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[2015] ZALCJHB 429
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National Union of Metalworkers of SA v Vanachem Vanadium Products (Pty) Ltd (J1869/15) [2015] ZALCJHB 429 (17 December 2015)
THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Reportable
Case
No J1869/15
In
the matter between:
NATIONAL
UNION OF METALWORKERS OF SA
Applicant
and
VANACHEM
VANADIUM PRODUCTS (PTY) LTD
Respondent
Date
heard:
8 December 2015
Order
given:
10 December 2015
Judgment
delivered: 17
December 2015
Summary:
Application to declare lay-offs of the applicants’ members
employed by the respondent unlawful on basis respondent
is excluded
from the terms of the MEIBC’s Main Agreement. Interpretation of
the Main Agreement.
JUDGMENT
NKUTHA-NKONTWANA
AJ
Introduction
[1]
In this
urgent Application the Applicant seeks an order declaring a lay-off
of the Applicant’s members by the respondent unlawful.
This
matter was initially heard by Brassey AJ on 17 September 2015 on
urgent basis. The parties reached a Settlement Agreement
which was
made an order of court. In terms of the Settlement Agreement the
application was,
inter
alia
,
postponed
sine
die
on
the basis that either party could re-enroll same on seven days’
notice to the other party. The Applicant availed itself
to the said
clause and hence these proceedings.
[2]
The
Applicant accordingly amended its notice of motion and now seeks an
order in the following terms:
“
1.
That the matter be dealt with on urgent basis and that the
Applicant’s non-compliance with the Rules of Court be condoned;
2. That it be declared
that the Respondent’s lay off of the Applicant’s members
as from 12 September 2015 and or its
subsequent implementation of
short time as form Saturday, 7 November 2015, was unlawful;
3. That the Respondent
be ordered to:
3.1
Forthwith allow the Applicant’s members to return to the work
place; and/or
3.2
Pay the Applicant’’ members all the wages forfeited as a
consequence of the Respond aforesaid unlawful conduct.
4.
Further and alternative relief”
Background
facts
[3]
The
pertinent facts are common cause. The Respondent is a producer of
vanadium and its sole source of ore was Mapochs mine. In April,
Mapochs mine was placed under business rescue and stopped to supply
ore to the Respondent. The Respondent’s ore reserves
were
depleted by 1 May 2015 and thereby creating a crisis. In response to
the emergency situation it was facing, the Respondent
implemented
short-time and lay-offs as provided for in the Main Agreement of the
Metal and Engineering Industries' Bargaining Council
("the
MEIBC").
[4]
It is the
Respondent's case that it and the Applicant's members are bound by
the terms of the Main Agreement. In terms of item 2
of Annexures "A"
to the Main Agreement, the Respondent is entitled to institute a
lay-off unilaterally. Clause 7 of the
Main Agreement allows for the
implementation of short time "owing to a shortage of work and/or
materials and any other justifiable
contingencies including planned
load shedding and/or unforeseen contingencies and/or circumstances
beyond the control of the employer".
[5]
Conversely,
the Applicant disputes that the Main Agreement applies to the
respondent and its members in the employ of the Respondent.
In
essence, that is the crisp issue to be determined by this court.
[6]
It is a
well-known fact that the steel industry is on its knees due to global
slow down. The Mapochs mine is under business rescue
and the mine
ceased to operate during April 2015 and resumed for a brief period on
9 August 2015. Mapochs mine had surplus of "lumpy"
ore
available to sell to the Respondent. However, the Respondent needs
"fines" ore and would have to crush and screen
the "lumpy"
ore before it could be used, at additional cost it could hardly
afford.
[7]
The
business rescue practitioner of Mapochs mine was willing to reduce
the price of "lumpy" ore by 50%. To accept the
offer, the
Respondent had to reduce its total cost by 30% and that would have
enabled it to carry on production, although still
at a loss. Its
monthly loss was about R49m in September 2015.
[8]
The
Respondent had consultations with all its employees and its salaried
staff, non-unionised employees and Solidarity trade union
agreed to
the proposed wage reduction of 30%. On 1 and 8 September 2015, it
consulted with the Applicant on the same issue but
did not respond to
it. As a result, the Respondent resorted to lay-off since it had no
ore.
[9]
The lay-off
was not a permanent solution to the Respondent's financial
difficulties. For this reason, the Respondent commenced with
section
189A process. This process is aimed at addressing the Respondent's
long term operational requirements.
[10]
The
Respondent remained without ore and was thus unable to resume
production after the expiry of the 8-week period of a lay-off
in
accordance with the Main Agreement. Thereafter, a short time was
implemented in terms of the Main Agreement in order to allow
necessary maintenance to be done without the Respondent incurring its
full wage bill whilst it was unable to produce and earn any
income
from production.
[11]
The
worsening financial situation of the Respondent forced it into
business rescue on 17 November 2015. Whilst section 189A process
is
still pending.
Analysis
[12]
In terms of
Part 1 Clause 1(3)(e) of the MEIBC Main Agreement, the Main Agreement
does not apply to enterprises that are,
inter
alia
,
engaged in ‘the production of iron and/or steel and/or
ferro-alloys’. It is common cause that the Respondent’s
operations fall within this exclusion.
[13]
Given the
crisp issues for determination, I do not intend to deal with the
applicability of other MEIBC Collective Agreements. Save
to
interrogate the plant level agreements concluded by the parties in so
far as they are linked to the Main Agreement.
[14]
Historically,
the terms and conditions of employment applicable to the Applicant’s
members in the Respondent’s employ
had always been regulated by
what was called House Agreements which were comprehensive and
provided for lay-off. The last House
Agreement expired on 30 June
2010.
[15]
In 2011,
the parties concluded a separate agreement wherein they agreed to be
bound by the Main Agreement. However, that agreement
was unilaterally
terminated by the Applicant and it went ahead to table its lists of
demands for negotiation at the plant level.
The Respondent refused to
bargain with the Applicant, insisting that the parties were still
bound by the Main Agreement. The matter
was referred to the MEIBC and
on 25 October 2012 Commissioner Dibden issued an advisory award in
favour
of the Applicant
confirming that the Main Agreement was not applicable to its members.
[16]
Subsequent
to a protracted strike by the Applicant, the parties concluded a
Strike Settlement Agreement dated 5 December 2012. Clause1
thereof
states that the parties agree that the variation of all conditions of
employment contained in annexure A shall be determined
and be based
on the terms and conditions of the signed MEIBC Main Agreement.
Annexure A interestingly refers, in summary, to rates
of pay,
allowance, call outs, fatigue rest period, housing subsidy. The
Strike Settlement Agreement remains applicable for the
duration of
employees’ employment.
[17]
On 30 May
2014, another collective agreement was concluded between the parties,
termed Supplementary Conditions of Employment Agreement,
which
expressly provides that it must be read together with the Strike
Settlement Agreement. It is clear from the terms of this
collective
agreement that, contrary to the Respondent’s adamant assertion
that the Main Agreement is applicable to its employees,
the parties
yet again collectively bargained issues that fall within the ambit of
a Main Agreement at the plant level.
[18]
The
Respondent raised two main defenses. Firstly, that effect that the
Main Agreement, as amended by the agreements negotiated by
parties,
is binding on the parties; and secondly, that the matter is
res
judicata
.
[19]
The counsel
for Respondent referred me to the SCA’s judgment in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[1]
which contextualized the new approach to be adopted in interpretation
of documents. For completeness sake, I intend to refer the
whole
paragraph 26 partially quoted by the Respondent’s counsels:
“
In
between these two extremes, in most cases the court is faced with two
or more possible meanings that are to a greater or lesser
degree
available on the language used. (footnote omitted) Here, it is
usually said that the language is ambiguous although the
only
ambiguity lies in selecting the proper meaning (on which views may
legitimately differ). In resolving the problem, the apparent
purpose
of the provision and the context in which it occurs will be important
guides to the correct interpretation. An interpretation
will not be
given that leads to impractical, unbusinesslike or oppressive
consequences or that will stultify the broader operation
of the
legislation or contract under consideration.”
[20]
With due
respect, Part 1 Clause 1(3)(e) of the MEIBC Main Agreement
unambiguously excludes business operations involved in ‘the
production of iron and/or steel and/or ferro-alloys’. As such,
Natal
Joint Municipal Pension Fund
is not applicable in this instance.
[21]
However,
I am not oblivious of the views expressed by the LAC
in
North
East Cape Forests v S A Agricultural Plantation and Allied Workers
Union
,
quoted with approval in
Food
& Allied Workers Union (FAWU) v Commission for Conciliation
Mediation and Arbitration and Others
[2]
that:
"
In
the case of a collective agreement, the parties are in an employment
relationship, with conflicting interests: their agreement
generally
represents a compromise that is the result of a protracted process of
negotiation, and may follow the exercise of power.
I do not therefore
think a collective agreement can be properly interpreted without full
regard for the context in which it is
negotiated …
In
my opinion the effective resolution of labour disputes is not
promoted by reliance on a legal rule of evidence which restricts
the
abilities of parties to present the argument at a forum such as this
.
[Emphasis added]
[22]
In
North
East Cape Forests
the
court held further that “the primary objects of the LRA are to
advance economic development, social justice, labour peace
and the
democratisation of the workplace, and that these objectives are
better served by the practical approach to the interpretation
and
application of the collective agreement rather than by reference to
purely contractual principles.” Other than being
bound by this
dictum, I totally agree with it.
[23]
In this
instance, it is clear that parties to the Main Agreement deliberately
and expressly excluded business operations involved
in ‘the
production of iron and/or steel and/or ferro-alloys’. The terms
and conditions of covering the excluded enterprises
were deferred to
House Agreements. As stated above, there is no House Agreement
currently. The conundrum the parties find themselves
in is owing to
the lacuna created by the lapse of their last House Agreement in 2010
and the absence of a clear replacement.
[24]
In the
premises, it is my view that that the Main Agreement is generally not
applicable to the parties, save for instances where
they have entered
into a collective agreement to extend its application totally or on
limited issues. Clearly, both the Strike
Settlement and the
Supplementary Conditions of Employment Collective Agreements do not
provide for the lay-off or short-time.
Res
judicata:
[25]
In
Nestle(SA)
(Pty) Ltd v Mars Inc.
[3]
stated
that:
“
The
defence of lis alibi pendens shares features in common with the
defence of res judicata because they have a common underlying
principal which is that they should be finality in litigation. Once a
suit has been commenced before a tribunal that is competent
to
adjudicate upon it the suit must be brought to its conclusion before
the tribunal and should not be replicated (lis alibi pendens).
By the
same token the suit will not be permitted to be revived once it has
been brought to its proper conclusion (res judicata).
The same suit,
between the same parties, should be brought only once and finally.”
[26]
Whilst
in
Dumisani
& another v Mintroad Sawmills (Pty) Ltd,
[4]
the Labour Appeal Court held that ‘
it
is against public policy that a litigant should on the same grounds
be able to keep demanding the same relief from the same adversary’.
[27]
For
a
defence of
res
judicata
to
succeed in this instance, the Respondent had to show that the prior
arbitration award and judgment concern the same parties in
which the
same point was at issue. There is no dispute that both the
arbitration award of Walele and judgment of Van Niekerk J
concern the
same parties. However, the Applicant asserts that they do not concern
the same issue since it now seeks a pronouncement
on the lawfulness
of the layoff and short-time.
[28]
It is
clear,
ex
facie,
the arbitration award of Walele that she misconstrued the issues
before. Contrary to her findings, the parties have since, as a
matter
of fact, concluded plant level collective agreements. In fact, the
issues that had been canvassed during the arbitration
proceedings are
now dealt with in terms of the Strike Settlement Agreement and the
Supplementary Conditions of Employment Agreement.
By the same token,
the issue that was before Van Niekerk J was about the legality of the
Applicant’s strike. The court in
that matter was asked to
determine whether the Applicant’s demands (appointment of shop
stewards, insourcing and transport
costs) constituted matters of
mutual interest.
[29]
Undauntedly,
both previous proceedings did not deal with the issues before this
court or finally and definitely determine the merits
of the dispute
between the parties. Accordingly, the Respondent’s defense of
res
judicata
is
untenable and stands to be dismissed.
Conclusion
[30]
In the
circumstances, it is clear that Part 1 Clause 1(3)(e) of the Main
Agreement unambiguously excludes the Respondent’s
business
operations. Even though the current plant level collective agreements
between the parties limitedly extend some of the
provisions of the
Main Agreement, lay-off and short –time provisions,
inter
alia
,
remain excluded.
[31]
Therefore,
the Respondent’s unilateral implementation of the lay-off of
the applicant’s members as from 12 September
2015 and/or
subsequent implementation of a short time as from 7 November 2015 was
unlawful. Consequently, the Respondent must reinstate
the Applicant’s
members’
status
quo ante
.
Costs
[32]
On costs,
it is practice that this court’s would normally decline to make
orders for costs in circumstances where the parties
to a collective
bargaining relationship are before the court, and where an order for
costs has the potential to prejudice that
relationship. There is no
reason to depart from that approach in the present instance. I,
therefore, find it proper not to make
any order as to costs.
Order
[33]
For the
above reasons, I make the following order:
1.
The matter
is dealt with on urgent basis and that the Applicant’s
non-compliance with the Rules of Court be condoned;
2.
It is
declared that the Respondent’s lay-off of the Applicant’s
members as from 12 September 2015 and or its subsequent
implementation of short time as from Saturday, 7 November 2015, was
unlawful;
3.
The
Respondent be ordered to:
3.1
Forthwith allow the Applicant’s members to return to the work
place; and/or
3.2
Pay the Applicant’s members all the wages
forfeited as a consequence of the Respond aforesaid unlawful conduct.
___________________
Nkutha- Nkontwana, AJ
Acting
Judge of the Labour Court of South Africa
APPEARANCES:
For
the Applicant:
Minnaar Niehaus
of Minnaar Niehaus Attorneys
For
the Respondents:
Adv G Pretorius SC with Adv H Viljoen
Instructed
by:
Cowan-Harper Attorneys
[1]
[2012] 2 All SA 262
(SCA) at paras 14
to 24.
[2]
Food &
Allied Workers Union (FAWU) v Commission for Conciliation Mediation
and Arbitration and Others
(C536/06)
[2006] ZALC 30
(27 January 2006) at para 69.
[3]
2001 (4) SA 542
(SCA)
[4]
(2000) 21
ILJ
125
(LAC) para 6