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[2011] ZALCJHB 107
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UASA- The Union and Others v Lonmin Platinum (JS 1193/09) [2011] ZALCJHB 107; (2012) 33 ILJ 1491 (LC) (5 December 2011)
REPUBLIC OF SOUTH AFRICA
THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Reportable
Case no: JS 1193/09
In the matter between:
UASA - THE UNION
…......................................................................................
First
Applicant
AC MARX AND OTHERS
….................................................
Second
and Further Applicants
and
LONMIN PLATIMUN
COMPRISING
WESTERN PLATINUM
LIMITED AND
EASTERN PLATINUM
LIMITED
….......................................................................
Respondent
Heard on: 07 - 11
November 2011, and 21 November 2011
Delivered on: 05
December 2011
___________________________________________________________________
JUDGMENT
BOQWANA AJ
Introduction
The applicants seek an
order declaring that an oral agreement was concluded between the
first applicant (‘UASA’) and
the respondent (“Lonmin”)
on 02 November 2007 on behalf of the second and further applicants
(‘individual applicants’)
who are also members of UASA
in the category C4 and C5 bargaining unit, to the effect that
overtime would be calculated on the
basis of Total Cost to Company
(‘TCTC’) remuneration package.
In the event that the
court finds that an oral agreement existed between the parties, the
applicants seek rectification of a written
agreement (‘wage
agreement’) concluded by the parties on 09 November 2007 to
reflect and give effect to the terms
of the oral agreement.
During the course of
September 2007 to November 2007, UASA and Lonmin engaged in wage
negotiations after which a wage agreement,
culminating from these
negotiations, was concluded between the parties and signed on 09
November 2007 for the duration of three
years, effective from 01
October 2007 until 30 September 2010.
It is the applicants’
case that an oral agreement was entered into during the process of
wage negotiations to the effect
that overtime would be calculated on
the basis of TCTC remuneration package. The existence of such an
agreement is denied by
Lonmin.
It is common cause
between the parties that at least prior to 1 October 2007, overtime
was calculated on the basis of a method
known as a Basic 2 formula.
Lonmin continued to pay overtime on the basis of the Basic 2 Formula
even after the wage negotiations
of 2007. It is Lonmin’s
alleged failure to effect the change on how to calculate overtime
that led the applicants to seek
enforcement of an oral agreement
allegedly concluded on or about 02 November 2007.
The applicants have set
out their claim in the statement of claim as follows:
‘
7.3
During the said wage negotiations Lonmin tabled a proposal to the
effect that, in future, remuneration for C4 and C5 employees
be
calculated on a Total Cost To Company (“
TCTC
package”
)
in terms of which employees would be able to structure their packages
according to their personal requirements (“
the
proposal”
)
.
7.4
During the wage negotiations UASA specifically enquired into the
basis of the calculation of overtime for C4 and C5 employees
should
the proposal be accepted.
7.5
Lonmin undertook to calculate overtime (for C4 and C5 employees)
based on 100% of the TCTC package and no longer in accordance
with
the “Basic 2 formula”.
7.6
UASA was mandated to accept the proposal on the basis that the
calculation of overtime on the aforesaid basis was more beneficial
to
the C4 and C5 employees than the “Basic 2 Formula”.
7.7
On or about 2 November 2007 UASA accepted the proposal as a result of
an oral agreement to the effect that remuneration and
overtime for C4
and C5 employees would be calculated based on the TCTC package came
into being (“
the overtime agreement”
).
8.1
(sic)
On or about 9 November 2007 and at or near Marikana UASA
and Lonmin, both represented by duly authorised representatives,
concluded
a written agreement regarding the review of wages and other
conditions of employment (“the wage agreement”).
8.2
(sic)
A
true copy of the wage agreement is annexed hereto as ANNEXURE “B”
and the terms and conditions thereof are incorporated
herein as if
specifically pleaded.’
On these grounds, the
applicants seek enforcement of the alleged oral agreement for the
duration of the wage agreement; being
from 01 October 2007 to 30
September 2010 alternatively for as long as the Total Cost To
Company remuneration package remains
operative.
The existence of the
oral agreement is denied by Lonmin. The case regarding the existence
on an oral agreement mainly focused
on the evidence presented by the
applicants’ witnesses regarding a question that was asked by
Johannes Scholtz (‘Scholtz’)
who was UASA’s chief
negotiator and later and more clearly by Frans Botha (‘Botha’)
to Anthony Steen (‘Steen’)
who was leading Lonmin’s
negotiating team.
In brief, the evidence
adduced by the applicants is as follows: Lonmin proposed to move C4
and C5 employees out of the officials
bargaining unit into
management ranks which would result in UASA losing bargaining rights
to negotiate conditions of employment
on behalf of their members in
this bargaining unit. UASA would only retain rights to represent
members in disciplinary hearings
and such forums. This proposal did
not go down well with UASA and was later abandoned by Lonmin. Part
of the proposal was to
move C4 and C5 employees to a TCTC
remuneration structure. This would enable employees to structure
their individual packages.
During the period of
July and August 2007, UASA sent various correspondences to all C4
and C5 Lomnin Platinum employees known
as ‘Mini Bulletin’
firstly, detailing Lonmin’s proposal to move C4 and C5
employees to management payroll and
also listing ‘management
proposals’.
It is worth noting that
overtime calculations were not part of the management proposals
listed on any of the bulletin from UASA
to the employees affected.
Scholtz testified that
calculation of overtime was also not on their demands or on their
‘wish list’ presented to
Lonmin as it was not an issue
before the wage negotiations. Scholtz alleged that overtime was not
on the list of their demands
because TCTC proposal was not from UASA
but from management. However, by the time negotiations started in
September 2007, UASA
was aware of Lonmin’s proposal to change
the pay structure.
It was Scholtz’
testimony that in one of the meetings he sought clarity from Steen
as to how overtime would be calculated.
He could not remember if he
used the words overtime. His question to Steen was something like:
‘
Do
I understand you correctly that everything that is inside the current
package will now be calculated on the total cost to company
package
and he said yes’.
Although Scholtz could
not recall the wording of the question asked from Steen, but the
thrust of the question was whether overtime
was going to be
calculated based on the TCTC remuneration package. Steen’s
answer to that question was ‘Yes’.
A couple of days
later, presumably on or about 02 November 2007, during the recess
there was uncertainty amongst some within
the UASA’s
negotiation team on whether or not the question of overtime was
clearly put to Steen by Scholtz. Botha then
requested permission
from Scholtz, during the caucus, to ask the question again to Steen
when negotiations resumed.
I must pause here to
point out that there was some contradiction between Scholtz and
Botha’s evidence regarding when these
events took place. Botha
seemed to suggest that uncertainty in the caucus was on the same day
that Scholtz asked the question
to Steen whilst Scholtz seemed to
suggest that it was on a different day
.
According to Botha the question to Steen by Scholtz was asked
earlier on 02 November 2007. I will however not concern myself
with
the credibility of the witnesses and contradictory evidence
presented at this absolution stage.
Of importance is that
both Botha and Scholtz testified that Botha asked for permission
from Scholtz if he could raise the question
of overtime with Steen
again. Scholtz gave Botha the necessary permission once negotiations
resumed and Botha specifically asked
Steen whether overtime,
standbys, call outs ‘and all such stuff’ would be paid
on TCTC and Steen answered ‘Yes’.
This took place on or
about 02 November 2007. This is the crux of what UASA alleges
constituted an oral agreement.
Throughout the evidence
there was special reference to clause 4.5 of the wage agreement.
This is apparently the only reference
to overtime in the entire
agreement and according to the applicants it records the
‘understanding’ between the parties
on how the issue of
overtime was to be treated. Clause 4.5 reads as follows:
‘
4.5
The contract of employment will reflect the operational and
compensation for standby, overtime, shift work and current continuous
operations. These elements are not part of the TCTC remuneration rate
to be reflected in the annexure and will be paid in addition
to the
TCTC package.’
There was some
concession from the applicants’ witnesses that this clause
said nothing about how overtime would be calculated.
In fact it
expressly excluded overtime and other elements from the TCTC
remuneration rate. Scholtz however, testified under cross
examination that he understood this clause to mean that overtime
would be calculated on the basis of TCTC.
Special reference was
made to clause 10.2 of two particular contracts of employment. One
contract concluded between Lonmin and
Mr JNH Noeth (‘Noeth’)
who was also a witness for the applicant in these proceedings.
Noeth’s contract of employment
was signed by him on 22
February 2008. (That is approximately three months after the
conclusion of the wage agreement). Clause
10.2 of Noeth’s
contract of employment states that:
‘
10.2
Compensation for such arrangements or hours will be done in
accordance with the
prevailing
company policy
,
procedure or practise and will be in addition to the TCTC as detailed
in the schedule.’
(My
own emphasis)
Similar to Noeth’s
contract, clause 10.2 in Mr RW Lonn (‘Lonn’) contract
reads the same except with reference
to ‘amended policy
reading with clause 6.1.’ Lonn’s contract of employment
was concluded between Lonn’s
and Lonmin on 05 March 2008.
Clause 6.1 provides that Lonmin operates on a total cost to company
remuneration philosophy.
The applicants’
case is that the amended policy referred to in the second contract
relates to the new calculation of overtime
(which is TCTC).
Applicants allege that Lonmin reneged on amending this policy to
reflect this change. The applicants’
witnesses testified that
UASA requested this amended policy from the Lonmin on numerous
occasions to no avail.
The amended policy
referred to is dated March 2009 and does not reflect overtime
calculated on TCTC instead it describes what
Basic 2 means.
Applicants allege that Lonmin acted in bad faith as they had
understood that Lonmin agreed on 02 November 2007
that overtime
would be paid on TCTC.
Applicants’
witnesses testified that UASA was approached by its members late
December 2007 complaining that overtime was
still calculated in
accordance with the old rate of Basic 2. This was taken up with Vusi
Sampula (‘Sampula’) who
is an Employee Relations Manager
at Lonmin and who was also part of the Lonmin wage negotiating team.
According to the applicants
Sampula agreed with UASA that an
undertaking was made by Lonmin to calculate overtime based on TCTC
at a meeting in December
2007. Sampula then undertook to resolve the
matter when Steen came back from leave.
When Steen was
confronted with the situation he denied that there was such an
undertaking. Various discussions ensued between
UASA and Lonmin and
the matter remained unresolved. A dispute was then referred to the
CCMA for interpretation of the collective
agreement but later
withdrawn when it became apparent that the real issue was whether or
not an oral agreement existed. The applicants
then decided lodge a
claim before this court.
Application for the
Absolution from the Instance
At the end of the
applicants’ case Lomnin applied for absolution from the
instance. Mr Grundlingh, counsel for the applicants,
submitted that
it is not competent for this court to consider an absolution from
the instance at this stage because this type
of application is
normally brought before the respondent opens its case but in this
case Lonmin had already started with the
evidence of Poena Prinsloo
(‘Prinsloo’).
At the commencement of
the trial, the parties had agreed that Prinsloo who is Lonmin’s
witness, would be called first (before
the applicants began with
their case) as he was going overseas and would not be available to
give evidence during the course
of the trial. The court granted
leave for this witness to testify first.
Mr Van As, Lonmin’s
counsel, submitted that Prinsloo’s evidence must be ignored by
the court for the purposes of the
absolution application, in that it
was done without prejudice by Lonmin and without attracting any
evidentiary burden. He argued
that it would not be fair to UASA for
Prinsloo’s evidence to be taken into account.
I am inclined to agree
with Mr Van As that calling Prinsloo first was merely done for
convenience and by agreement between the
parties. In my view nothing
prevents the respondent from bringing an application for absolution
after the applicant has closed
its case. In that regard, I see no
reason why the court should not consider Lonmin’s application
for absolution.
Lomnin has sought
absolution from the instance in respect of the applicants’
claim based on the following grounds:
UASA has not shown that
it has the requisite
locus standi
or authority to enforce the
oral agreement on behalf of the individual applicants;
UASA has failed to prove
the existence of the oral agreement.
The principles
applicable
This court has
previously affirmed that the test applied in absolution applications
is the following:
‘
...
whether there is evidence upon which a Court, applying its mind
reasonably to such evidence, could or might (not should, nor
ought
to) find for the plaintiff.’
1
In the case of
Black
v John Snow Public Health Group,
2
Molahlehi J, referring to an approval of this test by Harms JA in
Gordon Lloyd Page and
Associates v Rivera and Another,
3
held as follows:
‘
This
implies that a plaintiff has to make out a prima facie case –in
the sense that there is evidence relating to
all
the elements of the claim
–
to
survive absolution because without such evidence no court could find
for the plaintiff (Marine & Trade Insurance Co Ltd v
Van der
Schyff
1972
(1) SA 26
(A)
at 37G-38A; Schmidt Bewysreg 4
th
ed
at 91–2). As far as inferences from the evidence are concerned,
the inference relied upon by the plaintiff must be a reasonable
one,
not the only reasonable one (Schmidt at 93).’
(My
own emphasis)
The
Learned Judge went further to say:
‘
The
court ought not to be concerned with what someone else might think;
it should rather be concerned with its own judgment and
not that of
another “reasonable” person or court. Having said this,
absolution at the end of a plaintiff’s case,
in the ordinary
course of events, will nevertheless be granted sparingly but when the
occasion arises, a court should order it
in the interests of
justice.’
In order to avoid
absolution, the applicants would have to lead evidence that shows a
prima facie
existence of the oral agreement.
The first point advanced
by Lonmin is that the oral agreement cannot be a collective
agreement because the LRA and more specifically
section 23 states
that collective agreements must be reduced to writing. This
principle was confirmed by Molahlehi J, in the
case of
South
African Post Office Ltd v Communication Workers Union and Others.
4
Applicants’ counsel agreed with this proposition.
Lonmin submitted that
since the agreement in question is not a collective agreement, the
presumptions that flow from section 23
of the LRA regarding the
union’s authority to conclude collective agreements binding to
its members are not applicable
in this instance. Accordingly, UASA
cannot implicitly or automatically act and conclude an oral
agreement on behalf of the individual
applicants without the
necessary authority. Lonmin proposed that no authority flows
automatically in common law to UASA by virtue
of UASA being a
registered trade union negotiating on behalf of its members.
It would therefore be
necessary for UASA to establish, either based on the law of agency
that each of the individual applicants
properly mandated it to act
on their behalf or that the oral agreement, properly construed, was
a
stipulatio alterum
agreement for the benefit of the
individual applicants, which benefit the individual applicants
subsequently accepted.
According to Lonmin, no
evidence has been brought before this court, nor has it been pleaded
that UASA had the requisite authority
to conclude the oral agreement
on behalf of its members. Secondly, there is no evidence presented
to suggest that the individual
applicants accepted the benefits that
flowed from the alleged oral agreement.
Mr Grundlingh argued
that Lonmin is precluded from raising the issue of UASA’s
authority at this point. He submitted that
this ought to have been
raised in the pleadings and in the pre-trial minute. He further
pointed out that nowhere was this issue
brought to the applicants’
attention as being in dispute nor was it ever put to any of the
applicants’ witnesses.
The applicants were thus caught by
complete surprise.
I disagree with Mr
Grudlingh’s proposition. In my view, this is a point of law
that can be raised at any stage of the proceedings.
Mr Van As agreed
that this should have ideally been raised by way of an exception.
Failure to do so by Lonmin, will only affect
a cost order, should
Lonmin be successful in its application for absolution. In that
regard, costs would then be limited to costs
of an exception.
On the issue of UASA’s
authority, Mr Grundligh advanced an argument that parties had agreed
that the individual applicants
listed in annexure “A” of
the statement of claim are paid up members of UASA. He further
argued that UASA is a registered
trade union, who has been a
collective bargaining agent, recognised by Lonmin for many years. It
is inconceivable that UASA would
act outside or without getting the
necessary mandate from its members. Mr Grundlingh accepted that
presumptions flowing from
the LRA are not applicable in this
instance, however he proposed that it must be accepted that UASA is
entitled to negotiate
on behalf of its members and has the necessary
capacity to conclude oral contracts on their behalf.
I accept that UASA is
entitled to conclude contracts on behalf of its members. However,
this contract is different in that it
is an oral agreement and as
such it was imperative for UASA to lead evidence that it had the
requisite authority to conclude
an oral agreement for its members.
I am also not satisfied
that the individual applicants accepted benefits that flowed from
the alleged oral agreement. It is strange
that individual contracts
did not incorporate the benefits flowing from the oral agreement. I
disagree that Clause 10.2 is an
indication of an existence of an
oral agreement. Applicants allege that they had a
bona fide
belief that company policy would be amended. No evidence was placed
that Steen specifically agreed that the policy would be amended
to
reflect the change in overtime calculation. In fact after Steen’s
alleged positive answer the matter was not discussed
any further.
Both Noeth and Lonn
signed contracts of employment without the elements of the oral
agreement being reflected. The individual
contracts of employment
were checked and approved by UASA’s legal department. It does
not make sense why UASA would not
insist that contracts of
employment should incorporate the alleged oral agreement.
It
is also important to note that Both Noeth’s and Lonn’s
contracts of employment were signed some months after the
alleged
oral agreement was concluded. It does not make sense how those could
establish the existence of an oral agreement concluded
on 02
November 2007. Reference to a policy that was to be amended in
future does not, in my view, establish the existence of
the oral
agreement that was allegedly concluded on 02 November 2007.
Accordingly, I find that UASA has not shown any
prima
facie
evidence that it had
authority to conclude the oral agreement for its members.
Even if I am wrong on
this point, I am not convinced that essential elements necessary to
conclude a contract have been met by
UASA.
The evidence before me
does not show the existence of an agreement in that nothing shows
that an offer was made by Lonmin and
accepted by UASA. More
importantly, there was no evidence as to when that contract would
come into existence and when was it
communicated to the individual
applicants. In fact, the applicants’ witnesses in their own
version testified that overtime
was not on their list of demands
presented to Lonmin at the beginning or during wage negotiations.
This is surprising, if one
has regard to the allegations in the
pleadings that TCTC proposal tabled by Lonmin was to be accepted on
the basis that overtime
was calculated on TCTC package. If that was
so, this would have been tabled as a proposal or a demand upfront
and evidence would
have been led in support of the averments in
paragraphs 7.3 to 7.7 of the statement of claim.
It is also surprising
that none of the bulletin to C4 and C5 employees by UASA referred to
this issue at all. Communication to
members listed proposals from
management but for some strange reason overtime calculation was not
mentioned as a benefit that
UASA sought as a
quid pro quo
to
the TCTC proposal or as a benefit it later procured for its members.
Mr Grundlingh submitted
that one cannot divorce this alleged contract from the process of
the wage agreement. This does not help
the applicants’ case. I
find it hard to believe that in the midst of wage negotiations there
was this lone oral agreement,
whilst everything else had been
reduced to writing, which oral agreement did not feature in any of
the correspondence or feedback
bulletin to members.
This is even harder to
believe when parties expressly agreed in unequivocal terms in clause
4.7 of the wage agreement that the
balance score card bonus, which
was also previously calculated in terms of Basic 2 was going to be
calculated on a TCTC basis.
If that clause found itself in the wage
agreement, what stopped the parties from reducing the terms of the
overtime calculations
in writing.
I agree with Mr Van As
that the LRA sets out a clear framework that allows a trade union to
conclude collective agreements that
would bind its members. It would
be strange for this court to accept statements made during wage
negotiations as agreements without
any concrete and tangible
evidence placed before it. This is not to say that oral agreements
cannot be concluded from time to
time between unions and management.
However in those circumstances unions would have to rely on common
law and fulfil the common
requirements. What presents a greater
difficulty for the applicants in this case is that the alleged oral
agreement was concluded
in the midst of wage negotiations, where
terms and conditions culminating from that agreement were reduced to
writing and a written
agreement signed.
I also find it strange
that the applicants seek enforcement of this oral agreement from 01
October 2007 instead of 02 November
2007. It is clear that 01
October 2007 was chosen to run concurrently with the wage agreement,
which means the oral agreement
could not find its location outside
the wage agreement. I must also state that no evidence was led on
what the commencement date
of this oral agreement would be.
Conclusion
In conclusion, the
applicants have not been able to show any
prima facie
evidence in terms of which the court might find in their favour. The
applicants have accepted that the oral agreement alleged
could not
be a collective agreement for the purposes of section 23 of the LRA
and accordingly the presumptions flowing from the
LRA are not
applicable. In this regard it is also important to note that section
213 of the LRA defines a binding agreement as:
‘written
agreement concerning terms and conditions of employment or any other
matter of mutual interest concluded by one
or more registered trade
unions...’
The applicants’
witnesses failed to lead any evidence to show that UASA had the
necessary authority to act as an agent for
individual applicants,
nor was there evidence that the individual applicants accepted the
benefits flowing from the concluded
oral agreement by incorporating
those in their individual contracts of employment.
In any event no
prima
facie
evidence was led to show the essential elements of an oral
agreement had been met.
In view of my findings
it is not necessary to deal with the issue of rectification. In the
circumstances, Lonmin must succeed
with its application for
absolution.
Costs
With regards to costs
both parties submitted that neither of them would ask for costs in
view of the ongoing relationship between
the parties.
I therefore make the
following order:
Absolution from the
instance is granted.
No order as to costs.
____________
BOQWANA AJ
ACTING JUDGE OF THE
LABOUR COURT
APPEARANCES:
For the applicant: Adv. R
Grundlingh
Instructed by: Bester &
Rhoodie Attorneys, Pretoria
For the respondent: Adv M
Van As with Adv A Snider
Instructed by: Cliffe
Dekker Hofmeyer Inc, Sandton
1
See
Minister of Safety and Security v Madisha and Others
(2009)
30
ILJ
591;
Black
v John Snow Public Health Group
[2010]
4
BLLR
374
(LC
);
Claude
Neon Lights (SA) Ltd v Daniel
1976
(4) SA 403
(A)
at 409G-H
2
Black
v John supra
at paragraph 37
3
2001
(1) SA 88
(SCA)
at 92H-93A
.
4
(2010)
31 ILJ 997 (LC) at paras 17 and 18