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[2012] ZALCJHB 22
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Contract Employment Contractors (Pty) Ltd v Motor Industry Bargaining Council (MIBCO) and Others (C 97/2012) [2012] ZALCJHB 22; [2012] 7 BLLR 726 (LC); 2013 (3) SA 308 (LC) (27 February 2012)
REPUBLIC OF SOUTH AFRICA
Reportable
THE LABOUR COURT OF SOUTH AFRICA, Johannesburg
JUDGMENT
case
no: c 97/2012
In the matter between:
CONTRACT
EMPLOYMENT CONTRACTORS
(PTY)
LTD
…...............................................................................................
Applicant
and
MOTOR
INDUSTRY BARGAINING COUNCIL
-MIBCO
…........................................................................................
1
ST
Respondent
MINISTER
OF LABOUR
…..............................................................
2
ND
Respondent
RETAIL
MOTOR INDUSTRY ORGERNISATION
…........................
3
RD
Respondent
FUEL
RETAILERS ASSOCIATION OF SOUTH
AFRICA
….........................................................................................
4
TH
Respondent
NATIONAL
UNION OF METAL WORKERS OF
SOUTH
AFRICA
…...........................................................................
5
TH
Respondent
Heard
: 17 February 2012
Delivered
: 27 February 2012
Summary:
RULING: POINT IN LIMINE
RABKIN-NAICKER J
Introduction
[1] This application came before me on an urgent basis on 17 February
2012 when a point in limine was raised and argued. The respondents
urged the court to find that the founding papers in the application
did not disclose a cause of action and as a result, there was
no case
to answer.
[2] I must consider how the court should approach such a point in
limine. In Valentino Globe BV v Phillips and another
1
,
Harms JA held that it was wrong to permit the use of the procedure
whereby the respondent in a court of first instance argued
at the
outset that the founding affidavit did not make out a prima facie
case for the relief claimed, without reference to other
affidavits
filed, where there was no real conflict of fact on the papers. (At
779I--I/J.)
[3] He held, further, that the analogy between this procedure and the
exception procedure might have been inappropriate and the
comparison
should rather have been made with an application for absolution from
the instance in a trial action
2
.
(At 779J--780B.)
[4] The test for absolution from the instance is that to escape
absolution, a plaintiff must tender evidence on which court might
or
could reasonably find for him or her
3
.
[5] I consider it appropriate, given the Supreme Court of Appeal
authority referred to above, to treat the point in limine as akin
to
an application for absolution from the instance.
[6] In its
notice of motion the applicant sought inter alia the following
orders:
"Declaring that clause 38(5) of the collective agreement
concluded by the 3rd, 4th and, 5th respondents on 17 September 2010
are (sic) unconstitutional, contrary to section 198 of the Labour
Relations Act and as such of no legal effect and or unenforceable;
Declaring that the extension of the collective agreement to
non-parties by the 2nd respondent as promulgated in the Government
Gazette No. 9459, Vol.547 and dated 28 January 2011 is
unconstitutional, contrary to section 198 of the Labour relations Act
and
as such of no legal effect and or unenforceable in so far as the
said clause 38(5) of the amended collective agreement are (sic)
contained therein”.
[7] In the
alternative, the applicant sought a rule nisi, the terms of which are
not necessary to traverse for the purposes of this
ruling.
[8] Mr.
Katz for the first respondent submitted that the applicant’s
purported cause of action was two-fold:
1. That clause 38(5) of the Council’s main collective agreement
is inconsistent with section 22 of the constitution and;
2. Secondly, that clause 38(5) of the Council’s main agreement
is inconsistent with section 198 of the LRA.
[9] The
right on which applicant sought to base its application is that
contained in section 22 of the Constitution. Section 22
provides as
follows:
“
Every citizen has the right to choose their
trade, occupation or profession freely. The practice of a trade,
occupation or profession
may be regulated by law.”
[10] Respondents argued that this right does not attach to corporate
persons but only to natural persons and furthermore to those
natural
purpose who are citizens of the Republic of South Africa. Further, it
was submitted that on the papers, the applicant did
not purport to
bring the case on behalf of any other person or party. In the result,
so the argument went, because the applicant
is not a natural person
who is a citizen and yet complains that its section 22 rights have
been threatened or violated, it clearly
has no cause of action. I
note that in paragraph 18 of the founding papers, the Applicant avers
that its “immediate concern
was and still is” for the
impact of compliance with the collective agreement on the 22
employees it supplies to work in the
affected sector of the motoring
industry.
[11] Of the cases referred to by Mr Katz, for the First Respondent,
two decisions support the proposition that section 22 introduces
a
constitutional protection to be enjoyed by individual citizens as
opposed to juristic persons. Davis J held in City of Cape Town
v AD
Outpost (Pty) Ltd and Others
4
that section 22 was not a provision that should be extended to the
regulation of economic intercourse as undertaken by enterprises
owned
by juristic bodies (at 747E-F/G). This approach was followed obiter
by Conradie J in First National Bank of SA Ltd t/a Wesbank
v
Commissioner, South African Revenue Service and Another
5
,
a case later reversed on appeal to the Constitutional Court.
[12] The Court in Van Rensburg v South African Post Office Ltd
6
,
did not decide the question as to whether rights under section 22 can
be enjoyed by a body corporate, but in so far as it was
necessary,
assumed that a body corporate can claim the protection of section 22
rights. (At 1322 B-D.)
[13] In Platinum Asset Management (Pty) Ltd v Financial Services
Board and others; Anglo Rand Capital House (Pty) Ltd and others
v
Financial Services Board and others
7
,
the court held inter alia that the rights to freedom of trade,
occupation and profession of the applicant company under section
22
of the Constitution had not been infringed. (At 147.)
[14] The Constitutional Court has not decided the issue but in
Phumelela Gaming and Leisure Ltd v Gründlingh and Others
8
,
the court, in a full bench decision, considered whether principles of
market competition were constitutionally recognised. The
court per
Langa CJ, held that although the Bill of Rights did not expressly
promote competition principles, the right to freedom
of trade
enshrined in s 22 of the Constitution was consistent with a
competitive regime in matters of trade and the recognition
of the
protection of competition as being in the public welfare (paragraph
[36]). In Affordable Medicines Trust & Others v
Minister of
Health & Others
[2005] ZACC 3
;
2006 (3) SA 247
(CC) the court per Ngobo J, as he
then was, considered the scope of the right stating inter alia that:
“In broad terms this
section has to be understood as both
repudiating past exclusionary practices and affirming the
entitlements appropriate for our
new open and democratic society.
Thus, in the light of our history of job reservation, restrictions on
employment imposed by the
pass laws and the exclusion of women from
many occupations, to mention just a few of the arbitrary laws and
practices used to maintain
privilege, it is understandable why this
aspect of economic activity was singled out for constitutional
protection.”(at paragraph
57)
[15]
Section 8(4) of the Constitution provides that:
“
A juristic person is entitled to the rights
in the Bill of Rights to the extent required by the nature of the
rights and the nature
of that juristic person”
[16] In dealing with NT 8(4) in Ex parte Chairperson of the
Constitutional Assembly: In Re Certification of the Constitution of
the Republic of South Africa
1996 (4) SA 744*
, the Constitutional
Court stated:
“
[57] Objection was also taken to NT 8(4),
which states that
'(j)uristic persons are entitled to the rights in the Bill of Rights
to the extent required by the nature of the rights and of
the
juristic persons'.
The comparable provision in the IC is 7(3), which provides that
'(j)uristic persons shall be entitled to the rights contained in this
chapter where, and to the extent that, the nature of the
rights
permits'.
The objection was based on the language of CP II, which provides that
'everyone shall enjoy all universally accepted fundamental
rights and
freedoms'. It was argued that 'everyone' in CP II refers only to
natural persons, and that, by extending the rights
to juristic
persons, the rights of natural persons are thereby diminished. We
cannot accept the premise: many 'universally accepted
fundamental
rights' will be fully recognised only if afforded to juristic persons
as well as natural persons. For example, freedom
of speech, to be
given proper effect, must be afforded to the media, which are often
owned or controlled by juristic persons. While
it is true that some
rights are not appropriate to enjoyment by juristic persons, the text
of NT 8(4) specifically recognises this.
The text also recognises
that the nature of a juristic person may be taken into account by a
court in determining whether a particular
right is available to such
person or not.
[58] The objectors were also concerned that affording rights to
powerful and wealthy corporations would result in detriment to
individual rights, given that powerful corporations have greater
resources to enforce their rights through litigation. But the
same
could be said of powerful and wealthy individuals. Moreover, the
objection wrongly equates juristic persons with powerful
and wealthy
corporations. In South Africa there are countless small companies and
close corporations that need and deserve protection
no less than do
natural persons. The CA was entitled to retain the provision in IC
chap 3 that provides that juristic persons are
entitled to the
benefits of the entrenched fundamental rights. The objection
therefore has no basis in the CPs.”
[17] The sentiment relating to small corporate bodies that may need
and deserve protection resonates with the recent judgment of
the
Namibian Supreme Court in Africa Personnel Services (Pty) Ltd v
Government of the Republic Namibia & others (2011) 32 ILJ
205
(Nms.). In this case the constitutionality of s 128 of the Labour Act
11 of 2007 (Namibia) which provided for the prohibition
of labour
hire was considered. The first ground upon which the respondents
challenged the appellant's right to seek constitutional
review of s
128 of the Act related to standing, on the basis that the fundamental
right protected by article 21(1) (j) of the Constitution,
(that all
persons shall have the right to practise any profession, or carry on
any occupation, trade or business) only vests in
natural - not
juristic - persons. The Court referred to the South African judgment
of Affordable Medicines Trust & others v
Minister of Health &
others
[2005] ZACC 3
;
2006 (3) SA 247
(CC) at 274H – 275B in which Ngcobo J
stated in dealing with section 22:
“
What is at stake is more than one's right
to earn a living, important though that is. Freedom to choose a
vocation is intrinsic
to the nature of a society based on human
dignity as contemplated by the Constitution. One's work is part of
one's identity and
is constitutive of one's dignity. Every individual
has a right to take up any activity which he or she believes himself
or herself
prepared to undertake as a profession and to make that
activity the very basis of his or her life. And there is a
relationship
between work and the human personality as a whole. It is
a relationship that shapes and completes the individual over a
lifetime
of devoted activity; it is the foundation of a person's
existence."
[18] The Namibian Supreme Court remarked that:
“
It must also be recognized that the freedom
is essential to the social, economic and political welfare and
prosperity of our society.
By according its members freedom to engage
in different professions or occupations and to carry on a wide range
of different trades
and businesses, the Constitution allows them to
render services, to provide food and goods and to earn incomes which
are necessary
to sustain and uplift their families, their communities
and, ultimately, the nation - even, if and where needed or required,
also
communities in other countries. This they do, not only as
individuals or in partnership or association with others, but also -
and perhaps most importantly - by organizing themselves and
contributing their collective resources to structured corporations
and enterprises which, by their size and resources, are often better
positioned to make larger and more meaningful contributions
to the
development and welfare of society.” (At paragraph 36.)
[19] Having adopted a purposive approach to the interpretation of the
relevant clauses of the Namibian Constitution the Court went
on to
hold that:
“
We do not find any justification to exclude
juristic persons from the protection of article 21(1)(j) and hold
that the phrase 'all
persons' in article 21(1), when read in the
context of the freedom protected in para (j) thereof, is inclusive of
natural and juristic
persons; that the appellant, as a juristic
person, is also a bearer of that freedom and, therefore, that it is
an 'aggrieved person'
entitled to approach the court to seek
enforcement or protection of its fundamental freedoms as contemplated
by article 25(2) of
the Constitution. The respondents' objection to
the appellant's standing is dismissed. No justification to exclude
juristic persons
from the protection of article 21(1)(j) and held
that the phrase 'all persons' in article 21(1), when read in the
context of the
freedom protected in para (j), was inclusive of
natural and juristic persons; that the F appellant, as a juristic
person, was also
a bearer of that freedom, and therefore that it was
an aggrieved person entitled to approach the court to seek
enforcement or protection
of its fundamental freedoms as contemplated
by article 25(2) of the Constitution.” (At paragraph 44.)
[20] The applicants sought to suggest that the distinction between
the words ‘all persons’ and “every citizen”
in the relevant sections of the Namibian and South African was
determinative. I cannot agree. The implications of such a reading
would be that those who did no enjoy freedom to trade under the
apartheid order would only be protected by this right if they
conducted their trade as sole proprietors.
[21] In my view, given the internal limitations contained in section
22 of our Constitution and the wording of section 8(4), in
particular
its reference to the nature of the juristic person in question, the
word “citizen” in section 22 may be
read to include
juristic persons. This takes into account the purpose of redress that
section 22 serves and the possibility that
its ambit may cover
certain forms of South African juristic persons, the benefits of
which were previously enjoyed only by a minority
of our people.
[22] Even if I am wrong in my view that the Applicant has standing to
base its application on section 22 of the constitution, I
find that
given its averment contained in paragraph 18 of the founding papers,
in regard to its concern towards the natural persons
it employs, I
must find that the doctrine of objective unconstitutionality applies.
In terms of this doctrine a corporate applicant
will not need to show
that a law infringes its own constitutional rights to challenge the
validity of that law.
[23] Davis comments on this doctrine relying on Ferreira v Levin NO
and Others; Vryenhoek and Others v Powell NO and Others
9
at paragraphs 27-30 and 158-168, and states that that if a law
unconstitutionally violates the s22 rights of natural persons, it
is
objectively invalid, and any corporate with an interest in setting
aside the law has standing to challenge its constitutional
validity.
10
[24] The Applicant therefore meets the threshold required by an
application for absolution in respect of the attack on its standing
in respect of section 22. Given this finding I do not consider it
necessary to deal with the issue of the interpretation of section
198
of the LRA in this ruling. The application should be fully
ventilated, including the question as to whether the applicant has
met the requirements of urgency.
Order
I make the
following order:
The point in limine is
dismissed.
The parties are to agree
a timetable for the further conduct of the matter.
The parties are to
arrange a date with the Registrar for the hearing of the
application.
Costs to stand over
_______________________
Rabkin-Naicker J
Judge of the Labour Court of South Africa
APPEARANCES:
APPLICANT: Adv. C de Kock, instructed by CK Attorneys.
FIRST RESPONDENT: Adv. A. Katz SC and Adv G. Leslie, instructed by
Cliffe Dekker Hofmeyr Inc.
SECOND RESPONDENT: Adv. C. Tsegarie, instructed by the State Attorney
FIFTH RESPONDENT: Adv. A. Oosthuizen SC, instructed by Haffegee
Roskan Attorneys
1
[1998] ZASCA 43
;
1998
(3) SA 775
(SCA)
2
Valentino
Globe BV v Phillips and another 1998 (3) SA 775 (SCA)
3
De
Klerk v Absa Bank Ltd and Others
2003 (4) SA 315
(SCA)
4
2000
(2) SA 773
5
2001
(3) SA 310
(C)
6
1998(10)
BCLR 1307 (E)
7
2006
(4) SA 73
(W)
8
[2006] ZACC 6
;
2007
(6) SA 350
(CC)
9
1996
(1) SA 984
(CC)
10
Constitutional
Law 2
nd
Edition at S4-8,footnote 4