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[2007] ZALCJHB 31
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Zero Appliances (Pty) Ltd v Commission for Conciliation Mediation and Arbitration and Others (JR805/06) [2007] ZALCJHB 31 (28 March 2007)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT JOHANNESBURG
CASE
NO: JR 805/06
In
the matter between:
ZERO
APPLIANCES (PTY) LTD
Applicant
and
THE
COMMISSION FOR CONCILIATION,
MEDIATION
& ARBITRATION
First
Respondent
J
S E NKOSI NO
Second
Respondent
SELLO
MAKGOBA & 62
OTHERS
Third
to further respondent
JUDGMENT
RAMPAI
AJ
[1]
These proceedings are concerned with two matters. The purpose of the
application is, therefore, twofold. In the first instance
the
employer seeks to have the second respondent’s ruling reviewed
and set aside. In the second instance the employer seeks
to have the
second respondent’s certificate also reviewed and set aside. I
shall revert to the ruling and the certificate
in due course.
[2] I
shall refer to the applicant as the employer and to the third
respondent and sixty one others as the employees. The historical
background seems to be necessary.
[3]
The employer’s deponent, George Monoyoundis, stated in the
founding affidavit that in the year 2004, the employer experienced
such severe financial difficulties that it negotiated with another
company called Domitec and explored the possibility of Domitec
buying
the business of the employer as a going concern. The negotiations
were fruitless.
[4]
The abortive sale negotiations forced the employer to initiate a
retrenchment process based on operational requirements. Among
others,
the employer operates a business which chiefly manufactures
absorption refrigeration units in their entirety. These units
are
operated through gas and electricity. The employer supplies the goods
to both the local and international markets. The individual
respondents, in other words Makgoba and others, were employed by the
applicant, Zero Appliances (Pty) Ltd. The employer started
with the
employee’s retrenchment process on 12 May 2005. The employer
issued notices of possible retrenchment and caused
them to be
delivered to all the employees concerned as well as the Metal &
Engineering Industries Bargaining Council within
whose registered
industrial scope the employer falls.
[5]
The first consultative meeting was held on 23 May 2005. The employees
were duly represented. The employer was requested to provide
documentary proof that there was no viable alternative save to
retrench. The second consultative meeting was held on 08 June 2005.
The unions requested for the appointment of a facilitator by the
CCMA. It was agreed that the union WESUSA would take the matter
up
with MEIBC.
[6] On
4 July 2005 the first respondent came on board. The first
facilitation meeting took place at the first respondent’s
offices on 13 July 2005. The employees were duly represented. At this
meeting the facilitator directed the employer to furnish
the
employees with financial statements and other information relative to
its financial affairs. The second facilitation meeting
was held on 22
July 2005. Two trade unions namely SACWU and WESUSA were involved
throughout the process. The non-unionised employees
were represented
by one employee, a delegate of their choice, throughout the process.
During the facilitative phase of the retrenchment
process neither the
two unions nor the delegate questioned or disputed the employer’s
reasons for retrenchment. At the second
facilitative meeting all the
stakeholders agreed that early retirements or voluntary retirements
or both options would serve as
alternatives to outright mass
retrenchment. The negotiated alternatives were accepted and endorsed
by both the unionised and non-unionised
employees.
[7] The parties reached a
facilitation agreement and signed it soon afterwards. A list of
employees who opted for early retirement
or voluntary retirement was
compiled and agreed upon. In terms of the facilitation agreement the
employer issued notices of termination
on 29 July 2005. The notices
were then served on the employees concerned.
[8] A
week later, on 5 August 2005, to be precise, the affected employees
received the final payslips, cheques, lump-sum breakdowns,
certificates of service, the unemployed insurance forms ui19 as well
as the contact details forms for the purpose of possible future
re-employment. The third respondent and sixty two others were among
those employees whose employment contracts were terminated
in
accordance with the terms and conditions of the facilitation
agreement.
[9]
Approximately three months later, on 3 November 2005 the employer
received a letter from Tshabalala Labour Consultants. The
consultants
advised the employer they acted on behalf of the sixty three
individual respondents. Through the consultants the employees
alleged
that they were unfairly retrenched by the employer. The reason they
gave for the alleged unfairness was that the employer
did not comply
with section 189 of the Labour Relations Act No. 66 of 1995 (LRA).
[10]
In its founding affidavit the employer stated that it thereby
understood that the employees were complaining about the procedural
fairness of their dismissals- vide par 8.19 founding affidavit p14 of
the record. In their answering affidavit the employees admitted
the
employer’s averment that the crux of the dispute was the
procedural unfairness of the retrenchment process which preceded
the
termination of their individual contracts of employment -vide par 5
of the answering affidavit p150 of the record. In a further
letter
addressed to the employer on behalf of the employees, Tshabalala
Labour Consultants confirmed that the only issue the employees
were
complaining about was that the employer did not follow a fair
procedure in retrenching them.
[11]
On 29 November 2005, some one hundred and twenty three days after
their contracts of employment were terminated, the aggrieved
employees referred a dispute of unfair dismissal to the first
respondent, the Commission for Conciliation, Mediation and
Arbitration.
In their referral they alleged that their multiple
dismissals were procedurally unfair.
[12] I
have two difficulties with the employees referral. First, they
referred the dispute to the wrong tribunal, the CCMA instead
of the
MEIBC. The employer falls under the scope of the latter and not the
former. Second, the referral was channelled through
the wrong route.
Disputes about procedural unfairness of dismissals on the ground of
operational exigencies are the exclusive business
of the labour court
and not the CCMA or any bargaining council.
[13]
Prior to the scheduled conciliation meeting, the employer’s
representative, the General & allied Industries Employers’
Organisation, notified the first respondent about the existence of
the MEIBC and that MEIBC was the only recognised structure with
jurisdiction over the employer as far as dispute about labour
relations were concerned. Notwithstanding such notice the first
respondent carried on with the conciliation meeting as scheduled.
[14] The conciliation
hearing was held at the CCMA offices on 22 February 2006. The first
respondent appointed the second respondent
Commissioner JSE Nkosi to
chair the conciliation proceedings. The employees were represented
but the employer was not. The conciliation
proceedings were held
under case number GA 31757-04. Having heard the representative of the
employees the second respondent did
two things:
Firstly
he granted the application of the employees for condonation of their
late referral of the dispute. Secondly he certified
that the dispute
remained unresolved, and issued a section 135 certificate to that
effect and directed the employees to refer the
dispute to the labour
court.
[15]
These are the two rulings by the said commissioner which are
currently under attack. The employer wants to have both the
condonation
ruling and the conciliation certificate reviewed and
reversed.
[16]
Pursuant to the aforesaid rulings by the second respondent, the
employees filed a statement of case in this court under case
number
JS 147-06. The employer opposed the claim of the employees and filed
a statement of response. In their statement of case
the employees
reiterated their earlier extra curial complaint that their multiple
dismissals were procedurally unfair. Therefore
the procedural
unfairness was and is still is the only issue between the employees
and the employer, in those pending proceedings.
[17]
The purpose of this application before me, as I have already
mentioned, is to have the second respondent’s ruling by
virtue
of which condonation was granted to the employees reviewed and set
aside and also to have the second respondent’s
certificate in
terms of which direction was given to the employees to refer their
belated dispute to this court be reviewed and
set aside. This then is
the undisputed factual matrix of the case before me.
[18] I
now turn to consider the grounds of the review as advanced by the
employer. Mr Gerber counsel for the employer argued that
the employer
operated a business which fell within the registered scope of MEIBC.
That being the case, he argued further, that
MEIBC had jurisdiction
over the dispute as the employer fell under its umbrella. Therefore,
he submitted that the first respondent,
the CCMA did not have
jurisdiction over the dispute the employees referred to it. The
submission is a sound legal proposition.
The matter of dispute
resolution mechanism is covered by the main collective agreement. The
employees and the employer are bound
by the dispute resolution
procedure as set out therein. The mere fact that the first respondent
was involved during the facilitation
phase of the retrenchment
process prior to the termination of the employees contract of
employment did not entail the transfer
of the jurisdiction over the
dispute from the MEIBC to the CCMA.
[19]
It follows from the above that since the CCMA did not have
jurisdiction over the dispute between the employees and the employer,
it was not competent to entertain the referral; to appoint the second
respondent to conciliate the dispute; to hear the application
of the
employees for condonation pertaining to the late referral and to
issue the certificate. In doing all these things the first
respondent
and the second respondent exceeded their powers. The second
respondent’s ruling which condoned the late referral
was
fundamentally defective. He exercised the power which he did not have
in law. Such lack of competent power invalidates his
ruling. It
follows, as a matter of logic, that since the decision to condone was
per se invalid any further act flowing from such
invalid decision is
similarly invalid. Therefore the second respondent had no competent
power to conciliate the dispute and to
issue a certificate of outcome
as he did. The first respondent could not confer on the second
respondent the jurisdiction itself
did not have.
[20]
The dispute resolution procedure followed by the employees was
incorrect. The first respondent did not realise that the employees
were on the wrong track. Likewise the second respondent did not
detect that the employees were lost.
[21]
It must be appreciated that the employees referred the dispute to the
CCMA in terms of the ordinary dispute resolution procedure
as
provided by
section 191
of the
Labour Relations Act No. 66 of 1995
for an alleged unfair dismissal. Where, as in this case, the alleged
unfair dismissals are based on the employer’s critical
operational requirements, the employee would, after unsuccessful
conciliation, ordinarily refer the dispute to this court for
adjudication.
[22] In the instant case,
however, the mass dismissals of the employees are governed by
extra-ordinary provisions of
section 189A.
The alleged unfair
dismissals concerned a huge number of employees of which sixty two
are now involved in this dispute. The gist
of their dispute is that
their multiple dismissals were procedurally unfair. The labour court
cannot adjudicate an ordinary dispute
about unfair dismissals on the
ground of procedural unfairness if such a dispute comes through the
ordinary dispute resolution
referral procedure for alleged unfair
dismissals relating to a small number of employees affected by
retrenchment on operational
requirements- vide
section 189A(18).
It
reads as follows:
“
The
Labour Court may not adjudicate a dispute about the procedural
fairness of a dismissal based on the employer’s operational
requirements in any dispute referred to it in terms of
section
191(5)(b)(ii)
”.
[23]
The labour relations legislation makes a specific provision for a
special dispute resolution procedure in a case where a large
number
of employees participating in or affected by possible mass
retrenchment based on operational requirements feel that the
employer
is not adhering to a fair procedure.
Section 189A(13)
provides that
employees with such a grievance may directly approach the labour
court by way of a formal application and seek a
court order
compelling an offending employer, among others, to comply with a fair
procedure. The benefits of this special dispute
referral procedure
are obvious. It obviates the conciliation procedure and the
arbitration proceedings which characterise the ordinary
dispute
referral procedure as stipulated in
section 191
Labour Relations Act
No. 66 of 1995
. It affords the aggrieved employees a direct and
speedy access to the Labour Court and accelerates the eradication of
an employers
labour misdemeanours during the retrenchment process.
[24]
Section 189A(17)
compliments
section 189A(13).
It provides that such
a special application in terms of subsection (13) must be brought not
later than thirty days after the retrenching
employer has given
notice to terminate the employee’s services. In this case the
employees were warned on 12 May 2005 that
the employer was
contemplating mass retrenchment. On 29 July 2005 the employees
contracts of employment were terminated. Their
services were
terminated after a negotiated, open, and facilitated retrenchment
process which lasted for seventy eight days. The
employees were duly
represented during the entire period. Their representative fully
participated in the process. They demanded
this and that and they
were given. During that whole and long period none of them ever
complained about any procedural unfairness
on the part of the
employer. Instead they all received their dues on 5 August 2005 and
left their workplace peacefully and without
any protest.
[25]
On 3 November 2005, some ninety seven days after their contracts of
employment had been terminated, the employer heard for
the first
time, that the employees were crying foul play. By then the
retrenchment process was an accomplished fact. The employees
had
enjoyed the rewards of the facilitation agreement. In my view such an
agreement evidences, albeit prima facie, not only the
active
participation of the employees via the representative but also the
transparency of the retrenchment process in addition
to its
substantive fairness and procedural fairness. The dispute raised by
the employees ninety seven days later raises serious
questions about
their bona fides.
[26]
As if their long deafening silence was not incredible and amazing
enough, the employees on the advice of the labour consultants
then
embarked on a wrong dispute referral procedure. Not only did
they follow the wrong route to the wrong forum- when they
eventually
approached this court on 24 March 2006 they came on a wrong ticket-
the statement of case proceedings in terms of
rule 6
instead of
correct ticket- by way of the special application proceedings
in terms of
section 189A
(13) read with
section 189A(17).
[27]
But the problem of the employees does not end there. Let us suppose
for a moment that the employees had followed the correct
dispute
referral procedure as
section 189A(13)
requires. They will still find
themselves in a tight corner. In that event their obstacle would be
section 189A(17).
The section requires that an application in terms
of
section 189A(13)
must be made within thirty days from the day the
contract of employment was terminated. In
casu
the employees initiated the dispute in this court some two hundred
and thirty eight days (on 24 March 2006) after their service
agreements were terminated. They should have done so by no later than
28 August 2005 seeing that their service agreements were
terminated
en bloc on 29 July 2005. In such a scenario the employees would still
be hopelessly out of time. To make matters worse
there is no
explanation of any sort for the considerable delay of two hundred and
eight days. There is no formal application for
the condoning of such
delay.
[28]
The statement filed by the employees can never be a substitute for
the required special application. Strictly speaking there
is no valid
dispute about the procedural unfairness pertaining to mass dismissals
of the employees pending in this court. The employees
did not
timeously follow the correct dispute referral procedure. The second
respondent exceeded his powers when dealing with the
matter as he
did. The relevant labour legislation does not make provision for such
a procedure. The procedure he followed is foreign
to our labour law.
It is in conflict with the special dispute referral procedure for
which a specific provision is made in terms
of
section 189A.
[29]
In the circumstances I have come to the conclusion that the second
respondent misdirected himself on the question of law. The
misconduct
he committed in condoning the late referral of the dispute, the
misconduct he committed in purporting to conciliate
the dispute and
the misconduct he committed in purporting to issue a certificate in
terms of
section 135
cannot be allowed to stand. All these abortive
acts have to be nullified. They were not legally justified.
[30]
The employer’s review application was filed out of time.
The extent of the lateness is marginal. The application
was four days
late. The reasons for the delay are satisfactory and adequate. I find
the employer’s explanation acceptable.
Briefly stated the
employer’s human resource manager and his team who were
intimately involved in the drafting of the review
application as a
whole were not unavailable on the last day of the six week period, at
the time the founding papers had to be signed.
The founding affidavit
had to be redrafted one day out of time. Moreover, the employer’s
excellent prospects of success as
fully examined and elucidated above
adequately compensate for the employer’s slight delay. The
matter is of outmost importance
to the employer since the employees
have already received their voluntary severance package and the first
respondent and the second
respondent have effectively given them a
chance to have a second bite of the cherry whereas they were not
competent to grant them
the remedies they granted on a matter which
fell outside their jurisdiction.
[31] I
am persuaded by Mr Gerber’s submission that the employer has
made out a proper case for the relief sought. The employer’s
review application and condonation application were opposed. However,
only the third respondent appeared in person and opposed
the
employer’s applications. He argued that he was mandated by the
sixty two other employees or individual respondents to
act on their
behalf. From the bar he handed numerous affidavits, which as he said,
were signed by his co-respondents who authorised
him to represent
them before me. Trying to digest his argument was no stroll in the
park for me. Suffice to say there was little,
if any, substance in
his arguments. I was not surprised. The legal issues were too complex
for a layman to appreciate. Although
he had a mysterious junior on
his side who he frequently consulted when the going got tough, such
frequent consultation did not
really help. When the going gets tough
only the tough get going. The rest get nowhere.
[32]
The public gallery was almost full of members of public. I suspected
that the majority of them were some of Mr Makgoba’s
co-
respondents. I could not identify any of them because the customary
list of the names of the other sixty two co-respondents
was not
annexed to the answering affidavit. Among these unidentified people
who looked like they had direct interest in the matter
was Mr
Tshabalala, the employees labour consultant. He was identified
through Mr Gerber’s courtesy. He was anxious and unease.
I am
not certain whether he was also feeling the heat of the debate which
was turned on his client.
[33]
Mr Gerber argued that Mr SJ Makgoba was neither a union
representative nor a fellow employee to his sixty two other
co-respondents.
The contention was that he could not as the third
respondent act as the representative of the rest. The numerous
affidavits, forty
nine all in all, handed in from the bar had not
been served on the employer. Thirty nine of them were signed and
attested on 02
December 2005. The remaining ten were signed and
attested between 05 December 2006 and 14 December 2006. Their
contracts of employment
were terminated on 29 July 2005,
approximately sixteen months before these forty nine former employees
of Zero Appliances (Pty)
Ltd mandated the third respondent to
represent them in these proceedings. It follows therefore that since
the third respondent
was no longer their fellow employee at the time
they gave him the mandate, the mandates so given were of no force and
effect in
law. They might as well have instructed any lay person-
which is impermissible in a court of law. There was no longer a
mutual
bond of common employment to legitimise such purported
mandates.
[34]
The above finding is of great importance as far as the order of costs
is concerned. The applicant prayed that should the respondents
unsuccessfully oppose the review application and the condonation
application they must be ordered to pay the costs of these
applications.
In the absence of the proper list signed and annexed to
the answering affidavit by the third respondent’s
co-respondents,
it cannot be said that the alleged fourth respondent
to sixty second respondent were properly before the court in these
proceedings.
The forty nine affidavits attributed to some of the
sixty two respondents were so materially defective that I am entitled
to regard
them as
pro non-scripto
.
The third respondent was therefore the only respondent who resisted
the applicant’s applications. The costs of this opposition
must
be borne and paid by the third respondent alone.
[35]
Accordingly I make the following order:
35.1
The condonation ruling made by the second respondent on 22 February
2006 whereby he condoned the late referral
of the dispute to the
first respondent for conciliation has been reviewed and is now set
aside.
35.2
The conciliation certificate issued by the second respondent on 22
February 2006 under case number GA 31757-05
under the auspices of the
first respondent has been reviewed and is now set aside.
35.3
The ruling of the first respondent granting the application of the
employees for condonation is hereby altered
and substituted with the
ruling that the first respondent does not have jurisdiction to
entertain the dispute or the application
of the employees for
condonation relating to such dispute.
35.4
The issue of the conciliation certificate by the second respondent
was irregular and invalid seeing that a competent
bargaining council
exits to entertain such a dispute, the first respondent also lacks
jurisdiction to appoint the second
respondent who likewise lacks
jurisdiction to issue a certificate of outcome as he did.
35.5
The third and the other sixty two respondents should apply to this
court, if so advised, for an appropriate relief
in terms of
section
189A(13)
of the
Labour Relations Act No. 66 of 1995
as amended.
35.6
The entertainment of the said respondent’s statement of case
filed under case number JS 147/06 is hereby
stayed pending the
outcome of the applicant’s review application.
35.7
The third respondent is directed to pay the
costs of this
application.
__________________
Rampai
AJ
APPEARANCES
On behalf of the
applicant:
Adv H Gerber
Instructed
by:
OJ
Botha Attorneys
On behalf of the
respondents: Mr SJ Makgoba
Instructed
by:
Third
to further respondents
Date of
hearing:
15 February 2007
Date of
judgment:
28
March 2007