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[2013] ZALCD 22
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H & A Manufacturing (Pty) Ltd v Pender-Smith and Others (D124/12) [2013] ZALCD 22; (2013) 34 ILJ 2581 (LC) (22 February 2013)
7
REPUBLIC OF SOUTH
AFRICA
THE LABOUR COURT OF
SOUTH AFRICA, AT DURBAN
JUDGMENT
Reportable
case
no: D124/12
In the matter between:-
H & A
MANUFACTURING (PTY) LTD
..................................................................
Applicant
and
JENNIE PENDER-SMITH
........................................................................
First
Respondent
COMMISSION FOR
CONCILIATION,
MEDIATION AND
ARBITRATION
......................................................
Second
Respondent
ALMEIRO DEYZEL N.O
.........................................................................
Third
Respondent
Heard: 8 February 2013
Delivered: 22 February
2013
Summary: Review of
arbitration ruling regarding jurisdiction of CCMA to proceed with
unfair dismissal dispute
JUDGMENT
HASLOP, AJ
[1] This is an
application for the review of a ruling by the third respondent, a
commissioner at the CCMA, to the effect that the
jurisdiction of the
CCMA in this matter is not ousted by virtue of the fact that it would
be necessary, during the course of the
arbitration of the dispute, to
make a finding whether or not the parties entered into a
valid
agreement (the commissioner’s emphasis), whether such agreement
terminated the employment relationship by consent and whether
the
applicant at the CCMA, who is the first respondent in this
application, waived her rights in that agreement to pursue the
dispute that is the subject of the arbitration.
[2] The review
application was not opposed and was heard on 8 February 2013. The
late delivery of the application was condoned.
[3] The background to
this matter is that, during the arbitration at the CCMA to determine
the employee’s claim that she had
been unfairly dismissed, and
that she should be paid allegedly outstanding commission, notice pay,
leave pay and severance pay,
it emerged that the employee had signed
what was described as a retrenchment agreement.
[4] After reflecting, in
its preamble, that the employee’s position with the employer
had ‘become redundant’,
the retrenchment agreement
provides that the employee’s services would terminate on a
particular date and that she would
receive a ‘final severance
package inclusive of Notice Pay, Leave Pay and Severance Pay’
in an amount set out in the
agreement. The agreement went on to state
that it had been entered into after due and proper consultation and
that the employee
waived any right that she may have had to proceed
with any dispute, howsoever arising, and in any forum whatsoever.
[5] During her attorney’s
opening statement at the arbitration, it was claimed, on behalf of
the employee, that the retrenchment
agreement misrepresented the true
position in that the employee’s position was not, in fact,
redundant, no consultation process
had taken place, no agreement had
been reached on severance pay and the employee did not waive any of
her rights to pursue her
dispute.
[6] Indeed, it was
claimed that she had signed the agreement under duress, the details
of which were set out in the opening statement,
and that the
agreement was therefore invalid.
[7] As I have indicated,
the employee claimed further that she had been dismissed, and that
her dismissal was unfair.
[8] The employer denied
that the agreement had been signed under duress and argued that, in
any event, the CCMA did not have jurisdiction
to determine its
validity.
[9] The third respondent
then issued his ruling referred to above.
[10] Stated briefly, the
applicant contends that the commissioner’s ruling is grossly
irregular and ought to be set aside
because the determination of the
validity of an agreement such as the one in question falls outside of
the jurisdiction of the
CCMA.
[11] It must be noted, in
that regard, that the commissioner’s ruling is not that the
CCMA does in fact have jurisdiction
to determine a dispute concerning
the validity of an agreement of the sort involved in this matter, but
that the jurisdiction of
the CCMA to proceed with the arbitration is
not ousted because it will be necessary to make a finding on such
validity during the
course of such arbitration. The distinction is
fine, but important.
[12] It concerns the
vexed question of interim rulings by commissioners concerning their
own jurisdiction and the desirability or
otherwise of this court
entertaining jurisdictional disputes while the CCMA arbitration
process is in progress.
[13] I was referred, in
the applicant’s heads of argument, to the decision in
EOH
Abantu v Commissioner for Conciliation, Mediation & Arbitration &
another
1
.
The commissioner also refers to this judgment in his award. In that
matter this court granted interim relief staying a CCMA arbitration
pending the finalisation of a review application regarding a
commissioner’s jurisdiction.
[14] I should mention,
though, that the approach in that case was not followed in
EOH
Abantu v Commissioner for Conciliation, Mediation & Arbitration &
others
2
,
a subsequent judgment involving the same parties,when Cele J refused
to grant final relief in the matter. In his judgment, he
points out
that, ‘the expeditious resolution of labour disputes is not
served by a piecemeal approach’
3
.
[15] The approach of Cele
J in the second
EOH
Abantu
judgment
found favour with this court in
Workforce
Group (Pty) Ltd v National Textile Bargaining Council & Another
4
.
In fact, this court has, in a number of cases,
5
expressed its disapproval
of the piecemeal approach to the resolution of disputes whereby
parties interrupt arbitration proceedings
to bring jurisdictional
questions to the Labour Court. I associate myself with that
disapproval.
[16] This application
ought therefore to be dismissed for that reason alone.
[17] However, the basis
of this review, as set out in the applicant’s heads of
argument, is that the CCMA does not have jurisdiction
to deal with
the validity of agreements, and that the agreement in question could,
on various grounds that were argued before me,
in any event not have
been an agreement of the sort referred to in
s 24(8)
of the
Labour
Relations Act 66 of 1995
.
Indeed, one of the
grounds of review is that the commissioner failed to follow a binding
judgment of this court, namely
First
National Bank Ltd (Wesbank Division) v Mooi NO & others
6
.
[18] I therefore consider
it appropriate to deal with the jurisdiction of the CCMA as conferred
on it by
s 24(8)
of the LRA.
[19] Jurisdiction is a
matter of legal fact, rather than reasonableness
7
.
The question, therefore, is not whether a commissioner’s
jurisdictional ruling is grossly irregular, as suggested by the
applicant, but whether it is legally wrong.
[20] Counsel for the
applicant referred to
First
National Bank Ltd (Wesbank Division) v Mooi NO & others
8
as support for the
proposition that the CCMA, which has no jurisdiction outside of
matters in respect of which jurisdiction has
specifically been
conferred upon it, does not have jurisdiction to determine the
validity of an agreement such as the one described
in this case as a
retrenchment agreement.
[21] In that case,
Molahlehi J, held, that ‘the powers of commissioners of the
CCMA to rule on the interpretation and application
of agreements
(are), in my view, confined to collective agreements in terms of
s 24
of the
Labour Relations Act 66 of 1995
’
9
.
This view found support in
Premier,
Limpopo Province v Makgoka& others
10
where Lagrange J stated
that the arbitral powers of CCMA commissioners ‘. . . are
limited when it comes to matters of interpreting
agreements to the
interpretation and application of collective agreements’
11
.
[22] But, as the
commissioner pointed out in his ruling which is the subject matter of
this review, this court has expressed conflicting
views concerning
the meaning and applicability of
s 24(8)
of the LRA.
[23] In an unreported
judgment handed down in
Fidelity
Security Services (Pty) Ltd v Paul JacobusBenneker
12
,
Conradie AJ considered the matter and held, without referring to
either of the judgments mentioned above, that the wording of
the
section clearly applies to settlement agreements in general, as long,
of course, as they are settlement agreements contemplated
in either
s
142A
or
s 158(1)(c)
13
anc" HREF="#sdfootnote13sym">
13
.
I find myself in respectful agreement with that conclusion, although
the language of the section does require some interpretation.
[24]
Section 24(8)
, which
was inserted into the LRA by amendment effected some six years after
the date of commencement of the Act itself, reads as
follows:
‘
If there is a dispute about the
interpretation or application of a settlement agreement contemplated
in either
section 142A
or
158
(1)(c), a party may refer the dispute to
a council or the Commission and subsections (3) to (5), with the
necessary changes, apply
to that dispute.’
[25] It will be noted
that the phrase ‘collective agreement’ does not appear in
that wording. However, the general heading
of
s 24
is ‘Disputes
about collective agreements’. That appears to have given rise
to a view that everything contained in the
section must, of
necessity, apply only to collective agreements. I do not agree.
[26] While ‘headings
to chapters and sections of (a statute) … may in principle be
consulted in determining the meaning
of doubtful and ambiguous parts
of the contents of. . . the section to which they refer’
14
,
that particular aid to interpretation is not, in my opinion, to be
preferred either to the principle of statutory interpretation
that
words are to be given their ordinary meaning
15
or to the presumption
that statute law is not purposeless
16
.
[27] In relation to the
first of these principles, the wording of
s 24(8)
that refers to
settlement agreements contemplated in
s 142A
and
s 158(1)(c)
(read,
as it must be, with
s 158(1A))
, does not confine itself to collective
agreements.
[28] In relation to the
second, subsections (3) to (5) of
s 24
already refer to ‘a
dispute about the interpretation or application of a collective
agreement’ that is required to
be referred to the Commission in
terms of
s 24(2)
in the absence of an operative dispute resolution
procedure contained in the collective agreement itself. It would
appear to be
entirely superfluous or, to use the language of the
presumption, purposeless, to restate that position in
s 24(8)
, but to
confine its operation to a specific class of collective agreements
that would already have been covered by the more general
provision
earlier in the section.
[29] I point out that
there is, in fact, one jurisdictional distinction between
s 24(2)
and
the plain wording of
s 24(8).
Disputes under
s 24(2)
may be referred
to the CCMA only, while those under
s 24(8)
may be referred to the
CCMA or the relevant bargaining council.
[30] If, as
s 24(2)
suggests, it had been the intention of the legislature that, where
collective agreements did not contain their own operative dispute
resolution clauses, the CCMA was to have exclusive jurisdiction to
rule on their interpretation and application, then it is, in
my
opinion, much more likely that the purpose of
s 24(8)
was to deal
with settlement agreements generally, and not only settlement
agreements collectively concluded.
[31] I have not lost
sight of the fact that a possible consequence of this interpretation
is that bargaining councils now, subsequent
to the 2002 amendment,
have the jurisdiction to interpret and apply some collective
agreements in respect of which they did not
previously have that
jurisdiction. However, that broadening of their jurisdiction will
only apply to collective agreements in settlement
of disputes that
have been referred to the council
(s 142A
read with
s 51(8))
and of
disputes that a party had the right to refer to arbitration by the
council or to this court
(s 158(1)(c)
read with
s 158(1A))
, where
those collective agreements do not, in any event, prescribe a dispute
resolution process involving arbitration by a council.
[32] Since experience has
demonstrated that the overwhelming majority of the types of dispute
referred to in those sections will
be individual rather than
collective disputes, it seems unlikely that this is the only
distinction that the legislature intended
to make by promulgating
s
24(8).
[33] The consequence of
this is then that the CCMA has jurisdiction, in terms of
s 24(8)
, to
interpret and apply settlement agreements that are not collective in
nature.
[34] But the matter does
not end there. The applicant argued that such an interpretation of
the section would still not give the
CCMA jurisdiction over this
particular agreement.
[35] For the section to
apply, the agreement must be one envisaged by
s 158(1A).
In other
words, it must be a written agreement in settlement of a dispute that
a party had the right to refer to arbitration or
this court. In
addition, the CCMA only has jurisdiction to hear a dispute concerning
the interpretation or application of such
an agreement.
[36] Counsel for the
applicant distinguished the concepts of interpretation and
application of agreements from determinations about
their validity.
He also argued that this agreement is not a settlement agreement for
the purposes of the legislation. I disagree
with both of these
arguments.
[37] Having regard to the
fact that no evidence concerning the conclusion of the particular
agreement in this matter has yet been
led at the arbitration, I
understood his argument on the second issue to be that an agreement
concerning the termination of an
employee’s employment that
purports to fully and finally deal with ‘any dispute howsoever
arising’, whether or
not such dispute had already arisen, is
not a settlement agreement.
[38] It seems to me,
firstly, that the very point of the agreement, on the applicant’s
own case, was that it should deal finally
with the termination of the
first respondent’s employment and its consequences. A dispute
regarding the termination of her
employment on grounds of redundancy
is one that the first respondent would have had the right to refer to
arbitration or the Labour
Court, and a dispute, as defined in the
LRA, includes an alleged dispute.
[39] The parties do not
have to be in agreement over the fact that a dispute exists. I do not
agree with any suggestion that the
fact that the employee signed a
waiver of her rights to proceed with ‘any dispute howsoever
arising’ means that the
intention of the agreement was not to
settle a dispute that the employee had the right to refer to
arbitration or the Labour Court.
I note, from the arbitration award,
that it was the applicant who called the agreement a retrenchment
agreement. I cannot imagine
what its purpose can have been if the
applicant had not intended it to settle, possibly amongst others, at
least any disputes that
might arise from the applicant’s
retrenchment.
[40] I now turn to the
contention that a dispute over the validity of an agreement, where
the employee avers that it was obtained
under duress, is not a
dispute over its interpretation or application. Surely what an
employee in the position of the first respondent
is saying in a
matter such as this is, ‘I am not bound by this agreement. It
is not applicable to me because I was forced
to sign it.’
[41] I disagree with the
contention, made by the applicant’s counsel, that the question
of the application of an agreement
only arises in the context of a
collective agreement, or at least of an agreement concluded with a
number of people. That seems
to put unnecessary strain on the
ordinary meaning of the word ‘application’.
[42] Although the word
does not appear in the definitions section of the Act, its ordinary
meaning
17
includes ‘relevance’
and ‘practical operation’. The CCMA therefore has, in
terms of
s 24(8)
, the jurisdiction to determine the relevance and
practical operation of a settlement agreement. I find, therefore,
that the words
‘interpretation or application’, as they
appear in the section, are sufficiently broad to encompass a dispute
about
the validity of an individual agreement that deals with a
dispute that, but for the dispute over the validity of the agreement,
an employee had the right to refer to arbitration or the Labour Court
and that was allegedly signed under duress.
[43] In other words, an
agreement of the sort referred to in this matter may, subject to the
evidence that might be led at the arbitration,
be an agreement as
envisaged in
s 158(1)(c)
and, consequently,
s 24(8).
[44] In the
circumstances, it is unnecessary for me to decide whether the
statement made by Molahlehi J
18
was made
obiter
dictum
,
as suggested by the third respondent, or was part of the
ratio
decidendi
of
his judgment, as argued by the applicant.
[45] Finally, it seems to
me that the bottom line in this particular matter is that the onus
will be on the employee to prove that
she was dismissed. If she
cannot do so, perhaps because the employer is able to demonstrate
that she signed a valid retrenchment
agreement, that is the end of
the matter. The question of jurisdiction will then be merely
incidental and the object of the LRA
to promote the effective
resolution of labour disputes will have been achieved.
[46] In the premises, I
make the following order:
1. The review application
is dismissed;
2. There is no order as
to costs.
_______________________
Haslop, AJ
Judge of the Labour Court
Appearance:
For the Applicant: W.
Shapiro
Instructed by Futcher
Attorneys
1
(2008)
29 ILJ 2588 (LC).
2
(2010)
31 ILJ 937 (LC).
3
Above
at para 16.
4
[2011]
11 BLLR 1136
(LC), para 19 of the judgment.
5
See
also, for example,
Jiba v Minister of Justice &
Constitutional Development & others
[2005] ZALC 15
;
[2009] 10 BLLR 989
(LC)
and
Bombardier Transportation (Pty) Ltd v Mtiya NO & others
[2010] 8 BLLR 840
(LC).
6
(2009)
30 ILJ 336 (LC).
7
See,
for example,
J & J Freeze Trust v Statutory Council for the
Squid & Related Fisheries of SA & others
(2011) 32 ILJ
2966 (LC) at para 22 and
Gubevu Security Group (Pty) Ltd v
Ruggiero NO & others
[2012] 4 BLLR 354
(LC) at para 19.
8
Above
at 6.
9
Above
at para 16.
10
(2010)
31 ILJ 2974 (LC).
11
Above
at para 23.
12
C
ase
number C933/2008, dated 18 August 2011.
13
Above
at para 11.
14
25
Part 1
Lawsa
2 edpara 351.
15
Above
at para 337.
16
Above
at para 330.
17
New
Shorter Oxford English Dictionary
.
18
First
National Bank
judgment, para 16.