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[2014] ZALAC 18
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South African Municipal Workers Union v Syntell (Pty) Ltd and Others (CA 3/2013) [2014] ZALAC 18; (2014) 35 ILJ 3059 (LAC) (27 May 2014)
REPUBLIC OF SOUTH
AFRICA
IN THE LABOUR
APPEAL COURT OF SOUTH AFRICA, CAPETOWN
JUDGMENT
Reportable
Case no: CA 3/2013
In the appeal of:
SOUTH
AFRICAN MUNICIPAL WORKERS
UNION
......................................................
Appellant
and
SYNTELL (PTY)
LTD
................................................................................................
First
Respondent
COMMISSION FOR
CONCILATION
MEDIATION AND
ARBITRATION
....................................................................
Second Respondent
D.I.K. WILSON
N.O.
…............................................................................................
Third
Respondent
Heard: 12 March
2014
Delivered: 27 May
2014
Summary:
Demarcation disputes- NEDLAC empowered by the LRA to be consulted in
demarcation disputes- s 62(9) of the LRA requires
a commissioner to
consult with NEDLAC before making an award- commissioner sending
draft award to NEDLAC- Commissioner revising
final award in light
with NEDLAC comments- no obligation on the commissioner to have
parties to comment on NEDLAC views- Commissioner
not abdicating his
function by accepting NEDLAC comments. Commissioner finding that
first respondent not falling within the jurisdiction
of the SALGBC.
Commissioner applying his mind to the evidence before him. Award
reasonable- Labour Court judgment upheld-. Appeal
dismissed with
costs.
Coram: Davis JA,
Molemela and Sutherland AJJA
JUDGMENT
SUTHERLAND AJA
Introduction
[1]
This case originated in a dispute about
whether or not the activities of the first respondent (Syntell)
render it subject to the
jurisdiction of the South African Local
Government Bargaining Council (SALGBC) on account of it being
allegedly associated with
its employees in a Local Government
Undertaking (LGU). The appellant (SAMWU) caused a hearing to be held
in terms of section 62
of the Labour Relations Act 66 of 1995 (LRA),
which section regulates demarcation disputes, in order to determine
the controversy.
The proceedings were conducted before the third
respondent (The Commissioner).
[2]
The Commissioner consulted the National
Economic Development and Labour Council (NEDLAC), as he was obliged
to do, sending to it
a draft award declaring Syntell to fall within a
LGU, but after the consultation, he changed the award to declare that
Syntell
was not engaged in a LGU. That decision was taken on review.
The review application was dismissed. This appeal is against that
decision.
[3]
Ultimately the critical question is whether
the Commissioner rendered an award that was reasonable in relation to
the evidence before
him. The review was conducted pursuant to the
powers of the Labour Court in terms of Section 158 of the LRA. (
Coin
Security v CCMA
(2005) 26 ILJ 849 (LC)
at [40])
[4]
The following issues anterior to that
question were posed both before the court
a
quo
and this Court:
4.1.
Did the Commissioner commit a
process-related error by failing to give the parties the benefit of a
hearing on the views expressed
by NEDLAC to the Commissioner, which
views were solicited after the conclusion of the proceedings,
pursuant to the obligation on
the Commissioner to consult with NEDLAC
as contemplated in section 62(9) of the LRA?
4.2.
Did the Commissioner commit a
process-related error by changing his initial view and adopting a
contrary view to conform with the
view as expressed by NEDLAC,
thereby delegating his function to NEDLAC?
4.3.
Did the Commissioner, in deciding that
Syntell was not engaged with its employees in the Local Government
Undertaking
,
fail
to properly apply his mind to all the relevant evidence and to the
relevant law?
The answer to these
questions depends on an examination of the facts of this dispute.
A narrative of
the relevant facts
[5]
SAMWU has a long history of organising
workers in municipalities. It is a party represented, along with
other unions, on the SALGBC.
It recruited members who are employees
of Syntell; about 40 out of 340 countrywide.
[6]
An oral hearing was convened. No evidence
was adduced. Instead, a trade union official presented a set of
documents upon which he
offered comment. The thrust of SAMWU’s
case was that, from these documents, it could be inferred that
Syntell operated in
the LGU sector because of its operations in
relation to traffic management matters. Syntell was represented by a
Human Resources
manager. She too tendered no evidence under oath, but
in her presentation gave information orally and alleged facts about
what
Syntell did and about its relationship with municipalities.
[7]
The Commissioner dealt with the matter on
the basis of this information as put before him. He alluded to the
data as ‘evidence’
and although not so, treated the
representations as if they were evidence. Owing to the manner in
which the Commissioner chose
to inform himself, ie on untested
statements, it must follow that the only safe data to rely on were
the common cause facts, and
the statements by Syntell which were
unrebutted by SAMWU. This is an approach that echoes the approach in
application proceedings
as exemplified in
Plascon
–Evans Paints Ltd v Van Riebeeck Paints (Pty (Ltd)
1984
(3) SA 620
(AD) at 634 E-F.
[8]
The record shows that SAMWU’s case
about Syntell being engaged in the LGU sector was premised on lifting
passages from Syntell’s
web site prospectus, from the tender
documents put out by some municipalities and from some employment
contracts of workers whose
terms of employment were linked to the
duration of the contract between Cape Town and Syntell. In these
documents, several functions
of Syntell were mentioned, which it was
argued were ‘traditionally’ performed by a municipality.
In this regard, attention
was drawn to allusions in the prospectus to
Syntell having a road safety unit, a revenue collection unit and a
traffic management
unit; to an investment of R100 million in
public/private partnerships; and to a statement offering a complete
outsourcing model
for vending systems. From the tender documents,
references to the installation and maintenance of cameras, the
installation of
robots, the collection of data to institute violation
proceedings and the service of summons were highlighted. From the
employment
contracts a reference to the possibility of a Syntell
employee working in the municipality’s
office was noted. In addition, SAMWU alleged, without substantiation,
that Syntell’s
employees did work from municipal premises, but
this allegation was denied.
[9]
Syntell’s case was that the
inferences sought to drawn were factually incorrect. It was said that
the prospectus was in some
respects outdated and included allusions
to work not carried on at the present time and to work which could be
undertaken but was
not necessarily being carried on at the present
time .This was from an unsafe source from which to contend what, in
reality, was
actually happening. The tender documents presented were
the municipalities’ specifications of a total programme of
services
which it wanted and goods that it wanted. Because it did not
necessarily follow that a tenderer, like Syntell, who was awarded a
contract, was in fact contracted to supply all the goods or to
perform all the services mentioned therein
,
the tender documents were an unsafe indicator of what Syntell really
did in terms of its contracts with the various municipalities.
As to
the sample employment contracts, Syntell’s representative said
that the allusion to the potential
siting
of employees at the municipalities’ offices
did not mean any were so situated, and indeed none were situated at a
municipality.
[10]
Syntell’s representative further
submitted that Syntell’s actions were the following:
10.1.
It supplied software, called Opus and
Cypress, which captured data used in the preparation of summonses to
be issued, but was not
involved at all in the issue or service of
summonses to anyone.
10.2.
It supplied and installed cameras for speed
control, but was not at all involved in the collection of films from
the units, which
was done by municipal officials.
10.3.
It installed a very small number of robots
and, mostly, what it did in relation to robots was to supply the
software to regulate
the colour changes.
10.4.
It supplied software, designed in-house, to
be used in the collection of traffic fines on the Payfine web
platform and to be used
in the collection of energy charges on an
energyonline web platform, but was not involved in the actual
administration of the money
collections.
10.5.
It provided ‘back office’
support on its software; by this is to be understood the technical
support to preserve operationality
of the systems.
10.6.
About 5% of its 340 staff were on short
term contracts tied to the three year contracts it had with
municipalities. No personnel
were sited at municipal offices. 90% of
the staff were engineers of one kind or another.
10.7.
All contacts were obtained in competitive
bids in response to tenders. No joint venture type of agreement
existed and no outsourcing
type function was performed.
10.8.
On the premise of these facts, Syntell
contended that SAMWU was mistaken that its operations could fall with
the LGU sector and
that rather, it was a technology goods and service
supplier.
[11]
Moreover, it was stated that Syntell did
work for private business too, mainly in back up support of computer
systems to smaller
businesses without in-house Information Technology
staff. The proportion of business undertaken for municipalities and
for other
entities was not known by the Syntell representative.
[12]
The parties offered rudimentary arguments
which included a reference to the definition of LGU in the
constitution of the SALGBC,
and some other demarcation awards of
other commissioners; the utility of which is addressed elsewhere in
this judgment.
[13]
After the hearing, the Commissioner
prepared a draft or provisional award. According to his affidavit,
when he sent it to NEDLAC,
as he was obliged to consult it, his state
of mind was that he ‘….was uncertain whether or not my
initial finding
was correct’. What he had provisionally
concluded was that Syntell was operating in the LGU sector. He
offered a rationale.
In essence, he reasoned:
13.1.
He had no doubt that Syntell was ‘
involved’
in the traffic management activities undertaken by various
municipalities. (Emphasis supplied) He quoted from the prospectus
which
claimed that Syntell ‘delivers technology based services
and systems for the effective administration of world class
municipalities.
Our areas of expertise cover road safety, revenue
collection and traffic management’ in support of the finding.
13.2.
He held that
whether
or not
Syntell’s employees were sited
at municipal offices was an irrelevance.
13.3.
He held that the award in
Workforce
Group (Pty) Ltd v MEBC
(2008) 29 ILJ
2636 (CCMA) was properly comparable to the present case: ie because
employees were employed to specifically deal
with the Cape Town
contract, he reasoned that the circumstances were comparable to
Workforce Group (Pty) Ltd,
labour broker, employing workers who were deployed to render services
to clients, resulting in the common purpose between the broker
and
its deployed workers to operate in the industry sector of the client.
13.4.
He concluded that what Syntell undertakes
falls within the definition of LGU in the SALGBC constitution.
[14]
NEDLAC commented on the award’s
conclusion and provided its reasons in a succinct letter. It made,
without further amplification,
four points critical of its content
and a fifth point not raised previously; these were:
14.1.
The insufficiency of evidence to
substantiate the inclusion of Syntell in the LGU sector.
14.2.
Whatever Syntell did that required on site
operations was too unclear to warrant its inclusion in the LGU
sector.
14.3.
The presence of Syntell employees on
municipal premises ‘was key’ and it was unclear if there
were any, or if so, how
many.
14.4.
The analogy with the award in the
Workforce
Case, in the absence of knowledge that there really were Syntell
employees on municipal premises, was unsustainable.
14.5.
‘
Private enterprises cannot fall
within the ambit of the Local Government Bargaining council.’
This was a novel point.
[15]
Upon receipt of these comments, the
commissioner, in his affidavit, says he changed his mind and revised
the award accordingly.
He abandoned the reasons initially given, save
that he persisted in holding that ‘he had no doubt’ that
Syntell was
‘
involved
in the traffic management activities undertaken by various
municipalities.
[16]
The Commissioner proffered these reasons to
conclude that Syntell was not operating in the LGU sector:
16.1.
The claim by Syntell that none of its
employees worked on municipal premises could not be refuted, and by
implication had to be
accepted.
16.2.
The
Workforce
case was not comparable after all.
16.3.
There was no ‘concrete evidence’
(sic) relating to the work performed by [Syntell’s] employees
in servicing the
municipal contracts”.
16.4.
There was no evidence (sic) of how many
employees ‘were involved’ in municipal work as distinct
from private work.
16.5.
The limited duration of the municipal
contracts.
16.6.
Therefore, SAMWU had ‘not discharged
the
onus’
of proving that Syntell’s employees are ‘associated for
the institution, continuance or finalisation of an act scheme
or
activity undertaken by a municipality’ (a quotation from part
of the text of the definition of LGU in the constitution
of SALGBC)
[17]
The details of the change of stance by the
Commissioner were then reported to SAMWU by a Labour delegate to
NEDLAC. The propriety
of the disclosure is not a matter upon which
this Court has to pronounce in this case; however, it may well
surface for consideration
in another forum. SAMWU was aggrieved and
instituted a review application.
The process
related issues
The Legislative
framework for demarcation disputes
[18]
The ambit of the statutory framework for
demarcation proceedings and the nature of the proceedings
per
se
require examination.
[19]
The initial demarcation of sectors of
industry is a function performed by NEDLAC. Section 29 of the LRA
regulates that role. Section
29(8) provides that NEDLAC must
demarcate the ‘appropriate sector’ over which a
bargaining council will exercise jurisdiction.
A failsafe provision
authorises the Minister of Labour to perform the task if no agreement
is reached by NEDLAC.
[20]
Thereafter, demarcation disputes are
subjected to a dispute resolution process as provided for in section
62 of the LRA. Section
62(4) stipulates,
inter
alia
, that such a process shall be in
accordance with section 138 ‘read with changes required by the
context’. Section 138
is a provision which lays down the basic
arbitration procedure common to all arbitrations conducted under the
auspices of the LRA,
requiring, subject to an overriding discretion
by the arbitrator as to appropriateness, the leading of evidence,
cross-examination
and the like. A commissioner, in proceeding in
terms of section 62, has no discretion whether or not to convene an
arbitral hearing;
it is peremptory.
[21]
In the main, arbitrations under the LRA are
those which address disputes of right and are adjudicative
proceedings proper. In section
62, the word ‘arbitration’
is not used to describe the process. Indeed, if a ‘demarcation’
issue arises
in any ordinary adjudicative proceedings, those
proceedings must be stayed until the demarcation issue is decided in
the distinct
process provided for in section 62.
[22]
The section 62 process, as is evident from
its provisions, contemplates more than a conventional adversarial
contest between immediate
interested parties. It presupposes a
broader investigative role. In such a context,
whether
or not
an
onus
in any sense exists is not obvious.
[23]
These considerations which are imbedded in
the provisions of the section underscore its
sui
generis
character. The section 62
process was commented on by Francis J in
Coin
Security (Pty) Ltd v CCMA
(2005) 26 ILJ
840 (LC) at [43] and [63 -64]:
“
[43]
The function of a CCMA commissioner in a demarcation dispute is a
classic case of the legislature entrusting a functionary
with the
power to determine what facts are about the making of a decision and
the power to determine whether or not they exist.
It is fundamental
to the effective operation of the Act that the commissioner must be a
repository of such power.
[63] The demarcation
process is one entrusted to a specialist tribunal in terms of the
provisions of the Act.
The demarcation decision is one involving
facts, law and policy considerations
. In demarcation decisions,
there will, more often than not, be no one absolutely correct
judgment. Particularly in decisions of
this sort, and given the
provisions of the Act, there must of necessity be a wide range of
approaches and outcomes that would be
in accordance with the behests
of the Act. Due deference should therefore be given to the role and
functions and resultant decisions
of the CCMA in achieving the
objects of the Act. This approach will not only be consistent with
these principles, but also consistent
with the need for the Act to be
administered effectively.
[64]
The case for judicial deference becomes all the more compelling in
this matter given that NEDLAC agreed to support the provisional
award.” (emphasis supplied)
[24]
More recently, Van Niekerk J affirmed this
perspective in
National Bargaining
Council for the Road Freight Industry v Marcus N. O
.
(2011) 32 ILJ 678 (LC) at [22]:
“
[22]
It should also be recalled that
Coin
Security
is also authority for the
point that a demarcation involves considerations of fact, law and
social policy and that in these circumstances,
due deference ought to
be given to a commissioner making a demarcation award (at para 63 of
the judgment). As I understand the
judgment, in demarcation judgments
there will be, more often than not, no single correct judgment, and
that a wide range of approaches
and outcomes is inevitable. A
reviewing court should be attuned to this reality, and recognize it
by interfering only in those
cases where the boundary of
reasonableness is crossed. Further,
Coin
Security
recognizes that a demarcation is provisional - s 62(9) of the LRA
requires a commissioner to consult with NEDLAC before making
an
award. As the court in
Coin Security
observed, the case for judicial deference is all the more compelling
in these circumstances. In short, far from encouraging an
expansive
approach to a demarcation, the
Coin
Security
judgment requires this court
to recognize the specific expertise of commissioners who undertake
this task and to defer to that
expertise.”
[25]
Section 62(9) provides that: ‘
b
efore
making an award, the commissioner, must consider any written
representations that are made, and must consult NEDLAC’.
This
peremptory requirement is in addition to the oral hearing
contemplated by section 138.
[26]
The section implies two sources of input.
26.1.
The reference to “written
representations” is in contemplation of responses to the
publication, when decided to be appropriate,
in the government
gazette inviting interested parties (ie other than the immediate
disputants) to express a view, as is provided
for in section 62(7)
and (8). Such written representations are available to the
Commissioner seized of the matter before the oral
hearing, because,
in terms of section 62(8) the hearing may not be convened until after
the date for submission of such representations
has occurred.
Self-evidently, such representations from other interested persons
would be available to the immediate parties to
the dispute too. In
this matter no publication of a solicitation to other potential
interested parties was thought necessary and
thus no other
representations were submitted.
26.2.
As regards the consultation with NEDLAC,
section 62(9) does not define consultation for these purposes nor
does it prescribe any
formalities or stipulate at what stage the
Commissioner must consult NEDLAC, other than it must, axiomatically,
be before ‘making
an award’. No indication is given in
the Record of the usual practice followed in consulting NEDLAC.
Notably, the duty imposed
on the Commissioner is not to invite NEDLAC
to participate in the hearing, which, it is plain from the text of
the section, is
a distinct happening. Thus
,
there is no contemplation apparent from the text of the section that
there would be any interaction between the immediate disputants
and
NEDLAC.
[27]
What ‘consultation’ means in
this section will not usefully be divined by recourse to dictionaries
or to other judicial
pronouncements on other enactments where that
word is used. The word must bear a meaning that is context-specific
and functional
to the objective of section 62. The intrinsic notion
of ‘consultation’ embraces a solicitation about a
contemplated
course of action or decision. In this section it
contemplates NEDLAC, the decision-maker which initially demarcated
the sector,
furnishing the Commissioner with its views about a
decision to be taken by him. Accordingly, it would seem wholly
appropriate that
the timing of this peremptory consultation be the
moment when a prima
facie view
can be expressed by the Commissioner and comment can be solicited
about that
prima facie
view. Self-evidently, it cannot be the commissioner’s final
view because that would render the consultation a sham. Lastly,
it
bears emphasis that the role of NEDLAC is not to ‘approve’
an award; the decision, from first to last, is that of
the
commissioner.
[28]
The contention has been advanced that the
scope of legitimate input to be proffered by NEDLAC is circumscribed
by the provisions
of the National Economic Development and Labour
Council Act 35 of 1994 (NEDLAC Act). The NEDLAC Act is the statutory
instrument
that created NEDLAC. It is a body composed of
representatives of organised Labour, organised Business and the
representatives of
the State, and also persons to represent
‘community and development interests’. Section 5 provides
for its objects
powers and functions thus:
‘
(1)
The Council shall-
(a)
strive to promote the goals of economic growth, participation in
economic decision-making and social equity;
(b)
seek to reach consensus and conclude agreements on matters pertaining
to social and economic policy;
(c)
consider all proposed labour legislation relating to labour market
policy before it is introduced in Parliament;
(d)
consider all significant changes to social and economic policy before
it is implemented or introduced in Parliament;
(e)
encourage and promote the formulation of co-ordinated policy on
social and economic matters.
(2) For the purpose
of subsection (1), the Council-
(a)
may make such investigations as it may consider necessary;
(b)
shall continually survey and analyse social and economic affairs;
(c)
shall keep abreast of international developments in social and
economic policy;
(d)
shall continually evaluate the effectiveness of legislation and
policy affecting social and economic policy;
(e)
may conduct research into social and economic policy;
(f)
shall work in close co-operation with departments of State, statutory
bodies, programmes and other forums and non-governmental
agencies
engaged in the formulation and the implementation of social and
economic policy.
(3) Nothing in this
section shall preclude the Council from considering any matter
pertaining to social and economic policy.’
[29]
The focus of the section is plainly on what
may be labelled, for convenience, the social and economic
implications of laws and policies
conceived by others and to mandate
NEDLAC make constructive input about such laws and policies. On the
basis of this premise, it
was argued by Mr Leslie for SAMWU, that the
actual comments offered by NEDLAC to the Commissioner were
ultra
vires
these powers and functions as
they cannot be read as comment on social or economic policy. Hence
the expression of them to the
Commissioner was illegitimate and
should have been ignored.
[30]
This line of argument was not foreshowed in
the founding affidavit of SAMWU and as a result there is no factual
material on record
that could have informed the court about the usual
practice of NEDLAC, and what range of comment is in practice offered
in demarcation
disputes. To the extent that the argument rests wholly
on a textual evaluation of section 5 of the NEDLAC Act, it seems to
me to
be a difficult stance to adopt that the range of comment that
NEDLAC may offer is seriously circumscribed in any way, given the
centrality of economic dynamics to social life. However, for reasons
given elsewhere in this judgment, it is unnecessary to pronounce
on
this aspect of the import and scope of section 5 of the NEDLAC Act.
[31]
The most notable aspect of the NEDLAC Act
is the singular absence of any mention of the demarcation process.
The role of NEDLAC
in that process is mentioned only in section 29 of
the LRA which is concerned with the procedure to demarcate an
industry sector
in order to register bargaining councils and in
section 62 dealing with consequential disputes arising from those
demarcations.
[32]
The registrar is required to undertake the
registration of bargaining councils, upon application, and, among
other factors, an application
must in terms of section 29(4)(b) be
evaluated as to the appropriateness of the ‘sector and area’
over which the potential
bargaining council shall exercise
jurisdiction. In this regard, sections 29 (7)(8)(9) and (10) provide
thus:
‘
(7)
The registrar, as soon as practicable, must send the application and
any objections, responses and further information to NEDLAC
to
consider.
(8) NEDLAC, within
90 days of receiving the documents from the registrar, must-
(a)
consider the appropriateness of the sector and area in respect of
which the application is made;
(b)
demarcate the appropriate sector and area in respect of which the
bargaining council should be registered; and
(c)
report to the registrar in writing.
(9) If NEDLAC fails
to agree on a demarcation as required in subsection (8) (b), the
Minister must demarcate the appropriate sector
and area and advise
the registrar.
(10) In determining
the appropriateness of the sector and area for the demarcation
contemplated in subsection (8) (b), NEDLAC or
the Minister must seek
to give effect to the primary objects of this Act.”
The
only other reference to NEDLAC in this context is Section 62(9).
[33]
When the LRA was enacted, NEDLAC had
already been created. The provisions of the NEDLAC Act do not
indicate that a role in demarcation
was envisaged when the NEDLAC Act
was framed. Its role in demarcation was added to its remit
afterwards, by way of provisions in
the LRA. Hence it is the LRA that
is the source of its authority to do so, not the NEDLAC Act. This
leads to the conclusion that
the provisions of the NEDLAC Act
per
se
have no bearing on its function to
demarcate or in disputes thereafter, to be consulted. Accordingly,
the provisions of the NEDLAC
Act are irrelevant to a demarcation
dispute and to what is or is not appropriate to offer comment about.
Should audi
alterem partem have been afforded to the parties?
[34]
It is plain that the bare text of section
62(9) does not stipulate an obligation on the Commissioner to give
the immediate disputants
an opportunity to express views about
NEDLAC’s views. It was not argued that the section could be the
source of such an obligation.
Instead, it was contended that the
source of such duty on the Commissioner is a residual fair process
norm which is located in
general principles of law and fairness which
govern an institution such as the CCMA.
[35]
Appeals to general principle in respect of
a body which is a creature of statute tend to be fraught with some
danger. As a matter
of general principle, what a decision-making body
exercising public power may do, and how it is to do it, is to be
found in the
provisions of the statute that empowers it. (
Fedsure
Life Assurance v Greater Johannesburg TMC
[1998] ZACC 17
;
1999 (1) SA 374
(CC) at
[58]
. It was not suggested that was any
authority for the proposition that there was a right to a second
hearing nor that there was
a basis to invoke a legitimate expectation
of a second hearing.
[36]
However, the circumstances which have
aggrieved SAMWU are not novel. The question of what is necessary to
facilitate a fair process
when
new
material
is garnered about which one or
more interested parties have not been previously alerted has been
addressed by the courts.
[37
In
Earthlife
Africa (Cape Town) v D-G, Department of Environmental Affairs and
Tourism and Another
[2005] ZAWCHC 7
;
2005 (3) SA 156
(C), a case decided under the Promotion of Administrative Justice Act
3 of 2000 (PAJA), the court was asked to review a decision
of the D-G
under section 22 (3) of the Environment Conservation Act 73 of 1989
(ECA). Acting pursuant to that section, the D-G
had authorised the
construction of a demonstrator model pebble bed nuclear reactor. This
had occurred after a process of public
consultation during which the
applicants had had a full opportunity to express their views about
the contents and merits of an
environmental impact report (EIR).
However, after that comment had been submitted, further facts had
been gathered which had then
been taken into account in a revised and
final report which had not been made available to interested parties
for further comment.
In defence of refusing further input, the D-G
had argued that the Regulations under EIA did not provide for such a
further step.
The court held otherwise and at [60] – [64]
Griesel J stated:
‘
[60]
I find this approach to be fundamentally unsound. The regulations
provide for full public participation in 'all the relevant
procedures
contemplated in these regulations'. The respondents seek to limit
such participation to the 'investigation phase' of
the process (as
contemplated by regs 5, 6 and 7). After submission of the EIR,
however, the 'adjudicative phase' of the process
commences, involving
the DG's consideration and evaluation, not only of the EIR, but also
- more broadly - of all other facts and
circumstances that may be
relevant to his decision. There is nothing in the Act (ECA) or the
regulations that expressly excludes
public participation or
application of the audi rule during this 'second stage' of the
process. In line with settled authority,
therefore, it follows that
procedural fairness demands application of the audi rule also at this
stage.
[61] A further
reason why I find the respondents' approach to be unsound is because
it overlooks the fact that, on the DG's own
version (though not
Eskom's), the final EIR was 'substantially different' from the draft
EIR. The final EIR made material changes
and incorporated
substantially more documentation than the draft EIR. The question for
decision can therefore be narrowed down
to an enquiry whether it was
procedurally fair to take administrative action based on
'substantially different' new matter on which
interested parties have
not had an opportunity to comment.
[62] By analogy with
the approach adopted in motion proceedings where new matter is raised
in reply, I am of the view that, if such
new matter is to be
considered by the decision-maker, fairness requires that an
interested party ought to be afforded an opportunity
first to comment
on such new matter before a decision is made. 21 Support
for this attitude is to be found in the following
dictum of Van den
Heever JA in Huisman v Minister of Local Government, Housing and
Works (House of Assembly) and Another:
'Were
new facts to be placed before the ''administrator'' which could be
prejudicial to an appellant, it would be only fair that
the latter be
given an opportunity to counter them if he were able to do so, more
particularly were the matter one in which the
extant rights of an
appellant could be detrimentally affected.'
[63] Similar
sentiments are expressed by De Ville:
'Where
the final decision-maker is not permitted to take account of new
evidence or required to hold an enquiry him/herself, but
simply has
to take a decision on the evidence (and recommendations) presented to
him/her after a full enquiry (complying with the
requirements of
procedural fairness), a hearing will not be required before the
taking of a final decision.'
[64] In the present
case, where the draft EIR was substantially overtaken by the final
EIR, it is clear to my mind that new facts
had indeed been placed
before the decision-maker on behalf of Eskom. In these circumstances,
I am of the view that the applicant,
as an interested party, was
entitled, as part of its right to procedural fairness, to a
reasonable opportunity to make representations
to the DG on the new
aspects not previously addressed in its submissions in relation to
the draft EIR.’(footnotes omitted)
[38]
Significantly, the point of departure of
the court was the proper interpretation of the enabling regulations,
rather than delving
into general principle. Moreover, the reliance on
the decision in
Huisman v Minister of
Local Government, Housing and Works (House of Assembly) and Another
[1995] ZASCA 151
;
1996 (1) SA 836
(AD) is equally significant for its emphasis on the
distinction between the marshalling of new facts and the entertaining
of additional
opinions or arguments on the ‘old facts’.
In the
Huisman
Case,
the Minister was required to decide an appeal against a decision of a
municipality to refuse to permit a particular property
development to
take place having regard to town planning and usage considerations.
The Minister dismissed the appeal. The applicant
for such development
rights was aggrieved by the dismissal on the grounds, among others,
that the municipality had expressed adverse
views to the Minister,
and that the applicant had not been afforded a chance to address
those views. The review against the Minister’s
decision failed
because no new facts were presented to the Minister (at 845G). Van
den Heever JA added at 845G -846A:
‘
Mr
Buchanan could not point to any additional information contained in
either the written memorandum submitted by the Town Clerk
in reply to
that of the appellant, or the documentation in Dercksen's file, of
which the appellant had not been aware and with
which he had not
dealt earlier. Indeed, the complaint voiced persistently in the
appellant's affidavits was that
he had
not been given an opportunity to deal with the submissions
advanced
by the officials of the municipality .Mr Buchanan repeated this
initially: the appellant wanted to have the last word.
He had been
entitled to a right of reply. Mr Buchanan offered no authority
undermining the common-sense approach of the Court a
quo, that
proceedings could be endlessly protracted were any such 'right' to be
held to exist. Why should the municipality not
then have a right in
turn to reply to the appellant's submissions, and so on? When Mr
Buchanan was reminded that in terms of the
Rules of this Court, an
applicant for leave to appeal and the respondent were ordinarily each
offered only one bite at the cherry,
without any suggestion ever
being advanced that that is ipso facto unfair, he altered his attack
and submitted that in terms of
the rules of natural justice a hearing
should not only be fair, but be perceived to be fair.’
[39]
The upshot is that there is no ground upon
which to criticise the Commissioner for not offering the parties a
second chance to make
representations.
Do the facts
support the conclusion that the commissioner delegated his function
to decide the question to NEDLAC?
[40]
The contention that the Commissioner
abrogated his responsibility is premised on two ideas; first a
slavish deference to the unmotivated
points made in the NEDLAC
letter, and second, a belief that the Commissioner had already made a
reasoned decision which he then
reversed, without giving reasons for
the reversal, to accord with the unreasoned views expressed by
NEDLAC.
[41]
The point of departure in examining these
contentions ought to be a recognition that the very point of the
consultation is to enable
NEDLAC to influence an outcome different to
the one put to it. Even
a slavish about
face
in my view, does not, necessarily,
establish abdication. The adoption of unmotivated views similarly
does not result, necessarily,
in an inference of improper deference.
[42]
The argument is advanced that NEDLAC had no
material to consider except the draft award and therefore the
Commissioner was better
placed to make an evaluation than NEDLAC.
This proposition, on the facts, is sound, but is beside the point. It
is not obvious
that a “proper consultation” required
sharing all the data gathered by the commissioner. Indeed to have
done so, might,
paradoxically, have provoked a complaint about
whether the Commissioner was deciding the matter independently or was
trying to
share the decision-making burden. The possibility that the
consultation was inadequate or even slovenly cannot be ruled out, but
no attack on such grounds was advanced on review and it is
inappropriate to assess it now on appeal. In any event such a factor
would, also, not necessarily show a fettering of the decision-maker’s
power to decide.
[43]
The Commissioner in his affidavit denies
that he had taken a firm view when he sent the draft award to NEDLAC.
This is a fact that
must be taken into account. It weighs heavily and
no other facts are on record to rebut it. Moreover, to have held no
firm view
at that stage would have been the correct and proper stance
to have taken. The criticisms about the anaemic reasons for holding
one or another view belong to an assessment of the third review
ground, but do not throw light on this issue because making a bad
choice or being unreasonably impressed with a bad suggestion is not
evidence that he fettered or abdicated his authority, but simply
that
he was wrong to have been impressed by a bad point.
[44]
Accordingly, on the facts, no case is made
out that the Commissioner delegated his decision to NEDLAC.
Did the
commissioner apply his mind to all the relevant facts and
considerations?
[45]
The aim of an enquiry to decide whether an
enterprise is operating within a given industry or sector requires an
examination of
what the enterprise undertakes, in common purpose with
its employees, to achieve. The venerable decision in
Rex
v Sidersky
1928 TPD 109
remains our
lodestar. Logically, first the industry must be described, secondly
the business of the enterprise must be described,
then thirdly, upon
these facts, the character of the enterprise’s business
activities is tested to determine for what common
purpose is the
enterprise and its employees associated. The approach was endorsed
and amplified in
Greatex Knitwear (Pty)
Ltd v Viljoen
1960 (3) SA 338
(T) at
344H – 345D, and more recently in
Coin
Security
(Supra,) at [54] – [58],
Francis J affirmed it.
[46]
What is the ‘Local Government
Undertaking’ sector? The SALGBC is registered under section 29
of the LRA. However, it
appears to be common cause that the “sector”
over which it exercises jurisdiction is not defined in the
certificate
of registration. The only definition of LGU is that which
appears in the constitution of the SALGBC. Therein it is defined as:
‘
the
undertaking in which the employer and employees are associated for
the institution, continuance or finalisation of any act scheme
or
activity undertaken by a municipality and by municipal entities as
established in terms of the
Local Government: Municipal Systems Act
32 of 2000
.’
[47]
The decision in
Golden
Arrow Bus Services (Pty) Ltd v CCMA and Others
(2005) 26 ILJ 242 (LC) at 252B held that the certificate alone ought
to be used to determine the scope of an industry. It was contended
by
Mr Harrison for Syntell that the definition in the SALGBC
constitution should therefore be ignored. However, it seems to me
that this finding was in the context of a difference between the
certificate and the constitution of that bargaining council.
Self-evidently, the certificate should trump the constitution, but if
there is no inconsistency, no sound reason exists to ignore
the only
definition of a sector simply because it is in only the constitution.
Moreover, the constitution must itself be approved
by the registrar
in terms of
section 29(11)(b)(ii)
of the LRA, which implies approval
of the definition.
[48]
Mr Harrison for Syntell, further argued
that the absence of a certificate definition meant that it was
necessary to fall back on
section 151(1) of the Constitution of the
Republic of South Africa, where it is provided that the ‘local
sphere of government
consists of municipalities’. I am of the
view that section 151 was not formulated to address the question of
the demarcation
of industries or undertakings but rather, is intent
on distinguishing, in constitutional terms, the third tier of the
state; ie
local government. Thus, section 151 is not pertinent to the
controversy.
[49]
In my view, it was not improper for the
Commissioner to conclude that the LGU sector was that activity as
defined in the SALGBC
constitution.
[50]
The Commissioner was required to apply his
mind to the facts as summarised above in paragraphs [9] – [13]
and ask if the information
presented to him could be construed to
locate the activities of Syntell in the LGU sector, as defined.
[51]
The two sets of reasons invoked by the
Commissioner to reach opposite conclusions in each of the versions of
the award have been
set out above in paragraphs [14] and [17].
The provisional
draft award
[52]
One common finding in both versions of the
award is that Syntell was “involved” in the LGU sector.
The word “involved”
is empty of substance. It may be
supposed that what was intended by this term was that Syntell did
something that had something
to do with what municipalities do. There
was an appreciation in this remark that the very issue the
Commissioner was required to
decide was the content and extent of
such involvement. The finding is then made that Syntell’s
performance falls within the
definition of LGU in the SALGBC
constitution, a point he reversed in the final award by concluding
that there was insufficient
evidence to make such a finding.
[53]
Three further reasons in the draft award
were afflicted with obvious misconceptions. These are:
53.1.
He held that the
Workforce
Case was comparable. The basis for comparison which the Commissioner
suggested; ie that there were in both instances employees
who were
dedicated to work for the ‘client’ was specious. In this
regard, the NEDLAC criticism was valid. A labour
broker’s
personnel, when deployed within a client’s organisation,
understandably function within the client’s
operations. In
addition, section 198(4) of the LRA makes the client co-liable in
respect of various aspects of the employment relationship.
The
material distinction between that situation and the situation of
Syntell is manifest.
53.2.
The invocation of the claims in the
prospectus completely ignored the statements from Syntell’s
representative about the misimpression
that the prospectus could
create. Moreover, there is no hint that Syntell’s factual input
was weighed or evaluated. Given
that the Commissioner could not
legitimately make a credibility finding against the Syntell’s
representative, the information
given by her made it quite plain that
all Syntell did was supply and install software, supply and install
cameras, and supply and
install robots and nothing more. Moreover,
the very claim in the prospectus relied upon, even on a textual
analysis, does not support
the inference found because it is so
generalised that it does not indicate what is actually done. In the
review application, numerous
other passages were lifted to try to
show the role of Syntell was a
de facto
outsourcing operation. The contention is unsound as the puffery in
that document does not disclose what was actually happening
nor does
it trump the information which Syntell’s representative gave
the commissioner.
53.3.
The finding that the place where the work
was carried out is an irrelevance is mistaken. It is, indeed, an
obvious relevant factor,
but it is not dispositive of the question.
At NEDLAC’s equally wrong-headed comment that the place where
the work was carried
out was a ‘key’ factor, he reversed
his reasons to invoke the flipside of the same wrong approach.
[54]
The major flaw in the provisional award is
the abject failure to acknowledge the facts of the case put forward
by Syntell or to
appreciate the implications of that data. However,
it was, after all, only a draft and the Commissioner was, as his
affidavit says,
not committed to the ideas expressed therein. He was
fully entitled to abandon them if upon reflection, he later thought
them unpersuasive.
The final award
[55]
The final award contains the reasons to
which the Commissioner committed himself. The main thrust of the
commissioner’s reasons
was that there was an absence of
evidence to establish that Syntell’s operations were located it
within the LGU sector. This
finding, in my view, erred on the side of
caution, because, on the body of information (it was not evidence)
the statements presented
by Syntell, described above in summary, were
a complete bar to finding that Syntell operated in the LGU sector.
[56]
The misconception in the final award over
the significance of where the work was done did not detract from the
outcome. Nor did
the misguided idea that the short duration of the
contract was a useful fact, affect the outcome. Both were superfluous
reasons.
The issue of the proportionate split between private clients
and municipal clients was a relevant factor, but on the body of
information
gathered which was so weighted in Syntell’s favour,
the lack of information about the split was not critical to the
outcome.
[57]
The notion advanced by NEDLAC that a
private concern cannot be in the LGU sector was not invoked by the
Commissioner to justify
the final award. He says nothing to reveal
his view on this issue. Although the issue is an important one, and
may well be a correct
proposition, it is unnecessary for this Court
to pronounce on it in these proceedings as the enquiry necessary for
the appeal is
confined to the reasonableness of the commissioner’s
award. The question of whether
or not,
in
principle, and if so on what terms, a private concern ought to be
subject to the SALGBC remains an issue that requires proper
clarification after a proper and focussed enquiry.
Conclusion and
the order
[58]
In summary:
58.1.
The parties’ rights to a fair process
were not violated by not being given the opportunity to address the
views of NEDLAC.
58.2.
The Commissioner did not delegate his
decision making authority to NEDLAC when he reversed his provisional
view and ruled consistently
with the view of NEDLAC.
58.3.
Despite some misconceptions about
tangential issues by the Commissioner in the final award, ultimately
the outcome that Syntell
does not fall within the LGU sector is
supported handsomely by the information on record.
58.4.
The award is thus one to which a reasonable
Commissioner could have come.
[59]
Accordingly, an order is made that the
appeal is dismissed with costs.
_____________
Sutherland AJA
I
agree
_____________
Davis JA
I
agree
_____________
Molemela AJA
APPEARANCES:
FOR
THE APPELLANT: Advocate G. Leslie,
Instructed by
Cheadle Thompson Haysom Inc
Ref J Whyte
FOR
THE FIRST RESPONDENT: Attorney S. Harrison,
of Edward Nathan
Sonnenbergs
Cape Town.