About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Labour Appeal Court
SAFLII
>>
Databases
>>
South Africa: Labour Appeal Court
>>
2014
>>
[2014] ZALAC 41
|
|
UASA and Others v Lonmin Platinum Comprising and Others (JA59/2012) [2014] ZALAC 41 (19 August 2014)
REPUBLIC OF SOUTH
AFRICA
IN THE LABOUR APPEAL
COURT OF SOUTH AFRICA, JOHANNESBURG
Case
no: JA 59/2012
Not Reportable
In the appeal of:
UASA
First
Appellant
(First
Applicant in Court
a quo
)
A C MARX AND
OTHERS Second
and Further Appellants
and
LONMIN PLATINUM
COMPRISING
Respondent
WESTERN PLATINUM AND
EASTERN PLATINUM
LIMITED (Respondent
in Court
a quo
)
Heard:
18 March 2014
Delivered:
19 August 2014
Summary:
Locus Standi
is
a question of law and can be raised at any stage of the proceedings-
Trite principle union having authority to negotiate on behalf
of
members. Court
a quo
erring in holding the contrary. Absolution from instance. Absolution
from instance may be decided on the basis of reasonable inferences.
Appellants failing to prove the existence of oral agreement.
Inference drawn from the written agreement that no oral agreement
was
concluded. Court
a quo
finding upheld. Absolution from instance granted.
CORAM:
WAGLAY JP
et
NDLOVU, JA
et
MOLEMELA AJA
JUDGMENT
MOLEMELA AJA
Introduction
[1] This is an appeal,
with leave of the Court
a quo
, against the whole of the
judgment of the Labour Court (Boqwana, AJ) granting absolution from
the instance.
[2] The appellants raised
numerous grounds of appeal but these can be condensed into the
following three grounds: firstly, that
the Court
a quo
erred
by not finding that the respondent was precluded from challenging
locus standi
or authority of the first appellant to conclude
an oral agreement with the respondent for and on behalf of the second
and further
appellants concerning the formula for the calculation of
overtime, as the respondent had not raised this challenge before the
closing
of the appellant’s case. Secondly, that the Court
a
quo
erred in finding that the first appellant lacked such
locus
standi
or authority and therefore erred in granting absolution
form the instance. Thirdly, that the court
a quo
erred in
finding that the appellants had failed to prove the existence of such
an oral agreement on a
prima facie
basis and therefore erred
in finding this to be the basis for granting absolution from the
instance.
Background facts
[3] Prior to 1 October
2007, the overtime of all employees categorised as C4 and C5
employees of the respondent was calculated and
paid according to a
method known as the “Basic 2 formula”. During the period
September to November 2007, the appellants
and respondent engaged in
wage negotiations. During these negotiations, Mr Scholtz was the
chief negotiator of the appellants and
Mr Steen was the chief
negotiator of the respondent. The appellants’ version is that
on 2 November 2007, the first appellant
accepted the respondent’s
proposal that in future, remuneration for C4 and C5 employees would
be calculated on the total
cost to company (“TCTC”)
formula and not the basic 2 formula. Two days later, i.e. on 4
November 2007, Mr Steen repeated
this proposal to another member of
the first appellant’s negotiating team,
viz
Frans Botha.
On 9 November 2007, a written wage agreement was concluded, in terms
of which it was agreed that C4 and C5 employees
would be employed on
a TCTC package.
[4] Following the
conclusion of the wage agreement, all C4 and C5 employees of Lonmin,
of which the second and further appellants
formed part, were
presented with a written contract of employment (“the
employment contract”) for their signature.
[5] The salient terms of
the employment contract were to the following effect:
(i)
The respondent operates on a TCTC remuneration philosophy;
(ii)
The employee undertakes and agrees to work shift arrangements,
overtime and outside
of normal working hours whenever it is deemed
necessary by the respondent or the requirements of the business
require these arrangements
to be worked, subject to the respondent
consulting with the employees and the first appellant. The employee
may not unreasonably
withhold his/her labour from the respondent.
Compensation for such arrangements or hours would be done in
accordance with the amended
company policy read with procedures or
practice set out in clause 6.1 and would be in addition to the TCTC.
[6] The employees signed
the employment contract. The appellants assert that the employees
signed the contract in the
bona fide
belief that the amended
company policy referred to in clause 10.2 of the employment contract
would reflect the correct terms of
the overtime agreement insofar as
the calculation of overtime for C4 and C5 employees was concerned.
[7] During or about 2009,
the respondent adopted a Human Capital Policy on overtime, standby
duties and “call outs”.
This policy came into effect on 1
July 2009. Overtime payment and the rate at which compensation would
be calculated, are dealt
with in clause 4.3 of the said policy. On
the issue of overtime payment in respect of C4 and C5 employees,
clause 4.3 made no reference
to the calculation of overtime for C4
and C5 employees on the basis of a TCTC package.
Proceedings at the
Labour Court
[8] The appellants
eventually referred a dispute to the Labour Court pertaining to the
overtime agreement. The appellants formulated
the following legal
issues for determination:
(i)
whether the overtime agreement was concluded between the first
appellant and
the respondent and, if so, whether the second to
further appellants were, in terms of the overtime agreement, entitled
to payment
of overtime calculated on 100% of the TCTC package;
(ii)
whether it was necessary for the wage agreement to be rectified in
order to reflect
and give effect to the terms of the overtime
agreement, and if so, whether the wage agreement was susceptible to
rectification
under the circumstances.
[9] The respondent
disputed that any overtime agreement was concluded and contended that
there was no change in the calculation
of overtime. The respondent
thus continued to pay the second to further appellants in accordance
with the basic 2 formula. At the
close of the appellants’ case,
the respondent applied for absolution from the instance on two
grounds,
viz
that
(i)
the first appellant had not shown that it had the requisite
locus
standi
or authority to conclude the overtime agreement on behalf
of the individual appellants; and
(ii)
that the first appellant had failed to prove the existence of the
overtime agreement.
[10] On the
locus
standi
issue, the Court
a quo
held that the first
appellant should have
prima facie
shown, based on the law of
agency that each of the individual appellants properly mandated it to
act on their behalf, or that the
oral agreement, properly construed,
was a stipulation
alteri
agreement for the benefit of the
individual appellants, which benefit the individual appellants
subsequently accepted. The Court
a quo
accepted that the first
appellant was entitled to conclude contracts on behalf of its
members, but held that the agreement under
consideration was
different in that it was an oral agreement. It further found that it
was imperative for the first appellant to
lead evidence that it had
the requisite authority to conclude an oral agreement for its
members.
[11] It is apposite to
quote verbatim from the Court
a quo
’s judgment
pertaining to the issue of the
prima facie
existence of the
oral agreement and the inferences drawn. It found as follows:
‘
[41]
I am also not satisfied that the individual applicants accepted
benefits that flowed from the alleged
oral agreement. It is strange
that individual contracts did not incorporate the benefits flowing
from the oral agreement. I disagree
that Clause 10.2 is an indication
of an existence of an oral agreement. Applicants allege that they had
a bona fide belief that
company policy would be amended. No evidence
was placed that Steen specifically agreed that the policy would be
amended to reflect
the change in overtime calculation. In fact after
Steen’s alleged positive answer the matter was not discussed
any further.
[42]
Both Noeth and Lonn signed contracts of employment without the
elements of the oral agreement
being reflected. The individual
contracts of employment were checked and approved by UASA’s
legal department. It does not
make sense why UASA would not insist
that contracts of employment should incorporate the alleged oral
agreement.
[43]
It is also important to note that Both Noeth’s and Lonn’s
contracts of employment
were signed some months after the alleged
oral agreement was concluded. It does not make sense how those could
establish the existence
of an oral agreement concluded on 02 November
2007. Reference to a policy that was to be amended in future does
not, in my view,
establish the existence of the oral agreement that
was allegedly concluded on 02 November 2007. Accordingly, I find that
UASA has
not shown any prima facie evidence that it had authority to
conclude the oral agreement for its members.
[44]
Even if I am wrong on this point, I am not convinced that essential
elements necessary to conclude
a contract have been met by UASA.
[45]
The evidence before me does not show the existence of an agreement in
that nothing shows that
an offer was made by Lonmin and accepted by
UASA. More importantly, there was no evidence as to when that
contract would come into
existence and when was it communicated to
the individual applicants. In fact, the applicants’ witnesses
in their own version
testified that overtime was not on their list of
demands presented to Lonmin at the beginning or during wage
negotiations. This
is surprising, if one has regard to the
allegations in the pleadings that TCTC proposal tabled by Lonmin was
to be accepted on
the basis that overtime was calculated on TCTC
package. If that was so, this would have been tabled as a proposal or
a demand upfront
and evidence would have been led in support of the
averments in paragraphs 7.3 to 7.7 of the statement of claim.
[47]
Mr Grundlingh submitted that one cannot divorce this alleged contract
from the process of the wage
agreement. This does not help the
applicants’ case. I find it hard to believe that in the midst
of wage negotiations there
was this lone oral agreement, whilst
everything else had been reduced to writing, which oral agreement did
not feature in any of
the correspondence or feedback bulletin to
members.
[48]
This is even harder to believe when parties expressly agreed in
unequivocal terms in clause 4.7
of the wage agreement that the
balance score card bonus, which was also previously calculated in
terms of Basic 2 was going to
be calculated on a TCTC basis. If that
clause found itself in the wage agreement, what stopped the parties
from reducing the terms
of the overtime calculations in writing.
[49]
I agree with Mr Van As that the LRA sets out a clear framework that
allows a trade union to conclude
collective agreements that would
bind its members. It would be strange for this court to accept
statements made during wage negotiations
as agreements without any
concrete and tangible evidence placed before it. This is not to say
that oral agreements cannot be concluded
from time to time between
unions and management. However in those circumstances unions would
have to rely on common law and fulfil
the common requirements. What
presents a greater difficulty for the applicants in this case is that
the alleged oral agreement
was concluded in the midst of wage
negotiations, where terms and conditions culminating from that
agreement were reduced to writing
and a written agreement signed.’
Analysis of
evidence and submissions
[12] On the question of
locus standi
, there is no doubt that an issue pertaining to a
party’s standing in civil proceedings is a point of law. It is
trite that
a point of law can be raised at any stage of the
proceedings. The fact that such a point of law was not identified by
the parties
as an issue to be decided in their pre-trial minutes does
not in itself preclude any party from raising it; neither is it
binding
on the court. The first ground of appeal therefore fails.
[13] The question is
whether the Court
a quo
erred in finding that the first
appellant lacked such
locus standi.
The context in which the
discussions held on 2 November 2014 took place must never be lost
sight of, i.e., that the discussions
were within the context of wage
negotiations in which the first appellant, as a registered union
recognised by the respondent,
was entitled to represent its members.
The assertion that an oral agreement was allegedly reached on that
particular day of the
wage negotiations should not have any bearing
on the union’s authority to represent its members. A union’s
authority
to represent its members should not be compartmentalised in
such a manner that it is perceived to have authority only in respect
of discussions that eventually culminate in a written collective
agreement being concluded. After all, collective bargaining does
not
always culminate in a collective agreement.
[14]
On the acceptance of the trite principle that a union has the
authority to represent its members during wage negotiations,
I am of
the view that the Court
a
quo
erred in finding that it was imperative for the appellant to actually
lead evidence that it had the requisite authority to conclude
the
alleged oral agreement for its members. It thus also erred in the
findings it made on agency. See
Blyvooruitzicht
Gold Mining Co Ltd v Pretorius.
[1]
However, nothing much turns on this conclusion as it was not
dispositive of the matter. In my view, the appellants still had to
come home on the
prima
facie
existence of the oral agreement pertaining to overtime and this it
did not do, for reasons set out hereunder.
[15]
In
Gordon
Lloyd Page & Associates v Rivera and Another,
[2]
the court stated that “a plaintiff has to make out a
prima
facie
case-
in the sense that there is evidence relating to
all
the elements of the claim- to survive absolution because without such
evidence no court could find for the plaintiff” (my
emphasis).
It is trite that a party relying upon an oral agreement for the
purposes of absolution from the instance must prove
the following:
(i) the date and place of the
contract; (ii)
the parties
to the contract; and (iii) the
terms of the contract. See
CGEE
Alsthom Equipments et Enterprises Electriques, South African division
v GKN Sankey (Pty) Ltd
.
[3]
[16] There was no clear
evidence pertaining to the terms of the oral agreement. Under
cross-examination, Scholtz testified that
the calculation of overtime
was encapsulated in the wage agreement. This was, however, not borne
out by the wage agreement.
[17] In his testimony,
Scholtz relied on clause 4.5 of the wage agreement and not on the
oral agreement, as the basis for his contention
that the individual
appellants were entitled to overtime calculated on TCTC. Under
cross-examination, Scholtz testified that Botha
made enquiries as to
the calculation of overtime in order to properly understand the draft
wage agreement.
[18] The following
evidence by Mr Scholtz Vol 3 on p202, who was the key negotiator for
the appellants, is significant:
‘
If
I remember correctly, when we went back after the recess process I
cannot recall that I specifically said overtime, call outs,
blah,
blah, blah, whatever is in the package. My question to Anthony Steen
was: do I understand you correctly, that everything
that is inside
the current package will now be calculated on the cost to company
package and he said yes, and that was, we did
not debate it because
there was a lot of other issues that we need to get out of the way
into the process because there was all
these other issues that we
still needed to negotiate, like for instance, the sick leave policy
and stuff like that.
’
[19] The extract referred
to above does not establish the existence of the oral agreement, let
alone its terms. Absolution from
the instance is apposite on that
ground alone.
[20]
In the case of
De
Klerk v ABSA Bank Ltd and Others,
[4]
the court stated as follows:
‘
The
correct approach to an absolution application is conveniently set out
by Harms JA in
Gordon Lloyd Page &
Associates v Rivera and Another
2001 (1)
SA 88
(SCA) at 92E - 93A:
'[2]
The test for absolution to be applied by a trial court at the end of
a plaintiff's case was
formulated in
Claude Neon Lights (SA) Ltd v
Daniel
1976 (4) SA 403
(A) at 409G - H in these terms:
''. . . (W)hen absolution
from the instance is sought at the close of plaintiff's case, the
test to be applied is not whether the
evidence led by plaintiff
establishes what would finally be required to be established, but
whether there is evidence upon which
a Court, applying its mind
reasonably to such evidence, could or might (not should, nor
ought to) find for the plaintiff.
(
Gascoyne v Paul and Hunter
1917 TPD 170
at 173;
Ruto Flour Mills (Pty) Ltd v Adelson
(2)1958 (4) SA 307 (T).)''
[21]
In the case of
Ruto
Flour Mills (Pty) Ltd v Adelson (2)
[5]
,
the court explained the test in the following terms:
‘
At
the close of the case for the plaintiff, therefore, the question
which arises for the consideration of the Court is: 'Is there
evidence upon which a reasonable man
might
find for the plaintiff?'
If the defendant does not
call any evidence but closes his case immediately, the question for
the Court would then be: 'Is there
such evidence upon which the Court
ought
to give judgment in favour of the plaintiff?'
If the
evidence is not only not convincing, but actually found by the trial
Court to be an utter fabrication or, if it be a
fact that it is
too vague and contradictory to serve as proof of the question in
issue then it would be evidence on which a reasonable
man
would
not find, and the Court would be perfectly justified in granting
absolution from the instance at the close of the case for
the
plaintiff.’ (cases omitted)
[22] Although the
“reasonable man” formulation was criticised, the court in
De Klerk’s
case,
supra
, as clouding the issue,
this does not detract from the fact that evidence found to be too
vague and contradictory does not pass
muster when determining whether
a
prima facie
case has been made.
[23]
In
Gandy
v Makhanya,
[6]
it was stated as follows:- It follows, in my opinion, that in order
to avoid absolution at the close of his case, a plaintiff need
not
necessarily persuade the court hearing the application that there
exists an actual preponderance of probability in his favour.
In my
view, the test at this stage of the trial is to be stated as follows:
the court will refuse the application for absolution
from the
instance unless it is satisfied that no reasonable court could draw
the inference for which the plaintiff contends.”
[24]
In the case of
Gordon
Lloyd Page & Associates v Rivera and Another,
[7]
the court endorsed reliance on inferences at the stage of absolution
from the instance.
[25] It is clear from the
above authorities that an application for absolution from the
instance may be decided
inter alia
on the basis of reasonable
inferences. Mr Grundlingh, on behalf of the appellants, criticised
the Court
a quo
for having considered probabilities. He had no
quarrel with the trite principle that reasonable inferences may be
drawn. The extract
of the Court
a quo’s
judgment speaks
for itself and the inferences that it drew are self-evident. The
existence of the written wage agreement that was
subsequently signed
on 09 November 2014 is a common cause fact. The same applies to its
content. Nothing precluded the Court
a quo
from drawing
inferences from these common cause facts. Although four of the
appellants’ witnesses stated in their evidence
in chief that Mr
Steen agreed that TCTC would be applied to overtime,
cross-examination revealed vagueness on this aspect. This
is
especially so when one considers that Scholtz, being the chief
negotiator, conceded that he was still seeking clarification
on this
aspect even after 02 November 2007, being the date on which the oral
agreement was allegedly concluded.
[26] The following
exchange during Scholtz’s cross-examination is also telling:
‘
Mr
Snider: Only one remaining
question for this witness. Mr Scholtz, I just want to refer you
once
again to the agreement, the corrected agreement and particularly
clause 14 on page 37 of Bundle A. This clause says that this
agreement, these ten pages, constitutes the entire agreement between
the parties and no representation not contained herein shall
be of
any force between the parties?
Mr Scholtz:
Yes, I see that.
Mr Snider:
So I put it to you that if you want to make something, if you want to
bargain
and negotiate something and the particular terms of the
contract it needs to be in this agreement?
Mr Scholtz:
I just want to understand that clearly, can you please put it to me?
Mr Snider:
What I am putting to you is that, if you negotiated something?
Mr Scholtz:
Yes.
Mr Snider:
If something has been agreed between the parties?
Mr Scholtz:
Yes.
Mr Snider:
In relation to the subject matter of this agreement?
Mr Scholtz:
Yes.
Mr Snider:
It needs to be in this agreement, not outside the agreement?
Mr
Scholtz:
That
is correct
.’
(My emphasis)
.
[27] The preamble of the
written agreement entered into after the wage negotiations states as
follows: “The Company and UASA
engaged in discussions regarding
the remuneration of employees traditionally part of the “Officials”
category of employees
with the view to restructure the remuneration
of CU employees, determine increases to remuneration for all official
category staff
and to conclude a three year wage agreement. While
many of the issues could be resolved during the discussions, some
(e.g. performance
management and a new incentive scheme) requires
further work with both parties committed to work together and make
the in-principle
agreement a sustainable reality.”
[28] I
have already alluded to the fact that the high water mark of the
evidence of the appellants’ witnesses did not
prima
facie
establish
the existence of the oral agreement as it did not address all the
required elements of the oral contract. I have referred
to Mr
Scholtz’s concession on aspects that are not incorporated in
the written wage agreement. The contents of the wage agreement
speak
for themselves, in particular the preamble, the non-variation clause
as well as clause 4.5 of the agreement,
[8]
from which it is evident that overtime is not calculated on the basis
of TCTC. When all these circumstances are taken into account,
it is
clear that when considering the application for absolution from the
instance, the Court
a
quo
was not limited to oral evidence but was also entitled to draw
inferences from other facts, including the common cause facts as
borne out by the documentary evidence.
[29] The context in which
the alleged oral agreement was concluded is also important, in my
view. The wage agreement entered into
on 9 November 2007 was a
product of a collective bargaining process, was reduced to writing
and therefore constituted a collective
agreement. Clause 4.5 of the
wage agreement seems incongruous to the alleged oral agreement. When
everything alluded to above is
considered, there remains only one
reasonable inference: that no oral agreement could have been
concluded on 2 November 2007 during
a collective bargaining process
but without being made to form part of the ensuing collective
agreement that was signed on 9 November
2007. The Court
a quo’
s
conclusion, based on inferences, that the appellant failed to
establish a
prima facie
case showing the existence of the oral
agreement pertaining to overtime cannot be faulted. The Court
a
quo
correctly granted an order of absolution from the instance.
It cannot be said that the Court
a quo
exercised its
discretion granting absolution from the instance capriciously or on
wrong principles or for unsubstantial reasons.
It follows that the
appeal on this ground stands to fail. However, the appellant has been
successful on the issue of
locus standi
even though it has no
impact on the overall outcome of the appeal as it is not dispositive
of the issue. Under the circumstances,
justice and equity dictates
that each party must pay its own costs in respect of the appeal.
[30] In the result, the
following order is granted:
Order:
1.
The appeal succeeds only in respect of the
finding that there was no
prima facie
evidence proving the appellant’s
locus standi
.
2.
The order of the Court
a
quo
is set aside and replaced with the
following:
2.1
The respondent’s point
in
limine
on
locus
standi
is dismissed.
2.2
An order of absolution from the instance is
granted.
2.3
There is no order as to costs.
3.
No order of costs is granted in respect of
the appeal.
____________________
M.B. Molemela AJA
I concur.
____________
Waglay
JP
I
concur.
___________
Ndlovu JA
APPEARANCES:
FOR THE APPELLANTS:
Adv R
Grundlingh
Instructed
by Bester & Rhoodie Attorneys
FOR THE RESPONDENT:
Adv M van As
Instructed
by Cliffe Dekker Hofmeyer INC
[1]
[2000]
7 BLLR 751
(LAC) at para 12.
[2]
2001
(1) SA 88
(SCA) at 92G.
[3]
1987
(1) SA 81 (A).
[4]
2003
(4) SA 315
(SCA) at p 323C.
[5]
1958
(4) SA (T) at 309D – F
[6]
1974
(4) SA 853
(N) at 856B.
[7]
Supra
at
92H.
[8]
Clause
4.5 provides: “The contract of employment will reflect the
operational need and compensation for standby, overtime,
shift work
and current continuous operations. These elements
are
not
part of TCTC remuneration rate to be reflected in the annexure and
will be paid in addition to TCTC package.”