THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case no: JR 1662/20
In the matter between:
NATIONAL BARGAINING COUNCIL FOR THE ROAD
FREIGHT AND LOGISTICS INDUSTRY Applicant
And
GUY BLOCH N.O. First Respondent
CRYSTAL COOL LOGISTICS (PTY) LTD Second Respondent
MOTOR TRANSPORT WORKERS UNION
obo MEMBERS Third Respondent
Heard: 5 October 2023
Delivered: 26 January 2024
This j udgment was handed down electronically by circulation to the parties and
legal representatives by email. The date and time for hand -down is deemed to
be 26 January 2024
Summary: Bargaining council arbitration proceedings – review of
proceedings, decisions and awards of arbitrators – test for review considered –
s 145 as read with s 158(1)(g) of LRA 1995 – determination of conduct of
arbitrator, gross irregularities and reasonable outcome
Collective agreement – compliance with agreement – principle of substantial
compliance considered – employer substantially complying with agreement
even though not complying with the letter thereof – arbitrator’s finding of
substantial compliance upheld
2
Collective agreement – purpose of provision relating to incentive scheme in
collective agreement considered – purpose was achieved in this case –
incentive scheme valid – finding of arbitrator to this effect not reviewable
Bargaining Council collective agreement – purpose of enforcement provisions
considered – purpose is to secure compliance and not to punish – employer
having remedied non-compliance – objective of enforcement process achieved
– arbitrator’s finding to this effect sustainable on review
Condonation – principles considered – late filing of review application –
applicant making out proper case for condonation – condonation granted
Review application – arbitration award constituting reasonable outcome –
applicant failing to make out case
Judgement
SNYMAN. AJ
Introduction
[1] This judgment concerns an application by the National Bargaining Council for
the Road Freight and Logistics Industry (NBCRFLI), as applicant, to review and set
aside an arbitration award handed down by one of its own arbitrators, emanating from
enforcement proceedings between the applicant and the second respondent under
section 33A of the Labour Relations Act (LRA)
1. The dispute placed before the first
respondent, who was the duly appointed arbitrator in the proceedings , was whether
the second respondent had complied with the provisions of clause 35 of the Main
Collective agreement of the NBCRFLI (the Main Agreement). The current review
application has been brought in terms of section 145 as read with section 158(1)(g),
of the LRA.
[2] In an arbitration award dated 1 August 2020, the first respondent decided that
the second respondent was in compliance with clause 35 of the Main Agreement, and
therefore that an incentive scheme implemented by the second respondent to
1 Act 66 of 1995 (as amended).
3
remunerate its employees, in terms of that provision, was valid, and stood. It is this
award of the first respondent that forms the subject matter of the review application
brought by the applicant.
Condonation
[3] The arbitration award of the first respondent was received by the applicant on
1 August 2020. The applicant filed its review application on 19 November 2020 .
However, the time limit as contemplated by section 145(1) 2 of the LRA expired on 15
September 2020, making the applicant’s review application just more than two months
out of time. The applicant did apply for condonation as part of its notice of motion and
founding affidavit in the review application.
[4] I n dealing with the condonation application, I am satisfied that o verall
considered, it was a proper condonation application dealing with all the condonation
considerations as articulated in Melane v Santam Insurance Co Ltd
3. In dealing with
an application for condonation specifically where it came to the late filing of a review
application, the Labour Appeal Court (LAC) in A Hardrodt (SA) (Pty) Ltd v Behardien
and Others
4 said:
‘The principles laid down … included, firstly that there must be good cause for
condonation in the sense that the reasons tendered for the delay had to be convincing.
In other words, the excuse for non-compliance with the six-week time period had to be
compelling. Secondly, the court held that the prospects of success of the appellant in
the proceedings would need to be strong. The court qualified this by stipulating that
the exclusion of the appellant's case had to be very serious, ie of the kind that resulted
in a miscarriage of justice.’
[5] Dealing first with the length of delay, although the delay of two months, in the
context of a review application, would be considered to be excessive, it is not unduly
2 The prescribed time limit is 6(six) weeks.
3 1962 (4) SA 531 (A) at 532C -E. The Court held that these requirements for consideration are the
length of the delay, the explanation for the delay, the importance of the case (prejudice) and the
prospects of success. These requirements are interrelated, and must be holistically considered.
4 (2002) 23 ILJ 1229 (LAC) at para 4.
4
lengthy to the extent of mitigating, in itself, against the granting of condonation, absent
a truly excellent explanation. In short, it sits on the border of becoming problematic ,
but is not unduly excessive.
[6] The next element to considering any condonation application is that of the
explanation provided for the delay. This must be a proper explanation supported by
sufficient particularity, dealing with the entire period of the delay. In Seatlolo and others
v Entertainment Logistics Service (a division of Gallo Africa Ltd)
5 the Court held:
‘In order to exercise its discretion whether or not to grant condonation, this court must
be appraised of all the facts and circumstances relating to the delay. The applicant for
condonation must therefore provide a satisfactory explanation for each period of delay.
See NUMSA & another v Hillside Aluminium [2005] 6 BLLR 601 (LC) where Murphy
AJ held that an unsatisfactory explanation for any period of delay will normally be fatal
to an application, irrespective of the applicant's prospects of success.’
[7] In my view, the issue of a proper explanation for the entire period of the delay
would be the most critical component to any condonation application. This is even
more so in a review application, considering the words of ‘convincing’ and ‘compelling’
used by the LAC in A Hardrodt supra in describing what the explanation needs to be.
As to how this explanation must be provided, the Court in Independent Municipal and
Allied Trade Union on behalf of Zungu v SA Local Government Bargaining Council
and Others
6 provided the following guidance:
‘In explaining the reason for the delay it is necessary for the party seeking condonation
to fully explain the reason for the delay in order for the court to be in a proper position
to assess whether or not the explanation is a good one. This in my view requires an
explanation which covers the full length of the delay. The mere listing of significant
events which took place during the period in question without an explanation for the
time that lapsed between these events does not place a court in a position properly to
assess the explanation for the delay. This amounts to nothing more than a recordal of
the dates relevant to the processing of a dispute or application, as the case may be.’
5 (2011) 32 ILJ 2206 (LC) at para 11
6 (2010) 31 ILJ 1413 (LC) para 13
5
[8] Any explanation in the application for condonation must be considered in the
context of the imperative of the expeditious resolution of employment disputes. In Food
and Allied Workers Union on behalf of Gaoshubelwe v Pieman’s Pantry (Pty) Ltd7 the
Court said:
‘… Our courts have, on occasion, pronounced on the importance of labour disputes to
be conducted with expedition. For example, in National Research Foundation the
Labour Court held:
‘[15] It is now trite that there exists a particular requirement of expedition where it
comes to the prosecution of employment law disputes. …’
[9] Next, the applicant for condonation must deal with the issue of prejudice. The
applicant must set out in what manner the applicant would be prejudiced if condonation
is refused, again with sufficient particularity. The prejudice the applicant would suffer
should be compared to the possible prejudice the other party would suffer if
condonation is granted, so as to enable the Court to make a balanced decision on this.
[10] The issue of prospects of success must also be considered. However, and
where it comes to considering the issue of prospects of success, there is a proviso,
which proviso in fact illustrates the critical importance of the explanation for the delay.
Where an applicant fails to provide an explanation for the delay or material parts of the
delay, the issue of prospects of success may become an irrelevant consideration.
8
[11] Turning to the explanation provided by the applicant in casu, it says that initially,
the delay was caused by a misunderstanding between itself, and the Motor Transport
Workers Union (MTWU), which union was also a participating party in the arbitration
proceedings opposing the second respondent’s incentive scheme. The applicant
thought that MTWU was going to file the review application, but after about two
months, MTWU reverted to the applicant and indicated that it was of the view that the
applicant was better suited to proceed with the review application.
7 (2018) 39 ILJ 1213 (CC) at para 187.
8 See Universal Product Network (Pty) Ltd v Mabaso and Others (2006) 27 ILJ 991 (LAC) at para 20;
Colett v Commission for Conciliation, Mediation and Arbitration and Others (2014) 35 ILJ 1948 (LAC)
at para 38; Mgobhozi v Naidoo NO and Others (2006) 27 ILJ 786 (LAC) at para 34.
6
[12] On 2 October 2020, the applicant sought opinion from its attorneys as to
prospects of success where it came to the review application, and received this opinion
on 14 October 2020. After the applicant’s officials properly considered the opinion, it
was resolved that t he applicant proceed with the review application, and attorneys
were instructed on 26 October 2020 to take this action. The draft of the application
was completed by 6 November 2020. The draft had to be considered by Mongezi
Kekana (Kekana), who was the designated agent directly involved in this matter
throughout, but he was on leave which caused a further delay of about a week.
[13] In cons idering this explanation, it is a little thin , but at least there is an
explanation for the entire period of the delay. It is clear to me that at all relevant times,
the applicant actively pursued the matter, and was always intent on pursuing it to
finality. The bulk of the delay sits in the misunderstanding between the applicant and
MTWU, and although one can say that the applicant should have rather simply
proceeded with the review of its own accord, the explanation is not unreasonable. The
applicant, being a bargaining council funded by contributions from industry employers,
cannot be criticised for wanting to first secure legal opinion on the prospects of success
of its review application, before deciding to pursue it. The period of just more than
three weeks it ultimately took to prepare and file the review application once attorneys
were instructed, cannot be considered to be an undue delay. Overall considered, the
applicant has thus, in my view, provided a proper explanation for the delay in this
instance.
[14] On the issue of prejudice, the applicant did elaborate, in the founding affidavit,
on the prejudice it would suffer. I do not intend to re peat all of this in this judgment.
Suffice it to say, this consideration favours the applicant. If condonation is not granted,
the review application will fail, in an instance where the application and interpretation
of the applicant’s main agreement is at stake, which is an issue that should be finally
determined by this Court and could have importance for the whole industry . Where it
comes to prejudice to the second respondent, it will still have opportunity to state its
case if condonation is granted, which largely ameliorates its harm. Fairness dictates
that the applicant must be given an opportunity to present its review case in this regard
to this Court.
7
[15] Finally, the issue of prospects of success is interwoven with the merits of the
review application, and should not be considered separately in this instance.
Condonation is thus essential to enable the merits of the review application to be
properly and fairly ventilated.
[16] Even though the second respondent opposed the review application, it did not
advance any facts in contradiction to the applicant’s explanation, in its answering
affidavit. Its opposition was in essence aimed at taking apart the applicant’s
explanation. Even though some of the criti cism of the second respondent levelled at
the applicant’s explanation is justified , I do not believe it is sufficient to non- suit the
applicant where it comes to the explanation provided. I remain satisfied that the
applicant always had the intention to pursue the matter further, and did file the review
application within about a month after receiving opinion from its attorneys, which is not
an undue time taken.
[17] I am therefore inclined to grant the applicant ’s application for condonation for
the late filing of the review application, and I shall now attend to deciding this review
application by first setting out the relevant background facts.
The relevant background
[18] The applicant is a bargaining council registered and established in terms of the
LRA, for the sector defined as the road freight and logistics industry (the industry). Part
of the specific functions bestowed on bargaining councils, under the LRA, is to enforce
the provisions of collective agreements concluded between the parties in the
bargaining council, as well as against non- parties where the collective agreements
have been extended to non-parties by virtue of section 32 of the LRA.
[19] In casu, the applicable Main Collective Agreement (Main Agreement) of the
applicant, concluded on 16 August 2016, was extended to non-parties by the Minister
8
on 28 October 2016. 9 The Main Agreement, and all its provisions, were thus at all
relevant times to this case operative and binding on the second respondent.
[20] The second respondent is a logistics business, conducting business within the
course and scope of the industry . The second respondent specializes in refrigerated
transport. The second respondent employs truck drivers as part of its ordinary
operations. At the time of arising of the issue in this matter, the second respondent
employed some 103 drivers. The terms and conditions of employment and
remuneration of those truck drivers are determined by the Main Agreement.
[21] Ordinarily, the Main Agreement prescribes that truck drivers are remunerated
on the basis of an hourly rate linked to hours / days worked by such drivers. However,
it is often true that employers in the industry would rather remunerate drivers based
the output of work done. This is referred to payment incentive schemes. These
schemes not only benefit employers because it enhances work output, but employees
have the opportunity to earn far more than simply what is prescribed by the Main
Agreement.
[22] Appreciating the need for this basis of remuneration, the parties to the industry
brought about a change the Main Agreement effective 16 January 2012, which change
introduced clause 35 to the Main Agreement , which clause currently still exists and
applies. The current version of clause 35 reads:
‘(1) An employer may introduce an incentive scheme in terms of which an employee’s
remuneration is based on the quantity of work done or the employee’s output, if –
(a) the scheme complies with this clause and has the approval of the Council;
(b) the registers prescribed in clauses 50 and 51 of this Agreement are properly kept;
(c) an employee who is part of the scheme, is not paid less than the amount that
employee would otherwise be entitled to in terms of clauses 11, 14, 15, 16 and 36 and
Schedule 5.
9 By way of Notice 726 in Government Gazette 40385 of 28 October 2016.
9
(2) An employer who wishes to introduce an incentive scheme must set up a
committee consisting of an equal number of representatives of management and
elected representatives of employees to negotiate and agree the terms of the scheme.
(3) The terms of an incentive scheme –
(a) must be reduced to writing and be signed by all the members of the joint
representative committee; and
(b) may not be varied or terminated by any party to the scheme unless that party –
(i) has given all other parties notice in writing as may have been agreed upon by the
parties who entered into the scheme;
(ii) has complied with any other obligations set out in the scheme for varying or
terminating the scheme.’
[23] By virtue of the provisions of clause 35, the second respondent sought to
introduce an incentive scheme for its drivers in 2017. It did this by way of what was
described as a ‘collective agreement’ for an incentive payment system it concluded
with the ‘employees’ of the second respondent on 11 July 2017 (the 2017 agreement).
This agreement obviously could not be a collective agreement as contemplated by the
LRA, as the LRA requires that the agreement be concluded with a registered trade
union.
10
[24] The 2017 agreement was however not signed by all the employees on 11 July
2017 and was ultimately also not signed by each and every individual employee. From
the record of the arbitration, it appears that two copies of the 2017 agreement was
signed by employees . On one copy, a total of 58 employees signed the 2017
agreement in the period between 11 July 2017 and 28 February 2018. On the other
copy, 27 employees signed between the period 26 July 2017 and 31 May 2018. It
appears clear that the 2017 agreement was presented to each and every individual
employee on a one on one basis to sign.
10 In section 213 of the LRA, a collective agreement i s defined as ‘ … a written agreement concerning
terms and conditions of employment or any other matter of mutual interest concluded by one or more
registered trade unions, on the one hand and, on the other hand- (a) one or more employers; (b) one
or more registered employers' organisations; or (c) one or more employers and one or more
registered employers' organisations’ (emphasis added).
10
[25] On 15 September 2017, M TWU, purporting to represent 66 employees
employed at the second respondent,11 submitted an application to the applicant to
investigate alleged non-compliance with the payment provisions of the Main
Agreement, by the second respondent . It appears that this referral arose because
MTWU believed clauses 11, 14, 15, 16 and 36 were not being complied with, pursuant
to the implementation of the incentive scheme by the second respondent.
[26] Despite this application for an inspection, MTWU and the second respondent
concluded a collective agreement on 20 November 2017 (MTWU agreement). This
agreement appears to be more or less identical to the 2017 agreement. This
agreement however does not indicate who the members of MTWU were, that were
employed at the second respondent.
[27] The upshot of all the aforesaid was that second respondent, pursuant to
concluding the two agreements in 2017, implemented the incentive scheme as set out
in those agreement s. However, the applicant never approved the incentive scheme.
Also, and at the time, there was never a committee established with an equal number
of management and employee representatives to negotiate and agree the terms of the
incentive scheme.
[28] On 5 December 2017, the second respondent sent an e- mail to the applicant
attaching the agreements signed by its employees as constituting the agreed incentive
scheme, for approval by the applicant . It was stated in this e- mail that the second
respondent had also now appointed the members of the joint negotiating committee.
The second respondent followed up on this request for approval , by way of a further
e-mail on 9 January 2018. The applicant, by way of the senior agent Fernando Pedro
(Pedro), answered on 10 January 2018 to the effect that a meeting will be set up with
the second respondent to go through the requirements of clause 35 to ensure they
have been met.
[29] On 18 January 2018, Pedro sent an e-mail to the second respondent in which
he then proposed an inspection at the second respondent to ensure that the second
11 It turned out later that MTWU only had six members employed at the second respondent.
11
respondent was complying with clause 35. Pedro stated in this e-mail that if it was
found that clause 35 had been complied with, the applicant will only then be able to
state whether approval is given. The second respondent was agreeable to this
proposal. The parties then agreed to an inspection on 31 January 2018.
[30] The inspection was conducted by one of the applicant’s designated agents,
being Kekana, at the second respondent on 31 January 2018 , as agreed. Following
the inspection, Kekana was not satisfied that the second respondent was compliant
with clause 35 . It appears that there was a delay in Kekana giving feedback to the
second respondent on the outcome of the inspection, and only on 12 April 2018,
Kekana gave feedback to the effect that the incentive scheme was not compliant with
clause 35 in that there was no joint committee in place. According to Kekana, it was
now appropriate to issue a compliance order, so as to enable the second respondent
to comply. On the facts, it does appear that Kekana’s views were not entirely correct,
as the committee had been in place since the start of 2018.
[31] In an e-mail on 2 May 2018 sent to Kekana, the second respondent’s managing
director, Jaco Viljoen (Viljoen), attached minutes of meetings of the committee held on
12 and 20 April 2018, which, according to Viljoen, put the compliance issue to bed.
Viljoen further, in an e -mail on 16 May 2018, attached the agreements co ncluded in
2017 to prove the terms of the incentive scheme had been agreed to.
[32] Kekana disagreed. In an e-mail dated 16 May 2018 to Viljoen, Kekana indicated
that it did not appear from the April 2018 minutes that the committee discussed or
agreed to the incentive scheme. Kekana stated that the second respondent was
obligated to negotiate the incentive scheme with the committee, after its
establishment, and then the committee still had to agree to it. According to Kekana,
the agreements concluded in 2017 did not constitute compliance, because it was
concluded prior to the establishment of the committee. Kekana stated that a
compliance order would now be issued to enable the second respondent to comply
with what the applicant required.
[33] Kekana then, on 21 May 2018 issued a compliance order to the second
respondent. The compliance order was to the effect that the second respondent had,
12
in the period 1 to 28 February 2018, implemented an incentive scheme that did not
comply with the requirements of clause 35.
[34] In response to the compliance order, the second respondent convened a
meeting of the committee on 1 June 2018. In this meeting, the individual terms of the
incentive scheme were discussed, and then agreed to by the committee. It was
specifically recorded in the minute of the meeting that all parties were in agreement
with the terms of the incentive scheme. Viljoen, in an e-mail dated 4 June 2018, sent
the minutes of this meeting to Kekana, and requested that the incentive scheme now
be approved.
[35] Kekana was still not satisfied. In an e-mail on 11 July 2018 to inter alia Viljoen,
he noted the contents of the minutes of 1 June 2018, but then required that the second
respondent submit the incentive scheme actually signed by the members of the
committee. As far as Kekana was concerned, the agreements signed in 2017 still did
not qualify as compliance with the provision that the incentive scheme had to be in
writing and signed, even though such agreements were referred to in the minutes and
were in essence ratified by the committee.
[36] In order to put an end to the issue , what the second respondent then did was
take the incentive agreement, which had now been negotiated and agreed to in the
committee established in terms of clause 35, and have it signed again by all the
members of the committee. This was done on 18 October 2018. This agreement, duly
signed by the committee, was sent to Pedro and Kekana on 22 October 2018, again
with a request for approval by the applicant.
[37] Nonetheless, the applicant did not approve the incentive scheme. Instead, it
referred the dispute concerning the second respondent’s non-compliance with clause
35, to arbitration before an arbitrator appointed by the applicant. Having been dealt
with first by default, which was subsequently rescinded, and then postponed on
several occasions after that, this dispute was ultimately set down for arbitration on 30
July 2020 before the first respondent . The issue placed before the first respondent
concerned the second respondent’s alleged continued non- compliance with the
compliance order issued on 21 May 2018.
13
[38] The first respondent, in his award, recorded that what he was called upon to
decide was whether the incentive scheme of the second respondent was valid,
considering the provisions of clause 35 of the Main Agreement. He ultimately decided
that the incentive scheme was valid, for the reasons dealt with later in this judgment.
But in a nutshell, the first respondent concluded that the second respondent had
‘substantially’ complied with clause 35. This conclusion then gave rise to the current
review application.
The test for review
[39] The test for review is trite. In Sidumo and Another v Rustenburg Platinum Mines
Ltd and Others,12 the Court held that ‘the reasonableness standard should now suffuse
s 145 of the LRA’, and that the threshold test for the reasonableness of an award was:
‘… Is the decision reached by the commissioner one that a reasonable decision-maker
could not reach?...’13. In Duncanmec (Pty) Ltd v Gaylard NO and O thers14 the Court
succinctly summarized the test as follows:
‘This test means that the reviewing court should not evaluate the reasons provided by
the arbitrator with a view to determine whether it agrees with them. That is not the role
played by a court in review proceedings. Whether the court disagrees with the reasons
is not material.
The correct test is whether the award itself meets the requirement of reasonableness.
An award would meet this requirement if there are reasons supporting it. The
reasonableness requirement protects parties from arbitrary decisions which are not
justified by rational reasons.’
12 (2007) 28 ILJ 2405 (CC).
13 Id at para 110. See also CUSA v Tao Ying Metal Industries and Others (2008) 29 ILJ 2461 (CC) at
para 134; Fidelity Cash Management Service v Commission for Conciliation, Mediation and Arbitration
and Others (2008) 29 ILJ 964 (LAC) at para 96.
14 (2018) 39 ILJ 2633 (CC) at paras 42 – 43
14
[40] It is always necessary and important for the Court to enquire into and consider
the merits of the matter and the entire evidence on record in deciding what is
reasonable.15 In Herholdt v Nedbank Ltd and Another16 the Court said:
‘… A result will only be unreasonable if it is one that a reasonable arbitrator could not
reach on all the material that was before the arbitrator. Material errors of fact, as well
as the weight and relevance to be attached to the particular facts, are not in and of
themselves sufficient for an award to be set aside, but are only of consequence if their
effect is to render the outcome unreasonable.’
[41] In sum, the review test has a logical chronology. First, it is determined if there
a failure or error on the part of the arbitrator. Second, and where there is such a failure
or error, it must be shown that the outcome arrived at by the arbitrator was
unreasonable as a result . This reasonableness consideration envisages a
determination, based on all the evidence and issues before the arbitrator, as to
whether the outcome the arbitrator arrived at can nonetheless be sustained as a
reasonable outcome, even if it may be for different reasons or on different grounds.
17
It would only be if the outcome arrived at by the arbitrator cannot be sustained on any
grounds, based on that material, and the irregularity, failure or error concerned is the
only basis to sustain the outcome the arbitrator arrived at, th at the review application
would succeed.18
[42] Against the above principles and test, I will now proceed to consider the
applicant’s application to review and set aside the arbitration award of the second
respondent.
15 Id at para 41.
16 (2013) 34 ILJ 2795 (SCA) at para 25. See also Gold Fields Mining South Africa (Pty) Ltd (Kloof Gold
Mine) v Commission for Conciliation, Mediation and Arbitration and Others (2014) 35 ILJ 943 (LAC) at
para 14; Monare v SA Tourism and Others (2016) 37 ILJ 394 (LAC) at para 59; Quest Flexible Staffing
Solutions (Pty) Ltd (A Division of Adcorp Fulfilment Services (Pty) Ltd) v Legobate (2015) 36 ILJ 968
(LAC) at paras 15 – 17; National Union of Mineworkers and Another v Commission for Conciliation,
Mediation and Arbitration and Others (2015) 36 ILJ 2038 (LAC) at para 16.
17 Fidelity Cash Management Service (supra) at para 102.
18 See Campbell Scientific Africa (Pty) Ltd v Simmers and Others (2016) 37 ILJ 116 (LAC) at para 32;
Anglo Platinum (Pty) Ltd (Bafokeng Rasemone Mine) v De Beer and Others (2015) 36 ILJ 1453 (LAC)
at para 12.
15
Analysis
[43] I must confess that having regard to the facts of this matter, I find it difficult to
understand why the applicant persisted in proceeding to arbitration with its challenge
that the second respondent failed to comply with clause 35 of the Main Agreement,
and simply did not approve the same as required by clause 35(1)(a). As a general
proposition, it is always about compliance, and as will be dealt with detail below,
compliance happened in this case long before arbitration. This being said, and overall
considered, I can find little fault with the reasoning of the first respondent where it
comes to the conclusions he arrived at, and these conclusion s certainly resort well
within the ambit of what may considered to be a reasonable outcome. I will now set
out the reasoning for my finding in this regard.
[44] In his arbitration award, the first respondent departed from the premise that
where an employer in the industry contravenes the Main Agreement, the system of
inspections and compliance orders are designed to bring such an employer in line by
remedying the contravention. In simple terms, a compliance order is not there to
punish an employer. The very point of the compliance order is that the particulars of
non-compliance are specifically brought to the attention of the employer, and the
employer is then give n the opportunity to remove the causes of complaint. This
intention was actually acknowledged by Kekana in his e-mail to the second respondent
on 16 May 2018, prior to issuing the compliance order, where he said the same in
almost so many words.
[45] The above being so, what did the applicant then want from the second
respondent in terms of the compliance order? As the first respondent finds , the
applicant was seeking to ‘ correct’ the second respondent’s non-compliance with
clause 35, and what the applicant was asking the second respondent to do was ‘for a
committee to be established and the agreement (re) signed by the committee’. These
findings of the second respondent are in my view unassailable and fully in line with the
evidence, for the reasons to follow.
[46] A simple consideration of the e-mail correspondence that passed between the
parties in the period 7 December 2017 to 16 May 2018, as well as the events relating
16
thereto, established what the applicant wanted from the second respondent. It started
off with the second respondent sending the incentive agreements signed in 2017 to
the applicant, and asking it for approval. The request resulted in an inspection ,
pursuant to which the applicant adopted the view that the incentive scheme was not
compliant with clause 35 in that there was no joint committee in place. It was common
cause that following this inspection, a committee as contemplated by clause 35 was
indeed established by the second respondent. The committee met in April 2018, and
the minutes were sent to the applicant, however the applicant was still not satisfied
that the incentive scheme had been properly dealt with and negotiated in the
committee. According to the applicant, the agreements concluded in 2017 did not
constitute compliance with the requirements that the incentive scheme must be
negotiated in the committee, because those agreements were concluded prior to the
establishment of the committee. The compliance order of 21 May 2018 was issued on
this basis. The second respondent sought to adhere to the compliance order, by
convening a meeting of the committee on 1 June 2018, in which the individual terms
of the incentive scheme was discussed (negotiated) and agreed to by the committee,
and the minutes of such meeting were sent to the applicant. The applicant was still not
satisfied, and required that the incentive scheme itself had to be signed by the
members of the committee, which was then indeed done on 18 October 2018, and this
agreement was submitted to the applicant, again with a request for approval . For all
intents and purposes, and in my view, this constituted full compliance with what the
applicant required from the second respondent for approval of the incentive scheme.
The objective of remedying non-compliance by way of the compliance order had been
fulfilled. As a result, and as the first respondent correctly said, in the context of what
was required to effect compliance, ‘this is what the respondent then did’.
[47] All the above considered, I simply cannot understand why it would be necessary
to delve into the question of whether the 2017 agreement and / or the MTWU
agreement were valid and constituted compliance with clause 35 where it came to the
incentive scheme applicable in the second respondent. It equally does not matter, for
the purposes of deciding this case, to determine the consequences of concluding such
agreements in the absence of a committee appointed in terms of clause 35. I will
accept, for the purposes of this judgment, that clause 35 requires that the employer
must establish a committee as contemplated by clause 35 and negotiate and agree
17
on the terms of the incentive scheme in that committee, in order for there to be a valid
incentive scheme susceptible to being approved by the applicant. I will also accept
that an agreement concluded between individual employees and the employer, in the
absence of such a committee, would not meet the clear requirements of what is
stipulated in clause 35. But none of these kinds of failures have any consequence or
effect in this case, because of the subsequent events that took place in 2018, and the
end result arrived at on 22 October 2018.
[48] Whilst it is true that the second respondent implemented the incentive scheme
in 2017 in circumstances where it did not comply with clause 35, that is not where the
enquiry ends where it comes to deciding whether ultimately, and when the matter was
arbitrated, there was a valid incentive scheme in place. If that was where the enquiry
would end, it would be impossible for any employer to remedy non- compliance, and
this would subvert the essential objective of obtaining compliance from employers,
rather than punishing them. As I said, compliance orders are intended to fix things
where to comes to what employers do, and what the Main Agreement actually requires
them to do.
[49] In the context of clause 35, the Main Agreement allows for employees being
remunerated by way of an incentive scheme negotiated and agreed to in an individual
employer in the industry. The substantive proviso is that such a scheme cannot cause
the employees to be remunerated less than what is guaranteed in the ordinary course,
in the Main Agreement, relating to overtime work , Sunday work, work on public
holidays, night work, and remuneration and benefits .
19 The employer is further
required to maintain prescribed records so as to enable the applicant to ascertain if
these minimum standards are adhered to. 20 Then there are further procedural
safeguards. The first is that the incentive scheme must be negotiated with the
employees in a committee established as prescribed in the clause, for that purpose.
The second is that the incentive scheme must be reduced to writing and signed by the
19 These are stipulated in clauses 11, 14, 15 and 16, as well as schedule 5, of the Main Agreement.
20 These records are those prescribed in clauses 50 and 51 of the Main agreement. Clause 50 includes
a time, wage and leave register, and a register identifying each employee with date of commencement
of employment and class of work. Clause 51 requires a drivers’ daily logbook to be kept, containing all
the information as prescribed in clause 51(1).
18
committee. Once the employer has complied with these provisions, the employer has
complied with what is required of it in terms of clause 35.
[50] This leaves the requirement that the applicant must approve the incentive
scheme. In my view, this requirement is not a general discretion afforded to the
applicant to approve or not to approve an incentive scheme, even if the employer has
complied with all the other requirements of clause 35. So, and by way of simple
illustration, it is not open the applicant to say to an employer that even where the
employer has complied with all that clause 35 requires, the applicant has decided, for
its own reasons, not to approve it. The approval contemplated in cl ause 35 is, in my
view, an oversight of compliance function, which, once compliance with clause 35 is
established, enables the incentive scheme to come into operation. In short, and where
the employer submits an incentive scheme to the applicant for approval, the applicant
checks that scheme as against the requirements of clause 35, and if it finds that those
requirements are met, it is compelled to approve the incentive scheme.
[51] So where does all the above leave the case in casu? As said, and should the
second respondent have demanded approval of the incentive scheme only based on
the agreements concluded in 2017, the applicant would have been justified in refusing
to approve it. And as I have also said, this is indeed where things started. But instead
of simply refusing the approve the incentive scheme as asked for by the second
respondent at the time , and in a manner which I consider to be proper , rational and
responsible conduct, the applicant instead engaged with the second respondent ,
seeking to arrive at a state of affairs where clause 35 has been complied with and the
applicant would be in a position to give its approval. On the facts, this intervention on
the part of the applicant was successful. As of 18 October 2018, there was, on the
undisputed facts, a proper committee established in terms of clause 35, the incentive
scheme had been negotiated and agreed to in this committee (the minutes thereof
were submitted to the applicant ), and the committee had signed the incenti ve
agreement setting out all the terms of the scheme. There was no dispute as to
compliance with the other substantive requirements of clause 35. It follows that the
second respondent was entitled to approval of its incentive scheme by the applicant,
at this time. It simply does not matter what happened in 2017.
19
[52] When the matter came before the first respondent in 2020 , the applicant
seemed to change tack. It now suggested that there was still not compliance with
clause 35, because the second respondent could in essence not remedy that which
had already been implemented in 2017 when there was, undeniably, not compliance
with clause 35. Considering all the facts in this case , I find this argument rather
opportunistic, and simply unsustainable. Th roughout, there was never an issue of
invalidity of t he incentive scheme because it contravened substantive aspects such
the guaranteed minimum payments under cause 35(1)(c) or that the necessary
records in terms of clause 35(1)(b) were not kept. It was always a case of procuring
compliance with the procedural requirements under clause 35(2) and 35(3)(a), so
approval for the scheme can be obtained. On the facts, the terms of the incentive
scheme as embodied in the 2017 agreements always remained the same, and was
again agreed to in writing, once the procedural requirements of clause 35 had been
fulfilled, by the committee . It means that when the case came before the first
respondent, there was an incentive scheme in full compliance with clause 35. For the
applicant to say that all this effort should be discarded because it was impossible to
fix, is simply an unfounded proposition.
[53] I can see no reason why the applicant could not have granted its approval for
the incentive scheme as of 22 October 2018, when it received the resigned incentive
agreement with a request for approval. If the reason is that non-compliance with clause
35 could not be remedied, that is plainly wrong, and flies in the face of the objective
sought to be achieved by the compliance order of 21 May 2018. To put it bluntly, the
applicant first said to the second respondent, in order to secure its approval for the
incentive scheme, to get a committee. That the second respondent did. The n the
applicant told the second respondent to negotiate the incentive scheme terms with the
committee and get the committee itself to agree to the incentive scheme. Again, the
second respondent did this. And finally, the applicant said it wanted the incentive
scheme to be signed by the committee after having agreed to its terms. The second
respondent provided this signed incentive scheme in the form of an agreement signed
by the committee. It is an untenable that the applicant should nonetheless continue
with its conduct of not approving the incentive scheme, in all these circumstances.
20
[54] One final consideration remains. It is true that when the matter came before the
first respondent on 30 June 2020, the applicant had still not approved the incentive
scheme. It is also true, as discussed above, that clause 35(1)(a) does specifically
prescribe that approval of the applicant is necessary. Does that mean that the first
respondent’s decision to nonetheless uphold the incentive scheme as valid is flawed?
I think not, for the reasons to follow.
[55] One must consider the rationale for the requirement of approval by the
applicant, as discussed above. It can perhaps be most simply described as an audit
function. Once the ‘audit’ is successfully completed by the applicant , by ensuring
compliance with clause 35, the incentive scheme must be signed off by the applicant,
which is what the approval would be. In casu, on the facts, and actually pursuant to
intervention by the applicant itself, the audit was successfully completed by 22 October
2018. There is no reason why the incentive scheme could not have been then signed
off. The applicant’s failure to do so, without proper reason or cause, cannot be held
against the second respondent, where it comes to the validity of the incentive scheme.
[56] It is also not as if the second respondent simply embarked upon its own mission
to establish an incentive scheme, in circumstances where, although complying with
clause 35, the incentive scheme was never brought to the attention of the applicant. I
accept that clause 35 does contemplate, considering the rationale behind the
requirement for approval by the applicant as discussed above, that at the very least
the applicant must be provided by an employer with all the information relating to the
incentive sche me and its compliance with clause 35, and then be asked by the
employer to approve the same. This is exactly what happened in casu. The applicant
was not only provided with all the information, but it was directly involved in arriving at
the point of compliance. It was also on several occasions asked, in writing, to approve
the incentive scheme. There was nothing standing in the way of the applicant
approving the incentive scheme of the second respondent , as it had before it all that
was needed, with a request for approval.
[57] The added problem is that the applicant did even come out and refuse approval.
The applicant not once, after 22 October 2018, provided any reason to the second
respondent why it did not approve the incentive scheme, and simply remained supine.
21
This state of affairs actually illustrates why the absence of approval, in this particular
case, cannot serve to visit the second respondent’s incentive scheme with invalidity.
To illustrate, if the applicant, for its own reasons, decides not to approve an incentive
scheme, all it has to do is simply do nothing, and that inaction effectively scuppers the
scheme. This cannot be acceptable. The applicant’s intransigence, which in this case
persisted for almost two years up to the point of arbitration, is untenable. It should not
be allowed to serve to invalidate the second respondent’s incentive scheme.
[58] The argument presented by the applicant of the second respondent not being
able to retrospective remedy the non-compliance only came out in the arbitration. I do
not believe this kind of conduct is bona fide . What the applicant knew was actually in
existence, long before this matter was arbitrated, was a proper incentive scheme at
the second respondent in compliance with clause 35. And as I have said, achieving
that kind of compliance was the very point of the compliance order the applicant sought
to enforce. How can the applicant on the one hand say to the second respondent not
to worry about the compliance order, because all that was intended is for it to fix what
is wrong, but on the other hand demand enforcement of the compliance order because
the second respondent cannot fix what is wrong. It makes no sense.
[59] And finally, one has to ask if the purpose of clause 35 has been complied with,
even if there was no approval by the applicant, because the absence of approval would
mean that the letter of clause 35 has not been complied with. This is where the issue
of so-called ‘substantial compliance’ comes in, especially considering it is trite that a
collective agreement concluded in a bargaining council that has been extended to non-
parties by way of section 32 of the LRA , is regarded as subordinate legislation.
21 As
said in National Commissioner of SA Police Service and Others v Phopho22:
‘… in order to determine substantial compliance the court must first establish the
purpose of the provision and then determine whether what was done by the applicant
to comply with the provision satisfied that purpose. If so, the court may find that the
21 See Platinum Mile Investments (Pty) Ltd t/a Transiton Transport v SA Transport and Allied Workers
Union and Others (2010) 31 ILJ 2037 (LAC) at para 41; Municipal Workers Union and Another v City of
Johannesburg and Others (2018) 39 ILJ 894 (LC) at para 35.
22 (2021) 42 ILJ 1666 (LAC) at para 77.
22
action was in substantial compliance of the provision, although it did not comply with
the letter thereof.’
[60] The locus classicus where it comes to the substantial compliance with a
statutory enactment is Maharaj and Others v Rampersad 23, where the Court held as
follows:
‘… The enquiry, I suggest, is not so much whether there has been ''exact'', ''adequate''
or ''substantial'' compliance with this injunction but rather whether there has been
compliance therewith. This enquiry postulates an application of the injunction to the
facts and as a resultant comparison between what the position is and what, according
[to] the requirements of the injunction, it ought to be. It is quite conceivable that the
Court might hold that, even though the position as it is, is not identical with what it
ought to be, the injunction has nevertheless been complied with. In deciding whether
there has been a compliance with the injunction the object sought to be achieved by
the injunction and the question of whether this object has been achieved are
of importance. …’
[61] The principles as set out in Maharaj supra was applied in National Union of
Metalworkers of SA v Intervalve (Pty) Ltd and Others24, and the Court came to the
following conclusion:
‘… This test focuses on the statute's objective or purpose. It countenances deviation
from statutory prescriptions provided the purpose has been met. Since Maharaj,
courts have generally adopted a three- step approach to evaluate this; some courts
add a fourth step:
1 What is the purpose of the statute as a whole, as well as the specific
provision at issue?
23 1964 (4) SA 638 (A) at 646C – D.
24 (2015) 36 ILJ 363 (CC) at para 45 . See also African Christian Democratic Party v Electoral
Commission and Others 2006 (3) SA 305 (CC) at para 25; Weenen Transitional Local Council v Van
Dyk 2002 (4) SA 653 (SCA) at para 13.
23
2 What steps did the party take to comply with the provision? Here,
only the acts of the party seeking to comply are relevant. The conduct of the other
party is not.
3 Did the steps taken achieve the purpose of the statute and of the
specific provision, even if the precise requirements were not met?
4 Was there any practical prejudice because of non-compliance? …’
And in National Education Health and Allied Workers Union v Minister of Public
Service and Administration and Others; SA Democratic Teachers Union and Others v
Minister of Public Service and Administration and Others; Public Servants Association
and Others v Minister of Public Service and Administration and Others; National Union
of Public Service and Allied Workers and Others v Minister of Public Service and
Administration and Others25 the Court had the following to say:
‘… In deciding whether there has been compliance with the statutory injunction, what
is important is the object sought to be achieved by the injunction and whether this
object has indeed been achieved. The central element is to link the question of
compliance to the purpose of the provision. It has to be determined ‘whether what the
applicant did constituted compliance with the statutory provisions viewed in the light
of their purpose …’
[62] So, and taking this step by step, what is the core purpose of clause 35? This
has been dealt with above. However, and in sum, it s purpose is to allow for incentive
based remuneration to employees, provided the minimum standards in the Main
Agreement are not contravened and proper prescribed records are kept. It then also
seeks to achieve this purpose by prescribing employees’ involvement in the
negotiation of, and then their agreement to, such an incentive scheme. Considering
the facts of this case, and when the case came before the first respondent , these
purposes had all been achieved.
[63] Next, what steps did the second respondent itself take to ensure compliance
with the provision? The answer is that it did everything it could. It agreed to an
25 (2022) 43 ILJ 1032 (CC) at para 72.
24
inspection by the applicant . It at all times furnished the applicant with information
required. It sought to give effect to all the recommendations made by the applicant.
And lastly, it on several occasions asked the applicant to approve the incentive
scheme, the last occasion being on 22 October 2018, when it was fully compliant.
There was nothing more the second respondent could do, and worse still, there was
nothing standing in the way of the applicant approving the incentive scheme as the
last outstanding requirement.
[64] The steps taken by the second respondent indeed ensured compliance with all
that was required by clause 35. Despite having the agreements concluded in 2017,
the second respondent, based on what had transpired in 2018, did not seek to continue
to assert , in the face of all else, that those agreements constituted substantial
compliance with clause 35. Instead, it established the required committee, convened
meetings of that committee, again negotiated the terms of the incentive scheme with
the employee representatives in the committee, and then secured their agreement to
such terms. The appli cant followed this up with a written agreement cont aining the
terms of the incentive scheme signed by all the committee members. If these steps
taken are not considered to be proper steps to ensure compliance, it is difficult to
comprehend what would be.
[65] There was no prejudice accruing to any of the employees because the applicant
did not approve the incentive scheme. As said, the terms of the scheme remained the
same since 2017. Even in 2017, as the first respondent correctly appreciated, it was
negotiated with the employees on a one on one basis and not unilaterally
implemented. However, and in 2018, in the specific context of clause 35, it was again
negotiated with employee representatives in the prescribed committee, and it was
agreed to by them. It was also undisputed that the incentive scheme left the employees
better off , remuneration wise, than what they would earn only under the Main
Agreement. The incentive scheme also benefits the second respondent. So, there is
no prejudice flowing from regarding the incentive scheme as valid, even in the absence
of approval by the applicant. In fact, the only real prejudice that will result to all parties,
would occur if the incentive scheme is scuppered because of lack of approval by the
applicant.
25
[66] Finally, it is not as if the applicant refused approval. It simply did not approve
the incentive scheme by doing nothing, and proceeded with enforcement compliance.
This is an inexplicable approach to adopt. It left matters in limbo, so to speak, which
is most unfair to the second respondent. I am satisfied that the second respondent
was justified to continue to apply its incentive scheme in the circumstances. There is
nothing to indicate that the applicant, especially considering everything it had been
provided with, could not promptly approve the incentive scheme, or at the very latest,
by the end of 2018. I thus cannot accept that the second respondent’s incentive
scheme be compromised as a result of the applicant’s wrangling.
[67] Accordingly, I am satisfied that even though, when the matter came before the
first respondent for determination, the letter of clause 35 of the Main Agreement had
not been complied with because there existed no actual approval of the incentive
scheme by the applicant, there had been substantial compliance with the clause. The
purpose of the clause had be en fully complied with, and the second respondent has
done all it could to secure compliance with the clause, with the steps taken by it being
sufficient to ensure compliance with the purpose of the clause. There was no prejudice
to any party because of the lack of approval by the applicant. And finally, there was no
justification or reason for the applicant not to have approved the incentive scheme,
which it, in the circumstances of this case, was actually enjoined to do.
[68] Therefore, based on all the reasons set out above, I conclude that the first
respondent’s arbitration award is simply not reviewable. Insofar as the issue of the
outcome arrived at by the first respondent be considered on the basis of it being
reasonable or unreasonable, there is in my view no doubt that it would comfortably
resort within the bands of reasonableness as required, in order to be sustainable on
review. The applicant’s review application falls to be dismissed.
Costs
[69] This then leaves only the issue of costs. In terms of the provisions of section
162(1) of the LRA, I have a wide discretion where it comes to the issue of costs. I refer
to what the Court said with regard to costs in employment disputes in Union for Police
Security and Corrections Organisation v SA Custodial Management (Pty) Ltd and
26
Others26 in exercising this discretion, which is that when making a costs order in a
labour matter, a presiding officer is required to consider that costs are not ordinarily
awarded, the principle of fairness must be considered, and due regard must be had to
the conduct of the parties. In this instance, the case had some complexity / novelty to
it. I do not believe the applicant acted unreasonably in pursuing the review application,
even though I do not understand why it decided to do so since, properly considered,
the incentive scheme of the second respondent was beyond reproach as it stood. I do
not believe the applicant’s conducting of the proceedings show the kind of ineptitude
or hopelessness that may attract the granting of a costs order. Overall considered, in
my view, at worst for the applicant , the scales where it comes to costs are equally
balanced, and as such, the ordinary principle as set out above that costs do not follow
the result should carry the day. Therefore, I am satisfied in this case that no order as
to costs is appropriate and would be fair.
[70] In the premises, I make the following order:
Order
1. The late filing of the applicant’s review application is condoned.
2. The applicant’s review application is dismissed.
3. There is no order as to costs.
S. Snyman
Acting Judge of the Labour Court of South Africa
Appearances:
For the Applicant: Advocate M R Maphutha
Instructed by: Moeti Kanyane Inc Attorneys
For the Second Respondent: Advocate A L Cook
Instructed by: Cliffe Dekker Hofmeyr Inc Attorneys
26 (2021) 42 ILJ 2371 (CC) at para 35. See also Zungu v Premier of the Province of Kwa-Zulu Natal and
Others (2018) 39 ILJ 523 (CC) at para 25; Long v South African Breweries (Pty) Ltd and Others (2019)
40 ILJ 965 (CC) at para 30.