Obtaining a damages award against a financially distressed union
26 Jun 2015
The important factor to be determined is whether the effect of a particular award of compensation against a trade union is likely to seriously compromise its ability to function.
COURT’S DECISION
In Algoa Bus Company (Pty) Ltd v Transport Action Retail And General Workers Union (Thor Targwu) (P368/13) [2015] ZALCPE 31 (7 May 2015), the employer applied for compensation for economic loss sustained as a result of an unprotected strike embarked upon by the trade union and its members who are employed as drivers.
It was common cause that the employees had embarked upon an unprotected strike which commenced on 23 January 2013 and ended on 30 January 2013, even though the strike was interdicted on 25 January 2013. The employer therefore claimed for losses it sustained as a result of the strike.
In terms of section 68(1)(b) of the Labour Relations Act 66 of 1995, when a strike is not in compliance with the provisions of the LRA (i.e. it is unprotected), the Labour Court has jurisdiction “to order the payment of just and equitable compensation for any loss attributed to the strike”. In making such an order, the court must have regard to certain factors, including whether attempts were made to comply with the strike provisions in the LRA, whether the strike was premeditated, whether the strike was in response to unjustified conduct by the other party to the dispute, the duration of the strike as well as the financial position of the employer, trade union or employees.
In terms of the evidence before the court, the trade union had done little if anything to discourage its members from participating in the strike or to distance itself from the strike. The strike was not a spontaneous process and it was in response to legitimate and justified conduct on the part of the employer. Furthermore, the interdict against the strike was not adhered to, resulting in the strike lasting seven and a half days.
The trade union was in a poor financial condition. However, the court held that the fact that an award of compensation against the trade union might cause further financial damage is not in and of itself a reason for not granting relief. The important factor to be determined is whether the effect of a particular award of compensation against a trade union is likely to seriously compromise its ability to function, bearing in mind that it will usually have responsibilities to members in other workplaces whose rights ought not to be seriously compromised by the unlawful conduct of a section of the membership. This does not however, mean that a trade union can expect to be immune to the financial consequences of reckless conduct by its members or office bearers.
The court held that there was no credible evidence of how an award of compensation would affect the trade union’s collective bargaining capability. It weighed up various factors and concluded that even if it made allowances for the strikers’ actions until 25 January 2013 as being misguided and ill-informed, given the fact that the employees had defied a court order interdicting the strike, they should be liable for the full costs of the damages suffered for the remainder of the strike (i.e. from after the date upon which the interdict was granted). The court therefore ordered payment of damages based on the losses sustained over five of the seven and a half days of strike action.
IMPORTANCE OF THIS CASE
A trade union cannot be expected to be protected from the financial consequences of reckless conduct by its members or office bearers simply because of its poor financial situation.
The important factor to be determined is whether the effect of a particular award of compensation against a trade union is likely to seriously compromise its ability to function, bearing in mind that it will usually have responsibilities to members in other workplaces whose rights ought not to be seriously compromised by the unlawful conduct of a section of the membership. A trade union that takes little, if any, action subsequent to an interdict being granted against the unprotected strike action of its members must expect to face the risk of having to compensate the employer for the financial prejudice it suffered as a result of such strike action.
(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)