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[2014] ZALAC 119
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UASA and Another v Lonmin Platinum Compromising & Others (JA 59/2012) [2014] ZALAC 119 (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.”