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[2009] ZALCJHB 37
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Metal and Engineering Industries Bargaining Council v Commission for Conciliation Mediation And Arbitration and Others (JR774/08) [2009] ZALCJHB 37 (24 April 2009)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT JOHANNESBURG
CASE NO: JR774/08
In the
matter between:
METAL
AND ENGINEERING
INDUSTRIES Applicant
BARGAINING
COUNCIL
and
THE
COMMISSION FOR
CONCILIATION First
Respondent
MEDIATION
AND ARBITRATION
STONE,
P
N.O Second
Respondent
PICM
RANDFONTEIN (PTY)
LTD Third
Respondent
JUDGMENT
JAMMY
AJ
1.
In a demarcation dispute between the
Applicant, the Metal and Engineering Industries Bargaining Council
and the Third Respondent,
PICM Randfontein (Pty) Ltd (“the
Company”), referred to Arbitration under the auspices of the
First Respondent, the
Commission for Conciliation, Mediation and
Arbitration (“CCMA”), the Second Respondent, the duly
appointed Commissioner
in that Arbitration determined
inter
alia,
that the Company’s
workshop in Randfontein and the employees there employed do not fall
within the jurisdiction of the Applicant.
2.
It is that determination which the
Applicant in these proceedings, seeks to have reviewed and set aside,
with the additional prayer
that this Court must in turn determine
that the Third Respondent and its employees at its Randfontein
workshop –
“
are
engaged in activities that fall within the registered scope of the
Applicant and that the Third Respondent must register its
workshop at
Randfontein and the employees employed there with the Applicant”.
3.
The dispute is sourced in the fact that the
Company conducts its business in three different localities, - in
workshops at Randfontein,
Rustenburg, and Northam. In that
context, the Second Respondent, based on the evidence before him,
correctly recorded the
following further facts as being either common
cause, not disputed or conceded (the Applicant referred to by him is
of course the
Third Respondent in these proceedings):
“
1.
Of a total headcount of 407 employees, the Applicant employees 220
employees at Rustenburg, 108 employees
at Northam and 79 employees at
Randfontein.
2.
The income from the Applicant’s contracts with the Mining
Industry is approximately
R80 million per annum while the income from
the Randfontein workshop generates R20 million per annum, or 25% of
the Applicant’s
total turnover.
3.
70% of the income generated by the Randfontein workshop was in
respect of business with ‘external
clients’ i.e. not work
conducted internally in support of the Applicant’s primary
business activity.
4.
The Respondent (the Applicant in these proceedings) conceded that in
respect of Rustenburg
and Northam approximately 11 employees are
employed at each site in general engineering activities”.
4.
Of material relevance in the demarcation
context, is an agreement reached by agents of the Applicant and the
Bargaining Council
for the Building Industry following an inspection
in loco
of
the Third Respondent’s Randfontein business premises on 22
January 2008 to the effect that:
4.1
The Third Respondent’s primary business relates to civil
engineering support
services to the mining industry;
4.2
The employees at the Third Respondent’s workshop in Randfontein
are engaged
in work which falls within the registered scope of the
Applicant; and
4.3
Apart from the Randfontein workshop, the Third Respondent employs
personnel at mining
operations at Rustenburg and Northam.
5.
When due regard is had to the fact that the
Third Respondent’s primary business is civil engineering in the
mining industry,
it was argued before the Arbitrator on its behalf
that the relatively small size of the Randfontein workshop operation,
both in
respect of employee numbers and turnover and the fact that it
has no independent legal status, render the business operations as
ancillary to the Third Respondent’s main business. If, in
these circumstances, the Randfontein operation were to be
designated
as an industry separate from the main business of the Third
Respondent, collective bargaining within the Third Respondent’s
business would be undesirably fragmented.
6.
The Applicant’s response to those
contentions was based on the submission that where an employer, to a
substantial extent,
is engaged in activities separate, but ancillary
to its main business, which activities are characteristic of, or fall
under the
definition of a different industry from that of its main
business, a separate demarcation of the ancillary undertaking would
be
justified where the activities, independently assessed, were of
sufficient dimension to justify a conclusion that the employer
concerned was carrying on a business in more than one industry.
Whilst the statistical evidence relating to the employee complement
and turnover in the Randfontein operation was not disputed, these,
contrary to the Company’s contentions in that regard,
are, it
was argued, of a sufficient proportion to justify a separate
demarcation of the ancillary activity, more particularly in
the light
of the acknowledged fact that 70% of the Randfontein business is for
the “open market”.
7.
These submissions, in his award under
review, were in my view properly and responsibly considered by the
Second Respondent.
Quite apart from the fact that the
statistical information relating to the Randfontein workshop is not,
he determined, “the
primary consideration in determining
whether the operation is ancillary to the main business or a separate
industry”, he
found that this notwithstanding, those statistics
did not support the Bargaining Council’s argument that the
Randfontein
workshop should be treated “as a discrete industry
sector”. Submissions relating to the collective
bargaining
ramifications of a separate demarcation of the Randfontein
operation were, in essence, of no relevance in the absence of
evidence
of any existing collective bargaining relationships within
the Company’s scope of operations.
8.
As far as the Second Respondent was
concerned, the “crisp issue” for determination by him was
whether or not the Randfontein
workshop “should be classified
as a discrete industrial enterprise” within the Company’s
overall business.
On the evidence before him, he concluded, he
found “a direct linkage between the activities of the
Randfontein workshop and
the Applicant’s primary business
activity” and in that context the size of the Randfontein
workshop, when viewed against
the Company’s total business
activity did not justify a determination that the employees engaged
there in general engineering
work fell within the jurisdiction of the
Bargaining Council. The Applicant in these proceedings contends
that that determination
by the Second Respondent is not a decision
that a reasonable Arbitrator could reach, primarily for the reason
that he “failed
to appreciate the nature of the decision he was
required to make. Emphasis in support of that contention was
placed by the
Applicant’s Counsel on what has now become a
compelling examination of the grounds properly to be considered in
applications
for the review of Arbitration Awards. In the
Constitutional Court case –
Sidumo and Another v
Rustenburg Platinum Mines Ltd and Others (2007) 12BLLR 1097(CC)
Navsa
A J at page 1130, said this –
“
The
better approach is that Section 145 is now suffused by the
Constitutional Standard of Reasonableness … is the decision
reached by the Commissioner one that a reasonable decision-maker
could not reach?”
9.
The Second Respondent, in his finding that
the Randfontein workshop could not be demarcated as an undertaking in
an industry different
from that engaged in at the Company’s
other undertakings, failed, it is submitted, “to appreciate
what he was required
to do”.
10.
In the leading case of –
KWV v Industrial Council
for the Building Industry 1949(2SA600A)
Centlivres
J A, examining the issue of the separate demarcation of an ancillary
undertaking, commented, in essence, that this would
be justified if
-
“…
the
activities in question, viewed by themselves, were of sufficient
dimensions to justify the conclusion that the parties concerned
carried on more than one industry”.
11.
In –
Coin Security (Pty) Ltd v
CCMA and Others (2005) 7BLLR 672(LC)
The
Court said this at page 684 –
“
It
is possible for the same employer to be engaged in two or more
industries at the same time, and for the employer to be an employer
in each one. The question is one of fact and where it arises
each of the two enterprises is to be treated as separate from
the
other … The two or more industries may be utterly
distinct or the one may be ancillary to the other. Where
the
one industry is ancillary to another, it is a matter of degree
whether a person who carries on one particular industry is also
carrying on another industry. It is a question whether the
activities were of sufficient dimensions to justify the conclusion
that the employer carries on and is associated with its employees in
more than one industry”.
12.
An ancillary business, is in my view
correctly, defined in Coin Security (
supra
)
as one –
“
rendering
services to existing customers or clients of the main business.
Whilst what is ancillary is a question of degree, that
is not the
only enquiry. Ancillary business is also required as a matter
of both language and law to be performed as ancillary
to or, put
differently, to support existing business within a defined customer
base”.
13.
In R v Sidersky 1928 TPD109, referred to
with approval in KWV (
supra
)
what was noted as important in issues of this nature is that the
character of an industry is determined not by the occupation
of the
employees engaged in the employer’s business, but by the nature
of the enterprise in which the employees and the employer
are
associated for a common purpose. Once the character of the
industry is determined, all employees are engaged in that
industry.
The precise work that each person does is not significant. At
page 112 of Sidersky, the following was said
by Solomon J –
“
Dr
Reitz argued that the character of an industry is determined, not by
the kind of occupation in which the employees are engaged,
but by the
nature of the enterprise in which both employers and employees are
associated for a common purpose. Once the character
of the
industry is determined, all the employers are engaged in that
industry, whatever the actual work may be which the employer
allots
to them”.
14.
The evidence before the Second Respondent
was, that in addition to the “external” activities
conducted at Randfontein,
the workshop there provides steel
fabrication to the larger part of the main business of the Third
Respondent, namely civil engineering
support. Whilst the Second
Respondent’s award is concise in its terms, there is nothing in
its language to support
the Applicant’s contention that he was
not cognisant of and did not take into account the concept of
“ancillary”
and the principles enunciated in the
authorities. In his determination, as I have stated, he
considered the crisp issue before
him to be whether or not the
Randfontein workshop could be separately classified “as a
discrete industrial enterprise within
the Applicant’s overall
business” and found in that regard “a direct linkage
between the activities of the Randfontein
workshop” and the
primary business conducted by the Third Respondent.
15.
I can find nothing in the papers before
this Court or in the submissions made on behalf of the Applicant to
justify a conclusion
that the Second Respondent failed to appreciate
his function or properly to consider the evidence before him.
There is no
suggestion that his determination was not rationally
supported by the evidential and legal considerations which he was
required
to take into account and certainly nothing to suggest that
his ultimate determination was one that a reasonable decision-maker
could not reach.
16.
In the result, the Applicant has failed, in
my view, to establish a basis for interference in any context with
the Second Respondent’s
Award and the order I make is
accordingly the following:
16.1
The application is dismissed.
16.2
The Applicant is to pay the Third
Respondent’s costs
_________________________________________________
B
M JAMMY
ACTING
JUDGE OF THE LABOUR COURT
24
April 2009