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[2012] ZALCJHB 164
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South African Federation of Civil Engineering Contractors and Another v National Union of Metal Workers of South Africa and Others (J2847/12) [2012] ZALCJHB 164; (2013) 34 ILJ 2084 (LC) (19 December 2012)
Reportable
REPUBLIC OF SOUTH AFRICA
THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
Case no:J2847/12
In the matter between:
SOUTH AFRICAN FEDERATION OF CIVIL
ENGINEERING CONTRACTORS
.......................................................................
First
Applicant
THE CONSTRUCTURAL ENGINEERING
ASSOCIATION (SOUTH AFRICA
)
................................................................
Second
Applicant
and
NATIONAL UNION OF METAL WORKERS
WORKERS OF SOUTH AFRICA
....................................................................
First
Respondent
BUILDING CONSTRUCTION AND ALLIED
WORKERS UNION
....................................................................................
Second
Respondent
MWU SOLIDARITY
........................................................................................
Third
Respondent
UASA THE UNION
......................................................................................
Fourth
Respondent
NATIONAL UNION OF MINE WORKERS
......................................................
Fifth
Respondent
SOUTH AFRICAN EQUITY WORKERS
ASSOCATION
................................................................................................
Sixth
Respondent
METAL ELECTRICAL WORKERS UNION OF
SOUTH AFRICA
.......................................................................................
Seventh
Respondent
CHEMICAL, ENERGY, PAPER, PRINTING
WOOD AND ALLIES WORKERS UNION
.....................................................
Eight
Respondent
ESKOM HOLDINGS LTD
..............................................................................
Ninth
Respondent
________________________________________________________________
Heard: 27 November 2012
Delivered: 19 December 2012
Summary: Urgent application; purported cancellation/withdrawal by
one of union parties to collective agreement; meaning of ‘indefinite
period’ in section 23 (4) of the LRA.
JUDGMENT
Rabkin Naicker J
[1] This urgent application was
brought by the applicant employer organisations. They sought an order
in the following terms.
“
1.
DECLARING
that the Project Labour
Agreement concluded between the Applicants and the Respondents during
December 2008 and revised during December
2010 and in addenda
thereafter in respect of the Medupi Project
(“the
PLA”
) , is lawful,
valid and binding upon the First to Eighth Respondents and on each of
the other contracting parties, and their members.
2.
DECLARING
that the First
Respondent’s purported withdrawal and/or cancellation and/or
termination of the PLA to be invalid and/or unlawful,
and in breach
of the PLA;
3.
ORDERING
that the First
Respondent comply with all its obligations as a party to the PLA.
4.
ORDERING
that the costs of
this application be paid by the First Respondent and by the Further
Respondents, jointly and severally, but only
in the event that they
oppose this application.”
[2] The application was opposed by
NUMSA, its purported withdrawal from the PLA having precipitated this
application. The PLA, a
collective agreement was concluded to govern
industrial relations during the building of the Medupi Power Station
by Eskom’s
contractors.
[3] The parties agreed that the Labour
Court should hear the matter, Numsa having challenged the
jurisdiction of the Centre for
Dispute Resolution (CDR) established
in terms of the PLA, to determine the matter.
[4] NUMSA contends that the PLA
dilutes the constitutional rights of the parties and the rights
enshrined in the LRA, and is as
a result against public policy. The
collective agreement in its view, is unlawful. A second ground on
which NUMSA relies to withdraw
from the PLA is that the parties to it
laboured under a mutual error that they were permitted to compromise
the fundamental rights
of workers in permitting the curtailment of
the dispute resolution process under the LRA. The agreement they
submit in the alternative,
is thus void by reason of mistake.
[5] Alternatively, it is alleged by
NUMSA that an implicit, alternatively tacit term of the agreement is
that it could be cancelled
for good cause. Finally, NUMSA claims that
it was entitled to cancel the PLA under section 23 (4) of the LRA
which provides that
unless a collective agreement provides otherwise,
any party to a collective agreement that is concluded for an
indefinite period
may terminate the agreement by giving reasonable
notice in writing to the other parties.
Background
[6] The applicants concluded the PLA
with the respondent Trade Unions in December 2008. The PLA regulates
site specific terms and
conditions of employment including minimum
wages, industrial relations procedures, reciprocal rights and
obligations of the trade
unions and contractors, and dispute
resolution procedures
[7] The PLA contains a “peace
clause” at clause 12.1 thereof, which provides as follows.
“
12.1.1. The Parties shall not
sanction, promote or participate in industrial action until such time
as the procedures contained
or referred to in the Agreement and
applicable legislation have been exhausted. Neither should the
Parties provoke one another.
No industrial action shall take place:
12.1.1.1. concerning any issue which
is the subject matter of this or the relevant industry Agreements;
12.1.1.2. after the Parties have
agreed to refer the dispute to alternative dispute resolution
mechanisms agreed to by the parties;
12.1.1.3. following an Arbitration
Award;
12.1.1.4. in breach of any provision
of the
Labour Relations Act 66 of 1995
as amended; or
12.1.1.5. in respect of an issue that
the parties have to refer to arbitration as well as essential
services and emergency work,
such as safety, security, health
services or any other service that may be declared an essential
service in terms of the Act.
12.1.1.6. Parties agree that
site
specific issues will be referred
to the project CDR.’
(emphasis added)
[8] Clause 4.6.3 of the PLA provides
that the Parties agree as follows:
“
during the currency of this
Agreement,
no matter
contained in this Agreement may be re-opened for negotiation, or
comprise an issue in dispute, or give rise to any strike or lock-out,
or any conduct in contemplation or support of the strike or lockout”
(emphasis added)
[9] Clause 3.4 of Annexure D to the
PLA prohibits industrial action in the following circumstances:
“
where
any
issue is governed by arbitration as provided in the PLA neither party
shall be entitled to resort to industrial action in respect
of any of
the issues which are covered by this Agreement.
Should either party embark on industrial action in respect of any of
the issues covered by this agreement, it will be considered
unlawful
and unprotected in which case either party may take what steps may be
necessary to bring an end to the action including
the action
contemplated in clause 12 of the PLA.” (emphasis added)
[10] As the applicants submit in their
founding affidavit, the significance of the above clauses is to
prohibit strike action in
terms of disputes declared under the PLA,
including site specific mutual interest matters, and to have such
disputes determined
by way of conciliation and/or arbitration in
terms of the Dispute Resolution Procedure annexed to the PLA, as
‘Annexure D’.
[11] It is evident from the PLA, its
annexures and its addendums, that over and above the limitation it
imposes on the right to
strike on any site related issues:
11.1. All disputes that may lead to a
dismissal are subject to a pre- dismissal arbitration procedure if an
employee consents thereto,
otherwise an internal disciplinary will be
held and an award issued under the auspices of the dispute resolution
center;
11.2. the ambit of review of an award
is of the limited nature permitted in terms of the Arbitration Act;
11.3. disputes involving allegations
of unfair discrimination under the EEA or LRA are also to be
determined by an arbitrator and
subject to limited review in the
Labour Court;
11.4. no legal representation is
permitted in any proceedings under the auspices of the Dispute
Resolution Centre.
Evaluation
[12] Clause 6 of the PLA is headed
‘Duration of Agreement’ and provides:
“
This Agreement shall came into
operation on the date of execution hereof and shall remain in effect
for the duration of the construction
and commissioning phase of the
Project which shall mean the period in which all testing and final
quality controls shall take place
ensuring that the final product
Medupi Power Station is handed over to the client.”
[13]
Given that as a general principle where it is possible to decide any
case, civil or criminal, without reaching a constitutional
issue that
is the course which should be followed,
1
I
deal first with the issue of whether Section 23 (4) of the LRA
applies to the PLA. It was submitted on behalf of the applicants
that
it clearly does not, in that the duration of the PLA is for a fixed
period, as reflected in Clause 6.
[14] Section 23 of the LRA reads as
follows:
“
23 Legal
effect of collective agreement
(1)
A collective agreement binds-
(a)
the parties to the collective agreement;
(b)
each party to the collective agreement and the members of every other
party to the collective agreement, in so far as the provisions
are
applicable between them;
(c)
the members of a registered trade union and the employers who are
members of a registered employers' organization that are party
to the
collective agreement if the collective agreement regulates-
(i)
terms and conditions of employment; or
(ii)
the conduct of the employers in relation to their employees or the
conduct of the employees in relation to their employers;
(d)
employees who are not members of the registered trade union or trade
unions party to the agreement if-
(i)
the employees are identified in the agreement;
(ii)
the agreement expressly binds the employees; and
(iii)
that trade union or those trade unions have as their members the
majority of employees employed by the employer in the workplace.
(2)
A collective agreement binds for the whole period of the collective
agreement every person bound in terms of subsection (1)
(c) who was a
member at the time it became binding, or who becomes a member after
it became binding, whether or not that person
continues to be a
member of
the registered
trade union or registered employers' organization for the duration of
the collective agreement.
(3)
Where applicable, a collective agreement varies any contract of
employment between an employee and employer who are both bound
by the
collective agreement.
(4)
Unless the collective agreement provides otherwise, any party to a
collective agreement that is concluded for an
indefinite
period
may terminate
the agreement
by giving reasonable notice in writing to the
other parties”. ( my emphasis)
[15]
The meaning of the phrase ‘for an indefinite period’ has
been considered by our courts. In
Vansa
Vanadium SA Ltd v Registrar of Deeds and Others
2
,
the court surveyed certain authorities as follows:
“
In
Treadwell
and Another v Roberts
1913 WLD
54
it was held that an option
to purchase certain fixed property given for an indefinite period
could either be withdrawn at will,
or was void for vagueness. At 58
the learned Judge says the following:
`The next point to be considered is
what is the meaning of the expression "for an indefinite
period". "Indefinite"
in itself means "not
defined". Literally it is a promise that "for a period
which we do not define you shall have
the right to buy".
Worchester's dictionary gives the meaning as "not definite; not
determined; not definitely settled;
indeterminate".'
With respect to the learned Judge this
restricted meaning is not necessarily in all circumstances correct.
The word must be interpreted
according to the context within which it
is used. In
Cohen v Van der Westhuizen
1912 AD 519
at 528
Innes ACJ said the following in regard to the use of the word
`indefinitely' in a lease:
`What is the meaning of the expression
"renewable from time to time at the will of the lessee
indefinitely"? It may mean
renewable during the period to which
a limit has been fixed, but the duration of which is uncertain, or it
may mean renewable without
any limit at all; that is, in perpetuity.
And I think the latter is the construction which the sentence was
intended to bear.
The learned Acting Chief Justice then
dealt with the context in which the word `indefinitely' was used in
the contract of lease
there at issue.”
[16] What is the context of the word
‘indefinite’ as it is used in Section 23 of the LRA? A
collective agreement is
defined in the LRA as follows:
'collective agreement' means a written
agreement concerning terms and conditions of employment or any other
matter of mutual interest
concluded by one or more registered trade
unions, on the one hand and, on the other hand-
(a) one or more employers;
(b) one or more registered employers'
organizations; or
(c) one or more employers and one or
more registered employers' organizations;”
[17]
A collective agreement is a contract
sui
generis.
As is apparent
from section 23 of the LRA– a collective agreement may be
extended to bind persons who are not members of the
parties to the
agreement in certain circumstances. As the Labour Appeal Court has
stated, it is not an ordinary contract, and the
context within which
a collective agreement operates under the LRA is vastly different
from that of an ordinary commercial contract.
3
[18] An important element of a
collective agreement is that the parties - representative trade
unions and employers organizations
- are accountable to their members
for their decision making, and are bound to act in terms of their
constitutions which are regulated
in terms of section 95 of the LRA.
This aspect of accountability, together with the fact that collective
agreements can be extended
in certain circumstances to bind
non-parties, should give context to the words “indefinite
period” as they are used
in section 23(4) of the LRA.
[19]
A further important contextual consideration that this court has
identified in cases involving the withdrawal of an employer
organization from a collective agreement, is that of the principle of
voluntarism. In
TAWUSA &
Alliance comprising of STEMCWU v Anglo Platinum Ltd
4
this court dealt with an application
brought as a matter of urgency in which the applicants sought an
order to interdict the respondent
from cancelling the current ER
policy, a collective agreement, pending the finalization of disputes
declared about the interpretation
and application of the same ER
policy in relation to the cancellation and withdrawal of
organizational rights,
Van
Niekerk J
had this to say:
“
I turn first to the matter of a
clear right.
Section 23(4)
of the
Labour Relations Act provides
that
a party to a collective agreement that is concluded for an indefinite
period may terminate that agreement by giving reasonable
notice. The
respondent is, in terms of that provision, entitled to invoke the
right to give reasonable notice which, in my view,
it did; three
months' notice is not unreasonable to terminate the collective
agreement that is the subject of these proceedings.
The applicants' contentions before the
CCMA do not concern the unreasonableness of the notice of termination
given; rather, they
contend that the respondent is not entitled to
cancel the agreement at all and that certain consequences that will
flow from that
cancellation will have the effect of prejudicing their
members' rights…
The relief that the applicants seek,
as I have indicated, is in effect an interdict preventing the
respondent from cancelling the
collective agreement, pending the
outcome of the remaining disputes before the CCMA. To grant this
relief would, in my view, amount
to compelling the respondent to
continue in a collective bargaining relationship to which it no
longer wishes to be a party.
The applicants have, in these
circumstances no right to the relief that they seek, nor is it
competent for this court to grant it.
In this regard I would refer to
a judgment of this court,
National Police Services Union &
others v National Negotiating Forum & others (1999) 20 ILJ 1081
(LC
) in which the court was similarly faced with an application
by a minority union challenging the introduction of thresholds into
a
collective bargaining relationship that would have the effect of
derecognizing the applicant and terminating rights to check
off that
it previously enjoyed. In that matter the court said the following:
'All of these submissions [concerning
the consequences of a withdrawal of check-off facility] overlook an
important policy consideration
that underlies the LRA. The LRA adopts
an unashamedly voluntarist approach - it does not prescribe to
parties who they should bargain
with, what they should bargain about
or whether they should bargain at all. In this regime the courts have
no right to intervene
and influence collectively bargained outcomes.
Those outcomes must depend on the
relative power of each party to the bargaining process. That power is
underpinned by the organizational
rights conferred by part A of
chapter 3 of the Act and the right to collective action confirmed by
chapter 5.
To set aside the derecognition of a
union and to grant an order, even on an interim basis, that the union
remains recognized in
terms of the collective agreement constituted
by the regulations, would be an unwarranted interference in a
collective bargaining
relationship.’ “
[20]
In my judgment, taking into consideration the contextual issues I
have referred to, “indefinite period” in
section 23(4)
of
the LRA cannot simply mean in perpetuity, but its meaning must
include
a period of a fixed
term, the actual duration of which is unknown
.
This matter is a clear example of why such a reading is apposite. The
PLA has already been in existence since 2008. From the papers,
it is
evident that it is envisaged to continue for some years to come.
Where the duration of a collective agreement is tied to
an
indeterminate
period of time, i.e. the time that it
takes to complete certain works or a particular project, it would
amount to interference in
the collective bargaining relationship to
deprive a party of the right to withdraw from it in terms of
section
23(4).
[21]
In
Edgars Consolidated
Stores Ltd v Federal Council of Retail & Allied Workers Union
5
Moegeng JA, as he then was, had this
to say about
section 23(4)
of the LRA:
“
Section 23(4)
deals with the
termination of a collective agreement. Of course, organizational
rights that are contained in a collective agreement
fall away when
the collective agreement in which they are contained is validly
terminated. This provision only deals with the termination
of
collective agreements that are concluded for an indefinite period.
Obviously, a collective agreement that is concluded for a
fixed term
will come to an end when its term expires.
Section 23(4)
opens with
the words 'unless the collective agreement provides otherwise ...'.
These words suggest an exception to the general
rule that the balance
of the sentence provides for. The balance of the sentence is to the
effect that a party to a collective agreement
concluded for an
indefinite period may terminate that agreement by the giving of
reasonable notice in writing to the other party.
The exception
contemplated is where the collective agreement itself provides
otherwise. In other words a collective agreement cannot
be terminated
in the manner provided for in
s 23(4)
if it itself precludes that.
Such a case would be where a trade union and an employer have
included a clause in their collective
agreement to the effect that a
party must seek a third party's leave to terminate the agreement
before it can terminate it, e.g.
seek the court's leave or the CCMA's
leave.”
[22] In this matter, given the wording
of Clause 6 of the PLA, and on this court’s reading of the
meaning of the words ‘indefinite
period’ in
section 23(4)
LRA, the duration of the PLA is for an indefinite period. A party to
the PLA may therefore withdraw from it on reasonable notice
to all
parties. What is reasonable notice, depends on the nature of the
collective agreement in question, and the facts and circumstances
of
each case. In this case NUMSA indicated it was of the opinion that
the PLA could be cancelled and wrote a letter to this effect
on 6
July 2012. It invited the applicants to renegotiate the PLA in this
letter. On the 28 August 2012 it sent out a further letter
stating
that: “We confirm we have cancelled the PLA and/or withdrawn
from the Medupi project. We will utilize the MEIBC Agreements
and
expect you to do so too”.
[23] The above method of cancellation
was clearly not in line with the requirements of
section 23(4)
of the
LRA. Any party seeking to withdraw from the PLA would have to give
reasonable notice to all parties. Given the number of
parties to the
agreement, its ambit and complexity, I consider that six (months)
notice would constitute a reasonable period for
its cancellation. I
note that the requirement is included in
section 23
(4) of a
reasonable notice period, affords parties a period to attempt to
negotiate in order to sustain their collective agreements.
[24] In the beginning of this
judgment, I referred to the contentious issues raised about the PLA
in its current form. I do not
have to decide on the constitutionality
of the provisions, in particular those dealing with the ambit of the
right to strike; the
dispute resolution procedure and its operation;
access by the parties to the courts in respect of rights disputes and
the right
to legal representation. These issues may well be the
subject of future negotiation by the parties should they consider
same to
be important to the collective bargaining enterprise.
[24] In the result, it is not
necessary for the court to make a declaration in terms of prayer 1 of
the Notice of Motion. I do not
regard it in the interests of the
ongoing relationship between first respondent and the applicants, to
make a costs order in this
matter.
[25] I make the following order:
1. First Respondent’s purported
withdrawal and/or cancellation and/or termination of the PLA was in
breach of
section 23(4)
of the LRA and is therefore invalid;
2. Any party wishing to withdraw from
the PLA is required to do so on 6 months’ notice to all the
parties;
3. There is no order as to costs.
_____________
H. Rabkin-Naicker
Judge of the Labour Court
Appearances
For the Applicant: A. I. S Redding SC
instructed by Edward Nathan Sonnenbergs Inc
For the First Respondent: Advocate Van
der Riet SC instructed by Ruth Edmonds Attorneys (Heads of Argument
prepared by Adv. F. Boda)
.
1
Zantsi
v Council of State, Ciskei and Others 1995(4) SA 615 (CC) at paras
2-5
2
1997(2)
SA 784(TPD) @ 791A-D
3
North
East Cape Forests v SA Agricultural Plantation & Allied Workers
Union & others (1997) 18 ILJ 971 (LAC) at 979E-980H
4
(2009)
30 ILJ 2142 (LC)
5
(2004)
25 ILJ 1051 (LAC)