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[2009] ZALCJHB 106
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Molaba and Others v Emfuleni Local Municipality (J1438/07, J1443/07, J1439/07) [2009] ZALCJHB 106 (17 March 2009)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT JOHANNESBURG
REPORTABLE
CASE
NO. J1438/07
J1443/07
J1439/07
In
the matter between:
TUMELO
STEPHEN
MOLABA
First Applicant
MMAPHEELO
ROSELINE MOKOENA
Second Respondent
MOHAPINYANE
BEN
MAKUME
Third Respondent
and
EMFULENI
LOCAL MUNICIPALITY
Respondent
JUDGMENT
VAN
NIEKERK J
[1]
The parties agreed that these applications should be consolidated,
and they were argued on that basis. The applications raise
the
meaning of a “settlement agreement” for the purposes of
section 158(1) (c) of the Labour Relations Act. That subsection
empowers this court to “make any arbitration award or any
settlement agreement an order of the Court”.
[2]
The facts that give rise to these applications are not contentious.
The applicants are all employed by the respondent. During
early 2006,
they contended that they were performing the same jobs as other
employees engaged on a higher level, and that they
were being paid
less than their comparators. The applicants had individual meetings
with the respondent’s acting human resources
manager, Mr.
Chesty Mokoena. After each meeting, Mokoena addressed letters to each
of the applicants. The wording of each letter,
headed “Salary
Discrepancies: Re-Adjustment of Your Salary” is similar. The
salient part reads as follows:
“
The
pay-office has subsequent to our negotiations and agreement on the
above in my office, in Vanderbijlpark on 17 May 2006, been
asked to
do the following:
1.
Adjust your salary to the third notch of level 10 with effect from 1
August 2005 to pay you as such and to
retain your salary incremental
date as 1 August.
2.
That the adjustment of your salary and employment will also include
all due benefits as they would have been
applicable on 1 August 2005.
3.
To deduct any amounts that has to be (including amounts to be paid as
tax).
4.
To deduct and pay on your behalf all monies due to your pension fund,
medical aid, UIF and etc.
Kindly
confirm in writing not later than 22 May 2006 that you accept the
above-mentioned conditions.
And I also confirm
that by acceptance of the above-mentioned conditions that Council’s
obligations in your instance (i.e.
on salary disparities), are
considered closed.
It
is hoped that you will find the above to be in order.”
[3]
The applicants contend that the respondent has failed to comply with
the terms of the letters addressed to them by Mokoena.
The respondent
contends that it is not bound by Mokoena’s letter. First, it
avers that in June 2006, subsequent to the letters
being addressed to
the applicants, a memorandum of understanding was concluded between
the respondent and SAMWU, which effectively
replaced any individual
agreements concluded by Mokoena with any of its employees. The
applicants admit that they are members of
SAMWU, but contend
variously that SAMWU had no mandate to conclude any agreement with
the respondent on their behalf, that they
are not parties to the
memorandum of understanding, and that their individually concluded
agreements trump the memorandum. Secondly,
the respondent contends
that Mokoena had no authority to conclude any agreement with the
applicants, and that any agreement that
may have come into existence
is
ultra vires
.
In response, the applicants contend that Mokoena held himself out to
have the authority to conclude the agreements with each of
the
applicants, and that the respondent is estopped from denying that
authority.
[4]
On 25 June 2007, the applicants filed this application, seeking to
have what they termed a settlement agreement (in the form
of the
correspondence addressed to them by Mokoena) made an order of this
court in terms of section 158(1) (c).
[5]
The Act does not define a “settlement agreement”. Section
158(1) aside, the only other reference in the Act to a
settlement
agreement is found in section 142A. That section provides that the
CCMA may make any settlement agreement in respect
of any dispute that
has been referred to the commission, an arbitration award. A
settlement agreement is defined for this purpose
as “a written
agreement in settlement of a dispute that a party has the right to
refer to arbitration or to the Labour Court,
excluding a dispute that
a party is entitled to refer to arbitration in terms of either
section 74(4) or 75 (7).” (The latter
references are to
disputes in essential services and maintenance services, and are not
material to this application).
[6]
The wording of s 142A suggests that for an agreement to constitute a
settlement agreement, a number of requirements relating
to nature and
form must be met. First, the dispute that is the subject of the
settlement must have been “referred to the
Commission”.
“Referred” cannot mean referred to arbitration in terms
of s 136 - s 142A (1) requires that the
dispute must be one that a
party has the right to refer either to arbitration or to the Labour
Court. “Referred to the Commission”
therefore means
referred for conciliation in terms of section 134. This section, read
with the requirement that the dispute be
one that a party has the
right to refer either to arbitration or to the Labour Court, means
that it is only settlements of disputes
about a matter of mutual
interest that are either arbitrable or justiciable by this Court that
may be the subject of an arbitration
award in terms of s 142A. This
excludes, for example, a settlement agreement in respect of a dispute
about wages. Finally, the
agreement must be in writing. Those cases
that deal with the definition of a collective agreement (which in
terms of s 213 must
be a “written agreement”) would
obviously be helpful in giving content to this requirement. (See, for
example,
SAMWU v Weclogo
[2000]10 BALR 1160 (CCMA)).
[7] To the extent that s
158(1) (c) permits this Court to make “any” settlement
agreement an order of court, a broad
interpretation of this court’s
powers may be defensible. In
Harrisawak v La Farge (SA)
(2001)
22 ILJ 1395 (LC), for example, Pillay J said:
“
The
settlement occurred without the direct intervention of the CCMA. In
the circumstances, Mr Lawrence submitted for the respondent,
it was a
private agreement not determined by the CCMA at conciliation or
arbitration and should therefore be enforced in the civil
courts as
the cause of action arose from the agreement itself and not from the
employer-employee relationship. (Du Toit et al (3
ed) at 582.)
Support for this view cannot be found in s 158(1)(c) which reads:
‘
The
Labour Court may make any arbitration award or any settlement
agreement other than a collective agreement an order of court.’
[5]
The interpretation that Mr Lawrence seeks to place on s 158(1) (c) is
restrictive and not justified by the use of the word ‘any’
before the word ‘settlement’ in the section. Furthermore,
the settlement agreement relates to the employment relationship.
The
stated purpose of the LRA is to provide effective dispute resolution
in labour disputes. That includes the provision of services
by
personnel competent and qualified to resolve labour disputes.
Moreover, the dispute at the time the settlement agreement was
entered into was pending as arbitration before the CCMA.
[6]
In the circumstances, the court has the jurisdiction to hear a
dispute relating to the enforcement of the settlement agreement
about
an employment dispute concluded without the direct intervention of
the CCMA.”
These
remarks were made in the context of a dispute that had been referred
to the CCMA for conciliation, which proved unsuccessful.
The parties
entered into the settlement agreement in question after the
conciliation meeting but before arbitration proceedings
commenced.
[8] The
Harrisawak
judgment was delivered before the 2002 amendments to the LRA were
promulgated. Those amendments introduced section 142A and deleted
the
qualification in s 158(1) (c) that related to collective agreements.
After the 2002 amendments, a settlement agreement concluded
in the
circumstances of
Harrisawak
can be made an arbitration award
in terms of s 142A (because the dispute had been referred to the CCMA
for conciliation) and it
would not be necessary to seek this court’s
intervention to secure the enforceability of the agreement. But that
leaves open
the question whether the broad interpretation afforded s
158 (1) (c) in
Harrisawak
should survive the 2002 amendments.
[9]
I think not. The interpretation adopted in
Harrisawak
might suggest that this court ought to entertain an application in
terms of s 158(1) (c) only because the agreement in question
settles
an employment-related dispute. It implies that any party to the
settlement of an employment- related grievance, whatever
its nature,
is entitled to approach the court to have that settlement made an
order. It would also entitle any party to a collective
agreement to
have that agreement made an order, thus blurring the line between a
constitutive and a judicial act,
[1]
a line that s 142A clearly draws and that the broad architecture of
the LRA preserves.
[2]
A broad
interpretation would also suggest that the limitations established by
s 142A could be entirely undermined - none of the
conditions attached
to having a settlement agreement made an arbitration award in terms
of that section would apply if a party
were simply permitted to
approach this court to have any employment-related agreement made an
order. Finally, a broad interpretation
would blur the line between
what are properly contractual claims to be enforced either by the
civil courts, or by this court under
s 77(3) of the BCEA.
[10]
An alternative, narrower interpretation of s 158(1)(c) is to limit
its application to those instances where a party has validly
referred
a dispute to this court for adjudication and where the dispute, at
any time after the referral, has been settled. An interpretation
to
this effect would preserve the integrity of s 142A. It would also
avoid all of the difficulties, conceptual and practical, that
the
broad interpretation presents.
[11]
In the present instance, at best for the applicants, they raised a
grievance about their remuneration, discussed their concerns
with the
respondent’s human resources manager who then presented them,
in writing, with what amounted to a mutually agreed
variation of
their employment contracts. At no stage prior to the signature of the
letters did they declare a dispute, or refer
a dispute to the
bargaining council. For the reasons stated above, the letters
addressed to them confirming the arrangements that
they reached with
Mokoena were not “settlement agreements” as contemplated
by s 158(1) (c).
[12]
Finally, s 158(1) (c) clearly confers a discretion on this court to
make a settlement agreement an order of court. Even if
I am wrong in
my view that only settlements of disputes referred to this court are
capable of being made orders under s 158(1)
(c)
,
I would, in the exercise of my discretion, refuse to make the
correspondence relied on by the applicants a court order. The
respondent
has raised a number of defences to the claim that are not
easily resolved. After receipt of the correspondence from Mokoena,
the
applicants filed an unfair labour practice claim with the
bargaining council in which they effectively seek enforcement of the
terms of the letters addressed to them. Those proceedings remain
pending. If the respondent has reneged on the undertaking represented
by the correspondence addressed to each of the applicants, they are
also free to pursue a claim in contract. Section 1581)(c) was
not
intended for use as a vehicle to bypass other more directly available
causes of action contemplated by the LRA and the common
law, and to
provide the means to what amounts to final relief by way of motion
proceedings.
[13]
In summary, the correspondence addressed to the applicants by Mokoena
did not constitute a settlement agreement for the purposes
of s
158(1(c). Even if it did, the nature of the dispute between the
parties is such that it would not be prudent to exercise
the
discretion to make the agreement an order of this court.
I
accordingly make the following order:
The applications are
dismissed, with costs.
ANDRE
VAN NIEKERK
JUDGE
OF THE LABOUR COURT
Date
of hearing: 30 January 2009
Date
of Judgment: 17 March 2009
Appearances:
For
the applicants: Ms M Chenia from Glyn Marais Inc.
For
the Respondent: Ms Koulontis from Koulountis Inc.
[1]
See
Du Toit, et al.
The
Labour Relations Act of 1995
(1ed. at p. 337).
[2]
Collective agreements are enforceable through arbitration in terms
of s 24(5) of the Act.