constitutes an offence.
In closing, the court stated that:
"[22] ...it would be anomalous if an aggrieved employer or union was entitled to pursue a claim for compensation in this court under section 68 for loss attributable respectively to a strike or lockout that does not comply with Chapter IV but not for loss attributable to conduct that constitutes a breach of the same Chapter, simply because the strike or lockout is protected."
Labour Appeal Court
SACCAWU was granted leave to appeal against this finding. On appeal, it reiterated its argument, amongst other things, that Massmart's claim and remedy do not lie in the LRA but in the common law and that such a claim must be adjudicated upon the ordinary civil courts. It argued that there can only be one interpretation of section 68(1)(b) of the LRA – i.e. that the unlawful conduct must be in furtherance of or support of an unprotected strike. Since the strike was protected, section 68(1)(b) of the LRA did not apply and could not be relied upon by Massmart to claim compensation in the LC.
The LAC rejected SACCAWU's interpretation of section 68 of the LRA and upheld the arguments and decision of the LC. It found that to limit an aggrieved party to the remedy of a common law delictual claim in the civil courts, simply because the unlawful conduct occurred within the context of a protected strike, does not amount to a sensible interpretation of section 68 or accord with a plain reading of amendments made to Chapter 4 of the LRA in 2014, which amendments had the effect of broadening the scope of section 68(1)(b) of the LRA.
The LAC found that, if SACCAWU's interpretation was accepted, it would serve to undermine the role of the LC as a specialist court steeped in workplace issues and which was best able to deal with labour disputes.
Accordingly, the LAC dismissed the appeal and Massmart may proceed with its claim for compensation in the LC.
Conclusion
Although the LAC decision focused on a protected strike, its findings are equally applicable to lockouts implemented by employers and conduct engaged in by employers in the furtherance of lockouts. This decision is of importance as the remedy it provides holds certain advantages for employers. Although an amount awarded as compensation may not cover the full loss suffered by an employer, it does enable an employer to recover at least some of its losses in the LC without the need to meet the requirements set for a delictual claim to be considered in the civil courts. In addition, such a claim may provide unions with an incentive to seek to ensure that their members act lawfully during a protected strike.
To read the full judgment, please click here.
*ENS acted for Massmart in the LC and LAC.
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