21 June 2021 by and Employment Law Alert

An employer’s recourse to lockout and appoint replacement labour

Airline Pilots Association of South Africa (ALPA-SA), as represented by the South African Airways Pilots Association (SAAPA), a branch of ALPA-SA obo Members v South African Airways (SOC) Limited and Others (J398/21) [2021] ZALCJHB 57.

The Applicant, Airline Pilots Association of South Africa (ALPA-SA), as represented by the South African Airways Pilots Association (SAAPA) represents about 89% of the Pilots employed by South African Airways (SOC) Limited (SAA). Since December 2001, SAA tried to renegotiate and/or cancel a long-standing Collective Agreement (Regulating Agreement) governing the pilots’ terms and conditions of employment. It contended that the agreement is unduly onerous and unsustainable given its financial position. There was private arbitration held, the outcome of which was that the Regulating Agreement could not be terminated, even on notice. It could only be rescinded through a subsequent agreement. This did not deter SAA. In December 2019, it launched applications in the Labour Court and High Court to declare the agreement unconstitutional. These had not been determined as at the hearing before the Labour Court.

Business rescue and section 189A LRA process at SAA

On 5 December 2019, SAA was placed under voluntary business rescue. A rescue plan was adopted on 14 July 2020. Pursuant to the adoption of the rescue plan, SAA issued a Notice in terms of section 189(3) of the LRA to all its employees. Facilitation was conducted by the CCMA. When the parties could not come to an agreement regarding re-negotiating new terms and conditions of employment for its employees, SAA made various demands including termination of the Regulating Agreement and any other collective agreements between the parties. It also tabled revised salaries, and terms and conditions of employment. These were rejected. Thereafter, SAA referred a mutual interest dispute to the CCMA. The parties deadlocked. SAA then issued a notice of lockout in terms of section 64(1)(c) of the LRA. In response, SAAPA sought a final order from the Labour Court on an urgent basis declaring the lockout unlawful and unprotected. The court differed and dismissed that application. SAAPA appealed, however, were unsuccessful.

Basis for SAAPA’s interdict

On 30 March 2021, SAAPA gave notice of its intention to embark upon strike action in response to the lockout. SAA continued with the lockout. On April 2021, SAAPA approached the Labour Court on an urgent basis seeking an order declaring that the lockout effected by SAA was not in response to a strike on its part, SAA is not permitted to employ replacement labourers in place of its members who were engaged in industrial action, and SAA’s re-employment of pilots whose services were previously terminated to perform the functions of the striking pilots constituted a contravention of section 76 of the LRA.

Issue before the Labour Court

Essentially, the issue that the Labour Court was whether SAA’s conduct infringes the provisions of section 76(1)(b) of the LRA, and whether it was appropriate to interdict them from doing so pending the main application on 15 June 2021. Section 76 provides that-

(1)   An employer may not take into employment any person-

(a)   to continue or maintain production during a protected strike if the whole or a part of the employer’s service has been designated a maintenance service; or

(b)   for the purposes of performing the work of any employee who is locked out, unless the lockout is in response to a strike.

The court held that SAA was permitted to employ replacement labour even if it had initially instituted a lockout before the commencement of the strike, on the ground that the individuals who would ordinarily have performed the work in question, were not initially locked-out, but had refused to perform those duties. SAA was also not prohibited from doing so even if it had initially imposed a lockout. When the SAAPA commenced its strike action, SAA confirmed the continuation of its lockout in response to that strike. This entitled SAA to engage replacement labour. SAAPA had not satisfied the requirements of the relief it sought, and the application was dismissed.

Employers may be justified in locking out employees who refuse to perform their duties, even before receipt of a strike notice. The Labour Court held that this lockout was protected and lawful. Furthermore, the employer will have the right to appoint replacement labour in respect of striking employees. After receipt of SAAPA’s strike notice, SAA did not issue a new lockout notice. It simply advised the union that the already imposed lockout would continue, and then appointed replacement labour.

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