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[2013] ZALCJHB 123
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General Industries Workers Union of South Africa and Others v LLM Trading and Development CC (J 2660/12) [2013] ZALCJHB 123 (20 June 2013)
7
REPUBLIC OF SOUTH
AFRICA
THE REPUBLIC OF SOUTH
AFRICA, JOHANNESBURG
JUDGMENT
Not Reportable
Case no: J 2660/12
In the matter between:
GENERAL INDUSTRIES
WORKERS
UNION OF SOUTH AFRICA
AND OTHERS
.................................................
Applicants
and
LLM TRADING AND
DEVELOPMENT CC
.........................................
First
Respondent
Heard 06 June 2013
Delivered 20 June 2013
Summary: Section 197 –
transfer of employees – necessary factual contentions to
establish that a business or part of
a business has been transferred
as a going concern
JUDGMENT
GAIBIE, AJ
Introduction
The applicants launched
this application on an urgent basis on or about 11 October 2012.
Given the nature of the relief sought
by the applicants, a
rule
nisi
was
initially granted on 11 October 2012, and was extended on five
occasions until the matter was heard on 6 June 2013, the return
date.
On 6 June 2013, the only
issue left for determination was whether the Ekurhuleni
Municipality’s (“the third respondent”)
cleaning
services, and in particular that part of the services which was
focussed on cleaning the streets of the magisterial
district of
Germiston (“the cleaning service”), had been transferred
in terms of section 197 of the Labour Relations
Act
1
from LLM Trading and
Development CC (“the first respondent”) to Bvumi
Investment CC (“the second respondent”)
and or to
Makhala Ekuseni Trading and Project CC (“the fourth
respondent”), and consequentially whether the employees
of the
first respondent were employed by the second and or the fourth
respondents.
The story in this matter
begins with an account of the employment relationship between the 92
individual applicants (“the
employees”) and their
previous employer in the first instance, and their relationship with
their current employer, the
first respondent, in the second
instance. In respect of the latter relationship, the deponent of the
founding affidavit explains
that -
3.1. The employees were
2
employed by the first
respondent as general workers to clean the streets of Germiston for a
fixed period from September 2009 to
June 2012;
3.1. On 25 May 2012,
the first respondent
informed the employees that their fixed term employment contracts
would terminate at the end of June 2012 when
the contractual
arrangements between it and the third respondent would come to an
end. The first respondent also informed them
that if the contractual
arrangements with the third respondent was extended, they reserved
the right to extend the contracts of
employment with those employees
that they required, on a month to month basis;
3.3. The individuals
continued to be employed by the first respondent for the period after
June 2012, on a month to month basis
and subject to the ongoing
contractual relationship between the first and the third respondent;
3.4. At some stage during
August 2012,
the
employees declared a dispute of mutual interest in terms of which
they demanded that their employer, the first respondent,
should facilitate the
transfer of their contracts of employment to the third respondent.
In the referral of the
dispute to the CCMA, the dispute with the first respondent is
formulated in the following terms:
‘
Workers are
demanding that the company that employs us negotiate with the
Ekurhuleni Municipality to employ us directly as municipal
workers’;
3.5. The dispute was not
resolved at conciliation, and on 28 September 2012, their employer
exercised a pre-emptive lock-out prior
to them embarking on strike
action.
At this stage, the
employees were clearly bewildered by the impact of the lock-out and
in the circumstances, they embarked on
a program of picketing that
resulted in unfortunate circumstances that are documented at length
in the founding affidavit. The
deponent then gets immersed in a
detailed, vivid and extremely descriptive account of the employees
encounter with the police
and their inability to picket peacefully.
It is in those circumstances, that they approached this court on 11
October 2012 with
a view to secure protection for their picket and
to establish picketing rules with the assistance of the CCMA.
Precisely when or for
how long the strike action continued is unclear from the founding
affidavit. Perhaps most significantly,
the deponent does not explain
how or in what circumstances the employment relationship between the
employees and their employer,
the first respondent, was severed.
What is clear, however, is that the applicants understood that their
employment relationship
with their employer was for a fixed period
and that the relationship would come to an end either in June 2012
or soon thereafter,
but by no later than the date of termination of
the contractual relationship between their employer and the third
respondent.
Given the imminent expiration of the contracts of
employment with their employer, the employees foolishly embarked on
strike
action aimed at securing employment with the third respondent
but seeking a declaration from this court that the second respondent
was their employer. This confusion is not only apparent from the
pleadings under consideration, but also from the remarks of
the
employees’ legal representative, Mr Cartwright, who contended,
in argument, that the employees were still on strike
and that they
required a declaration from this court about the identity of their
employer so that they could tender their services
and return to
work.
Given the context of the
facts set out above, on what legal basis did the applicants seek a
declaration that the second respondent,
and or the fourth
respondent, is their employer?
Is the second
respondent and or the fourth respondent the employer?
In the founding
affidavit and based only on the contents of paragraph 76 thereof the
applicants contend, in the midst of strike
action directed against
their current employer, that the second respondent must be declared
to be their new employer. In paragraph
76 the applicants state the
following:
‘
I am advised
that if the service contract has, which all the circumstances seem to
confirm, now been transferred to the second respondent,
then the
second to further applicants must in terms of section 197 of the LRA
be regarded as the employees of the second respondent.’
The contents of
paragraph 76 are speculative. In addition, they are based on an
assumption that is simply unsubstantiated. The
applicants do not
indicate if, when, how, for what period or indeed to what extent the
cleaning service was transferred to the
second respondent.
Given the paucity of the
contentions relied upon by the applicants (in the founding
affidavit) for the declaration they seek in
respect of the second
respondent, they also seek to capitalise on the information
contained in the second respondent’s
answering affidavit for
the same purpose. In the circumstances, it is necessary to turn to
an assessment of the contentions made
by the second respondent.
The second respondent
denies that the third respondent had transferred its cleaning
services to it in terms of section 197 of
the LRA, and to the extent
that it sheds any light on its contractual relationship with the
third respondent, the deponent to
the answering papers, indicates
the following:
10.1. First, that it had
a limited duration contract for the period 1 to 31 October 2012 to do
‘additional cleaning work’
for the third respondent;
10.2. Second, that it
concluded a longer term contract with the third respondent for the
period 6 December 2012 to 30 June 2015
for the ‘cleaning of
area 1 (which requires around 40 employees to do cleaning) of
Germiston Customer Care Centre’s
central business district’;
and
10.3. Third, that the
third respondent had appointed the fourth respondent, Makhala Ekuseni
Projects CC, to clean area 2 of Germiston
Customer Care Centre which
is an area bigger than area 1.
[11] Based on these
contentions, the applicants contend the following in their replying
papers:
11.1. In relation to
whether and when the employment relationship with the first
respondent was severed, the applicants contend
that this is simply
not an issue of any relevance because “the individual
applicants were employed beyond the end date of
these contracts and
consequently it can be legally inferred that at the time that the
first respondent’s contract with the
third respondent
terminated they were employed permanently”.
3
Apart from being a
legally unsound proposition, the applicants do not indicate: 1)
precisely when the contractual relationship between
the first and the
third respondent came to an end; 2) who employed the employees at
this point; and 3) precisely when it is contended
they were
transferred to the second or the fourth respondents or indeed by whom
they had been transferred to the latter respondents.
Perhaps most
importantly, the applicants do not provide any factual basis for the
assumption that the cleaning services performed
by the first
respondent were in fact performed by the second respondent or the
fourth respondent apart from a bald assertion to
that effect.
11.2. That
notwithstanding the absence of necessary and material averments
regarding the alleged transfer of the third respondent’s
cleaning services, the applicants nonetheless contend that “the
second respondent was and is required to employ the second
and
further applicants as they are now consequent to the 197 transfer the
employees of the second respondent”.
4
This assertion is made in
the context of the applicants’ concession that the second
respondent may not have taken over the
whole of the cleaning service
but only a part of it.
5
11.3. Based on the
information contained in the second respondent’s answering
affidavit, the applicants contend in their affidavit
in which they
seek the joinder of the fourth respondent, that a
prima
facie
case
exists to declare the second and the fourth respondents the employers
of the employees. For the purposes of this application,
however, the applicants
must establish a ‘clear right’ to the relief sought
failing which this application must be dismissed.
Clear right
Based on the pleadings
before this court,
it
is not clear whether there was in fact a transfer of the whole or
part of the cleaning service of the third respondent as a
going
concern, let alone whether the whole or part of that business had
indeed been transferred by the first respondent to the
second and or
the fourth respondents in the first instance, or to the latter by
the third respondent.
It is not apparent from
the pleadings whether the cleaning services were rendered by the
third respondent, and thereafter rendered
by the first respondent.
What is apparent from the pleadings is that the second respondent
was responsible for rendering ‘cleaning
services’ that
the third respondent may or may not have rendered itself. In the
circumstances, this court must assume that
the first respondent was
responsible for making its own appropriate business infrastructure
arrangements, for acquiring its own
assets and equipment, for
securing its own staff, for acquiring administrative support, office
space and relevant equipment for
that purpose, in order to render
the services. In the absence of the necessary averments -
particularly in respect of the date
of the termination of the
contractual arrangements between the first and the third respondent,
and the details of the contractual
arrangements between the third
respondent on the one hand and the second and or the fourth
respondents on the other hand - the
only conclusion that can be
reached is that upon the termination of the contractual arrangements
between the first and the third
respondent, the first respondent
forfeited the right to render the service, and the infrastructure
for rendering the service
remained the property of the first
respondent. Consequentially, the first respondent was responsible
for any issues, legal or
otherwise, emanating from the termination
of the employment relationship with the employees.
If the applicants had,
on the basis of the necessary averments, established that the first
transaction, that between the third
respondent and the first
respondent amounted to a transfer of the service as a going concern,
the next question would be whether
the services, if any, rendered by
the second and or the fourth respondents amounted to a transfer of
the service as a going concern.
And that would require an analysis
of the terms of the transaction between the third respondent on the
one hand, and the second
and or the fourth respondents on the other
hand. It is quite impossible on the basis of this application, to
determine in the
air,
6
the nature of the latter
transactions.
As indicated by the
Constitutional Court in
NEHAWU
V University of Cape Town and Others
,
7
the determination as to
whether the service has been transferred as a going concern is
wholly dependent on the facts and circumstances
of the particular
case and in light of the circumstances of each transaction. In the
absence of these details, the applicants
have not established a
clear right to the relief sought.
In the circumstances, it
is not necessary to determine whether the applicants have satisfied
the other requirements for final
relief.
In the circumstances, I
make the following order:
The application is
dismissed with costs.
____________
GAIBIE AJ
Acting Judge of the
Labour Court
Appearances:
For the Applicants: D
Cartwright from Cartwright Attorneys
For the Second
Respondent: Adv: Mphahlani Instructed by Baloyi Attorneys
1
66
of 1995.
2
I
use the past tense given the date on which this matter was heard.
The deponent of the founding affidavit however explains the
issues
in the current tense.
3
Para
11 of the replying affidavit.
4
Para
12 of the replying affidavit.
5
Para
13 of the replying affidavit.
6
Aviation
Union of SA v SA Airways (Pty) Ltd
[2012] 3 BLLR 211
(CC) at
para 111.
7
2003
(3) SA 1
(CC) at paras 56-58.