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[2019] ZALAC 33
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Road Traffic Management Corporation v Tasima (Pty) Ltd (JA10/19) [2019] ZALAC 33; (2019) 40 ILJ 1785 (LAC) (15 March 2019)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case
no: JA10/19
In
the appeal between:
ROAD
TRAFFIC MANAGEMENT CORPORATION
Appellant
And
TASIMA
(PTY) LTD
Respondent
Heard:
08 March 2019
Delivered:
15 March 2019
Coram:
Coppin JA, Murphy and Savage AJJA
JUDGMENT
MURPHY
AJA
[1]
This is an appeal in terms of section 18(4) of the Superior Courts
Act
[1]
("the Act")
against an order of the Labour Court
(Prinsloo
J) ordering the operation and execution of an earlier Labour Court
decision by Steenkamp J, later upheld by this Court,
and which is now
the subject of an application for leave to appeal to the
Constitutional Court
.
The
background
[2]
The respondent “(“Tasima”) was the entity
responsible for the development,
operation, management, control, and
maintenance of the electronic National Traffic Information system
("the eNaTIS system")
and various services in relation to
it.
[3]
The eNaTIS system is a complex network of nationwide remit, pivotal
to the implementation
of road traffic policy and legislation. It is
self-financing through transaction fees, which accrue to the state.
Tasima operated
the system for nearly 15 years.
[4]
The eNaTIS system and the rendering of eNaTIS services was the sole
business of Tasima,
representing the entirety of its business and
revenue generation. All of its employees were dedicated solely to the
eNaTIS system
and the rendering of the eNaTIS services. The employees
were the 5
th
to 84
th
respondents in the urgent
application referred to below.
[5]
Pursuant to an order of the Constitutional Court on 23 June 2015, the
eNaTIS system
and services were transferred from Tasima to the
appellant (“the RTMC”).
[2]
After various negotiations and interactions, the RTMC took physical
transfer of the eNaTIS system on 5 April 2017. However, it
refused to
accept transfer of any of the employees. Tasima thus instituted an
urgent application before the Labour Court to compel
such a transfer.
The
application in terms of section 197 of the Labour Relations Act
[3]
(“LRA”)
[6]
On 25 May 2017, after hearing argument, the Labour Court (Steenkamp
J) made the following
order:
‘
63.1
It is declared that with effect from 5 April 2017, the contracts of
employment of the 5
th
to 84
th
respondents
transferred automatically from the applicant (Tasima (Pty) Ltd) to
the first respondent (the Road Traffic Management
Corporation) in
accordance with the provisions of section 197 of the Labour Relations
Act (Act 66 of 1995).
63.2
The RTMC is directed to pay the 5
th
to 84
th
respondents from 5 April 2017 to the date of the final determination
of the order in subparagraph 1 above:
63.2.1
on a monthly basis on or before that the contracts of employment of
the employees transferred automatically to RTMC the 25
th
of each month, the amounts set forth under the column headed “Monthly
CTC excl 13
th
cheque, annual bonus, overtime, standby
allowance, birthday voucher and night shift allowance” as set
out in Annexure “C”
to Annexure “FM 11.6” to
the founding affidavit of Fannie Lynen Mahlangu; and
63.2.2
on an annual basis, any additional amounts making up the column
headed “Annual Total CTC” as set forth in that
schedule.’”
[7]
On 21 December 2018, this Court partly upheld the decision of
Steenkamp J.
However,
as the legal
causa
of the transfer was in fact the order of the Constitutional Court of
23 June 2015, it held that the declaratory order in paragraph
63.1 of
the Labour Court’s judgment should be amended accordingly. It
held further that the Labour Court had erred in granting
the order in
paragraph 63.2 by reversing the principle of suspension on appeal
before an appeal was noted, thus pre-empting the
RTMC’s right
to address the issues of suspension and interim execution in an
appropriate application. The order in paragraph
63.2 impermissibly
circumvented the jurisdictional requirements of section 18 of the
Act. Had the learned judge simply ordered
payment of the salaries as
relief consequential upon the declaratory order, the situation might
have been different. He erred in
making the order one pending the
outcome of subsequent appeals.
[8]
In paragraph 57 of its judgment, this Court, therefore, ordered:
‘
1.
The appeal in respect to paragraph 63.1 of the order of the Labour
Court is dismissed with no order as to costs; save that the
effective
date of the transfer of the employees’ contracts is amended
from 05 April 2017 to 23 June 2015.
2.
The appeal in respect of paragraph 63,2 of the order of the Labour
Court is upheld with costs.’
[9]
The effect of the order of this Court is that the only extant order
of the Labour
Court, as amended, now reads:
‘
It
is declared that with effect from 23 June 2015, the contracts of
employment of the 5
th
to 84
th
respondents transferred automatically from the applicant (Tasima
(Pty) Ltd) to the first respondent (the Road Traffic Management
Corporation) in accordance with the provisions of section 197 of the
Labour Relations Act (Act 66 of 1995).’
The
application in terms of section 18(3) of the Act
[10]
The
RTMC has applied to the Constitutional Court for leave to appeal this
Court’s order declaring that the employees’
contracts
have transferred to the RTMC in terms of section 197 of the LRA. The
application for leave to appeal has the effect of
suspending the
operation and execution of the order of this Court (and the amended
order of Steenkamp J).
[4]
[11]
Additionally, in the interim, the RTMC has refused to accept the
employees (the fifth to eighty-fourth
respondents in the urgent
application) as its employees or to pay them their monthly
remuneration. Tasima accordingly brought -
in its own name and on
behalf of the employees – an urgent application in terms of
section 18(3) of the Act to enforce the
order of this Court.
[12]
The relevant part of section 18 of the Act reads:
‘
(1)
Subject to subsections (2) and (3), and unless the court under
exceptional circumstances orders otherwise, the operation and
execution of a decision which is the subject of an application for
leave to appeal or of an appeal, is suspended pending the decision
of
the application or appeal.
(2)
Subject to subsection (3), unless the court under exceptional
circumstances orders otherwise, the operation and execution of
a
decision that is an interlocutory order not having the effect of a
final judgment, which is the subject of an application for
leave to
appeal or of an appeal, is not suspended pending the decision of the
application or appeal.
(3)
A court may only order otherwise as contemplated in subsection (1) or
(2), if the party who applied to the court to order otherwise,
in
addition proves on a balance of probabilities that he or she will
suffer irreparable harm if the court does not so order and
that the
other party will not suffer irreparable harm if the court so orders.”
[13]
Section 18(4) of the Act provides that if an order is made under
section 18(1), the aggrieved
party has an automatic right of appeal
to the next highest court and the order under section 18(1) will be
suspended, pending the
outcome of such appeal.
[14]
The Act applies to superior courts which are defined in section 1 of
the Act to mean the Constitutional
Court, the Supreme Court of
Appeal, the High Court and any court of a status similar to the High
Court. Section 151(2) and section
167(3) of the LRA provide that the
Labour Court and the Labour Appeal Court are superior courts with
authority, inherent powers
and standing, in relation to matters under
their jurisdiction, equal to that of the High Court and Supreme Court
of Appeal respectively.
[5]
Section 18(3) of the Act is thus applicable to appeals under the LRA.
[15]
In paragraph 2.1 of its notice of motion for relief under section 18
of the Act, Tasima sought
an order that paragraph 57.1 of this
Court’s order, read with paragraph 63.1 of the Labour Court’s
order, “operates
and is extant until the determination of all
present and future leave to appeal applications and appeals”
against this Court’s
order. It in addition in paragraph 2.2 of
the notice motion sought an order that:
‘
[T]he
first respondent take transfer of the fifth to eighty fourth
respondents as its employees, on terms no less favourable than
their
contracts of employment with the applicant.’
[16]
The order sought in paragraph 2.2 of the notice of motion goes beyond
the declaration of rights
granted in paragraph 57.1 of this Court’s
order, read with paragraph 63.1 of the Labour Court’s order.
The relief sought
is consequential relief
ad factum praestandum
–
an order to perform some act
.
As an alternative to the relief
sought in paragraph 2.2 of the notice of motion, in paragraph 3 of
the notice of motion, Tasima
also sought an order similar to that
granted by Steenkamp J in paragraph 63.2 of his judgment. And, as a
further alternative, in
paragraph 4 of the notice of motion, it
sought an order directing the payment of salaries as set forth in an
annexure to the notice
of motion. The relief sought in paragraphs 3
and 4 being consequential relief
ad pecuniam solvendam,
also
goes beyond mere declaratory relief.
[17]
Prinsloo J held that Tasima had satisfied the three requirements for
the securing of section
18(3) relief; namely: i) exceptional
circumstances justifying reversing the ordinary rule of suspension;
ii)
proof on a
balance of probabilities that it (and the employees) will suffer
irreparable harm if the operation and execution of the
order is not
given interim effect; and iii) that the RTMC will not suffer
irreparable harm if the order is immediately put into
operation.
[18]
Prinsloo J made the following orders
[6]
:
‘
1.
Paragraph 57.1 of the Labour Appeal Court Order of 21 December 2018,
read with paragraph 63.1 of the Labour Court order, dated
25 May
2017, operates and is extant until the final determination of all
leave to appeal applications and appeals against the Labour
Appeal
Court order;
2.
The Road Traffic Management Corporation (First Respondent) is ordered
to comply with the Labour Court’s order of 21 December
2018,
read with paragraph 63.1 of the Labour Court order, dated 25 May
2017, by taking transfer of the Fifth to Eighty Fourth Respondents,
excluding those listed in annexure B to the Applicant’s notice
of motion, within 24 hours of this order being granted.’
[19]
Hence, the learned judge granted the declaratory relief sought in
paragraph 2.1 and the
ad factum
praestandum
relief sought in paragraph
2.2 of the notice of motion, but not the alternative relief in
paragraphs 3 and 4 of the notice of motion.
The
appeal in terms of section 18(4) of the Act
[20]
The RTMC has invoked its
automatic right of appeal to this Court in terms of section 18(4) of
the Act.
[21]
Counsel for the appellant, Mr. Redding SC, and counsel for the
respondent, Mr. Franklin SC, presented
cogent and well-reasoned
arguments pertaining to the requirements of section 18 of the Act. It
is not necessary to canvass them
all. For the narrow reasons that
follow, the order of Prinsloo J granting consequential relief pending
the appeal to the Constitutional
Court cannot stand.
[22]
The only order extant
after the variation of the order of Steenkamp J on appeal is the
declaratory order declaring
that
with effect from 23 June 2015 the contracts of employment of the
employees have transferred automatically from Tasima to the
RTMC in
accordance with the provisions of section 197 of the LRA. The
declaratory order is of the kind contemplated in section
21(1)(c) of
the Act which confers jurisdiction on all superior courts, including
the Labour Court, to enquire into and determine
any existing, future
or contingent right or obligation, notwithstanding that such person
cannot claim any relief consequential
upon the determination.
[23]
The employees in this case may well have a claim for consequential
relief compelling the RTMC
to accept the tender of their services (
ad
factum praestandum
)
and to pay remuneration to them under the transferred contracts of
employment (
ad
pecuniam solvendam
).
However, neither Steenkamp J nor this Court on appeal granted any
consequential relief.
[7]
As
stated, the only order subject to the application for leave to appeal
to the Constitutional Court is the declaratory order.
It is the
operation and execution of that order which has been suspended by
virtue of section 18(1) of the Act. And, thus, it must
follow
logically that only that order can be made operational or executable
in terms of section 18(3) of the Act.
[24]
Counsel submitted that the amended declaratory order necessarily
implies the contemplated consequential
relief. But that proposition
is not free from difficulty in the peculiar circumstances of this
case.
[25]
Under the common law, the courts did not have the power to grant
declaratory orders without consequential
relief.
[8]
However, over time, the courts have accepted that a declaration of
rights may be granted even if other consequential relief which
has
not been sought could have been granted.
[9]
It is therefore permissible for a declaratory order to be sought and
granted in advance of suing under a different cause of action
for
consequential relief such as the payment of remuneration.
[10]
In
Cape
Town Municipality v Allianz Insurance Co Ltd,
[11]
where the plaintiffs claimed a declaration as to the defendant’s
liability in terms of an insurance policy, the court was
prepared to
grant the declaration of rights even though the plaintiffs needed to
institute a further action to obtain payment of
the amount claimable
under the policy. It held that such an approach is not contrary to
the rule that a party can sue only once
upon a single cause of
action.
[12]
Likewise, it is
possible to seek a limited declaratory order that a contract of
employment is extant between parties and to proceed
by further action
for payment of remuneration.
[13]
[26]
Courts accordingly should hesitate to infer consequential relief from
the terms of an order merely
granting declaratory relief. And this is
particularly so in instances where an applicant seeks to reverse the
ordinary rule of
suspension and to execute an order subject to
appeal. The reversal of the rule of suspension is an exceptional
remedy granted only
if the jurisdictional pre-requisites have been
strictly established.
[27]
Our conclusion that Prinsloo J in the circumstances of this case had
no jurisdiction or power
under section 18(3) of the Act to order
consequential relief is reinforced by the principle that execution is
ordinarily only available
when a
lis
has been definitively and judicially resolved. A
lis
has not been resolved if the amounts owing and payable under the
judgment are ascertainable only after a further problem of law
has to
be decided.
[14]
A judgment
upon which execution is issued must be a judgment from which there
can be gathered what money or thing the judgment
debtor must
deliver.
[15]
[28]
The performance due and amounts payable by the RTMC in this case are
not definitively ascertainable.
The order of Steenkamp J declared
that the contracts of employment of 80 employees had transferred. In
its founding affidavit in
the section 18 application, Tasima
recognised that some of these persons no longer have a right to
employment or salaries because
they had either retired or resigned.
It identified those former employees and reduced the claim to only 68
employees whose salaries
it set out in Annexure C to the notice of
motion. However, a further complication arises in view of the fact
that this Court varied
the order of Steenkamp J by setting the
effective date of the transfer at 23 June 2015. The founding
affidavit in the application
in terms of section 18(3) of the Act is
silent on which of the 68 employees were in employment in June 2015.
In paragraph 20 of
its answering affidavit, the RTMC contended that
the employees had not put up sufficient facts to establish their
standing, including
that they were employed by Tasima prior to 23
June 2015 and performed a job connected to the “business”
that was transferred
to the RTMC. The RTMC accordingly contended that
the section 18 application could not be decided until there were
additional facts
before the Labour Court identifying which employees
had transferred. In reply, Tasima pointed out that the order of this
Court,
amending the order of Steenkamp J, despite varying the
effective date of the transfer, had nonetheless declared that the
contracts
of the 5
th
to 84
th
respondents had transferred under section 197 of the LRA. It declined
the invitation to identify the employees who took up employment
after
June 2015
[29]
It appears to be common cause that several of the employees were
indeed employed by Tasima for
the first time after June 2015. An
annexure to a letter addressed by Tasima’s attorneys to the
attorneys of the RTMC dated
11 April 2017 indicates that at least 19
employees took up employment with Tasima after June 2015. That
document, while a useful
indicator, is of insufficient evidentiary
value to determine conclusively which employees have in fact and in
law transferred.
[30]
While it may be that the amended declaratory order declared that the
contracts of all 80 employees
transferred, the
lis
cannot be
finally decided unless and until proper evidence, precisely
identifying the employees who are eligible to be paid remuneration
by
the RTMC, is placed before the court. It was inappropriate in the
circumstances to extend the declaratory order and permit execution
of
consequential relief not expressly ordered by this Court. Prinsloo J
erred in doing so.
[31]
That brings us to the question of whether the suspension of the
operation and execution of the
declaratory order in paragraph 63.1 of
the order of Steenkamp J should be reversed in terms of section
18(3). Accepting for the
purposes of argument that the circumstances
are exceptional, the evidence does not disclose that Tasima and the
employees will
suffer any harm if the suspension of the operation and
execution of the declaratory order is not reversed pending any appeal
to
the Constitutional Court. In the premises, the pre-requisites of
section 18(3) have not been met.
[32]
The following orders are issued:
35.1
The appeal in terms of section 18(4) of the Superior Courts Act is
upheld.
35.2
The order of the Labour Court is set aside and is substituted with an
order dismissing the application.
35.3
The respondent is ordered to pay the costs of the appeal.
_______________
JR
Murphy
Acting
Judge of Appeal
I
agree
_______________
P
Coppin
Judge
of Appeal
I
agree
_________________
K
Savage
Acting
Judge of Appeal
APPEARANCES:
FOR
THE APPELLANT:
Redding SC and
K Hopkins
Instructed
by Selepe Attorneys
FOR
THE RESPONDENT:
A Franklin SC and P McNally SC
Instructed
by Webber Wentzel
[1]
Act 10 of 2013.
[2]
Department
of Transport v Tasima
2017 (2) SA 622
(CC).
[3]
Act 66 of 1995.
[4]
Section 18(1) of the Act.
[5]
See
Luxor
Paints (Pty) Ltd v Lloyd
(2017)
38 ILJ 1149 (LC) and in
Wenum
v Maquassi Hills Local Municipality
(2017)
38 ILJ 1213 (LC).
[6]
Paragraph 125 of the judgment
[7]
The order in paragraph 63.2 was intended to be interim pending the
determination of all appeals.
[8]
Geldenhuys
and Neethling v Beuthin
1918
AD 426
at 439-441.
[9]
Safaris
Reservations (Pty) Ltd v Zululand Safaris (Pty) Ltd
1966 (4) SA 165
(D) at 171;
Standard
Bank of SA Ltd v Trust Bank of Africa Ltd
1968 (1) SA 102
(T) at 105.
[10]
Lawson
& Kirk (Pty) Ltd v Phil Morkel Ltd
1953 (3) SA 324
(A) at 333.
[11]
1990
(1) SA 311
(C) at 332D-333G.
[12]
See the discussion of this issue in Herbstein and Van Winsen:
The
Civil Practice of the High Courts of South Africa
Volume 2 1437-1438.
[13]
In terms either of the contract or
section 32
of the
Basic
Conditions of Employment Act 77 of 1997
.
[14]
De
Crespigny v De Crespigny
1959
(1) SA 149 (N).
[15]
McNutt
v Mostert
1949 (3) SA 253
(t) at 255.