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[2018] ZALAC 3
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National Union of Metalworkers of South Africa (NUMSA) obo Members v Transnet Soc Limited and Others (PA16/2016) [2018] ZALAC 3; [2018] 5 BLLR 488 (LAC) (25 January 2018)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, PORT ELIZABETH
Not
Reportable
Case
no: PA 16/2016
In
the matter between:
NATIONAL
UNION OF METALWORKERS OF SOUTH AFRICA
(NUMSA)
obo
MEMBERS
Appellant
and
TRANSNET
SOC LIMITED
First Respondent
TRANSNET
BARGAINING COUNCIL
Second Respondent
SATAWU
Third Respondent
UNTU
Fourth Respondent
Heard:
16 November 2017
Delivered:
25 January 2018
Summary:
Appeal against dismissal of urgent application purportedly brought in
terms of s189A(13) of the Labour Relations Act, 66
of 1995 (LRA) for
a declaratory order, an interdict, reinstatement and other relief--
Appeal dismissed: case not made out for relief
sought and application
was rightly dismissed by the Labour Court.
Coram:
Coppin and Sutherland JJA and Savage AJA
JUDGMENT
COPPIN
JA
[1]
Following a presentation made by the first respondent (Transnet) in
the second respondent (Transnet Bargaining Council) on 18
March 2016
indicating, inter alia, that it would not be renewing a large number
of fixed-term contracts due to depressed economic
circumstances, the
appellant brought an urgent application in the Labour Court,
purportedly in terms of s189A(13) of the Labour
Relations Act[1]
(LRA), construing Transnet’s conduct in that regard as
amounting to mass dismissals for operational reasons.
The appellant
sought, effectively, to compel Transnet to continue employing its
members despite the effluxion of the agreed periods
of their
respective fixed-term contracts and for Transnet to comply with a
fair procedure as contemplated in that section.
[2]
The Labour Court (Moshoana AJ) dismissed the application. This is an
appeal against that decision, leave to appeal having been
granted by
that court. No relief was ever sought against the second, third and
fourth respondents and they have not participated
in the litigation,
including the appeal.
Factual
background
[3]
It was not in issue that Transnet had been making use of fixed-term
contracts in respect of a particular component of its workforce.
These contracts were generally extended successively. On about 15
December 2014, and in the Transnet Bargaining Council, Transnet
concluded a collective agreement with the third and fourth
respondents, who were the majority unions in its workplaces at the
time, to regulate the terms and conditions of its fixed term
employees. The parties to the agreement purported to bind not only
themselves and the members of the union parties members, but “[a]ll
fixed term contract bargaining unit [e]mployees in Transnet
Soc
Limited including those [e]mployees who are not members of the trade
union parties to [the] agreement” (emphasis added).
This would
include employees who were members of the appellant, even though
neither the appellant, that had no organisational rights
at Transnet,
nor its members, were party to the collective agreement when it was
concluded.
[4]
A dispute arose between Transnet and the appellant concerning the
applicability of the collective agreement to the members of
the
appellant. This was exacerbated by the appellant’s lack of
organisational rights at Transnet’s workplaces, which,
in turn,
seemingly, was further complicated by uncertainty and resultant
disputes about the size of its membership at those workplaces.
[5]
The appellant contended, in essence, that the collective agreement
did not bind its members, because it was not extended to
non-parties
in terms of and in accordance with s32 of the LRA; and that their
fixed-term contracts were of indefinite duration
as contemplated in
s198B(5) of the LRA. Transnet contended that the collective agreement
was applicable and binding on all the
parties and employees
identified in it, which would include any members of the appellant.
It further contended that the collective
agreement had been validly
extended to non-parties in terms s23 of the LRA.
[6]
It appears common cause that at least several matters had been
referred by the appellant to the Bargaining Council in which
the
non-renewal by Transnet of those members’ fixed term contracts
had been challenged on the grounds that the members had
a reasonable
expectation of renewal; that in at least two of those matters, where
that the Bargaining Council had found in favour
of the employees,
Transnet was challenging the awards in review proceedings brought in
the Labour Court.
[7]
Many fixed term contracts were not renewed by Transnet. During about
February and March 2016, Transnet had also given written
notice to
affected employees, informing them of the end date of their fixed
term contracts and the reason(s) for the termination
of their
contracts. On 18 March 2016, Transnet made a presentation in the
Transnet Bargaining Council explaining why it would not
be renewing
some three thousand, of about seven thousand, fixed-term contracts
once they terminated by effluxion of time. The reasons
it furnished
were essentially financial and operational, brought about by adverse
climatic and economic circumstances.
[8]
The presentation and the alleged unwillingness of Transnet to
meaningfully engage with the appellant, concerning the non-renewal
of
fixed-term contracts, resulted in the appellant bringing an
application in the Labour Court, in which it cited, as respondents,
the parties as they appear in the case heading, and in which it
sought the following relief:
‘
1. That the matter be
entertained on an urgent basis and that the Applicant’s
non-compliance with the rules of Court be condoned.
2. That it be declared in terms of
Section 189A(13)
of the
Labour Relations Act, 66 of 1995
, as amended
(the LRA), that the First Respondent was obliged to invoke the
provisions of
sections 189
and /or 189A of the LRA relevant to the
termination of the employment of the Applicant’s members on or
about 31 March 2016
and/or 28 February 2016.
3. That, to the extent necessary, the
Applicant’s failure to institute these proceedings within 30
days in respect of those
dismissals which took effect on 28 February
2016, be condoned.
4 That the First Respondent be
restrained and interdicted from proceeding terminating any of the
Applicant’s member’s
contracts on the basis of it
contending that same constituted fixed-term contracts and that the
First Respondent be directed to
comply with the provisions of
Section
189/189A
in respect of any and all contemplated further terminations
premised on the erroneous description of employment contracts as
fixed
term contracts capable of expiring by way of effluxion of time.
5. That, to the extent necessary, it
be declared that the collective agreement entered into between the
First, Third and Fourth
Respondents on or about 15 December 2015 does
not bind the applicant and its members and /or same is not a
collective agreement
as envisaged in
Section 198B(2)(c)
of the LRA
and it accordingly does not have the effect of ousting the provisions
of
Section 198B
of the LRA relevant to the Applicant and its members.
6. That the First Respondent
accordingly be ordered to reinstate those of the Applicant’s
members whose services were terminated
as from 28 February 2016 on
the basis of an erroneous contention that these employees were on
fixed term contracts of employment
and that the First Respondent be
directed to comply with
Sections 189
and/or 189A of the LRA in
respect of meaningful joint-consensus seeking consultations, should
it wish to proceed with the termination
of services of these
employees;
Alternatively, that the First
Respondent be ordered to compensate the Applicant’s members
whose services were so terminated
on the basis that same constituted
a procedurally unfair dismissal.
7. That the costs of this application
be paid by such Respondents who oppose this application jointly and
severally, the one paying
the other to be absolved.
8. Further and/or alternative relief.’
[9]
A Infrastructure-Sector Co-ordinator of the appellant, Mr Viwe James,
deposed to the founding affidavit on its behalf. No list
of its
members is attached to the founding papers, and while names of some
employees appear in annexures to the founding affidavit,
none of
those employees, or persons, on whose behalf it allegedly brought the
application, is referred to by name in the body of
the founding
affidavit, and no confirmatory affidavit by any of them has been
filed. The application thus abounds with hearsay
information, while
an explanation for not filing any confirmatory affidavits is lacking.
[10]
The case purportedly made out by the appellant was, in essence, that
the collective agreement was not applicable to its members,
and that,
accordingly, those members’ employment contracts were not for a
fixed, but an indefinite term; that the termination
by Transnet of
those contracts amounted to dismissals, and because of their number
and the reasons furnished for not renewing them,
the dismissals were
for operational reasons, which required Transnet to comply with fair
procedures as envisaged in
sections 189
and
189A
of the LRA. The
application, according to the appellant, was one in terms of
s189A(13)
of the LRA, for the relief contemplated in that section.
[11]
Transnet opposed the application. It not only took the point that the
appellant had failed to prove that it had standing, or
to show on
whose behalf it was bringing the application, because of its failure
to properly identify its members, but denied that
the applicant had
made out a case that
s189A(13)
was applicable, persisted with its
contentions regarding the scope of the collective agreement and
denied that the fixed term contracts
were not justifiable as
contemplated in
s198B(3)
and (4) of the LRA.
[12]
The appellant filed a replying affidavit in which it attempted to
address the issues raised by Transnet. While copies of a
few
membership application forms were attached to that affidavit, not a
single confirmatory affidavit of any of its members, or
affected
members was filed.
The
Labour Court
[13]
The Labour Court dismissed Transnet’s locus standi point. Even
though the Labour Court, in another context, lamented
the fact that
the appellant did not “spell out” who its members were,
it found that the appellant, “must be having
members” on
whose behalf it was bringing the application, and that, in any event,
as a registered trade union it had an interest
in a dispute that
involved a mass dismissal of employees and was also permitted in
terms of s38 of the Constitution of the Republic
of South Africa to
allege an infringement of the Bill of Rights.
[14]
The Labour Court found that the Transnet Bargaining Council was a
“bargaining council” as envisaged in s213 read
with s27
of the LRA; that fixed term contracts were valid and enforceable and
that s198B of the LRA did not alter the common law
position; that the
collective agreement was a “collective agreement” as
envisaged in s198B(2)(c) and that the collective
agreement permitted
the fixed term contracts in terms of which Transnet’s employees
were engaged; that the collective agreement
was validly extended to
non-parties in terms of s23 of the LRA even though it was concluded
in a bargaining council, alternatively,
that non-parties were bound
because the contract clearly intended binding them to its terms and
they were also bound, inter alia,
on the basis of the majoritarian
principle. The Labour Court found that the appellant did not make out
a case for the interdictory
relief sought because the fixed term
contracts were valid and their automatic termination by the effluxion
of time did not constitute
dismissals. In those circumstances,
according to the Labour Court’s judgment, there was no
illegality and therefore no need
for an interdict was shown. The
Labour Court held further that the provisions of s189B(13) were not
applicable, because there were
no dismissals; and that a case of
reasonable expectation that the contracts would be renewed, as
envisaged in s186(1)(b) of the
LRA, was not made out. The Labour
Court, resultantly, dismissed the application and made no order
regarding the costs.
[15]
The appellant applied to the Labour Court for leave to appeal against
its order to this Court, and that Court granted the requested
leave,
but without furnishing reasons for doing so.
Grounds
of appeal
[16]
The appellant’s grounds of appeal, as per its notice of appeal,
are brief. It contends, in essence, that the Labour Court’s
“[f]inding that Sections 198B(3) and 5 of the LRA were not
applicable and that these provisions were ousted, in that Section
198B(2)(c) found application” was erroneous; and that it also
erred in its ”related finding” that the collective
agreement was binding on the appellant and its members on the basis
that it could be extended to them in terms of s23 of the LRA.
According to the appellant, it could only validly be extended to
non-parties in terms of s32 of the LRA. The appellant’s
intended argument before us was thus very narrow in its compass.
Consideration
[17]
As I shall shortly demonstrate, despite the possible merit of the
grounds relied upon by the appellant in its notice of appeal,
that
was barely enough to secure it any of the relief it sought in the
Labour Court. The application failed for other fundamental
reasons
not addressed by the appellant in its notice of appeal and,
apparently, in its application for leave to appeal in the Labour
Court. Those reasons were apparently also overlooked by that Court in
deciding to grant the appellant leave to appeal to this Court.
[18]
Regarding the extension of the collective agreement, there is
arguably merit in the contention that if the Transnet Bargaining
Council was a “bargaining council” as envisaged in s213
read with s27 of the LRA, and the collective agreement was
concluded
in that Council, it could only be extended in terms of s32 of the LRA
and not in terms of s23. Support for this argument
is to be found in
unanimous dictum of this Court in a recent decision that also went on
appeal to the Constitutional Court. Neither
the representatives of
the parties, nor the Court a quo, appear to have been aware of it. At
the hearing of the appeal, counsel
for both sides was made aware of
the dictum.
[19]
In Association of Mineworkers & Construction Union and Others v
Chamber of Mines acting in its own name and obo Harmony
Gold Mining
Co. Pty Ltd and Others[2] this Court, in summary, stated the
following on the issue:
‘
[43] It
is apparent from a reading of ss32 and 23, within their proper
contexts within the LRA, that the two sections
contemplate,
essentially, two different kinds of collective agreement. In s23,
collective agreements outside bargaining councils
are contemplated
and provided for, whereas s32 contemplates collective agreements
concluded on a broader basis, and more particularly,
within
bargaining councils…’.
[3]
[20]
Thus, there may be merit in the argument that the collective
agreement, which the parties to that agreement purported to extend
to
non-parties, on Transnet’s version, in terms of s23 of the LRA,
could not be so extended. The upshot of such a finding
would mean
that the collective agreement was not binding on non-parties,
including minority unions, who were not parties to that
agreement and
who did not subsequently subscribe to it. The difficulty confronting
the appellant here, of course, is that the case
it makes out in its
founding papers is to the effect that its members concluded standard
form fixed-term contracts with Transnet,
and it annexed a copy of a
standard form contract in substantiation of that averment to its
founding affidavit. One of the standard
terms of that contract is
that the terms of that contract are regulated by the collective
agreement. If that is so then those members
of the appellant, who
entered into such a contract, are arguably bound by the collective
agreement, not by its purported extension
to them in terms of s23 of
the LRA, but by their individual consent. However, as alluring as an
in-depth consideration and final
determination of the point,
concerning the scope and binding force of the collective agreement
might seem, it is not discreet,
nor decisive of this appeal. I do not
consider this a proper case for deciding that point in light of the
other, decisive, fundamental
weaknesses in the appellant’s
case.
[21]
It was a misconception on the part of the appellant to believe that a
favourable answer on the point referred to in the previous
paragraph,
was the silver bullet and that it was decisive of the application. A
related misconception was that if the collective
agreement did not
apply to their members, then the fixed-term contracts of their
members were automatically ineffective, and that
their respective
periods of employment were, consequently, indefinite.
[22]
Section 198B(2)(c) of the LRA provides that s198B, which essentially
regulates fixed-term contracts of employees earning below
a regulated
earnings threshold, does not apply to “an employee employed in
terms of a fixed term contract which is permitted
by any statute,
sectoral determination or collective agreement.” (There are
also other listed instances where the provision
does not apply, but
which are not relevant in light of the facts of this case). If one
were therefore to find that the collective
agreement did not apply to
the appellant’s members, it would simply mean that the
provisions of the section would be applicable
to those members who
earned below the prescribed earnings threshold envisaged in
s198B(2)(c). But it does not mean that their contracts
were, or are,
automatically invalid, nor does it mean that their duration was, or
is, for an indefinite period.
[23]
In terms of s198B(5): “Employment in terms of a fixed-term
contract concluded or renewed in contravention of subsection
(3) is
deemed to be of indefinite duration.” (emphasis added).
Therefore, in order to find that the contracts are of indefinite
duration, it must be shown that they were, at least, in contravention
of s198B(3). That subsection does not outlaw fixed-term contracts,
but seeks to regulate their conclusion. It, in essence, provides that
a fixed term contract, may be entered into with the employee,
to whom
s198B applies, for a period in excess of three months, provided
certain conditions are met, namely: (a) the nature of the
work for
which the employee is employed is of a limited or definite duration;
or (b) the employer can demonstrate any other justifiable
reason for
fixing the term of the contract.
[24]
In s198B(4) justifiable reasons for the conclusion of a fixed term
contract are listed. The first respondent’s counsel
submitted
that it was not a closed list. I consider that there is merit in that
submission, because subsection (3)(b) is cast in
broad terms and does
not purport to confine the justifiable reasons to those listed in
subsection (4). Fortunately, in light of
the view it does not have to
be decided in this case whether the list contemplated in that
subsection is a closed list. For present
purposes we shall confine
the discussion to the reasons listed in subsection (4).
[25]
In terms of subsection 4, the conclusion of a fixed term contract
will be justified if an employee (a) is replacing another
employee
who is temporarily absent from work; or (b) is employed on account of
a temporary increase in the volume of work which
is not expected to
endure beyond 12 months; or (c) is a student or recent graduate who
is employed for the purpose of being trained
or gaining work
experiencing order to enter a job or profession; or (d) is employed
to work exclusively on a specific project that
as a limited or
defined duration; or (e) is a non-citizen who has been granted a work
permit for a defined period; or (f) is employed
to do seasonal work;
or (g) is employed for the purpose of an official public works scheme
or similar public job creation scheme;
or (h) is employed in a
position which is funded by an external source for a limited period;
or (i) has reached the normal or agreed
retirement age applicable in
the employer’s business.
[26]
Subsection (6) provides that an offer to employ an employee on a
fixed term contract, or to renew, or extend a fixed term contract,
must (a) be in writing; and (b) state the reasons contemplated in
subsection 3(a) or (b). Of significance, subsection (7) regulates
the
onus of proof and provides that if relevant in any proceedings the
onus to prove that the fixed term contract was justified,
as
contemplated in terms of subsection (3) and that the term was agreed
rests on the employer.
[27]
It is trite that an applicant in application, or motion, proceedings
must make out a case in its founding papers for the relief
it
seeks.[4] Another trite principle applicable to such proceedings
where final relief is being sought relates to the method used
for the
resolution of disputes of fact on the papers by application of the,
so-called, “Plascon Evans” principle, in
terms of which
ultimately the matter is decided on the common cause facts and the
version of the respondent in respect of truly
disputed facts.[5]
[28]
The appellant did not specifically allege that it was bringing the
application on behalf of its members who earned less than
the
prescribed earnings threshold as envisaged in s198B, but merely
averred that the section applied, seemingly, labouring under
the
misconception that it applied to all fixed-term contracts. In support
of its averments concerning the applicability of s198B,
it relies on
a copy of a standard fixed term contract, allegedly utilised by
Transnet, that I have referred to earlier, which effectively
contradicts its averments that the collective agreement did not bind
its members and supports the respondent’s contention
that s198B
was not applicable. One of the standard terms of that contract is
that the terms of the fixed-term contract are regulated
by the
collective agreement. If its members concluded that standard form
contract, as contended by the appellant, they have incorporated
the
collective agreement into their fixed-term contracts by reference,
and are bound by the collective agreement by their consent.
If the
collective agreement binds them then s198B is not applicable, as
contemplated in s198B(2)(c) of the LRA.
[29]
In any event, even if it were to be found that s198B is applicable to
the contracts, there is no averment by the appellant
that the
contracts of its members were in contravention of s198B(3). Even
though the employer bears an onus to prove, in relevant
proceedings,
that the fixed term contracts were justified as contemplated in terms
of subsection (3) and that the terms of the
contract was agreed, the
appellant, unwittingly, assisted in the discharge of that onus. For
example, as part of its case it annexes
a few termination notices to
its founding affidavit. The notices are all similar or of standard
form and the main body thereof
reads as follows: “This letter
serves as official notice in terms of your employment contract that
your fixed-term employment
contract will end on …This is due
to the completion/ stoppage by the client of work on the project/ or
end of employment
contract”. There is no averment or suggestion
that the contracts were terminated before their expiry dates and no
version
proffered contradicting the reasons given by Transnet for the
termination of the contracts. In any event, the appellant’s
reliance on vague, general, unexplained hearsay statements, including
those that could possibly be construed as alluding to the
reasons for
the contracts of its members, cannot be of assistance to it.
[30]
The appellant, in effect, conceded to its inability to make out a
case in the application that any of its members, on whose
behalf it
was bringing the application, had a legitimate expectation that their
contracts would be renewed by Transnet, and that
the non-renewal was
accordingly dismissals as contemplated in s186(1)(b) of the LRA.[6]
This would have required the appellant
to, at least, put up facts and
circumstances in respect of each affected employee, which would cause
a reasonable person, in the
position of the particular employee, to
expect a renewal of the contract.[7]
[31]
The appellant avers that the application is an alternative to the
other processes that it has adopted, namely, resorting to
arbitrations to prove that their individual members had reasonable
expectations of renewal. The appellant refers to two cases where
awards were given in favour of their members, which were then taken
by Transnet on review to the Labour Court. The appellant complains
about the practicalities of running arbitrations on behalf of
“literally thousands of employees” and extols the
benefits
to be derived from the success of the application. Mr James
states in that regard: “…should this Court uphold the
applicant’s contentions relevant to the applicability of
Section 189B to the current situation, this will effectively dispose
of all cases and there will be no need to deal with the alternative
contentions relevant to a reasonable expectation of permanency.”
The reference to s189B appears to be an error, and reference was most
likely being made to s198B of the LRA, but that does not
detract from
the point that the appellant sought to use the application as an
alternative, or short-cut strategy, but failed to
make out a case for
the relief sought.
[32]
In summary, the appellant’ application was rightly dismissed by
the Labour Court. Notwithstanding the perceived merit
in the,
effectively, singular ground that the appellant chose to pursue on
appeal, it had failed to make out a case in the application
for the
relief it sought. At the core of this failure was its failure to
prove that any of its members, on whose behalf it was
bringing the
application, had been dismissed by Transnet. It failed to show that
its members were not bound to the collective agreement
by consent,
despite having incorporated it into their contracts by reference, and
that s198B was therefore applicable. Alternatively,
it failed to
show, at least prima facie, that if the section was applicable that
(each of) the contracts of the members, that it
was representing, was
in contravention of s198B(3), as contemplated in s198B(5) of the LRA.
Instead, it put up as part of its case
uncontested information that
the contracts were justifiable. On the papers as they stand a finding
cannot be made that the reasons
for the contracts advanced by the
first respondent are not justifiable as contemplated in s198B(3) read
with subsection (4).
[33]
In those circumstances, it also failed to prove that it was entitled
to rely on s189A(13) of the LRA, which can only find application
at
the instance of a consulting party in circumstances where mass
dismissals of employees for operational reasons (retrenchments)
were
contemplated by the employer, and the employer failed to comply with
a fair procedure. The section provides that in those
circumstances
the consulting party may approach the Labour Court by way of an
application for an order (a) compelling the employer
to comply with a
fair procedure; (b) interdicting and restraining the employer from
dismissing an employee prior to complying with
a fair procedure; (c)
directing the employer to reinstate an employee until it has complied
with a fair procedure; (d) make an
award of compensation, if an order
in terms of paragraphs (a) to (c) is not appropriate.
[34]
The first respondent did not ask for costs, in the event it was
successful, but preferred to leave the costs issue in the Court’s
discretion. Taking all relevant factors into account, a costs order
is not appropriate.
[35]
In the result, the appeal is dismissed.
_______________________
P Coppin
Judge
of Appeal
Sutherland
JA and Savage AJA concur in the judgment of Coppin JA.
APPEARANCES:
FOR
THE APPELLANT:
Mr Minnaar Niehaus
of Minnaar Niehaus Attorneys
FOR
THE FIRST RESPONDENT:
Mr P Pretorius SC, with Mr R Itzkin
Instructed by
Maserumule Attorneys
[1]
Labour Relations Act 66 of 1995
.
[2]
Association of Mineworkers & Construction
Union and Others v Chamber of Mines acting in its own name and obo
Harmony Gold
Mining Co. Pty Ltd and Others
(
2016) 37 ILJ
1333 (LAC).
[3]
Ibid at para 43.
[4]
See eg.
Titty’s
Bar & Bottlestore (Pty) Ltd v ABC Garage (Pty) Ltd
1974 (4) SA 362
(T) at 368-369.
[5]
See eg.
Fry’s
Metals (Pty) Ltd v NUMSA and Others
[2003]
2 BLLR 140
(LAC) at para 37.
[6]
Section 186(1)(b)
of the LRA provides that the
failure to renew a fixed term contract, which an employee reasonably
expected the employer to renew
on the same or similar terms, or its
renewal on less favourable terms, constitutes a dismissal
[7]
De Milander v Member of the Executive Council for
the Department of Finance: Eastern Cape and Others
(2013) 34 ILJ 1427 (LAC) at paras 25-27.