South Africa: Damage During A Strike - Can Employers Get Their Money Back?

Last Updated: 12 October 2011
Article by Stuart Harrison

Most Read Contributor in South Africa, September 2018

National and regional strike action this year has seen an unfortunately high incidence of violent conduct by strikers causing damage to property and physical harm. This abuse of the legitimate right to strike has resulted in renewed calls for legislation to be changed to provide innocent employers who are the victims of such behaviour, with proper legal protection and remedies. However, legislative change in this area is likely to be a long time coming, if it ever comes at all. So, what are the existing remedies available to employers who suffer such conduct?

Conduct during a protected strike

Striking employees and unions engaged in a protected strike are immunised from civil claims for damages courtesy of sections 67(2) to (6) of the Labour Relations Act, which provides amongst other things, that a protected strike and conduct in furtherance thereof is not a delict or a breach of contract and civil proceedings may not be instituted against participants because of the participation therein.

This immunity does not apply, however, to conduct during a protected strike that constitutes an offence. Strikers who participate in a rampage through the employer's premises and damage equipment, warehoused goods, furniture or offices as they go along (unfortunately an all-too-common occurrence in protected strikes these days), commit offences and such conduct does not enjoy protection. Apart from seeking urgent orders from the Labour Court interdicting such behaviour and laying complaints of criminal conduct with the South African Police Service (SAPS), those involved can be held civilly liable for losses suffered by the employer in this regard. The employer can institute civil claims against the culprits to recover contractual or delictual damages. The problem, of course, is that the strikers will often not be able – due to a lack of means - to pay any meaningful contribution towards the usually substantial losses suffered. Obtaining civil judgments against offending strikers is therfore usually more of a symbolic exercise than one which is aimed at securing real recompense for the employer. And, holding the union liable is often difficult as there may not be any evidence that the union itself (through its officials) instigated, encouraged or participated in the unlawful behaviour.

Unprotected strikes and conduct in furtherance thereof

The position is the same in relation to such behaviour during an unprotected strike, save that there is an additional statutory remedy available to employers, provided for under section 68 of the Labour Relations Act, for them to recover losses they suffer as a consequence of an unprotected strike or conduct in the furtherance or contemplation thereof. The remedy in question is just and equitable statutory compensation for any loss attributable to the unprotected strike or conduct. Three key requirements must first be satisfied in order to be able to make a claim under section 68, namely (a) the strike in question must be unprotected; (b) the employer must establish that it has sustained a loss in consequence of the unprotected strike; and (c) it must be demonstrated that the union (where liability is sought to be attached to the union, as opposed to the individual strikers) participated in the unprotected strike or committed acts in contemplation or in furtherance thereof. It is possible that either the trade union or its members involved in the unprotected strike/conduct or both can be held liable for compensation awarded under section 68. Employees can be liable because they participated in the unprotected strike and are, to that extent, the direct cause of the losses suffered by the employer. The trade union can be liable if it called for a strike that is unprotected and which leads to the employer suffering losses.

Assuming the three requirements mentioned above can be met, that is not unfortunately all that is required. Section 68(1)(b) also then requires the court to consider various factors spelt out in section 68(1)(b)(i) to (iv), all of which bear on the question of whether compensation should be awarded even though the three previously mentioned requirements have been met. The factors that are taken into account in this regard are:

  • Whether attempts were made to comply with the provisions of the Act (in relation to the requirements for a protected strike) and the extent of those attempts;
  • Whether the strike or conduct in furtherance thereof was pre-meditated;
  • Whether the strike or conduct in furtherance thereof was in response to unjustified conduct by another party to the dispute;
  • Whether there was compliance with any order of the Labour Court interdicting the strike;
  • The interests of orderly collective bargaining;
  • The duration of the strike or conduct in furtherance thereof; and
  • The financial position of the employer, trade union or employees respectively.

The Labour Court takes into account the above factors in deciding whether it would be just and equitable (i.e. fair) for compensation to be awarded and, if so, what the fair quantum thereof should be. The Court exercises a discretion in this regard and does not simply apply a mechanical calculation of losses actually suffered.

There are very few reported cases of employers pursuing this statutory remedy and in all those cases, the quantum of the compensation that the court has awarded has been low relative to the losses suffered. In Mangaung Municipality v SAMWU [2003] JOL 10582 (LC), the employer had sued for losses of approximately R270 000 but the court discounted part of these losses for technical reasons and ultimately only awarded the employer an amount of R25 000 as compensation. In Rustenburg Platinum Mines Ltd v Mouthpiece Workers Union [2002] 1 BLLR 84 (LC), the employer started out by seeking damages of approximately R15 million in respect of an unprotected strike but, by the end of the trial and before judgment was given, the employer (for reasons that are not disclosed in the judgment) limited its claim to only R100 000. The court ultimately ordered that this R100 000 should be paid by the union to the employer in instalments of R5 000 per month (the judge did say, however, that "fell well within the upper limit of what I would have considered fair in all the circumstances"). The only other reported matter in which an award of compensation has been made is in the matter of Algoa Bus Company v SATAWU & Others [2010] 2 BLLR 149 (LC) in which the employer sought an award of R465 000 but was awarded only R100 000 (the court appears to have been influenced by the fact that the strike only lasted 16 hours and not for 2 days as had been claimed by the employer). The court also ordered that the R100 000 must be repaid in instalments of R50 per month! Having regard to this sort of reduced level of compensation award and the likely high cost of litigating such matters, it is little wonder that not many employers have pursued relief under this remedy.

Given the prospect of a reduced quantum of compensation award under a section 68 statutory claim, consideration could be given to pursuing a civil, delictual claim. In the ordinary course, a person who has been subjected to a civil wrong (known as a delict) by another, has a claim under the common law against the wrongdoer for damages, which are calculated to be the amount required to place the innocent party in the position it would have been had the delict not been committed. The computation of damages in this regard would not suffer from the same problems of the consideration of the 'just and equitable' factors as arise in a section 68 claim. Such a claim would usually be pursued in the common law courts (i.e. the High Court). However, there appears to be no reported case of such a claim by an employer succeeding since section 68(1)(b) has been applicable. Section 68(1) also reserves for the Labour Court exclusive jurisdiction to order payment for any loss incurred as a result of an unprotected strike or conduct in furtherance thereof, and a defendant union may try and argue that this means that the only claim that is possible is a section 68(1)(b) claim, to the exclusion of a delictual claim in the common law courts.

Employers are therefore left in a highly unsatisfactory position in relation to obtaining real recompense for the losses they suffer from unlawful conduct relating to a strike. Obtaining urgent interdictory relief to put a stop to ongoing damage remains the best remedy to limit losses but, in respect of losses that are already suffered, it seems employers will have a hard row to hoe in recovering anything meaningful unless the Labour Court takes a harder line with section 68 compensation awards against the wrongdoers or delictual claims are pursued successfully, or there is legislative change.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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