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14 Apr 2020
BY Peter le Roux AND Jessie Moore

Compensation for loss arising from protected strikes: some thoughts on an employer’s options

A strike, and employees’ actions during a strike, will almost inevitably cause an employer losses. In terms of South African common law, an employer may have a delictual remedy at its disposal. It can, in certain circumstances, sue the union or its members for the losses suffered.

In order to protect unions and their members against such litigation, and to give effect to the constitutional right to strike, the Labour Relations Act, 1995 (“LRA”) provides that trade union members and employees who embark on protected strikes are immune from civil liability and cannot be held liable in terms of delict or breach of contract for losses suffered by an employer as a result of the strike or actions committed in furtherance or contemplation of the strike. However, if the conduct committed in furtherance or contemplation of the protected strike is an offence, this protection falls away in respect of this conduct.

In contrast, if the strike is unprotected, section 68(1)(b) grants the Labour Court exclusive jurisdiction to award “just and equitable” compensation to those who have suffered loss attributable to an unprotected strike or to conduct in furtherance thereof. But does this jurisdiction conferred on the Labour Court by section 68(1)(b) extend to protected strikes too and if not, what are the options available to an employer who has suffered loss as a result of a protected strike?

These are the questions that confronted the Mpumalanga High Court in the recent decision of Blinkwater Mills (Pty) Ltd & another v Food & Allied Workers Union (FAWU) & others. In this case, FAWU and its members participated in a protected strike at Blinkwater Mills (Pty) Ltd (the “Company”) During the course of the strike, FAWU’s members committed certain actions that caused loss to the Company. The Company then sought to recover this loss from FAWU and its members. It instituted a claim for damages in the Mpumalanga High Court on the basis that the actions that caused the losses were criminal offences. FAWU raised an exception, contending that, in terms of section 68(1)(b) of the LRA, the Labour Court had exclusive jurisdiction to order the payment of just and equitable compensation for any loss attributable to conduct during the strike. This argument rested on two contentions. The first was that section 68(1)(b) applied in the case of protected strike. The second was that it deprived the High Court of its jurisdiction to consider common law damages claims.

Both these contentions were rejected by the court. Section 68(1)(b) expressly refers to unprotected strikes. The High Court also confirmed that it does not have jurisdiction to consider a claim for compensation in terms of this section. Significantly, the High Court confirmed that it did have the jurisdiction to consider a common law claim for delictual damages and that the Labour Court did not have this jurisdiction.

If an employer suffers loss arising from conduct that constitutes an offence pursuant to a protected strike, the statutory immunity from civil liability falls away in respect of that offence. The LRA also does not provide any basis for the view that the common law delictual claim has been abolished by implication. In addition, since section 67(2) of the LRA provides that a person does not commit a delict by taking part in a protected strike, this presupposes that such a common law remedy still exists and had to be expressly excluded in the case of protected strikes.

This means that, depending on the facts of the case, if an employer can show, on a balance of probabilities, that an offence that caused him or her loss was committed pursuant to the protected strike, he or she may be able to institute a delictual claim for damages to recover the loss. This is despite the fact that the strike itself remained protected. The High Court recognised this in dismissing FAWU’s exception.

To succeed under the common law of delict, the employer must establish that:

  • it suffered quantifiable loss;
  • that was caused by an unlawful and intentional or negligent act or omission (such as malicious damage to property or assault); and
  • that this was wrongful.

Once the above elements are established on a balance of probabilities, an employer will then be entitled to claim the full amount of loss suffered from the person/s who committed the delict. A trade union can, in certain circumstances, also be held liable for losses caused to an employer by its members.  

Finally, it should be pointed out that this decision also supports the view that, in the case of an unprotected strike, an employer will have the option of claiming compensation in terms of section 68(1)(b) or of claiming damages in terms of common law delictual principles.

Peter le Roux
Executive Consultant | Employment
pleroux@ENSafrica.com
+27 83 626 2909

Jessie Moore
Candidate Attorney | Employment
jmoore@ENSafrica.com
+27 71 125 6135