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[2015] ZALAC 2
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Edcon v Steenkamp and Others (JS648/13, JS51/14, JS350/14) [2015] ZALAC 2; 2015 (4) SA 247 (LAC); [2015] 6 BLLR 549 (LAC); (2015) 36 ILJ 1469 (LAC) (3 March 2015)
REPUBLIC
OF SOUTH AFRICA
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Case no: JS648/13
JS51/14
JS350/14
DATE: 03 MARCH
2015
Reportable
In the matter
between:
EDCON
......................................................................................................................................
Applicant
And
KARIN
STEENKAMP
.................................................................................................
First
Respondent
(Applicant in
case no JS 648/13)
MINISTEROF
LABOUR
........................................................................................
Second
Respondent
NUMSA
........................................................................................................................
Third
Respondent
THE MINISTER OF
JUSTICE AND
CONSTITUTIONAL
DEVELOPMENT
................................................................
Fourth
Respondent
THE EMPLOYEES
LISTED IN ANNEXURE “A”:
MZIMKHULU DE BOOI
AND 3 OTHERS
(Applicants in
case no JS51/14)
VICTORIA SEKHOTO
AND 132 OTHERS
(Applicants
in case no JS288/14)
GOODNESS KHUMALO
AND 65 OTHERS
.......................................
Fifth
to Further Respondents
(Applicants in
case no JS350/14)
Heard: 23 October
2014
Delivered:
03 March 2015
Summary:
dismissal for operational requirements in terms of section 189A of
the LRA – employer failing to comply with timeframe
in terms of
section 189A(8) of the LRA in giving notice of termination as
contemplated in section 189A(2). Parties contending of
the
correctness of the
De Beers
principle that non-compliance with
a statutory requirement is sanctioned with invalidity and rendering
the dismissal of no
effect- The court held that the sanction of
invalidity not in keeping with the purpose of the LRA and
inconsistent with the intention
of the legislature to generally limit
relief for procedural lapses. Section 189(8) and (13) providing
urgent court application
or immediate industrial action as remedies
for procedural flaw - non-compliance with section 189A(8) of the LRA
was not intended
to result in the invalidity or nullity of any
ensuing dismissals. Invalidity foreign to remedies for dismissal -
De
Beers Group Services (Pty) Ltd v NUM
and
Revan Civil
Engineering Contractors and Others v NUM
wrongly decided.
Non-compliance with the provisions of sections 189A(2) and (8) does
not does not lead to an invalid dismissal.
Application upheld with
costs.
JUDGMENT
THE COURT
[1]
During April 2013, the applicant (“Edcon”) commenced with
a process of restructuring based on operational requirements.
The
process resulted in the retrenchment of about 3000 employees (some of
whom accepted voluntary severance packages) during the
period April
2013 to mid-2014. Edcon at the relevant time employed about 40 000
employees nationwide and the retrenchments
occurred throughout the
company.
[2]
Since the retrenchments involved more than 50 employees, the
provisions of section 189A of the Labour Relations Act
[1]
(“the LRA”) applied to the exercise. Section 189A(1) of
the LRA provides that the provisions of the section apply
inter
alia
to employers employing more than 500 employees if the employer
contemplates dismissing by reason of its operational requirements
at
least 50 employees.
[3]
Section 189A was inserted into the LRA by section 45 of Act 12 of
2002. The general purpose of the amendment was to enhance
the
effectiveness of consultation in large-scale retrenchments by seeking
to reduce friction in the process. The section provides
for
facilitation at an early stage and lays down the requirements and
elements of due and fair process. The section contains twenty
sub-sections, some of which are not relevant to the present dispute.
Nonetheless, it will assist in the discussion which follows
to
examine the section as a whole contextually with regard to its
purpose and the circumstances of its enactment.
[4]
The dispute between the parties relates to whether there has been
compliance with the section and significantly whether previous
pronouncements upon and the interpretation of the section by this
Court are correct and constitutionally sustainable. Given the
importance of the case, the Judge President, acting in terms of
section 175 of the LRA, directed that the matter be heard by this
Court sitting as a court of first instance.
[5]
The respondents in the matter are several employees of Edcon affected
by the retrenchments, the National Union of Metalworkers
of South
Africa (“NUMSA”), the Minister of Labour and the Minister
of Justice and Constitutional Development. We deal
with the relevant
facts and issues related to the referral of the dispute after first
providing an overview of section 189A.
[6]
Section 189A of the LRA, as we have said, regulates large-scale
retrenchments. It is an adjunct to section 189 of the LRA which
governs operational requirements dismissals in general. In terms of
the latter provision, as is well known, the employer is obliged
to
consult with appropriate bargaining agents and to engage in a
meaningful joint consensus-seeking process aimed at reaching
consensus on appropriate measures to avoid, minimise and mitigate the
adverse effects of the dismissals, as well as the method for
selecting the employees to be dismissed and the severance pay to be
paid. Section 189(3) of the LRA requires the employer to issue
a
written notice inviting the other consulting party to consult with it
and to disclose relevant information about the reasons
for the
proposed retrenchment, the alternatives considered and rejected, the
numbers of employees likely to be affected, the proposed
selection
criteria, the timing of the dismissals, the severance pay proposed
and assistance to mitigate the adverse impacts. The
remaining
provisions of section 189 regulate the consultation process, the
disclosure of information and the method of selection
of the
employees to be dismissed. One of the key innovations introduced by
section 189A of the LRA is that it allows for the consultation
process to be run by an independent facilitator.
[7]
Section 189A(3) of the LRA provides that the Commission for
Conciliation, Mediation and Arbitration (“the CCMA”)
must
appoint a facilitator to assist the parties engaged in consultations
in two instances, first: if the employer has in its section
189(3)
notice requested facilitation; or, second, if the consulting parties
representing the majority of employees who the employer
contemplates
dismissing have requested facilitation and have notified the CCMA
accordingly within 15 days of the section 189(3)
notice. The parties
may also appoint a facilitator by agreement between them.
[2]
In all cases, the facilitation must be conducted in terms of
regulations made by the Minister of Labour after consulting the
National
Economic Development and Labour Council (“NEDLAC”).
[3]
The Facilitation Regulations were issued by the Minister on 10
October 2003.
[4]
Regulation 3
provides that the facilitator must at the first facilitation meeting
assist the parties to reach agreement on the
procedure to be followed
during the facilitation and the information to be disclosed by the
employer. Unless agreed otherwise,
the facilitator will chair the
meetings between the parties, decide any issue of procedure that
arises in the course of the meetings,
arrange further facilitation
meetings and perform other relevant functions. The facilitator’s
rulings on procedure are final
and binding.
[5]
Facilitation can be conducted with or without prejudice.
[6]
[8]
Section 189A(2) of the LRA, which is of importance to the present
matter, reads:
‘
(2)
In respect of any dismissal covered by this section -
(a) an employer must
give notice of termination of employment in accordance with the
provisions of this section;
(b) despite section
65(1)(c), an employee may participate in a strike and an employer may
lock out in accordance with the provisions
of this section;
(c) the consulting
parties may agree to vary the time periods for facilitation or
consultation.’
[9]
The aim of section 189A(2) of the LRA is threefold: firstly, it
imposes a limitation upon the employer’s right to time
the
dismissal of employees in a large-scale retrenchment;
[7]
secondly, it introduces a right to resort to industrial action in
disputes about the fairness of the reason for such retrenchments;
and
thirdly, it permits the statutory time periods for facilitation or
consultation to be varied by agreement.
[10]
The introduction of the right to strike or to have recourse to a
lock-out in disputes about the fairness of the reasons for
larger
retrenchments signified a notable policy shift in the law of
collective bargaining and dismissal. Prior to the amendment,
it was
impermissible in our law for parties to engage in industrial action
in relation to disputes regarding the reasons for and
procedure
followed in dismissals. Such are regarded as “rights”
disputes which are customarily submitted to and resolved
by
adjudication or arbitration. Section 65 of the LRA which deals with
limitations on the right to strike or recourse to lock-out
includes a
prohibition on industrial action where the issue in dispute is one
that a party has the right to refer to arbitration
or to the Labour
Court in terms of the LRA. The relevant part of section 65(1) reads:
‘
No
person may take part in a strike or a lock-out or in any conduct in
contemplation or furtherance of a strike or a lock-out if
-
(c) the issue in
dispute is one that a party has the right to refer to arbitration or
to the Labour Court in terms of this Act.’
[11]
Section 189A(2)(b) of the LRA, by providing that “despite
section 65(1)(c)” employees and employers may participate
in
such industrial action, creates an exception to the general
prohibition on industrial action in relation to rights issues,
recognising that large-scale retrenchments may involve hybrid issues
not always classifiable as disputes of right or interest. This
innovation was the main purpose of the amendment of the LRA in 2002
and is thus key to its interpretation. The section as a whole,
as
evident from its content and structure, is directed at regulating the
process of industrial action and referrals to adjudication
where
facilitation or conciliation has failed to produce consensus in
relation to all the topics or subjects of consultation.
[12]
As we intimated earlier, the parties are not obliged to submit to
facilitation in all cases. Facilitation will only be obligatory
if
the employer or the other consulting parties request it in terms of
section 189A(3) of the LRA, or if there is an agreement
to appoint a
facilitator in terms of section 189A(4) of the LRA.
[13]
Section 189A(7) of the LRA deals with the situation where a
facilitator has been appointed. It reads:
‘
(7)
If a facilitator is appointed in terms of subsection (3) or (4), and
60 days have elapsed from the date on which notice was
given in terms
of section 189(3) -
(a) the employer may
give notice to terminate the contracts of employment in
accordance with section 37(1) of the Basic Conditions
of Employment
Act; and
(b) a registered
trade union or the employees who have received notice of termination
may either -
(i)
give notice of a strike in terms of section 64(1)(b) or (d); or
(ii) refer a dispute
concerning whether there is a fair reason for the dismissal to the
Labour Court in terms of section 191(11).’
[14]
It is immediately evident from this provision that where facilitation
has been attempted and 60 days have lapsed since the
employer issued
a section 189(3) notice inviting consultation and disclosing relevant
information, the employer may give notice
to terminate the contracts
of employment of the employees selected by it for retrenchment in
accordance with agreed or fair selection
criteria as required by
section 189(7) of the LRA. Section 37(1) of the Basic Conditions of
Employment Act
[8]
(“the
BCEA”) stipulates notice periods for the termination of
employment which are variable depending on the employee’s
period of service.
[15]
The notice given by the employer in terms of section 189A(7)(a) of
the LRA, after the 60 day period allowed for facilitation
has
elapsed, triggers the right of the employees or their representatives
to resort to either strike action in terms of section
189A(7)(b)(i)
of the LRA or litigation in terms of section 189A(7)(b)(ii) of the
LRA. There are two notable features of the right
to strike conferred
by section 189A(7)(b)(i) of the LRA. The first is that the dispute
does not have to be referred to a bargaining
council or the CCMA for
conciliation over a 30 day cooling-off period, as is normally
required in terms of section 64 of the LRA.
Where there has been a
facilitation process, it would be unnecessary duplication to require
an additional 30 day conciliation process
at the end of the 60 day
period allowed for facilitation - bearing in mind that the parties
may agree to extend the facilitation
period in terms of section
189A(2)(c) of the LRA. Likewise, the envisioned referral to the
Labour Court in terms of section 191(11)
of the LRA
[9]
does not require a prior referral to conciliation. Secondly, the
requirement of 48hrs notice
[10]
of the commencement of the industrial action remains applicable.
[11]
[16]
Where a facilitator is not appointed a different process is followed.
In such instances, the legislature contemplated that
the ordinary
conciliation and cooling-off provisions should continue to apply.
Section 189A(8) of the LRA provides:
‘
If
a facilitator is not appointed -
(a) a party may not
refer a dispute to a council or the Commission unless a period of 30
days has lapsed from the date on which
notice was given in terms of
section 189(3); and
(b)
once the periods in section 64(1)(a) have elapsed -
(i)
the employer may give notice to terminate the contracts of employment
in accordance with section 37(1) of the Basic Conditions
of
Employment Act; and
(ii) a registered
trade union or the employees who have received notice of termination
may -
(aa) give notice of
a strike in terms of section 64(1)(b) or (d); or
(bb) refer a dispute
concerning whether there is a fair reason for the dismissal to the
Labour Court in terms of section 191(11).’
The
main issue in the dispute presently before us relates to the
interpretation of section 189A(8) of the LRA and the consequences
of
non-compliance with the time periods stipulated by it. In view of the
detailed submissions made on behalf of the parties, the
provisions of
the sub-section require careful analysis, which we reserve until a
fuller explication of the facts and issues. Suffice
it for present
purposes to state that the sub-section, like section 189A(7) of the
LRA, permits the employees or their registered
trade union on receipt
of notices of termination to resort either to strike action or
litigation.
[17]
Once the employees make their election to strike or litigate under
section 189A(7) or 189A(8) of the LRA, they will be held
to it. If
they want to challenge the fairness of the reason for dismissal, they
must choose either to refer the dispute to the
Labour Court or to
strike. Section 189A(10) of the LRA provides that a consulting party
may not give notice of a strike in respect
of a dismissal if it has
referred a dispute concerning whether there is a fair reason for that
dismissal to the Labour Court and
likewise may not refer such a
dispute to the Labour Court if it has given notice of a strike.
[18]
In the event of the employees resorting to industrial action, their
objective ordinarily would be to obtain an agreement advantageous
to
their rights and interests on the various topics or subjects of
bargaining. Should they prefer to refer a dispute about substantive
fairness (concerning whether there was a fair reason for the
retrenchments) to the Labour Court, in terms of section 189A(19) of
the LRA the court will be obliged to find that the dismissal was for
a fair reason if -
(a) the dismissal
was to give effect to a requirement based on the employer’s
economic, technological, structural or similar
needs;
(b) the dismissal
was operationally justifiable on rational grounds;
(c) there was a
proper consideration of alternatives;
(d) selection
criteria were fair and objective.
[19]
Having carved out distinct alternative procedures for the resolution
of disputes about the substantive fairness of large scale
retrenchments, section 189A of the LRA additionally creates a
distinct procedure for disputes about procedural fairness in
dismissals
falling within the ambit of the section. Section 189A(18)
of the LRA provides that the Labour Court may not adjudicate a
dispute
about the procedural fairness of an operational requirements
dismissal referred to it in terms of section 191(5)(b)(ii) of the
LRA. Consulting parties who allege procedural unfairness in the
consultation process are now required to approach the Labour Court
by
way of an application made in terms of section 189A(13) of the LRA
within 30 days after the employer has given notice to terminate
or,
if notice of termination is not given, within 30 days of the date of
dismissal. In an application made in terms of section
189A(13) of the
LRA, the consulting party may seek an order, if need be on an urgent
basis,
[12]
-
(a)
compelling the employer to comply with a fair procedure;
(b) interdicting or
restraining the employer from dismissing an employee prior to
complying with a fair procedure;
(c) directing the
employer to reinstate an employee until it has complied with a fair
procedure; or
(d) awarding
compensation, if an order in terms of paragraphs (a)-(c) is not
appropriate.
[20]
The object of section 189A(13) of the LRA, as appears from a
purposive interpretation of section 189A read as a whole and in
context, is to separate out procedural issues and to provide a means
whereby the consultation and facilitation processes are not
undermined by procedural flaws. It offers a useful expedient to the
parties to seek the assistance of the court, acting as the
guardian
of the process, to ensure that the issues are adequately identified,
considered and ventilated in the process of consultation
or
facilitation before it ends. It thus ensures that only disputes about
the fairness of substantive reasons and outcomes will
generally be
subjected to resolution by means of collective action or in a trial
involving the hearing of oral evidence.
[21]
With this analysis of section 189A of the LRA in mind, we turn now to
deal with the facts, the issues in dispute and the question
of the
somewhat unusual relief sought by Edcon from this Court sitting
atypically as a court of first instance.
[22]
As stated at the beginning, Edcon commenced with a process of
restructuring during April 2013 which resulted in the termination
of
employment of approximately 3000 of its 40 000 employees. The
facilitation route was not followed, and for that reason
the
dismissals are governed by section 189A(8) of the LRA. According to
Edcon, 51 referrals have been made to the Labour Court
challenging
the fairness of the dismissals. These referrals involve a total of
1331 applicants. Four of these referrals are the
subject of the
application brought by Edcon. The first is case number JS 648/13
brought by Ms Karin Steenkamp, the first respondent
(“the
Steenkamp matter”). The applicants in the other three matters
have been cited as the fifth and further respondents
in this
application. The second referral, JS 51/14, has been made on behalf
of Mzimkhulu de Booi and three others; (“the
De Booi matter”);
the third referral has been made on behalf of Ms Victoria Sekhoto and
132 others, JS 288/14 (“the
Sekhoto matter”); and the
fourth is that made on behalf of Goodness Khumalo and 85 others, JS
350/14 (“the Khumalo
matter”).
[23]
An additional 47 referrals (involving 1127 applicants) were made
during the period 3 June 2014 to 5 September 2014 after Edcon
launched this application, which it describes as “a
constitutional challenge” to section 189A of the LRA.
[24]
The 1331 applicants who are party to the 51 referrals rely on a
single cause of action, namely that their dismissals were “invalid”
within the meaning of that term as understood by this Court in
De
Beers Group Services (Pty) Ltd v NUM
[13]
and
confirmed and applied in
Revan
Civil Engineering Contractors and Others v National Union of
Mineworkers and Others
.
[14]
In these cases, as we discuss more fully presently, this Court held
that where an employer issues notices of termination before
the
period referred to in section 189A(8)(b) of the LRA has elapsed (i.e.
prematurely), the ensuing dismissals are invalid, and
accordingly of
no force and effect. The parties have referred to this finding as
“the
De
Beers
principle”,
and it is convenient to adopt their nomenclature. Section 189A(8) of
the LRA, it will be recalled, deals with
the situation where a
facilitator has not been appointed. Section 189A(8)(a) provides that
in such instance a party may not refer
a dispute to a bargaining
council or the CCMA unless a period of 30 days has lapsed from the
date on which the employer issued
its written notice in terms of
section 189(3) of the LRA. Section 189A(8)(b) of the LRA provides
that once the periods in section
64(1)(a) of the LRA have elapsed
(being 30 days after the referral to a bargaining council or the CCMA
of an issue in dispute that
is the subject of a contemplated strike
or lock-out), the employer may give notice of termination of
employment triggering the
right of the employees to proceed to strike
action or litigation in terms of section 189A(8)(b)(ii) of the LRA.
[25]
Edcon’s initial challenge was of an entirely constitutional
nature in that it sought a declaration that section 189A(2)(a)
read
with section 189A(8) of the LRA, as interpreted in the
De Beers
case, are unconstitutional and in violation of section 9 and section
23 of the Constitution (the right to equality and the right
to fair
labour practices). Edcon, after taking heed of certain criticisms
levelled in the heads of argument filed on behalf of
NUMSA, sought
without objection to amend its notice of motion. In terms of the
amended notice of motion, it now seeks an order
in the following
terms:
‘
1.Joining
the Fifth and Further Respondents to these proceedings and
authorising the consolidation of proceedings under case numbers
JS648/13, JS51/14 and JS350/14.
2. Declaring that
the interpretation of section 189A(2)(a) read with section 189A(8) of
the Labour Relations Act, 1995 (as amended)
(the
LRA
) as
interpreted in the judgments of
De Beers Group Services (Pty) Ltd
v NUM
[2011] 4 BLLR 319
(LAC) and
Revan Civil Engineering
Contractors & Others v NUM
[2012] 33 ILJ 1846 (LAC),
(insofar as these judgments hold that non-compliance with the
provisions of section 189A(2)(a) read
with 189(8) results in the
invalidity of a dismissal) is wrong and constitutes an erroneous
interpretation or application of legislation
that has been enacted
to give effect to a constitutional right or in compliance with the
Legislature’s constitutional responsibilities.
3. Reinterpreting
the provisions of sections 189A(2)(a) read with 189A(8) in a manner
which is consistent with the objects of the
LRA and thus declaring
that where an employer does not comply with any of the provisions of
these sections, the dismissal is not
invalid and:
3.1 that the Court
considering the dismissal is at large to consider the fairness
thereof and the appropriate remedy;
3.2 an employee is
free to elect to choose compensation as a remedy instead of
reinstatement or re-employment.
4. Alternatively,
declaring that section 189A(2)(a) read with section 189A(8) as
interpreted in the judgment of
De Beers Group Services (Pty) Ltd v
NUM
[2011] 4 BLLR 319
(LAC) and
Revan Civil Engineering
Contractors & Others v NUM
[2012] 33 ILJ 1846 (LAC), (insofar
as these judgments hold that non-compliance with the provisions of
section 189A(2)(a) read with
189A(8) results in the invalidity of a
dismissal) are unconstitutional in particular because the sections as
interpreted, violate
the following rights:
4.1 The right to
fair labour practices set out in section 23 of the Constitution of
the Republic of South Africa;
4.2 The right to
equality set out in section 9(1) of the Constitution of the Republic
of South Africa.
5. Reinterpreting
the provisions of sections 189A(2)(a) read with 189A(8) in a manner
which is consistent with the fundamental rights
set out in paragraph
4 above and thus declaring that where an employer does not comply
with any of the provisions of these sections,
the dismissal is not
invalid and:
5.1 that the Court
considering the dismissal is at large to consider the fairness
thereof and the appropriate remedy;
5.2 an employee is
free to elect to choose compensation as a remedy instead of
reinstatement or re-employment.
6. Making such
further order that is just and equitable in the circumstances in
terms of section 172 of the Constitution of the
Republic of South
Africa, 1996.’
[26]
If this Court is persuaded that the interpretation of section 189A(8)
of the LRA in
De Beers
is wrong and constitutes an erroneous
interpretation, the relief sought in paragraphs 2 and 3 of the
amended notice of motion will
be dispositive. In which case, there
will be no need to pronounce upon the constitutionality of the
provisions as prayed for in
paragraphs 4-6.
[27]
The legal representatives of the parties filed an “agreed
statement of issues” setting out the facts upon which
Edcon
relies and defining the cause of action and defences in summary.
[28]
All of the employees in the Steenkamp, De Booi and Sekhoto matters
were issued with section 189(3) notices. On Edcon’s
version,
all of the applicants in the Khumalo matter (save for one who died
beforehand) accepted voluntary severance packages and
hence resigned
and thus were not issued with section 189(3) notices in contemplation
of dismissal. As mentioned earlier, no facilitator
was appointed in
terms of section 189A(3) or section 189A(4) of the LRA and the
provisions of section 189A(7) of the LRA do not
apply. Accordingly,
section 189A(8) of the LRA is applicable to all of the dismissals in
question. Neither Edcon nor the employees
made a referral to the CCMA
for conciliation before the employer gave notice to terminate the
contracts of employment. The time
period between the issuing of the
section 189(3) notices and the notices of termination in terms of
section 189A(8) of the LRA
varied from 6 days to in excess of 60
days. None of the employees brought an application in terms of
section 189A(13) of the LRA
alleging non-compliance with a fair
procedure. According to Edcon, only seven of the employees referred
an unfair dismissal dispute
to the CCMA in terms of section 191(1)(a)
of the LRA for conciliation after the dismissals took place before
making a referral
to the Labour Court. Some of the employees dispute
this. None of the employees challenge the substantive or procedural
fairness
of their dismissals. They all rely instead exclusively upon
the
De Beers
principle to assert a cause of action that their
dismissals were invalid and seek to be instated with full back pay.
The cost of
such orders, were they to be granted, would be
substantial.
[29]
There are two elements to the interpretation of section 189A(8) of
the LRA in
De
Beers
.
The first involves a determination of whether the parties must refer
a dispute to a bargaining council or the CCMA for conciliation
before
they may resort to industrial action or litigation in those cases
when the facilitation route is not followed; the second
is the
so-called
De
Beers
principle. The sub-section, to put it frankly, is badly drafted.
Although it seems to envisage that a dispute must be referred
to the
CCMA or a bargaining council in the absence of an agreement emerging
from the consultation process, it makes no express
provision for such
a requirement. The sub-section merely states that a party may not
refer a dispute to a council or the CCMA unless
30 days have lapsed
since the section 189(3) notice. In
De
Beers
this Court approved the finding of the Labour Court in
Leoni
Wiring Systems (East London) (Pty) Ltd v NUMSA and Others
[15]
that in terms of section 189A(8) of the LRA, a dispute must be
referred to a council or the CCMA after a period of 30 days has
lapsed after the issue of the section 189(3) notice.
[30]
In
National
Union of Mineworkers v De Beers Consolidated Mines (Pty) Ltd
,
[16]
Freund AJ referred to a submission by counsel that section 189A(8) of
the LRA must be construed to prohibit the employer from giving
notice
to terminate the contracts of employment unless and until a dispute
in respect of the proposed retrenchments has been referred
by one of
the parties to the CCMA or a council and the 30 day period mentioned
in section 64(1)(a) of the LRA had elapsed. Since
the applicant in
that case had in fact referred a dispute to the CCMA it was
unnecessary for Freund AJ to make any finding as to
whether the
notices of termination would have been invalid in the absence of a
referral, and
a
fortiori
whether such a referral was indeed required.
[17]
This Court in laying down the
De
Beers
principle was clearly of the opinion that such was indeed a
requirement, but neglected to read in specific wording whereby that
might be accomplished. Reading in such a requirement is warranted and
justifiable. Our labour legislation consistently requires
parties in
dispute to first attempt conciliation before resorting to industrial
action or litigation. Section 189A(7) of the LRA
exempts the parties
from the requirement where facilitation has been chosen by the
parties as a substitute. If there is no obligation
to refer a dispute
to conciliation under section 189A(8) of the LRA, it would mean that
the normal requirement of consensus-seeking
with the assistance of an
independent conciliator would unusually not apply. There is no
apparent reason justifying such a departure
from the norm and the
obvious conclusion is that the sub-section contains a
casus
omissus
which the court is bound to supply. Unfortunately we were not
provided during argument with possible wording to remedy the omission
by a reading in. There is however no need now to formulate the
precise wording of any reading in since it is possible to determine
this case on the shared assumption of the parties that a referral may
have been required but was not made. The principal question
for
determination is what should be the consequence of a non-referral
and/or the precipitous issue of termination notices by the
employer.
[31]
In the “agreed statement of issues” Edcon addressed the
requirement of a referral to a council or the CCMA under
section
189A(8) of the LRA by stating that it sought a reinterpretation of
section 189A(8) to the effect that:
‘
contrary
to what was found in
De Beers
,
where the facilitator route is not followed, in the absence of full
consensus being reached over a retrenchment, a “dispute”
does not exist for the purposes of section 189A(8)(a), and a referral
to the CCMA (by the employer in the absence of the employee
party
doing so) is not then a prerequisite for a retrenchment.’
In
argument, however, without conceding the correctness of the first
element of the
De
Beer’
s
judgment,
[18]
Edcon opted to
focus on the second and more controversial principle enunciated in
the
De
Beer’s
judgment that a dismissal will be invalid if the employer does not
comply with the requirements of section 189A(8) of the LRA,
in other
words that which it refers to as the
De
Beers
principle. Edcon contends that if the employer dismisses employees
without the dispute being referred to conciliation, or otherwise
prematurely before the lapse of the relevant time periods, such
procedural flaws, in the context of section 189A of the LRA, do
not
have the consequence that the dismissals are invalid and of no force
and effect.
[32]
The
De
Beers
principle
had its origin in the judgment of Freund AJ in
National
Union of Mineworkers v De Beers Consolidated Mines (Pty) Ltd
[19]
referred to earlier. In that case the employer had issued section
189(3) notices on 26 January 2006. More than two months later,
on 28
March 2006, the employer informed the union that it intended to issue
notices of termination of employment to the affected
employees on 31
March 2006. On 30 March 2006, the union referred a dispute to the
CCMA regarding the proposed retrenchments. On
31 March 2006, the
employer delivered letters to the affected employees giving them
notice that their contracts of employment would
terminate on 30 April
2006. The referral was made to the CCMA in terms of section
189A(8)(a) read with section 64(1)(a) of the
LRA. The union contended
that the notices of termination were premature in terms of section
189A(8)(b) in that the 30 day period
mentioned in section 64(1)(a) of
the LRA had not elapsed and the CCMA had not issued a certificate of
resolution before the expiry
of the 30 days. The union then applied
to the Labour Court
inter
alia
for an order declaring that the notices of termination were of no
force and effect and an interdict restraining the employer from
giving notice to terminate the contracts of employment until the
periods mentioned in section 64(1)(a) of the LRA had elapsed.
It is
not clear from the judgment whether the union approached the court in
terms of section 189A(13) of the LRA alleging that
the employer had
not complied with a fair procedure or if it relied on the general
provisions of section 158(1)(a) of the LRA which
permits the Labour
Court to grant urgent interim relief, an interdict and a declaratory
order. There are indications in the judgment
that the union relied on
both provisions in respect of the relief it sought, but did not
assert its rights under section 189A(13)
of the LRA in relation to
the employer’s premature notices of termination.
[20]
[33]
Freund AJ held that if a facilitator is not appointed, the employer
must wait 30 days from the date of the section 189(3) notice
to be
able to refer the dispute for conciliation and for up to a further 30
days (unless a certificate of resolution is issued
earlier or the
date is not extended by agreement) before being entitled to give
notice to terminate the contracts of employment.
He held that the
notices of termination on the facts before him were invalid and of no
force or effect. His motivation for his
conclusion rested singularly
on the word “must” in section 189A(2)(a) of the LRA. He
stated:
‘
Section
189A(2) provides explicitly and in imperative language that the
employer “must” give notice of termination in
accordance
with the provisions of section 189A. It would, in my view, flout the
intention of the language and the policy underlying
section 189A to
recognise the validity of notices given in contravention of section
189A(8).’
[21]
The
learned acting judge accordingly granted a declaratory order that the
notices of termination of the employees’ contracts
of
employment were of no force and effect. He refused however to grant
the interdict because the employer had become entitled to
issue the
notices after the lapse of the 30 day period mentioned in section
64(1)(a) of the LRA.
[34]
In
De
Beers Group Services (Pty) Ltd v NUM,
[22]
the case which Edcon submits was wrongly decided, this Court was
faced with a situation similar to the one dealt with by Freund
AJ. On
21 January 2009, the employer issued section 189(3) notices to four
of its employees inviting them to consult with regard
to their
proposed dismissal based on operational requirements. On 13 March
2009, they were issued with notices of termination advising
them that
their notice period would run from 22 March 2009 and that their
termination date would be 23 April 2009. On 14 April
2009, the union
referred a dispute to the CCMA for conciliation. The employees were
dismissed on 23 April 2009. A conciliation
meeting was held at the
CCMA on 19 May 2009, almost a month after the dismissal had occurred,
and a certificate of non-resolution
was issued. The dismissal of the
employees hence took place prior to the expiry of the 30 day period
mentioned in section 64(1)(a)(ii)
of the LRA and before a certificate
of resolution was issued in terms of section 64(1)(a)(i). On 4 June
2009, the union sought
an order from the Labour Court declaring that
the notices of termination were of no force or effect and
alternatively an order
directing the employer to reinstate the
employees pending compliance with a fair procedure and the
requirements of section 189A(8)
of the LRA, or further in the
alternative an award of compensation for procedural unfairness. It is
not clear from the judgment
whether the application was made in terms
of section 189A(13) of the LRA. It appears that it might have been.
The Labour Court
held that the notices of termination were tainted by
prematurity and were invalid and of no force and effect. It
accordingly granted
the employees an order of reinstatement. In its
view a dispute arose once consensus was not reached on the topics of
consultation
which had to be referred for conciliation and there was
no compliance with the time periods in section 189A(8)(b) of the LRA,
which
it held was peremptory.
[35]
The Labour Appeal Court held that a dispute existed between the
parties regarding the dismissal of the employees. As a facilitator
had not been appointed, a notice of termination could only be issued
in terms of section 189A(8) of the LRA once a 30 day period
had
elapsed from the issuing of the section 189(3) notice and
additionally the periods referred to in section 189A(8)(b) of the
LRA
had also lapsed after the dispute had been referred to the CCMA. In
response to submissions by counsel that a breach of the
statutory
duty to give proper notice did not result in invalidity, Davis JA
referred to the
dictum
of Freund AJ cited above and held as
follows:
‘
In
short, if the employer fails to comply with the mandatory requirement
of consultation in terms of section 189(2) and moves to
terminate the
employment in breach of these provisions, then the dismissal must be
considered to be invalid and accordingly of
no force and effect.’
[23]
The
Labour Appeal Court dismissed the appeal and in effect upheld the
order of reinstatement granted by the court
a quo
. It is these
findings which we have been urged to re-visit and hold to be
erroneous.
[36]
It is important to note that Freund AJ in the
National Union of
Mineworker’s
case did not make any finding that the
dismissals of the employees in that case were invalid. He consciously
limited the relief
granted to a declaratory order that the notices of
termination (not the dismissals) were of no force or effect. The
Labour Appeal
Court in
De Beers
, without any elaboration of
reasoning, assumed that because the notices of termination did not
comply with the statutory requirements
it axiomatically followed that
the dismissals were invalid and of no force and effect. The
proposition is debatable and possibly
wrong.
[37]
The failure by an employer to give proper or valid notice of
termination to an employee can be construed as a breach of contract
and if material may result in a wrongful or unfair termination of
employment, entitling the employee to invoke the remedies either
of
specific performance or damages for wrongful termination; or
reinstatement, re-employment or compensation (in terms of section
193
of the LRA) for unfair dismissal. Where the failure to give valid
notice is in breach of a statutory provision as well, the
breach will
be a violation of the principle of legality, perhaps allowing the
employee to challenge the lawfulness of the action
by means of review
proceedings. A review of a decision to terminate employment leading
to a declaration of invalidity is not unknown
in our law and is
predicated upon the general principle that acts carried out in the
performance of a statutory duty or obligation
must be performed in
accordance with the requirements of the statute, failing which they
are liable to be set aside by the courts
because acts performed
contrary to law are ordinarily void.
[24]
[38]
Early in the last century, our courts followed the thinking of
English law to hold that the remedy of specific performance
was not
available to aggrieved employees suing for wrongful dismissal.
[25]
The consequence of this view was that any termination of an
employee’s contract of employment by his employer, no matter
how wrongful or unfair, had the practical effect of putting an end to
the employment relationship (a concept broader than and different
to
a contract of employment) as the employee was restricted to seeking
damages. It followed that a dismissal of an employee did
not need to
be lawful or valid to terminate the employment relationship or to
constitute a dismissal.
[26]
Hence, in the employment context, somewhat abnormally, a contract of
employment could be regarded as at an end by the employer
rejecting
the continued use of the services of the employee and refusing to pay
remuneration, even though lawful cancellation had
not occurred.
[39]
The remedies for unfair dismissal introduced in our labour
legislation during the 1980’s, now contained in Chapter 8
of
the LRA, altered the range of remedies available to employees, by
including most notably the right to seek reinstatement.
[27]
[40]
The implicit acceptance by the Appellate Division in
Schierhout
v Minister of Justice
[28]
that
a wrongful or “invalid” termination can in effect bring a
contract of employment to an end has however persisted
in our labour
law. The notion is comprehended in the definition of “dismissal”
in section 186 of the LRA which defines
a dismissal to mean
inter
alia
“an employer has terminated a contract of employment with or
without notice”.
[29]
The
statutory concept of a “dismissal” is not the equivalent
of a lawful cancellation of a contract of employment.
It encompasses
much more. Besides the termination of a contract of employment with
or without notice, it includes the failure to
renew a fixed term
contract in certain circumstances, the refusal to allow an employee
to resume work after taking maternity leave,
selective non
re-employment and a resignation by an employee where the continuation
of the relationship has been rendered intolerable
by the
employer.
[30]
The statutory
concept of dismissal is therefore not restricted to the contractual
notion of lawful cancellation and recognises
that contract law is an
insufficient instrument to regulate the modern employment
relationship. The purpose of the wide definition
of “dismissal”
is to extend the LRA’s scope to cover the effective dismissal
of employees, whether or not by
due termination of their contracts of
employment.
[31]
A wrongful
termination without notice which does not constitute a lawful
cancellation or rescission of the contract may therefore
still
constitute a dismissal in terms of the LRA.
[32]
[41]
The definition of dismissal is thus wide enough to include a wrongful
or “invalid” termination in violation of
contractual or
statutory notice periods within its ambit. The word “terminated”
in section 186(1)(a) of the LRA should
be given its ordinary meaning
of “bringing to an end”. The ordinary meaning is not
coloured by the lawfulness, fairness
or otherwise of the action. The
fact that a remedy may exist to redress any wrongfulness or
unfairness does not
per
se
alter the consequence of an ending brought about by the employer’s
action. As a rule, a wrongful or unfair termination will
only be
reversed (and the contractual rights and obligations restored) by the
grant of the remedy of specific performance or an
award of
retrospective reinstatement at the discretion of the court. The
resultant legal position is not unlike that prevailing
in
administrative law where a declaration of illegality will not have
the inevitable consequence that wrongful action will be declared
invalid and set aside.
[33]
[42]
Despite the approach taken by the Appellate Division in
Schierhout
to the contractual remedy of specific performance, it went on to hold
that a distinction needed to be drawn in cases of employment
in the
public service which although primarily contractual were subject to
statutory regulation. The effect of this, as we have
mentioned, was
“to bring into play a fundamental principle of our law namely
that a thing done contrary to a statutory prohibition
is void and of
no effect”.
[34]
The
dismissal of a public servant in contravention of the statute
governing his employment could be declared invalid and set aside.
The
same would apply by extension to any employee whose employment is
regulated in part by statutory provisions like those in this
case.
The
De
Beers
principle is predicated upon this notion. A declaration of
invalidity however only entitled an employee to claim payment
of his
salary but did not constitute an order of specific performance
ad
faciendum
.
[35]
The character of a dismissal in contravention of statutory
provisions, as a consequence, was more voidable than void by reason
of the discretionary nature of the remedies available.
[43]
This case, as already explained, is concerned with whether
non-compliance with the notice and procedural provisions of section
189A of the LRA should result in a declaration of invalidity and an
entitlement to reinstatement on that ground. It will be recalled
that, unlike the situations in both the
National
Union of Mineworker’s
case and the
De
Beers
case, no dispute was referred to the CCMA in this case. It is also
common cause that there has been non-compliance with the time
periods
in both section 189A(8)(a) and section 189(8)(b) of the LRA. Should
the remedies of specific performance and reinstatement
be available
for these lapses in the context of the scheme enacted by the LRA? The
enquiry necessarily involves an examination
of the right sought to be
enforced and the wrong sought to be rectified. None of the applicants
in the various referrals has alleged
unfairness or unlawfulness
beyond the stated non-compliance. Where one is concerned with the
enforcement or breach of statutory
duties, as opposed to mere
contractual terms, the question must be resolved with reference to
the provisions of the applicable
statute, its purpose and any
remedies which the statute has appointed to redress breach of the
statutory obligations it has imposed.
The general principle of our
law, applied in the employment context by Innes CJ in
Schierhout
,
that a thing done contrary to the direct prohibition of the law is
void and of no effect, no longer applies in all cases. More
recent
cases have ruled that whether that is so will depend upon the proper
construction of the particular legislation.
[36]
In addition, our law now seeks to maintain a clearer divide between
the law regulating administrative action and that applicable
to
unfair labour practices, as mandated by the discrete constitutional
provisions and statutes applicable to such action.
[37]
[44]
While it is correct, as both Freund AJ and Davis JA pointed out, that
section 189A(2)(a) of the LRA uses imperative language
requiring an
employer to give notice of termination of employment in accordance
with the provisions of section 189A, it does not
say what the
consequences of non-compliance are. Edcon has submitted that on a
proper interpretation of the Act as a whole it does
not follow from
non-compliance with the procedural requirements of section 189A of
the LRA that any subsequent dismissal is rendered
a nullity. The
principles governing non-compliance with statutory requirements,
alluded to above, are well-established. The crucial
enquiry is
whether the legislature contemplated that the relevant failure should
be visited with nullity.
[38]
The governing principle was capsulated in an oft cited passage in the
English case
Howard
v Bodington
[39]
as follows:
‘
No
universal rule can be laid down for the construction of statutes, as
to whether mandatory enactments shall be considered directory
only or
obligatory, with an implied nullification for disobedience. It is the
duty of the courts …. to try to get at the
real intention of
the legislature by carefully attending to the whole scope of the
statute to be construed.’
[45]
Various factors must be considered, such as: the subject-matter of
the prohibition, its purpose in the context of the legislation,
the
remedies provided in the event of breach, the nature of the mischief
which it was designed to remedy or avoid, and any cognizable
impropriety or inconvenience which may flow from invalidity. Then the
court must ask whether it was truly intended that anything
done
contrary to the provisions in question was necessarily to be visited
with nullity.
[40]
The fact
that a statute provides for remedies in the event of a breach of its
provisions is a significant factor counting against
an inference of
invalidity. An equally important consideration is whether a
declaration of invalidity would have capricious, disproportionate
or
inequitable consequences. The principle was enunciated as follows in
Pottie
v Kotze
:
[41]
‘
A
further compulsory penalty of invalidity would…have capricious
effects, the severity of which might be out of all proportion
to that
of the prescribed penalties, it would bring about inequitable results
as between the parties concerned and it would upset
transactions
which,…the legislature could have no reason to view with
disfavour. To say that we are compelled to imply such
consequences in
the provisions of section 13bis seems to me to make us the slaves of
maxims of interpretation which should serve
us as guides and not be
allowed to tyrannise even us as masters’
[46]
The Labour Appeal Court did not give overt consideration to these
principles in
De Beers
when it reached its conclusion that
non-compliance with the procedural provisions of section 189A(8) of
the LRA should result in
any subsequent dismissals being a nullity
entitling the employees to reinstatement.
[47]
Counsel for Edcon, Mr Myburgh SC, has made detailed submissions in
support of his contention that it was never the intention
of the
legislature to visit non-compliance with section 189A(8) of the LRA
with invalidity. He argued that while the consequences
of a failure
to comply with a peremptory provision are not typically spelt out in
a statute, had the legislature intended invalidity
one would have
expected a clearer indication to that effect; particularly in view of
the severe consequences involved. In this
case the effect of
invalidity would be that despite the employees’ dismissal
probably being substantively fair and the employer
being able to
establish grounds for the refusal of reinstatement, it will be
prevented from doing so, and will be obliged to instate
the employees
with full back-pay simply on account of a procedural lapse and
despite the employees failing to tender repayment
of their severance
benefits.
[48]
Most importantly, section 189A of the LRA contemplates other remedies
when there is non-compliance with the procedural provisions
of
section 189A(7) and 189(8). Section 189A(9) of the LRA is of
particular relevance. It reads:
‘
Notice
of the commencement of a strike may be given if the employer
dismisses or gives notice of dismissal before the expiry of
the
periods referred to in subsections (7)(a) or 8(b)(i).’
The
provision bestows a right to resort to immediate retaliatory strike
action in response to premature notices of termination being
given.
In addition, as already discussed, section 189A(13) of the LRA
provides a remedy to deal with any procedural unfairness
on an
expedited and urgent basis, which can be resorted to prior to any
dismissal taking effect, or shortly after dismissal. In
terms of this
provision, the Labour Court may compel the employer to follow a fair
procedure; interdict the employer from dismissing
the employees
before having done so; order the employer to reinstate the employees
until it has complied with a fair procedure;
or award compensation
for any procedural unfairness. The aim is to ensure that if the union
or employees see a failure of procedure
in the consultative process
they should act immediately to rectify it as soon as the flaw is
detected. Remedies for procedural
flaws should preferably be resorted
to before the dismissal takes place or in its immediate aftermath.
The policy is confirmed
by the provisions of sections 189A(18) and
189A(19) of the LRA which limit court challenges after dismissal to
questions of substantive
fairness.
[49]
Mr Myburgh further submitted that the concept of an invalid dismissal
is incompatible with the scheme of sections 189 and 189A
of the LRA.
If such dismissals are to be regarded as a nullity (i.e. of no legal
consequence) that firstly would be inconsistent
with the provisions
of section 189A(9) of the LRA which evidently regards dismissals in
non-compliance with the time periods as
dismissals justifying
retaliatory strike action. Likewise, dismissals not in compliance
with a fair procedure (by not resorting
to conciliation or through
failing to give proper statutory notice) remain dismissals, which, as
discussed earlier, are defined
in section 186(1)(a) of the LRA to
include instances where an employer has terminated a contract of
employment with or without
notice. A termination by an employer
without giving proper or valid notice is still a dismissal. It may
prove to be a wrongful
or unfair dismissal, but it is a dismissal
nonetheless. As explained earlier, wrongful or unfair dismissals will
have the consequence
of bringing a contract of employment to an end
unless and until a court orders specific performance or retrospective
reinstatement.
The LRA thus clearly recognises what has been termed
“a premature termination” to constitute a dismissal. The
ideas
of nullity, voidness and invalidity are inconsistent with that
scheme.
[50]
The
De
Beers
principle introduces the anomaly that a conventional dismissal will
be removed from the scope of Chapter 8 of the LRA altogether
and will
not be assessed on the basis of fairness, merely because it was
procedurally premature and branded as invalid. The categorisation
of
the dismissal as invalid leads automatically to reinstatement, a
sanction not in keeping with the purpose of the LRA. Section
193(2)(d) of the LRA for instance makes it clear that reinstatement
is not a competent remedy for procedural unfairness. A declaration
of
invalidity and consequential relief in the form of automatic
reinstatement on the grounds of procedural non-compliance is
therefore
inconsistent with the intention of the legislature to
generally limit relief for procedural lapses.
[42]
Other remedies exist to deal with the problem of prematurity which in
their application will lead to more proportionate and less
capricious
consequences in keeping with the aim of the LRA to promote orderly
collective bargaining and the effective resolution
of labour
disputes.
[43]
The purpose of
providing the expeditious remedies of a retaliatory strike or a
procedural interdict under section 189A(13) of the
LRA would be
defeated if employees were allowed to claim reinstatement long after
the event on grounds of invalidity predicated
on procedural
non-compliance.
[51]
These considerations find additional support in the provisions of
section 189 of the LRA dealing with operational requirement
dismissals in general. The section imposes a number of duties on the
consulting parties in apparently peremptory terms. Thus, for
instance, the employer “must” consult, “must”
issue a written notice and “must” select according
to
fair criteria. Employers frequently fail to comply with these
provisions. The courts have not in the past regarded such failures
to
result in invalid dismissals leading to automatic reinstatement. The
remedy for non-compliance will be compensation or a pre-emptive
interdict where the failure is exclusively of a procedural
nature,
[44]
or otherwise
reinstatement or re-employment at the discretion of the court after
taking account of a range of factual considerations.
Again, the
notion that a retrenchment which does not comply with the
requirements of the section must be deemed to be invalid and
a
nullity, is foreign to the scheme and purpose of section 189A of the
LRA which provides discrete and effective remedies for redressing
flaws in the process.
[52]
It accordingly could not have been the intention of the legislature
that a failure to comply with section 189A(8), read with
section
189A(2)of the LRA, would result in the dismissals being invalid.
[53]
Counsel for the respondents predictably argued that it was consistent
with the purpose of section 189A of the LRA that where
notice has not
been given in accordance with the provisions of the statute the
contracts are not terminated. It is doubtful, considering
the
principles and precedents discussed above, that an employer’s
unilateral and premature act of termination would have
that result in
the law of contract. As explained, a termination in violation of
contractual terms would be in breach of contract
and possibly a
wrongful termination entitling the employee to seek specific
performance, a remedy not automatically available but
granted at the
discretion of the court. The fact that the notice provisions are of a
statutory nature, and are thus terms implied
by statute, could
justify a different approach, along the lines of past judicial
precedent before the enactment of the LRA. But
that submission
flounders where the Constitution and the legislature have quite
evidently appointed different remedies, namely
those provided in
section 189A(9) and 189A(13) of the LRA, which, consistent with the
overall scheme and approach of section 189A
of the LRA to collective
bargaining and dispute resolution, permits the union to elect either
to resort to retaliatory strike action
or expedited litigation to
safeguard procedural propriety in the consultative process.
[54]
Mr van der Riet SC, on behalf of NUMSA, submitted that non-compliance
with the notice provisions is not a procedural fairness
issue. We
cannot agree. Premature notice of termination of employment, where
the termination was substantively fair, relates to
the manner in
which the termination was effected and would found a cause of action
under section 189A(13) of the LRA that the employer
had not complied
with a fair procedure in the form of due notice. In any event, the
categorisation of the issue as procedural or
substantive has no
bearing upon the remedy available under section 189A(9) of the LRA.
Nor do we accept the contention that the
reference to dismissal in
section 189A(9) of the LRA should be read to mean “purported”
dismissal. There is no textual
or logical reason supporting that
interpretation, especially considering that section 186(1)(a) of the
LRA contemplates a termination
without notice as constituting a
dismissal.
[55]
By the same token, a failure to refer the dispute to conciliation
before the issuing of notices of termination is also a procedural
issue in that it involves the failure to follow a statutory
procedure. While such an obligation must be read in to section
189A(8)
of the LRA, no basis has been advanced, and there seems to us
to be none, for elevating that requirement to a jurisdictional
requirement
for any application to court in terms of section 189A(13)
of the LRA to redress a procedural unfairness. Unlike referrals of
unfair
dismissal disputes where conciliation is a jurisdictional
requirement by virtue of section 191(1)(a) read with section 191(5)
of
the LRA, there is no statutory basis to support the contention
that conciliation is required before a section 189A(13) application.
The remedy exists to compel further conciliation or consultation if
the court considers such a procedure to be desirable before
resort is
had to industrial action or litigation. Dispensing with the
requirement of conciliation under both section 189A(9) and
189A(13)
of the LRA is an expedient of urgency in the specific context of
seeking immediate resolution of a procedural issue. Any
precipitate
issuing of notices of termination, either in the form of a failure to
resort to conciliation or in a premature notice
of termination, is a
procedural lapse that can be remedied by an urgent court application
or immediate industrial action, which
will be competent and protected
despite themselves not being preceded by conciliation, and which will
have as their purpose the
restoration of the process and further
consultation on the disputed subjects of consultation.
[56]
In the premises, we are persuaded that non-compliance with section
189A(8) of the LRA was not intended by the legislature to
result in
the invalidity or nullity of any ensuing dismissals. Consequently, we
are of the opinion that the decisions in
De Beers Group Services
(Pty) Ltd v NUM
and
Revan Civil Engineering Contractors and
Others v NUM
were wrongly decided.
[57]
This Court may depart from its previous decisions and overrule
earlier precedents where it concludes that such were obviously
wrong.
However, in the
De Beers
case the employer petitioned the
Supreme Court of Appeal (the SCA) for leave to appeal against the
decision of the LAC. The SCA
refused the petition. The question now
arises whether the refusal of the petition has the consequence that
the SCA can be considered
to have adopted the decision of the LAC as
its own and that this Court is as a consequence bound to apply the
De
Beers
principle.
[58]
The SCA has decided that a refusal of a petition does not mean that
the judgment of the lower court becomes the judgment of
the court of
appeal. In
Hyprop
Investments Ltd v NSC Carriers and Forwarding CC and Others
[45]
Lewis JA said the following:
‘
The
mere fact that an appeal court does not grant leave to appeal to it
does not mean that it necessarily confirms the correctness
of the
judgment in the court below. The court that refuses leave has not
heard debate on the issues and does not give a fully reasoned
judgment as to why there are no real prospects of success on appeal.
Moreover, the appeal lies against the order and not against
the
reasoning.’
[46]
[59]
Accepting that the interpretation of the LAC in
De Beers
was
wrong and that this Court is not bound to follow it, there is no need
to deal with the relief sought by Edcon in terms of the
Constitution.
The applicant is entitled to the declaratory relief it seeks. There
is no reason why the costs should not follow
the result. The fourth,
fifth and further respondents did not actively oppose the application
and should therefore attract no liability.
[60] The following
orders are issued:
1. It is declared
that the interpretation of section 189A(2)(a) read with section
189A(8) of the LRA by this Court in
De Beers Group Services (Pty)
Ltd v NUM
[2011] 4 BLLR 319
(LAC) and
Revan Civil Engineering
Contractors and Others v NUM
[2012] 33 ILJ 1846 (LAC) that
non-compliance with the provisions of section 189A(2)(a) read with
section 189A(8) results in the
invalidity of any ensuing dismissal is
wrong and an erroneous interpretation and therefore that
non-compliance with these provisions
does not lead to an invalid
dismissal.
2.
The first, second and third respondents are ordered to pay the costs
of the application, jointly and severally, the one paying
the others
to be absolved, such costs to include the employment of two counsel.
Tlaletsi
DJP
Musi
JA
JR
Murphy AJA
APPEARANCES:
FOR THE
APPLICANT: Adv Myburgh SC and Adv Feroze Boda
Instructed by
Norton Rose Fulbright
FOR THE FIRST,
FIFTH and
FURTHER
RESPONDENTS: Adv ESJ van Graan SC
Instructed
by Keith Whitaker Attorneys
FOR THE THIRD
RESPONDENT: Adv Van der Riet SC and Adv L H Barnes
Instructed
by Ruth Edmonds Attorneys
[1]
Act
66 of 1995.
[2]
Section
189(4) of the LRA.
[3]
Section
189A (5) and (6) of the LRA.
[4]
GNR
1445 GG 25515.
[5]
Regulation
4.
[6]
Regulation
7.
[7]
Section
189A(2)(a) of the LRA.
[8]
Act
75 of 1997.
[9]
Read
with section 191 (5)(b) of the LRA.
[10]
7
days where the State is the employer.
[11]
Section
189A (7)(b)(i) read with section 64(1)(b) and (d) of the LRA.
[12]
Such
an order may be sought and obtained on an urgent basis in terms of
section 189A(14) of the LRA.
[13]
[2011]
4 BLLR 318 (LAC).
[14]
(2012)
33 ILJ 1846 (LAC).
[15]
(2007)
28 ILJ 642 (LC).
[16]
(2006)
27 ILJ 1909 (LC) at para 31.
[17]
At
para 39.
[18]
Namely,
that the matter must be referred to the CCMA and the dispute must be
certified as resolved; or 30 days must have elapsed
since the
referral.
[19]
2006
27 ILJ 1909 (LC).
[20]
See
paragraph 54.
[21]
Paragraph
40.
[22]
[2011]
4 BLLR 318 (LAC).
[23]
Paragraph
36.
[24]
Schierhout
v Minister of Justice
1926
AD 99
at110.
[25]
Specific
performance was regarded as an inappropriate remedy for breach of a
contract of employment for two reasons; the inadvisability
of
compelling one person to employ another whom he does not trust in a
position that imports a close relationship; and the absence
of
mutuality.
[26]
That
said, the courts in some instances, in accordance with the general
principles of the law of breach of contract, regarded
a wrongful,
unilateral termination of employment by an employer to amount to a
repudiation permitting the employee an election
to hold the employer
to the contract (despite the bar on specific performance) or to sue
for damages -
Strachan
v Lloyd Levy
1923 AD 670
,671. This led to the possibility that a contract of
employment could remain in force despite being unenforceable in the
absence
of an available remedy of specific performance – an
unsatisfactory position in principle. Be that as it was, the
decision
in
Schierhout
still meant that a contract of employment could in effect be
terminated by a wrongful or unfair dismissal. See in general M
Wallis:
Labour
and Employment Law
(Butterworths 1995) Chp 6.
[27]
The
prevailing view had in any event begun to change with the decision
in
National
Union of Textile Workers v Stag Packings (Pty) Ltd
1982
(4) SA 151
(T) that there was no general rule excluding specific
performance and that the remedy was available at the discretion of
the
court taking account of relevant considerations.
[28]
1926
AD 99
[29]
Section
186(1)(a) of the LRA.
[30]
Section
186(b) – (e) of the LRA.
[31]
This
point is supported by the fact that the existence of a legally valid
contract of employment is not a pre-requisite for a
dismissal under
the LRA -
'Kylie'
v CCMA and Others
(2010) 31 ILJ 1600 (LAC).
[32]
Terminations
without notice occur lawfully, for instance, when there are reasons
for summary dismissal (serious breach by the
employee justifying
unilateral cancellation), or through the effluxion of time where
there is an agreed termination date; or
wrongfully when in violation
of applicable notice provisions.
[33]
See
Oudekraal
Estates (Pty) Ltd v City of Cape Town
2004 (6) SA 222
(SCA); and
Louw
v Matjila and Others
1995
(11) BCLR 1476 (W).
[34]
Schierhout
v Minister of Justice
1926
AD 99
at109; and M Wallis:
Labour
and Employment Law
(Butterworths 1995) 6-10. The principle has been significantly
qualified by subsequent judicial decisions to which we refer later
in the text.
[35]
Schierhout
v Minister of Justice
1926
AD 99
at111 - This line of thought resulted in public servants
before the courts succeeding in having their dismissals set aside on
grounds of invalidity and in some cases obtaining orders declaring
them still employed and entitled to a salary and in others
actually
being reinstated, notwithstanding the bar on specific performance.
This casuistry brought about a measure of legal incoherence
and
inconsistency in relation to the remedies available for invalid
dismissals (as opposed to merely wrongful dismissals in breach
of
contract).
[36]
Lupacchini
NO v Minister of Safety and Security
2010(6) SA 457 (SCA) at para 8; and
Hubbard
v Cool Ideas
2013
(5) SA 112
(SCA) at para 10.
[37]
Gcaba
v Minister of Safety and Security and Others.
2010
(1) SA 238
(CC).
[38]
Nokeng
Tsa Taemane Local Municipality v Dinokeng Property Owners
Association and Others
[2011]
2 All SA 46
(SCA) para 14.
[39]
(1877)
2 PD 203, 211.
[40]
Palm
Fifteen v Cotton Tail Homes (Pty) Ltd
1978
(2) SA 872
(A) at 885E-G; and
ABSA
Insurance Brokers (Pty) Ltd v Luttig and Another NNO
[1997] ZASCA 61
;
1997 (4) SA 229
(SCA) at 238J-239B.
[41]
1954
(3) SA 179
(A) at 726 F-H.
[42]
Section
189A(13)(c) of the LRA does allow for a reinstatement order to be
made pending compliance with a fair procedure. Such
an order differs
from an ordinary order of reinstatement in that it is essentially
restores the
status
quo
until the retrenchment process has run its proper course in
accordance with due process.
[43]
See
section 1(d) of the LRA.
[44]
Section
193(2)(d) and section 189A(13) of the LRA.
[45]
2014
(5) SA 406 (SCA).
[46]
At
para [21]; See also
Independent
Outdoor Media (Pty) Ltd and Others v City of Cape Town
[2013] 2 All SA 679
(SCA) at paras [7] and [8]. See
Mphahlele
v The First National Bank of South Africa
Case
CCT23/98 decided on 1 March 1999 with regard to the
constitutionality of the petition procedure.