Workers dismissed for embarking on an illegal strike over Christmas bonuses three years ago have emerged slightly victorious in a Labour Court battle against Cape Town steel manufacturer, Allens Meshco, which has been ordered to compensate 21 employees five months’ salaries each.
The workers lost their jobs in October 2023 after demanding full payment of their annual bonuses, despite management warning that their industrial action was unlawful and could result in dismissal.
However, Labour Court Judge Robert Lagrange ruled that although Meshco had legitimate grounds to dismiss the workers, it violated their rights by denying them a fair opportunity to defend themselves before losing their jobs.
The judgment, delivered this week, marks a significant victory for the National Union of Metalworkers of South Africa (NUMSA), which challenged the dismissals on behalf of Anzio Barends and 20 other employees.
Meshco must compensate each worker five months’ remuneration within 15 days. The total financial liability remains unknown as their salaries were not disclosed.
Christmas bonuses spark industrial showdown
The dispute began when Meshco, a long-established manufacturer of steel wire, fencing and construction products, informed employees that financial difficulties had forced it to seek permission to pay only half their December 2023 leave enhancement pay.
Management blamed increased competition, subdued market conditions, lost business and stock theft for the company’s financial troubles.
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Workers were already unhappy after Meshco reduced an agreed 6% wage increase to 4%, following an exemption granted by the bargaining council.
The company subsequently increased the adjustment to 4.5% after its financial position improved.
On October 25, frustrated employees downed tools, demanding their full Christmas bonuses and an audience with company directors.
But the strike commenced without the legally required dispute-resolution procedures, prompting management to issue repeated warnings demanding their return to work.
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The industrial action continued across several shifts, disrupting production and sales.
An operations manager eventually approached striking employees individually, asking whether they intended returning to work or accepting dismissal.
Those refusing to resume their duties received termination letters on October 27. Four night-shift employees were dismissed three days later.
Numsa challenges mass dismissals
Numsa argued that management aggravated tensions by filming protesting employees and allegedly accusing workers of involvement in theft costing the company R300,000 monthly.
The union maintained that dismissal was excessively harsh, particularly because the strike was peaceful and employees had not been afforded disciplinary hearings.
One dismissed employee had served the company for 17 years.
However, Lagrange rejected the argument that management had provoked the strike, finding that the alleged provocative conduct occurred after the industrial action had already begun.
He also found that the workers deliberately ignored repeated ultimatums and that dismissal was a proportionate sanction.
Importantly, the court did not order Meshco to pay the disputed Christmas bonuses. Numsa’s victory concerned the fairness of the dismissal process, not whether employees were entitled to their full annual bonuses.
Meshco’s costly mistake
But Meshco’s victory on the legality of the dismissals did not absolve it of its obligation to treat employees fairly.
Lagrange found that management had confused issuing an ultimatum with giving employees an opportunity to defend themselves.
“It is true that Meshco made its intentions clear both to the strikers and the union that dismissals would ultimately follow if the strike action persisted,” he said.
However, asking employees whether they wanted to resume work or accept dismissal was not an adequate substitute for hearing their representations.
“At the very least, they could have advanced reasons why not all of them should be dismissed, based on various mitigating factors, or why a sanction less than dismissal ought to have been imposed.”
The judge said confronting workers individually on the factory floor provided no reasonable environment for employees or their union to present mitigating circumstances.
He consequently ruled that the dismissals were procedurally unfair, awarding each worker five months’ remuneration.
The employees will not be reinstated because the court upheld the substantive fairness of their dismissal.
No costs order was made.
- Twenty-one employees dismissed by Cape Town steel manufacturer Allens Meshco for an illegal strike over Christmas bonuses in October 2023 have won a Labour Court ruling requiring compensation.
- The Labour Court found Meshco's dismissals substantively fair but ruled the company violated workers' rights by denying a fair opportunity to defend themselves before termination.
- Each dismissed worker will receive five months' salary as compensation, payable within 15 days, but none will be reinstated.
- The dispute arose after Meshco reduced agreed wage increases and sought to pay only half of December 2023 leave enhancement bonuses due to financial difficulties.
- The court did not order payment of the disputed Christmas bonuses, focusing its ruling on procedural fairness during the dismissal process.
