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[2014] ZALCJHB 77
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Henred Fruehauf (Pty) Ltd and Another v Marcus NO and Others (JR2977/07) [2014] ZALCJHB 77; (2014) 35 ILJ 3147 (LC) (18 March 2014)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Reportable
Of
interest to other judges
Case
no: JR 2977/07
In
the matter between:
HENRED
FRUEHAUF (PTY)
LTD First
Applicant
HOUSE
OF TRUCKS (PTY)
LTD Second
Applicant
and
MARCUS
N.O. First
Respondent
CCMA Second
Respondent
NUMSA Third
Respondent
MEIBC Fourth
Respondent
MOTOR
INDUSTRY
BARGAINING Fifth
Respondent
COUNCIL
Heard:
14 February 2014
Delivered:
18 March 2014
Summary:
Review – demarcation – LRA ss 62, 145.
JUDGMENT
STEENKAMP
J
Introduction
[1
]
When is a trailer not a trailer? When it
weighs more than 27 273 kg, apparently. And is the manufacturing
of axles part of
the business of the manufacturing of trailers? Not
always.
[2]
These
are the issues that the commissioner
[1]
had to grapple with in a demarcation dispute referred to him in terms
of s 62 of the LRA.
[2]
He
decided that the manufacture of trailers more than 27 273 kg
(generally referred to as “20 tons”) falls within
the
scope of the Metal and Engineering Industries Bargaining Council
(MEIBC) and no the Motor Industries Bargaining Council (MIBCO).
It is
common cause that the manufacture of trailers that weigh less than 20
tons is a MIBCO activity.
[3]
The commissioner also found that an axle
factory operated by the applicants fell under the scope of the MEIBC
and not of MIBCO.
[4]
The
applicants, Henred Fruehauf and House of Trucks, take issue with this
demarcation and seek to review it. The third and fourth
respondents,
NUMSA
[3]
and the MEIBC
[4]
argue that the demarcation is a reasonable one and not open to
review.
[5]
A
trailer is a trailer is a trailer, Mr
Snyman
argued. And it has been said that a rose by any other name smells as
sweet.
[5]
Does it make a
difference if that trailer weighs more than 20 tons? And what about
its axles? Axl Rose may have seen some synergy
between Guns ‘n
Roses, but the commissioner had to decide on the demarcation between
axles and trailers in the heavy metal
industry.
Background
facts
[6]
The first applicant (HFT) manufactures road
freight trailers at its premises in Bellville (Western Cape) and
Wadeville (Gauteng).
The trailers are attached to trucks (or
“ponies”) to transport goods by road. HFT also
manufactures axles for trailers
at its Wadeville premises.
[7]
It is common cause that the manufacturing
of trailers weighing less than 20 tons falls under the scope of the
Motor Industry Bargaining
Council (MIBCO). HFT argues that the same
should hold for trailers weighing more than 20 tons (“large
trailers”) and
axles. NUMSA and the MEIBC contend that the
manufacturing of large trailers and axles are MEIBC activities and
fall under the scope
of that Bargaining Council.
[8]
HFT is bound by an earlier determination
that tanker trailers fall under the scope of the MEIBC. It does not
take issue with that
finding of the arbitrator.
[9]
HFT contends that the manufacture of large
trailers is, like that of smaller trailers, a MIBCO activity. NUMSA
and the MEIBC say
it is not. The arbitrator found that the
manufacturing of large trailers falls under the scope of the MEIBC.
[10]
HFT also manufactures axles. It argues that
it is an activity ancillary to its main business of trailer
manufacture and should be
demarcated under the scope of MIBCO. The
arbitrator found that it fell under the scope of the MEIBC.
Evaluation
/ Analysis
[11]
In short, then, HFT argues that trailer
manufacturing should not be subject to a weight limitation; that its
axle factory is ancillary
to its main activity; and that all of this
should be demarcated to fall under the scope of MIBCO. It seeks to
review the findings
of the arbitrator that the manufacture of large
trailers and of axles, respectively, should be demarcated under the
scope of the
MEIBC.
The
applicable legal principles
[12]
In
Coin
Security
[6]
the approach to reviews of demarcation decisions was described thus:
“
The
demarcation process is one entrusted to a specialist tribunal in
terms of the provisions of the Act.
[7]
The demarcation decision is one involving facts, law and policy
considerations. In demarcation decisions there will, more often
than
not, be no one absolutely correct judgement. Particularly in
decisions of this sort, and given the provisions of the Act,
there
must of necessity be a wide range of approaches and outcomes that
would be in accordance with the behests of the Act. Due
deference
should therefore be given to the role and function and resultant
decisions of the CCMA in achieving the objects of the
Act. This
approach will not only be consistent with these principles, but also
consistent with the need for the Act to be administered
effectively.”
[13]
The
same approach was followed in
National
Bargaining Council for the Road Freight Industry v Marcus N.O.
[8]
and
National
Textile Bargaining Council v De Kock N.O.
[9]
and confirmed by the Labour Appeal Court.
[10]
Definitions
[14]
The
certificate of registration of the MEIBC determines that the “general
engineering and manufacturing engineering”
industries fall
under its jurisdiction. Those industries are further defined as
“...the industries concerned with the maintenance,
fabrication,
erection or assembly, construction, alteration, replacement or repair
of any machine, vehicle (
other
than a motor vehicle
[11]
) or article consisting mainly of metal ...
but
does not include the motor industry
”.
[15]
The motor industry, in turn, is defined in
both bargaining councils’ certificates of registration as “the
assembling,
erecting, testing, remanufacturing, repairing, adjusting,
overhauling, wiring, upholstering, spraying, painting and/or
reconditioning
carried on or in connection with ... chassis and/or
bodies of motor vehicles ... and vehicle body building...”.
[16]
The definition of “motor vehicle”
specifically excludes trailers designed to transport loads of more
than 20 tons (or
27 273 kg).
[17]
The MEIBC and MIBCO certificates define
“vehicle body building” (falling in the scope of MIBCO)
as,
inter alia
,
“building of trailers, but
not
including the manufacture of wheels or
axles
therefor”; and “...all operations incidental to or
consequent upon” the activities defined as “vehicle
body
building”.
[18]
The parties agree with the commissioner’s
finding that the activity of trailer manufacturing falls within the
definition of
“vehicle body building”. But HFT takes
issue with the finding that the weight limitation applies and should
be read
into the definition of “vehicle body building”.
Trailers
over 20 tons
[19]
The commissioner found that the weight
limitation on trailers in the definition of “motor vehicle”
in the registration
certificates of both bargaining councils should
also be read into the definition of “vehicle body building”
in the
certificate and, therefore, that the manufacture of large
trailers does not fall under the scope of the motor industry (i.e.
MIBCO)
but is a metal industry activity and thus falls under the
scope of the MEIBC.
[20]
Historically,
both bargaining councils have interpreted the definition in that way,
i.e. that the manufacturing of large trailers
fell under the MEIBC
and not MIBCO.
[12]
[21]
The
concept of “vehicle body building” would be nonsensical
if it did not include “motor vehicles”. And
the
definition of “motor vehicle”
[13]
specifically excludes large trailers.
[22]
It
does not seem to me that it was unreasonable to conclude that
“vehicle body building” must also exclude large trailers,
as the definition of “motor vehicle” does. It may seem
anomalous; the reason for the distinction based on load carrying
capacity is hard to fathom. But the distinction has been written into
the definition of “motor vehicle” in both certificates
of
registration and cannot be wished away. The resultant difference in
demarcation, in this case, for activities carried out on
the same
premises may seem to be unusual, but it was not unreasonable for the
arbitrator to interpret the definition in the way
that he did. As
Landman J has held, employees of the same employer working on the
same premises can fall under the scope of different
industries and
bargaining councils, depending on the work they perform.
[14]
In this case, the arbitrator had to give meaning to the definitions
contained in the registration certificates of MIBCO and the
MEIBC.
The effect of his conclusion will not be that the same workers who
build lighter or smaller trailers and who would fall
under the scope
of MIBCO, will fall under the scope of the MEIBC when they
manufacture trailers with a carrying capacity of more
than 20 tons.
He determined that, depending on the dominant activity (i.e.
manufacturing of light or heavy trailers), the whole
enterprise would
fall under either MIBCO or the MEIBC. The parties were invited to
submit further evidence in that regard.
[23]
In short, it is clear that the arbitrator
carefully applied his mind to the evidence before him and to the
relevant industry definitions.
His interpretation of the relevant
definitions and his resultant conclusion on the appropriate
demarcation was a reasonable one.
It is not open to review.
The
axle factory
[24]
The commissioner found that HFT’s
axle manufacturing activity in Wadeville is of a sufficient dimension
to justify a finding
that it conducts business in two separate
industries. The axle factory, he determined, should be demarcated
within the scope of
the MEIBC and not of MIBCO. He ordered HFT to
register the axle factory and its employees with the MEIBC.
[25]
The parties agreed that the axle factory
would resort under the MEIBC if it operated as a separate and
independent business. HFT’s
argument is that the axle factory
exists primarily to make axles for its trailers and should be seen as
incidental or ancillary
to the business of (small) trailer
manufacturing, and thus to be demarcated under the scope of MIBCO and
not the MEIBC.
[26]
The arbitrator took into account that some
20% of the axles made at Wadeville are produced for sale on the open
market. More importantly,
he referred to the express exclusion of the
manufacture of axles from the definition of “vehicle body
building” that
includes trailer building, but not the
manufacture of axles for trailers.
[27]
Even
if axle building is an ancillary activity, the arbitrator found, a
separate demarcation of that activity would not be justified,
given
its dimensions. He referred in this regard to the judgment of
Centlivres JA in
KWV
v Industrial Council for the Building Industry.
[15]
He properly applied the criteria set out in that decision to the
evidence before him. His conclusion cannot be said to be so
unreasonable
that no other arbitrator could have come to the same
conclusion.
[16
]
Conclusion
[28]
I conclude that the conclusion reached by
the arbitrator in his demarcation award is not so unreasonable that
no other arbitrator
could have come to the same conclusion. It is not
open to review.
[29]
With regard to costs, I take into account
that there is an ongoing relationship between the parties. I also
take into account that
the definitions in the MIBCO certificate of
registration have changed subsequent to the arbitrator’s award.
All of the parties
– i.e. the applicants, NUMSA and the two
bargaining councils – are continuously engaged in a collective
bargaining
process. A costs order in these circumstances is not
appropriate, in law and fairness.
Order
[30]
The review application is dismissed.
_______________________
Anton
Steenkamp
Judge
of the Labour Court of South Africa
APPEARANCES
APPLICANT:
Sean
Snyman (attorney).
THIRD
AND FOURTH
Hans
van der Riet SC
RESPONDENTS:
Instructed
by Ruth Edmonds attorney.
[1]
The first respondent, Adv MH Marcus, in his capacity as a
commissioner of the second respondent, the CCMA.
[2]
The
Labour Relations Act 66 of 1995
.
[3]
The National Union of Metalworkers of South Africa.
[4]
The Metal and Engineering Industries Bargaining Council.
[5]
“
What's
in a name? that which we call a rose
By any other name would
smell as sweet;” – William Shakespeare,
Romeo
& Juliet
Act II Scene ii.
[6]
Coin
Security (Pty) Ltd v CCMA & Ors
[2005] 4 BLLR 672
(LC) para [63].
[7]
See
Coin
Security Group (Pty) Ltd v Minister of Labour
(2001)
22
ILJ
2399 (SCA) para [5].
[8]
(2011) 32
ILJ
678 (LC);
[2011] 2 BLLR 169
(LC) para [18].
[9]
[2013] ZALCCT 37.
[10]
National
Bargaining Council for the Road Freight Industry v Marcus NO &
others
(2013)
34
ILJ
1458 (LAC) paras 21-22.
[11]
My underlining throughout.
[12]
On 7 November 2013, long after this arbitration had been concluded,
the Registrar of Labour promulgated an amendment to the MIBCO
certificate of registration. The definition of “motor vehicle”
does not contain the weight limitation anymore. But
this court has
to consider the interpretation of the definition that served before
the arbitrator prior to its amendment.
[13]
As it then stood.
[14]
Golden
Arrow Bus Services (Pty) Ltd v CCMA & Others
(2005)
26
ILJ
242 (LC).
[15]
1949 (2) SA 600
(A) at 611.
[16]
The parties agreed that the test in
Sidumo
v Rustenburg Platinum Mines Ltd
(2007) 28
ILJ
2405 (CC) applies. That review test was also used in a demarcation
dispute in
NBCRFI
v Marcus N.O. & Others
(2011) 32
ILJ
678 (LC) at para [15].