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[2010] ZALCD 13
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Health And Other Services Personnel Trade Union of South Africa and Others v Member of the Executive Council for the Department of Health, Eastern Cape (D464/09) [2010] ZALCD 13 (14 November 2010)
Reportable
Of interest to other
judges
IN THE LABOUR COURT OF
SOUTH AFRICA
HELD
AT DURBAN
Case no: D 464/09
In
the matter between:
THE
HEALTH AND OTHER SERVICES
PERSONNEL
TRADE UNION OF
SOUTH
AFRICA
FIRST
APPLICANT
SAVELLE
EDMOND KOPS & OTHERS SECOND
AND FURTHER APPLICANTS
AND
THE
MEMBER OF THE EXECUTIVE COUNCIL
FOR
THE DEPARTMENT OF HEALTH,
EASTERN
CAPE
RESPONDENT
(the
Excipient)
JUDGMENT
GUSH J:
1. This matter concerns
an exception raised by the respondent/excipient (who I shall for the
sake of convenience refer to as the
respondent) against the
applicants’ statement of claim.
2. The applicants applied
for judgment against the respondent for payment of amounts the
applicant’s claimed were due to the
2
nd
and further
applicant’s arising from the application of the terms of a
collective agreement the first applicant had entered
into with the
respondent.
3.
The
agreement sought to regulate the “
post
transfer
”
implications “
in
relation to section 197 of the Labour Relations Act
”
arising from the “
transfer
of emergency medical services employees from the municipalities to
the eastern Cape Provincial Department of Health
”
[1]
.
The stated objectives of the agreement included “
to
ensure that the transfer of certain employees’ (including
second and further applicants) contracts of employment from various
municipalities to the department complied with section 197 of the
LRA
”
and “
to
align the remuneration and conditions of employment of such employees
with the public service remuneration system and practice
”
[2]
.
4.
The
applicants averred that in compliance with the collective agreement
the respondent had calculated what was due to the 2
nd
and further applicants. The applicants’ had accepted the
calculation and accordingly the 2
nd
and further applicants were due the amounts set out in a schedule
attached to the statement of claim.
[3]
5.
The
applicants recorded that “
notwithstanding
demand respondent has refused, neglected or otherwise failed to pay
to the second and further applicants the amounts
[set out in the schedule]
and
is accordingly liable to make such payments
”
[4]
.
6. Under the heading
“Legal Issues” the applicants aver that to their
knowledge there are no legal issues that are relevant
to the
application and that the matter only concerns the non payment of the
“undisputed obligations”.
7. In response the
respondent raised an exception to the applicants’’
statement of claim in that it was vague and embarrassing
alternatively lacked the necessary averments to sustain an action.
8. The respondent’s
reasons were that:
a.
the applicant’s claim for monies was based on the respondent’s
failure to give effect to or act in terms of the collective agreement
and therefore the applicants’’ sought to enforce
the
collective agreement but that the applicants expressly disavowed any
reliance on a cause of action based on a dispute about
the
application of a collective agreement;
b.
the applicants had not set out their cause of action in their
statement of claim; and
c.
despite the requirements of rule 6(1)(b)(iii) of the rules of
this
court that a statement of claim must contain a “
clear and
concise statement of the legal issues that arise from the material
facts which statement must be sufficiently particular
to enable any
opposing party to reply to the document
” the applicants had
stated that there were “
no legal issues that are relevant to
the application
”.
9.
When
the matter commenced the respondent argued that the exception (in
addition to the grounds set out in their notice) included
the
question of jurisdiction, which was referred to in its heads of
argument. The respondent submitted, based on the decision in
Viljoen
v Federated Trust Ltd
[5]
,
that for this reason too, the respondent’s exception should be
upheld.
10.
The
respondent argued that the court lacked jurisdiction by virtue of the
provisions of s 24 of the LRA as the dispute involved
the application
of a collective agreement.
[6]
11. The applicants were
of the view that this submission constituted a new ground of
exception and that they required time to address
this issue.
Accordingly the matter was adjourned by consent to allow the parties
an opportunity to specifically address the question
of jurisdiction
and both parties agreed to file and duly filed supplementary heads of
argument.
12.
Dealing
with the exception Mr Kroon, who appeared for the respondent, argued
that given the requirements of the rules of this court
the applicants
were required not only to set out the material facts upon which they
relied but also clearly and concisely record
the legal issues that
arise from those facts
[7]
. The
applicants’ statement of claim which contained the averment
that there were no legal issues arising from the cause of
action upon
which they relied did not comply with the provisions of rule 6.
13.
It
was submitted further that although the applicants’ claim
appeared to be based on the application of the collective agreement
the applicants had “
expressly
disavowed any reliance on the collective agreement in question
”
[8]
and that there were no legal issues for the court to decide.
14.
The
respondent insisted that despite averment in the applicants’
statement of claim that there was no dispute and that their
case
“
concerns
only the payment of undisputed obligations
”
[9]
there clearly was a dispute as the respondent had refused to make the
payment and that the dispute involved the application of
a collective
agreement. This meant that the applicants had not disclosed a cause
of action and that therefore the exception should
be upheld and the
applicants’ case should be dismissed.
15. Therefore Mr Kroon
argued that not only was the statement of claim vague and
embarrassing, alternatively that it lacked the
necessary averments to
sustain an action, but that it was also excipiable as the applicants
expressly disavowed any reliance on
a cause of action based on a
dispute about the application of a collective agreement. Mr Kroon
suggested that if there was no dispute
there was nothing for the
court to determine.
16. Regarding the
question of jurisdiction the respondent’s argument was that
it was clear from the applicants’
statement of claim that:
a.
there was a dispute between the parties;
b. the
dispute concerned the application of a collective agreement.
Therefore the provisions
of s24(2) applied and the matter should have been referred to
arbitration.
17.
In
response Mr Crampton for the applicants’ insisted that there
was no dispute and that if there was no dispute no arbitration
could
take place. He argued that the respondent had simply “
failed
neglected or refused
”
to pay the amounts due to the 2
nd
and further applicants and that this did not constitute a dispute.
These submissions were based on the decision in
Telecall
(Pty) Ltd v Logan
[10]
as
authority for the proposition that in order for an arbitration to
take place there must be an arbitrable dispute where it was
held that
“…
before
there can be a reference to arbitration a dispute , which is capable
of proper formulation… must exist…”
“
If
what is intended … is merely an expression of dissatisfaction
… no arbitration can be entered upon”
[11]
And
“…
a
failure to pay does not, without more, imply that there is a dispute
as to liability”.
[12]
18. There is no doubt
that if there is no dispute then there is nothing to arbitrate. I
will return to the applicants’ proposition
that there is no
dispute between the parties below.
19.
Turning
to the jurisdictional issue, Mr Crampton for the applicants suggested
that the court had jurisdiction by virtue of the provisions
of s77(3)
of the Basic Conditions of Employment Act.
[13]
This averment or reliance on s77(3) is not specifically pleaded.
Neither does it appear from the applicants’ statement of
claim
that they rely their contracts of employment in claiming what they
allege is due to them in terms of the collective agreement,
despite
the definition of a collective agreement being “
a
written agreement concerning terms and conditions of employment
”.
20. Mr Crampton argued
that once the court had jurisdiction to entertain the applicants’
claim by virtue of s77(3) of the
BCEA, should it appear later that
the claim was a “dispute” as contemplated in s158(2) of
the LRA then the court could
exercise its discretion as provided for
in that section.
21. If however an
applicant relies on the jurisdiction conferred on the Court by virtue
of s77 (3) of the BCEA on the grounds
that the cause of action is “
a
matter concerning a contract of employment
” there is no
reason why the provisions of s158 (2) of the LRA should, depending on
the respondent’s reply, determine
the manner in which it should
be decided. The Court’s jurisdiction would be established
by virtue of s77 of the BCEA
and it would determine the matter
accordingly. The cause of action would establish the jurisdiction and
there would be no need
to apply s158 (2) of the LRA. This argument
does not take account of s157(5) of the LRA which I deal with below.
22. I am not satisfied
that the applicants’ claim is based on a cause of action
contemplated by s77(3) and accordingly the
exception and the issue of
jurisdiction must be determined in accordance with the provisions of
the LRA and in particular ss 157
and 158.
23.
In
addition to the argument that the court had jurisdiction by virtue of
s77(3) the Mr Crampton submitted that the statutory requirement
that
disputes regarding the application of collective agreements as set
out in s 24(2) of the LRA
[14]
to be referred to arbitration was subject to the “
overriding
jurisdiction of this court is equivalent or similar to the
jurisdiction retained by a civil court in relation to a dispute
that
is covered by an arbitration agreement
”
[15]
and “
an
overriding jurisdiction in respect of “disputes about the
… application of a collective agreements
.
”
[16]
.
It
was suggested that on this basis the court had the jurisdiction to
entertain the matter and if or when it became a “dispute”
for example should the answering papers of the respondent reveal the
existence of a dispute then the court then had the discretion
to
either stay the proceedings and refer the dispute to arbitration or
with the consent of the parties if expedient proceed with
the court
sitting as an arbitrator.
[17]
24. The argument that the
court enjoys an “
overriding jurisdiction” “equivalent
or similar to the jurisdiction retained by a civil court in relation
to a dispute
that is covered by an arbitration agreement
”
ignores the specific provisions of s 157 of the LRA.
25. S157(1) of the LRA
confers exclusive jurisdiction on the Labour Court “
in
respect of all matters that elsewhere in terms of the Act or in terms
of any other law are to be determined by the Labour Court.
”
S157(5) specifically provides that “
except as provided for
in s158(2), the Labour Court does not have jurisdiction to adjudicate
an unresolved dispute if this Act requires
the dispute to be resolved
through arbitration
”.
26. S158(2) confers on
the Labour Court a limited and prescribed power to deal with disputes
that are required by the LRA to be
resolved through arbitration. The
section provides:
“
If at any
stage after a dispute has been referred to the Labour Court, it
becomes apparent that the dispute ought to have been referred
to
arbitration, the Court may-
(a)
Stay the proceedings and refer the dispute to arbitration; or
(b)
With the consent of the parties and if it is expedient to do
so, continue with the proceedings with the Court sitting as an
arbitrator,
in which case the Court may only make any order that a
commissioner or arbitrator would have been entitled to make”
27. It is so that in this
matter the applicants “expressly disavow” the existence
of a dispute involving the application
of a collective agreement and
in fact in their statement record that the matter concerns the non
payment of an “undisputed
obligation”.
28. In reply the
respondent argued that despite the insistence by the applicants that
there was no dispute the applicants’
averment in their
statement of claim that :
notwithstanding
demand respondent has refused, neglected or otherwise failed to pay
to the second and further applicants the amounts
[set out in the schedule]
and
is accordingly liable to make such payments
”
[18]
clearly
demonstrated that there was a “
referable
”
or arbitrable dispute. In support of this contention Mr Kroon
referred to the “Law of Arbitration”
[19]
where the learned author says:
“
Courts have
found that a referable dispute exists where-
…
(d)
money
is claimed unless and until the defendants admit that the sum is due
and payable. If letters have been written making some
request or
demand and the defendant did not reply, there is a dispute”
[20]
29.
Although
the authorities quoted by the author are from other jurisdictions the
logic is hard to refute. The applicant based its
averment that there
was no dispute on the authority that “
an
expression of dissatisfaction”
[21]
is
based not an arbitrable dispute and “…
a
failure to pay does not, without more, imply that there is a dispute
as to liability”
[22]
.
What distinguishes the applicants’ claim from these
propositions is that the applicants claim is not only on more
than an “
expression
of dissatisfaction
”,
but also that the respondent’s failure to pay must be seen in
the context of the applicants’ specific averment
that the
failure to pay is “
notwithstanding
demand”.
30. The respondent’s
insistence that the Court does not have jurisdiction because the
applicants’ claim is based on
a dispute about the failure of
the respondent to comply with a collective agreement or in other
words “
about the application of a collective agreement
”,
ignores the provisions of s158(5) which specifically confers
jurisdiction on the Court when confronted with such
disputes.
31.
In
the matter of Commercial Workers Union of SA v Tao Ying Metal
industries & Others the Constitutional Court
[23]
held that the objectives of the LRA required that the “
substantial
merits
”
of a dispute should be dealt with and that the arbitrator should in
dealing with matters “
reach
for the real dispute between the parties
”
[24]
and “
in
deciding what the real dispute between the parties is, a commissioner
is not necessarily bound by what the legal representatives
say the
dispute is. The labels that the parties attach to a dispute cannot
change its underlying nature
”.
[25]
Despite the applicant
having decided approach the Court directly and therefore eschew the
benefits of the informality attached
to the arbitration process the
fact remains that the issue in dispute requires it to be arbitrated
which is a process designed
to resolve disputes fairly and
expeditiously In accordance with the objects of the LRA. In order to
ensure that the matter is resolved
without delay, there is no reason
therefore why in the specific circumstances of this matter that the
court should not similarly
adopt a more lenient approach to the
applicants’ pleadings given the fact that the court is
expressly given specific
powers to deal with disputes that should
have been referred to arbitration in the first instance.
32. For this reason I am
disinclined to uphold the respondent’s exception that the
applicants’ statement of claim is
vague and embarrassing or
that it does not disclose a cause of action, particularly in the
light of the respondent’s insistence,
despite what the
applicants say to the contrary, that there is in fact a dispute
between the parties and that this dispute concerns
the application of
a collective agreement. I am accordingly satisfied that the
applicants’ statement of claim does disclose
a cause of action
and that the cause of action is a dispute and that the dispute is a
dispute regarding the application of a collective
agreement.
33. That being so the
exception falls to be dismissed and the provisions of s158(2) must
apply to the resolution of this matter.
The parties have agreed that
they have not nor will they consent to the Court proceeding by way of
arbitration and therefore the
appropriate order is to stay the
proceedings and order that the dispute be referred to arbitration
34. As far as costs are
concerned it is appropriate that each party pay its own costs.
35. Accordingly I make
the following order:
a. The
respondents exception is dismissed;
b. In
terms of section 158(2) of the LRA the proceedings are stayed and the
dispute is referred to arbitration;
c. Each
party to pay its own costs.
____________
GUSH
J
Date
of hearing
: 16
th
July and 26
th
October 2010
Date
of judgment
: 4
th
November 2010
APPEARANCES
For
the applicants :
Advocate D. P. Crampton
Instructed
by
:
Llewellyn Cain Attorneys
For
the respondent :
P. N. Kroon
Instructed
by
:
State Attorney Port Elizabeth
[1]
Annexure B to the statement of claim
[2]
Statement of claim para 6.1
[3]
Annexure C to the statement of claim
[4]
Para 11 of the statement of claim
[5]
1971 (1) SA 750 (O)
[6]
S 24 (2) “
If
there is a dispute about the interpretation or application of a
collective agreement, any party to the agreement may refer
the
dispute in writing to the Commissioner…
”
[7]
Rule 6(1)(b) of the Rules of the Labour Court
[8]
Respondents heads of argument
[9]
Applicants’ statement of claim para 12
[10]
[2000] ZASCA 97
;
2000 (2) SA 782
(SCA) at p786/7
[11]
[2000] ZASCA 97
;
2000 (2) SA 782
(SCA) at p786/7
[12]
PCL Consulting (Pty) Ltd t/a Phillips Consulting SA v Tresso Trading
119 (Pty) Ltd 2009 (4) SA (SCA) 68 at p73
[13]
Act 75 of 1997; s77(3) provides “The Labour Court has
concurrent jurisdiction with the civil courts to hear and determine
any matter concerning a contract of employment, irrespective of
whether any basic condition of employment constitutes a term
of that
contract”
[14]
S24(2) “If there is a dispute about the interpretation or
application of a collective agreement, any party may refer the
dispute in writing to the commission…”
[15]
Applicants heads of argument on the question of jurisdiction para 22
[16]
Applicants heads of argument on the question of jurisdiction para 37
[17]
S158(2) of the LRA
[18]
Para 11 of the statement of claim
[19]
Law of Arbitration. Ramsden. Juta 2009
[20]
At page 51
[21]
Telecall (Pty) Ltd v Logan (supra)
[22]
PCL Consulting (Pty) Ltd t/a Phillips Consulting SA v Tresso Trading
119 (Pty) Ltd (supra)
[23]
(2008) 29 ILJ 2461 (CC)
[24]
At page 2482 para [65]
[25]
At page 2483 para[66]