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[2012] ZALCCT 7
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Sgt Pepper's Knitwear and Another v SA Clothing and Textiles Workers Union and Others (C 769/10) [2012] ZALCCT 7; [2012] 6 BLLR 627 (LC); (2012) 33 ILJ 2178 (LC) (29 February 2012)
REPUBLIC OF SOUTH AFRICA
Reportable
Of
interest to other judges
THE LABOUR COURT OF South Africa, cape town
JUDGMENT
case
no: C 769/10
In the matter between:
SGT PEPPER’S KNITWEAR
First Applicant
ABBEY ROAD FASHIONS CC
Second Applicant
and
SACTWU
First Respondent
NATIONAL BARGAINING COUNCIL
FOR THE CLOTHING INDUSTRY
Second Respondent
REGISTRAR OF LABOUR
Third Respondent
MINISTER OF LABOUR
Fourth Respondent
Heard
:
23 February 2012
Delivered
:
29 February 2012
Summary:
Constitutional challenge – LRA s 105 –
locus standi
of employer to challenge independence of trade
union in terms of LRA s 95.
JUDGMENT
STEENKAMP J
Introduction
The applicants challenge the constitutionality of s 105 of the
Labour Relations Act.
1
That section reads as follows:
“
105. Declaration
that trade union is no longer independent.
—
(1) Any registered
trade union may apply to the Labour Court for an order declaring that
another trade union is no longer
independent.
(2) If the Labour
Court is satisfied that a trade union is not independent, the Court
must make a declaratory order to
that effect.”
The applicants are small clothing manufacturers. They claim that the
South African Clothing and Textile Workers’ Union
(SACTWU, the
first respondent) is not independent. Although the basis for the
claim is difficult to follow, it boils down to
this: SACTWU is not
independent because it controls a major clothing manufacturer,
Seardel, through its shareholding in Hosken
Consolidated Investments
(HCI); HCI is the major shareholder in Seardel; and therefore SACTWU
controls the Bargaining Council
(the second respondent). The
compliance orders issued by the Bargaining Council – which are
binding on the applicants –
are therefore unlawful.
The applicants were previously before this court (albeit in a
slightly different guise in the case of the first applicant). On
19
August 2010, Basson J made an order
2
dismissing the applicants’ claim on the basis that they had no
locus standi.
She also ordered the applicants to pay the
respondents’ costs on an attorney and client scale.
The reason for the applicants’ lack of
locus standi
is
that they are employers and not trade unions. In terms of s 105 of
the LRA, only a registered trade union may apply to the
Labour Court
for an order declaring that another trade union is no longer
independent.
The applicants now argue that the section is unconstitutional. They
say that it falls foul of s 34 of the Constitution
3
.
That section reads:
“
34. Access
to courts.
—Everyone
has the right to have any dispute that can be resolved by the
application of law decided in a fair public hearing
before a court
or, where appropriate, another independent and impartial tribunal or
forum.”
In other words, the applicants can only argue their case if they
have
locus standi
to do so; and in order to achieve that
objective, they ask this Court to declare s 105 of the LRA
unconstitutional.
This court has the jurisdiction to do so in terms of s 157(2) of the
LRA. Whether the applicants have made out a case for the
relief
sought, is a different question.
The applicants seek the following relief:
“
1. An
order that
section 105(1)
of the
Labour Relations Act 66 of 1995
be
declared invalid in terms of the Bill of Rights, section 34 of the
Constitution, Act 108 of 1996 [
sic
],
read with section 38 of the Constitution.
2. A declaratory order that
SACTWU fails to be an independent trade union in terms of section
95(1)(d) [of the LRA], since June
2001.
3. An order that SACTWU’s
failure to be independent as a trade union, disqualifies the Clothing
Bargaining Council as a bona
fide bargaining council.
4. An order that the enforcement
of the Main Agreement by the Bargaining Council is void and unlawful.
5. An order that prejudice
suffered by the applicants in the form of patrimonial loss since
2001, be compensated by the Bargaining
Council.
6. An order for interim relief
that compliance with the Main Agreement not be enforced by agents of
the Bargaining Council, pending
verification by the Constitutional
Court of the anticipated declaration of section 105(1) as invalid in
terms of the Bill of Rights”.
SACTWU is cited as the first respondent and the Bargaining Council
as the second respondent. The “Registrar of Labour”
–
clearly meant to designate the registrar of labour relations
appointed in terms of s 108 of the LRA – and the Minister
of
Labour are cited as the third and fourth respondents respectively.
Mr
Kahanovitz
, who appeared for the third and fourth
respondents, informed me that the Minister opposes the application
but the Registrar abides
the decision of the court.
The respondents have raised a number of preliminary arguments.
Before I deal with those, it will make for a better understanding
of
the dispute against a brief consideration of the background facts.
Background facts
The first applicant is a clothing manufacturing subcontracting
business, apparently wholly owned by Mr JJ Visser, who appeared
on
behalf of both applicants in these proceedings. Mr Visser informed
me from the bar that he is also the “managing member”
of
the second applicant, Abbey Road Fashions cc, another clothing
manufacturing subcontracting business operating from 18 Collinwood
Road, Observatory.
The applicants complain that SACTWU is not independent from Seardel,
a major clothing manufacturer. They allege that SACTWU,
through its
shareholding in Seardel, has become “the de facto owners of
Seardel”. The applicants, though non-parties
to the Bargaining
Council, say they are bound by the Main Agreement reached by parties
to the Council (apparently because the
Main Agreement is extended to
non-parties falling within the scope of the Council).
Their bone of contention is that SACTWU “sits on both sides of
the fence”, as employer and trade union, with the
result that
the Bargaining Council enters into agreements that are extended to
non-parties and that parties such as the applicants
find it
difficult or even impossible to comply with. And some suppliers of
work, to their credit, refuse to source garments from
the applicants
if they are non-compliant.
The applicants go so far as to allege that “the business”
– without specifying whether they refer to one of
the
applicants – “was starved and was forced to close down”.
Unfortunately the applicants provide no details
or proof of this
state of affairs, despite having been invited to do so by the
respondents in their answering affidavits. Neither
do the applicants
provide any details of their employees (if any), and whether they
are members of SACTWU. The applicants did
not file any replying
affidavits, despite a number of factual and legal disputes having
been raised by the respondents.
Mr Visser informed me from the bar that the first applicant is no
longer trading; yet he states in his founding affidavit that
“the
business recovered and since August 2009 ... starving of the
business of work by Bargaining Council officials is repeated
and
compliance is enforced, even though one party to the Council sits on
both sides of the collective bargaining table.”
The factual situation
In the absence of any replying affidavits, I am bound by the rule
set out in
Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty)
Ltd.
4
The factual situation that is set out in SACTWU’s answering
affidavit – and thus stands uncontested – is that
SACTWU
owns 39% of the issued share capital in HCI. HCI, in turn, owns 100%
of Fulela Trade & Invest 96 (Pty) Ltd, which
in turn owns 100%
of Fulela Trade & Invest 81 (Pty) Ltd. The latter entity is a
70% shareholder in Seardel. Seardel is a
group of companies with
significant interests in the clothing and textile industry, but it
is also involved in the manufacture
and distribution of office
automation, consumer electronics, toys, games and stationery. Apart
from clothing and textiles, HCI
is involved in media and
broadcasting, casinos, hotels and leisure, transport, energy, food
and beverages, mining, financial
services, property and technology.
While the 39% of shares in HCI are held by SACTWU, no SACTWU
official has any shares in HCI. The shareholding in HCI –
and
indirectly in Seardel – does not affect the independence of
the union. There is no “sweetheart” relationship
between
the union and Seardel; and the union engages entirely independently
from its investments, its investment trust and its
investment group
in the annual negotiations at Bargaining Council level.
Preliminary points
The respondents have raised a number of preliminary points in their
answering papers. The applicants did not deal with these
points in
reply. Mr
Visser
nevertheless dealt with them in argument.
Locus standi
Quite apart from the provisions of s 105 of the LRA, the respondents
raise the question of the applicants’
locus standi
in
these proceedings.
Mr Visser, the deponent to the founding affidavit, describes each of
the applicants as “a clothing manufacturing subcontracting
business”. The first applicant (Sergeant Pepper’s
5
)
purportedly “operated until April 2007” from an address
in Maitland; the second applicant has its principal place
of
business in Observatory.
In his heads of argument, Mr Visser changed the citation of the
first applicant to “JJ Visser trading as Sgt Pepper’s
Knitwear”. But there was no application to change the citation
in terms of rule 22. He informed me from the bar that he
is the sole
proprietor of Sgt Pepper’s and that it is no longer in
business; and that Abbey Road is a close corporation
comprising
three members of which he is styled as the “managing member”.
None of this information was backed up on
affidavit or by way of
annexures such as the relevant CK forms, despite invitations from
the respondents in their replying papers
to do so. And to add to the
confusion, the first applicant was decribed in the previous case
6
that served before Basson J as “Golden Rewards cc t/a Sgt
Pepper’s”.
As Mr
Kahanovitz
pointed out, it appears that Mr Visser
retains in his stable a number of entities that seem to suffer from
multiple personality
disorder. The court has no information before
it to show that the applicants are indeed involved in the clothing
manufacturing
industry and fall within the scope of the Bargaining
Council ; that the Main Agreement has been extended to them; or any
details
of their employees.
I am nevertheless loathe to close the doors of the court to the
applicants on these grounds alone. Mr Visser was unrepresented;
I am
therefore prepared to accept, based on his explanation from the bar,
that he is the sole proprietor of the first applicant
(albeit that
it is no longer in business). I am also prepared to accept that he
appears on behalf of the second applicant as
its member. In terms of
s 162 of the LRA:
“
In
any proceedings before the Labour Court, a party to the proceedings
may appear in person or be represented only by—
(a) a legal practitioner;
(b) a director or employee of
the party;
(c) any member, office-bearer or
official of that party’s registered trade union or registered
employers’ organisation;
(d) a designated agent or
official of a council; or
(e) an official of the
Department of Labour.”
I would read the reference to “a director” of a party
(i.e. a company) to include a member of a close corporation.
I
therefore accept that Mr Visser appears as the sole proprietor of
the first applicant and as a member of the second applicant;
and
that both entities have standing to bring the application.
Once and for all
Mr
Visser
is clearly an ardent Beatles fan, judging from the
names of the applicants (Sergeant Pepper’s and Abbey Road).
But as far
as the previous judgment of this court involving the same
parties is concerned, he could not “let it be”.
Basson J has made a ruling in the application that was brought on
the same substantive issues that the applicants have now referred
to
court afresh. That judgment was disposed of on the grounds that the
applicants did not have
locus standi
in terms of s 105 of the
LRA; hence the further application now before court to have that
section declared unconstitutional.
Our courts are not in favour of a piecemeal approach to litigation.
Hence the “once and for all” has developed, expressed
as
follows
7
:
“
The
‘once and for all’ rule applies especially to common law
actions for damages in delict, though it has also been
applied to
claims for damages for breach of contract (see
Kantor
v Welldone Upholsterers
1944 CPD 388
at 391;
Custom
Credit Corporation (Pty) Ltd v Shembe
1972
(3) SA 462
(A) at 472 A-D). Expressed in relation to delictual
claims, the rule is to the effect that in general a plaintiff must
claim in
one action all damages, both already sustained and
prospective, flowing from one cause of action (see
Cape
Town Council v Jacobs
1917 AD 615
at 620;
Oslo
Land Co Ltd v The Union Government
1938 AD 584
at 591;
Slomowitz
v Vereeniging Town Council
1966
(3) SA 317
(A) at 330;
Custom
Credit Corporation (Pty) Ltd v Shembe (supra
at 472). This rule appears to have been introduced into our practice
from English law (see
Coetzee
v SAR & H
1933
CPD 565
at 574; Prof CFC van der Walt
Die
Sommeskadeleer en die Once and for All – Reël”
(doctoral thesis) at 304, 329, 378-9). Its introduction and the
manner of its application have been subjected to criticism (see
Van
der Walt (op cit
at 425-85)), but it is a well-entrenched rule. Its purpose is to
prevent a multiplicity of action and to ensure that there is an
end
to litigation.”
I accept that this principle must also apply to applications in this
Court. And in any event, the applicants also purport to
seek
delictual damages (although this Court does not have the
jurisdiction to award it)
8
.
The facts, legal context, events and circumstances have not changed
between the time the applicants launched their first application
–
which Basson J dismissed – and this one.
Strictly speaking, therefore, the Court need not entertain this
application again. Nevertheless, the applicants have raised a
novel
constitutional issue; and in circumstances where they are not
legally represented, I will consider the application. The
question
of its merits (or lack thereof), and whether they should have
brought a second application, can be considered in the
allocation of
costs.
Unfortunately, interesting as it is, the Court should not consider
the constitutional point raised, given the merits of the
application.
The constitutional point is moot
It is a well-established principle of constitutional law and
practice that a constitutional point should not be considered if
it
is not necessary in order to dispose of the case. As Kentridge AJ
said in
S v Mhlungu:
9
“
I
would lay it down as a general principle that where it is possible to
decide any case, civil or criminal, without reaching a constitutional
issue, that is the course which should be followed.”
And Chaskalson P echoed these sentiments in
Zantsi:
10
“
The
same principle underlies the provisions of section 102(5) which
require appeals from a provincial or local division of the Supreme
Court to be dealt with first by the Appellate Division and, where
possible, to be disposed of by that Court without the constitutional
issue having to be addressed. It is only where it is necessary for
the purpose of disposing of the appeal, or where it is in the
interest of justice to do so, that the constitutional issue should be
dealt with first by this Court. It will only be necessary
for this to
be done where the appeal cannot be disposed of without the
constitutional issue being decided; and it will only be
in the
interest of justice for a constitutional issue to be decided first,
where there are compelling reasons that this should
be done.
This rule allows the law to
develop incrementally. In view of the far-reaching implications
attaching to constitutional decisions,
it is a rule which should
ordinarily be adhered to by this and all other South African Courts
before whom constitutional issues
are raised.”
The current application can be disposed of on the merits without
deciding the constitutional question. I turn now to those merits.
The merits
As I have set out above, on the evidence before me SACTWU is, as a
fact, independent of Seardel.
But in any event, the applicants’ case is misconceived. If
they were to have
locus
standi (i.e. if s 105 were to be held
to be unconstitutional), they seek a declaratory order that SACTWU
is no longer independent.
That contention is based on the
application of s 95(2) of the LRA. That subsection reads as follows:
“
(2) A
trade union is independent if—
(a) it is not under the direct
or indirect control of any employer or employers’ organisation;
and
(b) it is free of any
interference or influence of any kind from any employer or employers’
organisation.”
In other words, a trade union will be considered no longer to be
independent if it is shown to be “under the direct or
indirect
control of any employer or employers’ organisation” or
if it is subject to “any interference or influence
of any kind
from any employer or employers’ organisation.”
Neither of these scenarios is raised by the applicants on their
papers, even if the factual allegations made in the founding
affidavit were to have been uncontested.
The applicants allege the contrary: they allege that Seardel is
“under the control” of SACTWU, and not the other
way
round. That contention is based on the applicants’ mistaken
assertion that SACTWU has a controlling shareholding (via
HCI) in
Seardel.
The mischief intended to be addressed by the legislature from a
policy point of view in enacting s 95(2) is clear: it is to prevent
the formation and proliferation of “sweetheart unions”
that are formed to advance the employer’s interests
rather
than those of workers. That is why a trade union is empowered to
approach the court to seek an order that a rival union
is no longer
independent.
The contrary scenario – that a rival employer is controlled by
a trade union – is not envisaged by the Act. Neither
is a
declaratory order in circumstances such as those raised by the
applicants in this case covered by the provisions of s 95(2).
In these circumstances, the applicants have not made out a case on
the merits of their application and the constitutional point
is
moot.
Costs
The general rule is that unsuccessful constitutional litigants who
have raised meritorious issues of substance should not be
mulcted in
costs. Furthermore, this court is enjoined to take into account
considerations of both law and fairness in considering
whether to
award costs.
11
In doing so, the Court must take into account:
“
the
conduct of the parties—
(i) in proceeding with or
defending the matter before the Court; and
(ii) during the proceedings
before the Court.”
With regard to constitutional matters, Ackermann J noted in
Motsepe
v CIR:
12
“
In my
view one should be cautious in awarding costs against litigants who
seek to enforce their constitutional right against the
state,
particularly where the constitutionality of a statutory provision is
attacked, lest such orders have an unduly inhibiting
or ‘chilling’
effect on other potential litigants in this category. This cautious
approach cannot, however, be allowed
to develop into an inflexible
rule so that litigants are induced into believing that they are free
to challenge the constitutionality
of statutory provisions in this
court, no matter how spurious the grounds for doing so may be or how
remote the possibility that
this court will grant them access. This
can neither be in the interests of the administration of justice nor
fair to those who
are forced to oppose such attacks.”
In the current case, the conduct of the applicants becomes
significant. They brought an unmeritorious application to this
Court,
not once, but twice. They were not deterred by a punitive
costs order made by Basson J in the first round. The second
application
was distinguished only by the novel constitutional
ground raised; but because of the fact that the application had no
merit in
itself, that ground was doomed to fail. The applicants were
warned of the consequences of continued litigation; yet they
continued
regardless.
In these circumstances, despite the fact that the applicants are not
legally represented and that they purported to raise a
constitutional issue, costs should follow the result. I am not
inclined to award punitive costs, as the respondents invited me
to
do, though.
Given the unclear nature of especially the first applicant’s
legal personality, I will accept Mr
Visser’s
assurance
from the bar that he is its sole proprietor. Therefore ,Mr Visser
must be held jointly and severally liable for costs.
Order
The application is dismissed with costs, such costs to be paid by
the applicants and Mr JJ Visser jointly and severally, the
one
paying, the other to be absolved.
_______________________
Steenkamp J
APPEARANCES
APPLICANTS:
Mr JJ Visser.
FIRST RESPONDENT:
Adv E Tolmay (heads of
argument having been drafted by Adv TMG Euijen)
Instructed by Cheadle
Thompson & Haysom.
SECOND RESPONDENT:
Adv GA Leslie (heads of
argument having been drafted by Adv P Farlam SC)
Instructed by
Herold Gie Inc.
THIRD AND FOURTH
RESPONDENTS:
Adv CS Kahanovitz SC
Instructed by the State
Attorney.
1
Act
66 of 1995 (“the LRA”).
2
Case
no C 323/2010, Labour Court, Cape Town, 19 August 2010.
3
Constitution
of the Republic of South Africa, 1996.
4
[1984] ZASCA 51
;
1984
(3) SA 623
(A) at 634 H-I.
5
From
the names of the businesses Mr Visser appears to be an ardent
Beatles fan. He confirmed this in argument.
6
C
323/2010.
7
Evins
v Shield Insurance Co Ltd
1980 (2) SA 814
(A) at 835 A-E.
8
Mohlaka
v Minister of Finance & Others
(2009) 30
ILJ
622 (LC)
para [46]: “[N]othing in s 157 confers jurisdiction on the
Labour Court to try a claim for delict.”
9
[1995] ZACC 4
;
1995
(3) SA 867
(CC);
1995 (10) BCLR 1424
para [59].
10
Zantsi
v Council of State, Ciskei
[1995] ZACC 9
;
1995 (4) SA 615
(CC);
1994 (6) BCLR
136
(CC) paras [2] – [5].
11
LRA
s 162.
12
[1997] ZACC 3
;
1997
(2) SA 898
(CC);
1997 (6) BCLR 692
(CC) para [30].