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[2008] ZALCCT 2
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SACCAWU and Others v Western Province Sports Club t/a Kelvin Grove Club and Others (C121/08) [2008] ZALCCT 2 (18 April 2008)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT CAPE TOWN
CASE
NO: C121/08
In
the matter between:
SACCAWU 1
ST
APPLICANT
IVAN
BUNTSUNTSU
2
ND
APPLICANT
KENETH
SILWANA
3
RD
RESPONDENT
JUDITH
TSHIKILA
AND
OTHERS
4
TH
TO 6
TH
APPLICANTS
AND
WESTERN
PROVINCE SPORTS
CLUB
T/A KELVIN GROVE
CLUB 1
ST
RESPONDENT
THE
PROPERTY FACILITIES
COMPANY
(PTY)
LTD 2
ND
RESPONDENT
JUDGMENT
MOLAHLEHI J
INTRODUCTION
[1]
is an urgent application for an order-
“
2.1
Interdicting and restraining the Respondent(s) and those acting on
its authority and direction from transferring the affected
(applicants) employees for the purpose of outsourcing the applicant's
employees to the preferred outsourcing company
("THE PROPERTY FACILITIES COMPANY (PTY) LTD") until such
time they had properly consulted with the union and/or affected
employees on the matter.
2.2
Interdicting and restraining the 1
st
and 2
nd
Respondents and those acting on their authority from
transferring the 2
nd
to 16
th
Applicants from the employment of Kelvin Grove to THE PROPERTY
FACILITIES COMPANY (PTY) LTD as per their intentions annexed hereto
as ANNEXURE "B" & "A" and thereby.
2.3
Interdicting and restraining the 1
st
and 2
nd
Respondents and those acting on their authority and direction
from terminating the services of the applicants with the 1
st
Respondent and/or intimidation or victimization of the 2
nd
to 16
th
Applicants. “
BACKGROUND
[2]
It is common cause that the first and
second respondents (the respondents) entered into an agreement in
terms of which the first
respondent (old employer) would outsource
its housekeeping, kitchen and bar hand services to the second
respondent (the new employer).
The agreement took effect from 1
st
March 2008.
[3]
The agreement between the respondents
provided for the outsourcing to be as a going concern in terms of
s197 of the Labour Relations
Act 65 of 1995 (LRA). In addition the
respondents agreed on the evaluation of leave pay, notional severance
pay and bonuses due
to the second to the sixteen applicants (the
employees) as at 1
st
March 2008.
[4]
It was also agreed between the respondents
that the announcement of the outsourcing agreement to the applicants
will be jointly
made. And to this extent the old employer sent a fax
requesting a meeting with the first applicant for either the 27
th
or 28
th
February 2008. The letter requesting the meeting was headed “
GENERAL
ADMININSTRATIVE ISSUES.
” The
reason for the heading was according to the old employer because of
previous difficulties it had in arranging meetings
with the first
applicant. According to the old employer the first applicant would
not attend if it had mentioned that the meeting
concerned the issue
of outsourcing.
[5]
The first applicant had also addressed
correspondence during the same period requesting a meeting with the
old employer for purposes
of negotiating wages and conditions of
employment. The first applicant confirmed its attendance of the
meeting proposed by the
old employer in a letter date 22
nd
February 2008, wherein it also demanded union membership schedule and
staff complements excluding those of management.
[6]
On 28
th
February 2008, the first applicant informed the old employer that its
representative Mr Ncayo was not able to attend the meeting
as he had
been booked off sick by the doctor.
[7]
However, the new and old employer then
convened a meeting with the employees and informed them about the
outsourcing of the housekeeping,
kitchen steward and bar keeping
services and that as a result thereof their employment was also
transferred to the new employer.
The employees were then served with
a memorandum confirming the outsourcing of the services referred to
earlier. The relevant part
of the letter in as far as the employees
were concerned read as follows:
“
In
keeping with the provisions of Section 197 all the relevant
employees’ employment has been transferred to TPFC with effect
from 1
st
March 2008. Please be assured that the years of service with Kelvin
Grove will be carried over to TPFC and the relevant employees
will be
employed by TPFC on conditions which are on the whole no less
favourable than those applying to your employment with Kelvin
Grove.”
[8]
The employees were also served with the
copies of the outsourcing agreement between the new and old employer.
The old employer further
addressed a letter on the same day informing
the first applicant of outsourcing and in particular advising it (the
first applicant)
that the outsourcing was done in terms
of section 197 of the LRA.
THE
DISPUTE
[9]
The applicants contended that they were
entitled to an urgent interim interdict because they were not
informed prior to the transfer
of employees from the old to the new
employer. They also contended that they were not consulted
about their transfer in terms
of section 197(6) (a) read with section
189 of the LRA. Mr Ncayo for the applicants argued that the
respondents contravened sections
9, 10, 22, 23(1), of the
Constitution Act 108 of 1996, when they effected the transfer without
consulting the applicants.
[10]
As concerning the Constitutional right to
fair labour practice, Mr Ncayo argued that the applicants were
deprived off their right
to choose which employer they wished to work
for and that their freedom of choice was undermined by the transfer.
The essence of
this argument is that had there been consultation, the
employees, may have indicated that they did not wish to be employed
by the
new employer and that they would rather have negotiated the
severance packages.
THE
LEGAL PRINCIPLES
[11]
The traditional test
to be satisfied
by an applicant in an urgent interdict is to establish on the papers
before the court a prima facie right, which
may though be in doubt.
See in this regard
CB Prest, Law and Practice of Interdicts, Juta
1996, page 57
. The requirements for an urgent application
were set out in the case of
LF Boshoff Investment (Pty)Ltd v Cape
Town Municipality
1969 (2) SA 256
(C ) at 267 A-F, by Corbett J
(as he then was) as follows:
“
B
riefly
these requisites are that the applicant for such a temporary relief
must show-
(a)
that the right which is the subject
matter of the main action and which it seeks to protect by means of
interim relief is clear
or, if not clear, is prima facie established,
though in some doubt;
(b)
that, if the right is only
prima
facie
established,
there is a well- grounded apprehension of irreparable harm to the
applicant of the interim relief is not granted
and he
ultimately succeeds in establishing his right;
(c)
That the balance of convenience
favors the granting of interim. relief; and
(d)
That the applicant has no other
satisfactory remedy.”
[12]
The onus rests on the applicant to establish a
prima facie
case and irreparable harm arising from interference of his or her
right by the respondent.
See Molteno Brothers & Others v SA
Railways & Others
1936 AD 21
at 333
.
Johannesburg
Municipality v African Reality Trust Ltd
1926 AD 163
at 177
.
[13]
In the case of a final interdict the applicant has the onus of
showing on the balance of probabilities the existence of a clear
right which he or she seeks to protect. The other requisite for the
granting of the final interdict is for the applicant to proof
that
there is no other satisfactorily remedy available.
See
NUMSA and Others v Comark
Holdings (Pty) Ltd
(1997) 18 ILJ
516 (LC).
[14]
In the present case, it is therefore necessary for the
applicants to establish the existence of a prima facie right to be
consulted
prior to outsourcing and the transfer from the old to
the new employer. In this regard as appears from the facts set
out above the applicants sought to establish the existence of a prima
facie right by relying on the interpretation of the provisions
of
section 197 (6)(a) of the LRA read with the relevant provisions of
the Constitution.
[15]
In terms of section 197 of the LRA:
“
(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 of 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.”
[16]
The provisions of sub-section (6)(a) which
the applicants strongly relied on in support of their case,
that they have the
right to be consulted before effecting the
transfer reads as follows:
“
(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 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 the negotiations.
(c)
Section 16(4) to (14) applies, read with the changes required by the
context, to the disclosure of information
in terms of paragraph (b).”
[17]
Although, the applicants sought in their
notice of motion to interdict, the transfer of the employees from the
old employer to the
new employer, it is undisputed that by the time
the applicants brought their application the transfer had already
taken place.
It is also undisputed that by the time the application
was served and filed the employment of the transferred employees with
the
old employer had already been terminated.
[18]
The approach adopted by the applicant goes
against the purpose of an interdict. The purpose of an
interdict is not to remedy
the past invasion of rights. This
effect of an urgent interdict is to maintain the status quo and not
to return the status
quo. See
Law
and Practice of Interdicts (
Supra)
page 2.
[19]
It is apparent that the contention by the
applicants that they have the right to be consulted arises from their
incorrect interpretation
of section 197(6) read with section 189(1)
of the LRA.
[20]
In my view, reference to section 189(1) in
section 197(6) of the LRA was not intended to import into section
197(6) the process
of consultation as envisaged in section 189(1) of
the LRA. The reference to section 189(1) was intended to identify the
parties
to the negotiation process in the event the old and the
new employers wished to avoid the consequences of section 197(2) (a)
and (b) of the LRA, being that if a business is transferred as a
going concern, the new employer is automatically substituted in
the
place of the old employer in respect of all matters of
employment. And more importantly the general provisions of section
197 provide for the retention of the status quo in as far as the
terms and conditions of the contract of employment are concerned.
[21]
In my view the general rule in terms of
section 197 of the LRA is that whenever transfer of a business takes
place as a going concern
the old employer is automatically
substituted by the new employer, and in this regard the employees are
protected from losing their
employment. The exception to the
general rule provided for under section 197 applies where the new
employer or both the new
and the old employers wish to avoid the
automatic substitution as an operation of the law. The exception is
provided for in terms
of section 197(6) which allows the new and the
old employers to engage in negotiations with any of the parties
envisaged in section
189(1) of the LRA.
[22]
Thus, the right to consultation in a
transfer of a business as a going concern does not arise under any
provisions of section 197
of the LRA.
[23]
There is however no doubt that for purposes
of good industrial relations and good labour practice, consultation
should be encouraged
even where the transfer takes place as a going
concern and both the new and old employers comply fully with the
provisions of section
197(2) of the LRA. Consultation should be
encouraged because, in my view, it has long term mutual benefits in
the employment relations
between the transferred employees and the
new employer. Some of the benefits of consultation are that it
would clear fears
and perceptions of insecurity on the part of the
employees including building a better relationship between the
parties and enhancing
social partnership. This approach would promote
better channels of communication between the new employer and his or
her new staff.
[24]
The applicants’ argument that failure
to consult amounted to breach of their constitutional rights is
unsustainable. In my
view the constitutional imperatives built into
section 197 of the LRA, are intended to protect employees from unfair
dismissal
arising from a transfer of business as a going concern and
thus ensuring job security to the employees affected by the transfer
of the business.
[25]
I therefore do not, with due respect, agree
with Mr Ncayo for the applicants that the constitutional right
to freedom of trade
or occupation, as provided for in section 22 of
the Constitution, was taken away or interfered with by the
outsourcing of
the business from the old to the new employer because
of absence of consultation.
[26]
In summary, my view is that the employees
do not have the right to consultation under section 197 of the LRA.
Therefore the applicants
have failed to establish a prima facie case,
entitling them to the relief they sought.
COSTS
[27]
I see no reason why the costs should not in
law and fairness follow the results.
ORDER
[28]
It was on the basis of the above reasons
that I issued the following order:
1.
The application is dismissed with costs.
_______________
MOLAHLEHI
J
DATE
OF HEARING: 20 MARCH 2008
DATE
OF ORDER: 26 MARCH 2008
DATE
OF REASONS: 18 APRIL 2008
APPEARANCES
For
the Applicant : Mr MONDE NCAYO (Union Official)
Instructed
by : SACCAWU
For
the Respondent: Mr DEL MONTE
Instructed
by : J DEL MONTE ATTORNEYS