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[2012] ZALCJHB 111
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AHI Employers Organisation obo Members v Commission for Conciliation, Mediation and Arbitration; AHI Employers Organisation obo Members and Others v Commission for Conciliation, Mediation and Arbitration and Others (J656/2011; JR2518/10) [2012] ZALCJHB 111 (1 February 2012)
Reportable
Of interest to other judges
REPUBLIC OF SOUTH AFRICA
THE LABOUR COURT OF SOUTH AFRICA
(HELD AT, JOHANNESBURG)
Case
no: J 656/2011
In the matter between:
AHI
EMPLOYERS’ ORGANISATION obo MEMBERS
....................
Applicant
and
COMMISSION
FOR CONCILIATION MEDIATION
AND
ARBITRATION
....................................................................
Respondent
Case no: JR 2518/10
In the matter between:
AHI
EMPLOYERS’ ORGANISATION
obo
MEMBERS
........................................................................
First
Applicant
PAL WESSELS
..............................................................................
Second
Applicant
AA CELLIERS
....................................................................................
Third
Applicant
and
COMMISSION
FOR CONCILIATION MEDIATION
AND
ARBITRATION
............................................................
First
Respondent
COMMISSIONER
PAULUS MOTAKE (
N.O.
)
.................
Second
Respondent
NUDPW obo MEMBERS
...............................................................
Third
Respondent
Heard
: 3 June and 4 August
2011
Delivered
: 1 February 2012
Summary:
(review of CCMA
guidelines on representation – ultra vires)
judgment
LAGRANGE, J
Introduction
The first matter under case
number J656/2011 is a somewhat unusual review application. The
applicant is a registered employers’
organisation, which is
seeking to ensure that its members may be represented in proceedings
of the CCMA, by another member of
the Association even if that other
member is a juristic entity and even if it receives a fee from the
member it represents. In
striving to achieve this aim, it is
attempting in these proceedings to set aside certain circulars
issued by the CCMA to commissioners
concerning the way in which they
should evaluate whether or not an employer’s representative
has satisfied the requirements
of rule 25 (1) (a) (2) and rule 25
(1) (b) (3) of the CCMA rules.
Initially this matter came
before me on 3 June 2011 as a semi-urgent application to set aside
one circular. On that occasion I
agreed that the matter could
proceed on that basis but that there was not sufficient urgency to
justify the determination of
final relief without the benefit of
full oral argument supported by written heads from both parties. No
interim relief was sought
at the time by the applicant. The parties
agreed amongst themselves on further steps to be taken on the
further conduct of the
matter. When the matter came before me again
on 4 August 2011, the applicant had amended its notice of motion to
include an application
to set aside a second directive issued on 10
June 2011 (' the second circular'), which replaced the first
circular dated 28 March
2011 (' the first circular').
The publication of the second
circular had been anticipated at the earlier proceedings on 3 June
2011, at which the CCMA had argued
that there was no need to proceed
with the original application to set aside the first circular, in
view of the anticipated release
of the second circular which would
replace the first.
The parties also requested that
the first matter be heard jointly with another review application
under case number JR 2518/09
concerning an individual instance in
which a CCMA arbitrator had refused to allow one of the applicant's
members to represent
the other in an unfair dismissal hearing on the
basis that the representative did not qualify to appear in that
capacity in those
proceedings. Following the arbitrator's refusal to
admit the employer's representative, the employer and the
representative left
the arbitration which proceeded on a default
basis. The AHI took up the cudgels on behalf of its members and
together with the
aggrieved members launched an application to
review and set aside the arbitration award.
In his award that the
arbitrator set out reasons for his ruling against the employer's
representative appearing in the proceedings.
He noted that this was
not the first time he had made a ruling against the particular
representative, a Mr A Celliers. He had
refused to allow Cilliers to
represent parties in the CCMA because in his view Cilliers was not
"a genuine co-member as
he claimed". The arbitrator
continued, "I ruled that if he were representing parties as a
co-member he would not be
doing it on such High frequency as he did,
for instance, every day or every week or every month." The
arbitrator inferred
from the frequency of Cilliers's attendance as a
representative that it was his business to represent co-members and
that he
was paid to do so. He reasoned that Cilliers could not make
a living if he was not paid for his frequent attendances. The
arbitrator
accepted the right of a member of an employers'
organisation or union to represent a co-member but insisted that
Cilliers was
not performing that representative function as a
genuine co-member but more as an official of AHI or some other kind
of employers'
organisation. The Commissioner said that he relied on
the provisions of rule 25 which required him to investigate a person
who
wanted to represent a party if the Commissioner "suspected"
that such a person was not qualified to represent a party
at the
CCMA. He concluded that Cilliers was appearing as a Labour
consultant and not a genuine member of AHI.
The applicants sought to set
aside the arbitrator's ruling on a number of grounds including gross
irregularity, a failure of the
arbitrator to apply his mind to the
relevant facts and arguments before him, unreasonableness and acting
beyond his powers. The
principal ground of review is that the
arbitrator acted beyond his powers in excluding Cilliers on the
basis that he was not
a genuine co-member of the AHI, whereas the
CCMA rule provides that any member of an employer’s
organisation may represent
another in such proceedings.
Although the arbitrator's
ruling predated the publication of both of the circulars, for
reasons that will become apparent when
the circulars are considered
there is a considerable overlap in certain respects between the
substance of the review of the circulars
and the way the
commissioner exercised his judgment in this matter.
The Circulars and Rule 25 of
the CCMA rules
Since the introduction of
section 115 (2 A) of the Labour Relations Act 66 of 1995 ('the LRA')
in 2002, the CCMA has had the power
to make rules, amongst other
things, to regulate the practice and procedure of dispute resolution
through conciliation or arbitration
(section 115 (2 A) (a)), and to
regulate "the right of any person or category of persons to
represent any party in any conciliation
and arbitration
proceedings;..." (Section 115 (2 A) (k)). In terms of section
115(2A) (g) the CCMA is also empowered to
“publish guidelines
in
relation to any matter dealt with in this Act.
”
A commissioner is also required
to pay heed to guidelines issued by the commission in terms of s
138(6), which states:
“
The
commissioner
must
take into account
any
code
of good practice
that
has been issued by
NEDLAC
or
guidelines published by the Commission
in accordance with the provisions of
this
Act
that
is
relevant to a matter being considered in the arbitration
proceedings
.”
(emphasis added)
Prior to this, the right to
representation was dealt with in the LRA itself. Section 138 (4) of
the LRA, before it was deleted
by s 27 (k) of Act 12 of 2002,
read: “In any arbitration proceedings, a party to the
dispute may appear in person
or be represented only by a legal
practitioner or a co-employee or by a, member office-bearer or
official of that party's trade
union or
employers' organisation
and, if the party is a juristic person, by a director or an
employee.”
Rule 25 of the CCMA rules
The right to representation
found its expression in rule 25 of the CCMA rules
1
,
the current version
of which reads:
“
25 Representation
before the commission
(1)
(a)
In
conciliation
proceedings
a party to the dispute may appear in person
or
be represented
only
by-
(1) a
director
or
employee
of that party and if a close corporation also a
member thereof; or
(2)
any
member
,
office bearer
or
official
of
that party's registered
trade union
or registered employer's
organisation.
(b)
In any arbitration
proceedings, a party to the
dispute
may appear in person or be
represented only by:
(1) a
legal
practitioner
;
(2) a
director
or
employee
of that party and if a close corporation also a
member thereof; or
(3) any
member
,
office bearer
or
official
of that party's registered
trade union
or registered employer's organisation.
(c)
If the
dispute
being arbitrated is about the fairness of a dismissal and a party has
alleged that the reason for the
dismissal
relates to the
employee's conduct or capacity, the parties, despite subrule (1)
(b)
are not entitled to be represented by a
legal practitioner
in
the proceedings unless-
(1) the
commissioner and all the other parties consent;
(2) the
commissioner concludes that it is unreasonable to expect a party to
deal with the
dispute
without legal representation, after
considering-
(a)
the
nature of the questions of law raised by the
dispute
;
(b)
the
complexity of the
dispute
;
(c)
the
public interest; and
(d)
the
comparative ability of the opposing parties or their representatives
to deal with the
dispute
.
(2) If
the party to the
dispute objects to the representation of another party to the dispute
or the commissioner suspects that the representative of a party
does not qualify in terms of this rule
, the commissioner must
determine the issue.
(3) The
commissioner
may call upon the representative to establish why the representative
should be permitted to appear in terms of this
Rule
.
(4) A representative must tender
any documents requested by the commissioner in terms of subrule (3),
including constitutions, payslips,
contracts of employment, documents
and forms, recognition agreements and proof of membership of a trade
union or employers' organisation.”
The Circular of 28 March 2011
The first circular was in the
form of a standard letter, apparently sent out by the CCMA in
response to complaints about the exclusion
by commissioners of
would-be representatives of parties from proceedings. In order to
understand the context in which the circulars
were issued it is
useful to quote the first part of the circular letter in full:
"to whom it may concern,
There has been an alarming
escalation of complaints relating to the
locus standi
of
representatives during processes. The complaints have ranged from
allegations that commissioners allow representatives that
have no
legal right to represent parties to allegations of commissioners
being in cahoots with representatives to commissioners
furthering the
aims of the illegitimate trade unions and employer organisations. In
this regard commissioners have also raised
concerns that their
colleagues are not enforcing the rules and that they are in effect
been compromised when they enforce such
as the representatives often
cite instances where other commissioners have allowed them the right
to represent.
In an attempt to mitigate the
adverse effect of such conduct on our users, whether perceived or
real,
this office will in future and with immediate effect require
that all commissioners comply with the rules and insist that any and
all representatives provide proof of legitimacy to represent parties
regardless of whether or not the issue is challenged or raised
.
The aforementioned documents are to be placed in the relevant case
file and
the CCMA's National internal audit department will
immediately commence random file checks to monitor compliance. The
JHB management
will be responsible for enforcing this directive in
the region and will be engaging those commissioners that fail to
comply on
an individual basis
.
We will be implementing a few
measures to alert our users of this requirement and this will include
the display of notices in and
around the entrance foyer as well as
the hearing room floors. These notices will specifically detail that
all commissioners will in future require copies of the
registration certificate of an employers’ organisation or trade
union
together with copies of proof that the representative in a
personal capacity is a member of the employers’ organisation or
an employee of the employers’ organisation or trade union
.
This requirement is not new and dialogue with the registrar of Labour
relations in the Department of labour has already commenced
to verify
the legitimacy of these documents as well is to conduct an audit of
questionable employer organisations and trade unions.
In this regard you are reminded
of the following CCMA rule as well as the accompanying practice and
procedure.
CCMA practice and procedure
The commissioner making a
determination regarding the status of a representative
must
require
the person who is seeking to represent a party on the
basis that he/she is a member, official or office bearer of a trade
union
or an employers’ organisation, to establish each of the
following –
that the representative is a
member, official or office bearer of the trade union or employer's
organisation. An official letter
on the letterhead of the trade
union or employers’ organisation confirming that is all, in
the case of a member, a current
membership card should generally be
accepted as sufficient proof unless it is challenged;
that the trade union or
employers’ organisation is currently (i.e. at the time the
process is taking place, registered as
such. A certificate of
registration issued by the registrar of labour relations should
generally be regarded as sufficient proof;
that the party who the
representative is seeking to represent, is entitled to be a member
of the trade union or employers’
organisation and is in fact
such member. In this regard the relevant clauses of the relevant
constitution and the current membership
card should generally be
regarded as sufficient proof.
Only a natural person may
represent an employer party on the basis that they are fellow members
of an employers' organisation
.
Only employers may be members of an employers’ organisation and
therefore, provided that they meet all the other requirements,
it
is only possible for sole proprietors who are themselves employers,
to qualify to represent other employers
on
the basis of fellow membership of an employers’ organisation.
Directors of companies, members of close corporations and
employees
of companies and close corporations are not employers and are
therefore not entitled to be members of employers’
organisations. Such persons may not be allowed to represent employer
parties to the dispute on the basis that they are fellow members
of
an employers’ organisation. The fact that the company will
close corporation of which they are directors, members or employees,
belongs to an employer organisation, does not qualify them to
represent other members of the employers’ organisation..."
(
sic –
emphasis
added)
The remainder of the circular
then reproduced rule 25 in its entirety.
The Second Circular
The amending circular came to
light when the CCMA filed its answering affidavit in the review
application. In its answering affidavit
the CCMA stressed that its
concern about admitting certain representatives was not simply
because they represented an employer
who was a juristic person, but
rather that this type of representation was the subject of
widespread abuse to facilitate representation
of employers by labour
consultants in CCMA processes. The CCMA referred to the case of
NEHAWU obo Damoyi and Willow Park Primary
[2008] 29
ILJ
796 (CCMA)
as an example of the type of
situation it was seeking to prevent.
Nevertheless, the CCMA conceded
that it is theoretically possible that an employer might ask for the
assistance of a fellow member
of an employers’ organisation
and that assistance may be offered “on grounds of solidarity
and legitimate common
interests shared by employers that lead them
to form an employers’ organisation”.
Consequently, the CCMA decided
to amend the circular “to accommodate such a possibility
without permitting disguised Labour
consultancy arrangements.”
As mentioned above, the CCMA contends that this revision removes any
justification for AHI proceeding
with its application to set aside
the first circular. The pertinent portion of the second circular is
reproduced below with revisions
underlined:
"to whom it may concern,
1. There has been an alarming
escalation of complaints relating to the
locus standi
of
representatives during processes. The complaints have ranged from
allegations that commissioners allow representatives that
have no
legal right to represent parties to allegations of commissioners
being in cahoots with representatives to commissioners
furthering the
aims of the illegitimate trade unions and employer organisations. In
this regard commissioners have also raised
concerns that their
colleagues are not enforcing the rules and that they are in effect
been compromised when they enforce such
as the representatives often
cite instances where other commissioners have allowed them the right
to represent.
2.
This circular is issued as
a guideline to users and Commissioners
in an attempt to mitigate
the adverse effect of
inconsistent decisions on our users, and to
generate consistency in decision-making on questions of
representation
. This office will in future and with immediate
effect require that all commissioners comply with the rules and
insist that any
and all representatives provide proof of legitimacy
to represent parties regardless of whether or not the issue is
challenged or
raised. The aforementioned documents are to be placed
in the relevant case file and the CCMA's National internal audit
department
will immediately commence random file checks to monitor
compliance. The JHB management will be responsible for enforcing this
directive
in the region and will be engaging those commissioners that
fail to comply on an individual basis.
3. We will be implementing a few
measures to alert our users of this requirement and this will include
the display of notices in
and around the entrance foyer as well as
the hearing room floors. These notices will specifically detail that
all commissioners
will in future require copies of the registration
certificate of an employers’ organisation or trade union
together with
copies of proof that the representative in a personal
capacity is a member of the employers’ organisation or an
employee
of the employers’ organisation or trade union. This
requirement is not new and dialogue with the registrar of Labour
relations
in the Department of labour has already commenced to verify
the legitimacy of these documents as well is to conduct an audit of
questionable employer organisations and trade unions
that conduct
their affairs in breach of the requirements of the LRA, guidelines of
the registrar, and conditions under which they
are registered
.
4. In this regard you are
reminded of the following CCMA rule as well as the accompanying
practice and procedure.
5. CCMA practice and
procedure
5.1 The commissioner making a
determination regarding the status of a representative
must
require
the person who is seeking to represent a party on the
basis that he/she is a member, official or office bearer of a trade
union
or an employers’ organisation, to establish each of the
following –
that the representative is a
member, official or office bearer of the trade union or employer's
organisation. An official letter
on the letterhead of the trade
union or employers’ organisation confirming that is all, in
the case of a member, a current
membership card should generally be
accepted as sufficient proof unless it is challenged;
that the trade union or
employers’ organisation is currently (i.e. at the time the
process is taking place, registered as
such. A certificate of
registration issued by the registrar of labour relations should
generally be regarded as sufficient proof;
that the party who the
representative is seeking to represent, is entitled to be a member
of the trade union or employers’
organisation and is in fact
such member. In this regard the relevant clauses of the relevant
constitution and the current membership
card should generally be
regarded as sufficient proof.
5.2
Where a person seeks to
represent an employer party on the grounds that he/she is a director,
member or employee of a different
employer that is a member of the
same employers’ organisation, the commissioner should require
that that person to establish
each of the following –
That the party who the
representative is seeking to represent is entitled to be a member of
the relevant employers’ organisation,
is in fact such a
member, and that the employers’ organisation is currently
registered.
That the representative is a
director, member or employee of another employer that is entitled to
be a member of the same employers’
organisation and is in fact
such a member.
That the representative is
duly authorised by his/her employer to act on behalf of his/her
employer to represent the party in
proceedings before the CCMA in
its capacity as a fellow member of the employers’
organisation.
That the agreement by the
other employer to represent the party is a bona fide assertion of a
common interest between members
of the employers’
organisation, and is not a disguised Labour consultancy arrangement.
If the party is required to pay
the representative or his/her
employer for their services in representing the party, this will
ordinarily be a strong indication
that the arrangement is not bona
fide in this sense, and that it is in fact a disguised Labour
consultancy arrangement. (The
same principle applies to
representation of one trade union member by another.)
”
(sic).
A clear intention of the
revisions contained in the second circular was to remove the AHI’s
objection to the provision in
the first circular which sought to
exclude representation by one employers’ organisation member
on behalf of another unless
the representative was a sole
proprietor. Further, by expressly referring to the circular as a
‘guideline to users and
Commissioners’, it appears that
the CCMA sought to disabuse readers of the circular of any
impression they might gain that
the circular prescribed how
commissioners should determine whether representation should be
allowed or not, in circumstances
where the member seeking to
represent another member was not a natural person. Thirdly, it seeks
to introduce an additional criterion
a commissioner should consider
before permitting representation by another member of an employers’
organisation namely,
whether or not the representative party is
simply representing the employer as part of a commercial arrangement
rather than doing
so out of a selfless sense of solidarity or shared
interests as an employer. This approach suggests that membership of
the same
employers’ organisation alone is insufficient to
allow that representative to appear in that capacity in CCMA
proceedings.
Evaluation of the grounds of
review
The AHI contends that the CCMA
does not have the power to instruct commissioners, which it claims
the circulars do. It also submits
that the content of the circular
is simply incompatible with some of the provisions of rule 25.
The AHI correctly notes that
when the CCMA rules were first published in 2003, the rules on
representation in conciliation and
arbitration proceedings
replicated the former provisions of sections 135 (4) and 138 (4) of
the LRA. Initially, the new rules
excluded members of trade unions
and employers’ organisations as potential representatives in
CCMA proceedings. However,
in 2004 members of both types of
organisation were once again accorded recognition as representatives
in conciliation and arbitration
proceedings, when the CCMA amended
the rules.
Consequently, the AHI argues
that the inclusion of members of an employers’ organisation in
the class of potential representatives
was a conscious policy choice
on the part of the CCMA when it made the amendments, and it cannot
undermine the application of
that rule by means of a circular
requiring commissioners to interpret the rule more restrictively.
In relation to the first
circular, the AHI pointed out that since a member of an employers’
organisation might itself be
a corporate entity it could only
perform a representative function through the agency of a natural
person. Therefore, it stood
to reason that one employer member of
the organisation should be permitted representation by another
member, through the agency
of a natural person authorised by that
other member to perform its representative role, where the other
member is a juristic
entity,. No similar difficulty presents itself
in the case of trade union members as representatives, because they
will always
be natural persons.
The AHI’s attack on the
initial circular rested primarily on this argument. By removing the
prohibitions against representation
by a properly authorised person
acting on behalf of a juristic member in the second circular, the
AHI maintains that the CCMA
effectively conceded that such a
restriction was unjustifiable and unreasonable. But once this
particular hurdle is removed,
can the revised circular, now
characterised as a guideline, still be attacked on the basis that
the CCMA is acting beyond its
powers in doing so?
Essential differences between
the first and second circulars are that the CCMA described the
second circular as a guideline and
also stipulated that a
Commissioner ought to probe any agreement in terms of which one
employer represents another as members
of the same employers’
organisation in order to determine if that agreement is not simply a
mechanism for a Labour consultant
to represent an employer for a
fee.
The second circular’s
status as a ‘guideline’.
Aside from giving the revised
circular a non-prescriptive description, does it imply that
commissioners are free to determine,
in accordance with the
provisions of Rule 25(2), whether to refuse or permit the employer
representative to appear? If one considers
the last portion of the
wording of paragraph 2, which remains the same as in the first
circular, one is left with an unavoidable
impression that even
though the circular is referred to as a guideline, strict compliance
by commissioners is expected. The paragraph
contains two
injunctions. Firstly, at least as far as commissioners falling
within the remit of the CCMA’s Gauteng office
are concerned,
they are expected to insist that anyone claiming the right to appear
as a representative must provide evidence
of the basis on which they
claim such rights of appearance.
As mentioned, section
115(2A)(k) of the LRA empowers the CCMA to promulgate rules
governing who may appear as a representative
in such proceedings. In
giving effect to such rules, in principle it would not interfere
with a commissioner’s power to
decide if the representative is
qualified to appear or not, by requiring a Commissioner to require
evidence to substantiate that
entitlement. Indeed, Rules 25(3) and
(4) deal with the requirement of substantiation if an enquiry is
triggered under Rule 25(2).
Rule 25(2) itself does not oblige a
commissioner to insist on such substantiation as a matter of course,
but only if the other
party objects to the representative’s
right to appear, or if the commissioner suspects the persons does
not qualify to
appear as a representative. The prescripts of the
circular would trigger the investigation in the absence of either of
these
conditions being met.
A common theme in the various
strands of the applicant’s argument is that the circulars in
question do not properly qualify
as guidelines published in terms of
the Act. In relation to both circulars, the applicant says that by
requiring that commissioners
must invariably demand evidence to
substantiate the right of appearance, the CCMA has imposed a
requirement which the rules do
not contain. In effect, the
injunction in the circular imposes an obligation that the proof of a
representative’s status
must always be investigated, even if
neither of the pre-conditions for such an enquiry under Rule 25(2)
are met.
Moreover, both circulars make
it clear that the requirement will be ‘enforced’, at
least in the case of CCMA proceedings
falling under the authority of
the Johannesburg regional office, and that commissioners who fail to
comply with the ‘directive’
can expect an ‘engagement’
with management on their non-compliance. Labelling the circular a
‘guideline’
on the one hand, but in the same paragraph
referring to it as a ‘directive’ which commissioners are
required to comply
with, is clearly contradictory. The language of
the circular is more in keeping with an instruction than a guideline
which a
commissioner must simply consider. As such, it is difficult
to construe either circular as anything but peremptory in intent.
The effect of the requirement
in the circular would render the existing trigger mechanisms for an
investigation into a representative’s
status contained in Rule
25(2) redundant. The power to issue guidelines, cannot extend to the
imposition of peremptory procedures
which are at odds with the
rules.
The applicant further contends
that
any
guidelines dealing with an
issue contained in the rules are
per
se
invalid.
According to this argument, because the LRA itself does not regulate
the right of any person or category of persons to
represent any
party in conciliation and arbitration proceedings;...", the
representation of parties in CCMA proceedings
is not “a matter
dealt with in the Act” within the meaning of s 115(2A)(g).
Accordingly, so the argument goes, any
guidelines issued by the CCMA
on the question of representation would concern a matter not dealt
with in the Act and therefore
the pre-requisite set out in that
section for exercising the power to issue a guideline would not be
met.
However, the LRA does deal with
the issue of representation in CCMA proceedings by empowering the
CCMA to regulate the issue under
s 115 (2A) (k). It seems unduly
narrow to interpret the phrase ‘a matter dealt with in the
Act’ as only referring
to matters dealt with exhaustively in
the statute itself. By assigning the CCMA the power to regulate the
representation of parties,
the LRA does deal with the matter of
representation. Also, the fact that rules are promulgated does not
logically, nor as a matter
of principle, preclude the publication of
guidelines on their application.
2
However the guidelines cannot
supplant the rules.
Probing the bona fide nature
of the arrangement between the member and the representative
Currently, the CCMA rules on
representation of parties in arbitration and conciliation
proceedings are silent on the question
of whether a potential
representative should be excluded because the representative party
receives a fee for the representative
service rendered to the
member. The requirement of Rule 25(2) is that, in the case of
representation of one employer’s
organisation member by
another member, the representative party must be a genuine member of
the same employers’ organisation.
The second circular
introduces a further requirement that the member performing the
representative function may not do so for
a fee, which goes beyond
the requirement of mere membership in the rules.
Whether such an enquiry ought
to be included in the rules is another matter. The difficulties
relating to this part of the second
circular are twofold. Firstly,
the new paragraph 5.2 also forms part of the guideline which the
CCMA vows to ‘enforce’
and expects commissioners to
comply with. Secondly, the paragraph itself directs commissioners to
embark on an enquiry into the
bona fide
nature of the
arrangement between a party to proceedings and the representative,
irrespective of whether the issue is raised
or not in the
proceedings. A routine enquiry of this nature is not provided for
under Rule 25. Read in the context of the circular
as a whole,
paragraph 5.2 of the second circular tries to impose another
mandatory enquiry into an aspect of representation which
is not
addressed by the rules.
I am aware that there have been
challenges raised to representatives entitlement to appear in CCMA
proceedings on the basis that
the employer’s organisation to
which they claim to belong does not constitute a proper employer’s
organisation in
terms of the LRA because it does not serve the
purpose of “
regulating relations between employers and
employees or trade unions”
which is a characteristic of an
employer’s organisation as defined in section 213 of the LRA.
However, there is nothing
in the LRA or the rules regulation
representation that stipulates that a representative who is a member
of an employer’s
organisation must be acting for another
member in accordance with an agreement asserting their common
interests as members of
the employer’s organisation. If
however, the principal function of the employer’s organisation
was simply to facilitate
representation of employer’s in the
CCMA, the right of representation might be affected by the
characteristics required
of an employer’s organisation in
terms of the LRA.
I am satisfied in the
circumstances, that to the extent that the circulars contain
provisions which are cast in peremptory rather
than directory
language they go beyond what is permissible in a guideline. Further,
to the extent that they seek to hold commissioners
to account if
they do not conduct certain enquiries as a matter of course, even
though the rules do not enjoin them to do so
automatically, the
guidelines contained in the two circulars do not constitute
guidelines which the CCMA is entitled to publish
under section
115(2A) (g) of the LRA. The circulars effectively would rob a
commissioner of any independent exercise of their
judgment in
deciding whether or not to conduct such an enquiry in terms of Rule
25(2).
Secondly, in requiring a
commissioner to determine issues which go beyond the question of the
representative’s membership
of an employers’
organisation or trade union, the circulars introduce an additional
criterion which should properly be
addressed under the CCMA’s
power to make rules regulating who may appear in a representative
capacity. The CCMA’s
power to issue guidelines cannot regulate
the right of representation. Accordingly, the additional criterion
in paragraph 5.2
of the second circular is
ultra vires
the
CCMA’s power to issue guidelines.
However, I am reluctant to
grant an open-ended licence to AHI members to appear on behalf of
others irrespective of whether or
not they are being remunerated by
the represented member or not, because it is conceivable that other
issues connected with the
remuneration of such representatives might
give rise to different queries about the right of AHI members to
function in this
fashion as the cases mentioned below illustrate.
The review of the arbitration
award in JR 2518/10
As previously mentioned, the
award was issued when the circulars in question had not been issued.
However, it is clear that in
deciding to exclude the AHI member as a
representative, he embarked on the very enquiry that the CCMA would
like all commissioner’s
to undertake in terms of its second
circular. His conclusion was that the representative was not a bona
fide member of AHI but
was appearing as a labour consultant.
In considering the review
application, the question now concerns whether the commissioner
committed a reviewable error or irregularity
in embarking on that
enquiry, or to put it differently, was he entitled to enquire into
the nature of the relationship between
the two AHI members to try to
determine if there was another reason why one member was prepared to
represent the other? There
are a number of cases in which claims
have been made that the ostensible relationship between a party and
their representative
belies the true relationship and the parties
are engaged in a subterfuge to avoid complying with the legal
requirement for representation.
The line between those cases in
which the court has deemed such an enquiry appropriate and those in
which it has been held that
such an enquiry cannot be justified is
sometimes difficult to discern. Both parties referred to some of the
better known authorities.
Following the applicant’s
argument, it insists that the arbitrator’s enquiry should have
gone no further than determining
if the representative was a member
of the AHI or not. Once his membership status and that of the party
he was representing was
established, that was where the enquiry
should have ended. In
Vidar
Rubber Products (Pty) Ltd v CCMA & others
[1998]
6 BLLR 634
(LC)
Tip
AJ held that a labour consultant who purported to be an official of
an employer’s organisation registered for the sole
purpose of
representing employers in CCMA proceedings was not entitled to do
so. The learned judge held in that matter that the
Commissioner was
entitled to enquire into whether the employers’ organisation
was registered for a
bona
fide
purpose.
Importantly, the court held that the absence of the phrase
bona
fide
qualifying the
status of potential representatives in section 138(4) of the LRA,
did not mean that, representation could not be
refused even though
the representative was not an official of a
bona
fide
employers’
organisation.
3
It is important to note that in
Vidar Rubber
the representative, a labour
consultant, had previously sought to appear as an employee of the
employer party engaged on a retainer
basis. The arbitrator disagreed
and refused to admit the consultant as a representative. When the
arbitration resumed the same
individual appeared as the chairperson
of a yet to be registered employer’s organisation with 22
members in other provinces
and claiming to have represented other
employers in CCMA proceedings. The arbitrator found the employer’s
organisation
was ‘a sham’ and a device to gain access to
arbitration proceedings. The court dismissed the review application
to
set aside the arbitrator’s rulings on the basis that it was
clear the true purpose for the creation of the employers’
organisation was to represent employers in the CCMA and that the
arbitrator was correct in finding that the organisation did
not
satisfy the primary object of an employer’s organisation which
was to regulate relations between employers and employees
and trade
unions.
4
In the case of
Van Wyk
and Taylor v Dando and Van Wyk Print (Pty) Ltd
[1997] 7
BLLR 906
(LC)
a similarly crude attempt by a consultant to
obtain rights of appearance in court was thwarted by the court which
found that
the union had acted
ultra vires
in admitting the
consultant as a member when he did not qualify in terms of its
constitution. By contrast, in the case of
Smollan (Transvaal)
(Pty) Ltd v Lebea NO and others
(1998) 19
ILJ
1252 (LC)
, Revelas J set aside an award in which a
commissioner refused admission of a labour consultant who had been
appointed a director
of the employer company because nothing in the
LRA prohibited a consultant being appointed as a director and in the
absence of
fraud nothing prevented parties from arranging their
affairs in such a way as to bring them within the ambit of the law.
Revelas
J also considered
Vidar Rubber
and
Van Wyk’s
cases, but found them distinguishable on the facts.
In this instance, it was not
the bona fides of AHI as an employer’s organisation that was
under scrutiny but the
bona fide
nature of the
representative’s membership of AHI. However, there was nothing
before the arbitrator to support a conclusion
that the
representative, Cilliers, did not qualify to be a member of AHI in
terms of its constitution. Unlike in the case of
an employer’s
organisation, there is no statutory purpose which an individual
member of a trade union or employer’s
organisation needs to
fulfil in order to qualify for membership of the organisation. I
cannot see any reason for distinguishing
this case from that of
Smollan
, even if Cilliers’s motives for belonging to
AHI might have been to represent employers in CCMA proceedings.
Accordingly, the ruling on
representation in this case should be set aside
Concluding remarks
I appreciate that the CCMA is
experiencing great frustration in its efforts to keep professionals
out of CCMA proceedings, but
if the existing rules on representation
create avenues by which this might occur lawfully that is a
consequence of the way those
rules are framed. It cannot be remedied
by issuing guidelines instead of amending the rules.
Costs
In respect of the first hearing
of the application to review the circulars, I have previously
expressed my view that even though
a degree of urgency was
justified, the timetable chosen by the applicant necessitated a
delay in order to provide time for the
matter to be fully
ventilated. In the circumstances, the applicant should pay the
wasted costs of the CCMA’s preparation
and representation on
the first day when the matter was postponed.
As to the applicant’s
costs for the remainder of the proceedings including the drafting of
the original application, these
should be borne by the CCMA as the
applicant has been substantially successful.
In respect of the review of the
arbitration award, there seems no reason why costs should not follow
the result.
Order
In the result, the following
order is made:
In the second matter, namely
the review of the arbitrator’s ruling on representation in
case number JR 2518/10,
The arbitrator’s ruling
on representation of 10 September 2010 refusing the third
applicant permission to represent
the second applicant in the
arbitration proceedings is reviewed and set aside, as is the
default award issued under case
number FS 2733/10 on the same date
The first respondent must set
the unfair dismissal claims down for a hearing before another
commissioner other than the second
respondent at which hearing the
third applicant may represent the second applicant.
The respondents must pay the
costs of the application, the one paying the others to be
absolved.
In respect of the review of
the CCMA circulars under case number J 656/2011,
The circular issued to
commissioners and recorded in the Respondent’s email to the
Applicant of 28 March 2011 (annexure
“C” to the
founding affidavit) is declared
ultra vires,
invalid and of
no force or effect.
Any member of the Applicant
who is a party to proceedings before the CCMA may not be refused
representation by another member
of the applicant on the sole
basis that such other member is a juristic (and not a natural)
person.
A member of the applicant is
entitled to appoint a director, member or employee in the case of
a company, close corporation
or any form of juristic person
respectively through which it may represent a fellow member of the
applicant.
The following portions of the
circular issued by the respondent in June 2011, which is annexed
to the respondent’s supplementary
affidavit as annexure “D”
are
ultra vires
and of no force and effect:
“
This
office will in future and with immediate effect require that all
commissioners comply with the rules and insist that
any and all
representatives provide proof of legitimacy to represent parties
regardless of whether or not the issue is
challenged or raised.
The aforementioned documents are to be placed in the relevant
case file and the CCMA's National internal
audit department will
immediately commence random file checks to monitor compliance.
The JHB management will be responsible
for enforcing this
directive in the region and will be engaging those commissioners
that fail to comply on an individual
basis.”
“
These
notices will specifically detail that all commissioners will in
future require copies of the registration certificate
of an
employers’ organisation or trade union together with copies
of proof that the representative in a personal
capacity is a
member of the employers’ organisation or an employee of the
employers’ organisation or trade
union. This requirement is
not new and...”
Paragraphs 5.1 and 5.2
thereof.
The applicant shall pay the
respondent’s wasted costs of preparation and representation
for the hearing of this matter
on 3 June 2011, and
The respondent shall pay the
applicant’s costs of the application, excluding the costs of
preparation and representation
for the hearing on 3 June 2011, but
including the drafting of the founding papers.
_______________________
ROBERT LAGRANGE
Judge of the Labour Court of South
Africa
APPEARANCES
APPLICANTS: A Freund, SC
instructed by Anton Bakker Attorneys.
FIRST RESPONDENT: C Todd of
Bowman Gillfillan Inc.
1
Rules
for the Conduct of Proceedings before the CCMA as published in GN R
1448 in GG25515 of 10 October 2003 and amended by GN
R 1512 in
GG25607 of 17 October 2003; GN R 1748 in GG25797 of 5 December 2003;
GN R 530 in GG26279 30 April 2004;GN and R 531
and R 532 in GG26279
of 30 April 2004; GN R 380 in GG27490 of 22 April 2005, and GN R 97
in GG 29587 of 9 February 2007.
2
In
this regards, the observations of Cachalia, AJA in
MEC
for Agriculture, Conservation, Environment and Land Affairs v Sasol
Oil (Pty) Ltd and another
2006 (5) SA
483
(SCA)
, at 491 are apposite:
“
[19]
The adoption of policy guidelines by state organs to assist
decision-makers in the exercise of their discretionary powers
has
long been accepted as legally permissible and eminently sensible.
This is particularly so where the decision is a complex
one,
requiring the B balancing of a range of competing interests or
considerations, as well as specific expertise on the part
of a
decision-maker.”
3
At
638, [18]
4
At
639,[23]-[27]