Don’t be a sell-out, but working during strike action could be a bonus

Don’t be a sell-out, but working during strike action could be a bonus
18 Apr 2019

Most employers are familiar with the principle of “no work, no pay” in the context of strike action, but what about the concept of “work, pay, extra pay”? Can employers incentivise or reward non-striking employees who pick up the slack? This question was recently considered by the Labour Court in National Union of Mineworkers obo Members v Cullinan Diamond Mine A Division of Petra Diamond (Pty) Ltd.

In 2013, the Cullinan Diamond Mine (the “Company”) and the National Union of Mineworkers (“NUM”) were engaged in wage negotiations. The negotiations deadlocked and NUM called its members on a protected strike. In an attempt to avert the looming strike, the Company advised the employees that the annual performance bonus (which was linked to the Company’s production over the year) may be lost as a result of the impact of the strike on production. Not deterred by this possibility, NUM’s members nevertheless downed tools and went on strike. Ultimately, the annual performance bonus was not paid to any of the employees. However, during the strike, 38% of the workforce attended production in the normal course and were able to achieve 52% of the carat production. This was considered to be exceptional production and the Company took a decision to reward the non-strikers for the “exceptional work” that they had performed.

Aggrieved by this, NUM held the view that the exceptional performance bonus was in fact a contrived annual performance bonus, which was not paid to its members as a result of their participation in the strike. NUM challenged the payment of the exceptional performance bonus on two grounds:

  • firstly, that the bonus contravened section 5 of the Labour Relations Act, 1995 (“LRA”), which prohibits discrimination against any employee for exercising a right conferred by the LRA; and
  • secondly, that the Company unfairly discriminated against those employees who participated in the strike in terms of section 6 of the Employment Equity Act, 1998 (“EEA”), which prohibits unfair discrimination.

Section 5 of the LRA: Was the payment made in exchange for the right to strike?

Dealing with the first challenge, the Labour Court noted that the thrust of section 5 of the LRA is to protect employees from discrimination, victimisation and prejudice for exercising a right under the LRA. The section prohibits the conduct of differentiating for irrational, improper or illegitimate motives. A causal link needs to exist between the discrimination or prejudice and the exercise of a right in terms of the LRA for the section to be infringed.

For example, if the reason for differentiation was because of the employees’ participation in the strike, then section 5 would be infringed. In crystallising the question before it, the court considered two significant judgments: FAWU v Pets Products and NUM v Namakwa Sands, a division of Anglo Operations Limited.

In FAWU v Pets Products, the Labour Court found that the payment of a ZAR200 voucher to non-striking employees for the hard work that they performed during a strike was in contravention of section 5 of the LRA. Particularly, the court found that the non-strikers were paid a benefit or a reward of ZAR200 “in exchange” for them not having exercised their right to strike conferred by the LRA. Similarly, in NUM v Namakwa Sands, a division of Anglo Operations Limited, the Labour Court found that conduct of paying non-striking employees ZAR300 redeployment allowances, the provision of free meals and the excessive overtime worked, fell afoul of the provisions of section 5 of the LRA.

In this regard, the Labour Court concluded that it would be impermissible to simply pay the non-striking employees ex gratia bonuses in exchange for them not participating in the strike. However, if the payment was not in exchange for not exercising the right and was linked to some other legitimate reason, section 5 would not be infringed. The court emphasised that the mischief sought to be avoided is one of the employees “selling” their rights.

The Labour Court found that NUM had failed to show a casual link between the payment of the exceptional performance bonus and the participation in the strike. There was also no evidence to substantiate the allegation that the exceptional performance bonus was actually the annual performance bonus in a disguise. In coming to its conclusion, the court deviated from the reasoning set out in the Pets Products and Namakwa Sands. It reasoned that just because certain employees were participating in a strike, it does not follow that if an employee decides not to exercise this right (on his own without being coerced by the employer), then the employee should be denied contractual benefits.

Under the circumstances, the Labour Court found that NUM’s members were not discriminated against or prejudiced by the non-payment of the exceptional performance bonus and that therefore, the Company had not infringed section 5 of the LRA. It appears from this that the court linked the timing of the payment to the payment’s ability to offend section 5. Had the payment been offered to the non-striking employees prior to or during the strike, this may have resulted in the court coming to a different conclusion as it may have affected the employees’ decision to exercise the right to strike.

Section 6 of the EEA: Did the employer discriminate against the striking workers?

Turning to the allegation that the payment of the exceptional performance bonus unfairly discriminated against NUM’s members in terms of section 6 of the EEA, the Labour Court held that participating in a strike is not a ground listed in the EEA, nor could it be considered analogous to grounds such as race, gender and age. NUM failed to prove that the payment of the bonus was not rational and the Labour Court, accordingly, held that the non-payment of the exceptional performance bonus did not impair the dignity of the members. NUM’s claim was accordingly dismissed.

While this decision is authority for the proposition that an employer can reward non-striking employees for the effort that they put in during a strike to keep the business operations going, it should not be seen as granting employers a licence to pay employees for not participating in a strike. Such conduct would be likely to be found to be in contravention of section 5 of the LRA.

See also:

(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.)

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