Source:

Namibian Law Reports/CHRONOLOGICAL LISTING OF CASES January 1990 to 2021/1994/Volume 1: 1 ­ 397/SMIT v STANDARD BANK OF NAMIBIA 1994 NR 366
(LC)

URL:
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SMIT v STANDARD BANK OF NAMIBIA 1994 NR 366 (LC)

1994 NR p366

Citation 1994 NR 366 (LC)

Case No LC 6/94

Court Labour Court

Judge Strydom JP

Heard December 16, 1994

Judgment December 16, 1994

Counsel R Heathcote for applicant,

D F Smuts for respondent.

Annotations Link to Case Annotations

Flynote : Sleutelwoorde
Labour law ­ Labour Act 6 of 1992 ­ Lock­out ­ Legality of ­ Section 79(2)(a)(i)(aa) of Act ­ Employer trying to alter conditions of employment
­ Whether lock­out permissible depending on whether dispute is of right or of interest ­ Former prohibiting lock­out ­ J

1994 NR p367
Dispute relating to employee's housing subsidy ­ Such being dispute of interest ­ Court holding lock­out to be A permissible in such
circumstances.
Headnote : Kopnota
The applicant had been employed by the respondent. One of his conditions of employment was a housing subsidy amounting to approximately
N$5 000 per month. The applicant lived in a house belonging to the B respondent. The applicant was informed by the respondent that the
condition relating to his housing subsidy was to be altered. Three proposals were put forward but none of them was accepted by the applicant.
A conciliation board was appointed but that did not succeed either. On 9 December 1994 the applicant was informed that action would be taken
to try and persuade him to accept one of the proposals, such action being in the form of a C lock­out. The order which the applicant sought in
the present case was, inter alia, to declare the lock­out unlawful.
Held, that the issue between the parties was whether the dispute was a dispute of right or of interest: in the former case a lock­out was
specifically prohibited by the Labour Act.
Held, further, that the dispute in existence between the parties was that the respondent wanted the applicant to D agree to a change or
alteration of his conditions of employment, more particularly to agree to accept one of the three proposals to replace the subsidised housing to
which he was entitled in terms of his conditions of employment, and which the applicant refused to accept.
Held, further, that the respondent had no right in the legal sense to make this demand simply because the conditions of employment did not
afford the respondent that right: the only way by which this change could be effected was by way of negotiation and mutual agreement as
provided for in the Act. E
Held, further, that there was therefore no right upon which the Labour Court could adjudicate except the insistence of the applicant to stand on
his rights in terms of the contract, but that was not the dispute between the parties: the respondent fully accepted that it had no right in the
legal sense to change the conditions of employment, and that the only way open for it was the route laid down by the Act. F
Held, further, that had it not done so and had it changed such conditions unilaterally or intimated its intention to do so unilaterally, the dispute
between the parties would have fallen fair and square within the definition of 'dispute of right' being 'a dispute relating to the application or the
interpretation of any term and condition of a contract of employment . . . including the denial or infringement . . . of any right conferred by any
term and condition of a contract of employment. . . .'
Held, further, that when employees negotiated for higher wages or better conditions of employment the dispute in G such a case was not one
relating to rights but one relating to interests and consequently such employees would be entitled to strike in order to induce their employer to
agree to their demands, because they had no contractual right to make such a demand: conversely, unless the contrary intention appeared
from the Act, the employer would use the process provided for by the Act to negotiate a change of the conditions of employment of H his
employee or employees: this was precisely what the Act provided for, and there was no proof that in regard to the negotiating process there
was any intention to treat employers differently from employees in the Act.
Held, further, that the distinction between dispute of rights and dispute of interests in Wallis Labour and Employment Law at 47 footnote 6 was
apposite, namely 'conflicts of rights (or legal disputes) are those arising from the application or interpretation of an existing law or collective
agreement (in some countries of an existing contract of employment as well) whilst interest or economic disputes are those arising from the
failure of I collective bargaining, ie when the parties' negotiations for the conclusion, renewal, revision or extension of a collective agreement
end in deadlock'.
Held, accordingly, that the dispute between the parties was one relating to a dispute of interest and that consequently the respondent was in
terms of the provisions of the Act entitled to impose a lock­out as provided for in s 81(1) of the Act. Application dismissed. J

1994 NR p368

Case Information
Application for a declaratory order. The facts appear from the reasons for judgment. A
R Heathcote for applicant.
D F Smuts for respondent.
Cur adv vult. B
Postea (December 19).
Judgment
Strydom JP: This is an urgent application for a declarator and an interdict, namely: C
(1) to declare the respondent's action taken in terms of s 81(1) of the Labour Act Act 6 of 1992 to be unlawful and in contravention of s
79(2)(a)(i)(aa) and in contravention of s 81(1) of the Act; and
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(2) interdicting and prohibiting the respondent from soliciting, promoting D or continuing with the purported lock­out of applicant and all
other acts taken in terms of s 81(1) by virtue of annexure 'I' attached to the applicant's affidavit.
 Judgment
Strydom JP: This is an urgent application for a declarator and an interdict, namely: C
(1) to declare the respondent's action taken in terms of s 81(1) of the Labour Act Act 6 of 1992 to be unlawful and in contravention of s
79(2)(a)(i)(aa) and in contravention of s 81(1) of the Act; and

(2) interdicting and prohibiting the respondent from soliciting, promoting D or continuing with the purported lock­out of applicant and all
other acts taken in terms of s 81(1) by virtue of annexure 'I' attached to the applicant's affidavit.

The Court is further requested to order that para 2 shall operate as an interim interdict pending the final decision of the application. E
The applicant is employed by the respondent as relief manager. The applicant, who is from South Africa, took up employment with the
respondent during 1989. One of the conditions of his employment was a housing subsidy amounting to roughly N$5 000 per month. In order to
comply with this condition the applicant was permitted to live in a house belonging to the respondent and it was common cause between the
parties that the monetary F value of this accommodation was N$5 000 per month.
However, during July 1993, the applicant was informed by the respondent that it would endeavour to alter the conditions of applicant's
employment. This concerned the condition in regard to the subsidised housing. Alternative proposals were made by respondent which did not
meet with the applicant's approval. Further G alternative proposals were submitted to the applicant but were likewise not regarded by him as fair
and consequently he did not accept any of these proposals. H
Thereafter, and in June 1994, applicant received notice from the respondent that application was made for the appointment of a conciliation
board in terms of s 75 of the Act. Two meetings were held but the board was unable to resolve the dispute. Applicant says that he then
expected that respondent would refer the matter to the I Labour Court.
However, by letter dated 9 December 1994 applicant was given notice that respondent was going to take action against him by way of a lock­
out, commencing at 8:00 on Monday, 12 December 1994. The letter, annexure 'H', made it clear that the purpose of the lock­out was to try and
persuade the applicant to accept one of the three proposals J

1994 NR p369
STRYDOM JP
contained in respondent's offer before the conciliation board. Applicant, however, reiterated that he was not A prepared to accept any of the
proposals.
There is no real factual dispute between the parties. It is common cause that the housing subsidy forms part of the conditions of applicant's
employment with the respondent. B It was further common cause between the parties that it was the intention of the respondent to persuade
the applicant to accept a change of this condition in the form of one of the three proposals put before the conciliation board.
The issue between the parties is confined to whether the dispute between the parties relates to a right or an C interest. Applicant's stance was
that such dispute relates to a right and that the lock­out imposed by respondent was therefore invalid as it was specifically prohibited by s
79(2)(a)(i)(aa) of the Act. Mr Heathcote appeared for the applicant. Mr Smuts, on behalf of the respondent, submitted that the dispute relates
to an interest and that D respondent acted within its rights by imposing the lock­out.
From authorities cited by counsel it is clear that the distinction between what is a dispute relating to right and what is a dispute relating to an
interest is not always easy to determine. In order to determine this issue it is, in E my opinion, necessary and permissible to look at the
provisions of the Act and the generally accepted meaning of the words used by the Legislature. (See De Beer v Walker NO 1948 (1) SA 340
(T).)
By definition a lock­out is the converse of a strike. Lock­out in terms of s 1 of the Act means, and I only quote those provisions which are
relevant to the present issue: F
'(a) the exclusion of any number or all of his or her employees from any premises on or in which work provided by him or her is or has been
performed; or
(b) . . . G
with a view to inducing his or her employees to agree to, or to comply with, any demands or proposals which relate to any dispute or to
abandon any demand or modification of any such demand;'.
A 'strike' on the other hand is defined as a H
'refusal or failure in concert by two or more employees of an employer to continue, whether completely or partially, to work or resume their work or to comply with the
terms of conditions of employment applicable to them with a view to inducing such employer to agree to or to comply with any demands or proposals which relate to
any dispute or to abandon any demand or modification of any such demand'. I

Although in both these definitions reference is made to 'any dispute' counsel were agreed, and correctly so in my opinion, that the wide
wordings of the definitions are limited and are subject to the provisions of s 79(2)(a)(ii)(aa) which lay down that parties may not resort to a
strike or a lock­out if the dispute between them relates to a dispute of J

1994 NR p370
STRYDOM JP
rights. It follows therefrom that only if the dispute between the parties relates to an interest would a lock­out and a A strike as part of the
negotiating process be permissible.
Where the dispute relates to a right which remained unresolved after conciliation board proceedings, the parties are permitted by the Act to go
to the Labour Court which can then adjudicate upon the right (s 79(1)) or they may B agree to refer the dispute to arbitration (s 79(1)(b)).
At this stage it is necessary to look at the definition of 'dispute' in s 1. This reads as follows:
' "dispute" for purposes of Part IX means any dispute in any industry in relation to any Labour matter between ­ C

(a) On the one hand ­

(i) one or more registered trade unions:

(ii) one or more employees;

(iii) one or more registered trade unions and one or more employees;

(b) on the other hand ­

(i) one or more registered employers' organisations; D

(ii) one or more employers;

(iii) one or more registered employers' organisations and one or more employers,

and includes any dispute relating to ­

(aa) the application, or the interpretation of this Act or of any term and condition of a contract of employment or a collective agreement, including the denial
or infringement of any right conferred by or under any E provision by this Act or any right conferred by any term and condition of a contract of
employment or a collective agreement, or the recognition of a registered trade union as an exclusive bargaining agent or the refusal to so recognise any
such trade union.

(bb) the existence or non­existence of a contract of employment or a collective agreement.' F

This definition is then followed by the following two important definitions for this case, namely the 'dispute of interests' which means 'any
dispute in relation to any labour matter other than a matter referred to in para (aa) or G (bb) of the definition of "dispute" ' and a 'dispute of
rights' which means
'any dispute in relation to a matter referred to in para (aa) or (bb) of the definition of "dispute", excluding any such dispute in respect of which a complaint has been
lodged in accordance with the provisions of part IV'.

It is first necessary to determine what the dispute between the parties is. H
The dispute in existence between the parties is, in my opinion, that the respondent wants the applicant to agree to a change or alteration of
his conditions of employment, more particularly to agree to accept one of the three proposals to replace the subsidised housing he is entitled to
in terms of his conditions of employment, and which I the applicant refuses to accept. May I say immediately, and counsel also seem to have
been ad idem on this score, that the respondent has no right in the legal sense to make this demand simply because the conditions of
employment do not afford the respondent that right. Putting it differently, the contract between the parties does not give the respondent the
right
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 his conditions of employment, more particularly to agree to accept one of the three proposals to replace the subsidised housing he is entitled to
in terms of his conditions of employment, and which I the applicant refuses to accept. May I say immediately, and counsel also seem to have
been ad idem on this score, that the respondent has no right in the legal sense to make this demand simply because the conditions of
employment do not afford the respondent that right. Putting it differently, the contract between the parties does not give the respondent the
right to change the J

1994 NR p371
STRYDOM JP
terms and conditions of their contract. The only way by which this change can be effected is by way of A negotiation and mutual agreement in
the way provided for in the Act.
There is therefore, in my opinion, no right upon which the Labour Court can adjudicate except the insistence of the applicant to stand on his
rights in terms of the contract. But that is not the dispute between the parties as I B have tried to point out. The respondent fully accepts that
it has no right in the legal sense to change the conditions of employment, and that the only way open for it is the route laid down by the Act.
Had it not done so and had it changed such conditions unilaterally or intimated its intention to do so unilaterally, the dispute between C the
parties would have fallen fair square within the definition of 'dispute of right' being
'a dispute relating to the application or the interpretation of any term and condition of a contract of employment . . . including the denial or infringement . . . of any right
conferred by any term and condition of a contract of D employment. . .'.

Mr Heathcote conceded, correctly in my view, that when employees negotiate for higher wages or better conditions of employment the dispute
in such a case is not one relating to rights but is one relating to interests and consequently such employees would be entitled to strike in order
to induce their employer to agree to their E demands, because they have no contractual right to make such a demand.
Conversely, unless the contrary intention appears from the Act, the employer may use the process provided for by the Act to negotiate a
change of the conditions of employment of his employee or employees. In my opinion, F this is precisely what the Act provides for and I could
find no proof that in regard to the negotiating process there is any intention to treat employers differently from employees in the Act.
This issue can also be tested in a different way. As I have tried to point out, unless provided for in its conditions of employment an employer in
the position of the respondent would have no right to take the matter to the Labour G Court. But looking also at s 18 which clothes the Labour
Court with exclusive jurisdiction in certain matters I could not find a niche in which to put the present matter. Although the Court's powers are
wide it does not afford in my opinion a respondent a hearing or assistance to change the terms and conditions of employment of an H employee,
in these circumstances.
Mr Heathcote also referred the Court to the provisions of s 45, which I shall term unfair dismissals, and more particularly s 45(2)(c) which
provides that it shall be an unfair dismissal if an employee is dismissed I
'by reason of any act performed or omission committed which is by or under . . . any term and condition of a contract of employment, authorised or permitted, or the
exercise of any right conferred upon such employee by or under any such . . . term and condition'.

The answer to this seems to me that this section must be read in J

1994 NR p372
STRYDOM JP
conjunction with the rest of the Act, also the provisions of ss 79 and 81 of the Act. No doubt where a person is A summarily dismissed in a
situation which brings him or her within the ambit of this section it will result in a finding of an unfair dismissal. Where an employer follows bona
fide and fairly the mechanisms provided for in the Act to negotiate and it results in a dismissal it will in my opinion be a different situation. B I do
not hereby say that where an employer follows the mechanism provided for by the Act and which may result in a dismissal that for that reason
the provisions of s 45 will not apply. I am saying thereby that s 45 is not an indication that disputes concerning conditions of employment relate
exclusively to disputes of rights. C
I was also referred to various decisions and writers on the Labour Relations Act of the Republic of South Africa. As for the purposes of either
lock­out or strike no distinction is drawn between disputes relating to rights and disputes relating to interests, as is the case in our Act,
decisions on this issue must be applied with care. D However in Labour and Employment Law by Wallis, at 47, footnote 6, the following
distinction between disputes relating to rights and disputes relating to interests is given which in my opinion is apposite and which confirms the
conclusion to which I have come, namely: E
'Conflicts of rights (or legal disputes) are those arising from the application or interpretation of an existing law or collective agreement (in some countries of an existing
contract of employment as well) whilst interest or economic disputes are those arising from the failure of collective bargaining, ie when the parties' negotiations for the
conclusion, renewal, revision or extension of a collective agreement end in deadlock.' F

See further Industrial Law Journal vol 8 part 2 at 186. See also Rycroft and Jordaan Labour Law at 129.
In the result, I have come to the conclusion that the dispute between the parties is one relating to a dispute of interest and that consequently
the respondent is in terms of the provisions of the Act entitled to impose a lock­out G as provided for in s 81(1) of the Act. Consequently the
applicant's application is dismissed.
Applicant's Attorneys: Dr Weder, Kruger & Hartmann. Respondent's Attorneys: Lorentz & Bone.

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