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[2014] ZALCPE 19
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Mortimer and Others v Nelson Mandela Bay (P469/11) [2014] ZALCPE 19 (30 July 2014)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, PORT ELIZABETH
JUDGMENT
Not
Reportable
Case
No: P469/11
In
the matter between:
BERRY
MORTIMER &
OTHERS Applicants
and
NELSON
MANDELA BAY
Respondent
Heard:
30 July 2013
Delivered:
30 July 2014
Summary:
Costs are not automatically due by the initiating party when that
party withdraws a matter. When the
withdrawing party does not tender
costs a determination must be made whether a costs order is
warranted.
Payment
of costs by a party which withdraws a matter in terms of Rule 13 (1)
(b).
JUDGMENT
LALLIE,
J
Introduction
[1]
This is an application in terms of Rule 13 (1) (b) in which the
respondent seeks a costs order against the applicants pursuant
to
their withdrawal of their matter.
Factual
Background
[2]
The applicants are employees of the respondent. In 2005 they were
moved from the erstwhile Port Elizabeth Municipality to the
Nelson
Mandela Metropolitan Municipality. Before February 2006 Assistant
Directors, both placed and appointed, participated in
the same travel
allowance scheme. In February 2006, a Mayoral Resolution which
granted Assistant Managers a transitional allowance
as part of their
remuneration pending the job evaluation process was approved. The
transitional allowance was more beneficial than
the travel allowance
scheme. A number of placed Assistant Managers lodged a grievance
regarding the unequal payment of the transport
allowance leading to
the adjustment of the transport allowance of some Assistant Managers.
The applicants submitted that all the
placed Assistant Managers who
had participated in the grievance were awarded an adjustment on their
transport allowance which was
backdated from the date of
implementation of the new scheme. The respondent denied that the
transport allowance was backdated and
submitted that it was the
transitional allowance that was backdated. The applicants sought to
be placed in the same position as
the Assistant Managers who had
lodged a grievance but were unsuccessful. They referred an unfair
labour practice dispute concerning
payment of benefits to the South
African Local Government Bargaining Council (“the bargaining
council”) on 27 September
2010. The bargaining council issued a
certificate of the non-resolution of the dispute on 24 February 2011.
On 18 July 2011, the
bargaining council issued an arbitration award
that it lacked jurisdiction to arbitrate the dispute as payment of
the transport
allowance did not amount to a benefit. On 15 May 2012,
the applicants filed their statement of case.
[3]
In the statement of response the respondent raised a point
in
limine
that this Court lacks jurisdiction over this mater as
there is no provision in the Labour Relations Act 66 of 1995 (“the
LRA”) which confers jurisdiction on this Court after a finding
of lack of jurisdiction by a bargaining council. In addition,
the
applicant had characterized their dispute as an unfair labour
practice placing it outside the realm of this Court’s
jurisdiction. Lastly, the respondent submitted that the applicants
failed to apply for condonation having filed their statement
of claim
over a year after the arbitration award was issued.
[4]
The applicant’s attorneys forwarded the draft pre-trial minute
to the respondent’s attorneys, the first paragraph
of which
reads thus:
‘
1.1
It is the applicant’s view that in light of discussions had
between the Applicant’s
representative and the HR
representative of the Respondent during the course of the dispute
before the South African Local Government
Bargaining Council it
became clear that the Respondent is currently investigating the
dispute by the Applicant.
1.2
The Respondent’s representative has made it clear that in the
event of discrepancies
being found the implementation of the travel
allowance between the Applicants fellow employees, such discrepancies
must be placed
before council.
1.3
Flowing there from, Council may either uphold such payments which
will entail the Applicant’s
continuing with this matter.
1.4
Alternatively, Council may decide to adjust said travel allowance
which would potentially
lead to fellow employees having to repay the
excess amounts.
1.5
If this scenario occurs, the application as it currently stands
becomes academic’.
In
response thereto the respondent addressed the following letter on 15
October 2012.
‘
Dear
Sir
NELSON MANDELA BAY
MUNICIPALITY / BJL MORTIMER & OTHERS
1.
We have been instructed to, and accordingly shall,
request the registrar of the labour Court to enrol the above matter
for hearing
on the special plea/points
in
limine
raised by respondent in
paragraphs 1 to 9 of its statement of response, dated 1 June 2012.
2.
Furthermore, respondent hereby invites the
applicants, in the light of the claim in paragraph 1 of their draft
pre-trial minute
that “the Respondent is currently
investigating the dispute by the applicant” and that the matter
is accordingly “not
ripe for hearing”, to withdraw their
claim in the above matter, failing which our instructions are to seek
a punitive costs
order when the matter is heard.
3.
We look forward to your kind and urgent response’.
On
1 February 2013, the applicants’ attorney forwarded a notice of
withdrawal of the matter to the respondent‘s attorneys
who
pointed out the applicants’ omission to tender costs. The
applicants’ attorneys responded that the respondent’s
letter of 15 October 2012 made no reference to the issue of costs. As
the parties failed to reach agreement on the issue of costs,
the
respondent filed a notice in terms of Rule 13 (1) (b) for a costs
order against the applicants, alternatively, the dismissal
of the
applicants’ claim with costs.
[5]
The applicants objected to the notice filed by the respondent in
terms of Rule 13 (1) (b) on the basis that it did not comply
with the
Rule. Rule 13 (1) provides that if a party who has initiated
proceedings delivers a notice of withdrawal without tendering
costs
any other party may apply on notice for costs. The respondent
submitted that Rule 13 (1) (b) does not anticipate that a fresh
notice of application be served and filed at court. The respondent
sought to rely on a letter in which it informed the applicants
that
in the event of their failure to deliver a notice of withdrawal which
included a tender to pay the respondents costs, on or
before 18 March
2013, the respondent would request the registrar to enrol the matter
for the hearing of the points
in limine
it raised and the
dismissal of the applicants’ claim with costs. Lastly, the
respondent submitted that the notice issued
by the Registrar setting
this matter down for argument on the aspect of costs constituted
compliance with Rule 13 (1) (b).
[6]
In
NASECGWU
and Others V Donco Investments (Pty) Ltd,
[1]
the
giving of notice was held to be aimed at giving the recipient an
opportunity to consider its position and decide on an appropriate
response. I find the following dictum
in
Automobile Manufacturers Employers’ Organization v Numsa
[2]
a
pposite:
‘…
The
wording of the Act refers to a notice of application. A notice of
application is generally a notice of motion together with
supporting
affidavits. In my opinion this is the construction which must be
given to section 68 (3). A respondent, such as the
union and other
respondents in this case require to know what the case is that is
being brought against them .They need to know
whether they can oppose
the case and they require more than simply the gist of the case. The
applicant’s attorney’s
letter of 26 August 1998 sets out
the relief which is going to be claimed and the grounds but not the
facts which are to be relied
upon’.
[7]
The documents the respondent sought to rely on do not constitute
notice as envisaged in Rule 13(1) (b) because the decision
whether
costs should be granted is more complex at the Labour Court. Costs do
not necessarily follow the result. Section 162 of
the LRA provides
for factors which need to be taken into account in deciding whether a
costs order should be made. In the notice
referred to in Rule 13 (1)
(b). The respondent was required to state the grounds on which
it would rely on in its application
for costs and afford the
applicants an opportunity to consider those grounds and decide
whether to oppose the application and the
basis for the opposition.
Having considered the papers filed by the parties in respect of the
application for costs, I am satisfied
that there is substantial
compliance with Rule 13(1)(b). I have been placed in a apposition to
determine the application without
requiring strict compliance with
Rule 13(1)(b).
[8]
The respondent’s approach to the question of costs is that
costs usually follow the withdrawal of a matter. He submitted
that
absent substantial and cogent grounds as to why the applicants should
not pay the respondent’s costs as costs usually
follow the
event, as the applicants are the party which withdrew the action,
they are regarded as being the unsuccessful party.
A settlement of
the dispute does not, according to the respondent, in all instances,
translate to the conclusion that a costs order
can never be awarded
against an unsuccessful party. The respondent further argued that
generally, when an applicant withdraws an
application or an action
that applicant is in an analogous position as an unsuccessful
litigant and a respondent, by virtue of
the withdrawal, is entitled
to costs. In this regard see Reuben Rosenblum Family Investments
(Pty) Ltd and Another v Marsubar (Pty)
Ltd (forward Enterprices (Pty)
Ltd and others Intervening)
[3]
,
Waste Products Utilisation (Pty) Ltd v Wilkes and Another (Biccari
Interested Party)
[4]
[9]
It is worth nothing that most of the authority the respondent sought
to rely on consists of judgments of the High Court to which
section
162 of the LRA does not apply. The proper approach in dealing with
the issue of costs is captured in the following dictum
of
Van
Den Berg v SAPS
[5]
‘
I
am not persuaded that this principle applies with equal vigour in the
Labour Court. Rule 13 of the Rules of the Labour Court permits
a
party to withdraw a matter and if costs are not tendered then any
other party may apply for costs. There is no requirement
that
the party withdrawing proceedings tender costs. The provisions
of section 162 of the LRA govern the question of costs
and there is
no general principle in terms of which the party withdrawing is
liable, as an unsuccessful litigant, to pay the costs
of the
proceedings. In general the Labour Court may make an order for
the payment of costs, according to the requirements
of law and
fairness and can amongst other things take into account the conduct
of the parties in proceedings with or defending
the matter
(section162 (2)(b)(i)). Moreover, in
National
Union of Mineworkers v East Rand Gold and Uranium Company Ltd
[1991] ZASCA 168
;
1992
(1) SA 700
(A), the then Appellate Division held that although the
general rule that costs should in the absence of special
circumstances
follow the result is a relevant consideration, it may
yield where considerations of fairness require it. Proper regard
should be
had to all the facts and circumstances of a particular
matter. Furthermore, the special nature of dispute resolution in the
employment
context should always be kept in mind. In particular, the
making of costs orders may well discourage parties, and particularly
individual employees, from approaching the court and accordingly, the
court should hesitate before making such an order where a
genuine
dispute exists and the approach to the court was not unreasonable’.
[10]
It is common cause that at the bargaining council the applicants’
attorney and Mr Viviers (“Viviers”), an
official of the
respondent, discussed the inequality in payment of the transport
allowance between the applicants and their peers
and the applicants’
attorney was informed that the respondent was busy investigating the
issue. The possible outcome of the
investigation would be that the
applicants’ colleagues would have to repay money paid to them
in excess of their transport
allowance, alternatively the applicant
would be paid an equivalent amount.
[11]
The applicants referred a dispute at the bargaining council on 27
September 2010. The bargaining council issued its ruling
that it
lacked jurisdiction to arbitrate their dispute in July 2011. By July
2011 the discussion between the applicants’
attorney and
Viviers that the issue of the inequality of payment of the transport
allowance would be investigated had started.
On 15 May 2012, almost a
year later when the applicants approached this Court, the
investigation had not been completed. When this
matter was argued
there was no indication to the contrary. Based on the facts that are
common cause, there is a possibility that
there is transport
allowance due by the respondent to the applicants which they are not
receiving. They may receive, depending
on the outcome of the
investigation. Some of their colleagues are however, receiving it.
The applicants approached this Court in
an attempt to enforce their
right to equality. It would appear that the respondent is not taking
the necessary steps to establish
whether the transport allowance they
are seeking is due to them. In the mean time they are treated less
than their colleagues.
Employees who reasonably feel that they are
treated differently from their colleagues in circumstances where
their employer take
too long to establish the reason for the
differentiation should not be deterred from approaching this Court by
a fear of an adverse
costs order. It is not proper for litigants to
approach this Court prematurely and for purposes of protecting their
claims from
prescription only to withdraw their cases before they are
heard on the basis of not being ripe for hearing.
[12]
There was no duty on the applicants to tender costs when they were
withdrawing their action. The purpose of Rule 13(1) (b)
is to afford
this Court an opportunity to determine in terms of section 162 of the
LRA whether the withdrawal warrants an adverse
costs order against
the applicants. As the applicants did not act unreasonably in
approaching this Court and the respondent is
not before Court with
clean hands, granting a costs order will not be fair.
[13]
For these reasons, the respondent’s application for costs is
dismissed.
_________________
Lallie J
Judge of the Labour
Court of South Africa
APPEARANCES
For
the Applicants:
Advocate Grobler
Instructed
by:
Van Der Walt
Attorneys
For
the Respondent: Advocate Smith
Instructed
by:
Gray Moodliar Attorneys
[1]
[2010] 3 BLLR 271 (LC)
[2]
[1998] 11 BLLR 1116
(LC)
at para 8
[3]
2003 (3) SA 547
(CPD) at
550 C-D.
[4]
2003 (2) SA 590
(W) at
597 A-B.
[5]
[2005] 11 BLLR 1150
(LC)
at para 17.