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[2013] ZALCJHB 91
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Phaka and Others v Bracks and Others (JR1171/11) [2013] ZALCJHB 91 (29 May 2013)
REPUBLIC OF SOUTH
AFRICA
THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not Reportable
Case no. JR1171/11
In the matter between:
PHAKA AND 19 OTHERS
.
............................................................................
Applicants
and
COMMISSIONER RONNIE
BRACKS
...............................................
First
Respondent
NATIONAL BARGAINING
COUNCIL FOR ROAD
FREIGHT INDUSTRY
(NBCRFI)
...................................................
Second
Respondent
UTI SOUTH AFRICA (PTY)
LIMITED
(MOUNTIES DIVISION)
......................................................................
Third
Respondent
Heard: 19 December
2012
Delivered: 29 May 2013
___________________________________________________________________
JUDGMENT
BLEAZARD, AJ
[1] In this matter, the
applicants seek to review the first respondent’s Arbitration
Award issued under the auspices of the
second respondent under
consolidated case numbers D1207 and D1219/JHB/9259/05. Secondly, they
seek an Order ‘Substituting
the first respondent’s award
with an Order that the Applicants deemed to be employees of the Third
Respondent, termination
was unfair with the Order of reinstatement’
1
.
[2] The first issue is to
identify the “applicants”. The case heading referring to
“Phaka & 19 Others
”
is,
in fact, a misnomer. In terms of the applicant’s Founding
Affidavit, the applicants before the Court are, in fact, nine
applicants and they are Sidney Vusimuzi Tukula; Lazarus Ditshego;
June Maximillan Padi; Benjamin Sipho Maloma; Enock Maredi; Samuel
Hlohlongwane; Patrick Mathopa Phaka; Joseph Mokgalo and Patrick
Selogane Magampa.
2
Advocate Bruce Leech SC,
who appeared on behalf of the third respondent, raised the issue that
those of the applicants in this matter
who referred a dispute
concerning an unfair labour practice could never succeed in a claim
for reinstatement as set out in paragraph
2 of the Notice of Motion.
He says that in the absence of a referral of a dispute concerning
unfair dismissal, the first respondent,
and by extension this Court,
does not have jurisdiction to reinstate those applicants. For the
reasons set out below this does
not have to be determined.
[3] As I understand it,
this issue comes to this Honourable Court essentially as a
jurisdictional dispute and this Court is required
to make a
determination whether, objectively speaking, the facts which give the
second respondent jurisdiction to entertain the
dispute existed. If
such facts do exist, the second respondent has jurisdiction to hear
the matter and, if not, the second respondent
does not have
jurisdiction to consider the matter.
3
The issue of the
reasonableness of the Award as set out in the
Sidumo
4
judgment raised by both
parties does not appear, therefore, to be the correct test.
[4] Essentially the
matter came before the first respondent under the auspices of the
second respondent. After a long hearing the
second respondent made a
finding that the applicants were independent contractors and
dismissed the case against the respondent.
[5] Before proceeding
with the matter I must at the outset make the point that the record
in this matter that was presented by the
parties is far from
satisfactory. Unfortunately, due to the voluminous nature of the
record which was filed and due to the fact
that this matter came to
me in my capacity as an Acting Judge, I had not read the complete
record at the time when the matter was
argued in December 2012. It
now appears to me that the record that has been provided by the
parties is incomplete, is illegible
in some instances, and parts of
the witnesses’ evidence is missing. Nevertheless, I have taken
the view that there is sufficient
on record to deal with the
fundamental jurisdictional question as to whether the applicants were
employees or not.
[6] At the centre of the
dispute is whether a written contract that each of the applicants
concluded with the third respondent constituted
a contract of an
independent contractor or an employee. Allied to this is whether,
notwithstanding the express provisions of the
contract, the
applicants were nevertheless employees by virtue of the presumption
included in Section 200A of the Labour Relations
Act.
[7] The contract is
lengthy but there were certain provisions which were referred to by
Mr Khoza, who appeared on behalf of the
applicants in this Court,
which he regarded as indicative of the fact that the applicants were
not independent contractors but
were employees.
[8] Of particular concern
to Mr Khoza were the provisions of clauses 4.1, 4.2, 10.1 and 14 of
the contract. These clauses read as
follows:
‘
4.1. The
Contractor shall ensure that collections and deliveries are at all
times effected according to the Standard Operating Requirements
of
UTi Mounties Division in conjunction with the requirements of the
relevant route structures in Annexure A.
5
4.2. The Standard
Operating Requirements of UTi Mounties Division may be amended from
time to time in UTi Mounties Division’
sole discretion. The
Contractor undertakes to comply with such amendments.
6
10.1. The authority of
the Contractor in terms of this agreement shall be limited to the
delivery and collecting of goods to and
from the customers of UTi
Mounties Division within the areas stipulated in this agreement.
7
14.
Participation
in contractor assistance program
14.1. It is a condition
of this agreement that the Contractor participate in UTi Mounties
Division’ Contractor Assistance
Program.
14.2.1. The Standard
Operating Requirements will be issued by, and maintained by, the
Contractor Assistance Program.
8
[9] The other issue which
was pertinently raised by Mr Khoza is the effect of Section 200A of
the Labour Relations Act. He also
referred to Section 83A of The
Basic Conditions of Employment Act which contains the same
provisions.[10] Section 200A of the Labour
Relations Act states as
following:
‘
200A Presumption
as to who is an employee
(1) Until the contrary is
proved, a person who works for, or renders services to, any other
person is presumed, regardless of the
form of the contract, to be an
employee, if any one or more of the following factors are present:
(a) The matter in which
the person works is subject to the control or direction of another
person;
(b) The persons hours of
work are subject to the control and direction of another person;
(c) In the case of a
person who works for an organisation, the person forms part of that
organization, The person who worked for
that other person for an
average of at least 40 hours per month over the last 3 months;
(d) The person is
economically dependent on the other person for whom he or she works
or renders services;
(e) The person is
provided with tools of trade or work equipment by the other person;
or
(f) The person only works
for or renders services to one person.’
[11] The presumption
referred to above does not apply to persons who earn in excess of an
amount determined by the Minister of Labour
in terms of Section 6(3)
of The Basic Conditions of Employment Act.
[12] As I understand the
position in respect of the applicants in this matter, it was conceded
that they fall within the parameters
of Section 200A of the Labour
Relations Act.
[13] In this regard the
applicants’ representative referred to the clauses in the
contract which has been set out above and
raised, in particular, the
hours of work that the applicants were required to work and that
those were similar of the employees
of the third respondent, that the
applicants worked for the third respondent more than 45 hours per
week, that the applicants were
economically dependent on the third
respondent and that the third respondent assisted and provided the
applicants with the necessary
tools of trade or work equipment. Much
of the evidence led before the first respondent by each of the
individual applicants canvassed
these issues.
[14] I do not intend for
the purposes of this Judgment to repeat the evidence of the witnesses
at the Arbitration proceedings. Not
only is the transcript filed of
Record, but the first respondent has in his Award set out the
evidence in some detail. I do not
believe that his record of such
evidence is in dispute, it is the legal consequences which flow from
such evidence that are an
issue.
[15] In the matter of
Niselow
v Liberty Life Association of Africa Limited
9
, Streicher JA, stated:
‘
It was not contended that the
written agreement between the parties contained a simulated
transaction, that it had been amended
or that it was vague or
ambiguous. The legal relationship between the parties must therefore
be gathered from the terms of the
written agreement (see Smit at
64B)’.
[16] In
SA
Broadcasting Corporation v McKenzie
10
E-H, Myburgh JP, as he
then was, stated the following :
‘
The legal relationship between
the parties must be gathered primarily from a construction of the
contract which they concluded (
Smit
v Workmen’s Compensation Commissioner at 64B; Liberty Life
Association of Africa Ltd v Niselow at 683D-E,
‘although the parties’ own perception of their
relationship and the manner in which the contract is carried out in
practice may, in areas not covered by the strict terms of the
contract, assist in determining the relationship’ (
Borcherds
v CW Pierce & J Steward t/a Lubrite Distributors
at
1277H-I). In seeking to discover the true relationship between the
parties, the court must have regard to the realities of the
relationship and not regard itself as bound by what they have chosen
to call it (
Goldberg v
Durban City Council
1970
(3) SA 325
(N) at 331B-C). As Brassey ‘The Nature of
Employment’ at 921 points out, the label is of no assistance if
it was chosen
to disguise the real relationship between the parties,
but ‘but when they are
bona
fide
it surely sheds light
on what was intended’
.
’
[17] It is perhaps
worthwhile to set out what was said in the seminal decision of
Smit
v Workmen’s Compensation Commission
11
:
‘
It is convenient at this stage
to recapitulate some of the important legal characteristics of the
contract of service (
locatio
conductio operarum
) and the
contract of work (
locatio
conductio operis):
The object of the contract of service
is the rendering of personal services by the employee (
locator
operarum
) to the employer (
conductor operarum
). The
services or the labour as such is the object of the contract.
1. The object of the contract of work
is the performance of certain specified work or the production of a
certain specified result.
It is the product or the result of the
labour which is the object of the contract.
2. According to a contract of service
the employee (locator operarum) is at the beck and call of the
employer (
conductor operarum
) to render his personal services
at the behest of the latter.
By way of contrast the conductor
operis stands in a more independent position vis-à-vis the
locator operis
. The former is not obliged to perform the work
himself or product the result himself (unless otherwise agreed upon).
He may accordingly
avail himself of the labour or services of other
workmen as assistants or employees to perform the work or to assist
him in the
performance thereof.
3. Services to be rendered in terms of
a contract of service are at the disposal of the employer who may in
his own discretion decide
whether or not he wants to have them
rendered.
The
conductor operis
is bound
to perform a certain specified work or produce a certain specified
result within the time fixed by the contract of work
or within
reasonable time where no time has been specified.
4. The employee is in terms of the
contract of service subordinate to the will of the employer. He is
obliged to obey the lawful
commands, orders or instructions of the
employer who has the right of supervising and controlling him by
prescribing to him what
work he has to do as well as the manner in
which it has to be done.
The
conductor operis
, however,
is on a footing of equality with the
locator operis
. The
former is bound by his contract of work, not by the orders of the
latter. He is not under the supervision or control of the
locator
operis
. Nor is he under any obligation to obey any orders of
locator operis
in regard to the manner in which the work is to
be performed. The
conductor operis
is his own master being in
a position of independence vis-à-vis the
locator operis
.
The work has normally to be completed subject to the approval of a
third party or the
locator operis.
5. A contract of service is terminated
by the death of the employee whereas the death of the parties to a
contract of work does
not necessarily terminate it’
12
[18] I shall deal with
each of the issues raised by Mr Khoza which he says indicate a
contract of employment rather than an independent
contractor. First
of all, the issue of the hours of work that he states were
“controlled” by the third respondent.
The third
respondent’s evidence was that the times for the collection of
the documentation from the bank and the delivery
thereof was
determined not by the third respondent but by its customers with whom
the third respondent contracted. Being a courier
company transporting
sensitive and valuable financial documents for financial
institutions, the third respondent had to comply
with the
requirements of its customers and accordingly anyone who was to
perform on any of the routes had to comply with that time
schedule.
As the applicants had been employees of the third respondent they
were aware what was involved and the concept of the
routes which were
determined by the customers and the delivery times which were
mandatory. The applicants contended that after
they signed the
contract with the third respondent the system (i.e. of the times they
were required to work and the routes) was
unchanged from when they
had admittedly been employees of the third respondent. This is
correct. It must be borne in mind, however,
that a number of the
routes which were required to be undertaken were not performed
directly by the applicants after the contracts
were signed, but by
employees employed by the applicants. Those drivers, it was common
cause, were not employees of the third respondent
but were employees
of the particular applicant. Those employees were not under the
control of the third respondent but under the
control of their
employer, namely the specific applicant.
[19] At paragraph 17 of
his Award the first respondent deals with this issue as follows :
‘
In addition the majority of the
Applicants were ex-employees and knew exactly how the business
operated. In fact they stated that
they took over the same routes
that they had previously operated on. In addition each and every
contract signed had a route schedule
attached to it. I am therefore
surprised that the evidence regarding the routes is now being used
with the intention of supporting
their claim that the company
controlled them, when they knew that the routes formed the standard
operating requirements of the
contract. I am not at all convinced
that the route schedule supports the contention that the Applicants
were under control.’
13
14
[20] A further issue
raised by Mr Khoza was that the applicants were economically
dependent upon the third respondent.
[21] It is true that by
virtue of the time that the applicants spent on the contract which
they had concluded with the third respondent,
there was very little
time for them to engage in other contracts. But what is of
significance to me in regard thereto is that not
only did the
individual applicants apply for renewal of contracts (the contracts
were for a period of 2 years) but they, themselves,
employed drivers
on their behalf to operate on routes of the third respondent.
Accordingly, the contracts enabled the applicants
to expand their
economic power by obtaining another vehicle or vehicles and engaging
the services of their own employee or employees.
From what I can
gather, there was nothing to prevent one of the applicants from
giving up one of the routes undertaken by his employee
to engage in
other economic activity on behalf of that applicant. “Economic
dependence
”
accordingly,
does not of its own translate into an employment contract.
[22] A further issue
raised by Mr Khoza was that of the procurement by the third
respondent of motor vehicles on behalf of the applicants,
and that
this had to be done in accordance with the Contractor Assistance
Program referred to above, meant that Section 200A(f)
came into play.
Indeed, the procurement of motor vehicles for the applicants appears
to be in accordance with the
Draft
B-BBEE Charter – Road Freight Transport, Logistics and Allied
Services for Reward Industry
issued
under
Government
Notice 1162 of 2009
.
That document is filed of record and is at pages 147 to 182 of Bundle
C1 of the Record
15
.
One of the issues raised under that charter is that the “owner
driver
”
must
obtain “full ownership of the vehicle at the end of the
period
”
.
It would have been a vastly different matter, in my view, if the
third respondent had claimed the ownership of the vehicles in
question. It was common cause that although the type of vehicle was
prescribed, ownership thereof vested in the applicants (or,
in most
cases, close corporations of which they were the members and hence
the beneficiaries).
[23] A further issue
which was raised repeatedly in the evidence was whether the
applicants were given copies of their contracts
at the time that they
concluded those contracts and whether they were given an opportunity
to seek advice on those contracts. There
was some uncertainty about
this. However, those contracts were for fixed periods of two years
and new contracts were concluded
on a number of occasions in the same
terms. There is no doubt from the voluminous documents which have
been submitted in this matter
that the applicants acted in accordance
with those contracts and their subsequent contracts and arranged
their affairs in accordance
therewith. It is, in my view, highly
unlikely that they did not have access to and copies of the
contracts.
[24] The third respondent
raised a number of issues in support of its contentions that the
applicants were not employees but contractors.
First of all, the
contract itself which clearly stipulates that the contract is not an
employment contract and is an independent
contractor contract. In
this regard the applicants had previously been employees of the third
respondent and when they were invited
to participate in the
owner-driver scheme must have understood the implications of that. In
addition thereto, the contract clearly
makes no provision for leave,
sick leave or the like which would be part of the contract of
employment.
[25] The third respondent
also indicated that the ability of the applicants to employ their own
employees to service routes militates
against an employment contract.
The applicants issued invoices in accordance with their contracts and
refer to their “fee”
for services rendered for the
particular month. Also, they received a reimbursive amount per
kilometer for distance travelled which
was in accordance with the
contract and would not have occurred in an employment environment.
[26] The applicants, in
most cases, renewed their contracts. Those contracts were fixed term
contracts of two years.
[27] In all the instances
(except in respect of one Mr Padi where the evidence is not clear)
the applicants contracted through a
close corporation of which they
were the members.
[28] At no stage during
the periods of the contracts did the applicants seek to contend that
they were employees or seek to return
to the third respondent as
employees of the third respondent.
[29] In the decision of
Denel (Pty) Ltd v Gerber
Zondo JP (as he then was) formulated
the issue of jurisdiction on the following basis:
‘
[19]
When
a court or other tribunal is called upon to decide whether a person
is another’s employee or not, it is enjoined to determine
the
true and real position. Accordingly, it ought not to decide such a
matter exclusively on the basis of what the parties have
chosen to
say in their agreement for it might be convenient to both parties to
leave out of the agreement some important and material
matter or not
to reflect the true position.
[20] If a court or other tribunal were
to be precluded from looking at matters outside of the parties’
agreement, there would
be a serious danger that it could be precluded
from determining the true position or the true relationship between
the parties
and end up making a finding that the parties wish it to
make as to the position when in fact the true position is different.
That
cannot, in my view, be allowed in a case where the duty of the
court or tribunal is to determine that which is objectively the
position.’
16
[34] In the
circumstances, I am of the view that the contracts of the applicants
viewed holistically do not constitute contracts
of employment but
contracts as independent contractors. I am also satisfied that
although there are factors present which create
the presumption as
provided for in Section 200A, the third respondent has rebutted the
presumption for the reasons which have been
enumerated above.
[35] Consequently, I do
not believe there is a basis to review the decision to which the
first respondent came to in his Award and
that the application of the
applicants is dismissed.
[36] In his Heads of
Argument Bruce Leech SC, who appeared on behalf of the third
respondent indicated that the matter was of considerable
importance
to the parties and, even if I was to find in the favour of the third
respondent, the third respondent did not seek costs
against the
applicants.
[37] Accordingly, I make
the following order.
The Application of the
applicants to review the Award of the first respondent under the
auspices of the second respondent under
consolidated case numbers
D1207 and D1219/JHB/9259/05 is dismissed;
There is no order as to
costs.
_______________
Bleazard, AJ
Acting Judge of the
Labour Court
Appearances
:
For the Applicant: R
Khoza
Instructed by: Retail &
Allied Workers Union
For the third Respondent:
B Leech, SC
Instructed by: Wright,
Rose-Innes Inc
1
See
page 2 of Notice of Motion at para 2
2
See
page 2 of Founding Affidavit at para 3
3
South
Africa Rugby Players Association and Others v SA Rugby (Pty) Ltd and
Others [2008] 29 ILJ 2218 (LAC) at para 41.
4
(2007)
28 ILJ 2405 (CC).
5
See
page 187 of the Bundle
6
See
page 188 of the Bundle
7
See
page 190 of the Bundle
8
See
page 191 of the Bundle
9
1998
(4) S 163 (SCA) at 166
10
(1999)
20 ILJ 585 (LAC)
at
para.10.
11
1979
(1) SA 51
AD at 61 A-H :
12
1979
(1) SA 51
AD at 61 A-H
13
See
Page 38 of the Award para 17
14
1979
(1) SA 51
AD supra at 61 B-D
15
See
Pages 147 to 182 of Bundle C1 of the Record
16
(2005)
26 ILJ 1256 (LAC)