Definitive Report - Report No 340, March 2006

Case No 2406 (South Africa) - Complaint date: 09-DEC-04 - Closed

Allegations: The complainant organization alleges that 963 workers have been dismissed by Volkswagen S.A. for their participation in a strike, on the basis of a narrow interpretation of the Labour Relations Act 1995, which emphasized procedural irregularities over workers’ substantive rights and had a disproportionate effect on them. The complainant also alleges employer interference in the affairs of the trade union of which the 963 workers were then members

236. The complaint is contained in communications dated 9 December 2004 and 7 March 2005 from the Oil, Chemical, General and Allied Workers’ Union (OCGAWU).

1. 237. The Government provided its observations in a communication dated 18 May 2005.
2. 238. South Africa has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant’s allegations

1. 239. In its communication of 9 December 2004, the complainant OCGAWU indicates that 963 of its members were dismissed from their employment by Volkswagen S.A. because of their participation in a strike, and that all internal remedies have been exhausted. It alleges that, in essence, the decision to dismiss the workers was based on their failure to observe certain procedural requirements of the Labour Relations Act, 1995 (the “Act”) in relation to a strike in which they engaged. That strike followed the employer’s intervention in the affairs of the trade union of which the workers were then members (National Union of Metalworkers of South Africa (NUMSA)) through the seeking of an interdict preventing action by elected shop stewards on their behalf. For the complainant, that intervention was in itself a violation of Convention No. 98.
2. 240. The complainant organization also alleges that another violation of freedom of association principles arose from the narrow interpretation of the provisions of the Act, so as to give primacy to procedural irregularities over the substantive right of workers to engage in strike action. In this case, the workers concerned took industrial action because NUMSA refused to act on their behalf; they therefore had no alternative but to seek redress themselves, first through unsuccessful approaches to the employer, and then by making it clear to the employer that they would strike if their demands were not met. According to the complainant, the employer never agreed or attempted to discuss with the employees the nature of their grievances, with a view to preventing the strike; it was clearly aware of the impending industrial action but only reacted through threats concerning the illegality of the strike.
3. 241. The OCGAWU further alleges that the dismissal of workers for their participation in what it considers to be a legitimate strike violated freedom of association principles in that it constituted unwarranted action, depriving of their livelihoods many workers who had been employed in highly skilled occupations for long periods, and totally disproportionate to any infringement of the law that might have occurred. That law is supposed to apply ILO principles, as well as the South African Constitution which enshrines the right of every worker to strike as a fundamental right, and also provides for the application of ratified treaties and Conventions and of other elements of international law. These arguments were submitted to both levels of the Labour Court which heard the case but were not properly considered so as to give dismissed workers the protection to which they were entitled.
4. 242. In its communication of 7 March 2005, the OCGAWU submits that these arguments were not submitted to the Constitutional Court, which declined to consider the matter because of the ill-preparedness of the case presented by six individual employees without consultation of the other workers concerned. The Act and the Constitution required the application of ratified ILO Conventions as well as the principles derived from them, including those established by the ILO Committee of Experts and Committee on Freedom of Association. These arguments were either not addressed or misconstrued by the Constitutional Court, which summarily dismissed the referral. This exhausted all legal avenues of redress at national level.
5. 243. The OCGAWU stresses the unwarranted and improper interference in trade union affairs through the seeking by the employer of interdicts restraining the shop stewards concerned with the dispute which gave rise to the strike from proceeding with their activities. The recourse to strike action was in pursuit of their legitimate interests as workers and as members of a trade union (which had sought to remove their representative shop stewards from office and received the employers’ support in that action). The OCGAWU submits that the dismissals in this case were an unwarranted and improper form of retaliation, a sanction wholly out of proportion to the degree of the workers’ omission to comply with a legislative modality concerning strike action, which has been applied so as to deny them rights they have under the South African Constitution and ILO principles on freedom of association. The OCGAWU emphasizes that the complainants have been without employment since their dismissal in 2000, and that they seek whatever action may be necessary or possible to rectify the wrongs to which they have been subjected.
6. 244. The complainant organization attaches to its communication: the arbitrator’s award ruling in its favour; the judgement of the Labour Court which overruled the arbitrator; and the Labour Appeal Court confirming the decision of the Labour Court.
7. B. The Government’s reply
8. 245. In its communication of 18 May 2005, to which are attached the observations made by the employer on 7 March 2005 and the observations made by the National Union of Metalworkers of South Africa (NUMSA) on 5 April 2005, the Government states that it does not consider it appropriate to enter into the merits of the dispute between the workers and their union and the employer, and stresses that it does not and should not take sides in a labour dispute between dismissed workers and their private sector employer, particularly where the judicial process has run its course. Since the main thrust of the complainant’s criticism is directed at the employer, the Government considers it inappropriate to express any observations on the conduct of the employer, on the merits of the dispute, or on the decisions of the various jurisdictions that have adjudicated it.
9. 246. The Government does however consider appropriate to make observations on the constitutional or legislative provisions, and the judicial processes that are available for the resolution of disputes and for the realization of fundamental rights of workers and their trade unions, as guaranteed in national law and ILO instruments. In essence, the Government argues that: the relevant constitutional or legislative provisions are fully in compliance with the obligations of the Republic of South Africa under ILO Conventions; the national legislation does provide a system and a hierarchy of courts that are entrusted with interpreting and applying both national and international laws; the dismissed workers have fully utilized the four levels of the judicial process available, which has been exhausted with the decision of the Constitutional Court; there is no reason for concern about the inadequacy of the legislative provisions or of the judicial process; there is accordingly no basis for the Committee to intervene, either in connection with this dispute or with the domestic laws and judicial process that are in place. The Government provides detailed explanations on the applicable provisions, which are summarized below.
10. 247. Section 23 of the Bill of Rights, which is part of the Constitution, provides for fundamental rights of association of workers including the right to form and join trade unions, to participate in their activities and programmes, and to strike. Section 39(1) of the Constitution states that: “When interpreting the Bill of Rights, a court, tribunal or forum: (a) must promote the values that underlie an open and democratic society based on human dignity, equality and freedom; (b) must consider international law; (c) may consider foreign law.”
11. 248. Section 1 of the Labour Relations Act (the “Act”) provides that the objective of the Act is to realize both the fundamental rights guaranteed in the Bill of Rights and the Constitution, and the obligations of the Republic of South Africa as a member State of the ILO. Section 3 provides guidelines for the interpretation of the Act (give effect to its primary objects; and comply with the Constitution, the public international law obligations of the Republic). Section 4 protects the right to organize of workers, and their right to strike is protected by section 64(1), which provides inter alia some conditions and limitations before the taking of industrial action (referral of the dispute to a council; 30 days cooling-off period; 48 hours notice of strike; etc.). The Act distinguishes between “protected” and “unprotected” strikes, the latter being those that do not comply with its requirements. In case of unprotected strike, the Labour Court has jurisdiction to grant an interdict or an order to restrain any person from participating in that strike. The Act also protects workers against unfair dismissal; “automatically unfair dismissals” include those where an employee is dismissed for participation in a protected strike. In addition, where a worker participates in an unprotected strike, dismissal is not necessarily justified but may be appropriate, if it is both substantively and procedurally fair. Disputes about unfair dismissals are determined by a tribunal or a court. The Government concludes that the domestic legislation, which is the product of consultation and negotiation with all interested stakeholders, including representative trade unions, fully accords with the letter and spirit of Conventions Nos. 87 and 98.
12. 249. Whilst refraining from commenting on the correctness of the decisions made by the various courts on the merits of the dispute, the Government points out that there is in place a judicial process which was indeed utilized by the dismissed workers and their representatives. The dispute was first dealt with in arbitration; this was unusual since dismissals that relate to unprotected strikes are generally adjudicated at the outset by the Labour Court; the workers thus had an additional opportunity to present their case to an arbitrator before it reached the courts. The matter was then dealt with by the Labour Court, the Labour Appeal Court and finally the Constitutional Court. An analysis of all the judgements reveals that careful consideration was given to all the evidence and arguments advanced on behalf of the parties, including arguments relating to freedoms and rights protected under relevant ILO Conventions. The judicial process has accordingly been invoked and exhausted.
13. 250. Similarly, the employer invoked the statutory provisions that apply in the case of unprotected industrial action when seeking the interdict from the Labour Court, which exercised its jurisdiction and granted it on the basis of facts and law.
14. 251. In its communication of 7 March 2005, Volkswagen S.A. explains the background of the dispute. On 20 January 2000, a large number of workers engaged in industrial action at the Uitenhage plant, which the company had to close by 24 January. On 28 January, it concluded an agreement with NUMSA, whereby it recognized it as representing the overwhelming majority of weekly paid employees at the plant; it was agreed that the plant would reopen and that the workers would return to work on 31 January; the agreement also provided that those who continued the strike would be subject to disciplinary action, including dismissal. At the request of NUMSA, the company issued an ultimatum on 1 February to all striking workers to return to work by 3 February or be dismissed. A total of 1,336 employees did not comply and were accordingly dismissed.
15. 252. On 29 February, the affected workers referred the dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA), in the following terms: “Our dismissal was the result of a dispute which we had with our own union. Workers embarked on protest action after NUMSA forced 13 democratically elected shop stewards out of their positions with a Court order. For the first time in history of the labour movement, as far as we are aware, workers experienced a situation whereby their own union sided with the bosses against them and were dismissed thereafter.” The dispute remained unresolved during the conciliation process and was referred to arbitration. In his decision of 22 January 2001, the arbitrator found that the dismissal of the affected employees was substantively fair but procedurally unfair, and ordered their reinstatement, albeit not retrospectively.
16. 253. The employer filed an urgent application to review and set aside the arbitrator’s award and the employees brought a counter-application to set aside the arbitrator’s finding that their dismissal had been substantively fair. On 6 March 2001, the Labour Court: set aside the arbitrator’s award; held that although the employees’ dismissal had been procedurally unfair, they were not entitled to any relief; and dismissed the employees’ counter-application. The employees appealed to the Labour Appeal Court; the employer filed a cross-appeal limited to the Labour Court finding that the dismissals had been procedurally unfair. On 22 June 2001, the Labour Appeal Court dismissed the employees’ appeal, confirming the substantive fairness of their dismissal, and upheld the company’s cross-appeal, finding that the dismissals had also been procedurally fair.
17. 254. On 27 January 2003, the affected employees filed proceedings against NUMSA, claiming approximately 385 million rands in damages; the claim is pending before the High Court. In 2004, some three years after the issuing of the Labour Appeal Court judgement, the affected employees applied to the Constitutional Court, seeking leave to appeal the Labour Appeal Court judgement and requesting an extension of the delay for filing the application; on the undisputed facts, the Constitutional Court decided that there was no prospect of the employees succeeding on the merits (i.e. persuading the court that their dismissal was procedurally unfair) and that it was not in the interest of justice to extend the delay for leave to appeal.
18. 255. In its communication of 5 April 2005, NUMSA states its belief that the national courts, in particular the Labour Appeal Court and the Constitutional Court, have adequately dealt with the issues in the present case. NUMSA emphasizes that it is being sued for damages (for a total amount of R350 million) by many of the dismissed workers, now represented by OCGAWU. Their claim is principally based on the allegation that NUMSA caused their dismissals by agreeing to a collective agreement which dealt with, among other things, the return to work of striking workers. NUMSA has defended the claim, which it cannot comment since it is pending, except to deny strongly that it caused the workers’ dismissals or that it colluded with the management of the company.

C. The Committee’s conclusions

1. 256. The Committee notes that this complaint concerns allegations of dismissals of workers for their participation in a strike at a private company, on the basis of a narrow interpretation of the Labour Relations Act, 1995 (the “Act”), which emphasized procedural irregularities over workers’ substantive rights. The complainant also alleges employer interference in the affairs of the trade union. The Government submits for its part that the domestic law gives full effect to relevant ILO Conventions, and that all judicial recourses have been utilized and exhausted.
2. 257. The Committee notes at the outset that the present complaint took place in a context of intra-union rivalry, as explained for instance in the arbitrator’s decision of 22 January 2001. The Uitenhage production plant employs approximately 6,000 employees, of which some 4,500 were hourly paid; 80 per cent of those were members of the National Union of Metalworkers of South Africa (NUMSA), which became the sole bargaining agent in November 1990. In 1998 the company won a major export contract for A4 Golfs to the UK and Europe, which required it to more than double its production; negotiations took place between management and NUMSA, which resulted in August 1998 in the signing of the so-called “A4 Export Agreement”, the hiring of some 850 new employees and the introduction of new work practices. A group of workers apparently had some concerns with the A4 Export Agreement and with NUMSA officials who had signed it. As a result of shop stewards’ elections in March/April 1999, about half of the 32 shop stewards elected were new; division soon emerged within the Shop Stewards Council between the re-elected stewards and the newly elected ones, and also between the latter and NUMSA local officials. On 17 July 1999, NUMSA suspended eight shop stewards and requested the company to return them to the positions they held before their election, which it did; this led to a strike by a few hundreds of workers, a court order declaring the strike illegal, the lifting of the suspension of the eight shop stewards, a return to work, the resignation of 18 other shop stewards in protest against the reinstatement of the eight, etc. This resulted in serious difficulties in the labour relations structure, actions and counteractions by the opposing factions, including another strike on 20 January 2000. As a result, the plant was closed down from 24 to 28 January 2000, the date on which an agreement was concluded between management and NUMSA, whereby the workers would return to work on 31 January. As a number of workers did not return on that date, the company issued an ultimatum to all “striking workers” to resume work on 3 February 2000 or be dismissed. Most of them did not comply and were dismissed.
3. 258. The arbitrator seized with the dismissals ordered their reinstatement, albeit without retroactive pay; the Labour Court overruled the arbitrator; the Labour Appeal confirmed and strengthened the Labour Court ruling; and the Constitutional Court refused to grant the employees’ leave to appeal, which put an end to legal recourses.
4. 259. The Committee recalls that it is not competent to make recommendations on internal dissensions within a trade union organization, so long as the government does not intervene in a manner which might affect the exercise of trade union rights and the normal functioning of the organization [see Digest of decisions and principles of the Freedom of Association Committee, 1996, 4th edition, para. 962]. There is no suggestion that there was such an intervention by the Government in this case.
5. 260. As regards the complainant’s argument that the employer’s actions in seeking an injunction from the court was in itself a violation of Convention No. 98, the Committee fails to see how the exercising, by any party, of a legal recourse could constitute a violation of Convention No. 98.
6. 261. In these circumstances, as the case is outside the mandate of the Committee, it would be inappropriate for the Committee to intervene and substitute its own conclusions to that of the arbitrator and of specialized courts, which have had the advantage of hearing witnesses, evidence and arguments. The Committee therefore considers that this case does not call for further examination.

The Committee's recommendations

1. 262. In the light of its foregoing conclusions, the Committee invites the Governing Body to decide that this case does not call for further examination.