Success Panel Beaters and Service Centre cc v National Union of Metalworkers of South Africa and another (JA48/99) [2000] ZALAC 2 (17 March 2000)

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[2000] ZALAC 2
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Success Panel Beaters and Service Centre cc v National Union of Metalworkers of South Africa and another (JA48/99) [2000] ZALAC 2; [2000] 6 BLLR 635 (LAC) (17 March 2000)

IN THE
LABOUR APPEAL COURT OF SOUTH AFRICA
HELD AT
JOHANNESBURG
CASE NO JA48/99
In the
matter between:
SUCCESS PANEL BEATERS AND SERVICE CENTRE CC
Appellant
and
NATIONAL UNION OF
METALWORKERS OF SOUTH AFRICA
First Respondent
SHEZI, EC
Second
Respondent
____________________________________________________________________________
JUDGEMENT
___________________________________________________________________________
WILLIS
JA. :
This is an appeal against a decision of the Labour Court ordering the
appellant ( respondent in the Court
a quo
) to reinstate the
second respondent ( second applicant in the Court
a quo
)
and to pay him R24 000 as compensation for his unfair dismissal.
The Court
a quo
granted leave to appeal to this Court.
The judgement of the Court
a quo
has been reported.(
National Union of Metalworkers of SA & another v Success
Panelbeaters & Service Centre CC t/a Score Panelbeaters &
Service
Centre
(1999) 20 ILJ 1851 (LC).)
The Industrial Court, functioning in terms of the Labour Relations
Act No 28 of 1956 ( “ the old Act”) , had granted its order
against an employer known as Score Panel Beaters and Service Centre
( “Score”). This was the trading name of the business which
prior to its sale was owned by Stescore CC .The business of this
employer was sold to the appellant. The respondents invoked the
provisions of Section 197 (2)(a) of the Labour Relations Act No. 66
of 1995 ( “the LRA ” ) to obtain the same order against
the
appellant in the Labour Court .
The appeal turns on the question as to whether the rights and
obligations created by Section 197 (2)(a) of the LRA apply to
dismissals
which occurred prior to the coming into operation of the
provisions of the LRA relating to dismissals. The appellant, not
surprisingly,
contends that they do not. Equally unsurprisingly, the
respondents contend that they do.
The relevant facts are common cause and are relatively
straightforward:
(1) The second respondent was dismissed from Score on 7
th
March 1996;
(2) The second respondent thereupon duly referred a dispute relating
to his alleged unfair dismissal to the Industrial Court in
terms of
Section 46 (9) of the old Act.
(3 ) During either January or February 1997 but by no later than 3
rd
February, 1997 the business of Score was sold as a going concern to
the appellant.
(4) On 19
th
February, 1997, the Industrial Court made
the order referred to above requiring Score to reinstate the second
respondent and to
pay him compensation. (Score was in default of
appearance at the hearing although it had, in its answering
affidavit in the Industrial
Court proceedings, opposed the relief
sought by present respondents.)
(5) The provisions of the LRA relating to all matters relevant to
this matter, including but not limited to unfair dismissals,
came
into effect on 11 November, 1996.
(6) On 7
th
December 1998 the respondents brought an
application in the Labour Court for the order made by the
Industrial Court against Score
to be made effective against the
appellant.
(7) The Labour Court granted the aforesaid relief to the second
respondent.
Section 197 (2)(a) of the LRA provides as follows:
“
If a business, trade or undertaking is transferred in the
circumstances referred to in subsection (1) (a), unless otherwise
agreed,
all the rights and obligations between the old employer and
each employee at the time of the transfer continue in force as if
they
were rights and obligations between the new employer and each
employee and anything done before transfer by or in relation to the
old employer will be considered to have been done by or in relation
to the new employer.”
Subsection (1)(a) refers to the transfer of “the whole or any part
of a business, trade or undertaking” by an “old employer”
to
another employer “as a going concern”. This, of course, is
precisely what happened in this case.
There is no dispute that there was no applicable agreement that
would exclude the operation of Section 197 (2)(a).
As the dismissal of the second respondent occurred before the coming
into operation of the provisions of the LRA relating to dismissals,
the appellant relies very strongly on the trite presumption against
retrospectivity to argue that section 197(2)(a) does not apply
to
the order made by the Industrial Court.
The appellant also relies on the provisions of Item 21(a) and Item
22(a) of Schedule 7 of the LRA.
Item 21(a) provides as follows: “
Any dispute contemplated in
the labour relations laws that arose before the commencement of this
Act must be dealt with as if those
laws had not been repealed.
”
Item 22(a) provides as follows: “
In any pending dispute in
respect of which the industrial court or the agricultural labour
court had jurisdiction and in respect
of which proceedings had not
been instituted before the commencement of this Act, proceedings
must be instituted in the industrial
court or the agricultural
labour court ( as the case may be) and dealt with as if the labour
relations laws had not been repealed.
The industrial court or the
agricultural labour court may perform or exercise any of the
functions or powers that it had in terms
of the labour relations
laws when it determines the dispute.
”
In my view, the retrospectivity argument does not come to the aid of
the appellant.
Both the transfer of the business and the order of the Industrial
Court occurred after the coming into operation of the LRA in
full on
11
th
November, 1996.
The LRA was gazetted on 13
nd
December, 1995
(
Government Gazette
No. 16861 )
.
The provisions of the
LRA were available to the public for a long time before the transfer
of the business. Indeed, the appellant
claimed that it had obtained
a suitable undertaking that the previous sole member of the seller
would assume “ liability in respect
of any claim arising in
connection with the business in respect of which the cause of action
arose prior to 1
st
January, 1997.”
Moreover, the provisions of section 197(2)(a) are plain enough. They
provide,
inter alia ,
that “ anything done before transfer
by..... the old employer will be considered to have been done by
..... the new employer.”
In other words, the unfair dismissal of
the second respondent by Score will be considered to have been
effected by the appellant.
Item 21(a) does not assist the appellant .The issue that came before
the Court
a quo
was whether or not to make the order of the
Industrial Court applicable to the appellant. The Court
a quo
was not called upon to determine the fairness or otherwise of the
second respondent’s dismissal. The issue that the Court
a
quo
was called upon to decide arose after the commencement of
the LRA and, consequently
,
Item 21(a) did not prevent the
Labour Court from considering the matter or making the order which
it did.
Item 22(a) provides that a pending dispute in respect of which the
Industrial Court had jurisdiction must be dealt with as if the
labour relations laws had not been repealed. The pending dispute in
respect of which the Industrial Court had jurisdiction was
concerned
with the issue as to whether the second respondent had been unfairly
dismissed or not. At the time of the commencement
of the LRA there
was no issue, much less a dispute, as to the applicability to the
appellant of any order that the Industrial
Court may make. The
transfer of the business had not yet occurred. Item 22(a), for these
reasons, does also not assist the appellant.
The appellant has also raised the issue of its non-joinder in the
Industrial Court proceedings. The appellant contends that the
respondents were, at the time of the hearing in the Industrial
Court on 19
th
February, 1997, well aware of the fact that
the business of score had been transferred to the appellant and
ought to have joined
the appellant as a person having a direct
interest in any order which the Court may have made.
It is quite clear from the record, including an affidavit signed by
Mahomed Irfaan Yunoos, the sole member of the appellant that
he had
been informed by the first respondent of the pending application in
the Industrial Court and that he elected not to attend
the
proceedings. He, on his own version of events, gave as his reason
the fact that the seller of the business had undertaken “
liability in respect of any claim arising in connection with the
business in respect of which the cause of action arose prior to
1
st
January 1997.”
It is well settled law that a party with a direct and substantial
interest in any order which a court may make should be joined
in
proceedings unless it is clear that he has waived his right so to be
joined. ( See
Amalgamated Engineering Union v Minister of Labour
1949 (3) SA 637
(A) at 659, which case has been followed in numerous
judgements, reported and unreported, ever since.)
It is clear from the above that the appellant waived its right to be
joined. In effect, it told the respondents before the Industrial
Court hearing “Do your damnedest!”
For these reasons I am satisfied that the Court
a quo
correctly decided the matter. I should accordingly dismiss the
appeal. Neither the Industrial Court nor the Court
a quo
made
any order as to costs
.
These orders seem to me to have been
fair in the circumstances.
Nevertheless, if one bears the provisions of section 179 in mind, it
seems to me that fairness now requires that the costs of the
appeal
should follow the result. The parties agreed that this should be the
case.
Accordingly, the following order is made:
The appeal is dismissed with costs.
DATED AT
JOHANNESBURG THIS DAY of MARCH 2000.
N.P.
WILLIS
JUDGE
OF APPEAL
I agree
.
R.M.M.
ZONDO
ACTING
JUDGE PRESIDENT
I agree.
J.H.
CONRADIE
JUDGE
OF APPEAL
Counsel
for the Appellant: Adv. M. Van As
Counsel
for the Respondents: Adv. J.G. Van Der Riet SC
Attorneys
for Appellant: J. L. Van Der Walt
Attorneys
for Respondents: Cheadle, Thompson and Haysom
Date
of hearing: 7
th
March, 2000
Date
of judgement:17th March, 2000