• In the matter of South African Commercial Catering and Allied Workers Union (SACCAWU) obo Member vs Southern Sun Hotel Interests (Pty) Ltd [2021], the Labour Court handed down a judgment concerning the institution of a lock-out by an employer against employees for their refusal to reach an agreement indemnifying the employer against its failure to implement a wage increase as per the collective agreement.
• In this case, Southern Sun had commenced a lock-out action against its employees following their refusal to agree to a wage increase for the period of 1 April 2020 to 31 March 2021 to not be carried out, as per a collective agreement signed on 13 March 2020.
• Southern Suns argument stemmed from the COVID-19 pandemic. In light of the hospitality industry being so heavily impacted, the wage increase of 5.5% as initially agreed upon in terms of the collective agreement could not be effected throughout the period of 2020.
• This had resulted in a notice of termination of the collective agreement between Southern Sun and SACCAWU, with the indication from Southern Sun that no further collective agreements would be entered/re-entered into come 31 March 2021.
• Southern Sun then issued its employees with a demand in the form of a “non-implementation” agreement.
• SACCAWU on behalf of its members had subsequently rejected this demand, with the matter then being referred to the CCMA by Southern Sun.
• In light of the matter failing to reach consensus after 30 days, Southern Sun had issued a 48- hour notice of a lock-out on 27 July 2021, effected 30 July 2021.
• The Court held that “the respondent [Southern Sun] has indeed complied with the requisite process as set out in section 64 of the Labour Relations Act (LRA). This should ordinarily form the basis for a lock-out to be protected. With the collective agreement in place for the period of the increase forming the subject matter of the lock-out, the very lock-out certainly lost protection in view of section 65(3)(a)(i) limitations.”
• Section 65(3)(a)(i) of the LRA provides that “subject to a collective agreement, no person may take part in a strike or a lock-out or in any conduct in contemplation or furtherance of a strike or lockout if that person is bound by any arbitration award or collective agreement that regulates the issue in dispute.

Key learning: –

In order to avoid an unprotected lock-out, employers should be mindful of the extent of collective agreements which they conclude.