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[2011] ZALCJHB 65
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Cape Agri Employers Organization v Registrar of Labour Relations (J634/11) [2011] ZALCJHB 65; [2011] 11 BLLR 1055 (LC); (2011) 32 ILJ 2952 (LC) (20 May 2011)
Reportable
IN THE LABOUR COURT OF
SOUTH AFRICA
HELD AT JOHANNESBURG
Case no.: J634/11
In
the matter between:
CAPE
AGRI EMPLOYERS ORGANIZATION
…................................................
Applicant
and
REGISTRAR
OF LABOUR RELATIONS
…..................................................
Respondent
JUDGMENT
BHOOLA
J:
Introduction
[1] The applicant sought
urgent relief
inter alia
in the following terms :
“
2.That
it be declared that the decision of the Respondent to cancel the
registration of the Applicant as an employers’ organization
as
published in notice 176 of 2011 in the Government Gazette of 1 April
2011 was suspended by the lodging of an appeal against
that decision
;
Alternatively to
paragraph 2 above :
3.That the decision of
the Respondent to cancel the registration of the applicant as an
employers’ organization as published
in the Government Gazette
of 1 April 2011 under notice 176 of 2011 be suspended pending the
adjudication of the appeal”.
[2] At the commencement
of the hearing the applicant abandoned the declaratory relief sought.
Background facts
[3] The applicant was
formally registered on 21 June 2000 in terms of a certificate of
registration issued by the respondent under
the Labour Relations Act,
66 of 1995 (“the Act”). Clause 2 of its constitution
expressly provides that it is established
as an organization not for
gain. Clause 4 provides that its main objectives are: (a) to regulate
and promote relations between
its members and their employees and/or
trade unions; and (b) to promote and protect the common interests of
members with respect
to their employees, including providing members
with representation at the CCMA.
[4] The members of the
applicant are farmers in the Western Cape. The applicant states that
it is financially unable to employ more
than one employee to render
human resources and dispute resolution services to its members, and
the average farmer cannot afford
to employ someone in this capacity
in a small enterprise. It therefore provided these services to its
members by accrediting human
resource practitioners (“labour
consultants”) to assist them with labour law and dispute
resolution services, including
representation at CCMA proceedings. It
states “such service providers all joined the applicant as
members and all HR services
rendered by these practitioners to
members were paid for by the member concerned”.
[5] Following a complaint
received by the respondent from a trade union about the conduct of
these labour consultants in CCMA matters,
and expressed by it in
correspondence to the applicant in 2006, the applicant adopted a Code
of Ethics to regulate their conduct
and also set up an ethics
committee to oversee their conduct. It advised the respondent of
these developments. Thereafter in 2007
and 2008 correspondence ensued
between the parties regarding a further complaint received regarding
registration, as well as concerns
raised by a CCMA Commissioner
querying the membership of the labour consultants.
[6] The respondent
advised the applicant in about January 2010 that it appeared that the
applicant was used by labour consultants
as a profit-making vehicle
and that it was not an association not for gain. The applicant was
informed of the respondent’s
intention to publish a notice in
terms of section 106(2B) of the Act notifying all interested parties
of its intention to cancel
the registration of the applicant. The
applicant alleges that this was unexpected since it had for a period
of two years been unaware
that there were any further complaints
lodged against it with the respondent. Subsequently a notice in terms
of section 106(2B)
was published in the Government Gazette of 5
February 2010, inviting objections for a period of sixty days. The
notice stated that
the applicant “is used by consultants as a
vehicle for profit-making. This is an association for gain and
therefore not a
genuine employer’s organization as envisaged in
the Act”.
[7] The applicant
responded with submissions dated 16 March 2010, which were supported
by some of its members. In these submissions
it stated
inter alia
the conclusion reached by the respondent has no factual basis and
that its objectives relate to legitimate collective bargaining
and
providing advice to members on labour relations issues.
[8] No further
correspondence ensued between the parties and one year later, on 16
March 2011 the applicant’s registration
was cancelled. On 14
April 2011 the applicant lodged an appeal in terms of section 111(3)
of the Act.
The applicable legal
test
[9] In
Lowveld Allied
and General Employers’ Organisation v Minister of Labour &
others
(2011) 32
ILJ
340 (LC) Basson J found that a
deregistered employers’ organisation or trade union has the
right to approach this Court for
an order suspending deregistration
pending the appeal, but whether or not it is entitled to the order
depends on the facts and
whether or not the requirements for the
grant of interim relief have been satisfied.
[10] It is trite that in
order to obtain the relief sought the applicant has to show that:
it has a
prima facie
right to the relief ;,
there is a well grounded
apprehension of irreparable harm should relief not be granted,
the balance of
convenience favours the granting of relief ;and
there is no other
satisfactory remedy.
Analysis
[11] Although urgency is
in issue it was not seriously challenged and the matter proceeded on
an urgent basis. Mr Stoop, appearing
for the applicant, submitted
that the applicant has a
prima facie
right to the relief
sought since there are reasonable prospects of success on appeal.
Relying on the judgment of Van Niekerk J in
United Peoples’
Union of SA v Registrar of Labour Relations
(2010) 31
ILJ
198
(LC) he submitted that an assessment of the preliminary merits of the
case was essential to the grant of interim relief and
proceeded to
address this. He submitted that the respondent erred in determining,
on the basis of the role and functions of four
labour consultants who
were admitted as members of the applicant, that it was not a genuine
employers’ organisation but a
profit-making enterprise. This
decision fails to take into account that it has about 489 members who
employ approximately 68 000
employees to which it provided a broad
range of services; that it was involved in a broad spectrum of
collective bargaining activities
and satisfied the guidelines for a
genuine employers’ organisation provided for in section 95(8)
of the Act. Moreover, labour
consultant members are not paid by the
applicant but the members to whom they provide services. They were
not involved in the establishment
of the applicant and it was a
ruling issued by the CCMA that required them to become members.
[12] Mr Stoop submitted
further that the respondent failed to apply his mind to the totality
of circumstances in which the applicant
operates. This is relevant to
determining whether a party is a genuine employers’
organisation as was held to be the case
by Landman J in
Labournet
Holdings (Pty) Ltd v McDermott & another
(2003) 24
ILJ
185, where he examined the relationship between a labour
consultancy and the National Employers’ Federation and found
the
two entities to be indistinguishable from one another. The
decision to deregister cannot be justified in circumstances, such as
the present matter, where it is only membership of four labour
consultants that is the issue. However, as Ms Prinsloo submitted
it
is not the number but the principle that matters, as well as the role
and power of the respondent to intervene. Mr Stoop submitted
that the
respondent erred on the facts; the decision itself is unfair in the
circumstances since the labour consultants have not
taken over the
applicant; it is not a case where the deregistration was a necessary
step for financial due diligence (as in
United Peoples’
Union of SA
supra where the union had failed to provide audited
financial statements); and thus there is a reasonable possibility
that the
appeal will succeed.
[13] Ms Prinsloo,
appearing for the respondent argued that the applicant does not have
a
prima facie
right to the relief sought in view of the
express provisions of section 106(3) of the Act. It moreover cannot
rely exclusively
on the prospects of success to establish a
prima
facie
right. Section 106(3) unequivocally states that all the
rights enjoyed by an organisation as a result of being registered
will
end when it is de-registered. This is peremptory. As a result of
the applicant’s deregistration it can no longer enjoy the
rights that derive from registration and the Act contains no
provision for suspending the operation of the deregistration pending
the finalisation of an appeal against the decision.
[14] No factual averments
are made by the applicant to support its submission that it has a
prima facie
right. It is therefore unclear on what legal or
factual basis it alleges it is entitled to continue to operate
notwithstanding
deregistration in the circumstances contemplated in
the Act. On its own version, the applicant alleges that ‘service
providers’
rendering human resource services are not precluded
by the applicant’s constitution from becoming members. The
respondent
however cites this as one of the reasons for its
de-registration. It states that the definition of member in clause
3.2 of the
applicant’s constitution is an ‘employer’
within the agricultural sector. The applicant relies on an extremely
wide interpretation of ‘services’ provided to members,
described by respondent’s counsel as encompassing any
service
“from the fork in the ground to the fork in the mouth”
and which thus includes labour consultants irrespective
of whether
they are primary or secondary employers in the field of agriculture.
This will undoubtedly be fully ventilated on appeal
and is not for
this court to decide, although it implies that the prospects of
success may not be as secure as the applicant submits.
[15] The respondent
states further that in correspondence it raised with applicant the
concern that the genuineness of the organization
may be affected when
a labour consultant acts independently as a member of the
organization. In issuing certificates of membership
to these
consultants the applicant breached its own constitution. The
applicant was moreover aware, as far back as 2006, that there
were
serious concerns about the fact that it admitted labour consultants
as members, clearly in contravention of its constitution
and despite
this the applicant failed to act in compliance with its constitution.
It must now face the consequences of its conduct
and cannot seek to
preserve its registration having forced the respondent to determine
the issue.
[16] The applicant’s
case is that its members will suffer irreparable harm should relief
not be granted – they will
be left without representation in
their pending CCMA matters; many will cancel their membership
resulting in severe financial prejudice
to the applicant. In this
regard it would appear that no averments have been made to this
effect in the pleadings and this submission
is therefore purely
speculative. Moreover, the members are not without recourse since
they could join other trade unions or could
still obtain the
assistance of the existing or other labour consultants in pending
CCMA or Bargaining Council matters, or could
be represented by their
directors, partners, members, owners or legal representatives. In
Lowveld
(
supra
at [28]
)
Basson J (at para 28)
pointed out that this is an unfortunate consequence of deregistration
and one that was foreseen by the legislature
and cannot constitute
irreparable harm. I agree.
[17] The balance of
convenience requires weighing the prejudice the applicant may suffer
if its deregistration is not suspended
against the public interest of
protecting the interests of all members of trade unions and employer
organisations and enforcing
the provisions of the Act. Respondent’s
counsel submitted that the balance of convenience favours the
applicant in that it
will suffer irreparable harm arising from loss
of membership and concomitant financial prejudice should interim
relief not be granted.
On the other hand the respondent took a year
to reach a decision to deregister the applicant and would suffer no
prejudice if its
decision was suspended pending determination of the
appeal. Applicant’s counsel argued that from a public policy
point of
view an organization should not be entitled to continue to
enjoy the rights and benefits of registration if it has flaunted the
very statute from which those rights are derived. It is clear from
section 106 that the intention of the legislature was to bring
an end
to the rights and privileges enjoyed by an employer’s
organisation or trade union in these circumstances, at least
until
the main matter was determined. The rationale is to protect the
institutional framework of collective bargaining as well
as the
members of employer organisations and trade unions. The relief sought
by the applicant will have absurd results as it will
defeat the very
purpose of section 106 (3) and undermine the powers of the respondent
and its role in enforcing the Act. This is
contrary to the public
interest and clearly outweighs the granting of relief to the
applicant.
[18] On this point it was
held by Lagrange J in
General Domestic and Professional Employers’
Organization v Registrar of Labour Relations
(unreported case
number J1072/2010) that the employers’ organisation preserves
the title because an appeal was lodged while
the harm for the
respondent is that it suffers a loss of efficacy if it cannot clamp
down on organisations not functioning as genuine
employer
organisations. It would not be in the public interest and would
undermine the very fabric of the Act for the applicant
to continue
operating in such circumstances.
[19] It is further
untenable to submit that the applicant has no alternative remedy.
Indeed it exercised such an alternative when
it lodged the appeal. It
can in any event seek to expedite the date of hearing.
[20] In my view even if
the applicant has a
prima facie
right to relief based on some
prospect of success, this is outweighed by the balance of
convenience. It is in the public interest
that the office of the
respondent be permitted to exercise its powers conferred under the
Act without undue interference by this
Court. Moreover, the applicant
has not established the existence of irreparable harm or lack of a
suitable alternative remedy.
Therefore, the applicant has not met the
requirements for urgent interim relief and the application must fail.
There is no reason
why costs should not follow the cause.
Order
[21] In the premises, I
make the following order:
The application is
dismissed with costs.
_____________
Bhoola J
Judge of the Labour Court
of South Africa
Date of hearing : 17 May
2011
Date of judgment: 20 May
2011
Appearance:
For the Applicant : Adv
BC Stoop instructed by Coetzer & Partners
For the Respondent: Adv C
Prinsloo instructed by the State Attorney
7