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[2012] ZALCJHB 34
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Passenger Rail Agency of South Africa v South African Transport and Allied Workers Union and Others (J543/12) [2012] ZALCJHB 34; (2012) 33 ILJ 2659 (LC) (20 April 2012)
REPUBLIC OF SOUTH RICA
THE LABOUR COURT OF SOUTH AFRICA,
IN JOHANNESBURG
JUDGMENT
Reportable
Of interest to other judges
case
no: J 543/12
In the matter between:
PASSENGER RAIL AGENCY OF
SOUTH AFRICA
Applicant
And
SOUTH AFRICAN TRANSPORT AND
ALLIED WORKERS UNION
First
Respondent
THOSE PERSONS LISTED IN
ANNEXURE “A”
Second
and further Respondents
Heard
:
20 April 2012
Delivered
:
20 April 2012
Summary:
(Urgent – return day – strike interdict –
employer’s substantial compliance with strike demands; Forensic
audit – meaning of).
REASONS FOR JUDGMENT
LAGRANGE, J
Introduction
This matter came before me on the return day, 20 April 2012.
Originally it came before the honourable Basson J for interim relief
on 2 March 2012. Interim relief was granted, and on 7 March 2012 an
application before the honourable Malindi, AJ to rescind
the interim
order was dismissed by the honourable judge with costs. Still later,
on 16 March 2012, the rule was extended to 19
April 2012 in an order
by agreement handed down by the honourable Cele J. In terms of the
order, the rule was extended until
19 April 2012, and it was ordered
that the applicant's board meeting on 29 March 2012 should table the
dispute for discussion
and nominees of the board were to meet
officials of the union on 2 April 2012. The issue of costs was
reserved.
When the matter came before me I made the following final order:
the rule extended on 16 March 2012 is confirmed
the applicant is directed to hold a meeting as contemplated by
paragraph 2 of the court order dated 16 March 2012 within 10
days
of this order
the applicant is ordered to pay the respondent's costs for
appearing on 16 March 2012
there is no order as to costs made in respect of the remainder of
these proceedings.
My brief reasons for the order are set out below.
Background
In January 2012 and the union referred a dispute to the CCMA
demanding the suspension of the group CEO, Mr L Montana, and the
head of corporate security, Mr K Mantsane. Following the
unsuccessful conciliation of the dispute, the union issued a strike
notice to the employer (‘PRASA’) on 22 February 2012
advising it of its intention to embark on a strike on 27 February
2012. The strike demands were expressed in the following terms by
the union in the notice:
“
The aforementioned strike would be
undertaken to advance the following demands:
1. Suspension of the group CEO, Mr Lucky Montana and the Head of
Corporate Security Mr K Mantsane.
2 and that the forensic investigation be commissioned to probe
possible acts of misconduct on the part having regard to the dossier
submitted by SATAWU to PRASA Board of Directors."
(
sic
)
After the strike had commenced, PRASA brought an urgent application
to declare the strike unprotected in terms of the Labour
Relations
Act 66 and 1995 (‘the LRA’), on the basis that the first
demand made by the union and its members was unlawful
and that the
second demand had been met by the respondent and accordingly there
was no dispute in existence relating to this
demand. The employer
also asked for relief to restrain the union and its members from
assaulting and intimidating employees and
passengers, from damaging
its property and from restraining the respondents in interfering
with the running of the applicant's
business. This relief was
granted on an interim basis under the previous orders of this court
referred to above.
Merits
The unlawful demand
Essentially, this contention referred to the demand to suspend the
two managerial staff. PRASA claimed that a demand simply to
suspend
the two individuals without there being fair grounds for doing so is
unlawful, because the employer was obliged to follow
a fair
procedure and to be satisfied that there were fair grounds for
suspending employees before it could lawfully accede to
such a
demand. The applicant called Montana to a meeting of the board of
directors to answer the extensive allegations made by
the union. The
union had representatives in attendance at the meeting.
The PRASA board was satisfied on the strength of Montana’s
answers that there was no basis for suspending him. Though no
mention is made of whether PRASA also considered suspending Mr
Mantsane, it relies in any event on its claim that the suspension
demand was not one that it could comply with unless it was
procedurally and substantively fair. It was argued by Mr Manchu for
the respondents, that the demand did not necessarily mean the agency
should have suspended the two individuals without a fair
process.
However, the demand was not for the employer to suspend them only if
it would be fair to do so after following a fair process.
It might
have been different if the union had demanded that the company
should immediately consider the suspension of the staff
and
implement a suspension if there was good cause for doing so, or
simply that they be fairly suspended. In this regard it is
important
to mention that when the union filed its answering affidavit, it did
not explain that its demand was implicitly qualified
as was
suggested in argument. What the union said was that:
"The respondent [the union]
is adamant that its demands
are within the ambit of the law
and fall within the scope of
mutual interest disputes. The respondent submits that it has an
interest in the corporate governance
of the applicant and
it is
within its right to demand the suspension of an employee pending the
conclusion of forensic investigation
to either prove or disprove
the allegations against the affected employee."
(emphasis
added)
In this considered response it might be argued that it was implicit
that the union accepted that a suspension could only be implemented
after following due process and on good cause. However, elsewhere in
the answering affidavit, the union only says that the demand
to
suspend the two employees did not mean the applicant should not
follow due processes, but nowhere does it indicate that it
agreed
that the suspensions also would had to have been substantively fair.
The importance of this is that once the issue of
the true meaning of
the union’s demand was raised it should have clarified whether
it would have been satisfied with due
process, even if the outcome
did not result in suspensions. The union did not say unambiguously
that it was only calling for
the suspensions if they were warranted
after due process was followed.
Looked at from a different perspective, what would the employer have
needed to do to satisfy this demand? It is difficult to
escape the
conclusion that the only thing that would have satisfied the demand
was the actual suspension of the individuals in
question, even if
the union accepted the employer had to follow a fair process. In
this respect, the facts of this matter are
distinguishable from
those in
City of Johannesburg
Metropolitan Municipality v SAMWU & others
[2009]
5 BLLR 431
(LC)
, in which the court
noted that: “
In these
proceedings,
the suspension
demands, originally tabled in broad terms
,
have been clarified by the
union in its answering affidavit
.
Its members seek to strike in support of a demand that the employees
concerned be
fairly
suspended.”
1
(emphasis added)
In the
SAMWU
matter the union did not qualify its demand only
by an acceptance that the suspension had to be procedurally fair. In
this instance,
because the union qualified its answer only to say
that a fair process had to be followed, it cannot simply be assumed
that its
demand would have been satisfied if the employer had taken
the kind of steps contemplated in the
SAMWU
case to embark on
a fair preventative suspension.
2
The demand for a forensic audit
The demand for a forensic investigation was linked to
well-publicised allegations of serious corruption levelled by the
union
against the CEO, particularly in relation to the award of
various tenders by PRASA. PRASA stated that even though its board
was
of the view that Mr Montana’s response to the allegations
against him was comprehensive and supported with substantive
documentation, it nonetheless instructed its Group Internal Audit
and Deloitte to verify the documentation against the respondent's
allegations.
It further states that on 28 February 2012 the Group Internal Audit
and Deloitte tabled its findings to the board. It claimed
that the
allegations were found to have no basis by Deloitte, which was an
independent firm of auditors. Because the investigation
was
conducted with the assistance of a third party firm of auditors, the
agency contended that the call for a forensic investigation
was
pointless.
According PRASA, the outcome of the Group Internal Auditor and
Deloitte investigation was that:
There was no basis for the allegations made against the applicant
and Mr Montana;
All the tenders awarded were in line with the supply chain
management (“SCM”) policies and guidelines of the
applicant;
Proper approval procedures are in place and were followed in
relation to the alleged tender irregularities;
There was no wrongdoing on the part of Mr Montana and there is no
direct correlation between him and the specified tenders;
Security contracts scrutinised by Deloitte were issued within
Metrorail crafting and date back as far as the mid-1990s before
Mr
Montana was employed by the applicant, and
The applicant's corporate section had not awarded a security
contract or tender.
The union complained that it had no knowledge of the outcome report
as the agency did not provide it with access to the report.
It
further contends that in the absence of the reports it cannot be
satisfied that the reports produced met its demands and therefore
insists that its demands had not been complied with. The union also
points out that during the investigation process conducted
it was
not called upon to make representations as an interested party that
had brought the allegations to the attention of the
board of
directors, and if it had been invited it would have proved that
there was a legitimate basis for its allegations as
it had witnesses
to confirm them. Importantly, the union also said it resorted to
strike action as it disagreed with the outcome
of the investigation.
In response, the applicant points out that it was never part of the
union's demand that it be furnished with the report and that
the
fact that it was dissatisfied with the outcome of the report was not
a matter which had been referred to in conciliation
before the
strike notice was issued. To illustrate deficiencies in the
investigation report, the respondents’ counsel,
Mr Manchu,
referred to some of the seven ‘inconclusive’ findings
reached on allegations made by the union. The report
was supplied as
an annexure to a supplementary affidavit filed by the applicant a
couple of days prior to the hearing, so the
union did eventually
receive a copy.
On the face of it, the union might well have some reason to believe
that the report does not provide satisfactory answers to
some of the
allegations it made. The inconclusive outcomes of some enquiries in
the report might well give rise to new demands
for further
investigations or other steps to be taken. However, the difficulty
the union faces in relying on its original demand
for a forensic
investigation to be undertaken, is that it seeks, with hindsight, to
expand on the scope of its original demand
in a way that could not
have been anticipated by the applicant.
Thus it argues that it was implicit that it would be approached for
evidence of the allegations. It further argues that its request
clearly meant that an independent firm of auditors, which was not
PRASA’s firm of appointed internal auditors (Deloittes),
should have conducted the investigation. It demands that the
investigators should have delved deeper when they were unable to
obtain information in relation to the inconclusive results of some
lines of enquiry, and should have summonsed responsible persons
to
explain the absence of documentation or information.
I can understand that the union would have liked the most
comprehensive, independent and searching investigation to have been
conducted. However, I do not think it could assume that its view of
what was sufficient to constitute a forensic investigation
would
necessarily be the same as the employer’s. If it wished to be
part of an enquiry conducted by a third party agency
with no ties to
the applicant and wanted to receive the results and also wanted the
investigators to be given the power to summons
persons to provide
evidence to the enquiry it should have spelled out these ancillary
demands as part of its demands about the
investigation. Of course,
the fact that these demands were not clearly articulated previously
does not mean the union could not
table fresh demands flowing from
the perceived inadequacies of the original investigation, but then
at least the employer will
know how far the union expects it to go
to meet its demands. Strike demands must be sufficiently clear for
the employer to know
what is required to avert a strike.
The notion of what constitutes a ‘forensic investigation’
was debated in argument. Mr Manchu advanced a definition
which would
embrace all the unarticulated details mentioned above. Mr Pretorius
referred by contrast to a dictionary definition.
The adjective
‘forensic’ simply means something ‘pertaining to
or used in a court of law’ usually in
relation to the
detection of crime.
3
Forensic accounting is described as ‘the application of
accountancy to investigating fraud’.
4
Clearly, if the applicant appointed its internal audit department
and an auditing firm, albeit the one that normally conducts
its
internal audits, to investigate the allegations of corrupt practices
made by the union, that is not an investigation which
falls outside
of the scope of the meaning of a forensic investigation in the
common sense meaning of the phrase. It might be
the case that in the
accounting profession, the parameters and standards of a forensic
accounting investigation might be better
defined, but no expert
opinion was advanced to support the interpretation advanced by the
union’s counsel.
In the circumstances, I do not think the union’s subsequent
elaboration of what it expected the applicant to do in the
course of
conducting a forensic investigation can simply be read into its
original demand as features of a forensic investigation
necessarily
implied by the term. If it wanted those features to be part of the
investigation, it was up to it to specify those
as part and parcel
of its demands.
5
As things stand it must be accepted that if it seeks more from the
employer in relation to the investigation of corruption that
must be
articulated as a fresh demand. PRASA’s actions reasonably met
the demand originally articulated thereby resolving
that dispute and
ending the issue as a legitimate basis for striking
6
In respect of the forensic investigation demand there was not a
disjuncture between the real dispute and the demand, but between
the
dispute and demand as originally articulated and the demand as
subsequently articulated which set out previously unarticulated
pre-requisites for an acceptable investigation. Further, the
respondents embarked on a strike over their dissatisfaction with
the
outcome and extended the issue to a disagreement over the outcome of
the investigation. Apart from this being an entirely
new element in
dispute, the way in which this dispute might have been resolved is
unclear, in the absence of the union expressing
further demands as
to what would resolve this source of dissatisfaction. To the extent
that the industrial action was embarked
on simply as a way of
expressing dissatisfaction with the outcome of the investigation it
could not amount to a demand for the
purpose of grounding a
protected strike, even if it had been referred to conciliation,
which it was not.
The failure of PRASA board nominees to meet with the applicants
Cele J had, by agreement of the parties, ordered that the
applicant’s board nominees had to meet with the union
officials
on 2 April 2012. The applicant did not do so. The reason
advanced for not complying with the court’s order was that the
applicant claimed that the board had met with the union on 17
February 2012 and the honourable judge might not have been aware
of
this at the time. Accordingly, at a meeting on 29 March 2012, the
board resolved that it would be futile to meet with the
union again
to discuss the same issues. The applicant strenuously insisted it
meant no disrespect to the court by not complying
with the order.
The difficulty is that the order was made by agreement so it is hard
to understand how the applicant would have acceded to the
order if
it made no sense to it. If, in hindsight, it saw no point in the
meeting it was not within its power to decide to abandon
it, unless
the respondents agreed to abandon the relief as well. It is not for
one party to litigation to unilaterally elect
whether or not to
comply with orders of court. Its unilateral decision not to comply
with the court’s order was high-handed
and, if not outright
contempt, certainly bordered on it. Costs were awarded to the
respondents for the hearing on 16 March, because
the settlement
which resulted in the order was not complied with.
Variation of the order
In
setting out these reasons, it has also become apparent to me that a
patent
error
appeared on the face of the original rule that was confirmed by my
order, which the applicant had conceded at the hearing
was wrong.
Paragraph 2.1 of the order read as follows:
“
The
strike that commenced on 27 February 2012, is declared to be
unprotected, unlawful and prohibited as contemplated by section
65(1)(c) of the LRA.”
The reference to section 65(1)(c) is patently erroneous. The reasons
the strike were declared unlawful are the ones discussed
above,
namely that the first demand was unlawful and the second demand had
been substantially complied with. Accordingly, paragraph
2.1 in the
rule should read:
“
The strike that commenced on 27 February
2012, is declared to be unprotected, unlawful as the first demand is
unlawful and the second
demand does not concern an existing dispute
or grievance.”
The final order is accordingly varied by the substitution of
paragraph 2.1 of the rule with the revised wording in paragraph
[26]
above.
__
_____________________
R LAGRANGE, J
Judge of the Labour Court of South
Africa
APPEARANCES
APPLICANT: P Pretorius, SC assisted by S Khumalo instructed by
Maserumule Inc.
RESPONDENTS: T Manchu instructed by Thaanyane
Attorneys.
1
At
431
2
Ibid
.
The learned
judge identified three criteria for a fair preventative suspension
as follows:
“
The
first is that the employer must be satisfied that the employee is
alleged to have committed a serious offence. The second
requirement
is that the employer must establish that the continued presence of
the employee at the workplace might jeopardise
any investigation
into the alleged misconduct, or endanger the well-being or safety of
any person or property. The third is that
the employee must be given
a hearing in the form of an opportunity to make representations
before a decision to suspend is taken.”
3
Shorter
OED, 6ed.
4
Op
cit
5
See
FGWU & others v The Minister of Safety & Security
& others
[1999] 4 BLLR 332
(LC)
at
340,[27], viz
“
Once
that issue has been identified and dealt with in conciliation, the
would-be strikers can only strike over that issue. They
cannot
change the goal posts when they issue the notice in terms of
section
64(1)(b)
.
How the applicants understood and designated the issue in dispute
when they referred the matter to conciliation is therefore
of
crucial importance.”
6
See
in this regard,
Afrox Ltd v SACWU & others; SACWU &
others v Afrox Ltd
[1997] 4 BLLR 382
(LC)
, where
the court held, at 386:
“
A
strike can terminate in various ways. One way for a strike to
terminate is where the strikers abandon the strike. This normally
takes the place of an unconditional return to work. Another possible
way, for there are probably other ways, (Cf “Some
aspects of
the termination of a dismissal lock-out” 1994 Contemporary
Labour Law 79–83) is by the disappearance of
the substratum.
If the casus belli is removed, for example, by the employer
conceding to the demands of the strikers or by removing
the
grievance or by resolving the dispute then the foundations of the
strike fall away. The strike is no longer functional; it
has no
purpose and it terminates. When the strikes terminate so does its
protection. It is not in the interests of labour peace
for a strike
action to be continued in such circumstances even in the case of a
protected strike. See
section
1
of
the LRA.
”