Legality of paying a gratuity to non-striking employees

July 1st, 2012
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By Clement Marumoagae

The right to strike is a fundamental right enshrined in the Constitution and regulated by the Labour Relations Act 66 of 1995 (LRA). The LRA regulates the relationship between an employer and employees, who should try to resolve their disputes mutually without arbitrarily embarking on industrial action. However, if the dispute between the employer and employees remains unresolved and the dispute has been certified as unresolved by the bargaining council with jurisdiction or the Commission for Conciliation, Mediation and Arbitration (CCMA), employees may embark on strike action in an attempt to compel the employer to accede to their demands (see s 64(1)(a)(i) of the LRA). Embarking on a strike is a right, not an obligation, and some employees may choose not to exercise this right and elect to continue working during a strike.

Employers are not entitled to compel non-striking employees to do work normally done by striking employees (s 187(1)(b) of the LRA). This raises the question: What is the position when a non-striking employee voluntarily performs work ordinarily done by striking employees? Furthermore, can an employer pay a gratuity in addition to non-striking employees’ remuneration for work that they did during the strike? In this article I will discuss the circumstances in which employers might be said to undermine the right to strike by paying non-striking employees who elect to continue working during a strike a gratuity over and above their normal remuneration.

Background

The Industrial Court under the Labour Relations Act 28 of 1956 (1956 LRA) provided for employers to legitimately reward non-striking employees for not participating in a legal strike. In Chemical Workers Industrial Union v BP South Africa (1991) 12 ILJ 599 (IC) some employees went on a legal strike relating to demands concerning wages and ancillary matters. After the strike had begun, the employer took a decision to pay bonuses to non-striking employees, who were requested to work longer hours than usual, as well as to those who were requested to perform tasks falling outside their job description. This was to reward such employees for continuing production during the strike (at 601 – 602). The union was of the view that such conduct constituted an unfair labour practice in terms of the 1956 LRA. It was held that, in deciding to pay the bonuses, the employer’s objective was to ensure that its business operations continued during the course of the strike. The court was convinced that the payment of the bonuses was a suitable and necessary measure for the employer to employ to combat the strike and, as such, it was a fair, reasonable and legitimate response to the strike. The court also rejected the union’s contention that the employer’s payment of bonuses constituted victimisation of its striking members. The court ultimately held that the payment by the employer of bonuses to certain of its employees not engaged in the legal strike at its business premises did not constitute an unfair labour practice (at 600 – 608).

In SACCAWU v OK Bazaars (1929) Ltd [1995] 7 BLLR 1 (A) employer and trade union wage negotiations failed and the trade union served the employer with a strike notice. The employer warned the trade union and its members that should they embark on strike action they would lose their annual bonuses, in accordance with a long-standing policy of the employer. After completion of the strike, employees who were involved in the strike were not paid their bonuses, unlike those employees who were not involved in the strike. The court held that, because strikes are disruptive, measures to discourage them are to be encouraged and hence are legally permissible. Among these measures are the offerings of financial inducements to non-strikers, as well as imposing financial penalties on strikers. Further, the ‘threat of withholding a bonus from strikers, or actual withholding thereof does not affect workers’ freedom to strike. … The only result is to increase “the practical disadvantages to strikers which may flow from a particular strike action”.’

As can be seen from the abovementioned cases, the courts under the 1956 LRA found nothing exceptionable about rewarding non-strikers for going an extra mile or for denying strikers privileges during and after strike action’ (J Grogan Collective Labour Law (Cape Town: Juta 2010) at 244.). As such, under the 1956 LRA, employers were allowed to reward non-striking employees for work they did during the strike, including the work of striking employees. Employers were permitted to discourage striking employees from striking by withholding benefits due to them and according same to non-striking employees. Such conduct by employers was regarded as a counter measure to the strike. This was despite the fact that ‘strike action’ was viewed as the ultimate weapon that employees had against their employer. Nonetheless, under the 1956 LRA the right to strike was not explicitly recognised in South Africa.

The position under the current LRA

The current LRA does not expressly prohibit employers who are faced with strike action from providing non-striking employees with benefits they ordinarily do not receive or from rewarding employees who are not participating in strike action for the ‘extra work’ they put in during a strike.

There is no provision in the LRA that prohibits employees from going an extra mile when executing their duties. Going an extra mile might entail that employees are rendering a more efficient and better service than that for which they are paid, thereby increasing profits for the employer or making the employer’s workplace favourable and marketable to clients because of the services it renders.

On the other hand, going an extra mile by non-striking employees during strike action can be viewed as taking advantage of the strike situation in order to make more money. On the face of it, the LRA does not explicitly prohibit such conduct, but it can be viewed as undermining the right to strike because it has the potential to dilute the effect that the strike would have on the employer if production continued during strike action. As such, if non-strikers carry out tasks that are normally performed by striking employees, then the employer will not necessarily feel the impact of the strike. However, employers are permitted by s 10 of the Basic Conditions of Employment Act 75 of 1997 to require or permit employees to work overtime, provided employers have agreed with employees to this effect. I submit that such overtime work should be work that non-striking employees are eligible to work, and not the work of striking employees.

The right to strike is strengthened by both the right to freedom of association and the right to engage in collective bargaining. Collective bargaining will surely be weakened if employers are allowed to discourage employees from exercising their constitutional right to strike by denying them benefits they are entitled to, and affording such benefits to non-striking employees during or immediately after the strike. Such an undertaking undermines the rights of employees to freely associate and take part in the lawful activities of their unions, and amounts to discrimination. Should employers be allowed to reward employees for non-participation in legal and protected strikes this will clearly be against the spirit of the LRA.

Section 5(1) of the LRA provides: ‘No person may discriminate against an employee for exercising any right conferred by this Act.’ The right to strike is conferred in the LRA by s 64(1), which states: ‘Every employee has a right to strike … .’ As such, it has been correctly argued that ‘where an employer pays gratuities to employees for not participating in a strike, such conduct will amount to an infringement of section 5(1)’ of the LRA (AC Basson, M Christianson, C Garbers, PAK Le Roux, C Mischke & EML Strydom Essential Labour Law (5ed) (Mace Labour Law Publications 2009) at 253). By paying such a gratuity, an employer will send a message that, in future, for an employee to be awarded greater benefits when his colleagues down tools, he should continue working.

Section 5(3) of the LRA provides: ‘No person may advantage, or promise to advantage, an employee or a person seeking employment in exchange for that person not exercising any right conferred by this Act or not participating in any proceedings in terms of this Act.’ By rewarding non-striking employees, employers are advantaging those employees in exchange for them not exercising a right conferred by the LRA, namely the right to strike. As such, such a reward would amount to an infringement of s 5(3) of the LRA. On the other hand, rewarding non-strikers can also be viewed as a promise to advantage employees who are on strike if they end their strike action, thereby creating an impression that if they do not take part in strike action, they will also be eligible for the rewards awarded to non-striking employees. Such initiative by the employer would affect an employee’s decision in future as to whether or not to embark on a strike. As such, the employer will be dictating whether or not employees should exercise their right to strike. I am of the view that such conduct by the employer cannot be justified under the current LRA.

The Labour Court was faced with a similar issue in FAWU and Others v Pets Products (Pty) Ltd [2000] BLLR 781 (LC), where the employer paid vouchers to employees who did not participate in a strike. The union argued that such payment contravened s 5(1) and (3) of the LRA in that it discriminated against strikers for exercising their right to strike and that the employer advantaged the non-strikers in exchange for not exercising their right to strike. The union also argued that the effect of paying such vouchers was that those who did not strike were rewarded for doing so and those who did strike were penalised for doing so. It was further argued that this had the effect that the strikers and non-strikers were deterred from striking in future. The employer argued that the payment of the vouchers was simply a payment to those who did not strike, those who had worked during the strike and those who had ‘gone the extra mile’. Further, that the payment was for the ‘extra hard work’ done by the non-strikers and that the employer had no ulterior motive in making the payment to the non-strikers (at 1104).

The court was of the view that the sine qua non for the payment was not so much the hard work performed by the non-strikers, but that the non-strikers did not go on strike and maintained production (at 1106). It was found that non-strikers were remunerated for overtime work and for work they did on weekends. The court held that ‘the non-strikers did nothing extraordinary to warrant additional or extra payment other than that provided for in their service contracts’ (at 1106). In coming to its decision, the court opined that ‘the rights found in our Constitution and in the LRA are hard earned and well deserved. The right to organise, the right to engage in collective bargaining, and the right to strike are priceless.’ After employing the well-known Harken test (as outlined in Harksen v Lane NO and Others 1998 (1) SA 300 (CC) at paras 46 – 52), the court held that ‘where a person … discriminates against employees … for exercising their right to strike, which is conferred by this Act, then the unfairness of that discrimination is presumed although the contrary may still be established’. The court held that the employer had discriminated against the strikers for exercising their right to strike conferred by the Act and that, by doing so, the employer infringed s 5(1) of the LRA. Importantly, the court held that the employer had also infringed s 5(3) of the LRA by providing vouchers to the non-strikers. The right to strike cannot be waived unless there is an agreement between a trade union and the employer that regulates the issue. It was further held that there can be no justification for giving rewards to non-strikers because they refrained from exercising their statutory right to strike (at 1113).

In NUM v Namakwa Sands – A Division of Anglo Operations Ltd [2008] 7 BLLR 675 (LC) employees embarked on a protected strike, during which the employer provided non-striking employees with a daily allowance and food, and such employees also worked excessive overtime. The trade union argued that the provision of food, an allowance and excessive overtime to non-striking employees by the employer contravened s 5(1) and (3) of the LRA. Even though the employer did not dispute that it provided food, allowances and overtime, it nevertheless denied that it contravened s 5(1) and (2)(c)(i) of the LRA. The employer argued that it had a practice of paying a daily allowance to employees who were redeployed to do work that fell outside of their normal scope of duties. It transpired in the case that none of the striking employees received the allowance or meals from the employer during the strike. The court held that: ‘It is common cause that the payment of R 300 per day and the provision of certain meals to non-striking employees during the strike action is not a written term and condition of employment; it is not regulated by a collective agreement’. The court was satisfied that the employer’s practice of paying the redeployment allowance was ‘shrouded in secrecy’ to pay employees who performed alternative duties during strike action, and the fact that the employer had such a policy for a number of years did not render it lawful. The court further held that s 187(1)(a) and (b) of the LRA indirectly prohibits an employer from asking non-striking employees to do the work of striking employees during a protected strike. The court found that ‘employees who were not on strike were paid to do the work of non-striking employees and the reward for doing this was the R 300 daily allowance and free meals’. The court held that this was an employer’s strategy to negate the constitutional strike action embarked on by members of the union; hence this was an incentive for other employees not to join the legitimate strike action so much so that some of the striking employees went back to work and were also paid the allowance. The court held that the employer discriminated against members of the union and contravened the provisions of s 5(1), (2)(c)(1) and (3) of the LRA (at 702 – 722).

The approach adopted in the two cases discussed above illustrates a shift from the position under the 1956 LRA to the current LRA. It is evident from these cases that under the LRA employers are prohibited from granting non-striking employees rewards, benefits and allowances during a strike if these are aimed at diluting the employees’ constitutional right to strike. Such benefits can be viewed in two ways: Firstly, as an attempt by the employer to discourage striking employees from striking in the future and, secondly, as infringing the right to strike of both striking and non-striking employees, in that employers are prepared to pay them, and thereby dictate their choice whether or not to exercise their right to strike. The payment of rewards constitutes discrimination and victimisation of striking employees and amounts to a direct, or even an indirect, interference with their right to associate in the collective bargaining process, which includes the act of striking as provided for in the LRA.

Conclusion

Employers are naturally inclined to reward employees who have decided not to strike and such gestures are not expressly forbidden by the LRA. However, such conduct is treated by the courts as contravening s 5 of the Act. Nonetheless, I am of the view that if employees choose not to strike and perform duties they normally perform and also work overtime as provided for in their employment contracts or the Basic Conditions of Employment Act during the strike, then the employer cannot be held to be contravening s 5 of the LRA. However, if the employer offers benefits to those employees that they would not normally receive, this would be in contravention of the LRA.

Employees have a right to strike and a right not to strike, and cannot be compelled either way. As much as the employer cannot force non-striking employees to perform duties normally done by striking employees, employers should also not ‘bribe’ non-striking employees to perform such duties. That will amount to undermining, and ultimately diluting, employees’ right to strike. If the employer wishes to punish striking employees, he can employ the ‘no work no pay’ principle. He can also use replacement labour if he wishes to continue production, within the limits provided for in s 76 of the LRA. However, replacement labour has the effect of softening the blow to the employer, thereby rendering the strike action insignificant.

Clement Marumoagae LLB (Wits) LLM (NWU) Cert in Advanced Broadcasting Law (Wits) is a candidate attorney at the Benoni Justice Centre.

This article was first published in De Rebus in 2012 (July) DR 26.