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[2011] ZALCCT 4
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National Bargaining Council for the Clothing Manufacturing Industry (Cape) v J n' B Sportswear CC and Another (C489/2010) [2011] ZALCCT 4; [2011] 8 BLLR 756 (LC) (3 March 2011)
IN THE
LABOUR COURT OF SOUTH AFRICA
HELD AT
CAPE TOWN
Case No: C
489/2010
In the matter
between:
NATIONAL
BARGAINING COUNCIL FOR
THE
CLOTHING MANUFACTURING INDUSTRY
(CAPE)
Applicant
and
J
n‘ B
SPORTSWEAR CC
First
respondent
ADV
C DE KOCK N.O.
Second respondent
___________________________________________________________
JUDGMENT
___________________________________________________________
INTRODUCTION
This
application is brought in terms of section 158(1)(g) of the Labour
Relations Act ('the LRA') for a review of the award handed
down by
the arbitrator (the second respondent) in the arbitration between
the applicant, the Bargaining Council (in its capacity
as custodian
and enforcer of its collective agreements); and the first
respondent, the employer. The employer is a member of
an employers'
organisation which is a party to the Bargaining Council's main
collective agreement ('the Agreement').
The
arbitration was held under the auspices of the Bargaining Council on
26 April 2010, and concerned a dispute relating to the
employer's
compliance with the Agreement. It was accordingly referred to the
arbitrator in terms of section 33A(4)(a) of the
LRA and in terms of
clause 15.6 of the Council's constitution.
1
The
merits of the dispute pertained to the alleged underpayment by the
employer of an employee, Ms Masnoena Davids ('the complainant').
As
a consequence of the complainant's referral of the matter to the
Bargaining Council an investigation was undertaken by a
designated
agent of the Council, which culminated in a compliance order against
the employer in terms of section 33A(3) of the
LRA read with clause
15.6.3.2.5 of the applicant's constitution.
2
The merits of
the dispute were not canvassed at the arbitration proceedings, since
the employer raised a number of points
in limine
which were
set down for prior hearing. The decision on these points had the
effect of disposing of all but two months of the
arrear short
payments claimed by the Bargaining Council on behalf of the
complainant. It is this decision which the Bargaining
Council now
seeks to review.
The points on
which the arbitrator found in favour of the employer can be
summarised as follows:
The
Bargaining Council was estopped from claiming that the employer was
not compliant with the terms of the Agreement as the
Bargaining
Council had previously issued the employer with compliance
certificates, thereby representing to the employer that
it was
indeed compliant.
The
arbitrator found in the alternative to the finding on estoppel that
the Bargaining Council could only allege non-compliance
once a
previously issued compliance certificate had been withdrawn by the
Council, or reviewed or set aside by a competent
body or forum. The
arbitrator accordingly concluded that the Bargaining Council was
precluded from asserting that the employer
was non-compliant with
its Agreement for the periods covered by the certificates.
The third
point
in limine
upheld by the arbitrator was that a
designated agent of the Bargaining Council could not make an order
for compliance beyond
the term of one year, and that the
arbitrator, too, was bound by this limitation. For that reason,
according to the arbitrator,
any recovery of arrear wages must be
limited to a period of a year prior to the issue of the compliance
order by the designated
agent.
GROUNDS
OF REVIEW
The
applicant sourced the legal basis for its review application in
section 158(1)(g) of the LRA, which empowers this Court to
review
the performance of any function provided for in the LRA on any
grounds that are permissible in law.
Grounds
permissible in law would include a material error of law and/or
where, owing to an error of law, an arbitrator misconstrues
the true
nature of the dispute and asks herself the wrong question, thus
depriving the parties of a fair trial of the issues.
This
Court must ask itself whether the decision arrived at by the
arbitrator was one that no reasonable arbitrator could have
come to.
If the answer to that is in the affirmative then the decision falls
to be set aside.
3
Ms
MacKenzie
,
for the applicant, submitted that the arbitrator erred as a matter
of law in arriving at all three findings set out above with
regard
to the points
in limine
. I shall deal with each of those
points.
FIRST
FINDING -
The Bargaining Council was estopped from alleging
non-compliance with its agreement by the employer
The
arbitrator made a finding that the Bargaining Council was estopped
from alleging that the employer was non-compliant with
its Agreement
as a consequence of having issued it with compliance certificates
covering 12 months of the period in question.
The
doctrine of estoppel by representation states that a person is
precluded, that is estopped, from denying the truth of a
representation previously made by him or her to another person if
the latter, believing in the truth of the representation, acted
thereon to his or her prejudice.
4
Ms MacKenzie
contended that the arbitrator erred in finding that the Bargaining
Council was estopped from alleging a breach of
its Agreement by the
employer for the duration of those certificates.
Having
considered the arbitrato
r’s
finding on that ground, I am of the opinion that it is misdirected
for the following reasons:
Failure to
prove estoppel
The
onus of establishing that a party ought to be estopped rests on the
party pleading it. In
Stellenbosch
Farmers' Winery Ltd v Vlachos t/a Liquor Den
5
the Supreme Court of Appeal held that:
'Where a
misrepresentation is relied upon the party relying thereon has to
establish the misrepresentation and a reliance thereon
by the
plaintiff, which reliance was 'the cause of his acting to his
detriment'.
The
employer failed to place any evidence before the arbitrator with
regard
to
the manner in which the ‘representation’ (that it was
compliant) led it to act to its detriment, or why the
Bargaining
Council should be precluded from alleging the true state of affairs.
Alteration
of position and prejudice
The
doctrine of estoppel requires that the party seeking to rely on an
estoppel alters his position to his detriment or refrains
from doing
something beneficial.
6
The
employer has not claimed that it has altered its position in any way
or refrained from an otherwise beneficial opportunity.
In short it
has not alleged, much less proved, any prejudice, which is a
requirement for a defence of estoppel.
7
The
representation
In the first
place any 'representation' made by the Bargaining Council to the
employer on which it seeks to rely cannot be imputed
to the
complainant, and it is the complainant's claim against the employer,
not that of the applicant, which was sought to be
enforced through
the compliance arbitration.
As to the
representation itself, the compliance certificates issued by the
Bargaining Council to the employer were issued based
on information
furnished by the employer to the Bargaining Council and an
inspection of its business by agents appointed by the
Council.
If the
information furnished by the employer is subsequently challenged (in
this case the categorisation of the complainant which
forms the
subject matter of the dispute on the merits), and found to be
incorrect, the party responsible for that representation
can only be
the employer and not the Council. Since the compliance certificate
is issued on the basis of that information, there
can have been no
misrepresentation by the Bargaining Council as required by the law
of estoppel.
Estoppel
would result in a situation contrary to law or ultra vires the powers
of the applicant
A body such
as the Bargaining Council has such powers and duties as are
entrusted to it or imposed on it by statute and by its
own
collective agreements and cannot be bound by estoppel to act
contrary to these powers.
Thus
it was held in
Hoisain
v Town Clerk Wynberg
8
that where a town clerk issued a certificate to trade in error, he
was not estopped from refusing to put the name of the person
concerned on the list of general dealers for the area, the reasoning
being that he could not by his mistake be compelled to bring
about a
position which he had no power in law to create by his own free
will.
In
the same way, the Bargaining Council is tasked with monitoring and
enforcing its collective agreements, and cannot be excused
from this
obligation if there has been an error in the issuing of a compliance
certificate to an employer in circumstances where
that employer was
not, in fact, compliant at the time. See for instance
Fuls
v Leslie Chrome (Pty) Ltd
9
,
where the Court stated that 'estoppels cannot prevail if such would
result in the nullification of a statute'.
Moreover,
considering that compliance certificates are issued with a view to
the future (that is, for a period of six months)
it is inconceivable
that the Bargaining Council could be estopped on the strength of
such a certificate from investigating and
prosecuting future
breaches of its collective agreements by the holder of such a
certificate. This would amount to conduct (or
an omission) contrary
to the positive statutory duties placed on the Bargaining Council by
section 33A of the LRA, which permits
a council to patrol and
enforce its collective agreements.
It is
inconceivable that a Council could issue a compliance certificate on
day one, based on the information that it has; on day
two, the
employer flagrantly breaches the Main Agreement; and then argues
successfully that the Council cannot take any further
steps to
ensure compliance, because it has already certified that the
employer is compliant.
The
arbitrator
’s
fin
ding that the
Council is stopped from claiming non-compliance by the employer with
the Main Agreement relating to underpayment
of wages for the period
covered by the certificate of compliance is insupportable in law.
SECOND
FINDING -
The Bargaining Council was obliged to withdraw
the compliance certificate prior to instituting any claim based on
non-compliance
with its Agreement
The applicant
explains in its founding affidavit that compliance certificates are
issued as a matter of administrative convenience,
and can at most
amount to a
prima facie
indication that a particular employer
is operating in accordance with the provisions of its collective
agreements.
A compliance
certificate cannot be construed as conferring rights on the holder
thereof. It is simply a provisional acknowledgement
that it is
complying with the relevant prescripts of the collective bargaining
process, and it is a system established for the
facilitation of the
monitoring function of the council concerned, nothing more.
To suggest
that the Bargaining Council may not recover short payments on behalf
of complainants while such a certificate is in
operation, but must
first take steps to withdraw it, amounts to an unsustainable
construction of the status of such a certificate
It would lead to
unjust results in respect of individual employees in cases where
subsequent investigation reveals that the minimum
employment
conditions laid down in the Agreement have not been complied with.
I am of the
opinion that the conclusion arrived at by the arbitrator in this
regard is unsustainable in law, or on the facts of
this case.
THIRD
FINDING -
The arbitrator's powers were limited to those
of a designated agent issuing a compliance order
The
arbitrator also found that the compliance arbitration before him was
based on, and dependent on, the compliance order previously
issued
by a designated agent of the Council. He further concluded that such
an agent could not have greater powers than that
of a labour
inspector under the Basic Conditions of Employment Act
10
('the BCEA').
For that
reason, according to the arbitrator, any recovery of arrear wages
must be limited to a period of one year prior to the
issue of the
compliance order by the designated agent.
This finding
is untenable for two reasons.
Firstly,
the powers of designated agents derive from sections 33 and 33A of
the LRA read with Schedule 10 thereof, as well as
cl
ause
15.6.2 of the Council’s c
onstitution.
These provisions empower an agent, after conducting an investigation
of a specific complaint,
to ‘issue a compliance order’ directing the employer
to comply with the collective agreement to the extent of the deficit
revealed by the investigation.
These
‘orders’ are not enforceable against the employer, and
if contested, must be arbitrat
ed
through the usual dispute resolution procedures of the council
concerned, in this case through referral to a member of the
relevant
panel of arbitrators for adjudication of the dispute in terms of
clause 15.6.3.5
of
the Council’s c
onstitution.
The
arbitrator erred in elevating the comp
liance
order to the status of an enforceable finding in the dispute,
thereby considering himself bound by the parameters of a
designated
agent’s powers.
This
is clearly not the case, as the arbitration is an independent
dispute resolution procedure contemplated by both the LRA and
the
Council's Constitution by virtue of provisions independent of, and
separate from, those governing designated agents and the
‘
orders
’
they may make.
At
most a compliance order can be regarded as a demand for payment.
This finds support in the case of
Bargaining
Council for Hairdressing & Cosmetology Trade (Pretoria) v Smit
t/a Hair Mistique
11
where the council sought to make a compliance order issued by a
designated agent an order of court in terms of section 158(1)(c)
of
the LRA. In its constitution it had provided for this eventuality by
deeming a compliance order to be an award for purposes
of that
section.
The Court
held that this was impermissible, as the Council could not confer
jurisdiction on a body where neither the common law
nor the
legislature had done so. It therefore held that compliance orders
could not be made orders of court which could be executed
on.
In
this regard the Court stated as follows
12
:
‘
Secondly,
clause 31(3) of the collective agreement purports to amend the LRA by
attaching a meaning to a concept, “award”,
found in
section 158(1)(c) in an attempt to utilise the existing jurisdiction
of the Labour Court
by
deeming a compliance order which is not an award, to be something
else, namely an award
.’
(Italics added.)
The
second ground on which the arbitrator erred was in finding that the
powers of a designated agent in terms of the LRA were
limited to
those conferred on a labour inspector under the BCEA. In terms of s
70(d) of the BCEA a labour inspector may not issue
a compliance
order in respect of any amount payable to an employee if that amount
has been payable to the employee for longer
than 12 months before
the date on which a complaint was made to the labour inspector or
the date on which the inspector first
tried to secure a written
undertaking from the employer to comply.
13
It
is the applicant’s contention that, whatever the powers of a
designated agent, they are in any event not binding on,
or
prescriptive of, t
he
powers of an arbitrator in a compliance dispute. However, even on
its own reasoning the arbitrator
’s
award cannot be upheld in this regard as it is simply impermissible
to import the provisions of one statute into another
when the
legislatur
e has not
specifically done so.
In this case,
the arbitrator mistakenly placed unwarranted limitations on the
ambit of his powers, which, properly construed,
are those set out,
inter alia
, in section 33A(8)(a) of the LRA which entitled
the arbitrator to order the payment of 'any amount owing in terms
of a collective
agreement'.
CONCLUSION
The
findings of the arbitrator in respect of all three points
in
limine
are unsustainable in law, and fall to be set aside. The decision of
the arbitrator was not one that a reasonable arbitrator could
have
come to.
14
Given that
the matters canvassed in this review are of a purely legal nature,
the applicant submitted that I should substitute
my decision for
that of the arbitrator. I agree. It would serve no purpose to refer
the points
in limine
back for argument at the Bargaining
Council.
ORDER
The
arbitration award handed down by the second respondent on 26 April
2010 is reviewed and set aside.
The award is
substituted with an award that the points
in limine
raised by
the first respondent (the employer) are dismissed.
The main
dispute is remitted to the Bargaining Council for arbitration before
a different arbitrator on the merits of the dispute.
There is no
order as to costs.
______________________________
STEENKAMPJ
Date of
hearing and judgment: 3 March 2011
For the
applicant: Ms K J MacKenzie
Herold Gie
attorneys
1
Section 33A(3) reads as follows: “A
collective agreement in terms of this section may authorise a
designated agent appointed
in terms of section 33 to issue a
compliance order requiring any person bound by that collective
agreement to comply with the
collective agreement within a specified
period.” And s 33(4)(a) stipulates: “The council may
refer any unresolved
dispute concerning compliance with any
provision of a collective agreement to arbitration by an arbitrator
appointed by the council".
Clause
15.6 of the council's constitution stipulates that the council must
request the Minister to appoint designated agents.
“Such
designated agents shall perform the functions and have the powers
set out in the [Labour Relations] Act, including
sections 33A and
schedule 10 of the Act. It is specifically recorded that such a
designated agent shall have the power to issue
a compliance order.”
2
That clause empowers the designated agent to
issue a compliance order requiring any person bound by the agreement
to comply with
the agreement within a specified period.
3
Sidumo
v Rustenburg Platinum Mines Ltd
2008(2) BCLR 158 at 191 paragraph [119]
4
See
Joubert,
The
Law of South Africa
,
Second Edition, Vol 9, 401 at para 652.
5
[2001]
3 All SA 577
(SCA) 581h-I;
2001 (3) SA 597
(SCA)
6
Albatross Fishing Corporation (Pty) Ltd v Ramsay
1968 (2) SA
217
(C) at 221G.
7
Poort Sugar Planters (Pty) Ltd v Minister of Lands
1963 (3)
SA 352
(A) at 363E.
8
1916
AD 236
at 240
9
1962 (4) SA 784
(W) at 787
10
Act 75 of 1997
11
[2002] 3 BLLR 218
(LC). Although the judgment appears to precede the
insertion of s 33A into the Act by way of the Labour Relations
Amendment Act,
Act 7 of 2002, the
ratio
is still applicable.
12
At 220 H-I
13
In terms of s 68 of the BCEA.
14
Sidumo v Rustenburg Platnum Mines Ltd
[2007] ZACC 22
;
2008 (2) BCLR 158
para
[119]