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[2015] ZALCJHB 362
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Registrar of Labour Relations v Chemical, Energy, Paper, Wood and Allied Workers Union and Others (J815/2015) [2015] ZALCJHB 362 (9 October 2015)
REPUBLIC
OF SOUTH AFRICA
Not reportable
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Case
no: J 815/2015
In the matter between:
REGISTRAR OF LABOUR
RELATIONS
APPLICANT
and
CHEMICAL, ENERGY, PAPER, PRINTING,
WOOD
AND
ALLIED WORKERS UNION
FIRST RESPONDENT
SAMUEL CHIEF
SEATLHOLO
SECOND RESPONDENT
THULASIZWE
SIBANDE
THIRD RESPONDENT
SCOTCH MPONENG DIBETSO
FOURTH RESPONDENT
JOHANNES DUBE
FIFTH RESPONDENT
LAWRENCE NZELE
SIXTH RESPONDENT
SAMUEL XABA
SEVENTH RESPONDENT
Application argued: 7
October 2015
Judgment
delivered: 9 October 2015
JUDGMENT
VAN
NIEKERK J
[1]
On 24 April 2015, the applicant filed an application in which he
sought, on an urgent
basis, to have the first respondent (the union)
placed under administration in terms of
s 103A
of the
Labour
Relations Act, 66 of 1995
. The basis on which the order is sought is
that intra-union conflict and strife among the union’s
office-bearers had resulted
in the union becoming paralysed and
incapable of complying with its statutory obligations and those
established by the union’s
constitution. The deponent to the
founding affidavit, Mr JT Crouse, who at that time occupied the post
of Registrar of Labour Relations,
averred that the union had failed
properly to administer its finances and had failed to submit audited
financial statements as
required by the provisions of the
Labour
Relations Act (LRA
). In particular, Mr Crouse averred that the
union had failed to comply with clauses 41, 44 and 72 of its
constitution in
that it had failed to convene the required monthly
meetings of the national office bearers committee, annual meetings of
the national
executive committee and bi-monthly meetings of the
financial committee. Further, he averred that the union had failed to
comply
with its statutory obligations in terms of
sections 25(5)
,
98
and
100
of the LRA. He further recorded that in relation to levies
collected from its own membership as well as those collected in terms
of agency-fee agreements, the union had failed since 2010 to keep
records of its books of income, expenditure, assets and liabilities;
that it had failed to be there audited statements for the years 2010,
2011, 2012 and 2013; that it had failed to arrange an audit
of its
books and records of accounts and financial statements for the years
2010 to 2013; that it had failed to make the financial
statements and
auditors report available for inspection as required by
s
98(2)(b)
of the LRA; that it had failed to submit these
documents to a meeting of members of the union as required by the
union’s
constitution and that it had failed to prepare and
submit its annual financial statements to the registrar within the
required
statutory period. Indeed, the affidavit contains a litany of
breaches of the LRA and of the union’s constitution, and paints
a picture in terms of which the union’s general-secretary has
continued to collect levies from both members and non-members
and
proceeded to engage in expenditure of these funds without any formal
accountability. These and other failures by the union
to respond to
the many and various attempts by Mr Crouse to ensure compliance and
what appeared to him to be a manifest failure
by the union to have
regard to the statutory checks and balances established to ensure
transparency and accountability in the union’s
dealings, caused
him to seek to have the union placed under administration.
[2]
The present application was set down for hearing on 7 and 8 October
2015. During the
preceding fortnight, two significant events
occurred. First, on 29 September 2015, an application to amend the
notice of motion
was filed by the applicant. The post of Registrar of
Labour Relations at that point was temporarily occupied by Mr. M
Ntleki, after
a decision by the Minister of Labour on 23 July 2015 to
revoke the designation of Mr. Crouse as Registrar. As appears from
the
judgment by this court referred to below, that decision has its
roots directly in matters that relate to the present application.
In
essence, the proposed amendment seeks an order in terms of which the
first respondent is required to comply with certain obligations
within a defined period, failing which the applicant be granted leave
to seek an order placing the first respondent under administration.
[3]
The second significant event occurred on 5 October 2015 when Myburgh
AJ delivered
a judgment in terms of which the minister’s
decision to revoke Mr. Crouse’s designation as Registrar of
Labour Relations
was reviewed and set aside, and in terms of which
she was ordered immediately to reinstate him in that post. Myburgh AJ
found that
in making the decision to revoke Mr. Crouse’s
designation, the minister ignored materially relevant facts and thus
came to
a conclusion that was unreasonable, irrational and
procedurally unfair.
[4]
On the morning on which the present application was to be heard, the
minister filed
an application for leave to appeal against Myburgh
AJ’s judgment. In terms of
s 18
of the
Superior Courts Act, 10
of 2013
, ordinarily, the operation and execution of the decision
which is the subject of an application for leave to appeal is
suspended
pending the decision of the application. The application
proceeded therefore on the basis that although Mr. Crouse had deposed
to the founding affidavit in support of the application to place the
union under administration, Mr. Ntleki was authorised, in his
capacity as acting Registrar of Labour Relations, to bring the
application to amend and to depose to the founding affidavit.
[5]
In the circumstances, the parties agreed ultimately that the main
application was
not ripe to be heard by virtue largely of the state
of uncertainty occasioned by the appointment of the acting registrar,
the challenge
to the minister’s decision to revoke Mr. Crouse’s
designation in the absence of any replying affidavit in the main
application.
[6]
Turning then to the application to amend, in his affidavit, Mr.
Ntleki avers that
on his assumption of duties, he was furnished with
documentation in respect of the present matter and others. After
consideration
of the documents, he formed the view that there were
less drastic measures than those contemplated by the notice of motion
and
that in essence, it was appropriate to seek the amendment so as
to compel the union to cure the deficiencies recorded in the founding
affidavit and to provide a further opportunity for compliance within
a defined period of 90 days, on penalty of the bringing of
an
application on the current papers, supplemented as necessary, for an
order placing the union under administration. Amongst other
things,
Mr. Ntleki avers that there has been ‘remarkable progress’
in the preparation of audited financial statements
and auditors
reports, and he appears to express a degree of confidence in the
ability of the union to meet its statutory obligations
within the
required period. In short, the acting registrar premises the proposed
amendment on his conclusion that placing the union
under
administration is not likely to be in the best interests of the union
and its members, that less drastic measures are appropriate
and that
placing the union under administration is premature.
[7]
In terms of an order granted by this court on 4 June 2015, the 2
nd
to 7
th
respondents were granted leave to intervene. The
2
nd
to 7
th
respondents are national and
provincial office bearers; the second respondent is the deputy
secretary-general of the union, the
third respondent is its national
treasurer. On 20 May 2015, the 2
nd
to 7
th
respondents filed an answering affidavit which they express their
support for the relief sought by the applicant in the main
application.
The 2
nd
to 7
th
respondents oppose
the application to amend.
[8]
In effect, the proposed amendment provides the union with a final
opportunity to submit
audited financial statements failing which the
acting registrar intends proceeding against the union in terms of
s
103A.
The relevant elements of the proposed amendment would require
the union to be compelled to comply with the following obligations:
1.1
to
provide to the applicant the first respondent’s audited
financial statements for the respondent’s financial years
ending on December 2010, December 2011, December 2012, December 2013
and December 2014, which financial statements ought to comply
with
the relevant requirements of law and its constitution;
1.2
that
the first respondent be directed to convene and hold the relevant
meetings in accordance with its constitution in order to
be able to
comply with paragraph 1.1 above or to comply with the applicable laws
in general
1.3
that
the respondent the order to comply with paragraph 1.1 above within 90
days of the granting of this order.
[9]
Failing compliance with the above provisions, the proposed amendment
contemplates
that the applicant to be granted leave to bring an
application, on the existing papers supplemented as necessary, for an
order
placing the union under administration in terms of
s 103A
on
certain defined terms and conditions.
[10]
The union’s representative, Mr. Watt-Pringle SC, recorded that
the union had no objection
to the proposed amendment to the notice of
motion save for the reference to the 2014 annual financial statements
which for practical
reasons, cannot be finalised within the 90 days
contemplated by paragraph 1.3 of the amendment. Indeed, withy that
caveat, the
union indicated that it would support an order granted in
terms of the proposed amendment.
[11]
As I have indicated, the proposed amendment is opposed by the 2
nd
to 7
th
respondents. The deponent to the affidavit opposing
the amendment sought by the registrar is the union’s deputy
general secretary.
He avers that it is his firmly held view that the
present application is no more than a slight of hand intended to
achieve an alternative
to the withdrawal of the application. In
short, the 2
nd
to 7
th
respondents submit that
the proposed amendment would cause prejudice to the respondents and
that in any event, it was not
bona fide
.
[12]
After submissions have been made on behalf of the 2
nd
to
7
th
respondents by Mr Cook SC who appeared on their
behalf, Mr. Skosana SC, who appeared for the applicant, indicated
that his client
could address some of the concerns raised by the 2
nd
to 7
th
respondents, certain amendments to the proposed
notice of motion. It seems to me that the amendments proposed by Mr
Skosana go
some way to address the concerns expressed by the 2
nd
to 7
th
respondents relating to the prejudice that they say
will be caused to them by the amendment as originally cast, and their
concern
that the application to amend is not
bona fide
. In
particular, the amendments proposed relate to the constitution of
Fincom and its role in terms of the union’s constitution
in
relation to the preparation of financial reports for submission to
the NEC, the status and role of the national treasurer in
this
regard, and a requirement the national treasurer and other relevant
officials be entitled properly to inspect the union’s
financial
records and to carry out their obligations in terms of the union’s
constitution. Other proposed amendments related
to the terms on which
any order placing the union under administration might be granted. In
regard to the latter, in my view, this
is a matter that should be
left to the court if and when such an application is brought. There
is no reason for any order granted
in the present matter to constrain
the court in future.
[13]
In practical terms, courts are ordinarily inclined to allow
amendments unless they are
mala fide
or will cause a manifest
injustice to the other side. In each instance, the question is what
the interests of justice demand (see
Affordable Medicines Trust
and another v Minister of Health and others
[2005] ZACC 3
;
2006 (3) SA 247
(CC)).
[14]
I intend therefore to grant the applicant leave to amend the notice
of motion, substantially
in the terms proposed by Mr. Skosana. I
should emphasise that the order is made without any finding as to
whether the first respondent
or the 2
nd
to 7
th
respondents are the true guardians of the union, its constitution and
its members or indeed, which of the factions represented
by the first
respondent and the 2
nd
to 7
th
respondents is
the guardian of the truth. The order that I intend to grant is
premised on the obligations that are conferred on
office bearers’
and officials by the terms of the union’s constitution, and the
union’s statutory obligations.
The
order reads as follows:
1.
The
applicant is granted leave to amend the notice of motion in the
following terms:
1.1
by the
deletion of prayers 1 to 5 and their replacement by the following:
1.1.1
that the
first respondent to be and is hereby compelled to comply with the
following obligations:
1.1.1.1
to provide
to the applicant the first respondent’s audited financial
statements for the respondents financial years ending
on December
2010, December 2011, December 2012 and December 2013, which financial
statements must comply with the relevant provisions
of the Labour
Relations Act, 66 of 1995 (the LRA), and the first respondent’s
constitution;
1.1.1.2
to convene
and hold all such meetings that are required in terms of its
constitution in order to effect compliance with the provisions
of
paragraph 1.1.1.1, and to ensure compliance with any relevant
provisions of the LRA. Such meetings shall include meetings
of
the first respondent’s national financial committee (Fincom) in
terms of clause 72 (2) of the union’s constitution,
so as to
discharge the responsibilities of Fincom in terms of clause 72 (3)
and also the national executive committee and any regional
committees
or other structures that are required to meet in order to facilitate
the first respondent’s compliance with paragraph
1.1.1.1.
1.1.2
The first
respondent’s general secretary and deputy general secretary
shall comply with their obligations in terms of clauses
37(5) and
37(6) respectively to ensure that the meetings referred to in
paragraph 1.1.1.2 above are convened, and the necessary
reports
prepared.
1.1.3
The first
respondent’s national treasurer discharge his obligations in
terms of clause 37 (4) of the first respondent’s
constitution
and that in doing so, he receives all necessary assistance by the
first respondent’s general secretary as contemplated
by clause
37(5) of the first respondent’s constitution, and by any other
national and/or regional official whose assistance
is necessary to
enable the national treasurer to discharge his duties.
1.1.4
All such
books and accounting records of the first respondent as are necessary
for the national treasurer to submit final audited
reports to the
national congress must be made available to the national treasurer
for his or her inspection.
1.2
The first
respondent must comply with the provisions of paragraph 1.1.1.1 above
within 90 days of the date of this order.
1.3
If the
first respondent fails to comply with the provisions of paragraph
1.1.1.1 above, the applicant is granted leave to bring
an application
in terms of s 103A of the LRA, on the same papers supplemented as
necessary, for an order placing the first respondent
under
administration on such terms as may be determined by the court.”
2.
An order is
granted in terms of paragraphs 1.1, 1.2 and 1.3 above.
3.
There is no
order as to costs.
ANDRÉ
VAN NIEKERK
JUDGE
OF THE LABOUR COURT
REPRESENTATION
For
the applicant: Adv. Skosana SC, with him Adv. Majapelo, instructed by
the State Attorney
For
the first respondent: Adv. Watt Pringle SC, with him Adv. Viljoen,
instructed by Webber Wentzel
For
the second to seventh respondents: Adv. Cook SC with him Adv.
Williamson, instructed by Vasco De Oliveira Attorneys.