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[2012] ZALCJHB 37
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Strydom v T-Systems SA (Pty) Ltd (JS1171/2010) [2012] ZALCJHB 37; (2012) 33 ILJ 2978 (LC) (30 April 2012)
11
REPUBLIC OF SOUTH
AFRICA
THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Reportable
Case No JS1171/2010
In the matter between:
PIETER STRYDOM
…......................................................................................
Applicant
and
T-SYSTEMS SA (PTY) LTD
….....................................................................
Respondent
Heard: 17 April 2012
Delivered: 30 April
2012
Summary:
JUDGMENT
________________________________________________________________
Whitcher, AJ
Issues
[1] The Respondent has
sought an order upholding its exception and ordering that the
proceedings be stayed pending the joinder of
Business Connexion (Pty)
Ltd (“Business Connexion”) as the Second Respondent
herein, failing which an order dismissing
a part of the Applicant’s
claim with costs.
Background and
Submissions
[2] In pursuing a claim
of unfair retrenchment against his new employer, T-Systems SA (Pty)
Ltd [the Respondent], the Applicant
employee, Pieter Strydom, alleged
that, less than twelve months before this dismissal, his contract of
employment was transferred
from the old employer, Business Connexion
(Pty) Ltd, in terms of section 197 of the Labour Relations Act (the
LRA).
[3] The Applicant
employee claims,
inter alia
, that the terms relating to the
calculation of severance pay that ought to have applied upon his
retrenchment by the new employer,
were those that applied at the old
employer. The enhanced severance pay he claims, in turn, accompanied
the employee when he was
transferred about ten years earlier to the
old employer from an even older, original employer, Sasol Group
Management.
[4] The new employer is
the sole respondent in the unfair retrenchment dispute. The
Respondent has applied for an exception on the
basis that the old
employer, Business Connexion, is not joined. The Respondent alleges
that the old employer has a direct and substantial
interest in the
matter and/or has a legal interest in the subject matter of the
retrenchment dispute which may be prejudicially
affected by any
judgment handed down.
[5] This interest is said
to flow from the provisions of section 197 of the LRA which provides
as follows:
‘
(7) The old
employer must –
(i) agree with the new employer to a
valuation as at the date of transfer of –
(ii) the severance pay that would have
been payable to the transferred employees of the old employer in the
event of a dismissal
by reason of the employer’s operational
requirement
(8) For a period of 12 months after
the date of the transfer, the old employer is jointly and severally
liable with the new employer
to any employee who becomes entitled to
receive a payment contemplated in subsection (7) (a) as a result of
the employee’s
dismissal for a reason relating the employer’s
operational requirements or the employer’s liquidation or
sequestration,
unless the old employer is able to show that it has
complied with the provisions of this section.’
[6] The crux of the
Respondent’s pleadings is that, in the event that it is ordered
to pay the Applicant any of the claimed
severance pay, it will become
a statutory debtor, jointly and severally liable with the old
employer. As the Respondent enjoys
a common law right to recover a
pro rata
contribution from the old
employer, the old employer ought to have been joined in the matter.
It is thus a potential
financial
interest in the outcome
of the retrenchment dispute that is said to establish the necessity
of joining the old employer.
[7] The Applicant
disputes that the old employer has a direct, substantial and/or legal
interest in the matter such that it must
be joined of necessity.
[8] The Applicant cites a
test set out by the Supreme Court of Appeal to evaluate the extent of
a third party’s interest such
that joinder becomes imperative.
In
Gordon
v Department of Health: KZN
,
1
the SCA stated:
‘
In the
Amalgamated Engineering Union case, it was found that the ‘question
of joinder should not depend on the nature of the
subject matter but
on the manner in which, and the extent to which, the court’s
order may affect the interests of third parties’.
The court
formulated the approach as, first, to consider whether the third
party would have
locus
standi
to claim the relief concerning the same subject matter, and then to
examine whether a situation could arise in which, because the
third
party had not been joined, any order the court might make would not
be
res
judicata
against him, entitling him to approach the courts again concerning
the same subject matter and possibly obtain an order irreconcilable
with an order made in the first instance. This has been found to mean
that if the order or judgment sought cannot be sustained
and carried
into effect without necessarily prejudicing the interests of a party
or parties not joined in the proceedings, then
that party or parties
that have a legal interest in the matter must be joined’.
[9] The Applicant argues
that a direct and substantial interest is an interest in the
rights
at stake in proceedings and that a third party’s mere
financial interest in the relief claimed is insufficient to found a
direct, substantial and/or legal interest for the purposes of
joinder.
Analysi
s
[10] This matter turns on
whether being a statutory co-debtor in terms of section 197 of the
LRA obliges
an applicant
to join an old employer. To answer
this question, regard must be had to ordinary civil procedure in
respect of joinder by necessity
as well as the rules of the Labour
Court itself.
[11] It indeed seems to
be the position in our civil law that the mere fact that a third
party is jointly and severally liable for
a debt does not qualify as
a direct and substantial interest in
the right
that is the
subject matter of the dispute. Joint liability for a debt does thus
not trigger the joinder of such a party by necessity
(See:
Shell
Auto Care (Pty) Ltd v Laggar and Others
2005 1 SA 162
(D)). Put
differently, mere financial interest or prejudice has been held to be
secondary and indirect (see:
Bohlokong Black Taxi Association v
Interstate Bus Lines
(Edms) Bpk
1997 (4)
SA
635
(O) at
644 A-B
and
National Union of Textile
Workers v
President of the Industrial Court
(1985) (3) SA 251
(C) at 255E).
[12] In this court, Rule
22 governs joinder and stipulates that a party may apply on notice to
every other party for an order joining
any person as a party in the
proceedings if the party to be joined has a
substantial interest
in the subject matter of the proceedings
(emphasis added). This
confirms with the test developed by the High Court.
[13] It appears to me
that, in the present matter, no order is sought against the old
employer that directly and substantially affects
its rights and
interests
vis a vis
the Applicant employee. The Applicant is
not seeking reinstatement to the old employer, nor a declaration
concerning the applicability
of section 197 to his move from old to
new employer. The joint and several liability imposed, in principle,
upon the old employer
seems to me to be incidental to the relief that
the Applicant employee claims from the new employer (the Respondent).
Separate
legal processes exist for determining whether in fact such
liability exists and, if so, to quantify it.
[14] As such, with
reference to
Gordon
the severance payments claimed from the
new employer (the Respondent) in this matter can be sustained and
carried into effect without
necessarily prejudicing the interests of
the party not joined in the proceedings.
[15] In applying the test
for the existence of a direct and substantial interest suggested in
Gordon
,
I cannot say that a ruling made in respect of the severance pay
dispute between the Applicant employee and new employer (the
Respondent) would render
res
judicata
any
subsequent recourse pursued by the new employer (the Respondent)
against the old employer, Business Connexion, for a
pro
rata
contribution
thereto. These would be separate causes of action, involving separate
parties.
[16] It bears mention in
this regard that it is by no means a foregone conclusion that an old
employer will be held liable for any
portion of the relief ordered
against a new employer in subsequent proceedings between these two
parties. The finding of joint
and several liability is in principle
and the apportionment of liability depends on whether “the old
employer is able to
show that it has complied with the provisions of
this section” [section 197(8) of the LRA].
[17] I am aware of a
recently decided matter in which Steenkamp, J, ordered the joinder as
respondents of two additional employer
parties in a dismissal
dispute, which these parties resisted.
2
[18] The distinction
between the facts of the present matter and
Steinmuller
Africa
nicely
illustrate the difference between a mere financial interest and a
legal interest in the subject matter of legal proceedings.
In
Steinmuller
Africa,
the
joined respondents employed some of the dismissed employees and had a
hand, through shared HR services, in their dismissal.
This was held
to constitute a sufficient basis to justify their joinder. The
respondents in
Steinmuller
Africa
were thus directly
involved in the factual and legal substratum of the dispute, with
rights directly affected also by possible relief
ordered, for
instance reinstatement. It seems to me that respondents in such a
position would
need
to be
joined for the matter to be properly and fairly determined and for
any relief ordered to be sustained or carried into effect,
which is
not the situation if they were merely, in principle, co-debtors.
[19] In considering the
question of joinder, one must also be mindful of the effects of its
being too easily exercised. The facility
provided to creditors of
targeting one debtor among many potential debtors is an established
part of our law and fulfills important
social and legal functions.
This facility functions through orders of joint and several
liability. It seems important, particularly
in labour law where
employee litigants are often not on the same financial footing as
employers when it comes to affording the
costs of suit, to preserve
the ability of an employee to elect to pursue a particular debtor. If
the employee is successful, it
is up to the targeted debtor to assume
the administrative and financial burden of bringing any co-debtors to
account. The new employer
is the targeted debtor in this case and it
may exercise its right of recourse against the old employer in a
separate action, if
it chooses to. In a similar vein, the facility of
targeting a particular debtor means that, if the employee loses, he
or she is
not burdened with the costs of two legal teams.
[20] To some extent then
there may be said to exist a tension between the important facility
of targeting a debtor through an order
of joint and several liability
and the important principle that a party with a direct and
substantial interest in a legal dispute
must be joined. In the labour
context, this tension is smoothed out, on a case-by-case basis, by
measuring the extent to which
the facts meet the test proposed in
Gordon
and set
out in the Labour Court rules.
[21] In argument, the
applicant, correctly in my view, distinguished this matter from
Zikhethlele
Trade (Pty) Ltd v COSAWU and Others.
3
There joinder was deemed
necessary in circumstances where an uncited third party was found to
have been the employer, however briefly,
of workers moving from one
labour broker to another. Significant, direct and new legal interests
and potential obligations were
entailed in such a finding and the LAC
found that the third party ought to have been joined.
[22] I also agree with
the views of Musi, AJ in
Kopeledi
(Pty) Ltd v Madontsela and Others
,
4
wherein he opined that,
‘
Generally,
in section 197 disputes,
depending
on the nature of the dispute and the facts
,
it is
advisable
to join the old and the new employer or the old employer and the
putative transferee employer as the case may be’.
(emphasis
added).
It strikes me firstly
that by using the word ‘advisable’, Musi, AJ, is speaking
of joinder by convenience. The present
exception is pleaded on the
basis of necessity.
[23] Second, this matter
is not properly a transfer of business (section 197) dispute but a
retrenchment (section 189) dispute in
which an aspect of section 197
is relevant insofar as it identifies, in principle, a co-debtor. The
views of the learned judge,
above, thus do not apply to the facts of
the present exception which is applied for in a retrenchment (section
189) dispute.
[24] I hasten to add that
where an employee alleges a ‘transfer of business’ as
defined in the LRA and the putative
new employer disputes this fact,
the old employer will mostly need to be joined. In such a case the
dispute would be about the
applicability of section 197 to a set of
facts relating to a change of employer. The old employer would have a
direct and substantial
interest in the
rights
of the matter,
especially since it could be found that no transfer of business
indeed occurred.
[25] The Respondent in
this matter based its argument for joinder on the old employer,
Business Connexion, being a potential co-debtor.
Beyond that, it did
not put the applicability of section 197 at stake. I was not referred
to anything in the papers that established
any other interest of the
old employer in the subject matter of the retrenchment proceedings.
[26] Should the
Respondent, as a matter of convenience, wish to avoid an unnecessary
multiplicity of actions by bringing a potential
co-debtor to
this
court for a declaration as to their contribution, that is up to the
Respondent to serve what would amount to a third party notice
upon
the old employer (Business Connexion) and make the necessary
application. It is not the Applicant’s duty to perform
these
tasks and accommodate these interests in terms of who it cites as a
respondent.
[27] In order for the
joinder of the old employer to be legally necessary, a rather more
substantial interest in the rights of the
matter needed to be
established than was pleaded.
[28] As a corollary, the
manner in which and the extent to which the Labour Court’s
order in the eventual retrenchment matter
may affect the interests of
the old employer are not substantial or direct enough to deprive the
Applicant of its ability to target
only the new employer. The old
employer may suffer, at most, an order that it is
in principle
jointly and severally liable for a portion of severance pay. If the
new employer (the Respondent) seeks recourse against the old
employer
in terms of such an order, the old employer will still have its day
in (another) court to argue whether it is liable and,
if so, for how
much.
[29] In argument, the
Respondent raised an additional ground in support of joinder. This
related to the Applicant’s allegation
that his transfer between
old and new employer also constituted an automatically unfair
dismissal in terms of section 187 (1) (g).
As this allegation clearly
implicated the old employer, the argument for the exception was said
to be fortified. However, as pointed
out by the Applicant this issue
was not pleaded in the exception.
[30] In any event, to the
extent that the Applicant has obviously elected to pursue whatever
remedies might attach to such a
dismissal
claim only against
the new employer (the Respondent), no order that could affect the
interests of the old employer can be made.
[31] If the Respondent
wishes to raise a defence that it is not the employer for the
purposes of the allegedly automatically unfair
dismissal, it should
simply lead evidence to this effect. It seems to be an unnecessary
complication to seek to embroil a party
by way of joinder whom the
Applicant has, for better or for worse, elected not to pursue.
[32] As the dispute
between the parties is ongoing, neither party should pay the others’
costs.
Order
[33] The exception is
dismissed.
[34] There is no order as
to costs.
_______________________
Whitcher, AJ Acting
Judge of the Labour Court
Appearances:
For the Applicant: Adv
Z/R Grundlingh
For the Respondent: Adv J
Partingtom
Applicant’s
attorneys: Bester and Roodie Attorneys
Respondent’s
attorneys: Lindsay Keller Attorneys
1
(2008)
29 ILJ 2535 (SCA) at para 9.
2
See
NUMSA obo its Members v Steinmuller Africa (Pty) Ltd and Others
[2012] JOL 28637
(LC)).
3
(2007)
28 ILJ 2742 (LAC).
4
(2009)
30 ILJ 158 (LC
).