REPORTABLE

THE SUPREME COURT OF APPEAL

OF SOUTH AFRICA

Case No. 234/96

In the matter between:

W G DAVEY (PTY) LTD
Appellant

and

NATIONAL UNION OF METALWORKERS
OF SOUTH AFRICA
Respondent

Coram:

SMALBERGER, HOWIE, OLIVIER, SCHUTZ
JJA  and MELUNSKY AJA
Heard:

1   MARCH 1999
Delivered:
26 MARCH 1999

Unfair labour practice - dismissal of striking employees after
ultimatum - employer failing to take into account new facts arising
after ultimatum - dismissals unfair.

JUDGMENT

MELUNSKY AJA/

MELUNSKY AJA:
[1] 
The appellant is a company carrying on business as a
manufacturer in the engineering field.  The respondent is the National
Union of Metalworkers of South Africa ("NUMSA"), a trade union
registered under the Labour Relations Act 28 of 1956 ("the LRA").  This
appeal concerns the appellant's dismissal of nineteen employees during
August 1992 following their participation in a national strike in the steel
and engineering industry and their failure to comply strictly with the
appellant's ultimatum that they return to work or face dismissal.  All of
the employees were members of NUMSA.  In terms of s 46(9) of the
LRA, NUMSA, on its own behalf and on behalf of the dismissed
employees, applied to the industrial court for an order declaring that the
dismissals constituted an unfair labour practice,  payment of
compensation to the employees and their reinstatement.  The application

was opposed by the appellant.  After a lengthy hearing the court
determined that the dismissals did not constitute an unfair labour
practice.  The determination was reversed on appeal to the Labour
Appeal Court ("the LAC") on 6 December 1995.  It was the unanimous
view of the LAC (Nugent J and assessors) that the dismissals constituted
an unfair labour practice.  That court accordingly set aside the industrial
court's determination, ordered the appellant to reinstate the dismissed
employees with effect from 29 January 1996 (subject to certain
conditions) and directed it to pay each dismissed worker as compensation
an amount equivalent to his weekly wage at the date of his dismissal
multiplied by twenty-six.
[2] 
This appeal is one of a number of cases to come before the
courts as a result of the August 1992 national strike.  The strike followed
the collapse of annual wage negotiations which commenced at the

National Industrial Council for the Iron, Steel, Engineering and
Metallurgical Industries, a national collective bargaining forum.  The
parties to the negotiations included NUMSA, other trade unions and the
Steel and Engineering Industries Federation of South Africa ("SEIFSA"),
a body representing various employers' organisations.  The appellant is a
member of an employers' organisation which in turn was represented by
SEIFSA at the negotiations.  On 14 May 1992 deadlock was arrived at
between the trade union parties to the Industrial Council, including
NUMSA, and the employer organisations, represented by SEIFSA,
concerning the terms and conditions of employment in the industry.  The
dispute was referred to the Industrial Council but it remained unresolved.
[3] 
As a result NUMSA, through a committee known as the
National Strike Committee ("NSC"), called for a national strike of all of
its members after holding a strike ballot.  The strike commenced on 3

August 1992.  Twenty-five of the appellant's hourly-paid employees, all
members of NUMSA, joined the strike during the afternoon of 19
August.  On 25 August, and pursuant to an application brought by
SEIFSA and other applicants in the Supreme Court (Transvaal Provincial
Division), Myburgh J held that it had been prima facie established that a
number of irregularities had occurred in the holding of the strike ballot
and that the provisions of ss 65(2)(b) and 8(6)(b) of the LRA had not
been complied with.  As a result he issued an interim interdict restraining
NUMSA from calling for or taking part in the strike (Steel and
Engineering Industries Federation and Others v National Union of
Metalworkers of South Africa (2) 1993(4) SA 196 (T) ).
[4] 
On 26 August the appellant distributed a memorandum to its
striking workers calling upon them to return to work by 7 am on 28

August, failing which their services would be terminated.  On the
following day it fixed a notice headed "Final Ultimatum" to its main gate
requiring the striking employees to return to "normal working by 7 am,
Friday 28 August 1992".  The employees were advised, in terms of the
ultimatum, that those workers who failed to comply would be summarily
dismissed.  Only twelve striking workers arrived at work by the
stipulated time on 28 August.  The appellant considered that the
remaining thirteen employees had been dismissed and one of  those who
arrived at about 8.30 or 9 am, Mr Amon Madi, was so informed by the
appellant's factory manager, Mr Alastair Ian Wildman ("A I Wildman").
The employees who had returned to work asked A I Wildman whether
two of their number would be permitted to attend a meeting that was due
to be held later that day at Hunter's Field Stadium.  The purpose of the
meeting was to obtain advice and consider a recommendation of the NSC

that the strike be called off and that all striking workers resume
employment on Monday 31 August.  Wildman refused permission for
any of the employees to go to the meeting but six of them decided to
attend and they did so.  They, too, were regarded by the appellant as
having been dismissed.  On 31 August all of the employees reported for
work but the nineteen who did not work on the previous Friday were
informed that they had been dismissed.  This resulted in the proceedings
in the industrial court and the subsequent appeal to the LAC.  The main
question for consideration  in this appeal is whether the dismissals
constituted an unfair labour practice. A secondary issue, raised in the
appellant's heads of argument, was whether the order for reinstatement
was appropriate and equitable.
[5] 
Before dealing with counsels' submissions it is desirable to
have regard to certain factors that had a bearing on the LAC's judgment.

The first concerns the strike.  Counsel for the respondent did not question
the correctness of the judgment of Myburgh J.  For his part, counsel for
the appellant did not challenge the LAC's finding that the striking
workers bona fide believed the strike to be lawful until they were made
aware of Myburgh J's decision on or shortly after 25August.
[6] 
A second matter that should be mentioned concerns two
telephone calls that Mr Lucky Skosana, the local NUMSA branch
chairman, made to A I Wildman.  Two of the striking workers, Mr Jack
Ngozo and Mr Paulus Mbango, consulted Skosana on the morning of 27
August in connection with the appellant's memorandum of the previous
day.  Skosana telephoned A I Wildman in the morning and again in the
afternoon of 27 August with a view to obtaining an extension of the
deadline for the employees' return to work until Monday 31 August.

Skosana was not available to give evidence but Ngoza was in his
presence when both telephone calls were made and he testified about
Skosana's requests and Wildman's responses as conveyed to him by
Skosana.  There are disputes between Ngoza and Wildman as to what
was said on each occasion.  All of these were not resolved by the LAC
but the industrial court dealt with the conflicting versions on the basis
that NUMSA had an "evidentiary burden" to establish its version of the
disputed issues on a balance of probabilities.  It is not necessary, in the
circumstances of this case, to consider whether the industrial court's
approach was the correct one.  Nor is it necessary to attempt to resolve
all of the matters in dispute.   What is significant is the findings made by
the LAC, which are generally binding on this Court - see National Union
of Metalworkers of South Africa v Vetsak Co-operative Limited and
Others 1996(4) SA 577 (A) at 583I-584A.  One of these findings was

that A I Wildman refused to extend the deadline to 31 August without
asking the reason for the request.  A further factual finding was that
during the course of the second telephone conversation Skosana said that
the workers would return to work the following morning (28 August) but
asked that at least some of them be allowed to attend the meeting at
Hunter's Field Stadium to consider the recommendation of the NSC.
Wildman responded that Skosana's request would be discussed when
they returned.
[7] 
NUMSA's response to the interdict issued by Myburgh J is
not in dispute.  A meeting of the NSC had previously been arranged for
Thursday 27 August.  After NUMSA received the news of the interdict
during the afternoon of Tuesday 25 August, consideration was given to
advancing the NSC meeting to the following day but it was decided that
it was not practical to do so.  At the meeting of 27 August the NSC

decided to recommend to NUMSA members that they return to work on
Monday 31 August.  The recommendations of the NSC were debated and
adopted by local NUMSA structures on Friday 28 August and
subsequent days.  This led to approximately 80 000 to a 100 000 workers
returning to their employment on 31 August and all, save for about 2
000, including the nineteen employees of the appellant, were accepted
back by their employers.
[8] 
It is clear from the evidence of A I Wildman and his brother
Mr Nigel Wildman (the appellant's managing director) that the appellant
had decided to dismiss all workers who did not strictly comply with the
ultimatum, a decision that was taken even before the ultimatum was
issued.  What is more the appellant was not prepared to accept any
excuse for non-compliance on the part of its employees or to consider
any extension of the deadline.  Indeed, according to A I Wildman's

evidence (which was accepted on this point by the LAC), he refused
Skosana's request for an extension out of hand and without knowing why
it was required.
[9] 
What was the appellant's motivation in adopting such an
uncompromising stand?  The reasons given for the appellant's refusal to
extend the date fixed for the return are similar to those given for its
refusal to accept the employees back on 31 August, namely, that the
workers went on strike without notice, that they defied the court's order
which declared the strike to be illegal, that the employees were therefore
unreliable and that the appellant wanted a "disciplined" and not an
unreliable workforce.  Nigel Wildman put it in the following terms:
"I decided that I wanted to have a stable reliable workforce.  These
people had gone on strike without notifying anybody about it as
to why.  They had given us no forewarning.  They defied the
Supreme Court order.  They defied our memorandums and
ultimatums to them.  A deadline to me is a deadline and I had

given more than fair warning and I thought that in the event that
they don't comply with this deadline, then I am going to seek out a
reliable workforce. In the longer term, it will - it would be a better
bet for the company."

When asked in what sense were the striking workers not a reliable and
stable workforce, Nigel Wildman responded:
"Well, they were on strike when they should have been back at
work."

[10] There is no doubt  that the appellant was severely affected
by the strike.  There was a recession in the industry at the time.  Even
before the strike the appellant was having difficulty in obtaining orders
and it  had been obliged to adopt various measures to ensure its
continued viability.  It was a comparatively small company and
production came to a virtual standstill with the strike of twenty-six of its
thirty-three hourly- paid workers.  The manner in which it conducted
business, which was not to retain large stocks on hand, rendered it

particularly vulnerable to strikes.  The result was that it lost orders and
was unable to complete a large contract timeously which led to the loss
of a valuable customer.  In order to overcome the difficulties, it
commenced employing casual workers to replace the strikers during the
week commencing 24 August.  In all it eventually engaged about ten
other workers who, in due course, replaced the striking employees as a
permanent work force.  The replacement workers were, however,
inexperienced and unskilled and it was only after about three weeks of
training that they were able to perform work to the same standard as that
previously performed by the dismissed employees.
[11] The approach to be adopted by this Court in dealing with an
appeal from a labour appeal court is to determine whether, on the facts
found by it, the court a quo made the correct decision and order (see

Slagment (Pty) Ltd v Building, Construction and Allied Workers' Union
1995(1) SA 742 (A) at 751I-J).  With that in mind I turn to consider the
rationale behind the LAC's decision and order.  That court held that the
illegality of the strike was, in the circumstances of this case, not a factor
of great significance as the employees concerned believed that all the
correct procedures had been followed and that the strike was not
prohibited.  Although the position changed after Myburgh J's ruling, the
LAC considered that "any reasonable employer in this country" would
have appreciated that his employees would look to their union for
guidance on the implications of the court order before returning to work
and that this is precisely what occurred in the instant case. Therefore the
appellant should not necessarily have expected an immediate return to
work.  The LAC assumed, however, that while the appellant might have
been justified in issuing the ultimatum when it did, it was not justified in

adopting an inflexible attitude thereafter; that it should have been aware
that Skosana sought to extend the deadline to enable employees to
consider whether to heed the recommendation to return to work; and that
the meeting at Hunter's Field Stadium on Friday 28 August had been
called for that purpose.  In the result, the LAC held that the appellant
should have awaited the outcome of the meeting before implementing the
ultimatum.  On that ground the dismissals constituted an unfair labour
practice.
[12] In this Court counsel for the appellant accepted that the
fairness of the ultimatum and the fairness of the dismissal had to be
judged separately.  As far as the former was concerned, he argued that
the appellant was justified in requiring the employees to return to work
on 28 August having regard to the appellant's desperate financial plight,
the sudden withdrawal of labour by the strikers and the fact that the

strike had been declared illegal.  On the facts of this case these arguments
may not be as compelling as they appear to be, viewed in the light of a
nation-wide strike, ongoing contact between NUMSA and SEIFSA and
the prospect, after Myburgh J's judgment, that NUMSA might try to
oversee an orderly return to work within a reasonable time.  Nevertheless
I will assume, as the LAC did, that the ultimatum was fair at the time
when it was issued.  It should be added that there is no suggestion that
the ultimatum was not understood or that it did not come to the attention
of the employees concerned.  Nor did NUMSA contend that the
employees had insufficient time to consider the implications of the
ultimatum or to comply with its terms.
[13] The crucial question is whether the dismissals pursuant to a
fair ultimatum were also fair.  In the Vetsak case, Smalberger JA
observed at 589D:

"In my view, it would be unwise and undesirable to lay down, or
to attempt to lay down, any universally applicable test for deciding
what is fair."

Fairness is indeed an elusive concept in the context in which it is used in
unfair dismissal cases: but conduct that is unfair can often be recognised
when it is sought to apply the concept to the facts of the case.  On the
appellant's behalf it was submitted that the test of fairness had to be
judged in relation to the employees' failure to comply with the ultimatum
and that the LAC had erred in focussing the enquiry on whether the
appellant should have extended the ultimatum to 31 August.  This
submission seems to lose sight of the need to consider fairness from the
viewpoint of both parties to a dispute, a matter which is fundamental in
seeking to achieve one of the objectives of the LRA - the preservation of
labour peace (see the Vetsak case at 593G-I).
[14] The appellant's counsel placed particular stress on Skosana's

statement to A I Wildman that the employees would return to work on 28
August in compliance with the ultimatum.  This, it was argued, amounted
to an undertaking on which the appellant was entitled to rely.  It was
therefore reasonable for the employer to expect that the workers would
resume employment on the morning of 28 August and their failure to do
so entitled the appellant to dismiss them.  Consequently, and according to
the argument, there was no need for the appellant to have allowed the
employees an extension until 31 August for their return to work.  In any
event there was, at the time, no certainty that the employees would return
on 31 August.  The appellant, it was submitted, was justified in deciding
to tolerate no further disruption to its business.
[15] Before considering the validity of these arguments, some of
the matters raised require clarification.  The first is that A I Wildman
testified that not only did Skosana tell him that the workers would be

returning on the Friday but that he (Skosana) had already contacted them
in that regard.  Ngoza denied this.  He said that he made contact with
some of the workers only later that evening, an account which seems to
accord with the probabilities, as it is unlikely that Skosana would have
told the workers to resume employment on the following day while he
was still attempting to obtain an extension of the deadline.  Although the
LAC made no specific finding on which version was to be preferred, it
referred to Ngoza's account with apparent approval and it is reasonable to
assume that his account was accepted by the court a quo.
[16] A second aspect, and perhaps a more important one, is that
Skosana did not give A I Wildman an unqualified assurance that all of
the workers would report for duty in terms of the ultimatum as he asked
Wildman to release some of them to attend the meeting.  Wildman's
response, that the matter would be discussed on the following morning,

confirms that there remained a matter which still required some
negotiation.  There is a dispute between Ngoza and Wildman on
precisely what occurred on the morning of 28 August.  What is clear,
however, is that Wildman refused permission for any employees to
attend the meeting without, it seems, any further negotiation or even
discussion.
[17] On Thursday evening, Dr Fanaroff, who was then
NUMSA's national secretary, appeared on the national television on the 8
pm news and relayed the NSC's recommendation that all employees
should return to work on 31 August.  This recommendation was also
widely reported in the print media on the following morning.  A I
Wildman conceded that he was aware of the NSC's recommendation on
the evening of 27 August.  Moreover the LAC held that on the Friday
morning "he must ... have been aware" that the purpose of the meeting at

Hunter's Field Stadium was to consider the recommendation and that that
was the reason why Skosana asked him, on the previous day, to extend
the deadline.  It should have been obvious to the appellant on Thursday
27 August that there was a reasonable likelihood that the striking
employees would return to work on the following Monday.  In fact
nineteen did return on that day and it was then that at least twelve of
them were told of their dismissals for the first time.
[18] The appellant's factory was closed over the weekend and
what has to be decided, therefore, is whether, on the facts of this case, the
appellant should have stayed its hand for one day.  It must be emphasized
that a dismissal will not necessarily be fair merely because a fair
ultimatum is not complied with.  Dismissal is a drastic step and, as has so
often been said, a "course of last resort" (see National Union of

Mineworkers and Others v Free State Consolidated Gold Mine
(Operations) Ltd - President Steyn Mine; President Brand Mine;
Freddies Mine 1996(1) SA 422 (A) at 448H-I).  It is for this reason that
an employer, before implementing an ultimatum, should give careful
consideration, inter alia, to new facts that may have arisen or
circumstances that may have developed since the issue of the ultimatum.
It should also consider how the employees responded to the call to
return to work.  The need for an employer to act with a measure of
restraint may even be more important in  the case of mass dismissals
where the job security of a large number of workers may be at stake.
[19] The appellant's attitude in this case was inflexible and
intransigent.  It did not even consider extending the deadline, despite
significant facts that had occurred since the ultimatum was issued,
namely, that NUMSA (through the NSC) had recommended a return to

work on 31 August, that local structures were to consider this and that
the meeting at Hunter's Field Stadium on 28 August was called to discuss
this very recommendation.  The appellant had decided, when the
ultimatum was issued, that the deadline was "cast in stone", to employ
the expression used by both A I and Nigel Wildman and that any
employee who failed to comply with it would be dismissed. This rigid
approach was exemplified in the summary dismissal of Amon Madi on
28 August.  It would seem that the appellant did not even ask the reason
for Madi's late arrival at work before dismissing him.
[20] As a result of the intractable attitude adopted by the
appellant, the failure to comply with the ultimatum inexorably led to
dismissals.  The appellant had closed its mind to the developments that
had taken place since the ultimatum was issued.  It was not prepared,
under any circumstances, to postpone the time for the return to work.  As

Nigel Wildman put it: "come what may, we wouldn't extend the
deadline".  In the circumstances of this matter there were no compelling
reasons why the appellant could not have held back for one working day
and its refusal to do so was not based on rational grounds.  On the
contrary it insisted on the deadline with the apparent purpose of ensuring
that it would have a pliant workforce in the future.  This was not a fair
way of dealing with a labour dispute.  It therefore follows that the LAC's
decision on this point should be upheld.
[21] Although it was contended in the appellant's heads of
argument that the court a quo should not have ordered a reinstatement of
the dismissed employees, this aspect, quite correctly, was not seriously
pursued at the hearing of the appeal.  There is no reason, therefore, for us
to interfere with any part of the order of the LAC save to add a paragraph
to make provision for a deduction from the amounts payable to the

employees of  remuneration earned by them through employment from
the date of their dismissal until the date on which they might
recommence employment with the appellant.  This provision was agreed
upon and formulated by both counsel and we are grateful to them for
doing so.
[22] The question of costs remains.  In the appeal of National
Union of Metalworkers of South Africa v G M Vincent Metals Sections
(Pty) Ltd (case 116/96), I drew attention to the fact that many irrelevant
documents had been included in the record on appeal.  In this matter, too,
the record was unnecessarily burdened with a great deal of material that
was entirely unnecessary.  The explanation given by counsel for the
inclusion of these documents was the same as that put forward in the
Vincent case, namely that the parties had made a bona fide attempt to
reach agreement on the record but had been unsuccessful in doing so.

Although this explanation will be accepted for the purposes of the
present appeal, it is necessary to emphasize that it is not sufficient for the
attorneys for the parties  merely to attempt to reach agreement on what
parts of the record should be excluded.  It is likely that instances similar
to this will, in the future, be viewed in a more serious light and the
offending parties, or their attorneys, will be subjected to punitive costs
awards.
[23] Counsel for NUMSA requested the costs of two counsel to
the extent that two counsel had been employed for the purposes of the
appeal.  NUMSA decided, reasonably enough, that one counsel would
suffice for the purpose of arguing the appeal and there seems to be no
reason why two counsel were required for any preliminary stages.
[24] In the result it is ordered:
(1)
The appeal is dismissed with costs;

(2)
The date 12 April 1999 will be substituted for the date 12 January
1996 in paragraph 3 of the order of the LAC and the date 3 May
1999 will be substituted for the date 29 January 1996 in
paragraphs 3, 5 and 7 of the said order.
(3)
The order of the LAC is amended by the inclusion of the
following paragraph:
"10.1 Any amounts owing by the respondent to the individual
workers pursuant to this order of retrospective
reinstatement will be subject to deduction therefrom of all
remuneration that has been earned by such  worker through
employment from the date of dismissal until the date of
recommencement of employment with the respondent in
terms of this order.

10.2 In the event of a dispute arising between the parties
concerning whether, and if so what amount of remuneration
has been earned by any worker during the applicable
period, such dispute shall be referred to arbitration under
the auspices of the Independent Mediation Service of South
Africa (<IMMSA') in terms of the Arbitration Act 42 of
1965 for a determination of the amount of remuneration
earned during the period in question by the worker

concerned.

10.3 In the event of submission of the aforesaid dispute to
arbitration, the parties will attempt to agree upon the
arbitrator and the formulation of the arbitrator's terms of
reference.

10.4 Should the parties fail to reach agreement upon the
arbitrator then the director of IMMSA shall appoint an
arbitrator on the parties' behalf."

___________________
L S MELUNSKY
ACTING JUDGE OF APPEAL
Concur:

Smalberger JA
Howie JA
Olivier JA
Schutz JA