The test of reasonableness for secondary strikes

Donderdag, Augustus 30th, 2012
The test of reasonableness for secondary strikesJohanette Rheeder

Secondary strikes are used by employees of other employers to put pressure on the primary employer to accept the demand of the employees. However, its effect on the operations of the secondary employer cannot be denied. The question however is to what extend can it influence the primary strike?

A secondary strike is defined in section 213 of the Labour Relations Act as: ―

“a strike, or conduct in contemplation or furtherance of a strike, that is in support of a strike by other employees against their employer, but does not include a strike in pursuit of a demand that has been referred to a council if the striking employees, employed within the registered scope of the council, have a material interest in that demand.”

A secondary strike is therefore also a “strike”, as defined by the Labour Relations Act, section 66, and must comply with the requirements set out in the Act. The primary strike must also comply with the provisions of the Act, section 64 and 65, before the secondary strike will be protected.

In SALGA v SAMWU (2007) 16 LC 9.5.2[2007] JOL 20251 (LC) the court found that the Labour Relations Act 66 of 1995 permits secondary strikes but, in common with all forms of industrial action, the exercise of the right is not unlimited. The formulation of section 66(2) of the Act is such that participation in secondary strikes is prohibited unless all three conditions established by sub-paragraphs (a), (b) and (c) are met. These are firstly, the primary strike must be protected, secondly, seven days’ notice must have been given to the secondary employer; and thirdly, the nature and extent of the secondary strike must be reasonable in relation to the possible direct or indirect effect that the secondary strike may have on the business of the primary employer. This requires a two-fold test. Firstly, the requirement of reasonableness and secondly, the requirement of some direct or indirect effect on the business of the primary employer.

Although the first two requirements are procedural, the third requirement is substantive and depends of the facts of the matter. The court in SALGA found that this “reasonable requirement” is what lends secondary strikes their legitimacy. Without it, secondary strikes would become as John Grogan suggests, “mindless exercises of worker solidarity for the sake of nothing but worker solidarity” (see Grogan, “Collective Labour Law” (2007) Juta).

In the SALGA case, it was alleged that the withdrawal of labour in the local authority sector will have no direct or indirect effect on the business of national government. The deponent to the affidavit asserted that the effect of the proposed strike “will do no more than grossly inconvenience the members of the public”. In relation to the reasonableness requirement it alleged that the business of national government “is not dependent in any way on the functions carried out by local government” and further that “the source of the authority of local government is the constitution and not the national government”

The court found that this argument require only the existence of some nexus or link between the primary and secondary employer based on a relationship of dependence between them (called the “ally or associated employer” doctrine).This the court found, misconstrues the test that is established by section 66(2)(c). This argument ignores the emphasis placed by section 66 on the effect the secondary strike has on the business of the primary employer. The test therefore goes further than just some link between the two employers. The court found that this is not to say that some relationship or nexus between the primary and secondary employer is not a requirement, indeed it is difficult to conceive how a secondary strike could have a direct or indirect effect on the primary employer’s business without some relationship of sorts between the two employers. The court found that the correct approach as adopted by section 66(2) is to require the harm caused to the secondary employer to be proportional to its impact or likely impact on the business of the primary employer.

The court disagreed with the approach which disregards the proportionate effect on the secondary employer and found that an assessment of the nature and extent of the secondary strike clearly contemplates that its impact on the business of the secondary employer is a fundamental factor, and that an assessment of that impact is required.

In short, the court found that whether or not a secondary strike is protected is determined by weighing up two factors – the reasonableness of the nature and extent of the secondary strike (this is an enquiry into the effect of the strike on the secondary employer and will require consideration, inter alia, of the duration and form of the strike, the number of employees involved, their conduct, the magnitude of the strike’s impact on the secondary employer and the sector in which it occurs) and secondly, the effect of the secondary strike on the business of the primary employer, which is in essence an enquiry into the extent of the pressure that is placed on the primary employer. The court further found:

“It seems to me that underlying this requirement is the notion that the secondary action must have some impact on the bargaining process underway between the employer and the trade unions engaged in the primary strike. I do not mean to suggest that the secondary employer must necessarily and consequent on secondary strike action be capable of immediately and directly placing pressure on the primary employer, but since the bargaining process turns on the exercise of power, there ought to be some sense at least in which the secondary strike will affect the economic power or position of the primary employer.

In the present instance…… the system of co-operative government established by the Constitution is a relevant consideration in determining the possible direct or indirect effect of the proposed secondary strike on the business of national and provincial government. The imperative of co-operation between the three tiers of government is entrenched in a number of respects…..Given the integrated, co-ordinated and co-operative structure of government as a whole, it is entirely possible that the withdrawal of municipal services will have at least an indirect, if not a direct effect on the business of those higher levels of government engaged in the primary strike, and will thus place pressure on them in the national bargaining process currently underway.”

In the more recent case of Clidet No 957 (Pty) Ltd v SAMWU & others (2010) 19 LC 9.5.4 and [2011] 3 BLLR 225 (LC), the Court noted that establishing whether secondary strikes are permissible entails inquiries, firstly, into their effect on the secondary employer, having regard to the duration and form of the secondary strike, the number of employees involved, their conduct, the magnitude of the strike’ s impact on the secondary employer and the sector in which they occur and, secondly, into the likely effect of the secondary strike on the primary employer’s business. In the present case, the primary and secondary employers provided different services to an enterprise managed by a third party. While they shared a connection through the stations provided by the Bus Rapid Transport System, it was difficult to conceive how one service provider could exercise pressure on the other.

The Court noted further that the union intended to call for a complete and indefinite withdrawal of labour from the second employer, which would result in losses of about R200 000 a day. On the other hand, the only effect the secondary strike would have on the primary employer would be to inconvenience commuters.

The court confirmed the principles of SALGA v SAMWU (2007) 28 ILJ 2603 (LC) [also reported at [2008] 1 BLLR 66 (LC) and found that in the present instance, the two businesses represented by the primary and secondary employer are both service providers to an enterprise managed ultimately by a third party. MTC manages the bus stations and the applicant (secondary employer) operates the busses, ultimately for the benefit of the City. In one sense, the two entities share a connection – the stations exist to serve the busses, and the busses could not operate effectively without the stations. But that is not the test. The legitimacy (or otherwise) of the secondary strike must be determined by determining the nature and extent of the proposed secondary strike, and weighing that against the harm that will be caused to the business of the primary employer. This approach is obviously better suited to employers that stand in a relationship of customer and supplier, or who enjoy a connection by way of a common shareholding or some other nexus that bears on the capacity of the secondary employer to place pressure on the primary employer to resolve its dispute with the union.

Where both employers, the court found, as they are in the present instance, simply provide services for the benefit of a common client, it is difficult to appreciate how, ordinarily; the one is in a position to influence the other and how this will apply pressure to the client?

Furthermore, in this case, in regard to the nature and extent of the proposed secondary strike, the union appears to have called for a complete withdrawal of labour, for an indefinite period. The effect on the strike on the applicant’s business is likely therefore to be significant. The applicant generates revenue on the basis of kilometres travelled by the buses it operates – if the buses do not operate, it generates no revenue, and the uncontested evidence is that it will incur losses of some R200 000 per day. On the other hand, the primary employer will be marginally affected (if at all) by the proposed secondary strike. In these circumstances, the court failed to appreciate what pressure will be placed on the business of MTC should the secondary action proceed. The only significant effect that the strike will have is the inconvenience to the thousands of commuters who rely on the applicant for their daily transport. They will be inconvenienced no doubt by the primary strike given the absence of cashiers and the like, but the effect of the secondary strike will be to deny them access to the transport on which they ordinarily rely. But the question here is not the extent of any inconvenience to commuters rather than whether on the test established by section 66, the applicant can be said to be reasonably capable of exerting pressure on MTC to meet the union’s demand that its employees should be permanently employed. For the above reasons, in the court’s view, that question must be answered in the negative.

(Author: Mrs. Johanette Rheeder: JR Attorneys)

johanette@jrattorneys.co.za

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