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[2014] ZALAC 5
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South African Municipal Workers Union (SAMWU) v South African Local Government Bargaining Council and Others (DA7/2012) [2014] ZALAC 5; [2014] 7 BLLR 711 (LAC); (2014) 35 ILJ 2824 (LAC) (13 February 2014)
REPUBLIC
OF SOUTH AFRICA
IN THE LABOUR APPEAL
COURT OF SOUTH AFRICA, DURBAN
JUDGMENT
Reportable
Case no: DA 7/2012
In the matter between:
SOUTH AFRICAN
MUNICIPAL
WORKERS UNION
(SAMWU) Appellant
and
THE SOUTH AFRICAN
LOCAL GOVERNMENT
BARGAINING
COUNCIL First
Respondent
A.J.
RYCROFT
N.O
.
Second
Respondent
ETHEKWINI MUNICIPALITY
(METRO
FIRE
SERVICES) Third
Respondent
INDEPENDENT MUNICIPAL
ALLIED
TRADE UNION
(IMATU) Fourth
Respondent
Heard:
03 September 2013
Delivered:
13 February 2014
CORAM:
Tlaletsi DJP, Musi et Mokgoatlheng AJJA
JUDGMENT
TLALETSI DJP
[1] This appeal is about
whether an email, containing an extract of an award yet to be issued,
written and sent by the second respondent
(“the Commissioner”)
to the parties’ legal representatives for comment
constituted his award
and whether he could change the
extract before issuing the award. In light of the narrow issue to be
determined it shall
not be necessary to set out in detail the factual
background relating to the original dispute between the parties. The
factual
background will therefore be limited to the matters that led
to the current issue between the parties.
[2]
The appellant is the South African Municipal Workers Union (SAMWU), a
representative trade union having duly acquired its status
and rights
in terms of the Labour Relations Act
[1]
(the Act) which was cited as the fourth respondent in the court
a
quo
.
The appellant together with IMATU
[2]
were applicants in a dispute referred to the first respondent against
their employer, the third respondent.
[3]
The dispute was initially raised as a right dispute but the parties
agreed to refer the dispute to arbitration as an interest dispute.
[3] The Commissioner was
appointed to arbitrate the dispute under the auspices of the first
respondent. The issue in dispute was
a 29% exemption allowance, which
was paid to those employees of the third respondent who worked in the
Durban Central and Tongaat
entities, which was withdrawn as from
August 2003. The unions demanded that the employees concerned should
continue to receive
the aforesaid allowance until such time as the
third respondent rationalised its terms and conditions of employment.
[4] The parties presented
their evidence and written submissions to the Commissioner. The
latter needed some time to prepare his
award. On 4 December 2006, the
Commissioner forwarded an email to the parties’ respective
legal representatives. In the email
he wrote that:
“
Dear
Richard and Michael.
I am about to issue my
award in the Metro Fire exemption allowance arbitration.
I am anxious to avoid
an order which is difficult to implement or simply unworkable because
of a lack of records. What I would like
to do is to provide you both
with the last part of my award and for you to give me feedback on any
practical aspects which could
make the award easier to implement.
You’ll realize, I hope, that I am not asking for comments on
merits of my decision, just
the implementation thereof.
I’d appreciate
your comment
Regards
Alan Rycroft”
The email continued with
what appeared to be an extract on what he called for feedback:
“
61.
To sum up: It is my view that:
(a
there is no justification in the circumstances of this case to
reinstate the exemption allowance;
(b)
the averaged working hours system
does not include scheduled overtime;
(c)
with regard to unscheduled overtime,
there is no legal obligation to exclude from overtime pay those
employees earning in excess
of the amount determined by the Minister
from time to time in terms of s 6(3) of the BCEA;
(d)
I am not prohibited from considering
the fairness of the consequences of the threshold on individual
employees as there existed
a long-standing practice to pay an
allowance (which included overtime) regardless of the threshold
earnings;
(e)
It was inequitable to move from the
exemption allowance system which ignored salary thresholds to a
system which is prejudicial
to those earning in excess of the
threshold.
62.
A consequence of these views is that the Applicant’s pray that
I order that the exemption
allowance of 29% be reinstated is refused.
However with regard to those earning in excess of the threshold, I
order that they be
treated on the same basis as all other employees
as regards overtime, night allowance, Sunday time and public
holidays. This order
is hereby made effective until such time as
agreement has been reached in the rationalisation of allowances as
referred to in the
Staff Placement Policy.
63.
I can see no reason why this rectification should not be made
retrospective to August 2003.
I am mindful that there may be
difficulties in computing the arrear payments and, in accordance with
the Respondent’s request,
Applicants are required to submit a
list of individuals who are party to this dispute and a computation
of their claims so that
that list can be verified by the Respondent
before the award is given effect.
AWARD
For
the reasons set out above I make the order as set out in Paragraphs
62 and 63 of this award
_____________________
Professor Alan Rycroft
“
[5] The two legal
representatives replied by sending their written submission as
requested by the Commissioner. The submission made
on behalf of the
third respondent which is vital for this appeal concluded thus:
“
From
the difficulties set out above, it is suggested that a retrospective
award to the 1
st
August 2003 creates enormous practical problems and industrial
relations concerns. As this is a dispute of interest, there is
nothing preventing an award that is not retrospective or if it is to
be to be retrospective for a short period to lessen the
administrative
complications in implementing such an award.
In conclusion, the
impact on those employees that have moved on from Durban Fire since
August 2003 and on those employed after August
2003, make the
implementation of the award an industrial relations nightmare.”
[6] At the time the
Commissioner issued his award after considering the submissions made
on behalf of the parties, there were some
changes to paragraph 62. It
was now divided into two paragraphs and a new paragraph 64 was
introduced. It read as follows:
“
62.
A consequence of these views is that the Applicant’s prayer
that I order that the exemption allowance of 29% be reinstated
is
refused. However with regard to those of the Applicants earning in
excess of the threshold, I order that they be treated on
the same
basis as Applicants earning below that threshold for the purposes of
overtime, night allowance, Sunday time and public
holidays.
63. This order is
hereby made effective until such time as agreement has been reached
in the rationalisation of allowances as referred
to in the Staff
Placement Policy.
64. I am persuaded
that the rectification should not be made retrospective.
AWARD
For the reasons set
out above I make the order as set out in Paragraphs 62 to 64 of this
award.”
[7] The effect of the
award published by the Commissioner was that the position in the
email sent to the parties reflecting that
the award would be
retrospective to August 2003 had changed and the award was no longer
made retrospective. IMATU was aggrieved
by this development and
instituted review proceedings in the Labour Court seeking an order to
the effect that the ruling that the
award is not retrospective be
reviewed and set aside and be amended to read that the award is
retrospective to August 2013 which
would be in line with the email
communication received from the Commissioner on the previous
occasion.
[8] The unions contended
that the Commissioner had already decided that the award would be
retrospective and communicated that decision
to the parties by email
and was thus
functus officio
. They contended that he was bound
by his earlier decision that the award be applied retrospectively.
[9] In its judgment, the
court
a quo
considered the provisions s 138(7) of the Act
which it found to be peremptory and held that failure to meet them
would mean that
the award has no legal effect. The Labour Court
further dismissed the argument that the Commissioner was
functus
officio
on the retrospective application of the award on the
basis that the statutory requirements for a final award had not been
met.
The application for review was consequently dismissed with no
order as to costs.
[11]
The appellant is appealing against the order of the Labour Court with
leave of this Court, having failed to obtain leave in
the court
a
quo
. Mr Katz who appeared on behalf of
the appellant in this Court structured his submissions on what he
called three chapters namely,
the language, the power and the
fairness chapters. He submitted that all these points are
interrelated and interwoven. As regards
the first point, he submitted
that the language used by the commissioner in the email showed that
he had made an award which was
final and determinative of the
parties’ rights. He referred to words such as “
my
award”,
that
“
I
am anxious to avoid an order which is difficult to implement or
simply unworkable because of a lack of records”
that
“
You’ll realise, I hope, that I am
not asking for comments on the merits of my decision and just the
implementation thereof.”
[12] Counsel submitted
further that the summary provided in the email might not be a full
judgment but constitute an award with
brief reasons as required, and
further that there is nothing in the email to suggest that it was a
preliminary or provisional award.
He made an example of a fireman
employed by the third respondent during the period covered by the
disputed allowance gaining access
to the email which would tell him
on reading it to expect to be paid the allowance for the
retrospective period. Counsel contended
that the only purpose of the
email was to elicit assistance by way of perhaps a schedule which was
to reflect when the employees
joined or left so that the list could
be verified before the award is given effect to. He mentioned that it
was not about whether
the rectification should be made retrospective
as that decision had been made by the Commissioner already.
[13] With regard to the
second point, counsel for the appellant contended that because in
their view the Commissioner had already
decided that his
order
was retrospective, it was not competent for him to later revisit that
decision and change it when difficulties relating to implementation
of the
order
were pointed out to him by the third respondent’s
legal representative. With regard to the third aspect, namely
fairness,
it was contended that the Commissioner, being an
independent and impartial tribunal charged with the resolution of the
dispute
by application of law in a fair public hearing, acted
unfairly towards the appellant by having decided the issue relating
to retrospective
effect of the award and later changing it and
ordering that the award should not apply retrospectively.
[14] It is indeed correct
that the award that was issued by the Commissioner on 17 May 2006
differed or was in conflict with the
email correspondence to the
parties’ legal representative with regard to the retrospective
effect of the award. What should
be decided though is whether the
email constituted an award of the Commissioner and the consequences
of his actions in changing
it.
[15] The first
respondent’s constitution, in terms of whereof the Commissioner
arbitrated the dispute, provides in clause
10.7.10.1 that:
“
Within
14 days of the conclusion of the arbitration proceedings the
arbitrator must issue an arbitration award with reasons, signed
by
the arbitrator”.
These
provisions are identical to s 138 (7) of the Act which also requires
the Commissioner of the CCMA
[4]
to issue an arbitration award with brief reasons and signed by that
arbitrator. Service of the award on each party to the dispute
or
their representatives at the arbitration is the prerogative of the
Commission in the case of the CCMA or the Central Council
or Division
as the case may be if the arbitration was conducted under the
auspices of the first respondent.
[16]
For a commissioner to comply with clause 10.7.10.1 of the
constitution of the first respondent and s 138(7)(a) of the Act,
it
is necessary for him/her to a) issue the arbitration award, b)
provide reasons for the award and c) sign the award. The term
“issue”
is not defined in the Act or the constitution of the first
respondent. The ordinary meaning of the term in
Shorter
Oxford English
Dictionary,
[5]
is
inter
alia, the way an action or course of proceedings turns out
;
the
event
;
a
result
;
consequence;
be sent out officially or publicly, the action of issuing or giving
or sending out officially or publicly
.
[6]
By this definition, it means that the Commissioner must have intended
that what he sent out was made officially or publicly and
was a
result or the way the course of the arbitration proceedings turned
out.
[17]
There can be no doubt that the Commissioner when he sent that email
to the legal representatives did not intend to issue an
award. This
is clear from the words he employed in the email itself that “
I
am about to issue my award
”
Saying that he was about to issue his award can only mean that he is
not yet issuing his award. Furthermore, by stating
that he is
providing the legal representatives with the “
last
part of my award and for you to give me feedback which could make the
award easier to implement
”
suggests
that he is not making his full award available for issue as a final
document but that he is inviting comments on the practical
aspects of
the last part of his award. Further, the paragraphs quoted in the
email constituted only a small extract from the full
award. It also
did not contain brief reasons for the award but a summary of his
conclusions.
[18]
The third requirement that the award must be signed by the arbitrator
was also not met. The submission that the fact that the
Commissioner’s names and address appear at the end of the award
constitute an electronic signature is without merit. For
there to be
an electronic signature, there must be compliance with s 13 of the
Electronic
Communications and Transactions
Act
[7]
which
provides that:
1)
Where the signature of a person is required by law and such law does
not specify
the type of signature, that requirement in relation to a
data
message
is
met only if an
advanced
electronic signature
is
used.
2)
Subject to subsection (I), an electronic signature is not without
legal force
and effect merely on the grounds that it is in electronic
form.
3)
Where an electronic signature is required by the parties to an
electronic
transaction
and
the parties have not agreed on the type of electronic signature to be
used, that requirement is met in relation to a data message
if –
a)
method is used to identify the person and to indicate the
person's approval
of the information communicated; and
b)
having regard to all the relevant circumstances at the time the
method was used,
the method was as reliable as was appropriate for
the purposes for which the information was communicated.
4)
Where an advanced electronic signature has been used, such signature
is regarded
as being a valid electronic signature and to have been
applied properly, unless the contrary is proved.
5)
Where an electronic signature is not required by the parties to an
electronic
transaction, an expression of intent or other statement is
not without legal force and effect merely on the grounds that –
a)
it is in the form of a data message; or
b)
it is not evidenced by an electronic signature but is evidenced by
other means
from which such person's intent or other statement can be
inferred.
[19] It is evident from
the email sent by the Commissioner that there is no electronic
signature in compliance with s13 referred
to above. Furthermore,
sending the email to the parties’ legal representatives by the
Commissioner was not a method identified
for the issuing and sending
of the award. The ultimate award issued by the Commissioner is one
that complied with all the statutory
requirements of an award and was
complete in all respect.
[20]
As already pointed out, the Commissioner held a particular view with
regard to making his award retrospective and changed that
view when
he issued the final award. In my view nothing prevented him from
changing his view for as long as it was not what he
presented as his
final view. Of course it may not be advisable to do as the
Commissioner did in this case as an expectation was
or could be
created in the minds of those who stood to benefit from his
view, if it finally became his decision. However,
it cannot be said
on the facts of this case that the Commissioner was
functus
officio
.
The views expressed in his email cannot be said to be his intended
final and determinative view of the matter. For the
functus
officio
doctrine to apply it is a requirement that there be a final judgment
or order. In that situation the Commissioner would have no
power to
correct, alter, or supplement the order because his jurisdiction in
the case has been fully and finally exercised,
[8]
unless
he/she acts in terms of s 144 of the Act.
[9]
This was not the case with the Commissioner in this matter. Since
there was no award it can therefore not be said that the matter
was
not determined fairly and that the Commissioner must be held to his
previous view. The appeal must therefore fail.
[21]
As regards costs, it is in my view that in the circumstances of this
case that it would be according to the requirements of
the law and
fairness that there be no order as to costs.
[10]
[22] In the result, the
following orders are made:
i)
The appeal is dismissed.
ii)
There is no order as to costs.
__________________
Tlaletsi DJP
Deputy Judge President
of the Labour Appeal Court
Musi et Mokgoatlheng AJJA
concur in the judgment of Tlaletsi DJP.
APPEARANCES.
FOR THE
APPELLANT:
Adv Anton Katz
Instructed by Tomlinson
Mnguni James
FOR THE
RESPONDENTS:
Adv G.O. van Niekerk SC
Instructed
by Shepstone & Wylie Attorneys
[1]
Chapter
11 of the
Labour Relations Act 66 of 1995
.
[2]
Independent
Municipal and Allied Trade Union.
[3]
The
South African Local Government Bargaining Council (SALGBC) a
bargaining council established and registered under
Part C
of
Chapter 111 of the Act.
[4]
Commission
for Conciliation, Mediation and Arbitration.
[5]
Volume
1, 6
th
Edition, Oxford, pages 1442-1443.
[6]
See
Free
State Buying Association Ltd t/a Alpha Pharm v SA Commercial
Catering & Allied Workers Union and Another
(1998)
19 ILJ 1481 (LC) where Landman J held that an award, once it has
been signed will be issued once it is made available for
service and
filing.
[7]
Electronic
Communications and Transaction Act No. 25 of 2002.
[8]
Firestone
South Africa (PTY) LTD v Genticuro A.G.
1977 (4) SA 298
(A) at 306;
West
Rand Estates Ltd v New Zealand Insurance Co. Ltd
.
1926 AD 173
at 176,178,186-7.
[9]
Any
commissioner who has issued an arbitration award or ruling, or any
other commissioner appointed by the
director
for that purpose, may on that commissioner’s own accord or, on
the application of any affected party, vary or rescind an
arbitration award or ruling -
a)
erroneously sought or erroneously made in
the absence of any party affected by that award;
b)
in which there is an ambiguity, or an
obvious error or omission, but only to the extent of that ambiguity,
error or omission;
or
c)
granted as a result of a mistake common to
the parties to the proceedings.
[10]
S179
of the Act.