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[2019] ZALAC 30
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Wallenius Wilhelmsen Logistics Vehicle Services v National Union of Metalworkers of South Africa and Others (PA01/18) [2019] ZALAC 30; (2019) 40 ILJ 1254 (LAC); [2019] 8 BLLR 795 (LAC) (26 February 2019)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, PORT ELIZABETH
Reportable
Case no: PA01/18
In
the matter between:
WALLENIUS WILHELMSEN
LOGISTICS
VEHICLE
SERVICES
Appellant
And
NATIONAL UNION OF
METALWORKERS
OF
SOUTH AFRICA
First Respondent
STATION
COMMANDER: SAPS UITENHAGE
Second Respondent
THE PERSONS LISTED IN
ANNEXURE “A”
TO
THE NOTICE OF MOTION
Third to Further Respondents
Heard:
14 February 2019
Delivered:
26 February 2019
Summary:
Collective agreement regulating negotiation and level of bargaining –
union demanding an additional R40.00 for transport
per day for its
members – employer obtaining a rule
nisi
retraining the union intended strike- rule nisi discharged on the
return date on the basis that the bargaining council constitutional
prohibitions on plant level bargaining had no application while there
was no enforceable collective agreement in operation.
Held
that bargaining council constitution remained (and remains) extant
despite the expiry of the 2013 agreement. Clause 11 of the
MIBCO
constitution makes it abundantly clear that proposals and bargaining
in respect of the amendment of any existing agreement,
the
introduction of a new agreement
or
any matter of mutual interest
are to be negotiated at MIBCO level and not at plant level; and
clause 12 prohibits strike action unless and until the dispute
about
a matter of mutual interest has been dealt with at central level…The
prohibition on plant level bargaining is directed
at uniformity and
orderly substantive outcomes. The attempt by NUMSA to introduce
two-tier bargaining sought to alter substantive
wage rates at plant
level in respect of a single employer. That is a matter of mutual
interest reserved by the MIBCO Constitution
for centralised
bargaining. NUMSA’s failure to do that meant that the strike
was prohibited in terms of section 65(1)(a)
of the LRA. NUMSA was
bound by a collective agreement (the MIBCO constitution) that
prohibited a strike in respect of a demand
for increased wages at
plant level. The Labour Court accordingly erred in not confirming the
rule
nisi
.
Appeal upheld.
Coram:
Tlaletsi JA, Murphy and Savage AJJA
JUDGMENT
MURPHY AJA
[1]
The appellant appeals against the judgment of the Labour Court
(Prinsloo J) in which
it discharged a rule
nisi
granting an
interim interdict restraining the first respondent from conduct in
furtherance of a strike in relation to a demand
for what it termed a
transport allowance.
[2]
The appellant and the first respondent (“NUMSA
”
)
fall within the registered scope of the Motor
Industry Bargaining Council (“MIBCO”). NUMSA is a party
to
MIBCO and was a signatory to the
constitution establishing MIBCO. The other parties to MIBCO are the
Retail Motor Industry Organisation
(“RMI”),
the Fuel Retailers Association of Southern Africa, and the Motor
Industry Staff Association (“MISA”).
The appellant is a
member of
RMI.
MIBCO
operates at a national level and comprises 56 party representatives
from six regions of the country.
[3]
Section 11 of the MIBCO constitution governs negotiations, collective
agreements and
disputes. The relevant provisions of section 11 read:
‘
11.1.1
The Council shall from time to time determine the timetable for
negotiations in respect of the amendment of any existing
agreement,
the introduction of a new agreement or any matter of mutual interest.
11.1.2 Proposals in
respect of the amendment of any existing agreement or the
introduction of a new agreement or any matter of mutual
interest
shall be submitted to the General Secretary in writing.
11.1.4 If a settlement is
not reached after discussion at a Council meeting, any party may
declare a dispute on those issues on
which they have not reached
agreement as from the date of the last Council meeting.’
[4]
The other provisions of section 11 set out a dispute procedure
involving dispute meetings
by the Council, mediation, arbitration of
rights disputes and industrial action (or mutually agreed
arbitration) in respect of
disputes of interest.
[5]
Clause 12 governs strikes and lock-outs. It reads:
‘
No
strikes or lock-outs shall take place until the matter giving
occasion therefor has been dealt with in accordance with the
provisions
of Section 11 of this Constitution and sections 64 and 65
of the Act and shall not in any event take place during the currency
of an agreement arrived at by the parties.’
[6]
On 4 April 2014, the Minister of Labour, acting in terms of section
32(7) of the Labour
Relations Act
[1]
(“the LRA”), promulgated and declared the scheduled
collective agreement concluded in MIBCO binding on the parties
to
MIBCO and other employers and employees in the industry with effect
from 14 April 2014 and for the period ending 31 August 2016
(“the
2013 agreement”).
[2]
[7]
Clause 2 of the 2013 agreement entrenched centralised bargaining in
the following
terms:
‘
Bargaining
within the Motor Industry… takes place at centralized level.
There shall be no two-tier bargaining on any matter
of mutual
interest, other than in Sector 6 where the Parties may engage in
plant level negotiations on actual wages.’
[8]
Sector 6 is defined to mean dealers, sales and distribution
establishments. The appellant
is not an employer in this category.
[9]
Clause 4(1) of the 2013 agreement included a peace clause which read:
‘
The
Parties agree not to embark on and/or participate in any form of
industrial action as a result of any dispute on wages and/or
salary
adjustments and other conditions of employment relating to any sector
or chapter in this Agreement: Provided that an employer
has
implemented the wages and/or salary adjustments and other agreed
conditions of employment matters on or before promulgation.
Participation in any form of industrial action after the date of the
settlement Agreement until 31 August 2016 shall be unprotected.’
[10]
Clause 4(2) of the 2013 agreement repeated the stipulation in clause
2 that bargaining (other
than in Sector 6) would take place at
centralised level.
[11]
The “Main Agreement” is set out in the schedule to GN
37508 and comprehensively regulates
remuneration and other terms and
conditions of employment applicable in the industry.
[12]
During 2016, NUMSA raised a demand with the appellant for
R40.00
per working day to
be
paid to each of its members at the appellant’s Uitenhage plant,
which
it referred to
as
a “transport allowance”. This demand was for a benefit in
addition to a term contained in the 2013
agreement
that the appellant was obliged to provide transport to its employees
who end work after 20h00.
[3]
[13]
The demand
was essentially
a
demand for
a wage
increase
in that the amount of R40.00 was not for reimbursement of actual
transport costs and bore no relationship to the daily
cost of
transport as employees
lived in different
areas and travelled
at different times.
As stated, the demand was made by NUMSA at plant
level.
[14]
It is not clear from the record, the Labour Court judgment or
counsel’s heads of argument
in the appeal when precisely the
demand was first made in 2016. However, the 2013 agreement expired on
31 August 2016.
[15]
The dispute was referred to the bargaining council for conciliation
and remained unresolved.
On 28 October 2016, NUMSA issued a strike
notice advising that a strike concerning the demand would commence on
31 October 2016.
The appellant immediately approached the Labour
Court (“the first application”) and obtained a rule
nisi
comprising an interim order interdicting the intended strike action,
which rule
nisi
was returnable on 25 November 2016.
[16]
In the intervening period, on 18 November 2016, the parties to MIBCO
signed a “settlement
agreement” providing for a new
collective agreement (“the 2017 agreement”) regulating
wages and conditions of
employment from the date of promulgation by
the Minister until 31 August 2019. The settlement agreement contains
a clause (“the
immunisation clause”) immunising from
industrial action component manufacturers who implemented the
agreement earlier than
the date of promulgation. In the part dealing
with component manufacturers, and under the marginal note
“Implementation Date”,
the settlement agreement provided:
‘
Effective
date as published by the Minister of Labour in the Government
Gazette. The RMI however undertakes to recommend to its
members to
implement the terms of this agreement with effect from 1 September
2016, provided that where an employer has elected
to implement these
terms retrospectively, it shall be immune to any industrial action
that may arise as a consequence of any dispute
in any other sector of
the industry, with the express understanding that such industrial
action will be automatically unprotected.’
[17]
No similar immunisation was provided for employers other than
component manufacturers in other
sectors, regardless of whether they
retrospectively implemented the changes to wages and conditions prior
to promulgation. The
appellant is not a components manufacturer and
therefore did not benefit from the immunisation. It nonetheless
implemented the
wage increase with effect from 1 September 2016.
[18]
The settlement agreement concluded with a “reservation
clause”
[4]
as follows:
‘
All
other administrative and substantive aspects of the 2013 expired
agreement that are not amended by way of this settlement agreement
shall survive in the new Main Agreement, which will be the 2013
agreement inclusive of amendments to the extent that they are
provided for in this settlement agreement.’
[19]
The appellant referred to the intervening conclusion of the
settlement agreement in its replying
affidavit in the first
application. The Labour Court held that because the intervening
settlement agreement was not raised in the
founding affidavit, it
could not be taken into consideration. The rule
nisi
granted
in the first application was accordingly discharged on 7 December
2016. The next day, on 8 December 2016, the appellant’s
attorneys addressed a letter to NUMSA requesting NUMSA to advise
whether it still intended to proceed with the strike action. NUMSA
did not respond to the letter and the employees continued to work as
they did after the interim order was first granted on 28 October
2016.
[20]
On 23 January 2017, NUMSA gave the appellant notice once more of the
strike action to commence
on 24 January 2017. This notice
precipitated the institution of another urgent application (“the
second application”),
which is the subject of this appeal. On
25 January 2017, the appellant secured another interim order
interdicting the strike action.
However, on 3 April 2017, the rule
nisi
was discharged by Prinsloo J for the reasons set out in
the judgment under appeal.
[21]
The appellant advanced two key arguments in the second application
before the Labour Court, with
which it persisted before us. Firstly,
it argued that the strike action was unprotected in that clauses 11
and 12 of the MIBCO
constitution prohibit plant level negotiations
regarding any matter of mutual interest. The effect of clauses 11 and
12, it argued,
is that all matters of mutual interest must be
negotiated at a national level, which also accords with the
centralised bargaining
and peace clauses in clauses 2 and 4 of the
2013 agreement, which were re-enacted by the Minister in GN 40771 of
7 April 2017 when
she promulgated the 2017 agreement.
[22]
Secondly, the appellant contended that NUMSA had waived its right to
continue with the demand
for the payment of the R40.00 per day given
that, subsequent to the demand and the original strike notice,
negotiations had continued
and the 2017 agreement was signed on 18
November 2016. As said, the 2017 agreement includes the overarching
centralised bargaining
and peace clauses, without reservation of any
rights on the part of NUMSA to proceed with and pursue plant level
demands, outside
of all the tabled matters of mutual interest.
[23]
It is unnecessary to examine the reasoning of the court
a quo
in any detail. The learned judge held
inter alia
that there
was no operative or enforceable collective agreement in the period
between 31 August 2016 (the date the 2013 agreement
expired) and the
promulgation of the 2017 agreement. Moreover, because the appellant
was not a components manufacturer it was not
immunised from
industrial action by the settlement agreement, even though it
implemented the amended wages and conditions retrospectively.
[24]
The learned judge correctly interpreted the immunisation clause in
the settlement agreement as
foreseeing the possibility of industrial
action against employers who did not benefit from its restricted
scope. There was accordingly
no operative peace clause for employers
other than component manufacturers after 31 August 2016 until
promulgation of the 2017
agreement by the Minister in April 2017 –
or perhaps more accurately the peace clause in clause 4 of the 2013
agreement had
not wholly survived its expiry date in terms of either
the immunisation clause or reservation clause.
[25]
Moreover, in our view, the very existence and the restricted nature
of the immunisation clause
gives the lie to the argument that NUMSA
had waived its right to strike in relation to other demands. The
evident purpose of the
immunisation clause was to retain, until the
promulgation of the 2017 agreement, the right to strike in relation
to any disputes
against employers other than component manufacturers
and component manufacturers who did not immediately implement the
wage increases
retrospectively.
[26]
However, the Labour Court erred in its understanding and application
of the various prohibitions
against plant level bargaining in the
MIBCO constitution. It regarded the provisions governing centralised
bargaining in clauses
11 and 12 of the MIBCO constitution to be mere
procedural provisions not imposing any substantive prohibition.
It relied in this regard upon
dicta
in
County
Fair Foods (Pty) Ltd v FAWU and Others
[5]
which hold that parties who do not follow pre-strike procedures in
collective agreements may still enjoy protection provided the
procedures in section 64 of the LRA are complied with.
[6]
It
also concluded that the MIBCO constitutional prohibitions had no
application while there was no enforceable collective agreement
in
operation. The reasoning is erroneous for the following reasons.
[27]
Firstly, the MIBCO constitution is a collective agreement as defined
in section 213 of the LRA
in that it is a written agreement concerned
with matters of mutual interest concluded by registered trade unions
and employer organisations.
The MIBCO constitution remained (and
remains) extant despite the expiry of the 2013 agreement. Clause 11
of the MIBCO constitution
makes it abundantly clear that proposals
and bargaining in respect of the amendment of any existing agreement,
the introduction
of a new agreement
or
any matter of mutual interest
are to be
negotiated at MIBCO level and not at plant level; and clause 12
prohibits strike action unless and until the dispute
about a matter
of mutual interest has been dealt with at central level. These are
substantive prohibitions regulating levels of
bargaining and go
beyond mere process, notice provisions or a prerequisite of
conciliation for industrial action of the kind required
by section 64
of the LRA. The level of collective bargaining impacts substantively
on sectoral wage rates. The prohibition on plant
level bargaining is
directed at uniformity and orderly substantive outcomes. The attempt
by NUMSA to introduce two-tier bargaining
sought to alter substantive
wage rates at plant level in respect of a single employer. That is a
matter of mutual interest reserved
by the MIBCO Constitution for
centralised bargaining.
[28]
It follows that while the immunisation clause in the settlement
agreement permitted NUMSA to
demand an additional R40.00 per day for
its members working at the appellant, and notwithstanding the fact
that the centralised
bargaining clause in the 2013 agreement (which
survived in the 2017 agreement by virtue of the reservation clause)
was not operative
between 1 September 2016 and 14 April 2017, it was
still obliged to raise the demand and negotiate it at central level
in terms
of the MIBCO constitution. NUMSA’s failure to do that
meant that the strike was prohibited in terms of section 65(1)(a) of
the LRA. NUMSA was bound by a collective agreement (the MIBCO
constitution) that prohibited a strike in respect of a demand for
increased wages at plant level. The Labour Court accordingly erred in
not confirming the rule
nisi
.
[29]
Counsel for the respondent argued that the appeal had become moot on
account of the promulgation
of the 2017 agreement. We disagree. The
demand has not been withdrawn or settled and NUMSA might be minded to
strike in relation
to it on expiry of the 2017 agreement in August
2019. An order upholding the appeal will thus be of practical effect.
[30]
In the premises, the appeal is upheld and the following orders are
made:
30.1
The order of the Labour Court is set aside and substituted with an
order confirming the rule
nisi
.
30.2
The first respondent is ordered to pay the costs of the appeal.
_______________________
JR Murphy
Acting
Judge of Appeal
I agree
___________________
P Tlaletsi
Judge
of Appeal
I
agree
__________________
K Savage
Acting
Judge of Appeal
APPEARANCES:
FOR
THE APPELLANT:
CA Nel
Instructed
by Macgregor Erasmus Attorneys
FOR
THE RESPONDENTS:
FE le Roux
Instructed
by Gray Moodliar Attorneys
[1]
Act 66 of 1995.
[2]
GN
37508.
[3]
Clause 4.1B(3)(h) of Division A of the Main Agreement provided that
transport for employees whose shifts ended after 20h00 may
be
arranged by mutual consent or with the assistance of the relevant
regional council of MIBCO.
[4]
The
clause is accompanied by a marginal note reading - “All other
administrative and substantive aspects of the expired
agreement(s).”
[5]
[2001] 5 BLLR 494
(LAC) at para 20
[6]
Section 64 of the LRA confers a right to strike or lock-out provided
the matter has been referred to the relevant bargaining
council or
the Commission for Conciliation, Mediation and Arbitration for
conciliation, the dispute remains unresolved and 48
hours’
notice of commencement has been given.