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[2011] ZASCA 56
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Johannesburg City Parks v Mphahlani NO and Others (344/10) [2011] ZASCA 56; (2011) 32 ILJ 1847 (SCA); [2012] 1 BLLR 1 (SCA) (31 March 2011)
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THE SUPREME COURT
OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case no: 344/10
In
the matter between
JOHANNESBURG CITY
PARKS
................................................................
Appellant
and
ADV JAFTA
MPHAHLANI NO
........................................................
First
Respondent
THE
SOUTH AFRICAN LOCAL
.................................................
Second
Respondent
GOVERNMENT
BARGAINING COUNCIL
SAMWU obo F
MAGUVHE
.............................................................
Third
Respondent
COMMISSIONER,
CHAIRMAN WEBB NO
..............................
Fourth
Respondent
Neutral
citation:
Johannesburg City Parks v Mphahlani NO & others
(344/10)
[2011] ZASCA 56
(31 March 2011)
Coram:
Streicher, Nugent, Snyders, Bosielo and Majiedt JJA
Heard: 24
February 2011
Delivered: 31
March 2011
Summary
:
Labour Law –
Dismissal – Interpretation – s 62(3A)(a) and (b) –
whether the arbitrator had jurisdiction
to hear the arbitration
whilst there was a demarcation dispute pending before the CCMA
ORDER
On appeal from
:
Labour Appeal Court, Johannesburg (Zondo JP, Patel JA and Sangoni AJA
sitting as a court of appeal).
1 The appeal is
upheld with costs.
2 The order by the
Labour Appeal Court is set aside and substituted with the following
order:
1 The appeal is
upheld with costs.
2 The order made by
the Labour Court is set aside and substituted with
the following order:
‘
1
The arbitration award dated 17 November 2005 issued under the
auspices of the South African Local Government Bargaining Council
(case no GMD 080511) is set aside.
2 The third
respondent is ordered to pay the costs of the application.’
__________________________________________________________________
JUDGMENT
__________________________________________________________________
BOSIELO JA (Nugent,
Snyders and Majiedt JJA concurring)
[1] This is an
appeal with the leave of this Court against a judgment of the Labour
Appeal Court (LAC) dismissing an appeal by the
appellant against the
judgment of the Labour Court (LC) in terms whereof the appellant’s
application for the review and setting
aside of an arbitration award
made by one Ms Webb during 31 October 2005 was dismissed.
[2] The facts of
this case are fairly straight-forward and to a large extent common
cause. Mr Maguvhe was employed by the appellant.
He was a member of a
trade union called South African Municipal Workers Union (SAMWU), the
third respondent in this appeal. Following
upon a formal disciplinary
enquiry he was dismissed on 21 April 2005. A dispute regarding the
fairness of the dismissal arose between
the appellant and the third
respondent, representing Maguvhe, which was referred to second
respondent (SALGBC). Second respondent
is a duly registered
bargaining council. The appellant did not attend the conciliation
meeting alleging that it did not fall within
the jurisdiction of
SALGBC. The dispute was referred to arbitration and the fourth
respondent (Webb) was appointed the arbitrator.
[3] On 16 September
2005 the appellant sent a letter to the second respondent stating
that it would not attend the arbitration proceedings
as it did not
fall within its jurisdiction. In addition, the appellant advised
second respondent in the same letter that this was
due to the fact
that there was a demarcation dispute still pending before the
Commission for Conciliation, Mediation and Arbitration
(CCMA) and
that until that dispute is resolved, it would not be bound by any
decision taken by the second respondent. It stated
further that by
virtue of this fact its employees were free to refer their
disciplinary matters to the CCMA which the appellant
would duly
attend.
[4] It is not in
dispute that the letter aforesaid was received and read by the fourth
respondent. As foreshadowed in the letter
the appellant did not
attend the arbitration proceedings. Notwithstanding the clear
contents of the letter aforesaid and in the
absence of the applicant,
the fourth respondent found that she had jurisdiction and proceeded
with the arbitration proceedings.
She made a default award in favour
of third respondent.
[5] Aggrieved by the
arbitrator’s decision, the appellant tried unsuccessfully to
have the award reviewed and set aside by
the LC. This was followed by
an unsuccessful appeal to the LAC.
[6] This appeal
revolves around the correct interpretation of s 62(3A) of the Labour
Relations Act 66 of 1995 (LRA). I therefore
find it expedient to set
out the relevant part of s 62(3A) which reads:
‘
In any
proceedings before an arbitrator about the interpretation or
application of a collective agreement, if a question contemplated
in
subsection (1)(a) or (b) is raised, the arbitrator must adjourn those
proceedings and refer the question to the Commission if
the
arbitrator is satisfied that –
(a) the question raised –
(i) has not previously been
determined by arbitration in terms of this section; and
(ii) is not the subject of an
agreement in terms of subsection (2); and
(b) the determination of the
question raised is necessary for the purposes of the proceedings.’
[7] Before us
counsel for the appellant submitted that s 62(3A) is clear and has no
inherent ambiguities. He contended that the
section provides clearly
and unambiguously that when faced with a demarcation dispute, the
arbitrator has no choice but to adjourn
the proceedings until the
very issue of jurisdiction is resolved, more so that the Bargaining
Council itself does not possess the
jurisdiction to resolve a
demarcation dispute. This issue falls within the exclusive domain of
the CCMA, so it was submitted.
[8] On the other
hand, counsel for the third respondent, contended that even where the
issue of jurisdiction is raised, the arbitrator
must first satisfy
himself or herself if he or she has jurisdiction on the facts before
him or her and if the dispute is unrelated
to the pending demarcation
dispute, to proceed to hear the matter on the merits. He submitted
that if the party raising lack of
jurisdiction as a defence is
aggrieved by the decision of the arbitrator to proceed, he or she is
free to take such a decision
on review to the LC where the matter can
be referred to the appropriate forum with authority being the CCMA.
[9] It is common
cause that SAMWU and the Independent Municipal and Allied Trade Union
(IMATU) are both members of second respondent
(SALGBC). SAMWU and
IMATU contend that the appellant falls within the scope of second
respondent. The appellant disputes this vigorously.
It is this
dispute that was referred to the CCMA for determination in terms of
section 62 of the LRA by both SAMWU and IMATU. It
follows logically
in my view that, if the appellant is not a party to second
respondent, then the second respondent would not have
jurisdiction
over it. This is the issue that was raised pertinently as a point
in
limine
by the appellant. The question
therefore is whether the arbitrator acted correctly by proceeding
with the arbitration proceedings
whilst there was this unresolved
demarcation dispute.
[10] The LAC found
that the appellant relied on a wrong section as s 62(3A) is
restricted to an instance where the ‘proceedings
before an
arbitrator are about the interpretation or application of a
collective agreement’. The LAC found that the dispute
herein
was not about the interpretation or application of a collective
agreement but about unfair dismissal. The LAC drew a distinction
between s 62(3A) and s 62(3) and (5). The LAC found that the
distinguishing feature is that s 62(3) speaks of ‘any
proceedings’
whilst s 62(3A) restricts itself to ‘proceedings
before an arbitrator about the interpretation or application of a
collective
agreement.’ The LAC concluded therefore that s
62(3A) was narrower than s 62(3) and not applicable to this case. The
LAC
found that s 62(3A) did not apply to the proceedings before the
arbitrator as these were concerned with an unfair dismissal dispute.
Furthermore the LAC found that in the absence of any evidence being
put before the arbitrator, the arbitrator could not have been
and was
not satisfied about the questions raised in s 62(3A)(a) and (b).
[11] I do not agree
with the construction of s 62(3A) and s 62(3) and (5) as adumbrated
by the LAC. I found the distinction drawn
by the LAC to be more
illusory than real. The nub of the enquiry is simply whether the
arbitrator had the jurisdiction to arbitrate
this matter or not,
given the admitted fact that there was a demarcation dispute which
addresses jurisdiction pending before the
CCMA.
[12] It would appear
to me to be illogical that the arbitrator, fully alerted to the
objection raised by the appellant in their
letter of 16 September
2005, and whilst the demarcation dispute is still pending before the
CCMA, could ignore such an objection
and arrogate to herself the
jurisdiction to arbitrate this matter. The arbitrator could only have
had jurisdiction if the collective
agreement was binding on the
appellant. That was in issue and pending before the only body
empowered to decide it, the CCMA. In
order to decide jurisdiction it
had to be decided whether the collective agreement applied to the
appellant. That decision falls
squarely within the wording of s
62(3A). Logic dictates that in strict compliance with s 62(3A) which
is couched in peremptory
language that the arbitrator was obliged to
adjourn the proceedings as the demarcation dispute was still pending
before the CCMA.
[13] It is not in
dispute that the demarcation dispute herein had been referred by
SAMWU and IMATU during 2004 to the CCMA for determination
of the
question whether the appellant falls within the scope of the second
respondent. It is furthermore common cause that as at
16 September
2005 when the arbitration proceedings were held this dispute was
still pending before the CCMA. It makes little sense
to me that the
arbitrator could proceed to arbitrate the matter against an objection
to the jurisdiction of second respondent (SALGBC)
based on s 62(3A)
of the LRA. It appears to me plain that such conduct circumvents the
mischief which s 62(3A) seeks to address,
ie that the arbitrator
shall not adjudicate in a matter where his or her jurisdiction is
being challenged on the basis of whether
one of the parties is bound
by the collective agreement. To say that, an arbitrator can act even
in the face of a pending demarcation
dispute and that such a decision
can later be taken on review to the LC as submitted by counsel for
the third respondent would
cause multiple streams of litigation in
the same issue and is simply untenable. This is so because even the
LC itself will not
be able to handle the matter until the CCMA has
finally determined the demarcation dispute. Manifestly, the
consequences of such
an approach are so absurd that the legislature
could never have contemplated or intended them. An interpretation
which leads to
such patent absurdities should in my view, not be
countenanced. It follows in my view that this appeal must succeed.
[14] In the result
the following order is made:
1 The appeal is
upheld with costs.
2 The order by the
Labour Appeal Court is set aside and substituted with the following
order:
1 The appeal is
upheld with costs.
2 The order made by
the Labour Court is set aside and substituted with
the following order:
‘
1
The arbitration award dated 17 November 2005 issued under the
auspices of the South African Local Government Bargaining Council
(case no GMD 080511) is set aside.
2 The third
respondent is ordered to pay the costs of the application.’
_______________
L O Bosielo
Judge of Appeal
STREICHER JA
:
(NUGENT, SNYDERS and MAJIEDT JJA concurring)
[15] This is an
appeal against a judgment of the Labour Appeal Court (the LAC) in
respect of an unfair dismissal dispute between
the third respondent
and the appellant.
[16] The third
respondent was dismissed from the employ of the appellant on the
ground that he had been in breach of the appellant’s
conditions
of service in that he had done private work during working hours. He
contended that his dismissal was unfair and referred
the dispute to
the second respondent, the South African Local Government Bargaining
Council (the SALGBC). The SALGBC is registered
in terms of s 29
of the Labour Relations Act 66 of 1995 (the LRA) as a bargaining
council with the ‘Local Government
Undertaking in the Republic
of South Africa’ as its registered scope. The collective
agreements concluded in the SALGBC have
been extended in terms of
s 32 of the LRA to non-parties falling within its registered
scope.
[17] Upon the
dispute having been referred to the SALGBC it called on the appellant
and the third respondent to attend a conciliation
meeting. The
appellant responded that it would not attend the meeting as it did
not fall within the jurisdiction of the SALGBC.
It added:
‘
There
is a demarcation dispute pending at the CCMA case no SA 18299/04.
Until this matter is finalized by the CCMA Johannesburg
City Parks
will not be bound by any decision of the Bargaining Council and our
employees are free to refer disciplinary matters
to the CCMA which
the company duly attend.’
The SALGBC
thereafter called upon the parties to attend an arbitration of the
dispute to which the appellant responded in a similar
manner.
[18] The appellant
is an association established by the City of Johannesburg
Metropolitan Municipality and incorporated in terms
of s 21 of
the Companies Act 61 of 1973. The majority of the appellant’s
workforce is represented by the South African
Municipal Workers Union
(SAMWU) and the Independent Municipal and Allied Trade Union (IMATU).
SAMWU and IMATU contend that the
appellant and various other
utilities, agencies and corporatized entities (UAC’s)
established by the Greater Johannesburg
Transitional Metropolitan
Council and/or the City of Johannesburg Metropolitan Municipality,
which succeeded it, fall within the
registered scope of the SALGBC.
At all material times the appellant and the other UAC’s have
contended that they do not fall
within the scope of the SALGBC.
During 2004 SAMWU and IMATU referred this dispute to the Commission
for Conciliation, Mediation
and Arbitration (the Commission) in terms
of s 62 of the LRA. This is the demarcation dispute referred to
in the appellant’s
letters to the SALGBC in response to its
invitation to attend conciliation and arbitration proceedings.
[19] The SALGBC
proceeded with the arbitration by appointing Ms Webb, the fourth
respondent, to conduct the arbitration. The appellant
did not attend
the arbitration hearing and after having heard the evidence of the
third respondent the arbitrator held that he
had been unfairly
dismissed and ordered that he be reinstated retrospectively from the
date of his dismissal. The appellant thereupon
applied to the Labour
Court for an order reviewing and setting aside the arbitration award
on the ground that the SALGBC lacked
jurisdiction to adjudicate the
dispute. The labour court held that the SALGBC did have jurisdiction
in respect of the dispute and
dismissed the application for review
with costs.
[20] An appeal by
the appellant to the LAC was unsuccessful. Counsel for the appellant
submitted in that court, as he did before
us, that, in terms of
s 62(3A) of the LRA the fourth respondent was obliged to adjourn
the proceedings once she became aware
that a demarcation dispute was
pending before the Commission. The section reads:
‘
In any
proceedings before an arbitrator about the interpretation or
application of a
collective
agreement
,
if a question contemplated in subsection (1)
(a)
or
(b)
is raised, the arbitrator must adjourn those proceedings and refer
the question to the Commission if the arbitrator is satisfied
that –
(a) the question raised -
(i) has not previously been
determined by arbitration in terms of this section; and
(ii) is not the subject of an
agreement in terms of subsection (2); and
(b) the determination of the
question raised is necessary for the purposes of the proceedings.’
[21] Section 62(1)
deals with demarcation disputes and provides that any registered
trade union, employer, employee, registered
employers’
organisation or council that has a direct or indirect interest in the
application may apply to the Commission
for a determination as to (a)
whether any employee, employer, class of employees or class of
employers, is or was employed or engaged
in a sector or area; (b)
whether any provision in any collective agreement is or was binding
on any employee, employer, class of
employee or class of employers.
[22] The LAC held
that one should distinguish between a dispute and an issue in a
dispute and that ‘proceedings before an
arbitrator about the
interpretation or application of a collective agreement’
referred to in s 62(3A) were intended
to refer to proceedings
where the main dispute between the parties was about the
interpretation or application of a collective
agreement. In the case
under consideration, so it held, the main dispute concerned the
fairness of the dismissal of the third respondent
whereas the
application of the collective agreement was only an issue in that
dispute. For that reason the LAC held that the section
was not
applicable to the arbitration proceedings conducted by the fourth
respondent and that the appeal should be dismissed with
costs.
[23] In terms of
s 191 of the LRA a dismissed employee may refer a dispute about
the fairness of his dismissal to a bargaining
council if the parties
to the dispute fall within the registered scope of the council or to
the Commission if no council has jurisdiction
(s 191(1)(a)). The
council or the Commission must thereupon attempt to resolve the
dispute through conciliation (s 191(4)).
If the council or a
commissioner certifies that the dispute remains unresolved, or if 30
days have expired since the council or
the Commission received the
referral, and the dispute remains unresolved the council or the
Commission must arbitrate the dispute
at the request of the employee
if the employer alleged that the reason for dismissal is related to
the employee’s conduct
(s 191(5)(a)(i)). Section 51(4)
provides that if one or more of the parties to a dispute that has
been referred to a bargaining
council do not fall within the
registered scope of that council, it must refer the dispute to the
Commission. It is therefore clear
that a bargaining council has no
jurisdiction to arbitrate an unfair dismissal dispute if one of the
parties to the dispute does
not fall within the registered scope of
the council.
[24] If the employer
disputes that he falls within the registered scope of the bargaining
council to which a dispute has been referred,
as happened in the
present case and that issue has not been determined by a body having
authority to do so, it obviously needs
to be determined in order to
establish whether the bargaining council has jurisdiction in respect
of the dispute. But, quite understandably,
the LRA does not confer
jurisdiction on a bargaining council to arbitrate a dispute about its
own registered scope. In terms of
s 62 it is the Commission that
has jurisdiction to decide demarcation disputes.
[25] Counsel for the
third respondent did not submit that a bargaining council has
jurisdiction to resolve a demarcation dispute.
He submitted that the
unfair dismissal proceedings between the appellant and the third
respondent were not proceedings about the
interpretation or
application of a collective agreement and that s 62(3A) by
implication authorised an arbitrator in such
proceedings, in the
event of a demarcation issue being raised, to proceed with the matter
without determining the demarcation issue.
Thus, leaving it to the
party contending that he fell outside the registered scope of the
bargaining council, to review the arbitrator’s
award once the
demarcation issue had been decided by the Commission.
[26] I can
understand an argument to the effect that because the legislature
said that in proceedings about the interpretation or
application of a
collective agreement a demarcation dispute which has not been decided
must be referred to the Commission, the
legislature intended that in
other proceedings such a dispute need not be referred to the
Commission. But, that argument does not
deal with the question as to
what the arbitrator in such other proceedings is to do about the
demarcation dispute if the proceedings
are not adjourned and the
demarcation dispute is not referred to the Commission. According to
counsel for the third respondent’s
argument the arbitrator
simply has to ignore the dispute about its jurisdiction, proceed with
the matter, make an award which may
subsequently, maybe months later,
be reviewed and set aside. Meanwhile the award would presumably be
treated as a valid award which
may be enforced. I am satisfied that
the legislature could not have intended such an extraordinary result
and that had it intended
such a result it would have made its
intention clear.
[27] Section 62(3A)
provides that ‘no arbitrator’ may in the circumstances
mentioned in the section proceed with an
arbitration in the event of
a demarcation dispute being raised. The reference to an arbitrator is
therefore not a reference only
to the SALGBC as arbitrator but is a
reference to any arbitrator ie also an arbitrator appointed by
agreement between the parties
which, in terms of the agreement may
have had jurisdiction to decide the demarcation dispute between the
parties, had it not been
for the section. This section must therefore
have been intended to deprive arbitrators of jurisdiction to decide
demarcation disputes
between the parties in the circumstances
mentioned in the section. That being so, there is no way it can be
interpreted to have
been intended to confer jurisdiction on an
arbitrator, such as a bargaining council, which in any event does not
have jurisdiction
to arbitrate a demarcation dispute to proceed with
the arbitration.
[28] For these
reasons I agree that the appeal should succeed and that the order
proposed by my colleague Bosielo JA should be made.
__________________
P E STREICHER
JUDGE OF APPEAL
APPEARANCES:
For
Appellant: Adv Timothy Bruinders SC
Instructed
by:
Sim
& Botsi, Johannesburg,
Symington
& De Kok, Bloemfontein;
For
Respondent: Adv JG van der Riet SC
Instructed
by:
Cheadle
Thompson & Haysom, Johannesburg;
Matsepes Inc,
Bloemfontein;
McIntyre & Van
der Post, Bloemfontein