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[2008] ZALAC 27
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City of Cape Town v South African Municipal Workers Union obo Jacobs and Others (CA 1/2007) [2008] ZALAC 27; [2009] 9 BLLR 882 (LAC) (1 January 2008)
IN THE LABOUR
APPEAL COURT OF SOUTH AFRICA
HELD IN JOHANNESBURG
CASE NO: CA1/2007
(LC CASE NO: C783/05)
In the matter between:
CITY OF CAPE TOWN
..............................................................
Appellant
and
SOUTH AFRICAN MUNIPAL WORKERS
UNION (obo JONNY JACOBS)
......................................
First
Respondent
SOUTH AFRICAN LOCAL GOVERNMENT
BARGAININGCOUNCIL
...........................................
Second
Respondent
CECILIA BRUMMER N.O.
...........................................
Third
Respondent
JUDGMENT
___________________________________________________
TLALETSI AJA
Introduction
[1] This is an appeal from a judgment of the Labour
Court in a review application for the review and setting aside of an
arbitration
award that had been issued by the third respondent (“the
Commissioner”) under the auspices of the South African Local
Government Bargaining Council (“Bargaining Council”), the
second respondent in this appeal. The award issued on 13
October 2005
was a ruling on the points
in
limine
raised by the
appellant in a dispute that was referred by the first respondent to
the Bargaining Council.
[2] The referral of the dispute was made in terms of sec
186 (2)(a) of the Labour Relations Act 66 of 1995 (“the Act”)
in which the first respondent alleged that the appellant’s
failure to appoint its member, Mr Jonny Jacobs (“Jacobs”),
to a level 3 post constituted an unfair labour practice. In the
points
in limine
the appellant contended that Jacobs was an
applicant for employment and therefore fell outside of the purview of
sec 186 (2)(a).
The appellant further contended that Jacobs’
application was in the context a “
process of making
application to a more senior post and constituted an ‘alternative
to retrenchment’ and as such his
complaint was one which
related to an unfair retrenchment process under section 189 and/or
189A and not to an unfair failure to
promote.”
[3] The commissioner issued an award in which she found
in favour of the appellant. Aggrieved by such ruling, the first
respondent
brought a review application against the whole of the
award of the commissioner. The Labour Court after considering the
affidavits
as well as the arguments on behalf of the parties made an
order in terms whereof the ruling of the commissioner in respect of
the
points in
limine
was reviewed and set aside and referred
the dispute back to the second respondent for arbitration by an
arbitrator other than the
third respondent. It is against this
judgment and order of the Labour Court that the appellant is
appealing with leave of the Labour
Court. A brief background of the
material facts is necessary for a better understanding of the issues
as well as the points in
limine
.
Factual background
[4] Jacobs was employed by the Tygerberg Municipality as
a library Manager. This position was graded at level 4 in the
structure
of the Tygerberg Municipality. The Local Government
Transition Act 209 of 1993 (“the LGTA”) introduced an
overall restructuring
of the systems and the structures of local
government in this country. The LGTA envisaged three phases for local
government transition.
The first was the pre-interim phase which was
to take effect from the 2
nd
of February 1994 until the
first democratic local government elections. This phase was followed
by the interim phase. The final
phase commenced thereafter and
applied until the implementation of the Local Government Municipal
Structures Act 117 of 1998 (“the
Structures Act”)
[5] The process was triggered by the provincial member
of the Executive Committee (MEC) responsible for local government,
acting
in terms of sections 12 and 14 of the Structures Act by
issuing a Provincial Notice 479 of 22 September 2000 in terms whereof
the
appellant was established. This notice is commonly referred to as
“Section 12 Notice”. A copy of the notice issued by
the
MEC is not part of the record. However for the sake of convenience,
the provisions of sec 12 and 14 of the Structures Act which
prescribes the form and purpose of the notice which are relevant for
the determination of this dispute will in the cause of the
judgment
be quoted for a better understanding of the process.
[6] The effect of section 12 notice was to disestablish
the then existing municipalities of Cape Metropolitan Council as well
as
the metropolitan councils of Blaauwberg, Cape Town, Helderberg,
Oosternberg, South Peninsula and Tygeberg). These municipalities
were
as a result amalgamated to constitute the newly established structure
which became the present appellant. At the time the
new structure was
described as “
the Unicity
”.
[7] It is common cause that prior to the establishment
of the Unicity a multiparty advisory body called the “
Unicity
Commission
” was “commissioned” to develop the
human resources policies to be applied when the new city has been
established.
The Unicity Commission was also statutorily authorised
to engage in negotiations with the trade unions with a view to
concluding
collective agreements which would be binding on the new
city on its creation. The objective was that an agreement would be
concluded
to regulate, amongst others, the placement of staff into
the newly established City of Cape Town.
[8] It is common cause that as at 5 December 2000 all
persons who had been employed by the seven disestablished
municipalities,
including Jacobs, were transferred to the first
respondent. The transfer of these employees was a transfer as
envisaged in sec
197 of the Act. The appellant was, as result of the
transfer, faced with a challenge of placing employees in excess of 25
000 inherited
from the seven disestablished municipalities into the
structure of the newly established city of Cape Town. It was also
envisaged
that in the first place, an Organisational Design and a
Staff organogram needed to be formulated. Thereafter, a method had to
be
formulated to place employees into appropriate posts within that
newly created structure. To this end the Unicity published, first,
a
“Macro Design Structure” (regulating the broader
structure of the city and its management component) and thereafter
a
“Micro Design Structure” (detailing the precise posts
that would be available in the Unicity).
[9] It is common cause that the process as well as the
interactions with organised labour ─ first respondent and
IMATU, also
a representative trade union ─ were characterised
by a number of difficulties. These difficulties were exacerbated by
the
change in the political control of the city as well as the
process of negotiating with organised labour. The appellant embarked
on a major restructuring exercise to fill the posts on its permanent
staff establishment. The recruitment process to fill the new
posts of
levels 1-3 was both open to the existing employees who faced the
threat of possible retrenchment at some stage in the
future if they
were not appointed to a permanent position in the new structure, and
to persons who were not in the employ of the
Unicity.
[10] It is not disputed that a number of existing
employees who applied for posts advertised under the new structure
and who were
not appointed declared and referred their disputes with
the Unicity to the Bargaining Council. They claimed that their
non-appointment
constituted an unfair labour practice. A collective
agreement containing a dispute resolution procedure to deal with
non-appointments,
was in the process, concluded with IMATU. The first
respondent was however not a party to this collective agreement and
was therefore
not bound by the collective agreement.
[11] On 20 July 2004, the Unicity addressed a letter to
organised labour formally notifying them that the new structure would
be
implemented and invited them to participate in a consultation
process as envisaged in terms of sections 189 and 189A of the Act.
Following the notification, the parties embarked on an extensive
process which was facilitated by the Commission for Conciliation,
Mediation and Arbitration (“CCMA”). On 8 December 2004
the Unicity provided the unions with its approved organizational
structure, which reflected organizational changes at macro level. The
changes mainly impacted on levels 1─4 of the Unicity’s
grading system. Employees who could be appointed to positions in
levels 1─4 were informed that a competitive placement process
would be undertaken in respect of levels 1 and 2. The level consisted
of executive directors and directors and was to involve both
internal
and external search for appropriate incumbents. The Unicity advised
further that changes and realignment of positions
would occur at
levels 3 and 4, but not necessarily to the same extent as levels 1
and 2. As far as employees in levels 5 and below
were concerned, they
were advised that they were placed into the new organisation and that
their terms and conditions would remain
unchanged.
[12] At a facilitation meeting held on 15 December 2004
both unions were informed by the Unicity that the sec 189 process in
respect
of employees in levels 5 and below was being withdrawn
because dismissals were no longer contemplated at those levels. This
was
because all employees intended for those levels had already been
placed into the posts. This meant that consultations were only
to
continue in respect of appointments in levels 1 to 4.
[13] On 31 January 2005 a “
Placement Agreement
”
in terms of sec 189 and 189A of the act was entered into between the
Unicity and IMATU in settlement of a dispute referred
by IMATU to the
Bargaining Council. The dispute related to the restructuring process.
The Placement Agreement was therefore binding
on IMATU and its
members and according to the appellant, to non-members as well. The
relevant provisions of the Placement Agreement
for the purpose of
this dispute provide as follows:
[a] that the agreement supersedes and replaces the Micro
Design Process Agreement of 1 February 2002 and the Placement
Agreement
dated 7 May 2003 as well as the agreement on Restructuring
and Placement dated 23 September 2004;
[b] that the parties acknowledged the consultation
process on the organisational structures in terms of the sec 189 and
189A of
the Act and that the levels below level 4 of the new
organisational structure have been excluded for placement by the city
as the
section 189 process in respect of these employees has been
completed;
[c] that employees on level 5 and below have been placed
in positions within the city on their current pay scales and terms
and
conditions of employment and that these employees would not be
retrenched in terms of the employer’s notice of retrenchment
dated 20 July 2004;
[d] that affected employees that have not been placed in
terms of the process set out in the agreement would not be retrenched
in
terms of the appellant’s notice of 20 July 2004 and that
such employees would be offered reasonable alternative positions
on
their current pay scales and “terms and conditions of
employment”,
[e] that all permanent employees transferred from the
disestablished municipalities to the city have been transferred in
accordance
with section 197 of the Act as from 6 December 2000 and
that they enjoy the same rights and privileges they had with the
disestablished
municipalities;
[f] that the agreement forms “part and parcel”
of the consultation process in terms of sections 189 and 189A of the
Act;
[g] that employees in level 1─3 who are not
successful in their applications for posts in any of these levels can
apply for
posts in level 4 but that post in level 4 would however
first be filled from employees occupying this level on the basis of
“unchanged”
, “minor changed” or “major
changed posts”;
[h] that all employees who are not placed will be
offered reasonable alternative positions within the city;
[i] that the appellant would follow a competitive
recruitment, selection and appointment process in respect of posts at
levels 1,2
and 3.
[14] It is common cause that the city proceeded with the
advertising and filling of positions in levels 1 to 3 and at the same
time
engaging with the unions in the sec 189A facilitation process.
The facilitation process was concluded on 10 June 2005 and the
facilitator
was advised by the appellant that he was no longer
required. It is not disputed that the appellant recorded the
following aspects
on conclusion of the facilitation process:
[a] That levels 5 and below have been placed and those
levels have formally been withdrawn from the section 189A process;
[b] In respect of levels 3 and 4, in the city’s
view, this consultation process has been completed as no dismissals
are contemplated
any longer. Where applicable, affected employees
will be offered reasonable offers of employment. The city will
nevertheless keep
the section 189A process open to deal with the
issues relating to reasonable alternative offers of employment should
the need arise;
[c] In respect of level 4 the placement process as
agreed to with IMATU would proceed and SAMWU was once again being
offered an
opportunity to sign the agreement;
[d] In respect of levels 1-2 the city accepted IMATU’S
proposal on the basis that affected employees in these levels would
not be retrenched provided they accepted reasonable alternative
positions on terms and conditions which were not less favourable
than
those they currently enjoyed;
[e] It was the city’s view that through this
process it had achieved the objectives of section 189A, i.e. to avoid
dismissals,
and that there was no longer a need for the section 189A
facilitation process to continue.
[15] It is common cause that the appellant continued to
apply, without the specific consent of the first respondent but as
agreed
with IMATU, the provisions of the Placement Agreement in
respect of all employees including the first respondent’s
members.
The appellant was of the view that it was entitled to do so
given that the parties had failed to reach consensus through the sec
189 and 189A process. It is not clear from the record whether SAMWU
formally or otherwise objected to the implementation of the
Placement
Agreement to all other employees who were not members of IMATU.
[16] Jacobs, whose grievance is the subject matter of
the present dispute, occupied the position of Manager: Library
Services for
the disestablished Tygerberg Municipality. At the time,
he continued to occupy such position when transferred to the
appellant
despite the fact that such a post did not exist on the
appellant’s permanent establishment. According to the appellant
all
the old posts that existed in the disestablished municipalities,
were retained for administrative purposes only until the appellant’s
organisational design was completed and placement could be effected.
[17] It is common cause that when the appellant created
its first staff structure, one of the posts created was that of
“
Manager: Library and Information Services.”
Jacobs applied for this post and was not appointed. On 22 July 2005
the second respondent referred a dispute to the Bargaining
Council on
his behalf complaining about his non-appointment to the post and
claiming that the failure to promote him constituted
an unfair labour
practice. The relief he sought was either appointment to this post or
that “severance be negotiated and
concluded as a final
settlement.
The arbitration Proceedings
[18] The commissioner recorded what she regarded in her
opinion to be the “
crux of the matter
” to be:
1. “
Is Mr Jacobs an existing employee, or, is
he an applicant for a new position in this situation?
2. Does the acceptance that the process is one of
restructuring in terms of section 189 preclude a referral under the
unfair labour
practice definition?”
[19] In response to the above questions the commissioner
reasoned,
inter alia
, that the appointments into the new
entity were appointments in the first instance with a newly created
employer and that Jacobs
had never been employed before by the new
entity and as a result he could not be an existing employee of the
new entity for him
to regard his non appointment as a failure to be
promoted. She further held that the placements were done as an
alternative to
potential retrenchments. The commissioner ruled that
the Bargaining Council lacked jurisdiction to entertain the dispute
pertaining
to non-placement in the newly formed entity as an unfair
labour practice and that since the placement of Jacobs was an
alternative
to potential retrenchment he had not been retrenched and
that his dispute referral was accordingly premature. The Commissioner
consequently upheld the “point
in limine
” raised
by the appellant and made no order as to costs.
Proceedings in the Labour Court
[20] Aggrieved by the decision of the commissioner, the
first respondent brought a review application with a view to have,
inter alia
, the ruling reviewed, set aside and be corrected,
alternatively substituted to cure the defects alleged by the
applicants. The
grounds upon which the first respondent relied upon
to support its review application were that:
(a) the findings made by the third respondent upholding
the appellant’s point in
limine
constitute a gross error
of law;
(b) the third respondent failed to sufficiently apply
her mind to the law applicable to the dispute;
(c) the third respondent failed to apply her mind to
certain material facts, thereby rendering her award irrational;
(d) the third respondent relied on facts and arguments
irrelevant to a determination of the issues before her, and
(e) the ruling made by third respondent is irrational
and unjustifiable in relation to the reasons given for it and in
relation
to the facts and the law relevant to a determination of the
dispute.
[21] The Labour Court recorded in its judgment that the
placing of employees in a newly established entity could result in
the unfair
labour practice dispute. It further recorded that the
placing of the employees was done in accordance with the Placement
Agreement
which the first respondent did not sign. The Court held
however, that the fact that the Placement Agreement was not signed by
the
second respondent was not relevant for the purposes of this
matter. The Labour Court upheld the conclusion by the commissioner
that “
for a dispute to be framed as an unfair labour
practice relating to promotion, the first criterion is that the
grievant needs to
be an existing employee.”
The Labour
Court found, however that the finding by the commissioner that
“
Jacobs had never been employed before by the new entity”
and that “he cannot therefore be an existing employee of the
new entity
” to be flawed. The Labour Court reasoned that
the commissioner “
failed to take into account the fact that
the new entity was the employer of Mr Jacobs having taken him over in
terms of section
197 of the LRA”
and that he could not be
regarded as a non-employee of the Unicity. The Labour Court found
further that the new employer did not
come into effect at the time of
restructuring but came into existence in December 2000 and as a
result Jacobs was “
covered by section 186(2)(a) as an
employee.”
[22] The Labour Court found further that since the
appellant had advertised the level 3 position both internally and
externally,
Jacobs was free to apply for that post which would have,
if appointed, been an advancement in his status and therefore a
promotion,
and that any unfair act relating to the appointment of
Jacobs to the position applied for would [if proved] be regarded as
unfair
labour practice. The Labour Court went further to reason that
had the appellant retrenched all its employees and “
began to
employ its own employees, the position would [have been] different.”
In that instance, the Court held, the provisions of section 186
(2)(a) would not apply.
[23] With regard to the contention that Jacobs could
have attacked the appellant’s conduct on the basis of unfair
retrenchment
the Labour Court reasoned that Jacobs had not been
retrenched and such attack would not be available to him. The Court
held further
that an appointment to level 3 would not have
constituted an alternative to retrenchment because Jacobs had been
advised that the
employees on level 4 would be placed and not
retrenched. It is however not clear from the judgment of the Labour
Court as to which
level 4 which structure it was referring to. In
conclusion the Labour Court ruled that the second respondent does
have the requisite
jurisdiction to arbitrate the dispute and ordered
that the ruling by the commissioner be reviewed and set aside and
that the dispute
be referred back to the second respondent to be
arbitrated by an arbitrator other than the third respondent.
The Appeal
The statutory framework
[24] The relevant provisions of sections 12 and 14 of
the Structures Act in terms whereof the section 12 Notice was issued
to establish
the appellant are :
“
12 MECs to establish municipalities.
(1) The MEC for local government in a province, by notice in the
Provincial Gazette, must establish a municipality in each municipal
area which the Demarcation Board demarcates in the province in terms
of the Demarcation Act.
(2) The establishment of a municipality-
(a) must be consistent with the provisions of this Act; and
(b) takes effect at the commencement of the first election of the
council of that municipality.
(3) The notice establishing the municipality must set out-
(a) the category of municipality that is established;
(b) the type of municipality that is established;
(c) the boundaries of the municipal area;
(d) the name of the municipality;
(dA) in the case of a metropolitan or local municipality, the number
of wards in the municipality; and
(e) the number of councillors as determined in terms of section 20;
(eA) in the case of a district municipality, the number of
councillors, determined in terms of section 23, to-
(i) proportionally represent parties;
(ii) be appointed by each of the local councils within the district
municipality to directly represent each local municipality;
and
(iii) proportionally represent parties from each district management
area within that district municipality;
(f) which councillors of the municipality (if any) may be designated
as full-time in terms of section 18 (4);
(h) any provisions of this Act from which the municipality has been
exempted in terms of section 91; and
(i) any other relevant detail.
(4) The MEC for local government must-
(a) at the commencement of the process to establish a municipality,
give written notice of the proposed establishment to organised
local
government in the province and any existing municipalities that may
be affected by the establishment of the municipality;
(b) before publishing a notice in terms of this section, consult-
(i) organised local government in the province; and
ii) the existing municipalities affected by the proposed
establishment; and
(c) after such consultation publish particulars of the proposed
notice for public comment.
S 14 Regulation of effects of establishment of municipality on
existing municipalities
(1) (a) A municipality established in terms of section 12 in a
particular area, supersedes the existing municipality or
municipalities
to the extent that the existing municipality or
municipalities fall within that area.
(b) The superseding municipality becomes the successor in law of the
existing municipality subject to paragraph (c).
(c) Where a district municipality and one or more local
municipalities within the area of the district municipality supersede
the existing municipality or municipalities in that area, the
district and local municipalities in that area become the successors
in law of the existing municipality or municipalities depending on
the specific assets, liabilities, rights and obligations allocated
to
the district and local municipalities respectively in terms of the
relevant section 12 notice or notices.
(2) If subsection (1) is applicable, the section 12 notice, or any
amendment of the section 12 notice, must-
(a) provide for the disestablishment of the existing municipality or,
if only part of the existing municipality's area is affected,
the
disestablishment of the existing municipality in the affected area;
and
(b) regulate the legal, practical and other consequences of the total
or partial disestablishment of the existing municipality,
including-
(i) the vacation of office by councillors of the existing
municipality;
(ii) the transfer of staff from the existing municipality to the
superseding municipality, or, if there is more than one superseding
municipality, to any of the superseding municipalities;
(iii) the transfer of assets, liabilities, rights and obligations,
and administrative and other records, from the existing municipality
to the superseding municipality, or, if there is more than one
superseding municipality, to any of the superseding municipalities,
taking into account the interests of creditors of the existing
municipality; and
(iv) the continued application of any by-laws and resolutions of the
existing municipality to or in that area, and the extent of
such
application:
Provided that if the superseding municipality is a district or local
municipality a transfer referred to in subparagraph (ii) or
(iii)
must be effected in a way that would enable the superseding
municipality to perform the functions or exercise the powers
assigned
to it in terms of section 84 (1) or (2).
(4) (a) On production of a certificate by a municipality that any
asset registered in a deeds registry was transferred to it in
terms
of a section 12 notice, a registrar of deeds must make such entries
or endorsements in or on any relevant register, title
deed or other
document to register that asset in the name of that municipality.
(b) No duty, fee or other charge is payable for a registration in
terms of paragraph (a).
(5) The MEC for local government in a province, by notice in the
Provincial Gazette, may make provision for transitional measures
to
facilitate the disestablishment of an existing municipality and the
establishment of a new municipality. The MEC must consult
the
existing municipality before publishing the notice.”
[25] Section 186(2) of the Act which is the subject of
the point in
limine
provides that:
“
Unfair
labour practice' means any unfair act or omission that arises between
an employer and an employee involving-
(a)
unfair conduct by the
employer relating to the promotion, demotion, probation (excluding
disputes about dismissals for a reason
relating to probation) or
training of an employee or relating to the provision of benefits to
an employee;
(b) the unfair suspension of an
employee or any other unfair disciplinary action short of dismissal
in respect of an employee;
(c) a failure or refusal by an
employer to re-instate or re-employ a former employee in terms of any
agreement; and
(d) an occupational detriment,
other than dismissal, in contravention of the Protected Disclosures
Act, 2000 (Act 26 of 2000), on
account of the employee having made a
protected disclosure defined in that Act.”
(
Emphasis
added)
[26]
Turning to the case at hand, it
is not in dispute that the appellant was in a transition process
involving placement of employees
into the first posts of a newly
established local government entity. The transition was effected in
accordance with the above quoted
legislative provisions. It is
further common cause that Jacobs together with many other employees
were in fact and in law employees
of the appellant. To clear any
misunderstanding about this aspect, counsel for the appellant
submitted on behalf of the appellant
that it had never been the case
for the appellant that Jacobs was not an employee of the appellant.
The appellant’s case,
he submitted, has always been that Jacobs
was an employee of the appellant. Therefore the real issue before the
commissioner, in
my view, was whether given the transitional phase of
local government at the time, whether a person in a position of
Jacobs could
challenge his non placement in the position he applied
for under the unfair labour practice jurisdiction as being a dispute
involving
promotion.
[27] The point
in limine
raised by the appellant
relate to the issue of whether the council had jurisdiction to
entertain the parties’ dispute. That
being the case, it is the
general principle of our law that in determining whether the council
had jurisdiction, the enquiry is
not whether a finding by the
commissioner that the council had or did not have jurisdiction is
justifiable, rational or reasonable.
The question that the Labour
Court should have asked itself was whether, objectively speaking the
facts which must exist to clothe
the council with jurisdiction did
exist. If they exist the the council would have jurisdiction. If they
do not exist, then the
council had no jurisdiction to determine the
dispute. See:
Benicon Earthworks & Mining Services (Edms)
(BPK) v Jacobs No
(1994) 15 ILJ 801 (LAC):
Agricultural and
Rural Development Corporation v The Commissioner for Conciliation,
Mediation and Arbitration and others
(unreported) Labour Appeal
Court case no: JA 3/06 delivered on 6 May 2008.
Fidelity Cash
Management Services v CCMA & Others
[2008] 3 BLLR 197
(LAC)
para [101], (2008) 28 ILJ 964 (LAC) PARA [101].
[28] It is evident from the judgment of the Labour Court
that it approached the matter on the basis of answering the question
whether
the finding of the commissioner was either rational,
justifiable or not. The correct approach should have been to ask
whether the
jurisdictional facts which would have given the
Bargaining Council jurisdiction existed or not. In this case the
Jurisdictional
factors necessary would be an
unfair act or
omission that arises between an employer and an employee
relating
to promotion
. The onus of proving the existence of the
jurisdictional factors rests on the employee. It must be established
that Jacobs was
an existing employee of the appellant and that his
appointment would have resulted in some advancement or elevation in
rank or
rise in status. See generally:
Department of justice v
CCMA & others
[2004] 4 BLLR 297
(LAC): (2) ILJ and
Department
of Justice v CCMA & others
[2001] 22 ILJ 2439 (LC).
[29] It is tempting at first glance to conclude that the
jurisdictional factor relating to the employment relationship has
been
satisfied. This is because in this case it is common cause that
Jacobs was an employee of the appellant. His employment relationship
was created as a result of his transfer to the appellant in terms of
section 197
of the
Labour Relations Act. However
in view of the
process that was followed, his position differed from that of an
ordinary employee, in the sense that he was not
transferred into a
particular position within the new employer. Jacobs like the many
other employees were placed in what was described
as an
“
administrative unit
” created by the
implementation of the structures Act. He however, moved across as an
employee retaining all his benefits.
He was occupying no position as
this position that he occupied at the Tygerberg Municipality, no
longer existed following the disestablishment
of that municipality.
The commissioner’s remarks that Jacobs was never employed by
the appellant without qualification of
the conclusion, may have
created confusion because Jacobs was an employee of the appellant by
the operation of law. Although he
was an employee he together with
the other employees in a technical sense because they were placed in
a unique structure created
by the Structures Act, as a vehicle to
facilitate the transition process. They retained their post
designations with the disestablished
municipalities for
administrative purposes to facilitate the transfer to the newly
established City of Cape Town until the city’s
organisational
design was complete and placement could be effected. Because Jacobs’
position did not exist within the appellant
there were no prescribed
duties and functions attached to it. He may however have continued to
perform the same functions he did
before the amalgamation of the
municipalities. Such functions were however not attached to any
particular position within the appellant.
[30] The true position is that it was only after a
structure of the new employer; the appellant had been established and
approved,
that Jacobs would be able to occupy a particular position.
Because several municipalities were being amalgamated it would not
have
been Jacobs alone who had occupied the position of Manager:
Library Services or similar position. One would expect that there
would
have been other employees who occupied similar positions in the
disestablished municipalities who would have had to be placed in
the
new structure who were also retained in the administrative unit for
the time being. It would be absurd therefore to expect
each and every
one of those employees to claim that they were entitled to be
appointed to a newly created position when it required
only one
person to be appointed in line with the Placement Agreement.
[31] In my view the Labour Court seems not to have fully
appreciated the mechanism that was put in place to facilitate the
transition.
The Labour Court concluded that because sec 107 of the
Act was applied to transfer Jacobs and other employees of the
disestablished
municipalities, they for all intends and purposes
became the employees of the appellant and concluded the enquiry
without investigating
the nature of the relationship the employees
had with the appellant as well as their standing and positions within
the appellant.
The Labour Court ought to have recognised the fact
that Jacobs and many other employees were in a unique situation which
was established
merely to facilitate a smooth running of the process.
Their position was different from that of a conventional existing
employee
who enjoys an existing employment relationship with his
employer and seeking to be fairly treated in the promotion process.
This
aspect distinguishes Jacobs’ position from that of the
employees in the
Department of Justice
cases referred to
above, which cases were heavily relied upon by counsel on behalf of
the employee and the union. In the
Department of Justice case
this
Court did not consider the position of an employee under the
circumstances in which Jacobs found himself. Therefore, the principle
enunciated in that case remains valid but is not applicable in this
case.
[32] I therefore come to the conclusion that the
commissioner was correct to find that the bargaining Council lacked
jurisdiction
to entertain the dispute as formulated by the
respondents. In the light of this conclusion I do not find it
necessary to consider
the issue relating to whether Jacobs could
challenge his non placement under the unfair retrenchment provisions
of the Act.
[33] What remains is the issue of costs. Even though
counsels’ attitude was initially that costs should follow the
result,
I am of the view that given the importance of this matter to
the parties and the process of transformation of Local Government
from a long history of what this country has gone through, it will be
in accordance with the requirements of the law and fairness
that
there be no order as to costs.
[34] In the result I make the following order:
(1) The appeal is upheld.
(2) The order of the Labour Court is set aside and
substituted as hereunder:
“
The point
in
limine
is upheld.”
(3) There shall be no order as to costs either in the
Labour Court or in this Court.
_________________
Tlaletsi AJA
I agree
_________________
Khampempe ADJP
I agree
___________________
Ndlovu AJA
For the Appellant: Mr J.J Gauntlett and Mr C.S
Kahanovitz
Instructed by: Sonenberg Hoffmann Galombik Attorneys.
For the respondents: Mr J Whyte
Instructed by: Cheadle Thompson & Haysom Attorneys
Date of Judgment: