Labour Court dismisses the Airline Pilots Association of South Africa’s application to declare South African Airways lock-out of their pilots unlawful.
On 29 December 2020, the Labour Court gave judgment on an urgent application brought by the Airline Pilot’s Association of South Africa (the Applicant) application to declare South African Airways (SAA) lock-out of the Association’s pilots as being unlawful. The application by the Applicant was ultimately dismissed, and this article seeks to summarise important points which were raised in the judgment.
As a background, SAA was placed in business rescue on 5 December 2019, and on 14 July 2020 adopted a business rescue plan which contemplated the retrenchment of the majority of SAA’s employees and changes to the terms and conditions of the employment of the employees who remained. SAA made a number of demands whilst bargaining with the Applicant, which the Applicant did not agree with. SAA accordingly referred the dispute of mutual interest to the CCMA on 30 October 2020. Unfortunately, the parties could not come to any form of agreement during the statutorily permitted period of 30 days to allow parties to negotiate, and the CCMA issued a certificate of non-resolution. On 16 December 2020 SAA issued a notice to lock-out employees of the Applicant.
Prior to summarising the arguments of the Applicant, it is important to understand what a lock-out is. Section 213 of the Labour Relations Act of 1995 as amended (LRA) defines a lock-out to mean the exclusion by an employer of employees from the employer’s workplace, for the purpose of compelling the employees to accept a demand in respect of any matter of mutual interest between employer and employee, whether or not the employer breaches those employees contracts of employment in the course of or for the purpose of that exclusion.
In bringing the application, the Applicant relied on four principle submissions. The first was that the Applicant contended that the lock-out by SAA constituted a suspension of the employment contracts of the Applicant’s members, which was prohibited in terms of the Company’s Act, insofar as they related to the effect of business rescue on employees and contracts. In dismissing this argument, the Labour Court noted that the specific section relied on by the Applicant’s, section 136 (2A) of the Company’s Act, allowed for changes to terms and conditions of employment in accordance with applicable labour laws.
The Court noted further that the LRA recognised collective bargaining as a means to change terms and conditions of employment, and expressly permitted a resort to strikes and lock-out as legitimate measures to press for agreement to a proposed change. The Court noted further that strikes and lock-out were part and parcel of the collective bargaining process and were essential elements of and integral to collective bargaining. Lastly, on this point, the Court noted that the lock-out did not amount to a suspension of the employee’s contracts but rather a breach of the employees’ contracts, for which the employer (SAA) would be indemnified from civil action arising out of breach of contract due to the lock-out being protected.
The second argument led by the Applicant was that SAA had ceased to operate and that there was no workplace which could be referred to for the lock-out to be affected, more specifically, that since SAA had ceased all operations and had been under business rescue for a year, there was no place or places where the Applicant’s members were deemed to work.
The Court noted that the definition of a workplace should not be construed restrictively. In referring to the case of NUCCAWU v Transnet Ltd, the Court ruled that the definition of a workplace was sufficiently broad to extend to breaches of an employment contract that do not necessarily entail a physical exclusion from the employer’s workplace. The Court referred, further, to the case of Association of Mineworkers and Construction Union and Others v Chamber of Mines of South Africa and Others where the Constitutional Court made clear that the notion of a ‘workplace’ is flexible and not geographically bound to a specific place and in particular the Court found that the focus is on employees as a collectivity, and that location is a relatively immaterial factor. In this case, the business of SAA continued to run, and the Applicant’s members continued to tender their services, thus a lock-out excluded the Applicant’s members from the workplace.
The third submission made by the Applicant was that the lock-out notice issued by SAA was invalid to the extent that they excluded certain members of the Applicant and that some of the demands on the notice to lock-out were different to the original demands made by SAA in their referral to the CCMA. The Court noted that there was nothing in the LRA which required an employer to include all employees within the scope of an intended lock-out, rendering the Applicant’s argument to be without merit.
Insofar as the Applicant’s submission that SAA made certain other demands which were not included in their CCMA referral, the Court submitted that it would not adopt a technical, narrow approach to confine legitimate industrial action to bargaining positions as they were recorded in CCMA referral forms. The Court noted further that collective bargaining is a dynamic process with a purpose to find a compromise and that bargaining positions would inevitably shift during this period.
The final argument made by the Applicant was that the lock-out was unprotected due to the provisions of a collective agreement binding on SAA, which required that the specific issue in dispute be referred to arbitration. In short, the Applicant argued that the true nature of the dispute was whether the regulating agreement should or should not be applied to the present case. The Labour Court noted that a court must establish the true nature of a dispute to understand its substance. The Court ruled that in the current matter SAA did not dispute the validity of the regulating agreement but rather sought that the regulating agreement be cancelled in its entirety and that a new agreement on new terms and conditions be secured. The Court ruled that the Applicant’s submissions were without merit as the matter did not concern the interpretation or application of the agreement.
The Court ultimately ruled that the application be dismissed and that SAA was engaged in a lawful lock-out, indemnifying the organisation against any of the legal consequences that would ordinarily flow from a breach of the employment contract with the affected employees.
Article by: Avishkar Singh
Dispute Resolution Official – Durban