Before HLOPHE J Judgment HLOPHE J:

The applicant is Food & Allied Workers Union (FAWU), a trade union registered in terms of the Labour Relations Act 28 of 1956 as amended (the Act). The applicant brought this application in its own name and on behalf of its members employed by the respondent whose names were listed in the schedule annexed to the papers. The respondent is Ceres Fruit Juices (Pty) Ltd, a registered company with limited liability, carrying on the business of fruit juice processing at Bon Crecian Street, Ceres, Cape. It is not in dispute that prior to the respondent’s cancellation of the recognition agreement with the applicant on 1 July 1996, the applicant was a recognized collective bargaining representative of its members at the respondent. The applicant represents most of the respondent’s permanent employees. The applicant brought an urgent application on 11 July 1996 before Rose-Innes J. He ruled that the matter should be transferred to fourth division opposed motion roll to be heard at the first available opportunity. This was because the case raises matters of law and policy on the rights of employees and their employers. The parties were agreed at the hearing that the relief sought is final. I was informed that pending a determination by the court, there is a temporary arrangement between the parties whereby workers were allowed to return to work. Details of such arrangement were, however, not divulged to court.

As appears from the notice of motion, the applicant seeks the following final relief:

‘1 Declaring the breach of the applicant’s members’ contracts of employment and their exclusion from the respondent’s premises on or about 1 July 1996 and any continuation thereof to constitute a lock-out as defined in s 1 of the Act, which is and will continue to be unlawful until such time as the provisions of s 65 have been complied with;

2 an order interdicting the respondent from continuing with its unlawful lock- out as aforesaid in para 1 above;

3 declaring the unilateral implementation of new terms and conditions of employment by the respondent to be in breach of the contracts of employment of the applicant’s members and accordingly of no force and effect;

4 interdicting the respondent from continuing to breach the contracts of employment of the applicant’s members as aforesaid in para 3 above;

5 declaring the respondent’s cancellation of the recognition agreement entered into between applicant and respondent on 7 January 1991 to be in breach of the terms thereof and accordingly of no force and effect; and

6 ordering the respondent to pay the costs of this application.’

Mr Rose-Innes appeared with Mr Kahanowitz for the applicant. The respondent was represented in court by Mr Rogers. The parties were agreed that the case turns on the determination of the terms of the contracts of employment between the applicant’s

members and the respondent. In other words, what were the terms and conditions of service in place prior to the proposed three-shift system? The applicant alleged that since the construction of the Ceres plant in 1986 the plant has operated 24 hours a day on the basis of a two-shift system of 12 hours each. In terms of the workers’ employment contracts, workers were obliged to work five 12-hour shifts per week comprising 46 ordinary hours and 14 hours overtime. The shifts commenced at 07:00 to 19:00 and vice versa. It was conceded by the applicant that workers were paid a special overtime rate for anything in excess of 46 hours per week. It was also conceded that the night shift had a special allowance in terms of the wage agreement between FAWU and the respondent, clause 7.8 thereof. The applicant further alleged that despite workers being required to work extremely long hours, they have consented thereto in order to allow their minimum weekly salary to be increased to what they considered to be a living wage.

The workers regularly and habitually worked 12 hours per day for five days of the week. The practice was so entrenched that no overtime roster existed for weekdays as every worker worked the same hours every week. Accordingly, contracts of employment with the respondent provided as follows:

1 the first shift works a 12-hour day shift commencing at 07:00 and ending at 19:00;

2 the second shift works a 12-hour night shift commencing at 19:00 and ending at 07:00 on the following day;

3 all employees work habitual overtime and are contractually bound to work such overtime for five days of the week; and

4 weekend overtime is voluntary.

According to the applicant, the above remained the position until 1 July 1996 when the respondent, without the workers’ consent, varied their employment contracts by requiring the workers to work in accordance with a three-shift system involving three eight-hour shifts starting at 06:00, 14:00 and 22:00, respectively. The new system would have resulted in each worker working fewer hours per week, with a resultant reduction in wages. Therefore the workers refused to work in accordance with the new system, but tendered their services in accordance with the employment contracts summarized above. The respondent, however, refused to permit them to work except in accordance with the new system.

The respondent’s case, on the other hand, was that in terms of the contracts of service workers were only bound to work for 46 hours per week. Everything else in excess of 46 hours was voluntary overtime. Thus the proposed three-shift system did not constitute a variation of employment contracts. It merely involved a reorganization of the way in which work in the factory was to be done. This fell within the respondent’s managerial prerogative to organize its workplace. This is fortified by clause 3.5 of the recognition agreement entered into between FAWU and the respondent which was to remain in force until 31 July 1996. Accordingly, the workers’ refusal to work in accordance with the proposed three-shift system amounted to an illegal strike. It was the workers who had gone on strike by refusing on 1 July 1996 to work in accordance with the proposed three-shift system. It is not the employer who locked them out.

The respondent, however, does not seriously deny that up to 28 June 1996 and prior to the implementation of the three-shift system employees worked under a regime which provided for 12 hours of employment on five days of the week in terms of a two-shift system. Indeed Mr Venter who deposed to an opposing affidavit conceded this:

‘Produksie in respondent se aanleg is tot 28 Junie vanjaar gedoen volgens ‘n stelsel waar kragtens werknemers in die aanleg gedurende vyf dae van die week twee skofte van twaalf uur elk gewerk het. Die dag- en nagskof ruil weekliks.’

The respondent also does not dispute that workers worked about 60 hours per week. A fixed component of the two-shift system (which is also not denied by the respondent) was that at least as far as Monday to Thursday was concerned, the first shift would report for duty at 07:00 in the morning and end at 19:00, and the second shift would report for duty at 19:00 and end at 07:00 on the following day. Reference is made to Mr Visser’s founding affidavit and Mr Venter’s opposing affidavit. Therefore there seems to be no real, genuine dispute about the fact that prior to the implementation of the three- shift system, a two-shift system of 12 hours each was in place (see Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634H-I). The dispute between the parties, as I understand it, concerns overtime worked in excess of 46 hours per week. According to the applicant, workers were obliged to work overtime. The respondent contended that overtime remained voluntary at all times. There is a strong probability that there was a two-shift system prior to 1 July 1996. The existence of a tacit term that the day shift commenced at 07:00 and ends at 19:00 was clearly envisaged by the wage agreement. Clause 7.8 thereof provides for a night shift to commence when the day shift ends (19:00) and to terminate when the day shift begins (07:00). This clause also provides that the person who works night shift will receive an extra 80c per hour over the set tariff.

The probabilities are also that overtime was compulsory. Workers were obliged to work overtime and they could not unreasonably refuse to do so. The Appellate Division, in SA Breweries Ltd v FAWU 1990 (1) SA 92 (A); (1989) 10 ILJ 844 (A), recognized that a long-standing practice of working overtime ‘could conceivably give rise to a tacit agreement between an employer and an employee that the latter will work overtime whenever required to do so’ (at 96F-G). See also National Union of Metalworkers of SA v Gearmax (Pty) Ltd 1991 (3) SA 20 (A); (1991) 12 ILJ 778 (A) and National Union of Metalworkers of SA & others v MacSteel (Pty) Ltd 1992 (3) SA 809 (A); (1992) 13 ILJ 826 (A). This simply means that workers may not unreasonably refuse to work overtime if and when they are called upon to do so. It does not, however, mean that workers may demand to work overtime even if the need for that has not arisen. It is for an employer to call upon workers to work overtime in case of need. It is inconceivable that employees may demand to work overtime. Possibly no such right exists in our law. The right is that of an employer to call upon employees to work overtime when the need arises. Mr Rogers argued that a finding to the effect that workers were obliged to work overtime as the applicant contended, would lead to an absurd result that workers could insist on working overtime. I am unable to agree. All that it means is that workers could not unreasonably refuse to work overtime, and no more. After all it is not the respondent’s case that there is no need for workers to work overtime. On the contrary, the employer wants to increase production hours from 120 to 136 hours per week.

There can be no doubt to my mind that the terms of the employment contracts between workers and the respondent were as alleged by the applicant, namely, a two-shift regime consisting of 12 hours each and that workers were contractually bound to work overtime. An implied term (in casu to work compulsory overtime) will readily be imported into a contract if it is necessary to ensure its business efficacy (see Wilkins NO v Voges 1994 (3) SA 130 (A) at 137A-C. Compare Horrigan v Lewisham J London Borough Council 1978 ICR 15 where the court declined to find that there was any contractual obligation to work overtime, despite the fact that employees had worked overtime on almost every working day over a ten-year period). Even on the respondent’s own version, namely, that workers were only contractually bound to work for 46 hours

per week and anything in excess thereof was voluntary overtime, that does not, however, mean that the respondent could unilaterally impose a three-shift system without the workers’ consent.

It is no secret that between February and June 1996, a number of meetings were held between the respondent and the applicant over the respondent’s proposal that a three- shift system be implemented. No consensus was reached. Thereafter on 18 June 1996 the respondent sent a letter to the applicant’s shop stewards committee pointing out that lengthy consultation had been held over the merits of implementing the proposed three-shift system and that the respondent felt that it had no alternative in the circumstances other than to go ahead and implement it. It is also not disputed by the respondent that on 21 June 1996 Mr Visser, who deposed to a founding affidavit, wrote to the respondent on behalf of the union offering to agree to the proposed changes if the respondent would accept certain terms which mainly related to employees being compensated for wages to be reduced under the proposed system. The respondent rejected this offer advising Mr Visser that:

‘Niemand in redelikheid kan verwag om baie korter ure te werk en presies dieselfde lone as voorheen te kry.’

On 25 June 1996 Mr Venter addressed the shop stewards committee and advised them that the respondent would go ahead and implement the new system on 1 July 1996. On the same day the respondent then approached the employees directly and not through the recognized trade union (FAWU) and sent employees a standard letter advising them of the respondent’s intentions as appears from annexure PJV4. The proposed three-shift system was to commence on 1 July 1996. The said letter of 26 June 1996 clearly states that the proposed three-shift system would have the following elements as it pertained to shift workers:

1 there would be three shifts instead of two commencing at 06:00, 14:00 and 22:00, respectively;

2. 2  a reduction in working hours coupled with a consequent drop in wages; and
3. 3  affected workers would get a once off payment equal to 40% of monthly income

for July and August 1996 to enable them to ease into the new three-shift system.

As appears from annexure PJV8, being a letter written by Mr Venter of the respondent to Mr Visser dated 26 June 1996, the respondent proceeded unilaterally to allocate workers to the new shift system. Mr Visser was allocated to a shift commencing at 06:00 in the morning on 1 July 1996. The said letter made provision for him to sign, indicating that he understood and accepted the contents thereof. Mr Rose-Innes correctly argued that this is consistent only with an employer seeking acceptance of new terms and conditions of employment. The employer knew that it could not do that unilaterally without the employees’ acceptance. Hence provision was made in the letter for employees to consent in writing to the new terms and conditions of service. It is not in dispute that employees refused to sign the letter. Following that, on the 28 June 1996, the union responded by writing two letters to the management rejecting the three-shift system holding the respondent to the terms of the wage agreement, particularly the two-shift system enshrined in terms thereof. In terms of annexure PJV6, being a letter addressed by the union to the respondent, the union pointed out:

‘That the two-shift system was the result of protracted negotiations and stipulated in our wage and recognition agreement specifically clause 7. Unilateral implementation of the three-shift system constitutes a deliberate breach of that agreement.’

This was never denied by the respondent. On the same day, 28 June 1996, the respondent wrote to the union stating that it desired ‘to change to a three-shift system’. (See also annexure WPT5 being a statement issued by the respondent on 4 July 1996 wherein respondent spoke of the ‘necessity to change from a two by 12 hour (five-day) shift system to a three-shift system’.) The respondent contended for the first time in terms of para 3 of annexure PJV7 that:

‘Your attention is drawn to clause 3.5 on page 2 of our recognition agreement in which it is stipulated that the employer has the right and responsibility to decide on work practices in order to manage its operation. Sufficient opportunity was afforded to the union to make contributions and representations in this regard.’

I must pause here to mention that in none of the correspondence to the union prior to the 28 June 1996 did the respondent ever raise the contention that it was acting within its prerogative to organize the work practices. That, in my view, is not without significance. The clause 3.5 argument surfaced for the first time on 28 June 1996 after the respondent failed to get consensus over the proposed three-shift system. One would have thought that if the respondent seriously believed that it was acting within its prerogative to organize the work practices, then it would have made that clear to the union much more earlier. On the contrary, the respondent engaged in serious negotiations with the applicant over the proposed three-shift system. When the parties deadlocked, then it resorted to the contention that after all it fell within its prerogative to organize its work practices.

This contention is surely untenable. Deciding on work practices is one thing. An employer can never unilaterally alter existing conditions of service as the respondent did. See Transport & Allied Workers Union & others v Natal Co-operative Timber Ltd (1992) 13 ILJ 1154 (D) at 1159. As highlighted above the respondent made every effort to negotiate with the union and when an impasse was reached, then the respondent decided to implement the new shift system unilaterally.

The three-shift system differs in material respects from the two-shift system. Firstly, under the proposed three-shift regime, workers would now be required to work three shifts of eight hours each, whereas previously they worked two shifts of 12 hours each. Secondly, under the three-shift regime work would commence at 06:00, 14:00 and 22:00, respectively, whereas under the two-shift regime the day shift commenced at 07:00 and ended at 19:00 and the night shift commenced at 19:00 and ended at 07:00 the following day. Undoubtedly the hours of work would change significantly. Thirdly, the three-shift regime would have serious financial implications. It would affect workers adversely, a fact which the respondent itself recognized when it offered affected workers up to 40% over and above their wages for the months of July and August 1996. Surely, in my view, the respondent made this offer precisely because of its being aware of adverse financial implications on affected workers. There can be no other reasonable explanation for making the offer. Fourthly, it is clear that the new three-shift regime would require workers engaged in the night shift to work for 48 hours per week. The same is true of workers engaged in the morning shift commencing at 06:00. However, those workers engaged in the day shift would only work 40 hours per week (if one adds the three shifts together, 48+48+40, one gets a total of 136 hours per week). I did not understand Mr Rogers to be seriously contending that in that respect the three-shift regime did not differ from the two-shift regime previously in place. Clearly in relation to night and morning shifts workers were required to work 48 hours per week, which was in excess of 46 hours per week in terms of clause 7 of the wage agreement. In relation to day-shift workers who would only be required to work 40 hours per week, there can be no doubt that that was well below 46 hours per week agreed upon in terms of clause 7.

Given that workers were paid per hour and that provision was made for overtime rates in terms of the wage agreement, an inference is irresistible that those workers engaged in a day shift of 40 hours per week would earn less than those engaged in night and morning shifts of 48 hours per week. There was no suggestion that workers were remunerated on any basis other than hourly in terms of the wage agreement. In this respect I am unable to agree with Mr Rogers’s contention that it was not open to the applicant to raise the argument that workers engaged in a day shift of 40 hours per week would earn less than those engaged in other shifts, as same was not raised in the papers. There is authority for the view that a party in motion proceedings may raise arguments in court even if they are not raised in the papers, provided they arise from facts raised in the papers. See Cabinet for the Territory of South West Africa v Chikane & another 1989 (1) SA 349 (A) at 360F-G; Minister van Wet & Orde v H Matshoba 1990 (1) SA 280 (A) at 285E-G. Even though the applicant’s argument in this respect was not specifically mentioned in the papers, it clearly arose from the facts alleged.

It follows from the above analysis that even if I am wrong in saying that there were two by 12 shifts in existence prior to the proposed three-shift regime, that on the respondent’s own version of 46 hours per week normal work time plus overtime which was voluntary, the new three-shift regime seriously altered existing terms and conditions of service. This, the employer could not do unilaterally. The respondent itself was very conscious of that fact, hence it negotiated with the union over the issue for a long time. When negotiations failed, the respondent decided to implement the three-shift regime unilaterally. In doing so, the respondent acted unlawfully. See the discussion in Rycroft & Jordaan A Guide to SA Labour Law at 53; Riekert Basic Employment Law (2 ed by John Grogan) at 23-4. As Rycroft & Jordaan point out, a unilateral amendment of the terms of employment by the employer constitutes a repudiation of the contract which entitles the employee either to hold the employer to existing terms or, if the breach is sufficiently serious, to cancel the contract of service and sue for damages.

In my view there is no substance in Mr Rogers’s argument that the respondent was not legally bound to negotiate the three-shift system with workers prior to its implementation because the respondent had a prerogative to manage its business, as contemplated by clause 3.5 of the recognition agreement. The conduct of the respondent in engaging in negotiations with FAWU between February and June 1996 is inconsistent with that contention. The respondent engaged in such negotiations precisely because it was aware of its legal duty to do so prior to implementing the three-shift system. Surely there can be no prerogative of an employer unilaterally to change terms and conditions of service as the respondent did in casu. The employer must keep within the contracts of service and observe the rules that govern the employment relationship. See Checkers SA Ltd (South Hills Warehouse) and SA Commercial Catering & Allied Workers Union (1990) 11 ILJ 1357 (ARB) at 1364-6. To conclude this aspect of the judgment, a managerial prerogative does not and can never permit a unilateral variation of an employment contract. See also Food & Allied Workers Union v Pietersburg Milling Co (A Division of Tiger Milling & E Feeds Ltd) (1995) 16 ILJ 1497 (LAC) at 1502F-H and 1503G-1504A where a similar argument was rejected by Joffe J; Transport & Allied Workers Union & others v Natal Co-operative Timber Ltd at 1159.

It is necessary to deal with events that occurred on 1 July 1996. The respondent implemented the three-shift system. Employees entered the premises at the time set for the new proposed first shift, at 06:00 in the morning. However they refused to commence work until 07:00 which was the normal starting time under the two-shift system. They tendered to work from 07:00 to 19:00 in terms of the two-shift system. This tender was refused by the respondent. At about the same time the respondent switched off production machines before workers even arrived at their stations. The

workers who refused to work in accordance with the new three-shift system were asked to leave the factory. This they eventually did later that afternoon. The machines were available to resume production and the respondent was prepared to resume production if the workers were willing to work in accordance with the new shift regime. On the same day, 1 July 1996, the second shift was handed a notice by the respondent which provided, inter alia, that only those workers prepared to work in accordance with the three-shift regime would be allowed into the factory and that payment would be made only for work done in accordance with the three-shift system. The respondent also prepared letters which were left at the factory gate prohibiting entry into the factory unless employees provided a signed undertaking to work in terms of the three-shift system.

The above is not seriously disputed by the respondent. The respondent also does not dispute that employees have and continue to tender to work in terms of the two-shift system and that the respondent has refused the tender and instead adopts the attitude that unless the employees are prepared to work according to the three-shift system, they are engaging in an unlawful strike. The respondent further states that until workers adhere to the respondent’s demands, they will not be paid their wages.

Mr Rose-Innes contended that the conduct of the respondent falls squarely within the definition of a lock-out in s 1 of the Act. Section 1 defines a ‘lock-out’ as follows:

‘[A]ny one or more of the following acts or omissions by a person who is or has been an employer-

(a) the exclusion by him of anybody or number of persons who are or have been in his employ from any premises on or in which work provided by him is or has been performed; or

(b) the total or partial discontinuance by him of his business or of the provision C of work; or

(c) the breach or termination by him of the contracts of employment of anybody or number of persons in his employ; or …

if the purpose of that exclusion, discontinuance, breach or termination is to induce or compel any persons, who are or have been in his employ or in the employ of other persons-

(i) to agree to or comply with any demands or proposals concerning terms or conditions of employment or other matters made by him or on his behalf or by or on behalf of any other person who is or has been an employer; or

(ii) to accept any change in terms or conditions of employment.’

With reference to para (a) of the definition there can be no doubt that workers were excluded from premises. The allegations contained in Mr Visser’s replying affidavit, namely that shortly before Sunday, 30 June 1996, respondent had altered the magnetic card access control system and instructed the security guards that access to the premises was to be prohibited if workers did not report for duty in accordance with the three-shift system that the respondent intended to implement, were not denied. With reference to para (b), there can be no doubt that there was a partial and total discontinuance by the employer of business or of the provision of work. The applicant’s allegations that machines were switched off on 1 July 1996 were not denied by the respondent. The respondent sought to justify its conduct by alleging that machines were switched off to combat possible sabotage of the machines. There is clearly no substance in the contention. I agree with Mr Rose-Innes that this is a flimsy afterthought which

first saw the light of the day seven days after the events of 1 July 1996. I have no hesitation therefore in rejecting such contention. Compare National Union of Mineworkers & others v Richards Bay Minerals (1995) 16 ILJ 649 (IC) at 654-6. With regards to para (c) of the definition, I have already found that there was a breach of the contracts of employment by the respondent in the respects alluded to above. So much about the first leg of the enquiry.

The second one focuses on the respondent’s state of mind. The purpose of such exclusion, discontinuance, breach or termination must be to induce or compel any persons who are or have been in the employ or in the employ of other persons to agree to or to comply with any demands or proposals concerning the terms or conditions of employment or to accept any change in terms or conditions of employment. Mr Rogers argued that even if I reject the respondent’s version of contract (sic), still it could not be said that the respondent’s conduct was tantamount to a lock-out because the respondent’s state of mind was not to compel employees to accede to its demands. It was merely asking them to perform in accordance with their contracts. This contention is unfortunate. It flies in the face of undisputed allegations by the applicant, particularly those contained in annexure PJV9 and PJV11, which are lock-out notices. Clearly the purpose was to obtain agreement, acceptance or compliance with the three-shift system as annexure PJV9 reads:

‘Ons versoek u nou vriendelik dat diegene wat nie die drieskof-stelsel aanvaar nie, die perseel onmiddelik verlaat.’

There can be no doubt to my mind that the respondent, having failed to obtain consensus over the three-shift system, resorted to a lock-out as defined in s 1 of the Act. The Act does not seek to prevent lock-outs per se. It is only those lock-outs initiated by an employer who has failed to comply with the statutory procedures laid down in s 65(1) of the Act which are prohibited. The principal purpose of the Act is to combat industrial unrest by encouraging parties to arrive at the settlement of disputes. The Act seeks to discourage rushing into industrial action. The parties to a dispute must observe the rules of the game. See Metal & Allied Workers Union v National Panasonic Co (Pty) Ltd 1991 (2) SA 527 (C) at 530E-I and Trident Steel (Pty) Ltd v John NO & others (1987) 8 ILJ 27 (W).

To conclude, to comprise a lock-out there must firstly be conduct on the part of the employer in the form referred to in para (a), (b) or (c) above. And, secondly, the purpose of the employer’s conduct must be to induce or compel the employee to agree to or accept a demand or proposal of the type referred to in para (i) or (ii) above. Both legs of the definition have been satisfied in casu. There was a unilateral alteration of the terms and conditions of service coupled with a demand that workers should comply with the new three-shift system. Workers were locked out of the factory premises when they refused to comply with the demand. In the circumstances the respondent is engaged in an unlawful lock-out. See Walker NO v De Beer 1948 (4) SA 708 (A) G and Sappi Fine Papers (Pty) Ltd v Pienaar NO & others (1994) 15 ILJ 137 (LAC).

It has been conceded by the respondent that it did not follow the statutory procedures required for a lock-out laid down in s 65(1) of the Act. The court has already found that the conduct complained of constitutes a lock-out as defined in the Act. It follows therefore that the lock-out was unlawful due to the respondent’s failure to observe the statutory procedures laid down in the Act. It follows, furthermore, that the respondent’s contention that it was the employees who were on strike, cannot succeed. In my judgment the employees were locked out. They were certainly not on strike.

It is common cause that on 1 July 1996 the respondent unilaterally cancelled the recognition agreement entered into between the respondent and FAWU. This the respondent did in terms of annexure PJV12 with immediate effect. The letter of cancellation did not set out specified grounds for cancelling the recognition agreement. No reference was made to specific breaches by the union, repudiation of the agreement on the part of the union justifying cancellation, nor was there a call on the union to comply with the terms of the agreement or a declaration of a dispute in terms of clause 11 of the recognition agreement. In short, the letter of cancellation did not establish any basis for justifying a claim for such immediate cancellation of the agreement, a claim in respect of which the respondent would obviously bear the onus of proof. Mr Rogers argued that the respondent’s case is that it lawfully cancelled the recognition agreement because of material breach, namely the conduct of the applicant and its members in participating in an illegal strike on 1 July 1996. He argued further that in assessing the materiality of the applicant’s breach on 1 July 1996, regard may properly be had to the cumulative effect of the prior history of repeated illegal strike action by the applicant and its members.

In my view cancelling a recognition agreement is one of the most serious steps that an employer can ever take against a union. It is no exaggeration that such a step is tantamount to a declaration of war on the union. I am not persuaded that such perceptions are without foundation. It really says to the union that the rule book has been discarded, and that fundamental union rights such as access to company premises and stop-order facilities have been terminated. It has been held that by its very nature this is a stance that would almost always be preceded by a company’s declaring a dispute in terms of the agreement and threatening a cancellation of the agreement if the dispute is not resolved. See Food & Allied Workers Union v Pietersburg Milling Co (A Division of Tiger Milling & Feeds Ltd) at 1502H-1503A where the court held that a recognition agreement is the outcome of collective bargaining between a trade union and an employer and that the court would as a general rule maintain a recognition agreement’s integrity. See also Mutual & Federal Insurance Co Ltd v Banking Insurance Finance & Assurance Workers Union (1996) 17 ILJ 241 (A) at 247B-D.

The right of workers and employers to organize and bargain collectively is a fundamental right which is guaranteed in terms of s 27(3) of the Constitution of the Republic of South Africa (Act 200 of 1993, the interim Constitution). This fundamental right to collective bargaining lies at the heart of the industrial relations system in this country. It is the means preferred by the legislature for the maintenance of good labour relations and the resolution of labour disputes. Therefore recognition agreements underpin a system of collective bargaining and set out ground rules. It is for these reasons that the court should lean in favour of upholding such agreements as they promote the fundamental right to bargain collectively and their existence reduces the potential for industrial conflict.

I ask myself on what conceivable basis should the respondent be allowed to get away with what it did? In the first place the recognition agreement makes no provision for what the respondent did. On the contrary, provision is made that the agreement will continue indefinitely unless the union loses its majority in the bargaining unit (clause 14.2). In terms of clause 14.3 of the agreement, either party can give three months’ notice of its intention to cancel the agreement. It is common cause that prior to receiving respondent’s letter cancelling the recognition agreement on 1 July 1996, no prior notice of cancellation was received by the applicant. In my view, irrespective of whether grounds for cancellation existed, the procedure followed by the respondent to cancel unilaterally and summarily the recognition agreement is clearly in breach of the agreement, and accordingly it is unlawful. Dissatisfaction with the other party’s conduct

which is sufficiently serious to justify cancellation of the entire agreement is surely conduct in respect of which a dispute would have to be declared in terms of clause 11.2.1 of the agreement. Furthermore an attempt should have been made to resolve the dispute in terms of clause 11.2.2 and 11.2.3 prior to a resort to the extreme of cancelling the entire agreement. The purpose of the procedure is to attempt to resolve labour disputes amicably and peacefully.

Secondly, in any event, I would have thought that if the respondent felt so strongly about the applicant’s conduct, then it would have the decency to give the applicant reasonable notice of its intention to cancel the recognition agreement. This would be necessary to enable the applicant to make proper representations accordingly, particularly in view of the serious consequences that flow from such cancellation, such as loss of stop-order facilities, and the fact that the applicant has enjoyed recognition (and the rights and privileges that go with it) since the inception of the Ceres plant in 1986. In my view what the respondent did is both indefensible and inexcusable. If anything, it shows utter disregard for the applicant’s rights, interests and legitimate expectations. It shows little respect for the law that seeks to encourage collective bargaining. The respondent acted unreasonably, irresponsibly and unlawfully in summarily cancelling the recognition agreement as aforesaid. In the absence of any provision in the agreement entitling the respondent to do what it did, surely it was bound to follow the dispute procedure laid down in the recognition agreement. This the respondent did not do. Therefore it acted unlawfully in the circumstances.

The respondent’s contention that it would be improper for this court to uphold the two- shift system because overtime worked in terms thereof violates the provisions of the Basic Conditions of Employment Act 3 of 1983, is equally without merit. In view of the relief sought, it is strictly not necessary for me to deal with this contention. The relief the applicant seeks is declaratory orders that the lock-out is unlawful and that the unilateral implementation of the new terms and conditions of service contained in the standard letter referred to above, are in breach of the contracts of employment as well as related interdicts. The applicant is entitled to this relief as the court has found that the alleged grounds of illegality or breach are well-founded. With respect to Mr Rogers, this court is not called upon to make any express finding in regard to the contractual terms regulating overtime. The purpose of the order sought by the applicant is to restore the status quo and put the parties back into the position they were in prior to the introduction of the lock-out and breach of the contracts by the respondent. As Mr Rose- Innes contended, the court need go no further and advise the parties how to conduct themselves once they have been restored to that position which prevailed prior to the unilateral implementation by the respondent of the three-shift system.

Section 8(1) of the Basic Conditions of the Employment Act of 1983 stipulates, inter alia, that no employer may require or permit an employee to work overtime in excess of ten hours in any week. In terms of s 25(1) of the Act, a contravention of s 8(1) is a criminal offence. In my view there is certainly no merit in Mr Rogers’s contention that overtime worked in contravention of s 8(1) of the Act is a nullity, and therefore unenforceable in law. Section 8 of the Act does not contain an absolute prohibition on overtime. There are many indications in the Act to that effect. Section 8(2)(a) provides that an inspector may, on application, permit a maximum overtime period of more than ten hours per week. The Act has already provided for 60 hours work per week in respect of security guards in terms of s 2(1) thereof. Furthermore provision is made in terms of s 8(1)(b) of the Act for 14 hours overtime in the case of domestic workers. These are some of the indications that one is not dealing with an incurable illegality. Curing such illegality should pose no great difficulty to the employer. It would be a sad day for justice to allow the respondent to rely on its own admitted criminal conduct to justify its further and

subsequent unlawful action in locking its employees out. I am firmly of the view that the fact that the previous overtime regime may have contravened the provisions of s 8(1) of the Act does not result in the invalidity of the contract or any term thereof. There is no statutory provision for such invalidity. Section 25 confines the sanction to a criminal one. In every case it is a question of the intention of the legislature whether it is content with the penalty without rendering the contract void for illegality. See Standard Bank v Estate van Rhyn 1925 AD 266 at 274-5 and generally the discussion in Christie Law of Contract (2 ed) at 412.

In conclusion, the legislature did not intend to visit any agreement to work excessive overtime with a nullity. The statutory prohibition is undoubtedly directed at the employer, not the employee. See National Union of Metalworkers of SA v MacSteel (Pty) Ltd 1992 (3) SA 809 (A); (1992) 13 ILJ 826 (A), where Goldstone, JA said ‘[w]hat s 8(1) did was to create a criminal sanction applicable to employers who might by some means coerce employees to work overtime without their agreement to do so’ (at 815G). It would be absurd to allow an employer to rely on his own admitted criminal conduct as a justification for refusing to restore the status quo that prevailed prior to the conduct complained of. Equally, it would be ridiculous that employees should not be entitled to payment for work done in accordance with the old two-shift system. Compare Lende v Goldberg 1983 (2) SA 284 (C).

In summary, the order which I make is as follows:

(i) The breach of the applicant’s members’ contracts of employment and their exclusion from the respondent’s premises on 1 July 1996 and the continuation thereof constitute an unlawful lock-out as defined in s 1 of the Act.

(ii) The unilateral implementation of the new terms and conditions of employment by the respondent as set out in annexure PJV8 to the applicant’s founding papers is in breach of the contracts of employment of the applicant’s members and accordingly is of no force and effect.

(iii) The cancellation of the recognition agreement entered into between the applicant and the respondent on 7 January 1991 is declared to be in breach of the terms thereof and accordingly of no force and effect.

(iv) Respondent is interdicted from continuing with its unlawful conduct as aforesaid in paras (i), (ii) and (iii) above.

(v) The respondent is ordered to pay the costs of this application, such to include the costs of two counsel.

Applicant’s Attorneys: Chennells Albertyn. Respondent’s Attorneys: Marais Muller.