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[2011] ZALCCT 22
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Consol Glass (Pty) Ltd v Commission for Conciliation Mediation and Arbitration and Others (C 1095/10) [2011] ZALCCT 22; [2012] 1 BLLR 42 (LC); (2012) 33 ILJ 376 (LC) (25 August 2011)
REPUBLIC OF SOUTH AFRICA
Reportable
Of
interest to other judges
THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
case
no: C 1095/10
In the matter between:
CONSOL
GLASS (PTY) LTD
…........................................................
Applicant
and
CCMA
…................................................................................
First
respondent
CARLTON
JOHNSON N.O.
….........................................
Second
respondent
MARYKA
GREEFF
…...........................................................
Third
respondent
Heard
:
10 August 2011
Delivered
:
25 August 2011
Summary: LRA s 142A – settlement agreement before referral
to CCMA – jurisdiction – review of arbitration award.
JUDGMENT
STEENKAMP J
Introduction
The crisp question in this review application is whether section
142A of the Labour Relations Act
1
is applicable in situations where the parties had reached a
settlement agreement before the dispute had been referred to the
CCMA
2
;
in other words, does the CCMA have jurisdiction to make such an
agreement an arbitration award?
Background
Maryka Greeff, the third respondent (“the employee”),
was employed by the applicant as an accounts manager.
The applicant embarked on a process in terms of section 189 of the
LRA to consult with staff in contemplation of dismissals for
operational requirements pursuant to a restructuring process.
On 8 October 2010, and while she was still employed by the
applicant, the employee entered into a written agreement with the
applicant. That agreement was encapsulated in a letter that
stipulated,
inter alia
, the following:
“
1. The
effective date of termination of your contract of employment will be
30 November 2010.
2. Subject to you being able to
conclude the handover duties assigned to you during this period, you
may not be required to work
the contractual one month’s notice
period during the month of November and your last day at the office
will be 31 October
2010. Should you however not be able to finalise
these duties as required, you may be required to work part of or the
entirety
of your notice period.”
The letter then sets out a severance package and other benefits due
and stipulates that it is in full and final settlement of
all claims
that the employee may have, and that it precludes her from disputing
the termination of her employment at the CCMA
or this Court. She
countersigned the agreement on 12 October 2010.
The employee subsequently asked to be released from her duties as
from 18 October 2010. It is in dispute whether she was due
to take
up other employment as from that date or whether she merely needed
to go to an interview for other employment; what is
common cause,
though, is that the applicant insisted that she work out her notice
period; and that the applicant wrote to her
on 18 October 2010 to
place on record that it had accepted her resignation that she
allegedly tendered on 12 October. She denies
that she resigned and
says that the applicant breached the settlement agreement. The
applicant, on the other hand, alleges that
the employee had resigned
prematurely; that she was, therefore, in breach of the agreement;
and that it no longer needed to pay
her any severance pay.
The arbitration award
The employee applied to the CCMA to make the settlement agreement an
arbitration award in terms of s 142A of the LRA. That section
reads
as follows:
“
(1)
The Commission may, by agreement between the parties or on
application by a party, make any settlement agreement in respect
of
any dispute that has been referred to the Commission, an arbitration
award.
(2)
For the purposes of subsection (1), a settlement agreement is a
written agreement in settlement of a dispute that a party has
the
right to refer to arbitration or to the Labour Court, excluding a
dispute that a party is entitled to refer to arbitration
in terms of
either section 74(4) or 75(7).”
3
The arbitrator, commissioner Carlton Johnson (the second
respondent), did not hear oral evidence or argument. On 25 November
2010 he handed down an award in the following terms:
“
On
the 12
th
of October 2010 the parties entered into an agreement in terms of
which the dispute that had been referred to the CCMA was settled.
A
copy of the settlement agreement is attached hereto marked ‘A’.
4
The
settlement agreement is hereby made an arbitration award in terms of
section 142A(1)
of the
Labour Relations Act 1995
as amended.”
Grounds of review
The applicant seeks to have the award reviewed and set aside on two
grounds: firstly, that the CCMA did not have jurisdiction
to enable
the arbitrator to make the award that he did; and secondly and
alternatively, that he acted unreasonably by failing
to take into
account relevant considerations relating to the employee’s
alleged breach; and acted unprocedurally in failing
to hear oral
argument on the application.
If the CCMA did not have jurisdiction,
caedit questio.
That
is the end of the matter and I need not consider the alternative
grounds of review.
The question of jurisdiction is a factual one and the reasonableness
test applicable to reviews of CCMA awards in terms of
s 145
of the
LRA generally, as set out in
Sidumo v Rustenburg Platinum Mines
Ltd
5
,
does not apply.
6
Interpretation of
s 142A
In his award, the arbitrator describes the agreement between the
parties as one “in terms of which the dispute that had
been
referred to the CCMA was settled”. This is patently wrong. The
only matter that the employee referred to the CCMA
was the
application to have the settlement agreement made an arbitration
award in terms of
s 142A
; no other dispute had been referred to the
CCMA.
In those circumstances, did the CCMA (and thus the arbitrator) have
jurisdiction to make the settlement agreement an arbitration
award?
The plain language of
s 142A
appears to me to be abundantly clear:
it specifies that the CCMA may, by agreement or on application, on
application by a party,
“
make
any settlement agreement
in
respect of any dispute that has been referred to the Commission
,
an arbitration award.”
7
The plain language of the section states that it is only where a
dispute had already been referred to the CCMA, and the parties
reach
a settlement, that the arbitrator can make that settlement agreement
an arbitration award.
And yet there are judgments that appear to be in conflict when
interpreting the section. As my analysis will show, that conflict
may be more apparent than real; but yet I have to deal with it.
In
Molaba & others v Emfuleni Local Municipality
8
Van Niekerk J, in the context of discussing the meaning of
“settlement agreement” in
s 158(1)(c)
, held as follows
with regard to the interpretation of
s 142A:
“
The
wording of
section 142A
suggests that for an agreement to constitute
a settlement agreement, a number of requirements relating to nature
and form must
be met. First, the dispute that is the subject of
settlement must have been 'referred to the Commission'. 'Referred'
cannot mean
referred to arbitration in terms of
section 136
–
section 142A(1)
requires that the dispute must be one that a party
has the right to refer either to arbitration or to the Labour Court.
'Referred
to the Commission' therefore means referred for
conciliation in terms of
section 134.
This section, read with the
requirement that the dispute be one that a party has the right to
refer to arbitration or to the Labour
Court, means that it is only
settlement of disputes about a matter of mutual interest that are
either arbitrable or justiciable
by this Court that may be the
subject of an arbitration award in terms of
section 142A.
”
Van Niekerk J further expressed the view that the 2002 amendments to
the LRA that introduced
section 142A
meant that a settlement
agreement concluded in the circumstances discussed in
Harrisawak
v La Farge (SA)
9
can be made an arbitration award in terms of
s 142A
– but that
is because the dispute in that matter had been referred to the CCMA
for conciliation. But the broad interpretation
afforded
s 158(1)(c)
in
Harrisawak
would not, in his opinion, survive the 2002
amendments.
In
Tsotetsi v Stallion Security (Pty) Ltd
10
,
delivered a few months after
Molaba
, Molahlehi J cited
the passage in
Molaba, supra.
He did not expressly agree or
disagree with it. Yet he added:
“
In
my view, agreements that may be made orders of court include those
disputes which may have not yet been referred for which a
party has a
right to refer to the Labour Court. In other words, agreements which
may be made orders of court, would include those
agreements concluded
is for such disputes referred for conciliation or litigation. By way
of example if parties reach an agreement
regarding a discrimination
dispute before it is referred to conciliation, such an agreement
could be made an order of court. Similarly,
in the case of an
arbitrable dispute, if parties reach an agreement regarding an unfair
dismissal for such a dispute is referred
for conciliation, such an
agreement could be made an arbitration award records it is a dispute
which a party has the right to refer
to the commission."
Those remarks were made in the context of an application for leave
to appeal. Leave to appeal was granted. Unfortunately, it
does not
appear that the Labour Appeal Court has pronounced on the principle.
However, on the facts of that case, the employee
had already
referred a dispute concerning an alleged unfair dismissal to the
CCMA; an arbitration award had been issued; and
the parties were
engaged in review proceedings when they reached a settlement
agreement. The remarks of Molahlehi J pertaining
to
section 142A
therefore do not form part of the
ratio
of this judgement and
must be seen as
obiter
.
The next case in which the issue was discussed was
Dell v HPD
Construction.
11
In that case, Molahlehi J repeated his view that agreements that may
be made orders of court include those disputes which may
have not
yet been referred for which a party has a right to refer to the
Labour Court; and that, if parties reach an agreement
regarding an
unfair dismissal before such a dispute is referred for conciliation,
it could be made an arbitration award.
However, once again, the settlement agreement in
Dell
followed a dispute that had been referred to conciliation.
Therefore, it met the prerequisites outlined in
section 142A.
Insofar as the trio of judgements discussed above are in conflict
with each other, I respectfully align myself with the sentiments
of
the Niekerk J in
Molaba.
In my view, the prerequisites for making a settlement agreement an
arbitration award in terms of
s142A(1)
could not be clearer. The
section expressly provides that the agreement in the must be in
respect of "any dispute
that has been referred to the
commission
”. A settlement agreement in respect of a
dispute that has not been referred to the CCMA cannot, in my view,
be made an
arbitration award in terms of
section 142A(1).
Application to this dispute
It follows from my reading of
section 142A(1)
that the arbitrator in
this dispute did not have jurisdiction to make the settlement
agreement an arbitration award. The agreement
was not in respect of
a dispute that had been referred to the Commission.
Given the conclusion I have reached on jurisdiction, I need not
consider the other grounds of review.
Mr
Soldatos
, who appeared for the applicant, did not persist
in his prayer for costs.
Order
The ruling of the second respondent dated 25 November 2010 is
reviewed and set aside. There is no order as to costs.
_______________________
Anton Steenkamp
Judge
APPEARANCES
APPLICANT: Mr Ari Soldatos of Fluxmans Inc.
THIRD RESPONDENT: Adv Coenie de Kock, instructed by Carelse Khan.
1
Act
66 of 1995 (the LRA).
2
The
Commission for Conciliation, Mediation and Arbitration.
3
The
exclusions refer to essential services and maintenance services, and
are irrelevant to this application.
4
That
is the letter dated 8 October 2010 and countersigned by the employee
on 12 October 2010.
5
(2007)
28
ILJ
2405
(CC).
6
SA
Rugby Players Association & others v SA Rugby (Pty) Ltd
(2008)
29
ILJ
2218
(LAC).
7
My
underlining.
8
[2009]
7 BLLR 679
(LC) para [6].
9
(2001)
22
ILJ
1395
(LC);
[2001] 6 BLLR 614
(LC).
10
(2009)
30
ILJ
2802
(LC) para [17] – [18].
11
[2010]
6 BLLR 626
(LC).