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[2010] ZALCJHB 346
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Unica Plastic Moulders CC v National Union of South African Workers (J1072/2010) [2010] ZALCJHB 346 (3 August 2010)
IN
THE LABOUR COURT OF SOUTH AFRICA
(HELD
IN BRAAMFONTEIN)
CASE
NO: J1072/2010
In
the matter between :
UNICA
PLASTIC MOULDERS
CC
APPLICANT
V
NATIONAL
UNION OF SOUTH AFRICAN WORKERS
RESPONDENT
JUDGMENT
AC
BASSON, J
[1]
This is an urgent application in terms of which the applicant (UNICA
Plastic Moulders CC) applies for an order to interdict
and restrain
the respondent (“NUSAW”) from “
interfering with
the Applicant’s business, and its employees
”. The
applicant also seeks an order interdicting and restraining the
respondent from approaching or being within 50 meters
of the
applicant’s premises and from recruiting and writing letters to
the applicant.
[2]
It also
appears from the papers that NUSAW has referred a dispute about
organizational rights to the CCMA in terms of section 22
of the
Labour Relations Act 66 of 1995 (hereinafter referred to as “the
LRA”). Section 11 of the LRA clearly states
that only a
registered
trade union that is sufficiently
[1]
representative of employees employed by the employer in the
workplace, may apply and enjoy the organizational rights provided for
in Part A (sections 11 – 22) of the LRA.
[3]
It appears that this urgent application was prompted by the fact that
it came to the applicant’s attention that NUSAW
has been
de-registered by the Registrar of Labour Relations and that the
Registrar has removed NUSAW from the register of trade
unions as
published in Government Gazette No 30074 of 20 July 2007 (Notice 893
of 2007). It is common cause that an appeal has
been lodged to this
Court against the Registrar’s decision to de-register NUSAW.
[4]
In a letter dated 19 May 2010 the applicant wrote to the respondent
that NUSAW does not have any “bargaining powers”
because
it has been de-registered. In this letter it is also stated that the
respondent is not entitled to exercise any organizational
rights in
light of the fact that it was de-registered.
[5]
On 21 May 2010 the respondent responded to this letter and recorded
the following:
“
You are advised
that once Appeal is lodged the Registrar’s decision is put
aside until Labour Court rule otherwise (sic
).”
[6]
Also attached to the respondent’s papers is a letter from the
CCMA (Pretoria) dated 4 August 2009 in terms of which NUSAW
is
advised that, pending the finalization of the appeal, NUSAW is
entitled to represent its members at the CCMA.
[7]
In deciding this application, the following must be considered:
(i)
Firstly, the status of a trade union that has been de-registered
by
the Registrar of Labour in terms of the relevant provisions of the
LRA. I will refer to those provisions hereunder.
(ii)
Secondly, if it is held by this Court that a de-registered trade
union’s rights
are suspended pending the outcome of an appeal
against the decision of the Registrar to de-register, does that mean
that a trade
union has no rights
vis à vis
its members?
It appears to be the case of the applicant in the present application
that a de-registered trade union does not have
the right to even
recruit members or write letter to an employer.
Brief
exposition of the law
[8]
Section 8 of the LRA states that every employer’s organization
and every trade union have certain rights in terms of the
LRA. These
rights include the right, subject to the provisions contained in
Chapter VI of the LRA, to determine their own constitutions
and rules
and to hold elections for its office-bearers, officials and
representatives. Chapter VI of the LRA (sections 95 –
111)
contains detailed prescriptive provisions that must be complied with
if a trade union or an employer organization wishes to
apply for
registration in terms of the LRA. (For purposes of this brief
judgment I will only refer to trade unions with the understanding
that the provisions contained in Chapter VI of the LRA equally apply
to employer’s organizations except where the context
provides
otherwise.)
[9]
Trade unions apply for registration in order to be able to claim as
of right various rights provided for by the LRA but reserved
solely
for registered trade unions. As such only a registered trade union
can claim and enforce (in terms of section 22 of the
LRA) certain
organizational rights provided for in sections 11 – 21 of the
LRA. Only a registered trade union(s) and a registered
employer’s
organization(s) may establish a bargaining council as contemplated by
Part C of the LRA (sections 27 – 34).
Only registered trade
unions can seek the establishment of a workplace forum as
contemplated in Chapter V of the LRA (sections
78 – 94) and
only registered trade unions can conclude collective agreements as
contemplated by sections 23 – 26 of
the LRA. Of particular
importance is the fact that only a registered trade union may
represent (through its officials) its members
in proceedings at the
CCMA (see Rule 25(1)(b)(3) of the Rules of the CCMA), bargaining
councils and the Labour and Labour Appeal
Court (see section 161 of
the LRA).
[10]
Nothing in the LRA, however, prevents an unregistered or
de-registered trade union from recruiting members or from
representing
its members at disciplinary hearings (provided that
union officials are allowed to represent employees at a disciplinary
hearing).
Nothing also prevents an unregistered or de-registered
trade union from approaching an employer demanding that the employer
bargains
with it over wages. Nothing in the LRA also prohibits an
unregistered trade union (and its members) from participating in a
protected
strike.
[11]
Consequently, in so far as the applicant in the present application
is seeking an order against NUSAW (as a de-registered or
unregistered
union) interdicting it from recruiting members amongst the staff of
the applicant, the order should be refused as
the LRA clearly allows
even unregistered unions from operating in the workplace. What
unregistered or de-registered unions cannot
claim are those rights
specifically afforded to registered unions only.
[12]
In terms of section 95 of the LRA a trade union may apply to the
Registrar for registration and in doing so it must be able
to satisfy
the Registrar that it,
inter alia
, has adopted a constitution
that meets the requirements of subsection (5) and (6) of section 95.
Section 95(5) provides that the
trade union must be an association
not for gain. The constitution must provide for banking and investing
its money and must establish
the purpose for which its money may be
used. The Registrar will only register a trade union if it is
satisfied that the trade union
meets all the requirements for
registration. Section 97 of the LRA provides for the effect of
registration of a trade union.
[13]
Section 98
of the LRA is particularly important and requires that accounting
records must be kept and that audits must be done annually.
In terms
of this section every registered trade union must adhere to generally
accepted accounting practices, principles and procedures.
In terms of
section 100,
[2]
every trade
union is also required to provide the registrar,
inter
alia
,
with a statement certified by the secretary that it accords with its
records.
[14]
It is clear
from a reading of the LRA that the Registrar of Labour Relations is
assigned an important function which is to ensure
that trade unions
comply with the obligations prescribed by the LRA. Should the
Registrar be of the view that the union has failed
to adhere to its
statutory obligations in terms of the LRA, the Registrar is able to
take appropriate steps to rectify any non-adherence
to these
obligations.
[3]
In terms of
section 106 of the LRA, the Registrar also has a discretion to cancel
the registration of a trade union by removing
its name from the
appropriate register. Section 106(2A) and (2B) provides as follows:
“
(2A)
The registrar may cancel the registration of a trade union or
employers' organisation by removing its name from
the appropriate
register if the registrar -
(a) is satisfied that
the trade union or employers' organisation is not, or has ceased to
function as, a genuine trade union or
employers' organisation, as the
case may be; or
(b) has issued a
written notice requiring the trade union or employers' organisation
to comply with sections 98, 99 and 100 within
a period of 60
days of the notice and the trade union or employers' organisation
has, despite the notice, not complied with
those sections.
(2B)
The registrar may not act in terms of subsection (2A) unless the
registrar has published a notice in
the Government Gazette at least
60 days prior to such action -
(a) giving notice of
the registrar's intention to cancel the registration of the trade
union or employers' organisation ; and
(b) inviting the trade
union or employers' organisation or any other interested parties to
make written representations as to why
the registration should not be
cancelled.”
[15]
A party who is aggrieved by a decision of the Registrar to
de-register a trade union and to remove its name of the Registrar,
may appeal against the decision within 30 days of the written notice
of the decision of the Registrar. The Registrar must then
provide the
applicant with written reasons for the decision within 30 days of
receiving a demand in terms of subsection (1) of
section 111. Any
person who is then dissatisfied with the written reasons for the
decision may appeal to the Labour Court against
that decision within
60 days of the date of the Registrar’s decision or if
written reasons for the decision are demanded,
the date of those
reasons.
[16]
The
importance of the Registrar in ensuring compliance with the statutory
accounting and accountability standards as set out in
the LRA becomes
even more apparent when regard is had to two recent matters that came
before this Court, both of which concerned
de-registered trade
unions.
[4]
In both of these
judgments the learned judges referred to the shocking extent to which
some trade unions have failed to comply
with the prescribed
accounting procedures and standards prescribed by the LRA. In
National
Entitled Workers Union v Ministry of Labour & Others
(2010) 31
ILJ
574 (LAC), Wagley, DJP sets out in fair detail the degree to which
NEWU has failed to comply with the required statutory accounting
standards. In that matter the Registrar of Labour de-registered NEWU
after it discouvered various and serious incidences of financial
mismanagement. These include the granting of unsecured loans in
excess of R 400 000.00 to Mr. Maluleke without furnishing any
information in respect of whether the loans were paid back or when
the loans will be paid back. The Registrar was also of the view
that
NEWU is operating for the gain of certain individuals. The appeal in
that matter is still pending. The Registrar of Labour
Relations also
de-registered the United Peoples Union of South Africa (“UPUSA”)
after it detected similar acts of serious
financial and accounting
mismanagement. The Registrar similarly found that UPUSA had ceased to
function in terms of its constitution
and that it did not comply with
section 98, 99 and 100 of the LRA. The Registrar also found that
UPUSA had ceased to operate as
a genuine trade union. See in this
regard:
United
People’s Union
o
f
South Africa v Registrar
o
f
Labour
Relations
(Case
no
J
2178/09
).
An appeal is also pending against the decision of the Registrar of
Labour in the latter case.
What
is the effect of an appeal against a decision of the Registrar to
de-register?
[17]
I am of the view that the noting of an appeal does
not
suspend
the effect of the decision of the Registrar to de-registerpending the
appeal in terms of section 111(3) of the LRA. I have
come to this
decision on the following basis. Firstly, section 106(3) of the LRA
unequivocally states that all the rights enjoyed
by a trade union as
a result of being de-registered will end. This section is, in my
view, clear in its intention namely that the
(de-registered) trade
union will no longer be able to exercise or claim the rights reserved
for registered trade unions only. These
rights include the right to
organizational rights in terms of the LRA and also the right to
appear in this Court and at the CCMA
and Bargaining Councils.
Although section 106(3) does not expressly state that a decision of
the Registrar is not suspended (pending
the appeal), I am of the view
that it is implied having regard to the following: Section 106(3) of
the LRA must be read against
the transitional provisions contained in
Schedule 7 of the LRA which provides as follows:
“
Cancellation in
terms of sub-item (6) takes effect –
(a) if the trade union
or the employer’s organization has failed, within the time
contemplated in section 111(3), to appeal
to the Labour Court against
the cancellation, when that period expires; or
(b) if the trade union
or the employer’s organization has lodged an appeal, when the
decision of the registrar has been confirmed
by the Labour Court.”
[18]
Section 106(3) of the LRA now provides as follows:
”
When a trade
union’s or employer’s organisation’s registration
is cancelled, all the rights it enjoyed as a result
of being
registered
will
end
.”
[5]
[19]
I am
further of the view that this view does not conflict with the
academic authority which clearly states that the question of
whether
or not an administrative decision is suspended pending the outcome of
an appeal depends on the relevant statute itself.
Lawrence Baxter
Administrative
Law
[6]
discusses the question whether or not an administrative decision
which is challenged whether by way of a review or an appeal, has
interim effect. IBaxter
[7]
is of
the view that, in the case of private disputes, the effect at common
law of noting an appeal is to suspend the operation
of the decision
appealed against. However, where an appeal is noted against a
decision taken in terms of statutory powers, whether
or not the
decision appealed against is suspended, is dependent upon the
enabling statute. The common law principle constitutes
no more than a
presumption in the case of an administrative decision which
presumption may be negatived by the statute itself
.
[8]
[20]
A similar view is held by JR De Ville
Judicial Review: Procedure
and Remedies.
The learned author writes that where an appeal is
allowed against an
administrative decision
(such as in the
present case), the decision appealed against will be suspended and
will therefore only take effect (i) once the
period for the appeal
has expired and the person affected did not lodge an appeal or (ii)
the decision has been confirmed on appeal.
De Ville, however, also
points out that the decision will not be suspended if the statute in
question provides otherwise.
[21]
It would therefore appears from the aforegoing that the principle is
that, unless the relevant statute provides otherwise,
the lodging of
an appeal suspends the effect of the (administrative) decision
pending the outcome of the appeal. As already indicated,
I am of the
view that the statute is clear that the intention of the legislature
was to bring to an end the rights and privileges
enjoyed by a trade
union in terms of certain provisions of the LRA pending the outcome
of the appeal. There is also a further and
important public policy
consideration as to why the rights of a trade union should come to an
end when it is de-registered by the
Registrar (pending the appeal). A
trade union is in a position of trust
vis à vis
its
members and as such is entrusted with ensuring that the employee is
treated fairly by his or her employer in the workplace.
A registered
trade union is further allowed to represent its member at the CCMA,
the Bargaining Council and the Labour Court and
is as such in a
similar position as an attorney or counsel. From a public policy
point of view a trade union should not be able
to enjoy the rights
afforded to a registered trade union if it has flaunted the very act
from which these rights are being derived.
[22]
In preparing this judgment I also had the benefit of reading
my learned brother’s decision in
CCMA v Registrar of Labour
Relations & Others
(
Case No: J984/10)
dated 27 July 2010. Molahlehi, J came to a
similar decision namely that the decision of the Registrar to
deregister is not suspended
pending the outcome of the appeal in
terms of section 111(3) of the LRA. I am, in particular, in agreement
with his assessment
of what the objects of the LRA are in respect of
trade unions:
“
[35[ The
objects of s106 read with s111 (3) of the LRA must also be understood
in the context that the legislature having created
an environment and
a frame work for the guaranteed and enjoyment of the Freedom of
Association in form of trade unions, also sought
to ensure that
certain minimum duties of transparency and accountability are imposed
on the trade unions. The need for accountability
arises from the fact
that trade unions, as public entities, depends largely on financial
contributions from the workers who are
members of the public. It
cannot be denied that the decision of the Registrar to de-register a
trade union has serious consequence
on that union as an entity and
its members. As an entity the decision of the Registrar, is likely to
have a profound impact on
its structures and its operations including
the right to represent its members in various dispute resolution
processes. It further
cannot be denied that there exists a
possibility that the Registrar in arriving at the decision to
de-register a trade union may
be based on an incorrect interpretation
of facts before him or her or other invalid reasons which may
ultimately result in the
decision being overturned on appeal.
[36]
The prejudice that a union may suffer as a result of de-registration
and enforcing such, even
pending appeal, should be weighed against
the public interest of protecting the interest of union members in
particular that of
ensuring that funds contributed are utilized for
the purpose of benefiting union members. This simple accountability
principle
is founded on the notion that a union occupies a position
of trust as concerning the management of the funds contributed by
members.
In short the provisions of s 106 of the LRA are protective
in nature, intended to protect the vulnerable workers from abuse of
their trust by unscrupulous union officials whose involvement in a
union may be for no other reason but to advance their selfish
business interest. “
[23]
I am in agreement with the above sentiments. There is no doubt that
trade unions play an important role in the workplace and
in that
sense fulfill an important social responsibility towards employees
who in most instances have no other recourse than the
trade union who
will then be entrusted to ensure that he or she is treated fairly by
his or her employer. Where the union is registered,
the union has the
further right of representing the employee at the CCMA, Bargaining
Council and the Labour Court. Commissioners,
Arbitrators and Judges
expect of union representatives to diligently and honestly serve the
interest of their members. They have,
after all, been granted the
privilege and right to be able to represent their members by virtue
of them having complied with the
statutory provisions of the LRA. I
am therefore in agreement with my learned brother Molahlehi, J that a
trade union should not
be able to represent these vulnerable workers
if their conduct have been found to be unscrupulous by the Registrar
of Labour and
especially where the Registrar of Labour finds that the
union is no longer operating as a genuine trade union but is being
used
to advance the selfish business interests of individuals. See
further
CCMA v Registrar of Labour Relations
(
supra
):
“
[38] The
prejudice argument would probably have supported the interpretation
of the CCMA had one of the consequences of de-registration
been to
render the continued operation of such a union illegal. In our law
the existence and operation of unions is not based on
registration
but as indicated earlier on the principle of respect and guarantee of
Freedom of Association. Thus a de-registered
union can continue
operating even after the de-registration. The consequence of
de-registration is simply that the rights and benefits
given to the
union by the very law, which it had failed to obey, is taken away. “
[24]
The fact
that a trade union will no longer be able to exercise organisational
rights in terms of the LRA is an unfortunately consequence.
However,
the union only has itself to blame. See in this regard
United
People’s Union
o
f
South Africa v Registrar
o
f
Labour
Relations
(Case
no
J
2178/09
):
“
[10]
Mr. Lengane, who appeared for UPUSA, made much of the consequences
that a refusal to grant interim
relief would visit on UPUSA. Indeed,
those consequences have already manifested themselves in the form of
the withdrawal of recognition
and organisational rights by a number
of employers following on the Registrar’s decision. This may be
so, but UPUSA has only
itself to blame. Trade unions are public
institutions, not private businesses. The act of registration confers
many benefits on
those trade unions that seek to be registered. But
these benefits come at the price of submission to the reporting
requirements
established by section 100 of the LRA, all of the
requirements that are intended to provide a guarantee to union
members that their
membership subscriptions have been utilised to
further their interests. A failure by a registered trade union to
comply with section
100 and to keep books of account and records to
the standard required by section 98 undermines this statutory
guarantee. Ultimately,
it is the Registrar who is the underwriter of
this warranty, and like all underwriters, the Registrar must protect
the general
interest at the expense of the particular when this is
necessary. The Registrar is accountable to the public as a whole
should
a registered trade union (or employers’ organisation,
for that matter) fail to implement the required financial and
administrative
controls, and a degree of due diligence by the
Registrar in enforcing the relevant requirements of the Act is
therefore necessary
.
”
The
present matter
[25]
Turning to the present matter. Although the grounds for urgency set
out in the founding affidavit are rather flimsy, I have
nonetheless
decided to deal with the matter on an urgent basis. As far as the
merits of the application are concerned, I am of
the view that the
application should fail. I have already alluded to the fact that a
union may still, despite having been de-registered,
represent its
members albeit not before the CCMA, Bargaining Council or the Labour
Court. An unregistered trade union is also not
barred from recruiting
members nor is it barred from negotiating on behalf of its members. I
can also find no basis as to why NUSAW
should be interdicted and
restrained from approaching or being within 50 meters of the
applicant’s premises. An unregistered
trade union may, however,
not claim, as a matter of right any of the organizational rights
provided for in the LRA. There is a
dispute about organizational
rights currently pending before the CCMA. As a result of its
unregistered status (which is not suspended
pending the outcome of
the appeal against the decision to de-register) NUSAW do not have the
right to represent its members at
the CCMA despite a letter from the
Senior Convening Commissioner of the CCMA (Pretoria) allowing it to
do so. This is also the
view of my learned brother Molahlehi, J
(
supra
). The application therefore falls to be dismissed. I
can find no reason why costs should not follow the result.
[26]
In the event the following order is made:
“
The application
is dismissed with costs.”
________________________
AC
BASSON, J
DATE
OF APPLICATION
: 23 JULY 2010
DATE
OF JUDGMENT:
3 AUGUST 2010
FOR
THE APPLICANT:
Mr.
Madoda Khumalo of Kganare Attorneys
FOR
THE RESPONDENT:
Mr.
Matsobane Ramalatso of
Matsobane
Ramalatso Attorneys
[1]
In certain instances it is required that the union must be a
majority union. See, for example, section 14 and 16 of the LRA.
[2]
“
(a)
by 31 March each year, a statement, certified by
the secretary that it accords with its records, showing
the number
of members as at 31 December of the previous year and any other
related details that may be required by the registrar
;
(b)
within 30 days of receipt of its auditor's report, a certified copy
of that report and of the financial statements;
(c)
within 30 days of receipt of a written request by the registrar, an
explanation of anything relating to the statement of membership,
the
auditor's report or the financial statements;
(d)
within 30 days of any appointment or election of its national
office-bearers, the names and work addresses of those
office-bearers,
even if their appointment or election did not result
in any changes to its office-bearers ; and
(e)
30 days before a new address for service of documents will take
effect, notice of that change of address.”
[3]
See Part C of the LRA sections 108 – 110.
[4]
The LAC in
National
Entitled Workers Union v Ministry of Labour & Others
(2010) 31
ILJ
574 (LAC) stated as follows: “
[7]
The registrar is an important functionary in terms of the
LRA and
is tasked, inter alia, with ensuring due compliance by
registered trade unions the obligations imposed upon them
by the
LRA. The registrar is defined in the LRA as 'the registrar of labour
relations' and is the fourth respondent in this appeal
.”
[5]
My emphasis.
[6]
Baxter at page 360.
[7]
Baxter page 380 – 381.
[8]
Ibid
at 381: “
The
common –law principle can constitute no more than a
presumption in the case of administrative decision, and this
presumption
may well be negatived by the implications of the
statute.”