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[2014] ZALAC 88
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South African Municipal Workers Union v South African Local Government Bargaining Council and Others (DA 7/2012) [2014] ZALAC 88 (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entities, which was withdrawn as from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.