SACCAWU wins key battle against Massmart at Constitutional Court

Johannesburg March 25 – In a landmark ruling with profound implications for collective bargaining and industrial action, Constitutional Court has definitively drawn jurisdictional line between Labour Court and High Court concerning financial claims arising from strikes.

The Court held, by a majority of eight judges to one, that the Labour Court power to order payment of “just and equitable compensation” under section 68(1)(b) of the Labour Relations Act (LRA) is strictly limited to losses caused by unprotected strikes or lock-outs.

Consequently, if unlawful conduct—even criminal acts—occurs during a protected strike, an employer claim for financial damages is a delictual matter that must be pursued in the High Court.

The case stemmed from a protected strike by SACCAWU members at various Massmart stores including Game, Makro, and Builders in May 2021.

Massmart claimed  picketers breached agreed-upon rules blockading entrances, intimidating staff and customers, and damaging property, causing millions in lost profits.

The retailer sued SACCAWU in the Labour Court, seeking compensation under LRA section 68(1)(b).

SACCAWU raised an exception, arguing Labour Court lacked jurisdiction because the underlying strike was protected.

Both Labour Court and Labour Appeal Court dismissed this argument, leading SACCAWU to appeal to the Constitutional Court.

The judgment emphasised critical distinction between protected and unprotected industrial action, a distinction central to the Act’s design.

Section 67 (Protected Action): Grants participants immunity from civil liability (delict and breach of contract) and protects them from dismissal for striking. However, this immunity does not extend to acts that are criminal offences s67(8).

Section 68 (Unprotected Action): Provides the Labour Court with remedies—like interdicts and compensation—specifically for strikes or lock-outs that do not comply with the LRA’s Chapter IV.

The majority found that Massmart claim, while concerning conduct alleged to be unlawful, was intrinsically linked to a strike that was undisputedly protected.

Therefore, the claim did not fall under section 68.

“The consequence is that, where criminal or delictual conduct occurs during a protected strike, employer’s remedy lies in an action for damages under common law of delict, which must be instituted in the High Court,” Justice Majiedt stated.

The Court rejected the reasoning of the lower courts, which had relied on obiter comments in a Supreme Court of Appeal case, Dunlop Mixing, and instead affirmed  principles set out in the Labour Appeal Court earlier decision in Stuttafords.

In a dissenting judgment, Justice Dambuza argued for a broader interpretation.

She contended that the 2002 amendment to section 68(1)(b), which added the words “or conduct,” was intended to allow the Labour Court to award compensation for specific conduct during a strike that breaches Chapter IV of the LRA—such as violating picketing rules—even if the strike itself is protected.

This approach, she argued, keeps specialised labour disputes within the specialist Labour Court.

For Trade Unions: It reinforces the protective shield around protected strike action.

While unions and their members remain liable for criminal acts and can be sued for delictual damages, employers cannot use the quicker, specialist Labour Court route to seek financial compensation for losses incurred during a lawful strike.

This may reduce the financial litigation risk associated with organising protected action.

For Employers: The path to recovering financial losses from strike-related misconduct is now longer and potentially more complex.

Employers must build a traditional delictual case (proving wrongfulness, negligence, causation, and harm) and pursue it in the High Court, a process generally seen as more costly and time-consuming than Labour Court proceedings.

For Labour Peace: The judgment underscores the legislature’s intent to treat protected strikes as a legitimate economic weapon in collective bargaining.

By channelling delictual claims to the High Court, it potentially reduces the frequency of ancillary litigation in the Labour Court during or after strikes, allowing that court to focus on its core functions of resolving unfair labour practices and dismissal disputes.

The Constitutional Court decision ultimately strengthens  jurisdictional boundaries between South African court system, affirming that while the Labour Court is the master of labour law disputes, the High Court remains the guardian of common law delictual claims, even when they arise in a labour context.