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[2017] ZALAC 8
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Fleet Africa (Pty) Ltd v Nijs (JA9/15) [2017] ZALAC 8; (2017) 38 ILJ 1059 (LAC); [2017] 5 BLLR 450 (LAC) (20 January 2017)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA,
JOHANNESBURG
Reportable
Case no. JA 9/15
In the matter
between:
FLEET
AFRICA (PTY)
LTD
Appellant
(First Respondent
in the Court
a
quo
)
and
ERICA
NIJS
Respondent
(Second Respondent
in the Court
a
quo
)
Delivered
:
20 January 2017
Summary
:
Appeal – Interpretation and application of sections 158(1A) and
142A(1), in relation to sect 158(1)(c),
of the LRA. – Material
distinction between sections 142A(1) and 158(1A) – Issue:
Whether settlement agreement made
Order of Labour Court (LC) in terms
of sect 158(1)(c) complied with the 2002 amendment of that section.
No misdirection on the
LC in granting order ito sect 158(1)(c).
Appeal dismissed with costs.
Coram: Waglay JP, Ndlovu JA
et
Murphy AJA
JUDGMENT
NDLOVU JA
Introduction
[1]
This appeal is against the judgment of the Labour Court (Rawat AJ)
handed down on 30 May 2014, in terms of which the Labour
Court
declared that the settlement agreement concluded between the
appellant, Fleet Africa (Pty) (Ltd), and the respondent, Ms
Erica
Nijs, was valid and legally binding, and further ordered that the
settlement agreement concerned be made an order of the
Labour Court
in terms of Section (158)(1)(c) of the Labour Relations Act
[1]
(the LRA). Leave to appeal was granted by this Court on petition.
[2]
The issues in the Labour Court and on appeal can be summarised as
follows:
1.
whether the Labour Court had jurisdiction to entertain the
respondent’s
complaint against the appellant;
2.
whether the appellant was entitled to enter into the settlement
agreement with
the respondent on 21 May 2012;
3.
whether the settlement agreement concluded between the appellant and
the respondent
on 21 May 2012 complied with the statutory
requirements of the LRA and, therefore, valid and binding on the
parties; and
4.
whether the Labour Court erred in making the settlement agreement an
order of
the Court, in terms of section 158(1)(c) of the LRA.
[3]
The respondent was previously employed by the City of Johannesburg
(the City) from 6 September 1993 until 31 March 2001. On
1 April
2001, the respondent was transferred from the City to a corporate
entity known as Super Fleet Power Plus Performance (SFPPP),
in terms
of section 197 of the LRA. The SFPPP was later taken over by the
appellant, presumably again in terms of section 197.
The respondent
remained employed by the appellant until 30 June 2012 when her
services with the appellant terminated.
[4]
Sometime prior to the respondent’s termination of employment
with the appellant, the City had an outsourcing agreement
with the
appellant, in terms of which the appellant rendered fleet management
services for the City (in respect of the City’s
vehicles) on an
agreed fee structure. The duties performed by the respondent
allegedly formed part of the contractual obligations
in terms of the
contract between the City and the appellant.
[5]
When the City terminated its contract with the appellant on 29
February 2012, a dispute arose between the City and the appellant
on
the issue whether those employees of the appellant, who had mainly
performed their duties in terms of the terminated contract,
should be
transferred to the City in terms of section 197. The respondent was
allegedly one of such employees. The dispute was
initially brought to
the Labour Court for adjudication but was subsequently referred to
private arbitration before Advocate Franklin
SC. Later it was
referred to the arbitration appeal panel. I will return to this
aspect in due course.
[6]
In or about the same period the appellant lost another similar
contract which it had with the Eastern Cape Provincial Government.
Consequently, a need to retrench became a reality for the appellant.
Hence, whilst the outcome of the arbitration appeal process
was
awaited, the appellant commenced section 189 consultation process
with the respondent and other affected workers. The two processes
ran
parallel to each other, so to speak.
[7]
On 21 May 2012, pursuant to their section 189 consultation, the
appellant and the respondent concluded a settlement agreement,
in the
form of a voluntary retrenchment package. To the extent relevant, the
material terms of the settlement agreement are the
following:
1.
‘
The
employee [the respondent] has been granted voluntary retrenchment in
terms of the voluntary retrenchment policy applicable at
Fleet Africa
[the appellant] in respect of the restructure of the business.
Accordingly, the parties to this agreement have agreed
to the
termination of the Employee’s employment by way of voluntary
retrenchment.
2.
The
parties agree that in
full
and final settlement
of any claims of whatsoever nature arising (including but not limited
to any outstanding salary obligations, any accumulated leave
pay, any
severance benefit and any notice obligations,
any
entitlement to transfer in terms of section 197 of the Act (to the
City of Johannesburg or elsewhere)
and
any claims for unfair dismissal whether automatic or not that the
Employee may have against Fleet Africa to the following:
2.1
The
Employee’s last working day will be (fill in details); [sic]
2.2
the
Employee will be paid the gross sum of R215,145.49 as set out in the
breakdown of amounts due attached hereto, less all income
tax
deductions, and other deductions required in terms of a directive
obtained for this purpose;
2.3
The
Employee will be entitled to be paid the credit due to the Employee
from any retirement funds maintained by Fleet Africa on
the
Employee’s behalf, which payment shall be made in accordance
with the rules of any such fund.
2.4
The
Employee shall keep in strict confidence any information or knowledge
that the Employee has acquired while in the employ of
Fleet Africa
about the business of Fleet Africa, or any related entity, person,
director, employee or the like, and shall not disclose
any such
information to any third party.
2.5
The
Employee will continue to be bound by any restraint, confidentiality
or other like agreement contained in his current employment
contract.
2.6
The
Employee specifically waives his / her right to be ring-fenced and
considered as included as an employee of the business that
provided
the fleet service to the City of Johannesburg in terms of the
outsource agreement A114 at any time but more specifically
at 29
February 2012.
2.7
The
Employee agrees that the extent that it is permissible and required
that this agreement is made in compliance with sections
197(2) and
197(6) of the Act and the circumstances of such agreement has [sic]
been explained to the employee and the employee
has been given the
opportunity to take independent legal advice in respect of the
consequence[s] of this agreement.
2.8
The
Employee shall keep the concluding of this agreement and terms of
this agreement confidential.
3
…
.
4
The
Employee acknowledges that he / she knows and understands the content
of this agreement and the effect of this agreement to
expunge any
claims that he / she may have against Fleet Africa as defined herein
and that he/she voluntarily bind himself/ herself
to the agreement in
exchange for the benefits provided by this agreement.
5
Subject
to clause 2.5 of this agreement supersedes, overrides and replaces
any other agreements and/or any other terms and conditions
of
employment, whether written, implied or oral, that may exist between
the Employee and Fleet Africa, and the current employment
relationship is replaced in its entirety by this agreement. The
Employee confirms specifically and without limiting the foregoing
that he/she has no claims of whatsoever nature arising against Super
Group Ltd [presumably the holding company of the appellant].
6
This
agreement constitutes all the terms of the agreement between the
parties in regard to the subject matter thereof.
7
Neither
party shall be bound by any express or implied term, representation,
warranty, promise or the like not recorded herein.
8
No
addition to, variation, or agreed cancellation of this agreement
shall be of any force or effect unless in writing and signed
by or on
behalf of the parties.
No
indulgence which either party (“grantor”) may grant to
the other (“grantee”) shall constitute a waiver
of any of
the rights of the grantor, shall not thereby be precluded from
exercising any rights against the grantee which may have
arisen in
the past or which may arise in the future.” (
emphasised
)
[8]
Whilst the appellant was entangled in litigation with the City over
the section 197 transfer dispute at the arbitration level,
the City
was apparently unaware that the appellant was, at the same time,
engaged in a section 189 consultation with the respondent
and others.
This apparent lack of knowledge on the part of the City was
deliberately caused by the appellant, for what appears
to be, its
self-serving purposes. In this regard, Advocate William Berry (the
appellant’s labour specialist) made the appellant’s
intention clear when he addressed the workers on 16 May 2012:
‘
If,
first of all,
we
[are] not going to necessarily disclose to the City that there is
this agreement,
okay, because it’s our agreement. It’s something we’ve
negotiated between the parties.
So
they may not even know there’s a settlement agreement.
”
[2]
(
emphasised
)
[9]
In his further address to the workers, Mr Berry made it clear that by
signing the settlement agreement the workers thereby limited
their
rights in that they would have no other claims against the appellant
in connection with their termination. He even told them
that there
was the possibility that they could get a “
double benefit”
if the arbitration appeal award also found that they were entitled to
section 197 transfer to the City, that is, they would have
got the
retrenchment packages plus returning to work at the City. He pointed
out that it was so because the City was not a party
to the settlement
agreement. The following appears in the record:
‘
ADVOCATE
WILLIAN BERRY
:
…Now what Fleet Africa has done, is (sic) it has made a
voluntary retrenchment available okay. Now you might say ja but
we
[are section] 197 employees, why would we want to go down the route
of a voluntary retrenchment, and that’s a perfectly
valid
position to have. But Fleet Africa’s position is the following.
We want certainty. We not too, well we are concerned
by 97/189 what’s
going to happen, but at the end of the day we want certainty, so
Fleet Africa has agreed to have this voluntary
retrenchment available
to employees. And what it entails is it entails … (inaudible)
half severance package, because at
the end of the consultation
process, you have to be compulsorily retrenched.’
[3]
…..
‘
ADV
BERRY
:
Do you understand what I’m saying. If you don’t reach the
agreement then, then, you know if they can’t, that
can never be
raised at all by the City. I think if the City raised that you’ll
be able to, to, um, to beat any defences they
might be able to raise
it but that’s just a point of view that I’m giving you.
And so, so what I’m trying to
say, maybe I’m being overly
cautious but what I’m trying to say is enter into that
discussion with an open understanding
of what’s going on. So,
because when you do sign a settlement agreement, you do limit your
rights.
PERSON
D
[Worker]:
Yes
ADV
BERRY
:
Okay. You will not, and that’s the … (inaudible) that’s
the whole process of the agreement, you will not have
any claim
against Fleet Africa, and that’s our (inaudible) concern.”
[4]
…..
‘
PERSON
J
:
Let’s say for argument sake I take, I decide to take a
voluntary retrenchment package, okay.
ADV
BERRY
:
Ja
PERSON
J
:
And section 197 does happen to exist. Does that give, can the City
then still approach me and take me back?
ADV
BERRY
:
They have to.’
[5]
‘
ADV
BERRY
:
[The City] have not been part to this at all. This is our exercise.
Okay, so when you see the settlement agreement you”ll
see it
says full and final settle, all claims against Fleet Africa, blah,
blah, blah and the City, okay. But the City isn’t
a party to
this agreement. So we have to put it in because of our relationship
with the City because we don’t want anyone
coming back and
saying oh you settled with these guys and you didn’t tell us,
and you have … (inaudible). We want
to be able at a later
stage to say that, in fact, we have no obligation to include you in
this … (inaudible), okay.’
[6]
…..
‘
Then
you, then if you agreed not to go, you [are] entitled to go.
PERSON
J
:
Oh okay. … (Inaudible). ….
ADV
BERRY
:
… (Inaudible) that’s what you … (Inaudible)
you
[are] actually getting a double benefit
.’
[7]
(emphasised)
[10]
On 29 May 2012, the arbitration appeal award was issued, in terms of
which it was declared that the respondent had been transferred,
in
terms of section 197, from the appellant to the City with effect from
1 March 2012. In light of this arbitration appeal award,
the
appellant sought to resile from the settlement agreement, contending
that it meant when the settlement agreement was concluded
on 21 May
2012 there was no longer any employment relationship between the
appellant and the respondent, which had terminated retrospectively
on
1 March 2012 (according to the arbitration appeal award). To this
extent, the appellant submitted that the settlement agreement
was,
therefore, null and void and the Labour Court lacked the requisite
jurisdiction to deal with the matter.
[11]
Hence, the respondent (as the applicant then) instituted motion
proceedings in the Labour Court against the appellant (as the
first
respondent then) and the City (as the second respondent then). By
consent of the other parties, the City was withdrawn from
the matter.
In its notice of motion the respondent sought an order in the
following terms:
‘
1.
That it be declared that a valid and binding settlement agreement,
which terminated
the employment of the Applicant with the First
Respondent, was concluded between the Applicant and the First
Respondent on 21 May
2012;
2.
That the settlement agreement be made an order of the above
Honourable Court;
3.
That the First Respondent, alternatively the Second Respondent be
obliged to
perform in terms of the settlement agreement; the one
paying the other to be absolved;
4.
Costs of the application;
5.
Further and/or alternative relief.’
[12]
Upon consideration of the matter, the Labour Court found in favour of
the respondent (Ms Nijs). Amongst other things, the Labour
Court
found that “the [appellant]
was
not only entitled to conclude the settlement agreement with the
respondent but that it did so, most diligently, conscientiously,
and
in good faith.” The order of the Labour Court is in the
following terms:
‘
1.
The agreement of settlement entered into by Fleet Africa and the
applicant and which
has the dates of 18 May 2012 on which Fleet
Africa signed and 21 May 2012 on which the applicant signed is made
an order of court.
2.
Fleet Africa to pay the costs of the application.’
[13]
It is noted that the order of the Labour Court does not refer to, or
deal at all with, the respondent’s first prayer,
as appearing
in her notice of motion, namely: “
That it be declared that a
valid and binding settlement agreement, which terminated the
employment of the Applicant with the First
Respondent, was concluded
between the Applicant and the First Respondent on 21 May 2012.”
However, I am inclined to conclude that this was most probably an
inadvertent omission on the part of the learned Judge
a quo
. I
say so, first, because the Labour Court would obviously not have
granted the second prayer of making the settlement agreement
an order
of Court if the settlement agreement was not found to be a valid and
binding agreement, in the first place. Second, none
of the parties or
their counsel (the appellant in particular) ever raised this omission
as an issue.
The
appeal
[14]
The appellant’s grounds of appeal can be summarised as follows:
1.
The Labour Court erred in holding that it had the requisite
jurisdiction to entertain
the claim lodged to it by the respondent.
2.
The Labour Court failed to consider that the section 189 consultative
process
was subject to the outcome of the arbitration proceedings,
which was still pending.
3.
The Labour Court failed to take into account that although the
arbitration appeal
award was issued on 29 May 2012, it had a
retrospective effect from 01 March 2012, which was long before the
conclusion of the
settlement agreement signed on 18 May 2012 on
behalf of the appellant and on 21 May 2012 by the respondent
4.
The Labour Court failed to consider that the retrospective effect of
the arbitration
appeal award overtook the settlement agreement. In
other words, the respondent was entitled only to be transferred to
the City
in terms of Section 197.
5.
The Labour Court failed to consider that in light of the above when
the settlement
agreement was concluded there was no longer any
employment relationship in existence between the appellant and the
respondent.
On that basis, it was impossible that any labour dispute
could arise between the appellant and the respondent.
Submissions
by the appellant
[15]
Mr
Sniders
,
for the appellant, submitted that the Labour Court did not have
jurisdiction to entertain the respondent’s complaint on
the
basis that settlement agreements that are within the contemplation of
section 158(1)(c) arise as a compromise or resolution
to any
litigation brought in terms of the LRA. The section ought to be given
a narrow meaning as envisaged in section 142A of the
LRA. In this
regard, he referred us to the decision of this Court in
Molaba
and Others v Emfuleni Local Municipality,
[8]
(Molaba)
where it was recognised that the requirements as set out in the
definition in section 142A are relevant for the purposes of
interpreting
section 158(1)(c). In this regard, counsel submitted,
section 142A of the LRA narrows the interpretation of a settlement
agreement
contemplated in section 158(1)(c). Counsel further argued
that the
Molaba
decision held that although broader interpretation of the Court’s
power in terms of section 158(1)(c) of the LRA may be defensible,
such an interpretation would entirely undermine the limitations
established by section 142A. The settlement agreement referred
to in
section 158(1)(c) is one which is intended to settle a dispute
between employer and employee. Therefore, absent the
employer-employee
relationship between the parties there cannot be a
labour dispute arising between them and, axiomatically, the question
of a section
158(1)(c) settlement agreement does not arise.
[16]
Mr
Sniders
further
sought to emphasise his point by submitting that, since the
arbitration appeal award (issued on 29 May 2012) had a retrospective
effect from 1 March 2012, the settlement agreement (signed on 18 and
21 May 2012) was overtaken by the events, to the extent, counsel
submitted, that at the time the settlement agreement was concluded
between the appellant and the respondent, they were no longer
the
employer and the employee of each other, retrospectively.
Submissions
by the
respondent.
[17]
According to Mr
Cowley
, for the respondent, it was common
course that, at the time of the conclusion of the settlement
agreement i.e. 21 May 2012, there
was indeed an employer-employee
relationship between the appellant and the respondent. It is clear
from the wording of the settlement
agreement that the parties entered
into it intentionally and in good faith. There was nothing in the
agreement which pointed to
the fact that its operation was dependent
on the outcome of the arbitration process. He sought the appeal to be
dismissed.
Evaluation
[18]
Early in this judgment, I indicated the crisp issues before the
Labour Court and on appeal in this matter. For the sake of
convenience, I propose to restate them, namely:
1.
Whether the Labour Court had jurisdiction to entertain the
respondent’s
complaint against the appellant;
2.
whether the appellant was entitled to enter into the settlement
agreement with
the respondent on 21 May 2012;
3.
whether the settlement agreement concluded between the appellant and
the respondent
on 21 May 2012 complied with the statutory
requirements of the LRA and, therefore, valid and binding on the
parties; and
4.
whether the Labour Court erred in making the settlement agreement an
order of
the Court, in terms of section 158(1)(c) of the LRA.
[19]
It is settled law that, provided there is a contractual
employer-employee relationship between the parties to a dispute,
neither
the Labour Court nor the Commission for Conciliation
Mediation and Arbitration (the CCMA) nor an accredited bargaining
council,
possesses the requisite jurisdiction to entertain the
dispute. We know that the appellant’s version is that the
Labour Court
did not have jurisdiction to deal with the matter
because the respondent’s employment with the appellant had
already been
terminated at the time the two parties concluded the
settlement agreement on 21 May 2012, on the basis that the dispute
was resolved
retrospectively on 1 March 2012 through the arbitration
appeal award dated 29 May 2012; and that the settlement agreement was
accordingly
null and void.
[20]
It is important to note that the settlement agreement in question is
not just any settlement agreement, but one envisaged in
section
158(1)(c) of the LRA. Therefore, for its valid and binding nature, it
ought to comply, first, with the common law requirements
of a valid
contract; and second, with the statutory requirements of a section
158(1)(c) settlement agreement. I am mindful that
the appellant does
not challenge the common law validity of the settlement agreement.
The challenge is grounded on the alleged
non-compliance with the
statutory requirements. However, for the sake of background and
completeness, I propose to refer briefly
to the common law
perspective of it.
[21]
Recently, this Court in
Universal
Church of the Kingdom of God v Myeni
[9]
restated the essential aspects of a valid and legally enforceable
agreement under common law:
‘
It
is settled law that the intention of the parties in any agreement -
express or tacit - is determined from the language used by
the
parties in the agreement
[10]
or from their conduct in relation thereto.
[11]
Further, that not every agreement constitutes a contract.
[12]
For a valid contract to exist, each party needs to have a serious and
deliberate intention to contract or to be legally bound by
the
agreement, the
animus
contrahendi
.
[13]
The parties must also be
ad
idem
(or have the meeting of the minds)
[14]
as to the terms of the agreement. Obviously, absent the
animus
contrahendi
between the parties or from either of them, no contractual
obligations can be said to exist and be capable of legal
enforcement.’
[15]
”
(footnote omitted)
[22]
Due to the recent amendments brought to bear on the contextual and
elaborative interpretation of a section 158(1)(c) settlement
agreement, namely, section 158(1
A)
[16]
of the LRA, it follows that the definition of a settlement agreement
in terms of section 158(1)(c) must be read subject to section
158(1A)
[17]
.
[23]
Section 158(1)(c) provides that “
[t]he
Labour
Court may … make any arbitration award or any settlement
agreement an order of the Court.”
Section
158(1A) reads as follows:
‘
For
the purposes of subsection of (1)(c), a settlement agreement is a
written agreement in settlement of a dispute that a party
has the
right to refer to arbitration or to the Labour Court, excluding a
dispute that a party is only entitled to refer to arbitration
in
terms of section 22(4), 74(4) or 75(7).’
The
exclusionary latter part of section 158(1A) relates to (1) disputes
about organisational rights; (2) disputes involving essential
services; and (3) disputes involving maintenance services.
[24]
The appellant specifically relies on its proposition on the other
2002 amendment in the LRA, namely, section 142A(1),
[18]
which reads:
‘
(1)
The commission may, by agreement between the parties or on
application by a party, make
any settlement agreement in respect of
any dispute that has been referred to the Commission [the CCMA], an
arbitration award.
(2)
For the purposes of subsection (1), a settlement agreement is a
written agreement
in settlement of a dispute that a party has the
right to refer to arbitration or to the Labour Court, excluding a
dispute that
a party is entitled to refer to arbitration in terms of
either section 74(4) or 75(7).’
[25]
The distinction between sections 158(1A) and 142A(1) is obvious.
There is no way that these two amendment provisions can or
should be
read together as if they are mutually inclusive. Whilst, on the one
hand, section 158(1A) is concerned with the Labour
Court making “any
settlement agreement” an order of the Court; on the other,
section 142A(1) pertains to the situation
where the CCMA makes “any
settlement agreement” an arbitration award. In other words,
section 142A(1) merely adds to
the powers of the CCMA; whilst section
158(1A) elaborates on the powers of the Labour Court in terms of
section 158(1)(c). What
is important is that section 158(1A) seeks to
clarify that a settlement agreement envisaged in section 158(1)(c)
does not refer
to “
any
settlement agreement”
as the literal reading of the section appears to suggest. The
position of an arbitration award as referred to in section 158(1)(c)
is not affected by the section 158(1A) amendment. The Court in
Greef
v Consol Glass,
[19]
stated
as follows:
‘
So
properly interpreted, in terms of s 158(1)(c), read with s 158(1A),
the Labour Court may make any arbitration award an order
of court and
may only make settlement agreements, which comply with the criteria
stated in s158(1A), orders of court. A settlement
agreement that may
be made an order of court by the Labour Court in terms of s 158
(1)(c), must (i) be an order of court by the
Labour Court in terms of
s 158 (1)(c), must (i) be in writing, (ii) be in settlement of a
dispute (i.e it must have as its genesis
a dispute; (ii) the dispute
must be one that the party has a right to refer to arbitration, or to
the Labour Court for adjudication,
in terms of the LRA; and (iv) the
dispute must be of the kind that a party is only entitled to refer to
arbitration in terms of
s 22(4), or s 74(40 or s 75(7)’.
[26]
The Court, in
Greef v Consol
, supra, effectively overturned
the decision of the Labour Court in
Molaba,
saying that
“
[Molaba’s] interpretation of s158(1)(c), without
taking into account s 158(1A), but with reference to, in particular s
142A(1),
the equivalent of which is deliberately excluded from s 158,
was, with respect, wrong.”
[27]
The appellant submitted that the settlement agreement did not arise
from any dispute between the parties because at the time
of its
conclusion there was no such dispute in existence. According to the
appellant, the settlement agreement came about from
the desire on the
part of the respondent to take voluntary retrenchment package.
Indeed, it is imperative that for a settlement
agreement to conform
to the requirements of section 158(1A) there must be a dispute
between the parties, which either “
party has the right to
refer to arbitration or to the Labour Court, excluding a dispute that
a party is only entitled to refer to
arbitration in terms of section
22(4), 74(4) or 75(7)”
of the LRA. The question which
arises: Was there such a dispute between the parties in this
instance? The answer, in my view, is
in the affirmative.
[28]
The settlement
agreement
was the product of a long and protracted consultation and negotiation
between the appellant and the respondent, aimed
at fulfilling the
objections laid out in section 189 of the LRA. However, this process
did not just pop up without there being
any dispute between the
parties which had not been resolved. There was a long-outstanding
dispute between the parties in respect
of which the appellant
ultimately decided to engage a two-pronged strategy in desperately
trying to resolve the dispute. It is
common cause that the section
189 consultation process started at the time when there was an
arbitration appeal proceedings underway
and which had reached a stage
where the parties were only awaiting the issuance of the arbitration
appeal award from the arbitrator.
The section 189 consultation
process and the arbitration appeal process had one common objective,
namely, the attainment of a resolution
of exactly the same dispute
between the appellant and the respondent. This was the kind of
dispute which either party was entitled
to refer to the CCMA (or
accredited council) for arbitration or to the Labour Court for
adjudication, as the case may be, unless
otherwise by agreement of
settlement between the parties in terms of section 158(1)(c ), read
with section 158(1A); and section
197(6) of the LRA, individually
alluded to elsewhere in this judgment..
[29]
The appellant was not sure of the outcome of the arbitration appeal
process. Hence he tried the section 189 consultation process,
as an
alternative. Therefore, I do not agree with the appellant’s
submission that when the appellant and the respondent engaged
in
section 189 negotiations, culminating in the conclusion of the
settlement agreement on 21 May 2012, there was no dispute between
the
parties and that the negotiations were only in contemplation of a
voluntary retrenchment of the respondent.
[30]
Section 197 of the LRA provides,
inter alia
, the following:
‘
(2)
If a transfer of a business takes place,
unless
otherwise agreed in terms of subsection (6)
-
(a)
The
new employer is automatically substituted in the place of the old
employer in respect of all contracts of employment in existence
immediately before the date of transfer;
(b)
All
the rights and obligations between the old employer and an employee
at the time of the transfer continue in force as if they
had been
rights and obligations between the new employer and the employee;
(c)
Anything
done before the transfer by or in relation to the old employer,
including the dismissal of an employee or the commission
of an unfair
labour practice or act unfair discrimination, is considered to have
been done by or in relation to the new employer,
and
(d)
The
transfer does not interrupt an employee’s continuity of
employment, and an employee’s contract of employment continues
with the new employer as if with the old employer.’
(e
mphasised
)
Section
197 (6):
‘
(a)
An agreement contemplated in subsection (2) must be in writing and
concluded between-
(i)
Either
the old employer, the new employer, or the old and the new employers
acting jointly, on the one hand; and
(ii)
The
appropriate person or body referred to in section 189 (1), on the
other.
(b)
In
any negotiations to conclude an agreement contemplated by paragraph
(a), the employer or employers contemplated in subparagraph
(i), must
disclose to the person or body contemplated in subparagraph (ii), all
relevant information that will allow it to engage
effectively in
negations.
(c)
Section
16 (4) to (14) applies, read with the changes required by context, to
the disclosure of information in terms of paragraph
(b).’
[31]
The words “
unless otherwise agreed in terms of subsection
(6)” in section 197
clearly envisage, in my view, that
parties in a dispute concerning section 197 transfer, are not
precluded from resolving their
dispute through a settlement
agreement, as an alternative means. In such event, the dispute on
section 197 transfer falls away,
because that would otherwise mean
awarding a claimant with a “double benefit”. It seems to
me there would be no just
and legal cause to claim under section 197
again.
[32]
Indeed, the settlement agreement was concluded by the appellant and
the respondent “
in
full and final settlement of any claims of whatsoever nature arising
(including but not limited to any outstanding salary obligations,
any
accumulated leave pay, any severance benefit and any notice
obligations
any
entitlement to transfer in terms of section 197 of the Act (to the
City of Johannesburg or elsewhere)”
.
The appellant’s labour specialist, Mr William Berry, confirmed
this point when he addressed the workers on 16 May 2012. He
said:
“
[S]o
what we said it’s a full and final settlement of all claims
against Fleet Africa and the City
.”
[20]
However, notwithstanding these utterances, Mr Berry still advised the
affected employees that they could further claim against
the City in
terms of section 197 and thus get a “double benefit” –
an obvious contradiction on his part.
[32]
The settlement agreement went on to provide that “
no
addition to, variation, or agreed cancellation of this agreement
shall be of any force or effect unless in writing and signed
by or on
behalf of the parties” (clause 8).
Thus the only legal
means to rescind this agreement was in terms of this clause.
(emphasised)
[33]
The appellant contended that the conclusion of the settlement
agreement was always known between the parties, to be conditional
on
the outcome of the arbitration appeal award. In its answering
affidavit, the appellant,
inter
alia
,
avers:
[21]
“
The
[appellant] was very careful, on each occasion, to make it abundantly
clear that the [s189] consultations were always subject
to the
outcome of the [arbitration] process to compel the [City] to accept
transfer of the employment contracts of those employees
employed on
the A114 contract.”
(emphasised)
[34]
Stressing this point, in its answering affidavit, the appellant
further stated:
[22]
“
Throughout
the process a clear distinction was drawn between those employees,
such as the [respondent], who were consulted with
in terms of section
189 of the Act conditional on it being found ultimately that their
contracts of employment would not transfer
to the [City] in terms of
section 197 of the Act.”
Indeed, Mr Sniders in his argument before us reiterated the
appellant’s contention that the respondent was “
not
under any illusion”
of what was happening, namely, that there was a possibility that the
events would come to pass that she would, in fact, be transferred
to
the City at the end of the arbitration appeal process.
[35]
What I have just eluded to the above makes it abundantly clear that,
had the existence of this alleged suspensive condition
been real and
true, it would have been one of the most material and important terms
of the settlement agreement. Strangely, though,
not the slightest
mention is made in the settlement agreement of such a condition. Why?
Mr Sniders conceded, wisely so, in my view,
that this was a stumbling
block in his argument, which was “
difficult to challenge”.
[36]
In the present instance, therefore, once the parties concluded the
settlement agreement on 21 May 2012 the employment relationship
between the appellant and the respondent ceased to exist. That
contractual transaction (the settlement agreement) disposed of the
dispute (or whatever name the appellant prefers to call it) between
the appellant and the respondent. In the circumstances, the
outstanding arbitration appeal process ought to have fallen away
forthwith. In other words, the arbitration appeal proceedings
were no
longer necessary and justified to be pursued, and the respondent was
no longer entitled to the section 197 transfer to
the City because
that would mean an undue double benefit for her. However, that is
what happened.
[37]
The appellant was clearly aware that the affected employees (the
respondent in particular) could possibly get a double-benefit
in this
way. It is common cause that the City was unaware of the existence of
the section 189 negotiations between the appellant
and the
respondent, let alone the settlement agreement that culminated
therefrom. The appellant deliberately withheld this information
from
the City. Instead, the appellant used this factor as a means of
enticing and influencing the respondent, in particular, to
sign the
settlement agreement, in order to get
a “double benefit”,
to the detriment of the City.
[38]
Consequent to the City not knowing about the settlement agreement
concluded on 21 May 2012, the arbitration appeal process
was not
stopped or withdrawn until 29 May 2012 when the arbitration appeal
award was issued, declaring that the respondent’s
(and other
affected workers’) termination of employment with the appellant
amounted to their “
second generation transfer”
back to the City in terms of section 197. Indeed, it was not disputed
that the respondent subsequently reported for duty with the
City in
compliance with the arbitration appeal award. As to the propriety or
otherwise of the appellant’s conduct in this
regard, I prefer
not to comment, for an obvious reason: the issue is not before
us and therefore completely irrelevant.
[39]
Mr
Snider
further submitted that, in terms of the law, the
appellant was not entitled to conclude the settlement agreement with
the respondent
on 21 May 2012 because the arbitration appeal award
was already in place, having taken effect on 1 March 2012. With
respect, the
appellant is being disingenuous. Even though the
appellant does mention the fact that the arbitration appeal award was
actually
issued on 29 May 2012, with retrospective effect from 1
March 2012, the appellant is seemingly deliberately shy and reluctant
to
address the issue of the validity of the retrospectivity aspect of
the award. Whether the appellant was entitled to conclude the
settlement agreement on 21 May 2012, as the appellant did, is an
issue which ought to be determined in relation to that date, i.e.
21
May 2012 and not 29 May 2012 when the appeal award was issued. In
fact, the appropriate test, in my view, is whether the arbitrator
was
entitled to issue the award on 29 May 2012 with retrospective effect
from 1 March 2012 when, by that time, the settlement agreement
was
already legally in force. However, the arbitrator is not to blame,
but the appellant itself through its Mr Berry who deliberately
and
potentially fraudulently withheld the truth about the section 189
negotiations from both the City and the appeal arbitrator,
as alluded
to above.
[40]
In my view, the settlement agreement complied with all the
requirements of both the common law and as envisaged in section
158(1)(c) read with section 158(1A) of the LRA. In my judgment, I
would hold as follows:
(1)
that the Labour Court possessed the
requisite jurisdiction to entertain the respondent’s complaint
against the appellant
which culminated in the conclusion of the
settlement agreement between the parties on 21 May 2012;
(2)
that the appellant was legally entitled to conclude the settlement
agreement with the respondent on 21 May 2012; and,
(3)
that
the settlement agreement so concluded between the parties is valid
and legally binding between the parties to it namely, the
appellant
and the respondent;
(4)
that the settlement agreement
conformed to the requirements of section 158(1)(c), read with section
158(1A) of the LRA; and,
(5)
that the Labour Court was within
its discretionary power to make the settlement agreement an order of
court and that it properly
exercised its discretion in this regard.
The appeal must accordingly fail.
[41]
In light of the effect of this judgment, it seems to me that
determining the merits of the appellant’s preliminary
condonation
applications, at this stage, would serve no purpose and
would merely be an academic exercise which is ordinarily
impermissible,
save in exceptional instances where the interests of
justice demands it to be done. This case, in my view, does not belong
in that
category. In accordance with the considerations of the law
and fairness, I think the appellant must bear the costs of the
appeal.
[42]
In the result, the following order is made:
1.
The
appellant’s applications for condonation of its late filing of
the appeal record and for reinstatement of the appeal,
are granted.
2.
The
appeal is dismissed with costs.
_________________
Ndlovu
JA
Waglay
JP and Murphy AJA concur in the judgment of Ndlovu JA.
APPEARANCES:
FOR
THE APPELLANT:
Mr AN Snider
Instructed by Charlene Schlebusch
Attorneys, Rivonia, Jhb.
FOR
THE RESPONDENT:
Mr H Cowley
Instructed by Martin Henning
Attorneys, Bryanston, Jhb.
[1]
Act 66 of 1995.
[2]
Record, Vol 4 at
279 lines 12-15.
[3]
Record, Vol 4 at
264 lines 18-24 to 265 lines 1-4.
[4]
Record, vol 4 at
281 lines 2-13.
[5]
Record, vol 4 at
289 lines 8-13.
[6]
Record, vol 4 at
290 lines 1-5.
[7]
Record, vol 4 at
290
lines 10-12.
[8]
(2009) 30 ILJ 2760
(LC).
[9]
Universal Church of
the Kingdom of God v Myeni & Others
(2015)
36 ILJ 2832 (LAC);
[2015] 9 BLLR 918
(LAC);
[2015] JOL 33521
(LAC);
at para 44.
[10]
Scottish Union
& National Insurance Co Ltd v Native Recruiting Corporation Ltd
1934 AD 458
at para 465.
[11]
Irvin &
Johnson (SA) Ltd. v Kaplan
1940 CPD 647
at para 650.
[12]
Bourbon-Leftley
en Andere v Wpk (Landbou) Bpk
1999 (1) SA 902
(C);
Electronic
Building Elements v Huang
1992
(2) SA 384
(W) at 387E
[13]
Scottish Union
& National Insurance Co Ltd v Native Recruiting Corporation Ltd
1934 AD 458
at 465.
[14]
Macdonald Ltd v
Radin NO and the Potchefstroom Dairies & Industries Co Ltd
1915
AD 454
at 487.
[15]
At para 44.
[16]
Inserted by s36(c)
of Act 12 of 2002.
[17]
Greef v Consol
Glass (Pty) Ltd
(2013)
34 ILJ 2821 (LAC) at para 19.
[18]
Inserted by s31 of
Act 12 of 2002.
[19]
Greef
v Consol
supra
,
at para 19.
[20]
Record at 279
lines 3-4.
[21]
The appellant’s
a
nswering
affidavit: Record at p109 vol 2, para 7.28.
[22]
The appellant’s
answering affidavit: Record at p109 vol 2, para 7.32.