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[2015] ZALAC 35
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MEC of the Western Cape Provincial Government Health Department v Coetzee and Others (CA3/2011) [2015] ZALAC 35; [2015] 11 BLLR 1108 (LAC) ; (2015) 36 ILJ 3010 (LAC) (24 August 2015)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, CAPE TOWN
Case no: CA3/2011
DATE: 24 AUGUST
2015
Reportable
In the matter
between:
THE MEC OF THE
WESTERN CAPE PROVINCIAL
GOVERNMENT HEALTH
DEPARTMENT
.........................................................................
Appellant
And
PROF
A R COETZEE & 49
OTHERS
..............................................................................
Respondents
Heard: 17 July
2014
Delivered: 24
August 2015
Summary
:
Main
dispute about
interpretation
and application of collective agreement- Labour Court not empowered
to sit as arbitrator in terms of section 158(2)(b)
of the Labour
Relations Act- where matter had to be referred to conciliation
(arbitration) and a party, deliberately and with knowledge
of such
fact, nevertheless, does not refer the matter to the appropriate
forum for arbitration, but brings the claim directly to
the Labour
Court and requests the court to sit as arbitrator . The parties’
consent does not give the Labour Court the power
or confer on it the
jurisdiction to sit as arbitrator in the circumstances-Sections 77(3)
and 77a of the Basic Conditions of Employment
Act does not give the
Labour Court the jurisdiction or the power to resolve that dispute.
Coram: Tlaletsi
DJP, Ndlovu
et
Coppin JJA
JUDGMENT
COPPIN JA
[1]
This
is an appeal against judgments and orders of the Labour Court
(Cheadle AJ and Rabkin-Naicker J) with the leave of that court.
[2]
The
judgments and orders were in respect of different aspects of this
matter. The judgment of Cheadle AJ, which was handed down
in November
2010, deals with the interpretation and application of a collective
agreement (“
the
scarce skills agreement
”)
which introduced a scarce skills allowance and in terms of the
judgment, in essence, it was held that the collective agreement
applied to the respondents and that the appellant was obliged to pay
to them the scarce skills allowance.
[3]
The
judgment of Rabkin-Naicker J dealt with the issue of prescription
raised by the appellant in response to the respondents’
claims
for payment of the scarce skills allowances in terms of the scarce
skills agreement and it held, in essence, that the claims
had not
prescribed. That judgment was handed down on 20 March 2013.
[4]
At
all material times, 28 of the respondents have been professors in the
medical faculty of the University of Stellenbosch and 21
of those
respondents have been professors in the medical faculty of the
University of Cape Town. In terms of arrangements, the
details of
which are captured in agreements between the respective universities
and the erstwhile Provincial Administration of
the Cape of Good Hope,
they provided various medical services at hospitals in the Cape
Province, including at the Tygerberg and
Groote Schuur Hospitals and
also utilised the hospital facilities for teaching purposes.
[5]
The
agreements between the universities and the erstwhile provincial
administration deal with the funding and other resources to
be
provided by the respective universities and the provincial
administration for the running of the so-called “teaching
hospitals” and with the manner in which medical staff attached
to the universities and rendering services at those hospitals
will be
appointed, disciplined, deployed, etc.. The Stellenbosch University
agreement is in Afrikaans and the University of Cape
Town agreement
is in English, but they are similar in content and it was common
cause that there is no relevant or material difference
between them.
The latter agreement was, in fact, for convenience used in evidence
and argument in the Labour Court, but more specifically,
as being
reflective of what was provided in both agreements.
[6]
Of
significance, the agreements stipulate that each member of the “joint
staff” discharges duties toward both the (respective)
University and the Province. The duty toward the University is
essentially an academic duty of teaching and researching, and that
toward the Province, includes, providing and administering medical
services in the Province’s designated hospitals. They
are all
appointed on the conditions of employment of the university they are
attached to and the (respective) university is responsible
for the
payment of their salaries. In respect of appointments, the university
essentially advertises the position and having followed
its
appointment procedure nominates the appointee. The appointment is
then made with the approval of the Province. In respect of
their
salaries, the Province makes a contribution to their salary costs. In
terms of those agreements, disciplinary action against
“joint
staff” would be in terms of the respective university’s
disciplinary code. It is common cause that the
appellant is the
successor in title of the erstwhile Provincial Administration and
represents the Province.
[7]
On
28 January 2004, this scarce skills agreement was concluded in the
Public Health & Welfare Sector Bargaining Council (also
referred
to in the judgment as the “PH & WSBC” and “the
Bargaining Council” or “Council”).
The agreement
provided for the payment of non-pensionable scarce skills allowances,
calculated by a formula in that agreement.
Of significance to this
matter – this collective agreement provided that it applies to
“
the
Employers and Employees:
2.1 In the Public
Health Sector as managed by the Health Employer, but excluding those
health professionals in other sectors; and
2.2
falls within the registered scope of the PH & WSBC
.”
[1]
[8]
Beside
the appeal, there is an application by the appellant to condone the
late lodging of the record of the appeal and the appellant
seeks
reinstatement of the appeal.
[9]
The
appeal itself deals,
inter
alia,
with
the following issues, namely, whether Cheadle AJ (and subsequently
Rabkin-Naicker J) who, purportedly sat as arbitrator in
the matter in
terms of section 158(2)(b) of the Labour Relations Act No 66 of 1995
(“
the
LRA”)
had the power to do so. Or whether the Labour Court otherwise had
jurisdiction in terms of section 77(3) of the Basic
Conditions of
Employment Act No 75 of 1997 (“
the
BCEA
”)
to entertain the matter and make the orders being appealed against
given the facts and circumstances of the matter. (Similar
questions
would also pertain to the basis upon which Rabkin-Naicker J
entertained the matter and gave the judgment or order appealed
against.). Secondly, if it were to be found that it was not correct
for the Labour Court to have entertained the matter, whether
this
Court should nevertheless exercise its power in terms of the latter
part of section 174 of the LRA and decide the merits of
the appeal.
[10]
The
parties addressed us on condonation, the jurisdictional aspects, as
well as the merits. I shall first deal with the issue of
condonation.
Condonation
[11]
The
appellant seeks condonation in terms of Rule 12(1) of this Court for
its failure to timeously deliver an appeal record within
the time
period stipulated by Rule 5(8) and for the reinstatement of the
appeal to the extent that such reinstatement is required.
[12]
In
terms of Rule 5(17), if the appellant fails to lodge an appeal record
within the prescribed period, that is within 60 days of
the date of
the granting of leave to appeal (as stipulated in LAC Rule 5(8)), the
appellant will be deemed to have withdrawn the
appeal, unless within
that period, the appellant has requested the respondent (or its
representative) to consent to an extension
of the period (and such
consent was given), or if it was refused, has applied to the Judge
President (in chambers) on notice of
motion, within that period, for
an extension of the period within which to file the record.
[13]
Even
if Rule 5(17) was not complied with, this Court, in terms of Rule
12(1), has the power to condone the late filing of the record.
The
rule provides that this Court may “
for
sufficient cause shown
”
excuse parties for a failure to comply with any of the rules.
[14]
This
Court has a wide discretion which it has to exercise judicially in
light of all the facts. In essence, the question whether
to excuse
non-compliance is a matter of what would be fair in the
circumstances. Facts of obvious relevance, although there is
no
closed or exhaustive list, would be the degree of non-compliance, and
particularly, in the case of lateness, the degree of lateness,
the
explanation for the non-compliance or lateness, the prospects of
success, the importance of the issues in the case, the need
for
finality, and any prejudice, but overall, the interests of justice.
[15]
The
above factors are not individually decisive and are interrelated.
[2]
As indicated earlier, essentially two main issues were brought to the
Labour Court for determination, namely, whether the respondents
are
entitled to payment of the scarce skills allowance in terms of the
scarce skills agreement (i.e. the collective agreement)
and if so,
whether their claims to such payment had prescribed.
[16]
The
parties agreed to separate the two issues. The first was dealt with
by Cheadle AJ and the second by Rabkin-Naicker J in a subsequent
hearing. Cheadle AJ handed down judgment in favour of the respondents
in respect of the merits on 4 November 2010. The appellant
applied
for leave to appeal against that judgment and such leave was given on
29 November 2010.
[17]
However,
because it was anticipated that there would be a further appeal if
the prescription point was to be decided in favour of
the
respondents, the parties agreed that the prescription issue had to be
decided before the appeal and that the matter could be
expedited by
proceeding with all the appeals at the same time.
[18]
The
prescription and quantum issues were set down for argument, but due
to a delay in establishing the quantum of the respondents’
claims, the parties agreed to provisionally only argue the point of
prescription. This issue was heard by Rabkin-Naicker J on 10
August
2012 and judgment on the issue was handed down on 20 March 2013. The
quantum of the respective claims was subsequently agreed
between the
parties and a written minute to that effect was filed in the Labour
Court on 21 September 2012.
[19]
On
30 October 2012, while awaiting Rabkin-Naicker J’s judgment on
the issue of prescription, the respondents’ attorney
in
writing, requested the state attorney to proceed with the preparation
of the part of the record relating to the proceedings
before, and the
judgment of, Cheadle AJ.
[20]
On
3 December 2012, the state attorney commenced to have part of the
record prepared and informed the respondents’ attorney
accordingly. The transcript of the proceedings, before Rabkin-Naicker
J, were prepared and were received by the state attorney
on 25
January 2013, i.e., before the judgment of Rabkin-Naicker J which was
handed down on 20 March 2013. Leave to appeal against
that judgment
was granted on that same day.
[21]
It
is common cause that the entire record of appeal (both parts) was to
be delivered within 60 days of the order of Rabkin-Naicker
J granting
leave to appeal, i.e., by no later than 19 June 2013.
[22]
In
the meantime, the record of the proceedings before Cheadle AJ had not
been completely transcribed by Legal Transcriptions CC,
despite an
assurance from it that it had completed the transcription of that
record on 29 April 2013.
[23]
As
a result of the inability of Legal Transcriptions to complete the
record, another transcription service, Veritas Transcribers
(“
Veritas
”),
had to be engaged to prepare the record on an urgent basis. It was
anticipated that the record would be completed by 21
May 2013 and the
state attorney advised the respondents’ attorneys accordingly.
[24]
However,
it became apparent that the first transcription service had in fact
not transcribed any portion of the proceedings before
Cheadle AJ, but
had, instead, only transcribed the proceedings before Rabkin-Naicker
J. As a result, the disc containing the record
of the proceedings
before Cheadle AJ had to be requested so that it could be given to
Veritas to transcribe. The request was made
on 12 June 2013.
[25]
However,
because Veritas was too busy to do the transcription of the
proceedings before Cheadle AJ, the state attorney had to revert
to
the first transcription service, Legal Transcriptions CC and
requested that they do the transcription urgently. The state attorney
avers that the attorneys for the respondents were aware of these
challenges and developments.
[26]
It
took Legal Transcriptions CC one month to complete the transcription
of the proceedings before Cheadle AJ. This was then delivered
on 15
July 2013 to Veritas, which was preparing the appeal record. Veritas
could only complete the record on 29 July 2013. The
state attorney
served and filed the record that same day.
[27]
So,
instead of having filed the record, as per their agreement, by 19
June 2013, the record of appeal was only filed on 29 July
2013,
almost six weeks later.
[28]
The
state attorney attributes the delay, in filing the record timeously,
to the poor service it got from the first transcriber,
namely, Legal
Transcriptions CC, and to the time it took both transcription
services to complete their respective parts of the
record. She, in
turn, attributes the delay of the transcribers to their workload.
[29]
The
state attorney, in requesting condonation, highlighted that the
respondents, save for three or four who have retired, remained
in
gainful employment, that the appeal raises important points of law
that require determination by this Court; that the respondents
have
not been prejudiced and that, if it were to be found that the
respondents were indeed entitled to judgment of the scarce skills
allowance, they would not have been prejudiced in their claims,
because their claims bear interest at the statutorily prescribed
rate.
[30]
The
respondents cannot deny the importance of the issues raised, but
contend that the delays are lengthy and that they have not
been
explained adequately or at all, because the state attorney had
already been requested to commence with the preparation of
the record
of the proceedings before Cheadle AJ on 30 October 2012.
[31]
While
admitting that the transcription service transcribed the wrong part
of the record, the respondents submit that the transcribers
were only
instructed to transcribe the correct part of the record a week before
the record was due. The respondents also
alleged general
prejudice as a result of the delays and in particular averred that
some of the respondents have passed away in
the interim “
without
the benefit of their allowance due to them
”
in terms of the collective agreement as ordered by the Labour Court
(Cheadle AJ). It is furthermore submitted that the appellant
has
shown disdain for the rules of this Court and that the reinstatement
of the appeal was not in the interest of justice or the
proper
administration of justice.
[32]
It
is indeed so that condonation is not for the asking and that good
cause must be shown. Having considered,
inter
alia
,
the explanation for the delay (i.e. just more than a month), the
prospects of success, the importance of the issues, the necessity
of
finality and the interest of justice, I am of the view that the
appellant has shown good or sufficient cause for condonation.
The
late delivery of the record is therefore condoned and the appeal is
reinstated. Fairness and the law dictate that the parties
should bear
their own costs in respect of the condonation application.
[33]
I
am of the view that the opposition to the application was not
reasonable and therefore would not order the appellants to pay the
costs of the condonation application of the respondents.
Jurisdictional
issues
[34]
A
decision on the jurisdictional issues in this matter, as I will
explain in due course, may be dispositive of this appeal.
Accordingly,
I need to deal with them at the outset. We were
furnished with heads of argument and supplementary heads of argument
in respect
of the jurisdictional issues.
[35]
On
the eve of the day the matter was set down for argument before us, we
were provided with certain documents that were supposed
to be
included in the record. They include a record of proceedings in the
PH & WSBC; the dispute procedure of that Council
and other
correspondence.
[36]
The
documents related mainly to what preceded the application that was
brought in the Labour Court by the respondents and which
is the
subject of this appeal. It appears from those documents that on or
about 6 June 2006, the respondents had referred a dispute
to the PH &
WSBC and had requested conciliation, failing which, arbitration.
[37]
In
their documents in that forum, the respondents had described the
dispute as “
a
failure to implement the
[collective
agreement]” and in a short summary of the facts stated that the
Provincial Administration of the Western Cape
failed to pay the
non-pensionable retention allowance (i.e. scarce skills allowances)
for certain categories of health personnel.
[38]
The
conciliation proceedings under the auspices of the PH & WSBC were
scheduled for 13 November 2006. Most of the respondents
were
applicants in those proceedings and the appellant was a respondent in
those proceedings, where they made submissions.
[39]
Following
the submissions, the panellist in the conciliation at the PH &
WSBC held that on the facts before her, she “
had
no legal basis to conciliate the matter as applicants are
contractually employed by the University and not by the Department
of
Health
”.
The panellist (an arbitrator) then went on to make the following
ruling in her report which is dated 5 December 2006:
‘
1.
The Public Health and Welfare Sectoral Bargaining Council does not
have jurisdiction over the matter.
The
case is dismissed.’
[40]
Despite
that result, the respondents did not seek to review the ruling, but
instead, launched the proceedings that are the subject
of this appeal
in the Labour Court in Cape Town.
[41]
In
their statement of claim, the respondents (applicants in the court
a
quo
)
sought a declarator and payment of the scarce skills allowance (or
payment of that portion of the allowance that was (alleged
to be) due
to each of them respectively. In light of the referral to the
Bargaining Council and the manner in which the matter
was brought to
the Labour Court, we requested the parties to address this
Court on the following points:
a.
Whether
this was an appropriate case for the application of section 158(2)(b)
of the LRA and in particular, because it was known
by the parties at
the outset, before the dispute was referred to the Labour Court, or
before the hearing before Cheadle AJ, that
this was a dispute that
had to be referred to arbitration and that this did not only become
apparent after the dispute had been
referred to the Labour Court?;
b.
Whether
Cheadle AJ, sitting as arbitrator, assuming he could validly do so in
terms of section 158(2)(b) of the LRA, had the power
to proceed and
determine the dispute in the face of the ruling made by the panellist
of the PH & WSBC that the council did
not have jurisdiction in
the matter and that the case was dismissed, bearing in mind that in
terms of section 158(2)(b) of the
LRA, the judge sitting as
arbitrator, could only have made such order as the arbitrator would
have been entitled to make in the
circumstances?;
c.
Allied
to the question in the previous subparagraph, whether it was not
incumbent upon the respondents to have first set aside the
decision
of the panellist and whether the failure to do so did not present a
bar to the arbitration and by implication the continuation
of the
proceedings under section 158(2)(b) of the LRA?
d.
Whether,
in any event, this was not, as contemplated in section 62(3) or
62(3A) of the LRA, a case where a question had arisen whether
the
respondents were employed in a particular sector and whether the
collective agreement applied to them and to the appellant?
And if so,
whether Cheadle AJ should not, as contemplated in those subsections,
nevertheless, have adjourned the proceedings before
him and had
referred those questions to the PH & WSBC, alternatively, to the
Commission for Conciliation Mediation and Arbitration
(“
CCMA
”)
for determination.
[42]
I
shall now briefly in turn consider these questions and the parties’
submissions in respect of them. Overall, counsel for
the parties
seemingly made common cause arguments in support of the validity of,
or in justification of the proceedings before
Cheadle AJ and
subsequently, before Rabkin-Naicker J. Both parties were adamant that
whatever the outcome on the jurisdictional
aspects, this Court
should, nevertheless, decide the merits of the appeal.
[43]
In
brief, in respect of the first question, the appellant submitted that
the parties to a collective agreement are (a) registered
trade
union(s), (an) employer(s) or (an) employer’s organisation(s)
and not employees. The respondents, being mere employees,
were not
parties to the collective agreement and therefore could not refer
their dispute in terms of section 24 of the LRA to the
PH &
WSBC
[3]
for either conciliation
or arbitration.
[44]
According
to the appellant, the panellist’s approach, to first determine
the existence of an employer-employee relationship
before
conciliating the dispute, was correct
[4]
and her determination that the PH & WSBC did not have
jurisdiction, because the respondents were not employed by the
Department
of Health but by the universities, was reviewable.
[5]
[45]
It
was further submitted that the fact that the parties consented in
terms of section 158(2)(b) of the LRA to the continuation of
the
proceedings in the Labour Court before Cheadle AJ, did not extend the
scope of the powers which the judge in the Labour Court
could have
exercised under that section. Accordingly, Cheadle AJ could only
exercise as arbitrator those powers which a Bargaining
Council
Commissioner could have exercised in respect of a dispute which was
validly referred to the Bargaining Council.
[46]
It
was further submitted that since the dispute was
res
judicata
after the Commissioner’s determination,
[6]
it was not open to the arbitrator to revisit the issue unless the
Commissioner’s determination was reviewed and set aside.
[7]
[47]
Accordingly,
so it was argued, the panellist’s determination of no
jurisdiction stood unless and until it was reviewed and
set aside.
Absent such review, the arbitrator, or in this case, the Labour Court
judge, purporting to act in terms of section 158(2)(b)
of the LRA,
could not revisit the jurisdictional issue or assume jurisdiction.
[48]
It
was argued further that because section 24(1) of the LRA, read with
clause 3.1(c) of Schedule 2 of the Constitution of the PH
& WSBC,
required disputing parties to conciliate before arbitrating the
dispute and there had been no conciliation in this
case, the
proceedings before Cheadle AJ (i.e. in terms of section 158(2)(b) of
the LRA) were rendered incompetent.
[49]
Notwithstanding,
so it was argued on behalf of the appellant, this Court should deal
with the merits, because there are other grounds
upon which the
Labour Court could have dealt with the matter “
which
render it competent for the parties to bring the matter before this
Court
”.
[50]
The
argument on behalf of the appellant then goes on to suggest the other
grounds. The main contention being that section 77(3)
of the BCEA
gives the Labour Court the requisite jurisdiction to “
hear
and determine any matter concerning a contract of employment …
”;
and that section 77A of the BCEA vests the Labour Court with the
power to make any “
appropriate
order
”,
including the power to make “
any
determination that it considers reasonable on any matter concerning a
contract of employment in terms of section 77(3)
”.
[51]
The
appellant’s counsel went on to submit that the appellant does
not dispute that the matter was properly brought before
the Labour
Court in terms of section 77(3) and 77A(e) of the BCEA and that the
Labour Court had the requisite jurisdiction to determine
the merits.
A point is made with reference to what was decided in
Makhanya
v University of Zululand,
[8]
namely, that if a claim as formulated by the claimant is enforceable
in a particular court then the claimant is entitled to bring
it
before that court.
[52]
It
was further contended on behalf of the appellant, seemingly in the
alternative, that if this Court finds that Cheadle AJ incorrectly
dealt with the matter under section 152(2)(b) of the LRA, then this
Court, should nevertheless deal with the issue of whether the
respondents fell within the scope of the Bargaining Council. They
rely in this regard on what this Court held in
NUMSA
on
behalf of
Sinuko
Powertech Transformers (DPM) and Others
[9]
with regard to finalising matters on appeal before it, instead of
remitting them back to the Labour Court.
[53]
The
respondents made common cause with the appellant in respect of the
jurisdictional points and submitted that the respondents’
claims as formulated gave the Labour Court jurisdiction by virtue of
section 77(3) read with section 77A of the BCEA.
[54]
The
respondents further submitted that the Labour Court also had
jurisdiction because of section 158(2)(b) of the LRA and “
even
if its powers in that regard were those of an arbitrator, it still
sat as the Labour Court exercising these powers
”.
[55]
Relying
on the decisions in
Makhanya
and
SA
Maritime Safety Authority v McKenzie,
[10]
the
respondents submitted that their pleaded claim was one under the BCEA
and that determined whether the Labour Court had jurisdiction
in the
matter. This despite what appears on the record in that regard,
[11]
but submitted further that insofar as section 24(5) of the LRA
applied, the parties had agreed before the hearing that “
the
court a quo
determined
the matter sitting as arbitrator
”
and furthermore “
that
in doing so the parties … clothed the court with jurisdiction
insofar as this was necessary to interpret the collective
agreement
in determining the contractual claim
.
Section
158(2)(b) of the LRA permitted them to do so
”.
[56]
According
to the respondents’ argument, the Labour Court was “
called
upon to determine under either section 77(3)
[of
the BCEA]
or
section 158(2)(b) of the LRA or under both – alternatively, it
is submitted that this court has ‘the jurisdiction
and power to
deal with the issues presented to it in this appeal’ for the
reasons given by the appellant in its heads of
argument
”.
As stated earlier, the appellant had submitted that even if it were
to be found that Cheadle AJ incorrectly dealt with
the matter under
section 158(2)(b), this Court should nevertheless deal with the issue
whether the respondents fell outside the
scope of the Bargaining
Council and that this Court should do so on the same basis as
discussed in the
Sinuko
matter.
[57]
It
was further submitted on behalf of the respondents that the matter
“
did
not go to the arbitration route (even though the respondents
attempted to do so at first)
because
a conciliator of the Bargaining Council ruled at the conciliation
stage already that the Bargaining Council had no jurisdiction
over
the parties with the result that the respondents approached the
Labour Court on the above basis
”
.
The
respondents point out further that the relevant Bargaining Council
has been invited to join in these proceedings before the
Labour Court
but had declined to do so and that the relevant Minister was joined
as a party (i.e. as the fifth respondent before
the court
a
quo)
at the instance of the appellant, but that the Minister had elected
to abide the outcome of the proceedings in the court
a
quo
.
[58]
It
was further submitted in supplementary heads of argument filed on
behalf of the respondents that the short answer to the questions
posed was the following:
a.
Cheadle
AJ had jurisdiction to hear the matter “
by
virtue of section 77(3) of the BCEA and/or section 158(2)(b) of the
LRA
;
b.
There
was an attempt by the current respondents, save for one who was
joined later as a party by agreement between the parties,
to refer
the matter to conciliation;
c.
There
was no need to refer the contractual dispute to conciliation;
d.
The
appellant’s objection to the Bargaining Council’s
jurisdiction and the Bargaining Council’s “
incorrect
jurisdictional
determination
amounted to a
finding that the parties could not resolve the dispute before the
Bargaining Council
”
.
(Emphasis by respondents’ counsel).
[59]
In
respect of the point that Cheadle AJ had jurisdiction to hear the
matter under section 77(3) of the BCEA and section 158(2)(b)
of the
LRA, the respondents in their supplementary heads, elaborated on this
point and, in support of it, made the following submissions.
That it
was expressly pleaded by the respondents that the appellant had
refused to acknowledge, accept or admit that the respondents
were
entitled to or qualified for the scarce skills allowance and for
payment of amounts due in respect of such allowance as and
when they
fell due “
in
terms of the scarce skills agreement read with the UCT agreement
and/or the Stellenbosch agreement as the case may be
”;
furthermore, that the appellant refused to pay those amounts; that,
consequently, the appellant was “
in
breach of its contractual obligations vis-à-vis each of the
respondents
”;
further, that the dispute was referred to conciliation in accordance
with clause 3.5 of Part C of Schedule 2 of the Constitution
of the PH
& WSBC on 13 June 2006; that the PH & WSBC, however, ruled
that there was no basis to conciliate the matter because
the
respondents were not contractually employed by the Department of
Health, but by the university; that it was alleged that the
claim was
one concerning “
the
applicants’ contracts of employment
”;
that in terms of section 77(3) of the BCEA, the Labour Court had
concurrent jurisdiction with civil courts “
to
determine any matter concerning a contract of employment
”;
that insofar as section 24(5) of the LRA applied, which was not
conceded by the respondents and insofar as it required
the dispute to
be referred to arbitration, the respondents had sought the
appellant’s consent that the Labour Court determine
the matter
sitting as arbitrator in terms of section 158(2)(b) of the LRA;
furthermore, that “
this
was done because the dispute pertaining to the parties’
contracts of employment also required the interpretation of a
collective agreement which was incorporated in their contracts of
employment
”.
Lastly, of significance, it was further submitted that the parties’
consent “
clothed
the court with jurisdiction insofar as this was necessary to
interpret the collective agreement in determining the contractual
claim. Section 158(2)(b) of the LRA permitted them to do so
”.
I should just mention that no authority was cited for this
proposition.
Discussion
[60]
Due
to its length, I shall not quote the entire statement of claim here.
It suffices to state that the respondents’ claim
is essentially
based on the collective agreement. Even though it is stated in
paragraph 94 of the statement of claim that “
the
present claim concerning the applicants’ contracts of
employment in terms of
section 77(3)
of the
Basic Conditions of
Employment Act this
Honourable Court has concurrent jurisdiction with
the civil courts to hear and determine any matter concerning their
contract of
employment
”
and even though it is further alleged in paragraphs 95 and 96 as
follows:
‘
95
Insofar as
section 24(5)
of the LRA
applies (which is not conceded) and insofar as it requires the
dispute to be referred to arbitration (which is also
not conceded),
the applicants sought the consent of the parties (in particular of
the first respondent) on 30 September 2008 that
this Honourable Court
determine the matter sitting as arbitrator. A copy of this request is
annexed marked annexure ‘SOC’.
96 Insofar as the
first respondent does not so consent and insofar as it is required
that the matter be referred to arbitration,
the applicants
respectively pray that this Honourable Court stays these proceedings
and refers the dispute to arbitration.’
[61]
In
their claim under the heading, “
The
legal issues that arise from these facts
”,
the respondents (who are referred to as the applicants in the
statement of claim) alleged that the issues were as follows:
‘
97.
Whether the applicants are entitled to the benefits provided for in
the scarce skills agreement read with the UCT and/or the
Stellenbosch
agreements.
98.
Whether
the first respondent is obliged to discharge its obligations, arising
from the scarce skills agreement read with the UCT
agreement and/or
the Stellenbosch agreements, as the case may be, to the respective
applicants.
99. Whether the
first respondent is obliged to pay the applicants the equivalent of
15% of their annual basic salary, payable monthly
on a pro rata
basis, with effect from 1 July 2003, alternatively, as from the date
of their employment, whichever was the later,
and for as long as the
applicants have remained in the employ of the first respondent.’
[62]
The
relief sought in the statement of claim is, firstly, a declaratory
order that the respondents (i.e. the applicants in the court
a
quo
)
“
qualify
for payment by the appellant
”
of the scarce skills allowance as determined by the scarce skills
allowance agreement read with the UCT agreement and/or
the
Stellenbosch agreement, as well as consequential relief, namely
payment of the allowance in respect of each of them in a specific
amount, plus interest, both past and future as well as costs.
[63]
In
response to paragraph 95 of the respondents’ statement of
claim, the appellant only admitted that it was a dispute that
had to
be referred to arbitration and denied the remainder of the
allegations in that paragraph. With regard to the allegations
in the
subsequent paragraphs of the respondents’ statement of claim,
the appellant denied that the respondents were entitled
to any of the
relief that they claimed. The appellant denied that it was “
a
health employer
”
as envisaged in the scarce skills agreements in particular in
relation to the respondents.
[64]
More
importantly, the appellant in its response to the respondents’
statement of claim, raised three special pleas. The first
being that
the Labour Court lacked jurisdiction to entertain the respondents’
claim, because the “
claims
flow from a dispute about the interpretation or application of a
collective agreement
”
which, in terms of
section 24(5)
of the LRA, has to be resolved
through arbitration under the auspices of the CCMA and secondly, that
the claims of the respondents
had prescribed in terms of
section 12
read with
section 11(d)
of the
Prescription Act, No 68 of 1969
and
thirdly, raised a special plea of non-joinder, more particularly
alleging that the Minister of the Department of Public Service
Administration was a necessary party and that the respondents’
failure to join the Minister precluded them from being granted
the
relief which they sought.
[65]
On
5 March 2010 at the hearing in the Labour Court before Cheadle AJ,
counsel for the respondents (i.e. the applicants in that court)
informed the court with regard to the special plea on jurisdiction
that the appellant (i.e. the respondent at that hearing) now
consented to the Labour Court hearing the matter in terms of
section
158(2)(b)
of the LRA,
[12]
alternatively, had consented to the Labour Court’s
jurisdiction. Counsel for the appellant confirmed the agreement on
the
procedural issues.
[66]
Section
158(2)(a)
of the LRA provides that if at any stage after a dispute
has been referred to the Labour Court it becomes apparent that the
dispute
ought to have been referred to arbitration, the court may,
with the consent of the parties and if it is inclined to do so,
continue
with the proceedings with the court sitting as arbitrator in
which case, the court may only make any order that a commissioner or
arbitrator would have been entitled to make.
[67]
In
his judgment handed down on 4 November 2010, Cheadle AJ does not
state in what capacity he sat in the proceedings, but it is
clear
from the judgment that his determination was based on an
interpretation and application of the collective agreement. Cheadle
AJ formalised the critical issue for determination to have been
whether the respondents “
who
were employees of the Western Cape Provincial Government
”
and “
as
such fell within the registered scope of the Public Health Bargaining
Council and entitled to the allowances under the scarce
skills
agreement
”.
Cheadle AJ concluded that “
as
far as the literal wording of the different definitions of ‘employee’
in the LRA and the PSA and the registered scope
of the PSCPC and the
Public Health Bargaining Council and the scope of the applicability
of the scarce skills collective agreement
is concerned the
[respondents]
are
employees in the public service and entitled to the allowances
contained in the agreement and the province is obliged under
that
agreement to ensure that the applicants receive those allowances
”.
[68]
Having
considered further that a more restrictive interpretation of the
different definitions and scope of the collective agreement
was not
appropriate, Cheadle AJ went on to conclude that the respondents were
entitled to the scarce skills allowance and that
the Provincial
Government was obliged to either pay the allowance to each of the
respondents directly or to ensure that it was
paid to them by the
universities. The issue of prescription was to be dealt with
subsequently and was indeed dealt with before
Rabkin-Naicker J at a
subsequent hearing.
[69]
However,
before Rabkin-Naicker J, counsel for the respondents (i.e. applicants
in that hearing) again made it clear that the parties
had agreed
that, even though the Bargaining Council had jurisdiction in terms of
section 24(1)
of the LRA in respect of a dispute about the
interpretation and application of a collective agreement (i.e. the
scarce skills agreement),
the court could sit as arbitrator as
contemplated in
section 158(2)(b)
of the LRA if it was amenable to do
so.
[70]
Counsel
explained to Rabkin-Naicker J that Cheadle AJ had assumed
jurisdiction in terms of
section 158(2)(b)
of the LRA and that before
Rabkin-Naicker J it was a continuation of those proceedings; that
Cheadle AJ simply decided what the
collective agreement provided for
and that the “
exercise
is one which would have been done by the arbitrator in the Bargaining
Council had he accepted he had jurisdiction. He said
he did not have
jurisdiction at the conciliation stage, but after conciliation it was
then referred to the Labour Court in this
manner, and the
[appellant]
agreed
that it could continue in this manner
”.
Rabkin-Naicker J, thus understood that she too was to continue
sitting as arbitrator in the matter in terms of the provisions
of
section 158(2)(b)
since the proceedings commenced before Cheadle AJ
on the same basis.
[71]
Section
157(5)
of the LRA provides:
‘
Except
as provided in
section 158(2)
, the Labour Court does not have
jurisdiction to adjudicate an unresolved dispute if this Act requires
the dispute to be resolved
through arbitration.’
[72]
I
have quoted section 158(2) earlier. The specific section relied upon
by the respondents is section 158(2)(b) and they seem to
place much
emphasis on the fact that the parties had consented to the Labour
Court (i.e. Cheadle AJ) acting as arbitrator as contemplated
in that
section.
[73]
The
consent of the parties cannot clothe the Labour Court with
jurisdiction it does not have. The wording of section 158(2) is plain
and unambiguous. It only applies in matters before the Labour Court
“
if
at any stage
after the
dispute has been referred to the Labour Court, it becomes apparent
that the dispute ought to have been referred to arbitration
”
(Emphasis
added).
[74]
This
was clearly not a case where it only became apparent after the
referral to the Labour Court that the matter had to be referred
to
arbitration. This was a known fact before the referral to the Labour
Court. The respondents had started off by referring the
matter for
conciliation failing which arbitration.
[75]
In
the circumstances, the Labour Court (Cheadle AJ) could not have
properly exercised the discretion, which is clearly circumscribed
in
section 158(2) “
to
continue with the proceedings with the court sitting as arbitrator
”.
The court was requested at the outset to sit as arbitrator. There was
no “
continuation
”
of the proceedings in the sense contemplated in that section, but a
request at the outset that proceedings be conducted
with the court
sitting as arbitrator.
[76]
It
is clear from the section that the parties’ consent for the
court to sit as arbitrator had to be strictly within the
circumstances
prescribed and contemplated in section 158(2)(b). The
section was not intended to give parties a choice at the outset, to
avoid
the forums or structures where arbitrations are normally to be
conducted in terms of the LRA, in favour of opting for the Labour
Court to sit as arbitrator.
[77]
It
is not the Labour Court’s normal function to sit as arbitrator.
Section 158(2)(b) is intended to cover exceptional circumstances
where it was not apparent before the matter that it had to be
referred to arbitration.
[78]
The
respondents deliberately abandoned the referral to arbitration in the
PH & WSBC and chose, of their own accord, for the
Labour Court to
sit as an arbitrator, instead. The LRA does not allow for that. This
was clearly an instance of forum shopping,
which is completely
undesirable.
[13]
[79]
In
Gcaba
v Minister of Safety and Security and Others,
Van
der Westhuizen J warns that “
one
may especially not want litigants to ‘relegate’ the LRA
dispensation because they do not ‘trust’ its
structures
to do justice as much as the high court could be trusted
”.
[14]
Similarly, one does not want litigants to relegate certain provisions
of the LRA that provide for certain procedures in certain
forums or
structures created by or in terms of the LRA – because they do
not trust those structures or forums to do justice,
and which they
perceive the Labour Court (sitting as arbitrator) could do. Those
structures or forums were especially created to
deal with such
arbitrations.
[80]
On
this point then, in my view, the Labour Court, in the circumstances
of this case, was not empowered to sit as arbitrator as contemplated
in section 158(2)(b) of the LRA. Another aspect of section 158(2)(b)
of the LRA would, in any event, not have been complied with,
even if
the Labour Court had validly decided to sit as arbitrator – it
could only have made the order which the Commissioner
or arbitrator,
to which the matter otherwise had to be referred – would have
been entitled (i.e. empowered) to make. If the
matter had been
referred to arbitration in circumstances where the order made by the
panellist of the PH & WSBC or Bargaining
Council, had not been
set aside, the arbitrator would not have been empowered to proceed
with the arbitration and make an order
on its merits, until the order
of the panellist had been set aside. The Labour Court by the same
token, if it had properly sat
as arbitrator, could not do anything
more than what that arbitrator in the Bargaining Council could have
done in the circumstances.
[81]
The
next point to consider is whether the Labour Court had jurisdiction
in terms of section 77 of the BCEA. In my view, it clearly
did not.
[82]
It
is not disputed that the scarce skills agreement is a collective
agreement. Furthermore, it is not and cannot be contested that
a
dispute about the interpretation or application of a collective
agreement must be resolved by conciliation failing which arbitration,
under the auspices of the CCMA or the Bargaining Council having
jurisdiction. Section 24 of the LRA specifically provides
accordingly.
[83]
The
respondents have been equivocal and ambivalent about the basis upon
which the Labour Court could have had jurisdiction. In argument
before us they straddled sections 158(2)(b) of the LRA and section
77(3), as an alternative basis upon which the Labour Court could
have
exercised jurisdiction. I have already dealt with the former basis.
In respect of the latter, the argument is that the respondents’
claim was formulated as a breach of the individual respondents’
employment contracts and therefore the court had jurisdiction
in
terms of section 77(3) of the BCEA.
[84]
Section
77(3) of the BCEA provides:
‘
The
Labour Court has concurrent jurisdiction with the civil courts to
hear and determine any matter concerning a contract of employment,
irrespective of whether any basic condition of employment constitutes
a term of that contract.
’
[85]
The
section mainly confirms the jurisdiction of the Labour Court
vis-à-vis
other civil courts to determine any matter concerning a contract of
employment. However, the section does not and does not purport,
to
give to the Labour Court jurisdiction or power that it does not have
in terms of the LRA.
[15]
[86]
In
terms of section 77A of the BCEA, the Labour Court has not been given
powers in relation to the interpretation and application
of
collective agreements.
[16]
[87]
If
the real dispute on the pleadings is about the interpretation and
application of a collective agreement, the Labour Court had
no
jurisdiction, in the circumstances, to resolve it. Section 24 of the
LRA is applicable in those circumstances. This Court has
held
accordingly in
Ekurhuleni.
[17]
[88]
The
respondents have argued that the case they made out on the pleadings
was about the breach of the collective agreement, i.e.,
the scarce
skill allowance agreement read with their contracts of employment.
This, in my view, does in any event not clothe the
Labour Court with
jurisdiction.
[89]
It
is now trite that the jurisdiction of the Labour Court to resolve a
dispute is determined from the pleadings.
[18]
But the pleadings cannot be taken at face value. They need to be
properly construed to ascertain what the legal basis of the
applicant’s
claim is.
[19]
If the claim properly interpreted is not about a breach of the
individual contracts of employment, but about the interpretation
and
application of the collective agreement then the Labour Court has got
no jurisdiction and cannot derive any jurisdiction from
section 77(3)
of the BCEA concerning the interpretation and application of that
agreement.
[90]
In
this matter, the pleadings properly construed reveal that the legal
basis of the claim of the respondents is indeed about the
interpretation and application of the collective agreement as I
pointed earlier, when discussing the pleadings.
[91]
There
is absolutely nothing in the UCT and/or Stellenbosch agreements that
deal with the scarce skills allowance. Those are in any
event not the
individual contracts of employment that are envisaged in section
77(3) of the BCEA, but are the agreements entered
into between the
Provincial Administration (now represented by the appellant) and the
two universities. The universities themselves
are not parties to the
litigation. The individual contracts of employment can only be
amended as envisaged in terms of section
23 of the LRA if the
collective agreement, properly construed, applies to the respondents.
[92]
The
real dispute between the appellant and the respondents is about the
interpretation and application of the collective agreement.
In
particular, the respondents contend that they are covered by the
terms of the collective agreement and the appellant denies
it. The
only manner of resolving that dispute is to interpret the collective
agreement itself. That this is so is also apparent
from Cheadle AJ’s
judgment on the merits. It was mainly, or fundamentally, about the
interpretation of the collective agreement.
[93]
In
Ekurhuleni,
this Court has held that the Labour Court is not empowered under the
LRA or the BCEA to interpret and decide on the application
of a
collective agreement, particularly in circumstances where the
interpretation (and the issue of application) is pivotal and
fundamental (as in this case) and not merely incidental, to the
resolution of the real dispute between the parties.
[20]
[94]
These
conclusions in respect of the respondents’ (and to some extent
the appellant’s) reliance on section 158(2)(b)
of the LRA and
section 77(3) of the BCEA, is decisive of the appeal. The Labour
Court (Cheadle AJ and Rabkin-Naicker J) had no
jurisdiction in this
matter.
[95]
In
the light of the conclusion, it is not necessary to deal with the
other points in respect of which the parties were to address
this
Court, namely, the applicability of sections 62(3) and 62(3A) of the
LRA. I, nevertheless consider that those sections may
have
constituted obstacles to the Labour Court whether properly sitting as
such, or as arbitrator.
[96]
The
parties have submitted that even if we are not persuaded by their
submissions in respect of the jurisdictional issues, this
Court,
should, nevertheless, deal with the matter in terms of the latter
part of section 174(b) of the LRA and as discussed in
Sinuko
.
[97]
The
respondents in argument on this point went as far as submitting that
this Court is “
legally
competent to deal with this matter
”
notwithstanding, its conclusions on the jurisdictional issues. I
disagree.
[98]
The
latter part of section 174(b) of the LRA was never intended to give
this Court jurisdiction to deal with issues in circumstances
where it
held that the Labour Court had no jurisdiction to deal with such
issues. The power in that section is also discretionary.
This is a
wholly inappropriate case for the exercise of that power.
[99]
Since
the question of jurisdiction is decisive of the appeal, we need not
and clearly should not consider and comment upon the Labour
Court’s
decision on the merits of the dispute. It is for the forum and/or
structures with jurisdiction to decide on the interpretation
and
application of the scarce skills agreement (i.e. the collective
agreement).
[21]
[100]
There
is no reason why, given the circumstances, particularly, where the
appellant appears to have made common cause with the respondents
in
respect of the jurisdictional points which were decisive of this
appeal, that each party should not bear its own costs of the
appeal.
[101]
In
the result:
101.1
The appeal is upheld (on the basis that the Labour Court had no
jurisdiction
in this matter).
101.2
The orders of the court
a quo
(Cheadle AJ and Rabkin-Naicker
J) are set aside and replaced with the following order:
“
No
order is made in respect of the applicants’ claim and no costs
order is made.
”
P Coppin
Judge
of the Labour Appeal Court
Tlaletsi
DJP and Ndlovu JA concurred in the judgment of Coppin JA
APPEARANCES:
FOR THE
APPELLANT: A C Oosthuizen SC with him Brenton Joseph
Instructed by the
State Attorney, Cape Town
FOR THE
RESPONDENTS: R G L Stelzner SC
Instructed
by Macrobert Inc.
[1]
Concerning
the PH & WSBC - the powers of a Bargaining Council in relation
to its registered scope, in terms of section 28
of the Labour
Relations Act 66 of 1995 (”the LRA”), includes the power
to conclude collective agreements, to enforce
them, to prevent and
resolve labour disputes and to establish and administer a fund to be
used for resolving disputes. In terms
of section 213 of the LRA the
term “registered scope” is defined as meaning: “
(a)
in the case of the Public Service Co-ordinating Bargaining Council,
the public service as a whole, subject to section 36;
(b
)
in the case of bargaining councils established for sectors in the
public service, the sector designated by the Public Service
Co-ordinating Bargaining Council in terms of section 37(1
);
(c) in the case of any other council, the sector and area in respect
of which it is registered in terms of this Act.
”
(Emphasis
added).
In
terms of section 37(1) of the LRA the Public Service Co-ordinating
Bargaining Council may, in terms of its Constitution and
by
resolution,
inter alia
, designate a sector of the public
service for the establishment of a bargaining council. In terms of
section 37(2) such a council
must be established in terms of the
Constitution of the Public Service Co-ordinating Bargaining Council
and it has exclusive
jurisdiction in respect of matters that are
specific to that sector and in respect of which the State, as
employer in that sector,
has the requisite authority to conclude
collective agreements and resolve labour disputes. It is common
cause that the PH &
WSBC is such a bargaining council,
designated for the public health and welfare sector.
[2]
See
and compare
Motloi
v SA Local Government Association
[2006]
3 BLLR 264
(LAC);
Melane
v Santam Insurance Co Ltd
1962 (4) SA 531
(A) at 532C-E;
Queenstown
Fuel Distributors CC v Labuschagne NO and Others
2000 (21) ILJ 166 (LAC) at 53H-J;
NEHAWU
on behalf of Mofokeng and Others v Charlotte Theron Children’s
Home
2004 (25) ILJ 2195 (LAC); also referred to in
Keevy
NO v National Union of Metal Workers of SA and Others
2010 (31) ILJ 354 (LAC) para [20].
[3]
In
support of this argument, the appellant’s counsel referred to
the decision in
Arends
and Others v SA Local Government Bargaining Council and Others
2013 (34) ILJ 2560 (LC) paras [13]-[17];
NUMSA
v CCMA and Others
2000 (21) ILJ 1634 (LC);
Etschmaier
v CCMA and Others
1999 (20) ILJ 144 (LC);
Sapekoe
Tea Estates (Pty) Ltd v Maake NO and Others
2002 (23) ILJ 1603 (LC) and
Virgin
Active SA (Pty) Ltd v Mathole NO and Others
2002 (23) ILJ 948 (LC).
[4]
Reference
was made to
Shell
SA Energy (Pty) Ltd v National Bargaining Council for the Chemical
Industry and Others
2013
(23) ILJ 1419 (LC) para [13].
[5]
See
Eoh
Abantu (Pty) Ltd v CCMA and Another
2008
(29) ILJ 2589 (LC) para [90].
[6]
Reference
in this regard was made to the decision in
Johnson
v CCMA and Others
2005 (26) ILJ 1332 (LC) para [11].
[7]
In
this regard reference was made to the decision in
Eoh
Abantu (Pty) Ltd v CCMA and Another (supra)
particularly paras [15], [20], and [23]. It was submitted that even
though that decision dealt with the dispute referred to the
CCMA the
same position applied to proceedings before a bargaining council:
see
City
of Johannesburg Metropolitan Municipality v SA Municipal Workers
Union and Others
2008 (29) ILJ 650 (LC).
[8]
2010
(1) SA 62
(SCA) para [34].
[9]
[2014]
2 BLLR 133 (LAC).
[10]
2010
(3) SA 601
(SCA); (2010) 31 ILJ 529 (SCA).
[11]
The
respondents in their supplementary heads of argument made a point of
stating that they do not concede that section 24(5) of
the LRA
applies in this case.
[12]
The
record refers to section 158(2)(a) but counsel clearly intended to
refer to section 158(2)(b) of the LRA.
[13]
See
Gcaba
v Minister of Safety and Security and Others
[2009] 12 BLLR 1145
(CC) at 1161E-F, para [57], also referring to
what was stated in
Chirwa
v Transnet Limited and Others
2008
(3) SA BCLR 251 (CC)
[2007] ZACC 23
; ;
2008 (4) SA 367
(CC) paras [66] and [124].
[14]
Supra
at 1161 para [57].
[15]
See
Ekurhuleni
Metropolitan Municipality v South African Municipal Workers’
Union
[2015]
1 BLLR 34
(LAC); (2015) 36 ILJ 624 (LAC) para [30].
[16]
See
Ekurhuleni
para
[30].
[17]
(
Supra
)
para [31].
[18]
See
Gcaba
v Minister for Safety and Security and Others
(
supra
)
at 1167 para [75];
Ekurhuleni
(supra)
para [ 21 ].
[19]
See
the cases referred to in the previous footnote.
[20]
See
Ekurhuleni
para [30].
[21]
See
Ekurhuleni
para [30].