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[2011] ZALCJHB 82
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National Union of Mineworkers and Another v Eskom Holdings SOC Limited (J1934/11) [2011] ZALCJHB 82; (2012) 33 ILJ 669 (LC) (19 September 2011)
IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
Case Number: J 1934/11
Reportable
In the matter between:
NATIONAL UNION OF MINEWORKERS
…....................................................
First
Applicant
NATIONAL UNION OF METALWORKERS
OF SOUTH AFRICA
…................................................................................
Second
Applicant
and
ESKOM HOLDINGS SOC
LIMITED
…................................................................
R
espondent
Date of hearing: 14 September 2011
Date of Judgment: 19 September 2011
JUDGMENT
MOSHOANA AJ
Headnotes:
Interdict of an
implementation of a final wage offer pending the outcome of interest
dispute arbitration.
Introduction
[1] This is an urgent application
seeking to interdict the implementation of a wage offer. I would have
needed more time to write
this judgment however, it does seem that
difficult matters only come on urgent basis. Nonetheless, the Court
had to with the limited
time at its disposal make this judgment. What
made matters worse is that both counsel did not file heads on the
issues to be canvassed
in this judgment. The Respondent did file
heads though but those became superfluous in a sense after the
Applicants had changed
tack. I was informed by Adv Bruinders SC,
appearing for the Applicants that there is no authority that he was
able to lay his hands
on to support their case. Of course this added
salt to the wound given the fact that the Court was sitting as an
urgent court.
Both parties did not quibble about facts. To a large
extent this judgment would pay little regard to the facts of this
case.
Brief exposition of the facts
[2] The Respondent is an essential
services provider. It has been declared as such on 12 September 1997.
In 1998, the parties concluded
a Minimum Services Agreement, which
was ratified by the Essential Services Committee. On or about 12 May
2000, parties entered
into a Recognition Agreement. On or about 7
December 2004, the parties arrived at a consent award in terms of
which certain of
the clauses of the Recognition agreement were varied
and or were made redundant.
[3] On or about 19 April 2011 and in
accordance with the Recognition Agreement, the Applicants together
with the Respondent commenced
annual wage negotiations for the
financial year 2011. The negotiations continued until 4 August 2011.
In terms of the Recognition
Agreement, they were to be completed on
31 May 2011. The Respondent blames the Applicants for the delay. On 4
August 2011, the
Respondent presented its final offer. The Applicants
were to react to that offer on 12 August 2011. The Applicants failed
to react
to the offer. Meanwhile the Respondent had put systems in
place for the implementation of its final offer. On 26 August 2011,
the
Respondent notified the Applicants that it would implement its
final offer with immediate effect. That prompted a referral to the
CCMA, since
negotiations
failed to yield results
.
The dispute was conciliated on 7 September 2011. On 8 September 2011,
the Respondent requested the dispute to be resolved through
arbitration. The Respondent suggested terms of reference for the
requested arbitration. The arbitration is yet to be held. On 9
September 2011, correspondence was exchanged seeking undertakings not
to implement. No undertaking was given. The Applicants sought
to
refer a fresh dispute in terms of Section 64 (4) of the Labour
Relations Act (LRA)
1
,
seeking that the implementation should not happen as it amounts to a
unilateral change of conditions of employment.
[4] On 12 September 2011, the
Applicants launched these proceedings and sought the following
orders:-
Dispensing with the time periods set
out in the rules for the conduct of proceedings in the Labour Court
and allowing this application
to be heard as one of urgency;
Interdicting the respondent from
implementing its final wage offer, pending the outcome of the mutual
interest dispute referred
to arbitration by ESKOM and the
applicants, alternatively pending the expiry of the 30 day period
contemplated in
section 64(4)
of the
Labour Relations Act 66 of
1995
;
Directing the respondent to pay the
costs of the application;
Granting further and/or alternative
relief.
[5] The respondent opposed the
application in all respects.
Arguments
[6] At the outset, Bruinders SC for
the Applicants advised the Court that the alternative relief as set
out above was no longer
being pursued. What was being pursued was an
interdict to implement the final wage offer pending the mutual
interest dispute arbitration.
Put it differently, the Applicants were
seeking interdict
pendete lite.
He formulated a question to
the following effect:
Can Eskom unilaterally implement its final
offer before the arbitration has determined the wage dispute?
He
emphasised the fact that the Applicants cannot strike and somehow
their hands are tied. The only way is for them to be assisted
by this
Court using its interdictory powers. He argued that allowing the
Respondent to implement before the arbitration is tantamount
to
undermining the collective bargaining process.
[7] In dealing with the important
requirement of clear or
prima
facie
right, he contended
that there is no discernable right, but he pegged his submission on
principles more than right. He continued
to argue that that principle
is to be found elsewhere in the LRA, the Recognition Agreement and
the Consent Award. He contended
further that the Respondent agreed to
go to the CCMA in the event of a dispute. He elevated the conduct of
the Respondent in agreeing
to go to the CCMA, whilst on the one hand
implementing to an “injustice”. Quiet interestingly he
sought of piggy begged
on a submission made by his opponent in this
matter in the matter of
Eskom
v NUM and Others,
2
when he is quoted to have said:
“
Mr
Sutherland argued that the appellant’s implementation of its
suggested wage increase constituted the use of economic power
in
relation to the main dispute.”
In that piggy beg style, he submitted
that the unilateral implementation in this matter amounts to economic
power, which in his
submission is prohibited by
section 65
of the
LRA. He submitted that the LRA and the Constitution require orderly
collective bargaining, which the Respondent by implementing
its last
offer was not observing. The Respondent has an unfair advantage
before the arbitration, so the argument went.
[8] He referred the Court to the well
known case of
NUM v ERGO
3
and submitted that the similar
situation had arisen in this matter as it was in that case with a
slight differentiation. He lamented
that what the Respondent did was
not sound industrial relation and the Court ought to intervene. He
accused the Respondent of bargaining
in bad faith since, in his
submission, the pending arbitration is part of collective bargaining.
He argued that in employment contracts
as well as collective
agreements, good faith is implied. In substantiation of that argument
he referred the Court to some judgments
of this Court. He however in
his case relied on the provisions of the Recognition Agreement, in
particular the Introduction and
Preamble section, this part: “In
the interests of Eskom, its employees and the country, the parties to
the Agreement consequently
commit themselves:
To this Agreement,
To co-operate in a spirit of mutual
regard and respect,
To continually promote sound
industrial relations through good faith bargaining, consultation and
information sharing.
[9] In his submission, the Respondent
is in breach of this clause by wanting to implement before completion
of the arbitration process
as agreed. He correctly conceded that the
offer was not conditional and that the right to proceed to
arbitration is not being threatened
and remained intact. Having made
those concessions, he however retorted by submitting that if there is
no intervention by the Court,
the Applicants will turn into lame
ducks at arbitration if the offer has been implemented.
[10] On the other hand, Sutherland SC
for the Respondent submitted that a different case than the one set
out in the founding papers
is being argued. He further submitted that
the interdict requirements have not been met. He submitted that
although he does not
remember the submission referred to earlier in
this judgment, he does not believe that unilateral implementation is
exercise of
economic power. The LRA refers to strike and lockout and
nothing else. It is that which an employer and an employee in
essential
services are prohibited to embark in terms of section 74 of
the LRA. By abandoning the section 64(4) case, the Applicants
threw
bath water with the baby
as it were. He submitted that no right
in the LRA that has been violated. Reliance on
NUM v ERGO
is
misplaced as it was decided before the current Act. The old Act
legislated on the duty to bargain, whereas the current Act does
not.
Analysis
[11] As alluded to above, it is
difficult to write a seminal judgment as it were on a matter as
important as this one emanating
from an urgent court. This matter
raises very important issues for the Labour Law community and
certainly the parties in this dispute.
I am just hoping that another
opportunity will present itself where this Court can fully ventilate
these important issues. Nonetheless,
I am seized with this matter and
I have to attempt to help the parties to the best of my ability in
this limited time. Enough about
moaning and whingeing. I have
fundamentally difficulties with the Applicants’ case. In the
first instance, I agree with Sutherland
that this being an interdict,
the requirements ought to be met. In
L
F Boshoff Investments (Pty) Ltd v Cape Town Municipality,
4
Corbett J as he then was, in an
attempt to formulate Van Der Linden set the following requirements
for interlocutory interdict,
which I see it to be one in this matter:
The right which is the subject matter
of the main action and which he seeks to protect by means of an
interim relief is clear
or if not clear, is
prima facie
established, though open to some doubts;
That, if the right is only
prima
facie
established, there is a well-grounded apprehension of
irreparable harm to the applicant if the interim relief is not
granted
and he ultimately succeeds in establishing his right;
That the balance of convenience
favours the granting of interim relief; and
That the applicant has no other
relief.
[12] When the Court asked Bruinders
SC, which right in the main action is he seeking to protect, he
retorted by saying there is
no main action. If I properly understood
this matter, the right in the main action, being the impending
arbitration in my view,
should be that its last offer is an
acceptable one and by implementing the Respondent’s last offer,
the Applicants’
right will be harmed. If the Applicants’
case is being misunderstood, then it appears to me that they have
failed to even
demonstrate any right as argued by the Respondent’s
representative. Put it differently, if the Applicants are saying a
final
offer cannot be implemented pending the arbitration, and then
the Applicants have to show why the Respondent cannot. The argument
by Bruinders SC that the fact that the LRA does not say the employer
can, suggests that the employer cannot is without merits.
The
Applicants approached this Court; it is their duty to exhibit the
right before they can receive any protection. It does not
help the
Applicants to argue in reverse.
[13] A further difficulty lies in the
manner in which the case has been pleaded. It is now trite law that a
party must fully set
out its case in its founding papers (See in this
regard
Afrox Ltd v Laka and
Others
5
).
It is therefore imperative
for the Court to engage in a comparison exercise. I do so hereunder.
Case as pleaded
[14] Nica Rakau deposed to an
affidavit in support of the present application. Therefore, it is his
evidence as set out in the founding
affidavit that should make or
break as it were the Applicants’ case. As an opening gambit, he
testified that implementation
amounts to unilateral variation of
terms and conditions of employment. He went further to say such is
prohibited by section 64
(4) of the LRA. Relying on that section, he
said the Respondent cannot implement until 8 October 2011 or extended
agreed periods.
Most importantly he said:
“
(22)
Unilateral implementation is not economic power contemplated in the
Recognition Agreement. There the only economic power contemplated
is
the use of protected strike and lock-outs-where there is an MSA
ratified by the ESC.”
Having said that he stated that
unilateral implementation is not permitted by the LRA or the
Recognition Agreement. In punting for
urgent hearing of the matter he
said, Eskom was intending to implement its final offer after the 48
hour period contemplated in
section 64 (4).
[15] Regard being had to the above
evidence, it is clear that the Applicants moved from a premise that
the implementation they sought
to interdict amounted to unilateral
change within the contemplation of section 64 (4), when the
application was conceived. It is
now an open secret that that case
was abandoned. What is left then?
Case as argued
[16] The case as argued has been set
out in details above and for fear of being diatribe, it is not
necessary to repeat it here.
Suffice to mention that in the case
argued, the unilateral implementation is only seen as a usage of
economic power and no more
unilateral change of terms and conditions
within the contemplation of the section 64 (4). The case argued was
only foreshadowed
in the replying papers. The question, this Court
was implored to answer is raised in paragraph 6.7 of the reply. It is
a formulation,
though liberally couched as submitted by Sutherland
SC, the Respondent was also willing to adopt. The imminent difficulty
for the
Applicants with that formulation is that in stating that the
Respondent cannot, the Applicants present only broad reasons, one of
which was abandoned. Those are The LRA does not permit unilateral
implementation of a final offer where parties are compelled to
go to
compulsory arbitration over interest dispute and that the Respondent
is in breach of the
substratum
, spirit and a tacit term of the
Recognition Agreement that does not permit simultaneous referral to
arbitration and unilateral
implementation. This the Applicants set
out in the replying papers. Although I did not hear the Respondent’s
representative
complaining about that, it is not proper unless
explained why not set out in the founding papers, for a party to set
its case in
reply. Nonetheless, even if the Court was to seek
recourse from these, the statements remain broad and unhelpful.
[17] The LRA has about 213 sections
and various Schedules. It does not accord to a party to make a bald
allegation that some conduct
offends the LRA. Ironically, on the
abandoned case a particular section was set out. The very reason why
the Applicants chose a
linguistically styled approach by referring to
breach of
substratum
can only suggest that there is no
specific provision upon which breach can be relied on. In argument
the
Introduction and Preamble
clause was mentioned. If that
was the clause breached why not say so in the papers?
[15] In my view, the Applicants
presented two diametrically different cases and on that basis alone
they ought to fail. Even if
I am wrong in that conclusion, I refuse
the application on many other grounds, some of which have been
traversed above and others
to follow here under.
Is implementation of last offer an
exercise of economic power?
[16] The Applicants seem to
acknowledge that use of economic power is traditionally to embark on
a protected strike or lock-out.
On the contrary, the LRA prohibits
strike and lockout in essential services (Section 65 (1) (d) (i) read
with Section 74). I am
not about to attempt a classical definition of
the term economic power. However in my view, implementation of a
final offer in
a negotiation set up is far from being one. Before me
Sutherland, the author of the term did not own up to it. On the
contrary,
he submitted that the economic power contemplated is one
which is disruptive of service. To that I agree. Economic power
should
be strike and or lock-out and nothing else. The negotiations
in this matter commenced in April 2011. Parties cannot negotiate
forever.
There comes a point where one of the parties says-this is
it, take it or leave. When that stage comes, it is bizarre in my view
to suggest that muscles are being flexed.
[17] Economic power should be
something more than that. In my judgment, implementation of the last
offer is not an exercise of economic
power. At the very best, it
amounts to unilateral change of terms and conditions of employment.
It is not disruptive at all. Accordingly,
I am unable to uphold
Bruinders SC’s argument on this point. One wonders why in 2000,
when the Recognition Agreement was
signed, the Applicants understood
perfectly well that the term “economic power” relates to
strike and lockout and nothing
else. Such is clear from the defunct
part 7 headed “Rules for economic power”.
Can the Court interfere in
collective bargaining, particularly where parties have deadlocked?
[18] Both representatives seem to be
ad idem
that going to arbitration is part of collective
bargaining. I disagree. Arbitration is a process where a deadlock is
broken. Likewise
mediation is a process intended for that. On the
other hand collective bargaining simply means negotiation at the
collective level.
Whilst negotiations are continuing, there will be
no dispute to be resolved through any agreed process. Parties bring
their own
mental faculties to bear in order to find each other. Once
they fail to find each other in negotiations parlance they deadlock
and should find a deadlock breaking mechanism. Arbitration is one
such mechanism. Once the parties reach an impasse, there is a
temporary cessation of the bargaining process due to lack of success
of the parties’ negotiating efforts. During the pre-impasse
period, the duty to bargain in good faith necessarily operates to
preclude the employer from undertaking unilateral change, in
order
that bargaining be given suitable opportunity to succeed. However,
once the impasse is reached both the bargaining process
in good faith
are superseded by the overriding need for more drastic measures to
resolve the impasse. Lawful unilateral action
constitutes one such
measure, and may be utilised only once the parties have exhausted the
duty to bargain in good faith. Interest
arbitration was never
designed to displace collective bargaining; it was intended to be a
substitute only of particular forms of
industrial warfare such as
strike and lockout. (See Stuart S. Mukamal “Unilateral Employer
Action Under Public Sector Binding
Interest Arbitration”(1986)
vol 6 Journal of Law and Commerce )
[19] The American system has a
different system than ours. In terms of Section 8 (a) 5 of the
National
Labour Relations Act, it
is an unfair labour practice for an
employer to refuse to bargain collectively with the representatives
of his employees. This
section led the National Labour Relations
Board to develop the so-called
per se
test. In the American
system, the Respondent’s conduct may fall under the
per se
test. The National Labour Relations Board in one of its Annual
Reports had the following to say:
“
The
duty of the employer to bargain with the statutory representative of
his employees includes the duty to refrain from taking
unilateral
action with respect to matters as to which he is required to bargain,
and
from
making changes in the terms and conditions of employment
without consulting the employees’ representative.”
[20] In America, the Applicants could
probably have a leg to stand on. However, the Board found that there
are exceptions to the
per se
test. One such exception is an
impasse being reached. In an impasse, it was generally accepted that
an employer may take unilateral
action. This is the deadlock
situation I alluded to above. (See
Gary V
Dubin and Anthony C Gooch
“Notes and Comments Unilateral Action As A Legitimate
Economic Weapon: Power Bargaining By The Employer Upon Expiration Of
The Collective Bargaining Agreement”: (1962) vol June
New
York University Law Review
)
[21] In South Africa, the 1956 Act,
under which
NUM v ERGO supra
was decided; the unfair labour
practice regime recognised a duty to bargain. To the extent that
NUM
v Ergo
is an authority on
the duty as argued by Bruinders SC, a simply answer to that
submission is that the 1956 Act has come and gone.
The position that
obtains now has been succinctly put by my Brother Van Niekerk AJ, as
he then was, in
National
Police Services Union and Others v National Negotiating Forum and
Others.
6
There he correctly held as follows:
“
All
of these submissions overlook an important policy consideration that
underlies the LRA. The LRA adopts an unashamedly voluntarism
approach-it does not prescribe to the parties who they should bargain
with, what they should bargain about or whether they should
bargain
at all. In this regime, the courts have no right to intervene and
influence collectively bargained outcomes...To set aside
the
derecognition of the Union and to grant an order, even on an interim
basis, that the Union remains recognised in terms of the
collective
agreement constituted by the regulations, would be an unwarranted
interference in a collective bargaining relationship.
The NNF was
entitled to take the decision it did.”
I say no more. I fully agree with the
sentiments expressed above. Although in that judgment my brother Van
Niekerk J now, was dealing
with organisational rights, which
incidentally was an analogy I invited both Counsel to comment on, the
principle remain the same.
[22] A year later my Brother Francis
AJ as he then was echoed the sentiments I expressed earlier in
ECCAWU
and Others v Southern Sun Hotel Interests (Pty) Ltd
7
and said:
“
The
problem that I have with the relief is that it fails to take into
account that deadlock was reached between the parties...Negotiations
had taken place prior...and after the parties had reached a deadlock,
the applicants referred the dispute to the CCMA...Bargaining
was no
longer taking place.”
He went further to say:-
“
Although
the concept of the duty to bargain in good faith was recognised in
relation to the unfair labour practice jurisdiction
of the 1956
Labour Relations Act, this
is not the approach adopted in the current
Act. Accordingly, the duty which existed under the 1956 Act, under
the unfair labour
practice jurisdiction, has not been incorporated
into the current Act. There is no legal duty, implied by the Act, or
any other
law, to the effect that there is a duty to bargain in good
faith.”
8
I fully agree with the view above. In
the selfsame passage, my Brother expressed a view in
obiter
that if it is shown that it was implied in a recognition agreement,
perhaps, the Court might have upheld the case for the applicant.
In
my view, once an impasse has been reached, it matters not whether the
duty is implied in a recognition agreement or some other
collective
agreement. Once an impasse is reached, which is the case in the
present matter; there is no room for forcing bargaining
process. To
do so will be to undermine the very voluntarism and non interference
principle underpinned by the current Act. Much
as Bruinders SC’s
submissions are attractive and capable of persuading an American
Judge, like the Applicants as he submitted
my hands are tight at the
back. I am a creature of statute, the current LRA; any sympathy with
the Applicants’ position should
be guided by the enabling
legislation. Perhaps there must a lobby to bring the duty back into
the LRA. Accordingly, this Court
cannot interfere using its
interdictory power for two principal reasons in my view. The first is
that the LRA does no longer cater
for the duty, therefore no right be
it clear or
prima facie
. The second is that the parties have
deadlocked, bargaining time is over.
Does the Constitution help?
[23] As always in a matter like this,
it is appropriate to see if the Constitution could in any event help
the Applicants since
the current LRA does not. Section 23 (5) of the
Constitution of the Republic of South Africa, provides as follows:-
“
Every
trade union, employers’ organisation and employer has the
right
to engage
in collective bargaining. National legislation may be enacted to
regulate collective bargaining.” [My emphasis]
The constitutional right is that of
engaging. Clearly the National legislation contemplated is the LRA.
What does engage mean? Does
it rekindle the duty to bargain? The
dictionary meaning of the term engage is to involve. Therefore the
right available to a trade
union is to be involved in collective
bargaining. How to be involved the answer lies in the LRA. The
Applicants before me did not
seek direct reliance to the right in
section 23 (5).
[25] There is authority that where
there is legislation dealing with the right, a party cannot claim
direct reliance to a right
in the bill of rights. In
SANDU
v The Minister of Defence and others/ Minister of Defence and Others
v SANDU
,
9
the SCA found that the term engage is
open to at least three interpretations. It may mean that contemplated
national legislation
to regulate collective bargaining must impose a
duty to bargain on employers, or it may mean that the national
legislation must
provide a framework for collective bargaining, or it
may merely mean that legislation may not prohibit collective
bargaining.
[26] In the end the SCA found that the
South African Law does not recognise a legally enforceable duty to
bargain (See Collective
Labour Law-John Grogan 2007). The position of
the SCA was confirmed by the Constitutional Court in
SANDU
v Minister of Defence.
10
The solution according to the
Constitutional Court is to challenge the constitutionality of the LRA
in so far as the alleged right
to bargain in good faith is concerned.
In light of the above, any reliance on the constitutional right would
have equally failed
if attempted.
Conclusion
[27] In summary, my conclusions in
this matter are that the application does not satisfy the
requirements of an interdict, the most
important of which being clear
or
prima facie
right, the case as pleaded has been abandoned
and the case argued has not been properly pleaded, implementation of
the last offer
is not tantamount to exercise of economic power, the
parties have deadlocked and there is no constitutional right
available to
the Applicants.
[28] In the premises, I make the
following order:-
The application is dismissed, with no
order as to costs.
____________________________
G. N MOSHOANA AJ
Acting Judge of the Labour Court
Appearances
For the Applicants: ADV T BRUINDERS SC
Instructed by Cheadle, Thompson and Haysom Braamfontein.
For the Respondent: ADV R SUTHERLAND
with
ADV F BODA
Instructed by Cliffe Dekker Hofmeyr Sandton.
1
66
of 1995.
2
(2002)
23 ILJ 2208 (LAC).
3
[1991] ZASCA 168
;
1992
(1) SA 700
(AD).
4
1969
(2) SA 256
(C).
5
[1999]
5 BLLR 467
(LC).
6
(1999)
20 ILJ 1081 (LC) at para 52-53.
7
(2000)
21 ILJ 1090 (LC) at para 22.
8
Ibid
at para 27.
9
[2006]
11 BLLR 1043
(SCA).
10
[0000000000002007]
9 BLLR 1909
(CC) at page 1931 at paragraph 52.