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[2013] ZALAC 20
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South African Post office Ltd v CWU obo Permanent Part-Time Employees (CA 15/12) [2013] ZALAC 20; (2014) 35 ILJ 455 (LAC); [2013] 12 BLLR 1203 (LAC) (28 August 2013)
Reportable
REPUBLIC OF SOUTH AFRICA
THE LABOUR APPEAL COURT OF SOUTH
AFRICA, CAPE TOWN
Case no: CA15/12
In the matter between:
SOUTH AFRICAN POST OFFICE LIMITED
.........................................................
Appellant
and
CWU obo PERMANENT PART-TIME
EMPLOYEES
.......................................
Respondent
Heard: 23 May 2013
Delivered: 28 August 2013
Summary: Making settlement
agreement an order of court in terms of section 158(1)(C) of the LRA-
Prescription raised in argument
not properly before court-Labour
Court making a settlement agreement an order of court and ordering
the CCMA to conciliate and
arbitrate the issue relating to the
interpretation of the settlement agreement- section 158(1)(c) should
be read in conjunction
with section 158(1A) of the LRA- court should
exercise its discretion and satisfy itself whether the settlement
agreement meets
the criteria in section 158(1A)- court should also
consider all relevant facts and exercise its discretion to make a
settlement
agreement an order of court. Held that the terms of the
settlement agreement were disputed- dispute related to the
interpretation
of the settlement agreement- Labour Court lacks
jurisdiction to interpret a collective agreement and could not make
such agreement
an order of court. Appeal upheld with costs
Coram: Waglay JP, Tlaletsi ADJP and
Coppin AJA
_____________________________________________________________________
JUDGMENT
______________________________________________________________________
WAGLAY JP
Introduction
[1] This is an appeal against the
judgment of the Labour Court (Steenkamp J), in terms of which the
Labour Court made a settlement
agreement between the parties an order
of Court. The Labour Court further ordered that the dispute between
the parties about the
interpretation of the said settlement agreement
be conciliated by the Commission for Conciliation, Mediation and
Arbitration (“the
CCMA”) and if necessary arbitrated on
an expedited basis.
Background
[2] The Respondent referred a dispute
in respect of implementing the terms of a collective agreement
concluded between them in July
2007 to the CCMA for Arbitration.
While the Arbitration was proceeding, the parties settled their
dispute. The settlement agreement
was concluded on
29 February
2008
.
[3] The terms of the settlement
agreement are not relevant for present purposes, save to record that
a dispute arose about the interpretation
of the settlement agreement.
[4] On 4 August 2008, the appellant
referred a dispute related to the settlement agreement to the Labour
Court. Again the purpose
of the referral is not known, nor is it
relevant. The order of the Labour Court pursuant to the referral was
the following:
‘
the settlement agreement
between (the parties) on the 29
th
February 2008 is declared to
be of full force and effect and binding on the parties.
’
[5] Both parties submitted that the
Labour Court was not asked to, nor did it make the settlement
agreement an order of court.
[6] On 24 February
2011, four days before the third anniversary of the conclusion of the
said agreement, the respondent instituted
action proceedings against
the appellant.
1
The dispute it
referred to the Labour Court for adjudication was not pre-shadowed by
any conciliation process. The order the respondent
sought on behalf
of its members in the schedule to the papers was:
“
18.1
that the agreement concluded between the parties on 29 February 2008
be made an Order of this Honourable Court;
18.2
that the Respondent be ordered to –
18.2.1.
permit the Applicant’s members listed in the schedule hereto to
work the night shift, from the date on which an Order
is made, for as
long as that shift endures;
18.2.2.
pay to each of the Applicant’s 136 members the amount of R80
749.16, being the shift and transport allowances and
pension benefits
that they would have earned during the period 01 April 2008 to 31
January 2011, as well as the shift allowances
and overtime pay that
they would each earn from 01 February 2011 until the date of this
Order;
18.2.3.
to pay interest on all outstanding amounts due and payable by it to
the Applicant’s 136 members at the prescribed
rate; and
18.2.4.
pay the Applicant’s costs of suit.”
[7] It was common cause that the
prayers contained in the above quoted paragraphs related to the
interpretation of the agreement
which was sought to be made an order
of the Labour Court.
[8] The appellant
opposed the action. One of the grounds on which it opposed the action
was that the Labour Court had no jurisdiction
to deal with the
dispute relating to the interpretation of the settlement agreement as
such a dispute should be referred to the
CCMA in terms of section
24(8)
2
of the Labour
Relations Act of 1985 as amended (“the LRA”). The
appellant also objected to the respondent’s prayer
that the
settlement agreement be made an order of court in terms of section
158(1)(c) of the LRA on the grounds that the respondent
had taken an
irregular step by utilising an action procedure instead of an
application procedure to obtain this order.
[9] After the close of pleadings, a
pre-trial conference was held before a judge. At the conference, the
respondent sought for the
Labour Court to make the settlement
agreement an order of court. As the appellant did not agree to such
an order, the Labour Court
refused to make the agreement an order of
the Court at the pre-trial conference.
[10] In the
pre-trial minute, the respondent appears to have abandoned its
prayers for the Labour Court to interpret the settlement
agreement
and replaced it with a prayer that the dispute about the
interpretation of the settlement agreement be “
transferred
to the CCMA to be arbitrated on an expedited basis”
.
[11] Nothing further transpired in
this matter. There was no request for a trial date, nor was a notice
of withdrawal of the action
proceedings filed.
[12] On 23 February
2012, six days short of the fourth anniversary of the conclusion of
the settlement agreement, the respondent
brought the application,
which is now the subject matter of this appeal.
3
The relief sought
by the respondent in its application proceedings is the same as that
sought by it in its action proceedings, save
that while in its action
it sought for the Labour Court to transfer the dispute about the
interpretation of the agreement to the
CCMA to be arbitrated on an
expedited basis, it now asked in the application for the dispute to
be ‘
transferred
to the CCMA to be conciliated and if necessary, to be arbitrated on
an expedited basis.’
In
essence, the respondent was seeking, by way of application
proceedings, exactly the same relief it sought in its action
proceedings.
[13] The reading of the founding
affidavit in support of the relief leaves one totally aghast! The
founding affidavit is deposed
to by the attorney acting for the
respondent and, effectively, proffers as respondent’s reasons
for bringing the application,
the following:
the failure by the appellant to agree
to the orders that it seeks in its Notice of Motion;
the appellant’s “opportunistic”
behaviour in raising the defence of lack of jurisdiction of the
Labour Court;
that, “
it is a necessary
first step to have the settlement agreement made an order of court
to avoid it prescribing before a dispute
about its interpretation is
considered”
.
The Labour Court
[14] The Labour Court, in deciding the
matter found that the appellant wanted to “avoid” the
merits of the dispute and
that the only reason it opposed the
application was to ensure that prescription is not interrupted. It
thus held that the appellant’s
opposition was “cynical”.
The Labour Court also went on to say that the appellant’s
opposition to the application
“smacked of opportunism”
and on this, the sum total of its reasoning, went on to grant the
relief sought by the respondent.
Not only did the Labour Court make
the settlement agreement an order of court, it went on and ordered
the CCMA to conciliate the
dispute about the interpretation of the
settlement agreement [now the court order] and, if necessary, to
arbitrate the dispute
on an expedited basis. It also ordered the
appellant to pay the costs of the application. The Labour Court had
nothing to say on
the issue of prescription.
The Appeal
[15] On appeal both
parties contended that the first issue to be determined was whether,
by the time the respondent launched the
application now on appeal,
the settlement agreement had prescribed. In this respect, the
respondent made the submission that once
it had instituted the action
proceedings against the appellant, prescription was interrupted in
terms of the Prescription Act
4
and since the
action proceedings was instituted a few days before the third
anniversary of the agreement, the agreement had not
prescribed. The
appellant, on the other hand, argued that once the respondent
instituted the application proceedings it lost the
protection
afforded by the Prescription Act. The effect of the application
proceedings, so the appellant argued, was that the respondent
had
abandoned its action proceedings, and since the action instituted by
the respondent was not brought to finality the respondent
could not
use the action proceedings to claim that the prescription period was
interrupted by it.
5
The appellant thus
argued that the settlement agreement had in fact prescribed. One of
the arguments made by counsel for the appellant
was that the court
could not breathe life into that which was already dead. Respondent,
on the other hand, argued that the action
against the appellant was
still pending and the application proceedings was merely an
interlocutory application, adding that this
was evidenced by the fact
that the case numbers in both matters were the same.
[16] It was
disingenuous for Mr Williams to argue, on behalf of the respondent,
that the application was interlocutory. The application
was clearly
not interlocutory. Once granted it made the action instituted by the
respondent irrelevant. The relief claimed in the
application
proceedings, as I have said earlier, was exactly the same as the
relief claimed in the action proceedings. As regards
the case number,
in his affidavit, Mr Williams states,
inter
alia
,
that he was using the same case number in the action proceedings as
the previous matter, because the Registrar of the Labour Court
had
insisted that matters relating to a similar dispute should utilise
the same case number, but that the utilisation of the same
case
number should not be taken to mean that the action proceedings was
the same matter as the previous matter, i.e. which was
first assigned
the case number. In light of that, I find Mr Williams’ argument
as to why I should find the application to
be interlocutory, to be
less than candid.
[17] In the circumstances, appellant
is quite correct to argue that once the respondent brought the
application it signalled an
intention of an abandonment or withdrawal
of its action and could therefore not rely on the action proceedings
to seek protection
against prescription.
[18] In any event,
the issue of prescription is not a matter for determination, because
a court cannot pronounce upon the issue
of prescription unless it is
properly raised in the pleadings. In this matter, the appellant
raised the issue of prescription in
argument, but prescription was
not pleaded as a defence to respondent’s claim.
6
Appellant’s
argument was that the respondent had raised the issue of prescription
in the founding papers and it was therefore
entitled to argue the
issue. I believe not. Respondent had merely said that it wanted the
Labour Court to make the agreement an
order of court to prevent the
appellant from raising prescription as a defence against its claim.
The appellant cannot rely on
that statement to found a basis to argue
that the claim had prescribed. In the absence of prescription being
properly raised in
the pleadings and in the absence of agreement that
it may nevertheless be raised before us, it cannot be determined.
[19] The next issue for determination
is whether the Labour Court was entitled to make the settlement
agreement an order of court.
Section 158(1)(c) of the LRA provides:
“
(1)
The Labour Court may –
(a)…
(b)…
(c)
make any arbitration award or any settlement agreement an order of
the Court”.
[20] This section must be read with
section 158(1A) which defines the settlement agreement.
[21] Section
158(1)(c) of the LRA provides that the Labour Court has the
jurisdiction to make any settlement agreement, concluded
in respect
of a matter arising within the scope of the LRA, an order of court.
This does not mean that the order is there for the
taking. The Labour
Court has a discretion to make it an order of court even if it
otherwise meets the criteria provided in section
158(1A), read with
section 158(1)(c) of the LRA.
7
Hence, where a
settlement agreement provides for an employer to pay an employee
R5000,00 by a particular date and the employer pays
this amount on or
before the due date the employee would be foolhardy to approach the
Labour Court to make the settlement agreement
an order of court, as
no purpose would be served by doing so and the Court would refuse to
make it an order of court. By the same
token, where the settlement
agreement provides that the employer ‘
will
re-employ a dismissed employee if he feels like doing so
’
,
and the employer does not re-employ the employee, the employee would
be ill advised to approach the Labour Court and seek to make
that
agreement an order of court, because no purpose can be served by
making such an agreement an order of court. It is an agreement
that
leaves the discretion to employ entirely within the discretion of the
employer and he may employ ‘if he feels like doing
so’.
He cannot be forced by a court’s order to be in the mood to
employ and there is no enforceable obligation to employ.
The purpose
of making a settlement agreement or an arbitration award, an order of
court is to enforce compliance with the agreement,
or the award. The
agreement or the award must therefore be unambiguous and unequivocal
and not open to any dispute. This does not
mean that an award or
agreement that provides payment of salary or wages of a certain
period is not clear and precise. The parties
would know or easily
ascertain by having regard to documentation like pay slips or an
independent accounting exercise what the
amount is [although ideally
the amount should be clearly set out to avoid unnecessary delays and
expensive exercise to ascertain
the exact amount due]. What all this
means is that before the Labour Court will grant an order sought in
terms of Section 158(1)(c
) of the LRA it must be satisfied that, at
the very least :
the agreement, is
one which meets the criteria set in s 158 (1)(c) read with section
158(1A) of the LRA, and if it is an award,
that it satisfies the
criteria set in section142A of the LRA;
8
that the agreement or award is
sufficiently clear to have enabled the defaulting party to know
exactly what it is required to
do in order to comply with the
agreement or award; and,
There has not been compliance by the
defaulting party with the terms of the agreement or the award.
[22] Once the Labour Court is
satisfied with all of the above then it must, nevertheless, exercise
its discretion whether to grant
or refuse the order. In exercising
the discretion, the Court must take relevant facts and circumstances
into account, such as are
necessary to satisfy the demands of the law
and fairness. Necessarily, each case must be decided on its own facts
and circumstances.
There is, otherwise, no closed list of factors to
be taken into account. A relevant factor is the time it took the
party seeking
the relief to launch the application to make the
settlement or award an order of court. The Labour Court may, for
example, be more
reluctant to make an award for reinstatement of
employees an order of court where the employees unreasonably delayed
in seeking
the enforcement of the award, yet a delay in years in
seeking to make an award for payment a sum of money may not be
grounds for
refusing to make the award an order of Court. Finally and
most crucially it must be remembered that the purpose of making an
agreement
or award an order of the Labour Court is to compel its
enforcement, or enable its execution and not for some other purpose.
[23] In this matter it is evident that
the parties disagree about the meaning of the contents of the
settlement agreement. The respondent
states that the agreement needs
to be interpreted. In such circumstances, because the parties
themselves disagree as to what was
intended by the agreement, so much
so that both parties agree that third party intervention is necessary
to give a proper interpretation
as to what were the terms of the
agreement, the application does not even ‘get off the starting
blocks’. The Labour
Court cannot in such circumstances make the
agreement an order of court, because there is a dispute about what
was agreed, and
it would serve no purpose, other than exacerbate the
interpretational issue, if such an agreement were to be made an order
of court.
An order that is unclear and ambiguous is open to dispute
and that defeats the very purpose for making it a court order in the
first place. Such an order would not be enforceable or executable.
[24] This then
brings me to the issue of the referral of the settlement agreement to
the CCMA for interpretation. Section 24(8)
of the LRA provides that a
dispute about the interpretation of a settlement agreement must be
referred to a bargaining council
or the CCMA for resolution. The
settlement agreement must however be one that is capable of being
made an arbitration award in
terms of Section 142A, or an order of
court in terms of Section 158(1)(c) of the LRA. The order sought by
the respondent in this
matter and the one granted by the Labour Court
was totally misconceived and erroneous. The Labour Court made the
settlement agreement
an order of court (which it should not have
done) and having done so, ordered that the dispute between the
parties, about the interpretation
of what it made into a court order,
to be “transferred” to the CCMA for conciliation ‘
and
if necessary to be arbitrated on an expedited basis.
’
The Labour Court’s
orders cannot be referred to a bargaining council or the CCMA for
interpretation. It is not competent for
a quasi-judicial body to
interpret an order of a court. There is also no indication that the
Labour Court relied on the unreported
judgment of
Fidelity
Security Services (Pty) Ltd v P J Benneker,
9
(
Fidelity
judgment) which was
a judgment that was relied upon by the respondent. This judgment
purportedly held that a settlement agreement
once made an order of
Court may be referred in terms of section 24(8) of the LRA to be
interpreted by a bargaining Council or the
CCMA. In so far as that
judgment purports to say that, it is clearly wrong. In any event, s
24(8) of the LRA only deals with awards
and settlement agreements,
not Court Orders.
[25] The respondent
in its founding affidavit admitted that the Labour Court ‘
lacked
the jurisdiction to interpret a dispute concerning that agreement
’
referring to the
settlement agreement. Having regard to that, I fail to see the basis
upon which the Labour Court ordered a “transfer”
of the
dispute to the CCMA! It was a spurious prayer, alternatively sought
wrongfully, to limit the CCMA’s right to consider
the matter
without following its usual processes. The appellant properly submits
that there was no basis whatsoever for the Labour
Court to grant that
order, nor was it a matter that the Labour Court should have
considered, having regard to the pleadings in
this matter.
[26] In the circumstances, the appeal
must succeed.
[27] With regard to
the issue of costs, I am satisfied that this is a matter in which
consideration of law and equity demand that
costs should follow the
result. I say this for the following reasons. The respondent’s
attorneys appear to wrongly interpret
appellant’s agreement
that the respondent has a right to seek an order in terms of
s158(1)(c) of the LRA to mean that the
appellant is consenting to the
order. The respondent’s attorney also wrongly interpreted the
appellant’s agreement
with the respondent about the
interpretation of the
Fidelity
judgment to mean
that the appellant was agreeing to the judgment being correct. There
is no explanation why the respondent’s
attorney did not enrol
the action proceedings instead of launching the application
specially, in circumstances where there is nothing
to indicate that
the action could not have been dealt within a month or two of the
pre-trial minute having been finalised. And,
finally, when the issue
of the need for this application was raised, the attorney for the
respondent submitted that the application
was an interlocutory
application, whereas it was not. I have already stated earlier what I
thought of this argument.
[28] The application was without any
merit. The argument presented were not only misconceived but cannot
be said to be based independently
on the instruction of the client
without any input from the attorney, and in my view the attorney
failed to provide competent advise.
The facts and allegation
contained in the affidavit which formed the basis of the application
were sworn to by the attorney and
only he could form the opinions he
did which then formed the basis of the application. In the
circumstances, I was leaning towards
taking the view that a
de
bonis propriis
costs order might be appropriate, but having
regard to the fact that the matter has taken so long to get where it
was, blame cannot
be placed on the attorneys alone.
[29] In the result,
I make the following order:
The appeal is
upheld with costs and the order of the Labour Court is substituted
with the following order:
“
The
application is dismissed with costs”
________________
Waglay JP
I agree
_______________
Tlaletsi ADJP
I agree
_______________
Coppin AJA
APPEARANCES:
FOR THE APPELLANT: Adv. F
Boda
Instructed by Z Ngwenya of Cliffe
Decker Hofmeyer Inc.
FOR THE RESPONDENT: Mr Glyn Williams
of Chennells Albertyn Attorneys
1
The
case number used by the respondent was the same case number that was
allocated to the earlier matter which I have referred
to in
paragraph 4 above.
2
Section
24(8) provides that: ‘If there is a dispute
about
the interpretation or application of a settlement agreement
contemplated in either section
142A or 158(1)(c),
a party
may refer the dispute
to
a
council
or
the Commission and subsections (3) to (5), with the necessary
changes, apply to that dispute.’
3
This
matter also carried the same case number as the previous matters.
4
Act
no 68 of 1969 as amended which provided in s15(1) as follows: ‘The
running of prescription shall, subject to the provisions
of
subsection (2), be interrupted by the service on the debtor of any
process whereby the creditor claims payment of the debt.’
5
Section
15(2) of the Prescription Act provides that: ‘Unless the
debtor acknowledges liability, the interruption of prescription
in
terms of subsection (1) shall lapse, and the running of prescription
shall not be deemed to have been interrupted, if the
creditor does
not successfully prosecute his claim under the process in question
to final judgment or if he does so prosecute
his claim but abandons
the judgment or the judgment is set aside.’
6
See
Technikon Pretoria (now Tshwana
University of Technology v Commissioner EP Nel No and Others
case
number JA15/2012 heard on 14 May 2013 where the point
in
limine
raised by the appellant that
prescription by way of point of law was not properly before the
court
a quo
was
dismissed.
On appeal, the agreement
between the parties, that the application based on point of law be
struck from the roll was made an order
of court.
7
See;
Maryka Greef v Consol Glass (Pty)
Ltd (Unreported decision of
the LAC) Case No. CA02/12 delivered on 21 May 2013.
8
See
the
Maryka Greef
case (supra).
9
Case
number: C 933/2008 dated 18 August 2011(Unreported).