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[2014] ZALCJHB 318
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National Union of Metalworkers of South Africa obo Members v Lear Sewing (Pty) Ltd (JS445/13) [2014] ZALCJHB 318; (2014) 35 ILJ 3216 (LC) (4 July 2014)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
CASE
NO JS 445/13
REPORTABLE
In
the matter between:
NATIONAL
UNION OF METALWORKERS OF
SOUTH
AFRICA
obo APPLICANT
MEMBERS
2
ND
TO FURTHER APPLICANTS
and
LEAR
SEWING (PTY)
LTD
RESPONDENT
Trial:
12 June 2014
Judgment
delivered: 4 July 2014
JUDGMENT
VAN
NIEKERK J
Introduction
[1]
This is a dispute referred to this Court for determination in terms
of Rule 6. The parties have agreed that the only issue that
the Court
need decide, on the basis of facts agreed in the pre-trial minute,
is whether clause 4.4 of a production bonus
agreement concluded by
them constitutes a breach of s 5(4) of the Labour Relations Act, 66
of 1995 (LRA).
Factual
background
[2]
The respondent supplies car seats to motor vehicle manufacturers,
including Renault-Nissan and BMW. It does so on a ‘just
in
time’ basis, meaning that seats are manufactured to order, with
none kept in stock. Consequently, any delay in production
on the
respondent’s part is likely to result in a delay (referred to
as a ‘line stoppage’) on the production
lines of the
respondent’s customers.
[3]
On 7 May 2010, the first applicant (NUMSA) and the respondent
concluded the agreement that is the subject of the present dispute,
termed a ‘production bonus agreement’. In terms of the
agreement, production bonuses are payable in December, and calculated
on the basis of ‘
the entire shift performance for the J.I.T
department and the sewing department and not company performance
.’
Clause 4 of the agreement regulates the conditions on which the
production bonus will be paid. It provides that:
‘
4.1
The total value of the annual bonus will depend on productivity.
4.2
Dismissal due to misconduct will result in no payment of bonus.
4.3
Retrenchment will result in the pro-rata payment of the bonus.
4.4
A line stoppage at the customer will result in no incentive being
paid out.’
[4]
On 30 November 2012, COSATU ( a trade union federation to which NUMSA
is affiliated) organised a march to protest against e-tolling
in
Gauteng. It is common cause that the protest constituted protected
protest action for the purposes of s 77 of the LRA.
[5]
On 29 November 2012, Renault-Nissan informed the respondent that its
employees would be participating in the protest and that
its
production line would therefore not operate on 30 November. The
respondent informed its employees engaged in its Renault Nissan
department that there would be no orders for seats on 30 November.
Those employees were placed on short-time, and not required
to report
for work on 30 November.
[6]
BMW’s employees did not participate in the protest, and its
production line continued to operate on 30 November. Some
employees
engaged in the respondent’s BMW department reported for duty on
30 November; others did not. The result was a line
stoppage at the
BMW assembly plant.
[7]
On 3 December 2012, the respondent advised the first respondent that
in terms of clause 4.4 of the production bonus agreement,
those
employees who worked in the BMW departments would be denied the
payment of a bonus, because a line stoppage occurred at BMW
on 30
November. The refusal to pay the bonus extended to all employees in
the BMW department, including those employees who worked
on 30
November. The respondent’s employees engaged in the
Renault-Nissan department were all paid a production bonus, even
though they did not work on 30 November, because there was no line
stoppage at Renault Nissan on that day.
Issue
in dispute
[8]
As I have indicated, the parties have agreed that the only issue in
dispute is whether clause 4.4 of the production bonus agreement
is in
breach of s 5 (4).
Relevant
legal principles
[9]
Although this dispute concerns only the application of s 5 (4), that
section must necessarily be read in context. The germane
provisions
of sections 4 and 5 of the LRA read:
‘
4
Employees’ right to freedom of association
…
(3)
Every member of a trade union that is a member of a federation of
trade unions has
the right, subject to the constitution of that
federation –
(a)
to participate in its lawful activities;…
5.
Protection of employees and persons seeking employment.
(1)
No person may discriminate against an employee for exercising any
right conferred
by this Act.
(2)
Without limiting the general protection conferred by subsection (1),
no person may
do, or threaten to do, any of the following-
…
(b)
prevent an employee … from exercising any right conferred by
this Act or from
participating in any proceedings in terms of this
Act, or
(c)
prejudice an employee… because of past, present or
anticipated-
(iii)
participation in the lawful activities of a trade union, federation
of trade unions or
workplace forum;
…
(vi)
exercise of any right conferred by this Act..
(3)
…
(4)
A provision in any contract, whether entered into before or after the
commencement
of this Act, that directly or indirectly contradicts or
limits any provision of section 4, or this section, is invalid,
unless
the contractual provision is permitted by the Act.’
[10]
The first issue for decision is whether the production bonus
agreement is a ‘contract’ for the purposes of s 5
(4). It
is not disputed that the agreement constitutes a collective agreement
as defined in s 213 of the LRA – it is an agreement,
in
writing, between a trade union and an employer, regulating a term and
condition of employment matter of mutual interest. But
the penalty of
invalidity visited by s 5 (4) extends only to a ‘contract –
if the production bonus agreement is not
a contract, then s 5 (4)
does not apply.
[11]
The principles of interpretation to be applied were recently affirmed
in
Natal Joint Municipal Pension Fund v Edumeni Municipality
2012
(4) SA 593
(SCA). What the judgment underscores is that the exercise
of interpretation does not require a court to discern the intention
of
the legislature only by reference to plain meaning of words with a
deferential nod, if so required, in the direction of the OED.
Wallis
JA said the following:
‘
[18]…The
present state of the law can be expressed as follows: interpretation
is the process of attributing meaning to the
words use in a document,
be it legislation, some other statutory instrument, or contract,
having regard to the context provided
by reading the particular
provision or provisions in the light of the document as a whole and
the circumstances attendant upon
its coming into existence. Whatever
the nature of the document, consideration must be given to the
language used in the light of
the ordinary rules of grammar and
syntax; the context in which the provision appears; the apparent
purpose to which it is directed
and the material known to those
responsible for its production. Where more than one meaning is
possible each possibility must be
weighed in the light of all these
factors. The process is objective, not subjective. A sensible meaning
is to be preferred to one
that leads to insensible or unbusinesslike
results or undermines the apparent purpose of the document….The
‘inevitable
point of departure is the language of the provision
itself’ read in context and having regard to the purpose of the
provision
and the background to the preparation and production of the
document…
[25]
Which of the interpretational factors I have mentioned will
predominate in any given situation varies. Sometimes the language
of
the provision, when read in its particular context, seems clear and
admits of little if any ambiguity. Courts say in such cases
that they
adhere to the ordinary grammatical meaning of the words used. However
that too is a misnomer. It is a product of a time
when language was
viewed differently and regarded as likely to have a fixed and
definite meaning, a view that the experience of
lawyers down the
years, as well as the study of linguistics, has shown to be mistaken.
Most words can bear several different meanings
or shades of meaning
and to try to ascertain their meaning in the abstract, divorced from
the broad context of their use, is an
unhelpful exercise. The
expression can mean no more than that, when the provision is read in
context, that is the appropriate meaning
to give to the language
used. At the other extreme, where the context makes it plain that
adhering to the meaning suggested by
apparently plain language would
lead to glaring absurdity, the court will ascribe a meaning to the
language that avoids the absurdity.
This is said to involve a
departure from the plain meaning of the words used. More accurately
it is either a restriction or extension
of the language used by the
adoption of a narrow or broad meaning of the words, the selection of
a less immediately apparent meaning
or sometimes the correction of an
apparent error in the language in order to avoid the identified
absurdity.’
[1]
[12]
The LRA contains various references to the terms ‘collective
agreement’, ‘contract of employment’ and
‘contract’. By specifically defining the term
‘collective agreement’ (and thereby attributing a
specific meaning to it) the clear intention is that a collective
agreement is something other than a contract, or a contract of
employment, for the purposes of the Act.
[2]
The generally applicable rule is that where the same word is used in
the same enactment, it must be reasonably supposed, in the
absence of
any clear indication to the contrary, to be understood in the same
sense throughout the enactment (see
Minister
of the Interior v Machadodorp Investments
1957 (2) SA 395
, at 404 D). The terms ‘contract of employment’,
‘contract’ and ‘collective agreement’ are
used
separately throughout the Act and carry different but consistent
meanings. Had the intention been to include collective agreements
within the ambit of s 5 (4), there would have made specific reference
to that term. Read in context, in my view, a ‘contract’
for the purposes of s 5 (4) does not include a collective agreement.
[13]
There are other compelling reasons to support this conclusion,
especially in relation to the context in which s 5 (4) appears
and
the apparent purpose to which it is directed. First, the LRA accords
primacy to collective agreements as an integral element
of the
autonomy that it extends to the collective bargaining process. The
Act specifically contemplates that many of the rights
it confers are
subordinate to the terms of collective agreements. In the present
context, for example, while the right to strike
is clearly a right
that that may for the purposes of s 5 (2) (b) and (c) be exercised in
terms of the Act, collective agreements
may (and do) impose
limitations on the exercise of that right, to the extent of
preventing an employee from the exercise of that
right. To include
collective agreements within the ambit of s 5 (4) and thereby to
place a limitation on the scope of agreement
(at least to the extent
that a collective agreement would not be entitled to limit or exclude
any right established by the Act)
would be the antithesis of a
statutory framework based on self-regulation. Such an interpretation
(i.e. to extend the meaning of
‘contract’ to include a
collective agreement) would not only frustrate the rationale of
autonomy, it would make collective
bargaining unworkable. For this
reason too, in my view, the word ‘contract’ in s 5 (4)
does not extend to collective
agreements as defined in s 213.
[14]
The application therefore stands to be dismissed. In view of the
conclusion to which I have come, it is not necessary for me
to
consider the respondent’s further submissions based on the lack
of a comparator (for the purpose of establishing any anti-union
discrimination), or the application of the ‘no work, no pay’
principle.
Costs
[15]
The court has a broad discretion in terms of s 162 to make orders for
costs according to the requirements of the law and fairness.
The
court has traditionally not made costs orders in the case of a
dispute between bargaining partners where a genuine difference
of
opinion exists over the terms of a collective agreement between them,
and where the collective bargaining relationship may be
prejudiced as
a consequence of any costs order. In the present instance, I see no
reason to depart from this approach, and intend
to make no order as
to costs.
For
the above reasons, I make the following order:
1. The
referral is dismissed.
ANDRE
VAN NIEKERK
JUDGE
OF THE LABOUR COURT
Representation
For
the applicant: Adv. JG van der Riet SC, instructed by Ruth Edmonds
Attorneys
For
the respondent: Mr. L Frahm- Arp, Fasken Martineau.
[1]
At pages 609-610, footnotes omitted.
[2]
Of course, this does not mean that collective agreements have no
effect, potentially at least, on contracts of employment. Section
23
(3) specifically provides that where applicable, a collective
agreement varies a contract of employment.