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[2015] ZALCJHB 449
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Free State Gambling and Liquor Authority v Commission for Conciliation, Mediation and Arbitration and Others; In re: Free State Liquor and Gambling Authority v Motake NO and Others (J773/15; J894/15) [2015] ZALCJHB 449; (2015) 36 ILJ 2867 (LC) (26 June 2015)
THE
LABOUR COURT OF SOUTH AFRICA,
JOHANNESBURG
JUDGMENT
Reportable
Case
no: J773/15
In
the matter between:
FREE
STATE GAMBLING AND LIQUOR
AUTHORITY
.................................................
Applicant
And
COMMISSION
FOR CONCILIATION, MEDIATION AND
.................................
First
Respondent
ARBITRATION
TSEITSI
CHAKANE
N.O,
......................................................................................
Second
Respondent
MAJORO
MARVIN
MOFOKENG
..........................................................................
Third
Respondent
Case
no: J894/15
And
in the matter between
FREE
STATE LIQUOR AND GAMBLING
AUTHORITY
.................................................
Applicant
And
PEHELO
MOTAKE
N.O
.............................................................................................
First
Respondent
MARINA
TERBLANCHE N.O.
COMMISSION
FOR CONCILIATION,
MEDIATION
AND
ARBITRATION
........................................................................
Third
Respondent
NEHAWU
obo DINEO PATRICIA
RANI
..............................................................
Fourth
Respondent
Heard:
19 May 2015
Delivered:
26 June 2015
Summary: A
constitutionally sensitive reading of the provisions of section
145((7) and (8) of the LRA allows for the court to exercise
its
discretion as to whether security should be ordered or not; where an
applicant employer is governed by the PFMA and Treasury
regulations
the object of providing security in the event that an award is upheld
is met.
JUDGMENT
RABKIN-NAICKER
J
[1]
In these two urgent applications, the stay of the
certification and/or enforcement of two arbitration awards is sought
pending review
applications, as well as relief to:
1.1
Absolve the Applicant from paying security in terms of
sections 145(7)
and (8) of the
Labour Relations Act 66 of 1995
, as
amended (LRA);
1.2
Alternatively,
declaring
section 145(8)
of the LRA to be in conflict with
sections
66
of the
Public Finance Management Act 1 of 1999
, as
amended
(PFMA) and declaring further that the PFMA provisions override
section 145(7)
and (8); and
0.2
9in">
1.3
Further alternatively, interim relief pending an application
in terms of which the Applicant is granted leave to make application
to this Court to declare the provisions of
section 145(8)
of the LRA
to be unconstitutional, within 30 days of granting of the order and
the Applicant is directed to join all interested
parties.
[2]
The starting point of this judgment must be an interpretation
of
section 145(7)
and (8) of the LRA which were inserted into the LRA
by the Labour Relations Amendment Act 2014. The provisions read as
follows:
“
(7)
The institution of review proceedings does not suspend the operation
of an arbitration award, unless the applicant furnishes
security to
the satisfaction of the Court in accordance with subsection (8).
(8)
Unless the Labour Court directs otherwise, the security furnished as
contemplated in subsection (7) must-
(a)
in the case of an order of reinstatement or re-employment, be
equivalent to 24 months' remuneration; or
(b)
in the case of an order of compensation, be equivalent to the
amount of compensation awarded.” (my emphasis)
[3]
Before embarking on a reading of these provisions, the
approach to statutory interpretation in Natal Joint Municipal Pension
Fund
v Endumeni Municipality
2012 (4) SA 593
(SCA) as reformulated by
Wallis JA deserves re-statement:
“
The
present state of the law can be expressed as follows: Interpretation
is the process of attributing meaning to the words used
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. Judges
must be alert to, and guard against,
the temptation to substitute
what they regard as reasonable, sensible or businesslike for the
words actually used. To do so in
regard to a statute or statutory
instrument is to cross the divide between interpretation and
legislation; in a contractual context
it is to make a contract for
the parties other than the one they in fact made. 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.”
[1]
[4]
The crisp issue that the court must determine is whether its
discretion in terms of the above provisions is fettered in the sense
that it must order security to be furnished, albeit that it may
determine the quantum thereof. In my judgment this is not the case,
for the reasons set out below.
4.1
The inclusion of the phrase “to the satisfaction of the
Court” in section 145(7) needs to be considered. The phrase “to
the satisfaction of” has long been the subject of judicial
interpretation in administrative law. In Shifdi v
Administrator-General
for South West Africa and Others SA 631 (SWA)
the court considered and compared statutory enactments where the
phrase is used,
as opposed to those provisions where a discretion may
only be exercised validly if certain jurisdictional facts are present
stating
that:
..
in the one instance, ... the repository of the
power has a free discretion, and in the other instance .... it
exercises a bound
discretion. Where in a statutory enactment words
such as 'in his opinion' or 'to his satisfaction' are used the
repository of the
power is clothed with a free discretion. In
contrast thereto the enactment may require certain jurisdictional
facts to exist before
a discretion may be validly exercised. In the
latter instance the exercise of the discretion is bound and will be
invalid unless
those facts objectively exist.”
4.2
The court is required to interpret Sections 145(7) and (8) in
a constitutionally compliant manner. The LRA specifically provides
in
its interpretation clause that:
“
Any
person applying this Act must interpret its provisions-
(a)
to give effect to its primary objects;
(b)
in compliance with the Constitution; and
(c)
in compliance with the public international law
obligations of the Republic.”
4.3
A
court should have a discretion as to whether security is to be put
up. For example, Superior Court Rule 49(13)
[2]
dealing with the provision of security for costs in an appeal, where
no such discretion was provided for was held to be unconstitutional
and amended thereafter. The court in Shepherd v O'Niell
2000 (2) SA
1066
(N) stated that:
“
It
is clear from what is set out earlier in this judgment, that in
virtually every case where security is demanded of a litigant,
the
Court has a discretion whether to order that such security be put up.
As matters stand at present in terms of Rule 49(13) the
Court has no
power to either exempt an appellant from putting up security or to
interfere with the amount fixed by the Registrar.
There is much to be
said for protecting a respondent in an appeal from an impecunious
appellant who drags him from one court to
the other. On the other
hand to in effect bar access to a Court of Appeal because a deserving
litigant is unable to put up security
appears to me to be unfair and
in conflict with the provisions of the Constitution. The conflicting
rights of the litigants can,
in my view, be adequately safe-guarded
were the Court to be vested with the power to determine, in the
exercise of its discretion,
whether a particular appellant should be
compelled to put up security and in what amount. To the extent that
Rule 49(13) does not
embody that power I consider it to be in
conflict with the Constitution and to that
extent
invalid.”
4.4
Accepting that a proper, constitutionally compliant reading of
section 145(7) should allow that the court may decide whether a
litigant
is compelled to put up security or not, the phrase “Unless
the Labour Court
directs
otherwise” in section 145(8), should be read widely to mean
that unless the court directs an exemption from the provision
of
security, or directs that security is to be paid in an amount lesser
than those amounts set out in 145(8)(a) and (b).
4.5
The
above interpretation takes into account that the amendments contained
in the provisions were drafted to target a particular
mischief i.e.
to deter those litigants bringing review applications to frustrate or
delay compliance with arbitration awards and
to speed up the
finalization of review applications.
[3]
Therefore, the provisions should also be read to allow for the court
to exercise its unfettered discretion to order that security
be paid
or not, and if so, whether there should be a deviation from the
quantum set out in section 145(8) (a) and (b) thereof,
bearing in
mind the objectives of the amendment to section 145, and on a case to
case basis.
4.6
This
reading of the amended provisions is also sensitive to the
Constitution in recognizing the constitutionally protected right
to
“to have any dispute that can be resolved by the application of
law decided in a fair public hearing before a court or,
where
appropriate, another independent and impartial tribunal or forum.”
[4]
In addition, the Constitution requires a reading of the provisions
with proportionality in mind i.e. the weighing of an employees
right
to review an award in terms of the LRA, against the right of
dismissed employees to obtain their due redress despite the
inherent
inequality in power and resources between employers on the one hand,
and employees on the other.
[5]
Given
the interpretation accorded to the provisions above, it is only
necessary for me to decide whether the court should order
the
applicant, which is recognized by the National Treasury Department,
as a Provincial Government Enterprise
[5]
and is partly funded from ..government grants" as its financial
statements reflect, to pay
security
in these applications. The applicant is a regulator of the gambling
and liquor industries and is accountable to the responsible
MEC of
the Province. The applicant submits that the provision of security is
contrary to the provisions of section 66 of the PFMA,
and to comply
with those provisions and the requisite treasury regulation would
mean that a notice would have to be gazetted by
the Minister of
Finance each time such a “borrowing” is permitted
6
.
It is submitted that this is impractical. I would add that it is also
unnecessary.
[6]
In
my judgement, in applications such as these, where the applicant's
budget and financial management is governed by the PFMA and
Treasury
Regulations, and duly authorized averments are made to this effect,
the object of providing security is satisfied. The
respondent
employees in these applications are safeguarded if the awards in
question are ultimately upheld, as is an employee in
the private
sector whose private sector employer provides a security bond in an
application in terms of section 145(7) and (8).
[6]
Treasury
regulation 32.1 Borrowing [Section 66 of the PFMA]:
32.1.1
For purposes of section 66(5) of the Act, public entities
listed in Schedule 3A or 3D of the Act may borrow money for bridging
purposes
with the approval of the Minister of Finance, subject to the
following conditions:
(a)
the debt must be repaid within 30 days of the end of the
financial year;
(b)
borrowing may not exceed a limit determined in advance by the
Minister of Finance, in consultation with the national executive
authority or provincial MEC for finance, whichever appropriate;
(c)
(c) foreign borrowing may not be undertaken;
(d)
a request for borrowing for bridging purposes must be
submitted to the Minister of Finance at least 30 days before the
borrowing.
The following must be submitted together with the request
-
(i)
detailed cash flow and income and expenditure statements indicating
how the debt will be repaid during the prescribed period;
and (ii)
the terms and conditions on which the money is borrowed.
32.1.2
This regulation does not preclude the use of credit cards,
fleet management cards or other credit
facility
repayable within 30 days of the date of statement.
[7]
In the circumstances of this case, I find it equitable that
the applicant should pay the costs in these applications given that
they were brought to test the amended provisions of the LRA. I
therefore make the following order:
1.
The enforcement and/or certification of the awards under cases
numbers FSBF3091-14 and FS8655-13 is stayed pending the finalization
of the review applications under case numbers J894/15 and J773/15
2.
Applicant to pay the costs of these applications.
H.
Rabkin-Naicker Judge of the Labour Court of South Africa
Appearances:
For
the Applicant in J773/15 and J894/15:
FA
Boda SC and T Govender instructed by Sunil Narian For the Respondents
in J773/15:
S.
Grobler instructed by Kramer Weihmann & Joubert Attorneys
[1]
At paragraph 18
[2]
Rule 49(13) provided that: 'Unless the respondent waives his right
to security, the appellant shall, before lodging copies of
the
record on appeal with the Registrar, enter into good and sufficient
security for the respondent's costs of appeal. In the
event of
failure by the parties to agree on the amount of security, the
Registrar shall fix the amount and his decision shall
be final.'
[3]
Memorandum of Objects LRA Amendment Bill 2012.
[4]
Section 34 of the Constitution of the Republic of South Africa,
1996.
[5]
Listed in schedule 3 to the Constitution as a Provincial Public
Entity.
[6]
As has been directed by the Judge President of the Labour Court