Battled, bruised and somewhat beleaguered but still soldiering on, might be a fair way to describe our National Airline Carrier which was placed into business rescue during December 2019. The troubled relationship between SAA (in business rescue) and the South African Airways Pilots Association (SAAPA) recently became the subject matter of some public and judicial scrutiny and brought to the fore an established principle of law which employers have often over the decades overlooked or at the very least, been reluctant to resort to.

Armed and no doubt exhorted with a controversial and often maligned bail out, the Business Rescue Practitioners (BRP’s) had, in the preceding period, been labouring (no pun intended) to limit the financial exposure of South African Airways. Employers will appreciate that salaries are inevitably one of the more significant cost items comprising a considerable component of any balance sheet and often terms and conditions of employment and established practices need to be revisited for the purposes of ensuring business sustainability.

The BRP’s of SAA were required to revisit certain conditions of employment and other matters with a view to, amongst other things, reducing the remuneration payable in terms of previously concluded agreements and to re-assess certain practices and policies which had been fairly longstanding.

The detail of the proposed variation is not of importance in the context of the current discussion. However, in short, the BRP’s and SAAPA were unable to agree on the way forward and some drastic action was required to break the impasse which had arisen.

Most employees would have read and understood, particularly in the aftermath of Covid-19 and the unfortunate impact which this has had on both business and labour that, to simply change terms and conditions of employment without the consent of the employees would not only pose employment challenges but essentially be unlawful and constitute a repudiation of the employment contract, affording customary contractual (and other) remedies to aggrieved employees and trade unions.

This option was wisely avoided by the BRP’s. They rather sought (as the employer) to channel internal dispute resolving mechanisms and in the absence of any resolution, proceeded to “lock out” the employees forming the subject matter of the dispute once they had followed appropriate procedures in that regard.

What is a lock out?

Simply put, this form of industrial action is the employer’s equivalent of a strike. Employees are precluded from rendering their services and the employer is not required to pay the employees for as long as the lock out persists. Similarly to a strike, this form of industrial action is aimed at placing pressure on employees to induce a settlement on the terms proposed by an employer or on such other conditions as may be agreed upon ultimately. It is a perfectly legitimate course available to employers finding themselves in such difficulty.

Of course, the lock out option is not without its criticism. When this is instigated at the instance of the employer, no replacement labour may be engaged in the place of the “locked out” employees and as one would appreciate, fairly considerable industrial tensions can arise in the prosecution thereof.

Returning to SAA, the representatives of the pilots approached the Labour Court to declare the lock out unlawful and unprotected. They failed. The Court concluded that all procedures and prerequisites for the implementation of the lock out had been complied with and that nothing, in law or equity, prohibited the BRP’s from executing and implementing the lock out against the employees concerned.

Applying the lockout in current employment circumstances

The dispute in question raised, once again, a significantly topical issue as to the manner in respect of which employers faced with dwindling turnover and the concomitant reduction in profitability may be in a position to change terms and conditions of employment in a manner which is lawful, proper and without committing any form of unfair labour practice, so to speak.

Retrenchment, of course, is the remedy which most employers have immediately and somewhat spontaneously resorted to in the current environment. This course of action, in many instances, may of course alleviate the employer’s financial exposure and predicament. Job losses, however, are not always the answer. Aside from attracting considerable financial exposure in terms of severance packages, an employer may indeed need to retain the current workforce and the number of employees involved but not on the conditions of employment which have hitherto prevailed.

In such circumstances employers may, compellingly, through the following of appropriate procedures, engage upon a lock out process and endeavour to induce, through the process of collective bargaining, the amendment to the conditions of employment which they seek to achieve. This they do by precluding the employees from rendering their services until the deadlock is resolved.

Employees may be locked out, irrespective of the category of employment in which they are engaged (whether managerial or so–called “blue collar”) and until such time as resolution of the dispute is attained, the employment relationship is, for all practical terms, suspended.

Conclusion

Strikes, as we have come to know them over the decades, are aimed at compelling employers to comply with the demands of their employees. Nothing precludes the employers from engaging upon a similar course of action and provided such an option is effectively and properly planned and executed, employers might be well advised to consider such a course of action over these troubled times in seeking to change and vary conditions of employment. This, however, needs to be meticulously prepared and executed from both a legal and an operational perspective.