3 September 2018 Employment Alert

Planned unprotected strikes aimed at causing financial harm to the employer may get you dismissed no matter how short its duration!

This is what happened at County Fair Foods when 246 employees engaged in an unprotected strike. The company operates a chicken processing plant. In August 2010, the company advised employees that it may not pay out discretionary bonuses at the end of the financial year. On 12 October the company confirmed in a second communique that it had made a decision not to pay the bonuses due to its non-profitability caused by, among other factors, downward pressure on poultry prices. On 19 November, the company shared its financial indicators with the employees to justify its reason for not paying the bonuses.

On 15 December, the employees raised dissatisfaction with the company’s decision and demanded that the managing director address them on the issue. After the company denied this request, 246 employees downed tools. The production manager later addressed the employees and gave a verbal ultimatum, advising them that they were engaged in an unprotected strike which could result in dismissal. A written ultimatum followed, requiring the employees to return to work the following day. 68 employees listened and returned to work. Following a final ultimatum , another 58 employees returned. All employees who complied with the ultimatums received written warnings. 120 employees remained on strike and, following a hearing, the company ultimately dismissed them on 3 January 2011.

Assisted by the Food and Allied Workers’ Union, the employees referred a class action dispute to the Labour Court challenging the substantive fairness of their dismissal. They submitted that the strike was for a short duration, peaceful and for a justifiable reason. They also placed weight on their length of service and argued that the employer could have used a less severe sanction to discipline them. In response, the company referred to, among other things, its economic suffering caused by the strike, the fact that it had to employ replacement labour and that the employees had deliberately refused to comply with three ultimatums. In consideration of these submissions, Steenkamp J found that the strike was peaceful and for a short duration. He drew no distinction between the employees who received written warnings after returning to work and those who were dismissed for striking for an extra 1,5 days longer. The court found the dismissal unfair, reinstating the employees and awarding 6 months’ compensation.

Disgruntled by this decision, the company referred the matter to the Labour Appeal Court (LAC). In its submissions, the company alleged that the strike was in bad faith and strategically during a critical business production cycle of the company. This timing indicated a deliberate attempt, according to the company, of economic sabotage aimed at frustrating its ability to meet festive orders. The employees had received two months’ notice of the company’s decision but only chose to strike in December: the peak production season. There was also no reason as to why they had not complied with requirements of a protected strike in the Labour Relations Act, No 66 of 1995 (LRA) which could have protected them from dismissal. The employees had also been untruthful at the disciplinary hearings, denying knowledge that the strike was unprotected. This dishonesty impacted the trust necessary for a continued relationship. The employees opposed the appeal, arguing that the company suffered no irreparable harm during the strike as it had employed replacement labour.

In evaluating these submissions, Savage AJA relied on the Code of Good Practice to consider whether dismissal for participating in an unprotected strike was fair. She specifically relied on item 6 and 7 of the Code for guidance. In having regard to the above, the LAC found that the company issued three ultimatums written in clear language which the employees had ignored for no good reason. Other employees had opted to adhere to the ultimatum. Participating in an unprotected strike is serious misconduct entitling the employer to impose discipline.

The LAC found dismissal appropriate in circumstances where the employees planned the strike to create maximum pressure and undermine the employer’s authority, and where ultimatums were ignored, even where a strike had been for a short duration.

The court found the strike to have been deliberately embarked upon during end-of-year peak production with the employees making no attempts to comply with the LRA. The strike was not in response to unjustified conduct of the employer and less disruptive methods were available to the employees. The LAC agreed with the company and the appeal succeeded.

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