Questionable ruling whips up further headwinds for pilots
The latest labour court skirmish between the SAA Pilots’ Association and the airline’s business rescue practitioners (BRPs) requires special scrutiny. It concerns the BRPs decision to lock the pilots out (without pay) in an attempt to force them to accept, among other things, changes in their regulating agreement.
The BRPs sent the lockout notice to the pilots on December 16 2020 (a public holiday). The pilots association challenged the legality of the move urgently, and the matter was heard by labour court judge Andre van Niekerk on the morning of December 29. The judge delivered his ruling at 4pm the same day, dismissing the challenge. The pilots then applied for leave to appeal, which was refused on March 4 by the same judge.
The pilots association challenged the lockout on four grounds. I will only deal with the challenge raised in respect of section 136 of the Companies Act. This section provides protection to employees whose employers are in business rescue, providing that “a BRP must not suspend any provision of an employment contract”.
On the face of it, a lockout is nothing other than a suspension of an employment contract. However, the Companies Act yields to the Labour Relations Act insofar as the provisions of the two acts cannot be reconciled. It was on this basis that Van Niekerk held that the protections afforded to employees in the Companies Act do not apply.
Unfortunately, he did so in what can respectfully only be called a contrived manner. First, based upon some not quite analogous Constitutional Court decisions, he elevated employers’ right to lockout to the same level as the constitutionally protected right of employees to strike, in effect creating a constitutional right to lockout where previously there had been none. He then stretched his reasoning, without referring to any case law, through a tenuous interpretation of the Labour Relations Act, that his newly created right to lockout trumps the clearly worded protections given to employees in section 36 and elsewhere in the Companies Act.
Unsurprisingly, the pilots applied for leave to appeal to the labour appeal court, and the judge dismissed this application in scathing terms, with a cost order to boot. To obtain leave to appeal the would-be appellant must convince the judge that there is a reasonable prospect that another court could come to a different conclusion. It therefore requires a certain level of objectivity on the part of a judge to consider the possibility that he or she might be wrong. Van Niekerk flatly discarded that possibility (much to the delight of the BRPs).
Now it may be that his decision is correct, but there are several factors that should have persuaded him to at least let the labour appeal court reconsider the application. There is no guarantee that his interpretation of the Labour Relations Act and how it trumps the clear provisions of Companies Act is correct. They deal with different topics, hence one could argue there is no conflict between them and no need for the Labour Relations Act to prevail over the Companies Act. One would also have expected that on such an important topic he would at least have referred in his judgment to “Henochsberg on the Companies Act” (the most authoritative commentary on the Companies Act) which, in its discussion of section 136, says a BRP does not have any powers of suspension when dealing with employment contracts.
THAT THE MATTER WAS HEARD URGENTLY, AND THE JUDGMENT HANDED DOWN WITHIN A MATTER OF HOURS, IS ALSO CAUSE FOR CONCERN
His equation of lockouts with strikes is unconvincing. The effect of his judgment is that section 136 of the Companies Act can be struck from the law books, since the protections afforded in it to employees can be easily overridden with reference to his judgment. That cannot have been the intention of the drafters of the Companies Act.
That the matter was heard urgently, and the judgment handed down within a matter of hours, is also cause for concern. With respect, how can a judge be so convinced that an appeal against a judgment involving such important principles, in a matter of national and international interest, that he had reached after only a couple of hours, is not worthy of consideration by an appeal court? Judgments that take months to finalise are often set aside on appeal.
The pilots and SAA cabin crew, who have not been paid for a year now, are suffering mentally and physically, not to mention financially. Some have died after their life insurance (which would be paid from their salaries) lapsed, leaving their families destitute. Those are the issues for which the Companies Act provides protection, and that the judge should have considered. One can only hope this decision gets overturned in the future.