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[2015] ZALCD 16
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Workforce Group (Pty) Ltd v Van Zyl NO and Others (D1131/2012) [2015] ZALCD 16; (2015) 36 ILJ 2182 (LC) (20 February 2015)
REPUBLIC
OF SOUTH AFRICA
THE LABOUR COURT
OF SOUTH AFRICA, DURBAN
JUDGMENT
Case no: D
1131/2012
DATE: 20 FEBRUARY
2015
Reportable
In the matter
between:
THE WORKFORCE
GROUP (PTY)
LTD
....................................................................
Applicant
And
P E VAN ZYL
N.O
..........................................................................................
First
Respondent
NATIONAL
BARGAINING COUNCIL FOR THE
ROAD FREIGHT AND
LOGISTICS INDUSTRY
.......................................
Second
Respondent
M S DLANGISA AND
10 OTHERS
........................................
Third
and Further Respondents
Heard:
21 October 2014
Delivered:
20 February 2015
Summary:
Bargaining council arbitration proceedings – review of
proceedings, decisions and awards of arbitrators – test
for
review – section 145 of LRA – determinations of
arbitrator not irregular – no basis for review made out
Section
62 – nature of proceedings under this section – related
to demarcation disputes only – does not include
a case of
invalidity of collective agreement – section 62 not applicable
Demarcation
– nature of demarcation proceedings considered – case not
one of demarcation – section 62(3A) not
applicable
Collective
agreement – challenge of unlawfulness and ultra vires –
required prior challenge of agreement – no
such challenge
brought – collective agreement must this be complied with and
this challenge cannot be raised in enforcement
proceedings
Costs
– dilatory tactics by employer – costs award justified
JUDGMENT
SNYMAN,
AJ
Introduction
[1]
This matter concerns an application by the applicant to review and
set aside a ruling handed down by the first respondent, in
terms of
which the first respondent dismissed an application in terms of
section 62(3A) by the applicant before the first respondent
as
arbitrator. This application has been brought in terms of section 145
of the Labour Relations Act
[1]
(‘the LRA’).
[2]
The third to further respondents are all employees of the applicant.
The applicant conducts business as a temporary employment
service
provider. The third to further respondents all work in the industry
resorting under the scope and jurisdiction of the second
respondent
as bargaining council, and as such, the applicant and the third to
further respondents are subject to the main collective
agreement of
the second respondent and all of the conditions of employment
relating to individual employees contained therein.
The second
respondent sought to enforce provisions of the main collective
agreement against the applicant, in respect of the third
to further
respondents and itself but this was resisted by the applicant on a
number of grounds. At stake in the current proceedings
was an
application by the applicant in terms of section 62(3A) of the LRA,
to the effect that the enforcement arbitration proceedings
against
the applicant had to be aborted pending the consideration of issues
relating to section 62(1)(b) about the application
of the second
respondent’s main collective agreement to the applicant, by the
CCMA. As stated, this application was dismissed
by the first
respondent, with costs, and it is this determination by the first
respondent that forms the subject matter of the
review application
now brought by the applicant
Background facts
[3]
The second respondent is a bargaining council established under the
LRA for the road freight and logistics industry. It is,
as such,
responsible for the enforcement of its own collective agreement. From
the documents on record, it appears that dating
back to 2011, there
were a number of proceedings instituted against the applicant at the
second respondent with regard to issues
relating to non-compliance
with the main collective agreement of the second respondent, by the
applicant.
[4]
In total,
in casu
, there were 11 cases brought against the
applicant. Of these cases, four were brought by the second respondent
itself as to payment
by the applicant to the second respondent itself
in terms of the collective agreement, whilst the other seven cases
related to
the third and third respondents as individual employees of
the applicant with regard to benefits accruing to such employees
under
the collective agreement.
[5]
The applicant, as stated above, is a temporary employment service
provider. Its employees are posted and designated to work
and render
services at the customers of the applicant, which customers,
in
casu
, conduct business in the road freight and logistics
industry. From the documentary evidence forming part of the record,
these customers
are Value Logistics, Stuttafords Van Lines, Frasers
International and Kargo National. Whilst it is clear that the third
to further
respondents, therefore, indeed work and render their
services under the scope and jurisdiction of the second respondent,
the applicant
consistently sought to resist complying with the second
respondent’s main agreement.
[6]
Whilst I am sure there must be preceding events, I only become seized
with this matter at the point in time starting with the
set down of
some of the cases referred to above, on 24 July 2012. On 23 July
2012, the applicant raised a number of objections
in limine
with regard to the hearing set down for 24 July 2012. These included
allegations of non-compliance with sections 24(1) and 51 of
the LRA,
alleged non compliance with parts of Rule 5 of the second
respondent’s exemptions collective agreement and finally
alleged non compliance with section 3(2) of PAJA. Added to that the
applicant objected, in terms of section 33A(4)(b) of the LRA,
to the
appointment of an arbitrator by the second respondent. All of this
resulted in the hearing of 24 July 2012 being aborted.
[7]
The second respondent, pursuant to the objection in terms of section
33A, then sought the appointment of an arbitrator by the
CCMA to
conduct the hearing. This was done on 27 July 2012. The first
respondent was then specifically appointed by the CCMA
to attend to
the arbitration of all the disputes, which arbitration would be
conducted under the auspices of the second respondent.
The applicant
was accordingly informed on 7 August 2012 that all 11 matters will be
set down on 28 August 2012.
[8]
All 11 matters came before the first respondent on 28 August 2012. On
that day, the applicant then applied to consolidate these
11 matters
with all other cases between the applicant and the second respondent
of similar nature, pending in the entire country.
The first
respondent considered this consolidation application and dismissed it
on 10 September 2012. A new hearing date was scheduled
for 16 October
2012.
[9]
In the hearing on 16 October 2012, the applicant then raised another
point
in limine
. This time, the applicant contended that
questions as contemplated by section 62(1)(b) had now been raised by
the applicant, and
as such, the first respondent was obliged in terms
of section 62(3A) to adjourn the proceedings so these questions could
be decided
by the CCMA.
[10]
The applicant filed a written notice on 9 October 2012, setting out
the issues it contended was contemplated by section 62(1)(b)
of the
LRA that it was raising. The applicant contended that the main
agreement of the second respondent was not binding on it,
and ultra
vires, based, in short, on the following argument:
10.1
The second respondent had to have a constitution that complied with
section 30 of the LRA.
10.2
In terms of section 30(l) and (m) the second respondent’s
constitution must provide for banking and investment of funds
and the
purposes for which funds are to be used.
10.3
The second respondent’s constitution provided that expenses of
the second respondent shall be met from funds raised by
levies.
10.4
Further provision is made in the constitution that the second
respondent received income and interest from other funds it created,
in addition to the levy income.
10.5
The second respondent is compelled to establish schemes and funds for
the benefit of parties to the second respondent council
and its
members.
10.6
But because the second respondent can in terms of its constitution
derive income from funds other than levies, the second respondent
is
unjustly enriched at the expense of parties to the council and their
members.
10.7
Therefore, the main collective agreement of the council is in
conflict with the LRA and its own constitution, and therefore
it is
ultra vires and not binding on the applicant. This also infringed on
the applicant’s right to fair labour practices
in terms of
section 23(1) of the Constitution of the RSA.
[11]
The first respondent considered the above argument and decided that
section 62(1)(a) did not find application in this case.
The first
respondent held that the applicant’s challenge was one based on
the legality of the main agreement and this was
the reason why the
applicant contended the agreement did not apply to it. The first
respondent held that such a legality challenge
was not an issue as
contemplated by section 62(1)(b) and thus section 62(3A) simply did
not find application. The first respondent
reasoned further that
section 62 in fact relates to demarcation disputes, which was whether
employees, employers, classes of employees
and/or classes of
employers fall within the registered scope of a bargaining council
and this had nothing to do with the legality
or not of the collective
agreements in such bargaining councils. The first respondent
concluded that what the applicant was asking
for would be tantamount
to setting aside the Ministerial extension of the main agreement to
non parties which he did not have the
power to do. The first
respondent finally held that the applicant had taken no steps to
challenge the main agreement. The first
respondent consequently
dismissed the applicant’s application in terms of section
62(3A) and after considering the issue
of costs, also ordered the
applicant to pay the costs.
[12]
Finally as to the background facts, it is so that the applicant has
never brought a section 62 referral to the CCMA for determination,
nor has the applicant challenged the Ministerial extension of the
second respondent’s main agreement to non parties. The
applicant has also not instituted any legal proceedings challenging
the validity of the main agreement beforehand.
The
test for review
[13]
The test for review is trite. In
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others,
[2]
Navsa
AJ set the threshold test for the reasonableness of an award or
ruling as: ‘…Is the decision reached by the commissioner
one that a reasonable decision-maker could not reach?’
[3]
Following
on, and in
CUSA
v Tao Ying Metal Industries and Others,
[4]
O'Regan
J held: ‘It is clear… that a commissioner is obliged to
apply his or her mind to the issues in a case. Commissioners
who do
not do so are not acting lawfully and/or reasonably and their
decisions will constitute a breach of the right to administrative
justice.’
What
the Constitutional Court means in
Sidumo
and
Tao
Ying Metal Industries,
is a review test based on a comparison by a review court of the
totality of the evidence that was before the arbitrator as well
as
the issues that the arbitrator was required to determine, to the
outcome the arbitrator arrived at, in order to ascertain if
the
outcome the arbitrator came to was reasonable.
[14]
In deciding a review, it is all, in the end, about a reasonable
outcome. As was said in
Fidelity
Cash Management Service v Commission for Conciliation, Mediation and
Arbitration and Others:
[5]
‘
The
Constitutional Court has decided in
Sidumo
that the grounds of review set out in s 145 of the Act are suffused
by reasonableness because a CCMA arbitration award, as an
administrative action, is required by the Constitution to be lawful,
reasonable and procedurally fair. The court further held that
such an
award must be reasonable and if it is not reasonable, it can be
reviewed and set aside.
’
[15]
I also mention two recent considerations of the
Sidumo
test.
Firstly, the SCA in
Herholdt
v Nedbank Ltd and Another
[6]
said:
[7]
‘
In
summary the position regarding the review of CCMA award is this: A
review of a CCMA award is permissible if the defect in the
proceedings fall within one of the grounds in s 145(2)(a) of the LRA.
For a defect in the conduct of the proceedings to amount
to a gross
irregularity as contemplated by s 145(2)(a)(ii), the arbitrator must
have misconceived the nature of the inquiry or
arrived at an
unreasonable result. A result will only be unreasonable if it is one
that a reasonable arbitrator could not reach
on all the material that
was before the arbitrator. Material errors of fact, as well as the
weight and relevance to be attached
to the particular facts, are not
in and of themselves sufficient for an award to be set aside, but are
only of consequence if their
effect is to render the outcome
unreasonable.
’
[8]
Secondly,
the LAC in
Gold
Fields Mining South Africa (Pty) Ltd (Kloof Gold Mine) v Commission
for Conciliation, Mediation and Arbitration and Others
[9]
applied
the
Sidumo
test
as follows:
‘
Sidumo
does
not postulate a test that requires a simple evaluation of the
evidence presented to the arbitrator and based on that evaluation,
a
determination of the reasonableness of the decision arrived at by the
arbitrator… In other words, in a case such as the
present,
where a gross irregularity in the proceedings is alleged, the enquiry
is not confined to whether the arbitrator misconceived
the nature of
the proceedings, but extends to whether the result was unreasonable,
or put another way, whether the decision that
the arbitrator arrived
at is one that falls in a band of decisions a reasonable decision
maker could come to on the available material.
’
[10]
[16]
In short, and following the
ratios
in
Herholdt
and
Gold
Fields
, what is postulated is a two stage review test. The first
stage is to determine if a material irregularity exists in the
arbitration
award or the arbitration proceedings. This is done by
considering the proper evidence as gathered from the review record,
together
with the relevant principles of law and then comparing this
to the award and reasoning of the arbitrator as reflected in such
award.
The second stage in the review enquiry only follows if a
material irregularity is found to exist and this entails a
consideration
as to whether, if this irregularity did not exist, it
could reasonably lead to a different outcome in the arbitration
proceedings.
Put differently, the second enquiry step is simply
whether another reasonable decision-maker, in conducting the
arbitration and
arriving at a determination, in the absence of the
irregularity and considering the evidence and issues as a whole,
could still
reasonably arrive at the same outcome.
[17]
Against the above principles and test, the determination by the first
respondent that the applicant’s section 62(3A)
be dismissed
with costs, must be considered.
The Section
62(3A) application
[18] None of the
factual background is in issue in this matter and the whole matter in
essence turns on a consideration of law,
which is simply whether
section 62 of the LRA finds application or not. If section 62 indeed
finds application, then this review
application has to succeed but if
it does not, the review must fail. I say this because if the review
test as postulated above
is applied, it would be a material
irregularity should the first respondent conclude that a particular
legal provision does not
apply when it indeed does. Further, in terms
of this review test, such an irregularity would certainly cause the
outcome of dismissing
the applicant’s section 62(3A)
application to be unreasonable. In this regard, I align myself with
the following dictum in
Police
and Prisons Civil Rights Union v Ledwaba NO and Others
:
[11]
‘
In
the current matter, the facts are determined by an agreed statement
of case. There is thus no issue whether the arbitrator considered
all
the evidentiary material before him. The issue on review in essence
is one of law, namely whether the arbitrator, in deciding
that the
department and SACOSWU were entitled to conclude a collective
agreement on organizational rights, applied the correct
legal
principles and if so, whether he applied such legal principles in
a manner that is sustainable. There is ample recent
authority for the
proposition that a material misdirection on a principle of law would
constitute a reviewable irregularity….
’
So,
in essence, all turns on whether section 62 applies.
[19]
I will now consider whether the issues as raised by the applicant
in
casu
are indeed issues as contemplated by section 62(1)(b). The
first respondent, in my view, is undoubtedly correct in concluding
that
the issues raised by the applicant all pertain to a case as to
the legality of the main agreement of the second respondent. In my
view, it is undeniable that what the applicant is saying, in short,
is that if the main agreement is considered as a whole, it
contravenes a number of statutory provisions which taints its
legality and for this reason it is not binding on the applicant.
The
crisp question now is whether section 62 contemplates such a kind of
legality challenge. And in deciding this question, it
is not
necessary to determine whether this legality challenge indeed has
substance.
[20]
The point of departure in conducing this consideration is section 62
itself. Clearly, the section must be considered in the
proper
context, starting with the heading which reads ‘Disputes about
demarcation between sectors and areas’. And it
is in this
context that section 62(1) must be considered, which reads:
‘
Any
registered
trade union
,
employer,
employee
,
registered
employers' organisation
or
council
that has a direct or indirect interest in the application
contemplated in this section may apply to the Commission in the
prescribed
form and manner for a determination as to-
(a)
whether any
employee
,
employer, class of
employees
or class of employers, is or was employed or engaged in a
sector
or
area
;
(b)
whether any provision in any
arbitration award,
collective agreement
or wage determination made in terms of the
Wage
Act
is or was binding on any
employee
,
employer, class of
employees
or class of employers.
’
Turning
then to section 62(3A), this section reads:
‘
In
any proceedings before an arbitrator about the interpretation or
application of a
collective agreement
,
if a question contemplated in subsection (1)
(a)
or
(b)
is
raised, the arbitrator must adjourn those proceedings and refer the
question to the Commission if the arbitrator is satisfied
that-
(a)
the question raised-
(i)
has not previously been determined by
arbitration in terms of this section; and
(ii)
is not the subject of an agreement in terms
of subsection (2); and
(b)
the determination of the question
raised is necessary for the purposes of the proceedings.
’
Section
62(4) and (6) to (9) then prescribe the process that must be followed
in any application in terms of section 62(1) and this
ultimately
involves determination by arbitration and consideration by NEDLAC.
Also, the prescribed form of applying in terms of
section 62(1) is
found in Form 3.23 which specifically records that it is an
“Application about a Demarcation Dispute’.
[21]
In my view, it is clear from the above that section 62 was enacted to
achieve a specific purpose and that purpose is what is
commonly known
as the demarcation of sectors or areas in which employees are
engaged. In
National
Manufactured Fibres Employers Association and Another v Chemical
Workers Industrial Union and Others,
[12]
the Court considered the very meaning of demarcation and said:
‘…
.
The word 'demarcation' is not used in the Act. However, it is a
useful word to describe the function which is performed by an
appropriate body when that body decides whether or not an employer
and employees of a bargaining council or a statutory council
are
engaged in activities which fall within a particular sector, ie an
industry or service, and an area. Barker and Holtzhausen
SA
Labour Glossary
(Juta 1996) define
demarcation as:
“
Determining
whether any employer, employee or class of employer or employee is
employed or engaged in a particular sector or area
to ascertain
whether any arbitration award, collective agreement or sectoral
employment standard is binding upon a specific employer
and his or
her employees. NEDLAC, the Minister of Labour, demarcates the
appropriate sector and area in respect of which bargaining
councils
and statutory councils should be registered (
see
registered scope). In terms of the LRA, 1995, disputes regarding
demarcation are determined by arbitration by the CCMA (s 62).”
The
determination or demarcation of a sector takes place in terms of the
Act in two distinct and separate situations. First a demarcation
is
performed when a bargaining council or similar institution is in the
process of being set up. The second situation deals with
the case
where a sector has already been authoritatively established in
respect of a bargaining council, statutory council or a
statutory
instrument (a collective agreement or a binding arbitration award
etc) and the question is whether or not an employer
or employees fall
within the ambit of a particular sector and thereby also fall within
the ambit of the council concerned or the
legislative
instrument.
’
[13]
The
Court in
National Manufactured Fibres
then specifically
dealt with demarcation in the second situation referred to, in
particular where there existed established bargaining
councils and
said:
‘
The scheme of
the Act is that bargaining councils or statutory councils have
jurisdiction in respect of employers and employees
who fall within
their sectoral area of jurisdiction. Disputes may arise as to whether
or not an employer and employee are engaged
in a sector regulated by
a bargaining council or statutory council or whether they fall within
the area of jurisdiction of the
council. …. Any registered
trade union, employer, employee and registered employers' association
or council that has a direct
or indirect interest in an application
contemplated in terms of s 62 may apply to the CCMA in the prescribed
form and manner for
a determination as to-
(a)
whether any employee, employer, class of employees or class of
employers is or was employed or engaged in a sector or area;
(b)
whether
any provision in any arbitration award, collective agreement or wage
determination, made in terms of the Wage Act is or
was binding on any
employee, employer, class of employees or class of employers (see s
62 (1)).’
[14]
The
Court in
National Manufactured Fibres
concluded:
‘
In my
opinion, it is clear that in the second situation the determination
of a sector or an area is an activity which is done in
relation to
(a
)
a sector or area of a council, or
(b
)
a legal instrument such as an arbitration award, collective agreement
or wage determination made in terms of the Wage Act 1957.
Before a
demarcation can be undertaken there must be a yardstick in place. The
yardstick, as I have indicated, is the existence
of a registered
bargaining or statutory council or a legal instrument such as a
collective agreement, arbitration award or wage
determination. In the
absence of such a yardstick there can be no meaningful or purposeful
determination in terms of s 62 of the
Act….
’
[15]
[22]
In applying the above reasoning of the Court in
National
Manufactured Fibres
,
it is in my view clear that any determination contemplated by section
62(1) is a determination as to whether parties resort under
a defined
sector or area. The sector or area can be defined by way of the
establishment of a council, in a collective agreement,
or by way of
other statutory instrument. I agree with this reasoning and shall
follow suit. Therefore, currently what constitutes
a sector or area
can be established by way of the certificate of registration of a
council, a collective agreement,
[16]
and with the abolishment of the Wage Act, a sectoral determination
under the BCEA.
[17]
This is the ‘yardstick’ referred to in
National
Manufactured Fibres
.
In simple terms, if no such defined sector or area exists, there can
be no meaningful or purposeful demarcation. Therefore, at
its core,
the purpose of section 62 is to place employees into a specific
sector or area. In
SA
Municipal Workers Union v Syntell (Pty) Ltd and Others
,
[18]
the Court specifically dealt with demarcation proceedings and said:
‘
The
ambit of the statutory framework for demarcation proceedings and the
nature of the proceedings per se require examination.
The initial
demarcation of sectors of industry is a function performed by NEDLAC.
Section 29 of the LRA regulates that role. Section
29(8) provides
that NEDLAC must demarcate the 'appropriate sector' over which a
bargaining council will exercise jurisdiction.
A fail-safe provision
authorizes the Minister of Labour to perform the task if no agreement
is reached by NEDLAC.
Thereafter,
demarcation disputes are subjected to a dispute-resolution process as
provided for in s 62 of the LRA…
’
[19]
[23] In
Golden
Arrow Bus Services (Pty) Ltd v Commission for Conciliation, Mediation
and Arbitration and Others
,
[20]
the Court held:
‘…
The
determination or demarcation of a sector takes place in terms of the
LRA in two distinct and separate situations…
The
second situation, provided for in s 62 of the LRA, deals with the
case where a sector has already been authoritatively established
in
respect of a bargaining council, statutory council or statutory
instrument such as a collective agreement and the question is
whether
or not an employer or employees fall within the ambit of a particular
sector and thereby also fall within the ambit of
the council or
legislative instrument.
’
[24]
The first respondent, as arbitrator, was very much alive to the
above. The first respondent actually said in his ruling that
section
62 was about deciding whether employers and employees resort under
the registered scope of a bargaining council. This conclusion
is
undoubtedly correct. The first respondent then also determined that
the applicant’s case had nothing to do with such a
determination, and once again, the first respondent is correct in
coming to that conclusion. The applicant never said that it and
its
employees should be extracted from the area of jurisdiction of the
second respondent because this was not the area in which
the
applicant did business and in which it was associated with its
employees. The enquiry contemplated in this regard was set out
in
Coin
Security (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration and Others
[21]
as follows:
‘
The
character of an industry is determined, not by the occupation of the
employees engaged in the employer's business, but by the
nature of
the enterprise in which employees and employer are associated for a
common purpose… Once the character of the
industry is
determined, all employees are engaged in that industry. The precise
work that each person does is not significant…
’
The
Court in
Coin Security
further said:
‘
The
method used to determine whether a class of employers is engaged in a
particular industry was summarized as follows by Jansen
J in
Greatex
Knitwear (Pty) Ltd v Viljoen and Others
1960 (3) SA 338
(T) at 344H-345D:
'
(a)
The
meaning of ''industry' as used in the agreement, is determined. This
usually requires the interpretation of some definition
appearing in
the agreement. It seems that a restrictive interpretation is often
applied, cutting down the scope of the general
words in the
definition…
(b)
The activities of the employer
(personal and by means of his employees) are determined.
(c)
The
activities and the definition (as interpreted) are now compared…
’
[22]
The
point that I make is that the issues raised by the applicant in its
section 62(3A) notice raised none of these considerations
that
actually form the subject matter of a determination under section 62
of the LRA. What the applicant has raised in its notice
placed before
the first respondent are therefore not issues as contemplated by
section 62. The first respondent was, therefore,
correct in his
application of the law and in finding that section 62 did not find
application.
[25]
The applicant in its argument before the first respondent placed much
emphasis on the judgment of the SCA in
Johannesburg
City Parks v Mphahlani NO and Others
.
[23]
The first respondent considered this judgment and found it to be
distinguishable. I agree. In the
Johannesburg
City Parks
judgment, the Court specifically recorded that SAMWU and IMATU (the
two unions) contended that the employer fell within the scope
of the
bargaining council, which the employer, as the Court put it,
‘vigorously’ disputed.
[24]
In addition, in that matter, a dispute had actually been referred to
the CCMA for determination in terms of section 62 of the LRA
by both
unions and this dispute was still pending. The issue then raised by
the employer before the arbitrator was that the bargaining
council
did not have jurisdiction because the employer did not resort within
the particular industry covered by the scope of the
bargaining
council. The Court concluded:
[25]
‘
It is not in
dispute that the demarcation dispute herein had been referred by
SAMWU and IMATU during 2004 to the CCMA for determination
of the
question whether the appellant falls within the scope of the second
respondent. It is furthermore common cause that as at
16 September
2005 when the arbitration proceedings were held this dispute was
still pending before the CCMA. It makes little sense
to me that the
arbitrator could proceed to arbitrate the matter against an objection
to the jurisdiction of second respondent (SALGBC)
based on s 62(3A)
of the LRA. It appears to me plain that such conduct circumvents the
mischief which s 62(3A) seeks to address,
ie that the arbitrator
shall not adjudicate in a matter where his or her jurisdiction is
being challenged on the basis of whether
one of the parties is bound
by the collective agreement…’
[26]
The
basis of distinction is immediately apparent.
In casu
, the
applicant has never referred a demarcation dispute to the CCMA and
there is no demarcation dispute pending. Further, the applicant
has
never disputed that it resorted under the area (scope) of
jurisdiction of the second respondent. In short, the question posed
by the applicant
in casu
is not a question as contemplated by
sections 62(1)(a) or (b) of the LRA. The applicant’s reliance
on the judgment in
Johannesburg City Parks
is thus entirely
misplaced and the first respondent’s decision that the judgment
is distinguishable is correct.
[26]
I accept that section 62(1)(b) refers to the determination of an
issue as to whether a collective agreement is binding on an
employer
such as the applicant. But this does not mean that this section can
be used as a basis for deciding if a collective agreement
is bindings
based on a case of it being unlawful or ultra vires, as the applicant
says. As I have said, section 62 has a context
and that context,
where it comes to deciding whether a collective agreement is binding,
specifically relates to the question whether
the employer resorts
within the scope and jurisdiction of a bargaining council as defined
in the collective agreement of the council.
In other words, the issue
as to whether a collective agreement is binding on an employer as
contemplated by section 62(1)(b) is
one inextricably linked to a
determination whether the employer resorts under the scope and
jurisdiction of the bargaining council.
Section 62(1)(b) was thus
never intended to be used to challenge the validity or lawfulness of
the collective agreement of the
bargaining council. Where it comes to
the issue of the collective agreement of a bargaining council being
unlawful, irregular or
ultra vires, as a basis to challenge its
binding effect, this has to be an issue to be dealt with by way of
another course of action
and not using section 62.
[27] The applicant
has also argued that all it needs to do is to raise an issue as
contemplated by section 62(1)(b) and then it
is up to the first
respondent as arbitrator to adjourn proceedings and refer the matter
to the CCMA. I cannot agree with such a
contention. Section 62(3A)
must be read in proper context with section 62(1). In terms of
section 62(1), it would be up to the
applicant as an interested party
to refer such an issue to the CCMA. Then, if in enforcement
arbitration proceedings, it becomes
apparent that such a question has
indeed been raised but remains undetermined, section 62(3A) was
enacted so as to make adjournment
of the enforcement proceedings
compulsory so that the CCMA can have the opportunity to determine the
issue. Considering the nature
of the enquiry in section 62
proceedings, it simply cannot be said that it is the duty of the
arbitrator such as the first respondent
to initiate the proceedings,
as the applicant contends. In short, the applicant has the duty to
raise a question as contemplated
by section 62(1)(b) with the CCMA,
in the prescribed form and if it did so, the duty is then on the
first respondent to adjourn
the proceedings so the CCMA can determine
the question. In
G
A Motor Winders (East Cape) CC and Another v Director, Commission for
Conciliation, Mediation and Arbitration and Others,
[27]
the Court said:
‘
It is no
empty formality to insist on compliance with the procedures
prescribed by s 62 of the Act. There may be competing interests
involved in a determination as to whether a particular undertaking
falls within one industry or another, or within one area or
another.
There may be competing claims by bargaining councils to exercise
control over a particular type of undertaking. Subsections
(6) to
(11) of s 62 establish a means of addressing such difficulties as may
arise.’
I
am aware that Conradie JA held in
G
A Motor Winders
[28]
that:
‘…
It does no violence
to the language of the statute to say that a demarcation may be
'raised' by the material before a commissioner.
It need not be
'raised' by a party to the proceedings’.
But I remain
compelled to say that in considering the
ratio
in this very same judgment quoted above, together with all the
developments
[29]
that subsequently came about where it comes to the proper
determination of demarcation disputes, it remains my view that the
issue
must be raised by an interested party contemplated by section
62(1) by way of following the prescribed process, in order to serve
as a basis for the application of section 62(3A) compelling an
arbitrator to adjourn the proceedings. I find support for my view
in
the judgment of
Building
Industry Bargaining Council (East London) v Naidoo t/a Dev's
Construction Trust and Another
[30]
where the Court dealt with section 62(3), being the comparable
section to section 62(3A) applicable to proceedings in the Labour
Court, and said:
[31]
‘
I
am enjoined by s 62 (3) when a demarcation is raised to adjourn these
proceedings and refer the matter to the CCMA for determination.
However, I agree with applicants that this means properly and
genuinely raised. For it to have been properly raised the basis for
the defence should have been laid at the outset…
’
[32]
I
agree with the above reasoning. A matter as contemplated by section
62(1) can only be properly raised if the prescribed process
is
followed. But even if I am wrong in the above conclusion, the fact
remains that the issues raised by the applicant in its section
62(3A)
are simply not issues as contemplated by section 62(1)(b), for the
reasons I have already set out.
[28]
The first respondent was, in deciding this matter, very much alive
the necessity for the applicant to have pursued another
course of
action with regard to the points raised in its purported section
62(3A) notice. The applicant, however, complains that
the first
respondent should never have had any regard to such kind of
considerations. I, however, do not consider there to be any
merit in
the complaints raised by the applicant in this regard. As was said in
the
dictum
in
Dev's Construction Trust
referred to
above, part of the enquiry in terms of section 62(3A) has to be
whether the issue has in fact been ‘properly
and genuinely’
raised by the applicant. An enquiry as to whether the issues raised
by the applicant are indeed ‘properly
and genuinely’
raised would certainly encompass the very issues the first respondent
had regard to in his ruling and which
the applicant said he should
not have done.
[29]
The applicant has taken issue with the first respondent’s
reasoning that the kind of challenge raised by the applicant
was
tantamount to the applicant seeking to set aside Ministerial
extension of the collective agreement, which was not within his
powers to do. In this respect, I do believe the applicant’s
complaint has merit. The applicant has never taken issue with
the
extension of the main agreement nor with the fact that it, insofar as
it concerns the third to further respondents, resorts
under the scope
and jurisdiction of the second respondent. The first respondent was
thus never required to consider such an issue
and, insofar as the
first respondent refers to and relies on this in coming to a
conclusion, it would be an irregularity. But does
it render the
ultimate outcome to be unreasonable? I think not. Even if one
completely extracts this part of the reasoning of the
first
respondent from the award in its entirety, the dismissal of the
applicant’s section 62(3A) application would nonetheless
be
entirely reasonable, and justified, based on all the other
considerations I have referred to above, and later in this judgment.
[30]
In my view, and what the first respondent did seem to appreciate, was
that in the absence of a proper legal challenge to the
validity of
the collective agreement of the second respondent, it had to be
complied with. And such a proposition would be in my
view correct. If
the applicant wanted to challenge the validity of the collective
agreement of the second respondent on the grounds
set out in its
purported section 62(3A) notice, it needed to have approached the
Labour Court seeking an order to set the collective
agreement aside.
In
National
Bargaining Council for the Clothing Manufacturing Industry (Cape) and
Others v Zietsman NO and Others
,
[33]
the Court said the following:
‘
Fields Wear
has not brought an application to review and set aside the extension
of the relevant agreements; nor has it alleged
that the minister was
not satisfied as required by s 32(3)
(f)
and
(g)
. That
is a sufficient and valid basis to dismiss the 'unfair
discrimination' and 'unreasonableness' constitutional defences. If
there is any merit in these complaints initially raised by Fields
Wear, its remedy lies in proceedings to review the minister's
decision and not in a constitutional defence…’
In
order for the applicant to competently seek an adjournment of the
arbitration proceedings, as based on the challenge founded
on the
grounds it raised, and whether relying on section 62(3A), the
applicant needed to have challenged the validity of the collective
agreement, on the grounds raised, to the Labour Court. Its failure to
do this has to reasonably lead to the conclusion that the
issues it
then sought to raise in the purported section 62(3A) notice some 7
days before the enforcement arbitration was not properly
and
genuinely raised.
[31] The failure by
the applicant to have properly challenged the validity of the
collective agreement beforehand has another important
consequence.
The fact is that considering the nature of the second respondent’s
collective agreement and the fact that it
is statutorily extended to
non parties, the collective agreement is akin to subordinate
legislation. This means that it must be
considered to be valid and
complied with accordingly, until set aside. One can do little better
than refer to
Oudekraal
Estates (Pty) Ltd v City of Cape Town and Others,
[34]
where the Court said:
‘…
Until
the Administrator's approval (and thus also the consequences of the
approval) is set aside by a court in proceedings for judicial
review
it exists in fact and it has legal consequences that cannot simply be
overlooked. The proper functioning of a modern State
would be
considerably compromised if all administrative acts could be
given effect to or ignored depending upon the view the
subject
takes of the validity of the act in question. No doubt it is for this
reason that our law has always recognised that even
an unlawful
administrative act is capable of producing legally valid consequences
for so long as the unlawful act is not set aside.
’
[32]
In the circumstances, for all the reasons set out above, it is my
view that the application of the relevant legal principles
by the
first respondent firstly does not constitute any kind of irregularity
and is actually correct. Secondly, and in the instance
where the
first respondent’s reasoning does constitute an irregularity,
it does not render the ultimate outcome to be unreasonable,
in any
event. In short, the first respondent was correct in concluding that:
(1) the applicant’s reliance on section 62(1)(b)
and with it
section 62(3A) is misplaced as section 62 simply does not apply; (2)
that the grounds of complaint raised by the applicant
in its section
62(3A) notice do not concern a demarcation dispute contemplated for
the application of section 62; and (3); it was
incumbent on the
applicant to have challenged the collective agreement beforehand on
the basis of the grounds that it had raised,
which it never did. The
first respondent’s dismissal of the applicant’s section
62(3A) application thus had proper
foundation in law and must,
therefore, sustained. I, therefore, uphold the dismissal of the
applicant’s section 62(3A) application
by the first respondent.
Concluding
remarks
[33]
As touched on above, the first respondent made a costs order against
the applicant, in dismissing its application. In this
regard, the
first respondent actually provided detailed reasoning, which included
an analysis of the history of this matter. In
particular, the first
respondent considered that all of the points
in limine
that
the applicant has raised in the current proceedings had been raised
before in 2010 and again in 2012 and had all been disposed
of by
other arbitrators and even the Labour Court. Also, the first
respondent specifically considered the fact that if the applicant
was
indeed ‘serious’ about the grounds now raised in its
section 62(3A) notice, it would have raised them much earlier.
The
first respondent concluded:
‘
I
am of the view that the current application is yet another attempt by
The Workforce to delay and prolong the pending proceedings
against
it’.
For
the reasons I will now set out, I consider the reasoning of the first
respondent in this regard to have proper foundation in
fact and to be
entirely justified.
[34] In my view, it
is quite clear that the applicant has a penchant for seeking to
extract itself from compliance with the collective
agreements in
several bargaining councils. The applicant has clearly demonstrated
an approach of avoidance, rather than compliance.
The approach of the
applicant to bargaining council collective agreements is regrettable,
and should be discouraged. The applicant
has attempted virtually
everything it could think of so as to justify not complying with
these collective agreements. In
the reported arbitration awards
in
Workforce
Group Holdings (Pty) Ltd v National Bargaining Council for the Road
Freight Industry
[35]
and
Workforce
Group (Pty) Ltd v Metal and Engineering Industries Bargaining
Council
[36]
the applicant sought to extract itself from application of two
bargaining council collective agreements by contending that its
business of a TES does not resort under the jurisdiction of the
bargaining councils, which contention was rightly rejected by the
arbitrator on the basis that its employees perform no work for or in
association with the applicant in the conduct of its business
activities but rather that the
employees’
services are offered within its clients industry and it is the latter
industry that applies.
[35]
The applicant then shifted its approach of avoidance onto other
avenues, all of which was aimed at prolonging or obstructing
enforcement of the collective agreements. As has been referred to
above, it would seem that the applicant in fact resists all
enforcement across the country, considering its unsuccessful
application in this matter to consolidate all these kinds of cases
that it has across the country, into this matter. Grounds of
resistance range from inappropriate reliance on provisions in the
LRA, which have rightly been rejected, to Constitutional challenges.
I have referred to these above. Even in the matter now before
me, the
same points
in limine
were again initially raised at the
commencement of the arbitration before the first respondent and these
points were then either
dismissed or ultimately not pursued. Finally,
seven days before facing arbitration on the merits of the
enforcements, the applicant
for the first time raises the invalidity
grounds referred to above. If these grounds indeed have substance,
these grounds would
have been in existence all along and it is simply
inexplicable why these grounds are only raised on the eve of
arbitration on the
merits. A proper consideration of the award of the
first respondent reveals that he was certainly alive to all of this.
[36]
In my consideration of this kind of conduct of the applicant, I have
come across the judgment in
Workforce
Group (Pty) Ltd v National Textile Bargaining Council and Another
[37]
which once again is reported authority involving the current
applicant before me. In this case, the National Textile Bargaining
Council applied to the CCMA in terms of section 62 to determine a
demarcation dispute, in which it sought a demarcation that the
applicant fell within the textile sector and thus that it is obliged
to give effect to the main collective agreement governing
that
sector. Once again, the applicant was seeking to extract itself from
being bound by this sector collective agreement. In the
instance of
this judgment, the applicant resisted the demarcation proceedings by
way of
two
points
in
limine
,
similar to the kind of objections now being raised in the case before
me. The CCMA arbitrator dismissed both points
in
limine
.
The applicant then, in a fashion virtually identical to the
proceedings
in
casu
,
sought to obstruct the continuation of the demarcation arbitration on
the merits by filing a review application at the last moment
before
the arbitration; and then seeking a postponement of the arbitration
pending this review. When the bargaining council refused
to agree to
postpone the arbitration, alleging that the applicant was merely
seeking to delay the demarcation proceedings, the
applicant
approached the Labour Court for urgent intervention. Steenkamp J
refused the relief sought by the applicant, finding
that the
applicant had the proper alternative remedy of participating in the
arbitration proceeding to finality.
[38]
The Learned Judge also said the following:
‘
Furthermore,
the allegation that the applicant did not know what case to meet
appears to be baseless. The demarcation dispute is
clearly set out in
the application to determine the dispute in the prescribed form
LR3.23. On this ground also, the applicant's
prospects of success are
slim and it has not made out a
prima
facie
right.’
[39]
I
find it ironic that the applicant would seek to avoid section 62
proceedings when it is brought to compel the applicant to comply
with
a sector collective agreement, but now,
in casu
, tries to use
these very same section 62 proceedings to avoid compliance sought in
enforcement proceedings. I am comfortable in
saying that the
applicant’s conduct is not genuine and designed to avoid
compliance with each and every industry collective
agreement in which
it deploys employees.
[37]
I further consider, as the first respondent also did, that the
applicant was doing nothing more that applying delaying tactics
with
the view to obstruct and prolong the enforcement of the collective
agreement in the second respondent against it, to which
it is clearly
bound. This not only undermines the primary objective of the
expeditious resolution of employment disputes,
[40]
but also negates the very objective sought to be achieved by orderly
collective bargaining at a central (sectoral) level, being
part of
the
defined
primary purposes of the LRA in Section 1, which reads:
‘
The purpose
of this Act is to advance economic development, social justice,
labour peace and the democratisation of the workplace
by fulfilling
the primary objects of this Act, which are- …. (c) to provide
a framework within which employees and their
trade unions, employers
and employers' organisations can- (i) collectively bargain to
determine wages, terms and conditions of
employment and other matters
of mutual interest; and (ii) formulate industrial policy; and (d) to
promote- (i) orderly collective
bargaining; (ii) collective
bargaining at sectoral level….’
In
Police
and Prisons Civil Rights Union v Ledwaba NO and Others
[41]
the
Court said that ‘… t
he
fact remains that collective agreements have special status and
authority, as the very product of collective bargaining’,
and
‘…. What all of this show is that a collective
agreement, as the product of the collective bargaining process,
has
preference over all else…’ which is equally applicable
in
casu.
I of course agree with what Van Niekerk J said in
National
Education Health and Allied Workers Union and Others v MEC:
Department of Health, Eastern Cape and Others
[42]
to the effect that collective agreements are subject to the principle
of legality where the learned Judge held:
‘…
It
follows that a collective agreement that contains terms in conflict
with any applicable statutory instrument must yield to the
instrument, at least to the extent that the terms of the collective
agreement are inconsistent with the applicable instrument…’
But
notwithstanding, the fact remains that until it has been determined
in a competent forum or the Labour Court that the collective
agreement must so yield, it must be complied with, considering its
primacy.
The conduct of the applicant, in my view,
which in essence promotes unjustified non compliance, was deserving
of the censure meted
out by the first respondent when it came to the
costs award.
[38]
There is, accordingly, no reason to upset the costs order made by the
first respondent. I accept that the first respondent
properly
exercised the discretion that he had in this regard and came to a
proper and reasonable determination. Therefore, the
costs order made
by the first respondent must also be upheld.
Conclusion
[39]
Therefore, based on the reasons set out above, I conclude that the
first respondent’s ruling dismissing the applicant’s
section 62(3A) with costs must be sustained. I thus uphold the same.
It follows that the applicant’s review application must
be
dismissed.
[40] This then only
leaves the issue of costs in this review application. In terms of the
provisions of section 162(1) and (2) of
the LRA, I have a wide
discretion where it comes to the issue of costs. I must confess that
I find the conduct of the applicant,
seen as a whole and in context
of the history of this matter, to be unacceptable. I believe that
these review proceedings brought
by the applicant was yet another
component of its campaign and approach of prolonging enforcement of
collective agreements to which
it clearly bound, upon it. The review
application had little merit. In addition, the applicant could have
still participated in
the arbitration proceedings so it could be
finalised on the merits thereof and keep all its challenges to the
end. I fully align
myself with what Steenkamp J said in
Workforce
Group (Pty) Ltd v National Textile Bargaining Council and
Another,
[43]
where the learned Judge held:
‘
Mr
Euijen
,
for the council, submitted that this application was brought merely
to delay the demarcation dispute further; that it was part
of a
pattern of delaying tactics, and that costs should be awarded on a
punitive scale.
Although
the application is, in my view, without merit and did not warrant an
urgent application during the recess, there is not
enough evidence on
the papers before me to bear out the contention that the application
forms part of a pattern of delaying tactics.
In law and fairness,
costs should follow the result…
’
In
casu
, I am actually satisfied that the current proceedings before
me are part of a pattern of delaying tactics. I am satisfied that a
costs order against the applicant is justified.
Order
[41]
In the premises, I make the following order:
The
applicants’ review application is dismissed with costs.
Snyman
AJ
Acting
Judge of the Labour Court
APPEARANCES:
For
the Applicant: Advocate B M Jackson
Instructed
by: Hunts Attorneys
For
the Second Respondent: Mr A J Prior of Prior & Prior Attorneys
[1]
No 66 of 1995.
[2]
(2007)
28
ILJ
2405
(CC).
[3]
Ibid
at para 110.
[4]
(2008)
29
ILJ
2461 (CC)
at para 134.
[5]
(2008)
29
ILJ
964 (LAC) at para 96.
[6]
[2013] 11 BLLR 1074
(SCA)
per
Cachalia and Wallis JJA.
[7]
Id
at para 25.
[8]
Id
at para 25.
[9]
[2007] ZALC 66
;
[2014] 1 BLLR 20
(LAC)
per
Wag
lay
JP.
[10]
Id
at para 14.
[11]
(2014) 35
ILJ
1037 (LC) at para 18. See also See
MEC:
Department of Education, Gauteng v Msweli and Others
(2013)
34
ILJ
650
(LC) at para 45;
Renier
Reyneke Vervoer CC t/a Premium Trucking v Commission for
Conciliation, Mediation and Arbitration and Others
(2012)
33
ILJ
1262
(LC) at para 13;
Munnik
Basson Dagama Attorneys v Commission for Conciliation, Mediation and
Arbitration and Others
(2011)
32
ILJ
1169
(LC) at para 13;
Pam
Golding Properties (Pty) Ltd v Erasmus and Others
(2010)
31
ILJ
1460
(LC) at para 8.
[12]
(1997) 18
ILJ
1359 (LC).
[13]
Id
at 1365D-G.
[14]
Id
at 1366H-1367B.
[15]
Id
at 1367F-G.
[16]
For
example the industry collective agreements in the contract cleaning
and contract security services sectors.
[17]
See
sections 51 and 55 of the BCEA 75 of 1997.
[18]
(2014) 35
ILJ
3059 (LAC).
[19]
Id
at paras 18 – 20.
[20]
(2005) 26
ILJ
242 (LC) at 250B-E.
[21]
(2005) 26
ILJ
849
(LC) at para 54.
[22]
Id
at para 57.
[23]
(2011) 32
ILJ
1847 (SCA).
[24]
See
para 9 of the judgment.
[25]
Id
at para 13.
[26]
Id
at para 13.
[27]
(2000) 21
ILJ
323 (LAC) at para 10.
[28]
Id
at para 8.
[29]
See
National
Bargaining Council for the Road Freight Industry v Marcus No and
Others
(2013) 34
ILJ
1458
(LAC) at paras 19–24.
[30]
(2000) 21
ILJ
2253 (LC).
[31]
Id
at para 33.
[32]
Id
at para 33.
[33]
(2013) 34
ILJ
151 (LC) at para 59.
[34]
2004 (6) SA 222
(SCA) at para 26. This
ratio
in
Oudekraal
Estates
has followed in
Manok
Family Trust v Blue Horison Investments 10 (Pty) Ltd and Others
2014 (5) SA 503
(SCA) at para 17;
Kouga
Municipality v Bellingan and Others
2012 (2) SA 95
(SCA)
;
Camps Bay Ratepayers' and Residents' Association and Another v
Harrison and Another
2011 (4) SA 42
(CC) at para
62;
Seale v Van Rooyen NO and Others; Provincial Government, North West
Province v Van Rooyen NO and Others
2008
(4) SA 43 (SCA)
at para 14.
[35]
(2006) 27
ILJ
2747
(CCMA) at 2752.
[36]
(2008) 29
ILJ
2636 (CCMA) at 2639 – 2640.
[37]
(2011) 32
ILJ
3042 (LC).
[38]
See
para 17 of the judgment.
[39]
Id
at para 24.
[40]
See
Khumalo
and Another v Member of the Executive Council for Education:
KwaZulu-Natal
(2014)
35
ILJ
613 (CC) at para 42 where the Court said: ‘… the
importance of resolving labour disputes in good time is thus central
to the LRA framework...’
Aviation
Union of SA and Another v SA Airways (Pty) Ltd and Others
(2011)
32
ILJ
2861
(CC) at para 76 where the Court held: ‘….Speedy
resolution is a distinctive feature of adjudication in labour
relations disputes…’; and
National
Education Health and Allied Workers Union v University of Cape Town
and Others
(2003)
24
ILJ
95 (CC) at para 31 where it was said: ‘By their very nature
labour disputes must be resolved expeditiously and be brought
to
finality so that the parties can organize their affairs accordingly.
They affect our economy and labour peace. It is in the
public
interest that labour disputes be resolved speedily…’
[41]
Police
and Prisons Civil Rights Union v Ledwaba NO and Others
(
supra
)
at para 27.
[42]
(2013) 34
ILJ
2628 (LC) at para 19.
[43]
Workforce
Group (Pty) Ltd v National Textile Bargaining Council and Another
(
supra
)
at paras 25 – 26.