The interpretation of the exception contained in section 76(1)(b) of the LRA.
“An employer who embarks on a lock-out may not, as a general rule, use replacement labour to perform the work of the locked-out employees. There is one exception: if the lock-out “is in response to a strike”.[1]
On 18 April 2023, the Constitutional Court (“CC”) has handed down an important judgment in the matter of NUMSA v Trenstar (Proprietary) Limited relating to the use of ‘replacement labour’ in respect of ‘lock-outs’ and ‘strikes’, as contemplated in section 76(1)(b) of the Labour Relations Act (“LRA”).
Brief Background
During late 2020, NUMSA gave notice to Trenstar that its members would embark on a strike following a failed conciliation in respect of a demand for the payment of a once-off gratuity to employees. The strike continued for some weeks until Trenstar was informed that the strike was to be suspended on Friday 20 November 2020, but that the employees had not waived their right to demand the once-off gratuity. Trenstar responded by informing the employees that Trenstar would be implementing a ‘lock out’ from Monday 23 November 2020 in alleged response to the strike action – thus relying on section 76(1)(b) of the LRA i.e. a defensive lock out.
The issue for determination by the CC was whether Trenstar was entitled to rely on the provisions of section 76(1)(b) of the LRA to justify the use of replacement labour, after receiving notification that the strike would be suspended.
The Law
Section 76(1) of the LRA holds that:
“(1) An employer may not take into employment any person—
(a) to continue or maintain production during a protected strike if the whole or a part of the employer’s service has been designated a maintenance service; or
(b) for the purpose of performing the work of an employee who is locked out, unless the lock-out is in response to a strike.”
Arguments by the parties
NUMSA contended that the right of an employer to engage replacement labour in response to a strike impacts negatively on the efficacy of the strike action and thus the employer’s right to rely on the exemption permitted by section 76(1)(b) to use replacement labour ends when the strike ends. NUMSA argued that should the employer be allowed to continue with the use of replacement labour once a strike has ended, but in circumstances where the employer has opted to ‘lock out’ employees in accordance with the provisions of the LRA, this would constitute an unfair advantage to employers.
Trenstar, on the other hand, focused on the distinction between a terminated and suspended strike, arguing that the lock out notice was issued whilst the strike was still underway, and that the strike may have been reinstituted at any time – being that it was just ‘suspended’. Trenstar’s argument was, therefore, that no lock-out in response to a strike would ever succeed, if NUMSA’s argument were to be accepted, because employees could simply suspend the strike action on receipt of the lock-out notice.
Analysis by the CC
In a unanimous judgment by the CC, the CC delved into many important issues relating to ‘strikes’ and ‘lock-outs’, as well as the use of replacement labour, in the context of section 76(1)(b).
As to the distinction between a ‘suspended’ or ‘terminated’ strike, the CC held that a strike, in whatever form, must meet the definitions of the LRA, and there must be a concerted withholding of labour for a specified purpose.
The CC found that the “fact the grievance or dispute underlying the prescribed purpose remains in existence does not mean that the strike has not come to an end; a demand unaccompanied by a concerted withdrawal of labour is not a “strike”. The CC further found that “a “strike’ is a state of affairs occurring with a particular purpose. It either exists or it does not. A “strike” ends, in the sense of no longer existing, when there is no longer a concerted withdrawal of labour”.
The CC went on to distinguish the importance between a “strike” and an “unconditional right to strike”, emphasizing that there is no strike until there is a concerted withholding of labour. During a period of suspension [of the strike], there is no ‘strike’, but an ‘unconditional right to strike’, exists. Given the facts of the case, the CC found that the strike effectively ended on Friday 20 November 2020 when the employees tendered their services to the employer. Consequently, the Court held that the employees’ absence from work the following Monday, 23 November 2020, was as a result of the ‘lock-out’, rather than the ‘strike’ – which had, for all intents and purposes, been suspended.
As to the interpretation of section 76(1)(b), the CC assessed the earlier Labour Court judgments of Sun International, Ntimane, and Technikon. The CC agreed with the Ntimane judgment that “if the lock-out was implemented because the employees went on strike, one could say that the lock-out was “in response to a strike”.[2] However, the CC went on to find that section 76(1)(b) was capable of more than one interpretation, and a “lock-out”, as defined by the LRA, is a “state of affairs occurring with a specific purpose”.[3] The CC found that in the context of section 76(1)(b), the question is whether the state of affairs is in response to a strike.[4] The right to use replacement labour, consequently, was dependent on whether, at the time such use of replacement labour is proposed, the exclusion of the workers from the workplace is an exclusion which is responding to a strike – suggesting that the strike should be underway at the time.[5]
The CC further considered “parallel lock-outs”, where the “lock-out” is a notional exclusion of the employees from the workplace, since the employees are already withholding their labour. Such notion was found not to be uncommon; and that a parallel lock-out is often used in situations where there is a partial withdrawal of the workforce, or where the strike action results in obstruction of work.
Ultimately, the CC found that employers who lock-out employees after a strike has ended, and those employees have tendered their services, are no longer locking-out the employees in response to the strike, but may be deemed to be akin to punishing the employees for exercising their right to strike.[6] Such employers would not be allowed to rely on the provisions of section 76(1)(b) to use replacement labour, by implementing a lock-out in response to the strike. Once a strike has, effectively, ended, employers cannot use the services of replacement labour through ‘locking out’ employees.
The employer’s right to rely on the exception as contained in section 76(1)(b) to implement a lock out and use replacement labour ends if the strike is no longer in effect.
[1] Paragraph 1, NUMSA v Trenstar (ZACC) 11 (2023).
[2] Paragraph 32.
[3] Paragraph 33.
[4] Paragraph 33.
[5] Paragraph 34.
[6] Paragraph 41.
Should you require any more information, please contact Bryan White at bryan@bv-inc.co.za