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[2011] ZALCPE 1
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Building Industry Bargaining Council (Southern and Eastern Cape) v Commission for Conciliation Mediation and Arbitration and Others (P 477/2009) [2011] ZALCPE 1; [2011] 4 BLLR 330 (LC); (2011) 32 ILJ 1305 (LC) (10 January 2011)
Reportable
Delivered
100111
IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT PORT ELIZABETH
CASE NO P 477/2009
In
the matter between:
BUILDING
INDUSTRY BARGAINING COUNCIL
(SOUTHERN
AND EASTERN CAPE)
…..........................................................
Applicant
and
COMMISSION
FOR CONCILIATION,
MEDIATION
AND ARBITRATION
…...........................................................
Respondent
JUDGMENT
VAN
NIEKERK J
Introduction
[1] The applicant
is a bargaining council, established in terms of s 27 of the Labour
Relations Act (LRA), with a registered scope
that extends to the
construction sector in the Southern and Eastern Cape. In 2009, the
applicant applied to the respondent (the
CCMA) to be accredited to
perform conciliation and arbitration functions in respect of all
employers and employees who fall within
its registered scope. On 21
May 2009, the CCMA decided to accredit the applicant, but limited
that accreditation to the conciliation
of disputes between parties to
the council, for a period of one year. In this application, brought
under s 158 (1) (g)
1
of the LRA, the
applicant seeks to have the CCMA’s decision reviewed and set
aside.
Background
[2] The material facts are not in
dispute. In 1999, the applicant was accredited to by the CCMA to
perform conciliation and arbitration
functions in respect of disputes
between parties to the council as well as non-parties, i.e. those
employers and employees who
fall within the applicant’s
registered scope but are not members respectively of any employers’
organisation or trade
union that is a party to the applicant. The
applicant continued to be accredited by the CCMA on the same terms,
on application
and on an annual basis, until 31 May 2008. In 2008,
the applicant applied for accreditation on the same terms for the
period 1
June 2008 to 31 May 2009. On 31 May 2008, the CCMA
accredited the applicant to conciliate and arbitrate disputes, for
the period
1 June 2008 to 31 May 2009, but restricted the
accreditation to disputes between parties to the council (described
in the papers
as ‘party-party disputes’).
[3] In April 2009, applicant sought
accreditation from the CCMA to conciliate and arbitrate disputes in
respect of both parties
and non-parties to the council. As recorded
in the introduction, on 21 May 2009, the CCMA decided to accredit the
applicant to
conciliate party-party disputes only. This decision is
the subject of these proceedings.
[4] On 27 May 2009, the applicant
sought reasons for the CCMA’s decision to limit its
accreditation. These were eventually
furnished on 19 July 2009, by
email. The salient part of the email reads as follows:
As a result of the poor quality of
awards in general and the fact that there is no Collective Agreement
in place, it was resolved
that your Council only be accredited for
party-party conciliations.
The period of accreditation is one
year (1 June 2009 until 31 May 2010).
[5] The matter of the ‘collective
agreement’ referred to in the email assumed some significance
in these proceedings,
and is to be understood in the following
context. In May 2008, the CCMA advised the applicant that to be
accredited to resolve
non-party disputes, a collective agreement (or
some other suitable mechanism) would be required so that rules and
procedures relevant
to dispute resolution could be extended to
non-parties. The CCMA’s position was based on an opinion
previously provided to
it by Prof Paul Benjamin. In his opinion,
Benjamin noted that s 51 (9) of the LRA empowers bargaining councils
to establish procedures
to resolve disputes by way of a collective
agreement. Collective agreements concluded under the auspices of a
bargaining council
ordinarily bind only parties to the council. Since
the Minister is entitled in terms of s 32 to extend collective
agreements concluded
by bargaining councils to non-parties that are
in the council’s registered scope, Benjamin expressed the view
that effective
dispute resolution (a requirement established by s 127
(4)(b)), could be achieved if a bargaining council were to conclude a
collective
agreement establishing dispute resolution procedures and
have the Minister extend the agreement to non-parties. The opinion
concludes:
In our view, it is highly likely
that, in the absence of a collective agreement contemplated in
section 51(9) establishing dispute
resolution procedures, a
bargaining council would not be able to establish that it could
resolve non-party disputes effectively.
As a result, it would not be
able to gain accreditation for this category of disputes and the CCMA
would have to assume this responsibility
in terms of section 147 (8).
(We point out that this is not a categorical statement and there
remains the possibility that, despite
not having such an agreement, a
Council could demonstrate that it could perform these functions
effectively. This would have to
be evaluated in each case)
.
[6] There were a
number of further developments after May 2010, when the period of the
limited accreditation under review expired.
On 25 October
2010, the applicant was advised of the terms of its accreditation for
the new period of 1 November 2010 to 30 October
2011. In terms of
this most recent accreditation, the applicant has been accredited for
conciliation and arbitrations for disputes
between parties, on
condition that the arbitrations are conducted by part-time
commissioners of the CCMA and that quality control
of settlement
agreements and awards be conducted by a part-time senior commissioner
of the CCMA. This decision is not the subject
of the present
litigation, but is assumes some significance in relation to the
preliminary point raised by the CCMA to the effect
that the dispute
that is the subject of these proceedings is not justiciable on
account of it having become moot.
Mootness
[7] The CCMA contends that the issue
in dispute has become moot, since the accreditation that is the
subject of these proceedings
expired on 31 May 2010, and given the
accreditation on new terms for the period that expires in October
2011. In these circumstances,
the CCMA submits that the application
ought to be dismissed.
[8] The principles relating to
mootness are well-established. In
National Coalition for Gay and
Lesbian Equality & others v Minister of Home Affairs & others
[1999] ZACC 17
;
2000 (1) BCLR 39
(CC), the Constitutional Court said the
following:
A case is moot and therefore not
justiciable if it no longer presents an existing or live controversy
which should exist if the
Court is to avoid giving advisory opinions
on abstract propositions of law.
In
Independent Electoral Commission
v Langeberg Municipality
[2001] ZACC 23
;
2001 (9) BCLR 883
(CC), the same court
held that where there was no live controversy between the parties and
in the absence of any suggestion that
any order the court might make
would have any impact on the parties, the disputes between the
parties were moot, especially since
future cases would inevitably
present different factual matrixes, no purpose would be served in
resolving them. Similarly, in
Radio Pretoria v Chairman of the
Independent Communications Authority of South Africa & another
[2004] ZACC 24
;
2005 (3) BCLR 231
(CC), the court held that the refusal to grant
the applicant a licence in respect of the period April 1999 to April
2000 (the subject
matter of the review in that instance) was moot in
circumstances where the respondent had refused to grant a further
licence (in
September 2003) and where that decision was not a feature
of the review.
[9] The question then is whether there
is any practical purpose served by adjudicating a dispute about the
terms of the applicant’s
accreditation in respect of a period
that lapsed in May 2010. It seems to me that there are at least two
reasons for doing so.
The first relates to the CCMA’s
requirement that the applicant conclude a collective agreement
capable of binding non-parties,
as a prerequisite to accreditation in
respect of disputes involving those non-parties. To the extent that
the applicant’s
accreditation was limited on this basis both in
respect of the period that expired in May 2010 and that due to expire
in October
2011, the case presents a live controversy and the court
is not being asked to give an opinion in the abstract. Secondly, it
is
not inconceivable (indeed it is more than likely) that the basis
on which the decision that is the subject of these proceedings
was
taken is likely to serve as a basis for future, similar decisions,
where the same or similar facts will present themselves.
Thirdly, the
parties acknowledge that the issue that presents itself is one that
affects other bargaining councils, and that is
of general interest to
the industrial relations community. I intend therefore to consider
the merits of the applicant’s claim.
The nature of the review
application
[10] As I recorded in the introduction
to this judgment, the applicant brings this claim in terms of s
158(1) (g). The applicant
contends that in making a decision that
deprived the council of the accreditation it sought, the CCMA failed
to comply with its
own policy, was materially influenced by an error
of law, took irrelevant considerations into account and disregarded
relevant
material facts and acted capriciously or arbitrarily, with
the result that the decision was not rationally connected to the
purpose
for which it was taken, and that it was accordingly
unreasonable. This formulation of the applicant’s claim
requires some
analysis, if only to discern the extent to which this
court is entitled to intervene in the decision under review.
[11] In its notice of motion, the
applicant characterises the CCMA’s decision as an
‘administrative decision’.
However, in the applicant’s
heads of argument and in the submissions made during argument, the
principle of legality was
relied upon as the sole basis of the
applicant’s attack; the argument being, as I understand it,
that the CCMA’s decision
failed to meet the threshold
established by the principle of legality, and is thus reviewable. The
heads of argument refer to
Pharmaceutical Manufacturers
Association of South Africa & another: In re Ex parte President
of the Republic of South Africa
& others
2000 (2) SA 675
(CC)
where the court said, at paragraph [90] of the judgment:
It is a requirement of the rule of
law that the exercise of public power by the executive and other
functionaries should not be
arbitrary. Decisions must be rationally
related to the purpose for which the power was given, otherwise they
are in effect arbitrary
and inconsistent with this requirement. It
follows that in order to pass constitutional scrutiny the exercise of
public power by
the Executive and other functionaries must, at least,
comply with this requirement. If it does not, it falls short of the
standards
demanded by our constitution for such action.
The heads then move to the proposition
that against this background, the court is required to ask whether
the CCMA’s decision
is one that a reasonable decision maker
would reach. In this regard, the applicant refers to
Sidumo &
another v Rustenburg Platinum Mines Ltd & others
[2007] 12
BLLR 1097
(CC) as authority, it would seem, for the contention that
the Promotion of Administrative Justice Act (the PAJA) does not apply
to decisions made by the CCMA, and for the introduction of a
constitutional requirement of reasonableness. The conclusion drawn
is
that the CCMA’s decision is assailable since it is one that was
clearly unreasonable.
[12] This curious formulation prompted
me to enquire from Mr van Zyl, who appeared for the applicant, why
the application had been
framed as a legality review, rather than a
review in terms of the PAJA, since on the applicant’s version,
the CCMA’s
decision to limit its accreditation constituted
administrative action. Mr van Zyl’s response was that s 158 (1)
(g) of the
LRA contemplated a review on the basis of the principle of
legality.
[13] In my view, there is no merit in
adopting the restrictive interpretation of s 158 (1) (g) for which
the applicant contends.
Section158 (1) (g) is patently not limited to
what is known as a legality review - the section empowers this court
to review the
performance of any function under the LRA ‘on
such grounds as are permissible in law’. This includes not only
a review
of the exercise of any public power under the LRA on the
basis of the principle of legality but also, in appropriate
circumstances,
the review of administrative action under the PAJA and
possibly a common law review. In other words, s 158(1) (g)
establishes what
might be termed a ‘jurisdictional footprint’
for the review of the performance of functions under the LRA –
the
basis for review is dependent on the nature of the decision
taken. Section 7 of the PAJA, read with the definition of ‘court’
in s 1, certainly contemplates this that court is empowered to
entertain proceedings for judicial review.
[14] But the
conceptual confusion in the applicant’s argument extends beyond
its limited interpretation of s 158 (1) (g).
To the extent that the
applicant considers the
Sidumo
judgment to
preclude any review under the PAJA, it should be recalled that the
majority of the court in that matter held that while
a CCMA
arbitration constituted administrative action, the review provisions
of the PAJA did not apply for reasons related to the
statutory system
of dispute resolution and in particular, what was referred to as the
‘
specialised
legislative regulation of administrative action such as s 145 of the
LRA
…”
(at
paragraph 91). In other words,
Sidumo
was
concerned only with the function of compulsory arbitration by the
CCMA, and the PAJA was found not to apply because of s 145.
It does
not follow, as the applicant appears to assume, that because a CCMA
commissioner who conducts an arbitration hearing performs
an
administrative function that is not regulated by the PAJA,
2
that the PAJA does
not apply to all decisions taken by the CCMA or its various
functionaries. Where there is no specialised legislative
regulation
such as that established by s145 it seems to me that ordinarily, any
decision made by the CCMA that falls within the
scope of the PAJA
ought to be reviewed in terms of that Act. For the purposes of s1 of
the PAJA, the CCMA is an organ of state,
and its decision to limit
the accreditation of the applicant is clearly a decision made in the
exercise of a public power or the
performance of a public function in
terms of the LRA. More particularly, section 127 of the LRA confers a
power on the CCMA that
is not dissimilar to that enjoyed by a
licensing authority. It must consider any application for
accreditation and decide whether
the applicant meets the criteria
established by s 127 (4). In doing so, the CCMA necessarily exercises
a discretion that may adversely
affect the rights of an applicant for
accreditation and that has a direct external effect not only on an
applicant bargaining council,
but also the parties to that council
and those non -parties who fall within its registered scope.
[15] In short: a decision made by the
CCMA under s 127, whether it is to grant or refuse accreditation or
to extend accreditation
on terms more limited than those sought by an
applicant council, is not a decision that is infused with any of the
considerations
that caused the majority in
Sidumo
to find that
while the making of a CCMA arbitration award is administrative
action, the PAJA did not apply. There is no reason
therefore why the
PAJA ought not to have been the applicant’s first resort - it
is the statute that gives effect to the rights
under s 33 of the
Constitution, and which represents a codification of those rights
(see
Bato Star
(
supra
) at para 25).
[16] Having failed to present a claim
under the PAJA, and having persisted
solely
with a legality review, is the applicant’s inversion of
the constitutional logic of requiring reliance on the more specific,
constitutionally mandated norm as opposed to the general fatal to its
claim? This would appear to be the case. In
Minister of Health v
New Clicks South Africa (Pty) Ltd
2006 (2) SA 311
(CC)
,
the
Constitutional Court said, (per Chaskalson CJ):
PAJA
is the national legislation that was passed to give effect to the
rights contained in section 33. It was clearly intended to
be, and in
substance is, a codification of these rights.
3
It was required to cover the field
and purports to do so.
A
litigant cannot avoid the provisions of PAJA by going behind it, and
seeking to rely on section 33(1) of the Constitution or the
common
law. That would defeat the purpose of the Constitution in requiring
the rights contained in section 33 to be given effect
by means of
national legislation.
Professor
Hoexter sums up the relationship between PAJA, the Constitution and
the common law, as follows:
“
The
principle of legality clearly provides a much-needed safety net when
the PAJA does not apply. However, the Act cannot simply
be
circumvented by resorting directly to the constitutional rights in s
33. This follows logically from the fact that the PAJA
gives effect
to the constitutional rights. (The PAJA itself can of course be
measured against the constitutional rights, but that
is not the same
thing.) Nor is it possible to sidestep the Act by resorting to the
common law. This, too, is logical, since statutes
inevitably displace
the common law. The common law may be used to inform the meaning of
the constitutional rights and of the Act,
but it cannot be regarded
as an alternative to the Act.” (footnotes and emphasis omitted)
I
agree.
In other words, when it applies,
parties should not be permitted to bypass the PAJA by seeking to
review a decision on the basis
of the principle of legality. For this
reason, this application stands to be dismissed.
[17] To the extent that the applicant
has elected to frame its claim as a legality review, and to the
extent that the claim is justiciable
on this basis, it should be
recalled that contrary to Mr van Zyl’s expansive attack on the
CCMA’s decision, a legality
review is limited in the first
instance (as the applicant’s reliance on
Pharmaceutical
Manufacturers Association
illustrates) to the threshold
requirement of rationality, extending to procedural fairness ( see
Masetlha v President of the Republic of South Africa
[2007] ZACC 20
;
2008 (1)
SA 566
(CC), and possibly to the giving of reasons (see
Wessels v
Minister of Justice and Constitutional Development & others
[2009] ZAGPPHC 81 (2 June 2009), but not to reasonableness
itself. (See Prof. Cora Hoexter ‘The Rule of Law and the
Principle
of Legality in Administrative Law Today’ (2010)
(forthcoming)).
Pharmaceutical Manufacturers Association
makes
it clear that as long as the purpose sought to be achieved by the
exercise of public power is within the authority of the
functionary,
and as long as the decision under review is rational, the court is
not entitled to interfere with the decision simply
because it
disagrees with it or because it considers that the power was
exercised inappropriately.
[18] In so far as the rationality
requirement is concerned, a brief overview of the system of
accreditation is appropriate. The
LRA places the CCMA at the hub of
the statutory dispute resolution process. Although certain disputes
are always required to be
referred to the CCMA (see s 127 (2)), the
Act recognises that bargaining councils and private agencies have
roles to play in the
resolution of labour disputes. Integral to the
extension of statutory dispute resolution powers beyond the CCMA is
the system of
accreditation. In broad terms, a bargaining council,
statutory council and any private agency may apply to the CCMA to be
accredited
to resolve disputes through conciliation, and to arbitrate
unresolved disputes, if the Act requires those disputes to be
determined
by arbitration. Accredited councils and agencies may apply
to the CCMA in terms of s 132 for subsidies to perform dispute
resolution
functions for which they have been accredited.
[19] The resolution of disputes is a
central function of a bargaining council. In respect of parties to a
council, the LRA does
not prescribe how a council’s dispute
resolution functions should be carried out or the procedure to be
followed. These are
matters left to the parties, to be regulated in
accordance with the council’s constitution. In the case of
non-parties, the
situation is different. Section 51 (3) provides that
a party to a dispute that is not party to the council may refer a
dispute
to the council for conciliation and if conciliation fails,
for arbitration if the Act requires the dispute to be arbitrated and
any party to the dispute has requested arbitration. The council may
also arbitrate a dispute if all parties to the dispute agree
to
arbitration under the auspices of the council. If one or more parties
to a dispute fall outside of the council’s registered
scope,
the dispute must be referred to the CCMA. To perform these functions,
the council must apply to the CCMA’s governing
body in terms of
s 127 for accreditation.
[20] Section 127 of the LRA
establishes the criteria for accreditation. These are whether:
The services provided by the
applicant meet the CCMA’s standards.
The applicant is able to conduct its
activities effectively.
The persons to perform the functions
will be competent to do so.
The persons appointed by the
applicant to perform the functions for which accreditation is sought
will do so independently.
The applicant has a code of conduct.
The applicant uses acceptable
disciplinary procedures to enforce the code of conduct.
The applicant promotes a service that
is broadly representative of South African society.
(In the present matter, only the first
three of these criteria are of any relevance.) Councils may apply for
amendment to their
accreditation (s 129), and the CCMA may withdraw
accreditation (s 130). Any application to renew accreditation must be
dealt with
in terms of s 127.
[21] The CCMA’s
policy on accreditation, adopted on 9 December 2008, establishes
seven criteria which not surprisingly, mirrors
s 127. The applicant’s
primary complaint is the CCMA’s attitude that in the absence of
a collective agreement, it was
not entitled to grant accreditation to
a bargaining council (and the applicant in particular) to perform
conciliation and arbitration
functions in respect of non-parties. To
the extent that the applicant contends that the conclusion of a
collective agreement is
not a criterion for accreditation, it should
be recalled that the criterion at issue is efficiency – the
CCMA’s case
being that effective dispute resolution was not
possible in the absence of a bargaining council’s
ability
to
exercise
authority over a non-party. In this context, there is no material
difference, contrary to what Mr van Zyl submitted, between
‘efficiency’ and effectiveness. The CCMA took the view
that effective dispute resolution required a mechanism through
which
a bargaining council could bind non-parties to a disputes procedure,
the most obvious mechanism being a collective agreement.
The
existence of a collective agreement is the most obvious vehicle
through which to bind non-parties to a disputes procedure.
I fail to
appreciate how the CCMA’s insistence on a collective agreement
to bind non-parties can in these circumstances be
said to be
irrational- the applicant has proffered no other alternative
mechanism to bind non-parties or otherwise to act against
a
recalcitrant non-party who simply refuses to be bound by the
proceedings. While the applicant might consider, as it appears to
do,
that its adoption of the CCMA rules provides an adequate mechanism
for the resolution of disputes under its auspices and while
it may
adopt the view, as it appears to have done, that numerous non-party
employers and employees are happy to participate in
its structures,
the fact of the matter remains that the applicant is a statutory body
whose powers are limited by the Act and by
agreements concluded the
parties to it. The applicant may not exercise powers over those who
by eschewing membership of the council
elect not to be bound by its
constitution and agreements, unless, of course, the council is
sufficiently representative of the
sector for which it is registered
and the Minister has extended any collective agreement in terms of s
32 of the Act. Whatever
the applicant’s views may be of its own
efficiency and the level of satisfaction with the services it has
provided in the
past, the fact remains that in the absence of a
collective agreement regulating dispute resolution procedures
extended to non-parties,
it is ultimately unable to exercise any
authority over non-parties, and its functioning as an effective
dispute resolution agent
is and remains compromised to that extent. I
fail to appreciate how, in these circumstances, it can be said that
the CCMA’s
decision was not rationally related to the
objectives sought to be achieved by s 127, or that it was
unreasoned
or lacked any ostensible logic or comprehensible justification.
[22] There is an additional,
policy-related reason why the criterion applied by the CCMA should be
upheld. The CCMA is the statutory
authority that is ultimately
accountable for the standard of dispute resolution in South African
industrial relations either through
its own agency or through those
bodies that it accredits. The CCMA is governed by the social
partners, and decisions on accreditation
are accordingly the result
of tripartite reflection and consensus. This court should be slow to
second-guess decisions on the terms
of any accreditation of a
bargaining council or private agency, not only because this reflects
the proper application of this court’s
review jurisdiction but
because decisions that reflect a consensus reached by the social
partners will typically
reflect a
rational relationship between the exercise of the power and the
objectives of the accreditation processes.
[23] In so far as procedural fairness
is concerned, the applicant contends that it was not afforded the
opportunity to make oral
representations in respect of its
application for accreditation, and that the CCMA failed to convey the
outcome of its assessment
with the applicant This may be so, but the
record indicates that the applicant was furnished with a summary of
areas of concern
that needed to be addressed before the CCMA made a
final decision to grant the applicant limited accreditation. This
invitation
must be seen in a context in which the applicant was
advised as early as 2007 that unless it had a collective agreement in
place
binding on non-parties, it would not be accredited for
arbitrations. In March 2009, the CCMA offered to assist the applicant
to
ensure that a collective agreement was entered into. The applicant
was requested to provide the CCMA with a date for a meeting to
discuss the issue. The applicant failed to take up this offer.
[24] In so far as reasons for the
CCMA’s decision are concerned, these were requested on 27 May
2009 and furnished on 19 July
2009. The CCMA was tardy in responding
to the applicant’s request for reasons (although it did so
within the 90-day period
provided for in section 5(2) of the PAJA),
there is no suggestion that it failed or refused to furnish reasons
for its decision,
or that its reasons were inadequate.
[25] Finally, there is no reason why
costs should not follow the result. This may be a novel case, but
there was no suggestion that
it was a test case or that there was any
other compelling reason why the CCMA should be denied its costs
I accordingly make the following
order:
The application is dismissed, with
costs.
ANDRE VAN NIEKERK
JUDGE OF THE LABOUR COURT
Date of application: 18 November 2010
Date of judgment: 10 January 2011
Appearances:
For the applicant: Adv B van Zyl,
instructed by Dion van der Merwe
For the respondent: Mr C Todd, Bowman
Gilfillan Inc.
1
Section
158 (1) (g) empowers this court, subject to s 145, to review the
performance or purported performance of any function
provided for in
the LRA on any grounds permissible in law.
2
See
the
Sidumo
judgment at paragraphs [96] to [104].
3
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Others
[2004] ZACC 15
;
2004 (4) SA 490
(CC);
2004 (7) BCLR 687
(CC) at para 25.
13