Dismissed within a day: The Ahlesa Blanket lesson

Ahlesa Blankets manufactures blankets in an industry that has a pronounced cyclical slowdown during May to September each year. The Main Collective Agreement for the Textile Industry specifically allows for the introduction of short time.

In June 2008, Ahlesa decided to implement short time at its Atlantis factory by dividing its workforce in the dye house, spinning and weaving departments into two groups, so that one half of the workforce would work for two weeks while the other half of the workforce would take two weeks' leave, after which those working would be replaced by those on leave for two weeks. The individual employees could elect to take the two weeks as paid, in lieu of paid annual leave at yearend, or to take one week as paid leave, or two weeks' unpaid leave, with the unpaid portion, as the case may be, to be paid to them in December. Ahlesa had adopted the same short-time approach in 2006 and 2007, and did so again in 2009.

The first half of the workforce was due to commence its two working weeks on Tuesday, June 17 2008 at 0700, but instead the employees scheduled to work the morning shift (0700 - 1500) congregated in the canteen and refused to do any work. A union official, Mr de Bruyn, was contacted and invited to attend at Ahlesa's factory.

Back to work, or...

De Bruyn arrived at the factory and was advised by Ahlesa's human resources manager, Mr Buckle, that the employees were engaged in an unprotected strike. Buckle issued an ultimatum to the employees to return to work by 0945, failing which Ahlesa may take the necessary disciplinary action, which may lead to the employees' dismissal. The employees were unhappy about the implementation of two weeks' short time and proposed that the short time be reduced to two days only. Despite De Bruyn's intervention, employees refused to comply with the ultimatum.

A second ultimatum was issued to the employees demanding that they return to work by no later than 1345, failing which they would be summarily dismissed. This ultimatum was also ignored and at about 1500 a further ultimatum was issued demanding that employees return to work by 1600. At 1500, it was also the shift change-over from the morning shift to the afternoon shift (1500 - 2300). The afternoon shift walked straight to the canteen and joined the morning shift in the canteen.

At about 1700, the morning-shift employees and the majority of the afternoon-shift employees left Ahlesa's factory without having done any work on 17 June. Some, however, did return to their workstations and start the afternoon shift. At the beginning of the night shift (2300 - 0700), only one of six employees scheduled to work actually arrived at the premises. No ultimatums were issued to the night shift as no striking employees had arrived.

Work stoppage in sympathy

During the events of 17 June 2008, certain employees of departments other than the dye house and spinning and weaving, and who were not placed on short time, also embarked on a work stoppage in sympathy with their co-employees, but they did not couple a demand with their work stoppage.

On 18 June 2008, Ahlesa wrote a letter to the union confirming the dismissals of all striking employees and inviting the union to lodge appeals by no later than 20 June 2008 should it intend to challenge the dismissals. Later, certain employees who were placed on the two weeks' short time from 17 June 2008 onwards, but who did not return from such short time and who failed to provide any explanation for their absence, were also dismissed. The appeals were not successful and the union referred the employees' dismissals to the Labour Court, challenging both the substantive and procedural fairness of the dismissals.

On 19 March 2010, the Labour Court found that the dismissals of the morning and afternoon shifts were procedurally fair, but substantively unfair, while the dismissal of the night shift was both procedurally and substantively unfair. All the employees were reinstated, without loss of benefits, with effect from 1 December 2009. In the Labour Court's reasoning, the strike was of short duration and occurred in circumstances where Ahlesa's business was slack and which therefore did not justify the harsh and disproportionate decision to dismiss the employees. Furthermore, the court reasoned that the fact that the strike was not accompanied by any violence mitigated the misconduct.

Appeal

Ahlesa appealed the Labour Court's decision on the basis that it was wrong for the Labour Court to have found the dismissals to be substantively unfair where the employees' conduct forming the basis for their dismissals amounted to a clear challenge to Ahlesa's authority, namely the employees' refusal to comply with the ultimatums and return to work. (It should be said that Ahlesa had obvious difficulties in defending the night-shift dismissals on this basis.)

Somewhat interestingly, the LAC held that Section 68(5) of the Labour Relations Act, 1995 (the LRA), which reads: "participation in a strike that does not comply with the provisions of this chapter ... may constitute a fair reason for dismissal ... in determining whether or not the dismissal is fair, the Code of Good Practice: Dismissal in Schedule 8 must be taken into account", gives rise for the need to take into account both Items 6(1) and (2), entitled "Dismissals and industrial action" and Item 7, entitled "Guidelines in cases of dismissal for misconduct", particularly Item 7(b) (iv) - "whether or not dismissal was an appropriate sanction for contravention of the rule or standard".

The determination of the fairness of strike dismissals must therefore take place in a two-stage approach - firstly, under Item 6 when the strike-related enquiry takes place, and secondly, under Item 7 when the appropriateness of dismissal is considered.

The LAC upheld the Labour Court decision, finding that, by reason of the short duration of the strike, the absence of violence and the slackness of Ahlesa's trade at the time in question, the dismissals were substantively unfair. The appeal was dismissed and the Labour Court's order of retrospective reinstatement therefore stands.

An order of retrospective reinstatement (i.e. with backpay), such as occurred in the Ahlesa Blankets case, can have a devastating financial and industrial relations impact on a business. An employer's response to unprotected strike action should be rational and measured. There should not be an overhasty decision to dismiss unprotected strikers, no matter how emotional the situation may become.

*Alexander Rocher is a director, and Carmen Abboy an associate, in ENS's Employment department.

An order of retrospective reinstatement can have a devastating financial and industrial relations impact on a business

Source: The Times via I-Net Bridge