Brief Summary

Labour Law — Collective agreements — Interpretation and jurisdiction — Dispute regarding payment of full-time shop-stewards during strike — Appellant, Ekurhuleni Metropolitan Municipality, deducted salaries of shop-stewards during protected strike, invoking "no work no pay" principle — Respondent, South African Municipal Workers Union, contended deductions violated collective agreement and sought interdict — Labour Court ruled in favor of shop-stewards, ordering payment — Appeal raised issues of jurisdiction and interpretation of collective agreement — Majority held Labour Court lacked jurisdiction as dispute concerned interpretation of collective agreement, not merely peripheral issues — Appeal upheld, with costs.

Comprehensive Summary

Summary of Judgment

1. Introduction

The proceedings were an appeal to the Labour Appeal Court against an order of the Labour Court. The Labour Court had granted final interdictory and monetary relief arising from an employer’s deduction and withholding of remuneration during a protected strike.

The appellant was Ekurhuleni Metropolitan Municipality (the employer). The respondent was the South African Municipal Workers Union (SAMWU) acting on behalf of three members who were employed by the municipality and who served as full-time shop stewards in terms of a sectoral collective agreement.

In the Labour Court, SAMWU instituted application proceedings seeking (i) an interdict against salary deductions and (ii) repayment/payment of remuneration withheld or deducted during a strike. The matter was initially referred to oral evidence on a narrow factual dispute (whether the shop stewards attended work during the strike). After hearing oral evidence, the Labour Court granted the relief sought. Leave to appeal was granted, and the matter came before the Labour Appeal Court.

The general subject-matter of the dispute concerned the remuneration of full-time shop stewards during a protected strike, and more particularly whether the employer was entitled to apply the “no work, no pay” principle to them and deduct or withhold their salaries for the strike period. A further, decisive issue was whether the Labour Court had jurisdiction to determine the dispute, given that it turned on the interpretation and application of a collective agreement.

2. Material Facts

It was common cause that SAMWU, together with IMATU and SALGA (representing local government employers including the municipality), concluded a collective agreement (referred to as the “main agreement”) regulating, among other matters, the election, appointment, duties, accountability, and remuneration of full-time shop stewards.

It was also common cause that the three employees on whose behalf SAMWU litigated—Mrs Elsie Pos, Mr Nhlanhla Mazibuko, and Mr Philip Moepye—were duly elected and appointed as full-time shop stewards in accordance with SAMWU’s constitution/policies, and fell under the relevant provisions of the main agreement. They remained municipal employees, were remunerated by the municipality, and performed their shop steward functions from SAMWU’s offices.

The main agreement contained provisions describing the duties and obligations of full-time shop stewards (including that they represent the interests of the union and its members, are subject to employer rules and conditions of service, and are to be treated as any other employee regarding conditions of service) and provisions regulating remuneration, including that full-time shop stewards “shall be remunerated on the basis of the post they held at the time of election” and receive applicable increases and improvements.

It was common cause that on 10 February 2011, Pos (as acting branch secretary) gave notice that SAMWU members intended embarking on a protected strike commencing on 22 February 2011. The strike then proceeded and continued until around April/May 2011. During the strike, SAMWU members withheld their labour, and the municipality did not pay striking employees, invoking “no work, no pay” and referring to section 67(3) of the Labour Relations Act 66 of 1995 (LRA).

It was also common cause that the municipality withheld or deducted remuneration from the three full-time shop stewards for the strike period, treating them like other striking employees. SAMWU contended that these deductions/non-payments breached both the main agreement and the Basic Conditions of Employment Act 75 of 1997 (BCEA) (in particular sections concerned with payment and deductions).

A disputed factual issue was whether the three shop stewards attended work and performed duties during the strike. That issue was referred to oral evidence in the Labour Court. The municipality called no witnesses. The Labour Court accepted evidence presented for SAMWU and found, on the facts, that the three employees had signed in, reported for duty as full-time shop stewards, and performed shop steward functions during the strike (including monitoring the strike and attending disciplinary hearings and meetings). On that basis it concluded they had not participated in the strike in the sense of withdrawing labour from the employer, and ordered payment and interdicted deductions.

On appeal, the Labour Appeal Court treated the pivotal controversy as the parties’ conflicting positions on what the main agreement required and permitted regarding full-time shop steward duties and remuneration during a strike, and whether the municipality’s stance was justified.

3. Legal Issues

The central legal questions before the Labour Appeal Court were, first, whether the Labour Court had jurisdiction to decide the dispute in circumstances where the determination of the claim depended on the interpretation and application of a collective agreement, and where section 24 of the LRA prescribes conciliation and arbitration for such disputes.

Secondly, if jurisdiction existed, the court was asked to determine whether full-time shop stewards were entitled to be paid for the duration of a protected strike, particularly where the employer contended that they had participated in the strike and that section 67(3) of the LRA embodied a suspension of the employer’s duty to remunerate employees for services not rendered during a protected strike.

The jurisdiction issue was primarily a question of law (the proper forum and statutory route for the dispute). The merits, as framed in the Labour Court, involved a mixture of fact (whether the shop stewards worked/attended work) and the application of legal norms (the “no work, no pay” principle in a strike, and the contractual and collective-agreement framework governing full-time shop stewards). On appeal, however, the majority treated the dispute as fundamentally an interpretation-and-application dispute under the collective agreement, which triggered a jurisdictional consequence under section 24 of the LRA.

4. Court’s Reasoning

The judgment of Coppin AJA (with Tlaletsi DJP concurring) approached the appeal on the basis that jurisdiction was decisive. The majority emphasised that jurisdiction is determined from the pleadings (in application proceedings, the affidavits function as pleadings and evidence), but that the “true nature” of a dispute must be identified from the substance of the facts rather than the parties’ characterisation.

On analysis of the papers, the majority held that SAMWU’s case was expressly premised on allegations that the municipality’s withholding/deductions were in breach of the main agreement, and that the Labour Court was therefore required to determine whether the main agreement had been breached. That necessarily required the court to interpret and apply the relevant clauses, particularly those dealing with the duties and obligations of full-time shop stewards (clause 2.5.6) and their remuneration (clause 2.5.7), in the context of strike action. The core dispute, as the majority described it, concerned what full-time shop stewards are obliged to do (and what the employer must do) during a strike, and whether “organising/managing” a strike as shop stewards is compatible with being “at work” for remuneration purposes.

Having characterised the dispute in that way, the majority applied section 24 of the LRA, which provides for disputes about the interpretation or application of a collective agreement to be resolved through the collective agreement’s dispute procedure (which must require conciliation and arbitration), or failing that, through the CCMA by conciliation and arbitration. The majority treated this as an exclusive route for such disputes, meaning the Labour Court lacked power to determine the matter when the interpretation issue was pivotal rather than incidental.

The respondent’s answer to jurisdiction was that the main agreement’s terms had become part of the individual employees’ contracts of employment by virtue of section 23(3) of the LRA, and therefore the Labour Court had jurisdiction under section 77(3) of the BCEA (concurrent jurisdiction with civil courts on matters concerning contracts of employment). The majority rejected this attempt to reframe the dispute. It reasoned that while collective agreements may vary contracts of employment, interpreting the incorporated clauses remains, in substance, an interpretation of the collective agreement itself. The majority stressed the primacy of collective agreements within the LRA framework, including the objective of uniformity and orderly collective bargaining, and held that allowing plant-level contractual enforcement to become a vehicle for definitive interpretation of sectoral collective agreement clauses would be inconsistent with that primacy.

The majority further reasoned that section 77(3) of the BCEA does not confer jurisdiction on the Labour Court to do what the LRA reserves for statutory dispute-resolution bodies in section 24 disputes. It noted that the BCEA provisions invoked could not be applied in a manner that conflicted with the LRA, and that the Labour Court was not empowered under either statute to determine a dispute whose resolution fundamentally required interpreting and applying the collective agreement.

Because jurisdiction was dispositive, the majority held that the Labour Court should have declined to adjudicate the merits and allowed the matter to be pursued in the forum contemplated by section 24 of the LRA. The majority therefore did not decide the correctness of the Labour Court’s merits findings (including whether services were rendered during the strike). On costs, the majority took the view that no costs order was appropriate, including on appeal, in circumstances where the Labour Court should not have entertained the matter once the jurisdictional defect was apparent.

Waglay JP agreed that the appeal should succeed but delivered separate reasons. He considered that the Labour Court did have jurisdiction because the claim was framed as a contractual enforcement claim within section 77(3) of the BCEA, and that the court was obliged to determine it on that basis rather than recasting it as a section 24 dispute. However, he disagreed with the Labour Court on the merits. He reasoned that the employer does not remunerate shop stewards for union work as such; it pays them their normal salaries for their substantive positions while excusing them from performing those duties on the “fiction” that they perform them. Once the strike commenced with all SAMWU members participating, those substantive duties were no longer capable of being performed, and the employer was entitled to apply “no work, no pay” to the full-time shop stewards as well. He also considered it irrational to treat them differently from other striking employees. On costs, he would have awarded costs against SAMWU (including in the Labour Court), on the footing that the matter was contractual and costs should follow the result, and that SAMWU should bear the burden of the costs.

5. Outcome and Relief

The Labour Appeal Court (majority) upheld the appeal on the basis that the Labour Court lacked jurisdiction because the dispute required the interpretation and application of a collective agreement and therefore fell under section 24 of the LRA for conciliation and arbitration.

The Labour Court’s order was set aside and replaced with an order that the application is dismissed, with no order as to costs.

No order was made as to the costs of the appeal (majority). A minority judgment would also have upheld the appeal, but on the basis that the claim failed on the merits and would have ordered costs against SAMWU.

Cases Cited

Public Servants’ Association obo Liebenberg v Department of Defence [2013] 8 BLLR 804 (LC)

PSA obo De Bruyn v Minister of Safety and Security [2012] 9 BLLR 888 (LAC)

Chirwa v Transnet Ltd [2008] 2 BLLR 97 (CC)

South African Maritime Safety Authority v Mckenzie [2010] 5 BLLR 488 (SCA)

Wardlaw v Supreme Mouldings (Pty) Ltd [2007] 6 BLLR 487 (LAC)

NUMSA obo Sinuko v Powertech Transformers (Pty) Ltd [2014] 2 BLLR 133 (LAC)

Cusa v Tau Ying Metal Industries and Others (2008) 29 ILJ 2461 (CC); also reported as [2009] 1 BLLR 1 (CC)

Johannesburg City Parks v Mphahlani NO and others [2010] 6 BLLR 594 (LAC)

National Bargaining Council for the Road Freight Industry and Another v Carlbaik Mining Contracts (Pty) Ltd and Another (2012) 33 ILJ 1808 (LAC)

South African Motor Industry and Employers’ Association and Another v NUMSA and Others [1997] 9 BLLR 1157 (LAC)

Metro Bus (Pty) Ltd v SAMWU [2009] 9 BLLR 905 (LC)

United Association of South Africa v BHP Billiton Energy Coal SA Ltd [2013] 6 BLLR 602 (LC)

Legislation Cited

Labour Relations Act 66 of 1995 (sections 23(3), 24, 67(3), 199)

Basic Conditions of Employment Act 75 of 1997 (sections 33, 34, 77(3), 77A, 77A(e))

Rules of Court Cited

No specific rules of court were cited in the judgment.

Held

The majority held that the Labour Court’s jurisdiction is determined by the substance of the dispute emerging from the affidavits, and that this dispute turned centrally on the interpretation and application of clauses of a collective agreement regulating the duties and remuneration of full-time shop stewards during a strike.

It was held that disputes of that kind must be processed through section 24 of the LRA (conciliation and, if unresolved, arbitration in terms of the collective agreement procedure or at the CCMA). Accordingly, the Labour Court lacked jurisdiction to grant the interdictory and payment relief, and its order was set aside and substituted with a dismissal of the application, with no costs order and no appeal costs order.

A minority judgment would have found jurisdiction under section 77(3) of the BCEA but would have dismissed the claim on the merits on the basis that the employer could apply the “no work, no pay” principle to full-time shop stewards once the strike commenced.

LEGAL PRINCIPLES

The jurisdiction of the Labour Court (and of statutory dispute-resolution bodies) is assessed by reference to the pleadings, and in motion proceedings the affidavits perform the dual function of pleadings and evidence. Where pleadings are unclear or characterisations are contested, the court identifies the true nature of the dispute from the factual substance rather than the parties’ labels.

A dispute whose resolution depends fundamentally (and not merely incidentally) on the interpretation and application of a collective agreement is a dispute governed by section 24 of the LRA, which requires resolution by conciliation and arbitration through the procedure established in the collective agreement or, failing that, through the CCMA.

Collective agreements enjoy primacy in the LRA scheme. Although a collective agreement may vary individual contracts of employment in terms of section 23(3) of the LRA, the interpretation of incorporated terms remains, in substance, interpretation of the collective agreement clauses themselves; the statutory mechanism for interpreting those clauses must be respected to preserve uniformity and orderly collective bargaining.

Section 77(3) of the BCEA, conferring concurrent jurisdiction on the Labour Court and civil courts for matters concerning contracts of employment, does not operate to confer on the Labour Court a power that is inconsistent with, or circumvents, the LRA’s allocation of disputes about the interpretation and application of collective agreements to conciliation and arbitration. The BCEA and LRA should be read harmoniously, not in conflict.

Ekurhuleni Metropolitan Municipality v South African Municipality Workers Union (JA12/13) [2014] ZALAC 61; [2015] 1 BLLR 34 (LAC); (2015) 36 ILJ 624 (LAC) (23 October 2014)