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[2014] ZALCPE 31
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Rankwana v Kouga Municipality (P213/13) [2014] ZALCPE 31 (10 November 2014)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA,
IN
PORT ELIZABETH
Not
reportable
Case
no: P 213/13
In
the matter between:
DR
E
RANKWANA Applicant
and
KOUGA
MUNICIPALITY First
Respondent
Date
of hearing: 17 April 2014
Date
of judgment: 10 November 2014
Summary:
(s 158(1)(c) – settlement agreement – pre-requisites for
considering whether to make it an order - not met)
JUDGMENT
LAGRANGE, J
Introduction
[1]
This matter concerns an application in
terms of
section 158(1)(c)
of the
Labour Relations Act, 66 of 1995
,
brought by a former Municipal manager of the respondent, to make a
settlement agreement, which he claims was entered into between
himself and the respondent, an order of court. Further, the applicant
seeks an order against the respondent compelling it to pay
him a
performance bonus in terms of the provisions of the settlement
agreement, which is discussed in paragraph [5] below.
[2]
The applicant had also brought a
Rule 11
application challenging the authority of the deponent to the opposing
affidavit to oppose the main application, but this was withdrawn
at
the start of proceedings. The applicant then contended that the same
deponent to the opposing affidavit, who is the current
municipal
manager of the respondent, has no personal knowledge of the
background to the settlement agreement and the only way to
resolve
the disputes of fact raised on the papers was to submit the matter to
oral evidence. However, it first needs to be decided
if an
in
limine
point on jurisdiction raised by
the respondent is valid. The respondent contends that the settlement
agreement is not one that
the court can make an order of court.
Another interlocutory issue that needs to be decided is whether to
condone the late filing
of the respondent’s opposing affidavit.
The condonation
application
[3]
The opposing affidavit was eleven days
late. The respondent points out that in terms of the paragraph 11.4.2
of Labour Court Practice
Manual (2 April 2013) it is not necessary
for a party that fails to file an opposing or answering affidavit on
time to apply for
condonation unless the other party files a notice
of objection thereto within 10 days of receipt of the affidavit in
question.
Quite apart from the fact that the delay in question is not
significant in the context of the course of this litigation, the
applicant
did not file a notice of objection and accordingly it is
not necessary to condone the late filing of the opposing affidavit.
In limine
jurisdictional point
[4]
The settlement agreement in question was
concluded on 27 July 2011 according to the applicant, though the copy
provided by him is
only signed by himself. At the time the document
was signed it would appear that the applicant was still the municipal
manager
of the respondent. For the purposes of the analysis which
follows it is useful to record a few of the pertinent provisions of
the
agreement. Clause 2 which forms part of the preamble states:
“
Without any
admission of liability or wrongdoing on the part of either party, the
parties agreed to terminate their relationship
on the terms and
conditions set out in this agreement.”
The agreement goes on to
record that the applicant’s service will terminate on 31 July
but that he would receive 7 months’
notice pay and 39 days
accumulated leave pay, which clause 8 describes as constituting a
severance package. Clause 6A of the agreement
records that the
parties are in dispute about the payment of an amount of R 377,848.78
to the applicant in January and February
2011 and that the dispute is
the subject matter of a private arbitration process. Two other
provisions should be mentioned in full,
namely clauses 9 and 12, viz:
“
9. The settlement
agreement constitutes the full and final settlement of any dispute
(s) and/or claim (s) that the employee has
or may have had, against
the employer arising out of, or in any way connected with, the
employment relationship between the employer
and the employee and/or
the termination of such employment relationship including, but not
limited to, a claim based on the commission
of an unfair labour
practice, unfair dismissal, unfair constructive dismissal, a breach
of contract or delict perpetrated by the
employer against the
employee and/or a claim relating to the payment of severance pay
and/or any other claim of any nature whatsoever
under the basic
conditions of employment act 1997.”
and
“
12. In the event
that a dispute arises between the parties as to their rights or
obligations under this agreement, or the performance
by either party
of the obligations of this agreement, the matter shall be resolved by
the Magistrate Court for the District of
Humansdorp. The prevailing
party in any dispute that requires resolution by the courts, shall be
entitled to recover all legal
cost and expenses on scale as between
attorney and client.”
[5]
The reason the applicant wishes to make the
settlement agreement an order of court is that he complains that the
respondent has
not complied with clause 6B of the agreement which
requires the employer to evaluate and determine his bonus entitlement
of the
periods 2009/2010 and 2010/2011 in accordance with the
applicant’s performance contract and legislative pre-scripts.
The
same clause required the employer to commence the evaluation of
the bonus entitlement within 30 days of the date of the agreement
in
respect of the 1
st
period and within 30 days of the auditor general’s final report
being received for the 2
nd
period. Failing the employer completing those exercises within 60
days of the stipulated time limits, the applicant would be entitled
to receive the maximum performance bonus entitlement due and payable
immediately. It is this provision which the applicant seeks
to
enforce.
[6]
The
jurisdictional question which has arisen is whether the settlement
agreement is one that is capable of being made an order in
terms of
section 158(1)(c)
of the LRA. The LAC has recently clarified the
ambit of settlement agreements which may be made orders of court by
addressing the
question of settlement agreements of disputes which
had not been referred to the statutory conciliation mechanisms of the
LRA in
Greeff
V Consol Glass (Pty) Ltd
.
[1]
The court identified the following minimum pre-requisites a
settlement agreement must meet in order for the court to consider
making it an order of court:
“
[19] It is thus
clear from a reading of
s 158(1A)
that
s 158(1)(c)
must be read with
and subject to
s 158(1A).
Even though
s 158(1)(c)
refers to 'any
settlement agreement' this cannot be taken to mean, literally, 'any'
settlement agreement.
Section 158(1A)
describes what settlement
agreements are being referred to in
s 158(1)(c).
So properly
interpreted, in terms of
s 158(1)(c)
, read with
s 158(1A)
, the Labour
Court may make any arbitration award an order of court and may only
make settlement agreements, which comply with the
criteria stated in
s 158(1A)
, orders of court. A settlement agreement that may be made
an order of court by the Labour Court in terms of
s 158(1)(c)
, must
(i) be in writing, (ii)
be
in settlement of a dispute (ie it must have as its genesis a
dispute
);
(iii) the dispute must be one that the party has a right to refer to
arbitration, or to the Labour Court for adjudication,
in
terms of the LRA
;
and (iv) the dispute must not be of the kind that a party is only
entitled to refer to arbitration in terms of
s 22(4)
, or
s 74(4)
or
s
75(7).
Those kinds of dispute are excluded.”
[2]
[7]
In this instance, all the applicant stated
in his founding affidavit to identify the genesis of the dispute is
that: “The
parties had a dispute in term of the employment
relationship, and entered into an agreement to terminate the
employment relationship.”
This colourless description tells the
court little or nothing about the alleged dispute other than it was
one concerning the employment
relationship and that the dispute
probably arose before the termination of the relationship by mutual
agreement.
[8]
A
termination of an employment relationship is not a dismissal.
[3]
Consequently, the alleged dispute could not conceivably relate to any
unfair dismissal claim that might be arbitrated or adjudicated
in
terms of the LRA. No factual averment of any detail is made that
identify the dispute relied upon as one that could be the subject
matter of an unfair labour practice claim or a claim that might be
adjudicated by the labour court in terms of
s 77
of the
Basic
Conditions of Employment Act, 75 of 1997
. Consequently, the
applicant has not made out a basis on affidavit that the dispute is
one that could conceivably satisfy
the third requirement identified
in
Greeff’
s
case.
[9]
It is only in the settlement agreement
itself that reference is made to a claim that the parties have agreed
must be referred to
private arbitration for determination. What
relationship the amount in dispute that is mentioned in that clause
has to anything
that might be the subject matter of adjudication or
arbitration is not apparent on the face of the settlement agreement
and is
not explained in the applicant’s founding affidavit.
[10]
I have assumed for the purpose of the above
that there is a dispute which gave rise to the settlement agreement.
However, on the
slender factual allegations there is nothing which
discloses that the genesis of the settlement agreement was a dispute
other than
the one mentioned in the agreement. In any event, the
applicant ought to specifically allege the nature of the dispute from
which
the settlement agreement supposedly arose.
[11]
It was suggested that clause 9 of the
agreement clearly refers to disputes arising under the LRA. However,
it is one thing to have
a clause like this which tries to indemnify
each party from any disputes arising from the employment relationship
which might have
arisen, or may arise in the future. The
existence of such a clause does not necessarily imply that the
agreement was concluded
to settle any pre-existing dispute that had
arisen, which is required in terms of the second criterion identified
in
Greeff
.
[12]
For the above reasons, the Labour Court
does not have jurisdiction to entertain the application to make the
settlement agreement
an order of court.
[13]
In light of this conclusion which is
determined solely with reference to the applicant’s own
founding affidavit in which he
had to set out the evidentiary basis
for the relief he seeks, it is not necessary to consider the plethora
of interlocutory disputes
raised by the application, including a
rule
11
application to dismiss the respondent’s opposition based on
an alleged lack of authority to oppose the
s 158(1)(c)
application.
Order
[14]
The
s 158(1)(c)
application is dismissed
with costs.
_______________________
R LAGRANGE, J
Judge of the Labour
Court of South Africa
APPEARANCES
For
the Applicant:
W Van Rensburg of W Van Rensburg Attorneys
For the
Respondent:
M Grobler
Instructed
by:
Labushagne & Van Der Walt Attorneys
[1]
(2013) 34 ILJ 2835 (LAC)
[2]
At 2843
[3]
Kynoch
Feeds (Pty) Ltd v CCMA & others
[1998] 4 BLLR 384
(LC)
at 387,para [55].