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NBC & Others vs Rowmoor Investments 484 (Pty) Ltd

Rowmoor is situated in Qwa-Qwa. During December 2007, this company failed to pay their staff the required bonuses, outstanding wages and leave pay. The company then (on 14 January 2008 ) advised their staff that all employees were placed on short time. The union reported the matter the NBC. The NBC instituted legal action against the company. The matter was determined in arbitration.

In short, some of the important precedents recorded by the Arbitrator were:

•  “Even if I am wrong in inferring the requirement as an implied term of the Main Agreement I consider that it is a general requirement of our labour law that the imposition of short time, where this results in a reduction in employees' income, must be preceded by proper consultation with the affected employees or their representatives. I find support for this proposition in the decision of the Industrial Court in Amalgamated Clothing and Textile Workers Union of SA v SBH Cotton Mills (Pty) Ltd (1988) 9 ILJ 1026 at 1032A.

•  It is by now trite that a requirement for consultation implies that there should be adequate prior notice, that there should be a meaningful engagement in good faith between the parties in an attempt to reach consensus over the proposals at issue and that there should be a disclosure of relevant information that will enable the employees or their union to engage effectively in consultation .

•  The matter does not end there, however. I have already noted above that the definition of short time in the Main Agreement makes it clear that short time is intended to be a temporary measure. The Applicant's evidence suggests that a period of 6 weeks would be considered the outer limit of what might be reasonable in the case of a genuine short time regime.”

The above findings by the arbitrator establishes potential new requirements in respect of consultation prior to the institution of short time, notice to be given of intended short time and the length of short time, not only for the clothing industry but also for all other companies nationally.

In the award the Arbitrator, on several instances, refers to the “fraudulent and unlawful activities” of the employer. To this effect it is incumbent on the Council to pursue criminal prosecution against the employer concerned as is the case, for instance, with employers who deduct provident fund monies from employees and do not pay over the deductions to the Council. The NBC has advised that this criminal action would be dealt with in terms of the punitive measures of the Companies Act.

The Company has appealed against the award. The employer and union parties to the NBC has authorised legal defense.

The financial compensation awarded by the Arbitrator is the biggest ever amount made in the industry; he awarded R4.1, including legal costs.