Assume there is an agreed bargaining unit within a workplace and the employer has ‘recognised’ a registered trade union as the collective bargaining agent. The employer then bargains with employees in that bargaining unit who are not members of the trade union.
This results in different wage adjustments between union and non-union members. The Labour Appeal Court regards such employer conduct as a contravention of ss 5(2)(c)(i) and 5(3) of the Labour Relations Act 66 of 1995 because it prejudices or discriminates against union members.
Murphy AJA delivered a unanimous judgment on 17 September 2012 in Safcor Freight (Pty) Ltd v SAFDU case no JA13/11.
Here are some extracts from the judgment and thanks to Saflii the entire judgment can be read by clicking on the link. Footnotes have been omitted and references to ‘appellant’ have been changed to ‘employer’ and ‘respondent’ to ‘union’.
Of particular interest in the judgment is the extract in paragraph [18] below where the LAC dealt with the incorrect reliance on sections 9 and 23 of the Constitution by Cele J in the Labour Court.
[1] This is an appeal against a judgment of the Labour Court (Cele J) in which it declared that the award of a wage increase by the employer to certain of its non-unionised employees was discriminatory and prejudicial in violation of section 5 of the Labour Relations Act 66 of 1995 (“the LRA”) and sections 9 and 23 of the Constitution. The appeal raises important questions of principle and policy in relation to the right of an employer to bargain with employees who are not members of a bargaining unit represented by a recognised trade union.
[4] On 25 October 2006, the employer and the union concluded a collective agreement described by them as “a relationship agreement” which manages their relationship in detail. The union has been recognised as a bargaining agent by the employer since 1996; the relevant relationship agreement, however, was applicable only from late 2006.
[5] Clause 4.1 of the agreement confers recognition on the union as the bargaining agent of the members of the bargaining unit. The pertinent part of Clause 4.1 reads:
‘The Company shall recognize the Union as being a registered Trade Union within the workplace, and as the representative of its members within the bargaining unit for the purpose of collective bargaining for so long as the Union maintains a membership level of 50% (fifty percent) plus 1 of the employees within the workplace. In this respect, the Union shall negotiate wages and substantive conditions of employment for its members in the bargaining unit on an annual basis ….’
The “bargaining unit” is defined in clause 1.3 of the agreement to mean:
‘… permanent employees of the Company who are members of the Union with the exclusion of the following categories of employees:
1.3.1 Managerial staff (Grade B and D and upwards);
1.3.2 Financial Accountants;
1.3.3 Payroll and Human Resources Administrators.’
[6] It is common cause that at the relevant time the union’s members at the Durban operation numbered 111 of the total of 277 employees. The remaining 166 employees were not union members and therefore fell outside of the bargaining unit. The union thus represented about 40% of the employees working at the Durban operation. The employer has not challenged the union’s level of representation in these proceedings. One may infer, accordingly, that the employees that the union represented made up more than 50% of those employees who qualified to be members of the union and the bargaining unit. In terms of clause 4.1 of the agreement, the bargaining unit is defined by and based on union membership.
[18] The central, if not sole, issue in this appeal is whether the employer through its conduct infringed the protections accorded by the right to freedom of association enshrined in Chapter II of the LRA. In my view, the Labour Court erred in declaring the award of increased remuneration inconsistent with section 9 (equality) and section 23 (fair labour practices) of the Constitution. Where legislation has been enacted to give effect to a constitutional right, a party may not bypass that legislation and rely directly on a provision of the Constitution, without challenging that legislation as falling short of the constitutional standard. Insofar as the right to fair labour practices is given effect to by the LRA, the union is obliged to found its cause of action on the relevant provisions of the LRA, and may not rely directly on the general provisions of constitutional right to fair labour practices in section 23 or the equality clause in section 9 of the Constitution. In any event, as far as the anti-discrimination clause (section 9(3)) is concerned, it prohibits discrimination on the grounds listed therein or on analogous grounds. Union membership is not a listed ground and it is unlikely to be considered an analogous ground because such discrimination does not involve the requisite level of injury to human dignity; and adequate legislative protection is in any event available in section 5 of the LRA. There was for those reasons no need to declare the employer’s conduct unconstitutional. The Labour Court accordingly erred in that regard.
[20] The provisions [of section 5] must be read, inter alia, with section 4 of the LRA which guarantees every employee the right to freedom of association, in particular the right to join a trade union and to participate in its lawful activities.
[21] Simply put, the provisions of section 5 of the LRA constitute a prohibition against “anti-union discrimination”. Although section 5(1) does not qualify the term “discriminate” with the adverb “unfairly”, our constitutional and anti-discrimination jurisprudence generally require that discrimination be unfair and/or unjustifiable in order to constitute an infringement or violation. Differentiation which is fair and/or reasonable will not amount to discrimination. A contravention of section 5(1) therefore comprises two elements: discriminatory conduct or action and such being unjustifiable because it is irrational, lacking in proportionality, unreasonable or actuated by improper or illegitimate motives.
[22] The party alleging discrimination (or violation of the specific protections in section 5) must establish the facts of the allegedly objectionable behaviour, in which event the onus of justifying it shifts to the party who engaged in the conduct. Moreover, the existence of differentiation or disparate treatment is not enough; generally, it must be established that the reason for the differentiation relates to a proscribed ground, in this case union membership or union activities. Where there is more than one reason for the differentiation, the requirement normally will be met where it is shown that the prescribed ground has an element of predominance. The general prohibition against discrimination in section 5(1) is given content, without its generality being limited, by the provisions of sections 5(2) and 5(3) which impose stricter liability in respect of specific forms of anti-union discrimination. Two of these are of greater significance in the present appeal, namely: section 5(2)(c)(i) which prohibits prejudicing an employee because of past, present or anticipated trade union membership; and section 5(3) which proscribes advantaging an employee in exchange for not exercising any right conferred by the LRA.
[25] On that basis, one may conclude that the bargaining unit employees were prima facie prejudiced or discriminated against because of their membership of the union, while the non-union employees were advantaged in exchange for not exercising the right to join the union, albeit most starkly only for the 6 month period between 1 July and 31 December 2007.
[26] The question then is whether that discrimination or prejudice was unfair or unjustifiable, and whether the (possibly temporary) advantaging of the non-union members was fair and justifiable in the circumstances.
[29] The present state of affairs therefore is different to one in which an employer, at the conclusion of negotiations and a power play with different bargaining agents, has conceded to a proposal introducing more favourable terms for one segment of its workforce at variance with those applicable to the others. Here we have to do with a disparity advantaging non-union members which was proposed, formulated and unilaterally implemented by the employer, justified somewhat vaguely, if not speciously, as a more efficient use of management resources, which efficiency it was curiously not prepared to enhance by similarly adjusting the wage cycle of the union members despite their willingness to sign up to the proposal. In such circumstances it is legitimate to infer that the employer was engaged in a tactic aimed at weakening the bargaining position of the union. If not calculated or designed to undermine the union as a bargaining agent, objectively it had the potential to do so. Non-members would in effect be discouraged to join the union and members indirectly induced to resign. Had members resigned to benefit from the increase awarded or perceived promise of more favourable treatment in the future, the union risked losing its representative status and the concomitant right to act as a bargaining agent in terms of the collective agreement. There is no onus on the union to prove that the employer acted intentionally. Anti-discrimination law is concerned with the effect of discriminatory conduct, irrespective of the intention or motive of the perpetrator.
[30] The employer’s conduct was therefore a form of anti-union discrimination as proscribed by section 5(2)(c) and section 5(3) of the LRA. I agree thus with the submission of counsel for the union that whatever gloss the employer may wish to place on what it chose to do and its reasons for doing so, and for why it was not willing to accommodate the union to adjust the annual wage cycle for union members, there is no getting away from the impact of its actions, which would have been self-evident, and that was to provide a strong inducement to non-union members not to exercise their right to join the union for the relevant six month period, or for union members to resign. The fact that the disadvantage or prejudice was ameliorated later does not detract from the harmful effects. The measurement of the impact of the discrimination must be made when the prejudicial or disadvantageous behaviour takes place. On 1 July 2007 and until 31 December 2007, the employer differentiated prejudicially between its employees on the basis of the rights they respectively chose to exercise in terms of the LRA to join or not join a trade union. It is no defence to argue, as the employer has sought to do, that the differentiation is based on bargaining unit membership, not union membership, when the applicable agreement defines the bargaining unit as synonymous with union membership. All the more the case, when the introduced differentiation was subject to the condition precedent that the non-union members were paid more on the express understanding that their monthly remuneration would revert to what it was before the increase if they chose to exercise their fundamental right to join the union during the six month period.
[31] The union does not seek unfairly to prevent the employer from liaising or negotiating with employees not represented by the union and thereby to impose the equivalent of a closed shop or agency shop without meeting the requirements of the Act. What it hopes to do is to prevent the employer from undermining its position as a sufficiently representative bargaining agent by resorting to unacceptable and unfair tactics aimed at prejudicing or disadvantaging its members.
[34] Lastly, there is no merit in the argument that an award of damages or compensation amounts to inappropriately re-writing the contractual bargain between the parties. The Labour Court’s power to redress discriminatory conduct contravening section 5 by an award of damages or compensation is derived from section 158(1)(a)(iii) of the LRA which confers upon it the power to make any appropriate order including an order directing the performance of any particular act which order, when implemented, will remedy a wrong and give effect to the primary objects of the LRA.
It is reliably understood that the employer has applied to the Supreme Court of Appeal for leave to appeal against the decision of the Labour Appeal Court.