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[2016] ZALCCT 27
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Professional Allied and Transport Union v Registrar of Labour Relations (C879/2015) [2016] ZALCCT 27 (27 July 2016)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
Case
no: C879/2015
Not
Reportable
In
the matter between:
PROFESSIONAL
ALLIED & TRANSPORT
UNION
Applicant
and
REGISTRAR
OF LABOUR
RELATIONS
Respondent
Heard:
March 24 2016
Delivered:
27 July 2016
JUDGMENT
RABKIN-NAICKER,
J
[1]
This is an appeal in terms of section 111(3) of the LRA against the
decision of the respondent (the Registrar) to refuse to
register the
applicant (the union) as a trade union in terms of section 96 of the
LRA. Both parties have filed written submissions
before court.
[2]
The reasons for the refusal to register the union are set out in a
report by the Registrar dated 13 July 2015. It summarises
the basis
for the refusal of registration as the following:
“
-
There was no formation of a trade union
-
The Applicant does not have members
-
This is an association for gain of certain individuals
This
is therefore not a genuine trade union as envisaged in the Act.”
[3]
The LRA defines a trade union as ‘an association of employees
whose principal purpose is to regulate relations between
employees
and employers, including any employers’ association. In order
to enjoy the rights of a registered trade union,
a trade union must
meet the requirements as set out in Section 95, the contents of which
bear recording:
“
95
Requirements for registration of trade unions or employers'
organisations
(1)
Any trade union may apply to the registrar for registration if-
(a)
it has adopted a name that meets the requirements of subsection (4);
(b)
it has adopted a constitution that meets the requirements of
subsections (5) and (6);
(c)
it has an address in the Republic; and
(d)
it is independent.
(2)
A trade union is independent if-
(a)
it is not under the direct or indirect control of any employer or
employers' organisation;
and
(b)
it is free of any interference or influence of any kind from any
employer or employers'
organisation.
(3)
Any employers' organisation may apply to the registrar for
registration if-
(a)
it has adopted a name that meets the requirements of subsection (4);
(b)
it has adopted a constitution that meets the requirements of
subsections (5) and (6),
and
(c)
it has an address in the Republic.
(4)
Any trade union or employers' organisation that intends to register
may not have a name or shortened form of the name that so
closely
resembles the name or shortened form of the name of another trade
union or employers' organisation that it is likely to
mislead or
cause confusion.
(5)
The constitution of any trade union or employers' organisation that
intends to register must-
(a)
state that the trade union or employers' organisation is an
association not for gain;
(b)
prescribe qualifications for, and admission to, membership;
(c)
establish the circumstances in which a member will no longer be
entitled to the benefits
of membership;
(d)
provide for the termination of membership;
(e)
provide for appeals against loss of the benefits of membership or
against termination
of membership, prescribe a procedure for those
appeals and determine the body to which those appeals may be made;
(f)
provide for membership fees and the method for determining membership
fees and
other payments by members;
(g)
prescribe rules for the convening and conducting of meetings of
members and meetings
of representatives of members, including the
quorum required for, and the minutes to be kept of, those meetings;
(h)
establish the manner in which decisions are to be made;
(i)
establish the office of secretary and define its functions;
(j)
provide for other office-bearers, officials and, in the case of a
trade union,
trade union representatives, and define their respective
functions;
(k)
prescribe a procedure for nominating or electing office-bearers and,
in the case of
a trade union, trade union representatives;
(l)
prescribe a procedure for appointing, or nominating and electing,
officials;
(m)
establish the circumstances and manner in which office-bearers,
officials and, in
the case of a trade union, trade union
representatives, may be removed from office;
(n)
provide for appeals against removal from office of office-bearers,
officials and,
in the case of a trade union, trade union
representatives, prescribe a procedure for those appeals and
determine the body to which
those appeals may be made;
(o)
establish the circumstances and manner in which a ballot must be
conducted;
(p)
provide that the trade union or employers' organisation, before
calling a strike or
lock-out, must conduct a ballot of those of its
members in respect of whom it intends to call the strike or lock-out;
(q)
provide that members of the trade union or employers' organisation
may not be disciplined
or have their membership terminated for
failure or refusal to participate in a strike or lock-out if-
(i) no
ballot was held about the strike or lock-out; or
(ii) a
ballot was held but a majority of the members who voted did not vote
in favour of the strike or lock-out;
(r)
provide for banking and investing its money;
(s)
establish the purposes for which its money may be used;
(t)
provide for acquiring and controlling property;
(u)
determine a date for the end of its financial year;
(v)
prescribe a procedure for changing its constitution; and
(w)
prescribe a procedure by which it may resolve to wind up.
(6)
The constitution of any trade union or employers' organisation which
intends to register may not include any provision that
discriminates
directly or indirectly against any person on the grounds of race or
sex.
(7)
The registrar must not register a trade union or an employers'
organisation unless the registrar is satisfied that the applicant
is
a genuine trade union or a genuine employers' organisation.
(8)
The Minister, in consultation with NEDLAC, may by notice in the
Government Gazette publish guidelines to be applied by the registrar
in determining whether an applicant is a genuine trade union or a
genuine employers' organisation.”
[4]
It is thus mandatory for the Registrar to refuse registration if he
is not satisfied that the applicant union is ‘genuine’.
The Guidelines do not define the meaning of “genuine” but
as was submitted by Mr Bosch for the union, essentially the
guidelines suggest that the approach to be adopted by the Registrar
is to examine the actual operation of the union. Moreover he
must
ascertain the process by which the union was formed, its composition,
membership and the activities it undertakes.
[5]
The grounds of appeal by the union are set out as follows in the
Notice of Appeal:
“
4.
The Respondent erred in concluding that no trade union was formed. In
particular,
but without derogating from the generality of the
aforegoing:
4.1
The Respondent failed to appreciate that he was not required to
determine whether a trade
union was formed, but rather whether the
Appellant should be permitted to register as a trade union.
4.2
In any event, the Respondent ignored the definition of ‘trade
union’ in the
LRA when determining whether a trade union was
formed in the current matter;
4.3
The Respondent applied factors relevant to determining whether a
trade union is genuine
for the purposes of s97(7) of the LRA when
determining whether a trade union was formed in this case;
4.4
The Respondent had no factual basis on which to determine that no
trade union was formed.
In particular, the Respondent erred in
concluding that the meeting on 9 December 2014 was incapable of
adopting, or failed to adopt,
a constitution.
5.
The respondent erred in concluding that the Appellant had no members.
In particular,
but without derogating from the generality of the
aforegoing:
5.1
The Respondent failed to appreciate that he was not required to
determine whether the Appellant
had members, but rather whether it
should be permitted to register as a trade union;
5.2
In any event, the Respondent ignored the relevant evidence submitted
by the Appellant regarding
its membership base;
5.3
The Respondent relied on factors which were irrelevant or incapable
of sustaining a conclusion
that the Appellant had no members.
6.
The Respondent erred in concluding that the Appellant is an
association for gain
of certain individuals. In particular, but
without derogating from the generality of the aforegoing:
6.1
There was no factual basis on which to conclude that the Appellant is
an organisation for
the gain of certain individuals;
6.2
In reaching this conclusion the Respondent failed to appreciate that
none of the factors
to which he referred was apparent from the
evidence before him;
6.3
The Respondent applied wrong legal principles in concluding that
office-bearers are not
entitled to receive salaries or allowances
from a trade union.”
[7]
The documents before me comprise three parts:
7.1
The record filed by the Registrar (the Record)
7.2
Further documentation filed by the union (the union’s bundle)
7.3
A supplementary bundle filed by the Registrar (the Registrar’s
supplementary
bundle).
[8]
The Registrar’s reasons for his decision contain the following
pertinent paragraphs:
“
Formation
of a Trade Union
……
.The
applicant submitted minutes of an “inaugural congress”
meeting allegedly held at Motango in Pretoria on 9 December
2014.
From the start we learn that “delegates” had to introduce
themselves. For a new union starting from scratch,
it is confusing to
speak about a “Congress” with “delegates”.
The question will be who are the delegates,
who do they represent and
who elected them? This was not a meeting of members.
The
attendees purported to deal with the adoption of constitution as
follow: “Comrade L Mba adopted constitution and seconded
by S
Nkomo”. Further on we learn that “the constitution
adopted by S. Mathulachipe and seconded by Mafifi” As
we can
see from the Guidelines
[1]
above, the constitution must be adopted by members. The applicant did
not submit an attendance register despite request. From the
discussions in the meeting we deduce that the so called inaugural
congress was attended by a clique of only 7 people some of whom
were
members of a union called Professional Transport and Allied Workers
Union (PTAWU) Mr L. Tshifhesi was suspended by PTAWU for
engaging in
a conduct of establishing another trade union. Five of the people who
attended this meeting were still office bearers
of Professional
Transport and Allied Workers Union….
The
above mentioned people then nominated themselves into positions.
There was no adoption of constitution and election of office
bearers
by members.
We
conclude there was no formation of trade union.
Membership
As
per LRA form 6.1 the applicant claims to have 456 members. The
applicant submitted several copies of application forms for
membership
from Fidelity Security Services. This is the only company
in which the applicant claims to have members. The bank statements
reflecting
payments by Fidelity Security Services into the account of
the applicant was submitted. Also received by this office are pay
slips
from two employees reflecting double deductions for both
Professional Transport and Allied Union of South Africa (PTAWU) and
Applicant.
The pay slips relate a period covered by the bank
statement (April 2015).
This
office has documentary evidence that the membership of applicant and
this union is the subject of a dispute that has been taken
to the
Labour Court. The dispute in court relates to unlawful deduction of
subscriptions by Fidelity Security Services in favour
of Applicant.
The Registrar of Labour Relations has been cited as Third Respondent
in the matter.
Although
we accept that there is no law against dual trade union membership,
we cannot accept that the Applicant has members at
Fidelity Security
Services because of the dispute. We also take cognisance that the
Applicant claims to have members only at Fidelity
Security Services.
There is a stop order facility in favour of the Applicant although
Applicant is not a registered trade union.
We further note that huge
sums of money are deposited by Fidelity Services and after each
deposit of a large sum of money there
is a withdrawal of almost the
same mount deposited. It is a concern in this office why the sums of
money are deposited and withdrawn
immediately from the account.
As
stated above the conclusion is since there is an unresolved dispute
around the members at Fidelity Security Services, we cannot
accept
that the Applicant has members due to the uncertainty.
Association
for gain of certain individuals
………
The
fact that Elliot L Tshifhesi who is serving as President and
Nomaswazi Nkosi serving as Treasurer received unexplained amounts
of
R2000.00 and R1500.00 respectively is an indication that this is an
organisation for gain of certain individuals. The practice
where
office bearers draw money or unexplained allowances from the union is
an indication that it is an association for gain of
certain
individuals. Office bearers are employees in the scope of the union
and members of the trade union. They are not officials.
They are not
entitled to receive salaries or any unexplained allowances from the
union.
In
the circumstances we arrive at a conclusion that this is an
association for gain of certain individuals.”
[9]
I note that subsequent to the Registrar conveying his decision
refusing registration, the union furnished the Registrar with
further
documentation. This included an attendance register for the inaugural
meeting which was held on 9 December 2014. It also
made available
various minutes and attendances registers, not available to the
Registrar before the decision was made.
[10]
The further minutes and attendance registers contained in the union’s
bundle which appear to pre-date the inaugural meeting
of the union
include three in which there are discrepencies:
10.1
An attendance register dated the 25 April 2014 in respect of a
meeting held in Cape Town on 19 April 2014;
10.2
An attendance register dated 13 October 2014 in respect of a meeting
held in Port Elizabeth on 12 October
2014; and
10.3
Three attendance registers dated 25 October 2014 in respect of a
meeting held in Robertville on 22 October
2014.
[11]
Mr Bosch quite correctly informed the court that he could not take
the problem of these inconsistencies further in submission.
The
submission made on behalf of the Registrar was that where an
attendance register is not taken on the same day that a meeting
is
held the Registrar does not consider it to be sufficient proof of the
attendance at the meeting.
Evaluation
[12]
This is an appeal in the wide sense. It is a complete rehearing of
and fresh determination on the merits of the matter.
The court
can consider the matter afresh and make any appropriate order it
deems justified by the facts
[2]
As referred to above, the court has additional evidence before it,
not before the Registrar when he took his decision.
[13]
It was submitted on behalf of the union that the Registrar was
incorrect in his statement that ‘no trade union’
was
formed, given the definition of trade union in the LRA referred to
above. As a point of semantics this may well be correct.
What the
Registrar actually considers is whether there is a trade union ripe
for registration before him.
[14]
The union argues that the fact that only delegates and not all 456
members were at the inaugural meeting cannot be taken as
an
indication that the union is not a ‘genuine’ union. The
register of the inaugural meeting in the documents before
me provided
subsequent to the Registrar’s decision is headed “09
December 2014 Attendance register for Fidelity employees”
and
has 12 names and signatures on it. There is no indication of
the status of those present at the meeting in relation to
the regions
of the union. There is no indication in the minutes of this meeting
or the register that the persons nominated into
office bearer
positions are mandated by any collective of the union’s
members. However, read with the minutes provided of
the meetings held
in different regions, some of the names on the register are of
persons nominated to represent members at the
inaugural meeting.
[15]
The Ministerial Guidelines promulgated in terms of section 95(8) of
the LRA provide as follows in as far as the formation of
a trade
union is concerned:
“
Formation
of a trade union
7.
The process followed to form a trade union can give important
indications as to whether an organisation is a genuine trade union.
Key aspects of the process that should be examined include -
-
the number of founding members who attended the inaugural meeting(s)
to establish the trade union and who completed signed
registers indicating their names
and place of work;
-
the means by which the constitution of the trade union was drafted
and adopted;
-
the election of an executive committee or council of members and the
election of office-bearers.
The
crucial issue that must be addressed is whether the formation of a
trade union involved employees associating with one another
to
establish an organisation to regulate relations with their
employees).”
[16]
The union refers to only one inaugural meeting in its submissions
before court and submits that those attending the meeting
were
delegates. It further states that the minutes of regional meetings
indicate that members in various areas appointed representatives
to
attend and to adopt.
[17]
From the above, it is my view that given the record before me which
contains additional evidence than that serving before the
Registrar,
it cannot be said that the inaugural meeting did not consist of
delegates representing the membership. There are
in the region
of 456 members of the union who work for an employer with branches
all over the country. The finding that there are
no members of the
union is incorrect.
[18]
The Registrar was also influenced in
his assessment of the formation of the union by the fact that certain
of the representatives
at the regional meeting were office bearers of
another union (PTAWU). His report refers to these persons as a
‘clique’.
Reference is also made to an unresolved
dispute around the members at Fidelity Security Services, which the
report states means
that ‘we cannot accept that the Applicant
has members due to the uncertainty’. The papers in the dispute
referred to,
are contained in the record before me under case number
J791/15. A look at the answering papers in the urgent application
reflect
that it arose regarding a dispute over two R40 deductions
from the wages of an employee in respect of PATU who was not a member
of the union, but of PATAWU. The monies were refunded.
[19]
As referred to above, the Registrar also records in his reasons for
the decision not to register the union that he believes
that the
union is an association for gain of certain individuals in particular
that: “
The practice where office
bearers draw money or unexplained allowances from the union is an
indication that that is an association
for gain of certain
individuals. Office bearers are employees in the scope of the union
and members of the trade union. They are
not officials. They are not
entitled to receive salaries or any unexplained allowances from the
union.”
[20]
It is submitted on behalf of the union in relation to the issue of
payments made to office bearers, that: “...the respondent
applied wrong legal principles in concluding that office-bearers are
not entitled to receive salaries or allowances from a trade
union.
The guidelines themselves envisage that office bearers might be paid
salaries.”
[21]
The Ministerial guidelines provide in relevant part that:
“
Association
not for gain
18.
In terms of section 95(5)(a) of the LRA a trade union must state in
its constitution that it is an association not for gain.
The purpose
of this requirement is to prevent trade unions from being used
as vehicles for enriching individuals or
as a cover for
profit-making businesses.
In evaluating whether a trade union is a
genuine trade union, it is important to examine the actual financial
operation of the trade
union.
Among the factors that may indicate
that a trade union is operating in fact for the gain of certain
individuals are the following
(a)
Unrealistically high salaries and allowances are paid to the
officials, office-bearers or employees of the trade union.
(b)
Interest-free or low interest loans are made to officials,
office-bearers or employees, and those loans are not repaid.
(c)
Family members of office-bearers or officials are employed by the
trade unions.
(d)
Income earned by the trade union is not used for the benefit of the
organisation and its members but is paid out to officials,
office-bearers or employees.” (emphasis mine)
[21]
In my view the union is incorrect in submitting that the Guidelines
envisage office bearers may be paid salaries, although
not
unrealistically high. The Guidelines must be read with the provisions
of the LRA which distinguishes between employees of a
union and its
office-bearers.
Section 213 provides that:
“
'office-bearer'
means a person who holds office in a trade union, employers'
organisation, federation of trade unions, federation
of employers'
organisations or council
and who is not an official
;
(my emphasis)
'official',
in relation to a trade union, employers' organisation, federation of
trade unions or federation of employers' organisations
means a person
employed as the secretary, assistant secretary or organiser of a
trade union, employers' organisation or federation,
or in any other
prescribed capacity, whether or not that person is employed in a
full-time capacity. And, in relation to a council
means a person
employed by a council as secretary or in any other prescribed
capacity, whether or not that person is employed in
a full-time
capacity;”
[22]
In terms of the Guidelines, the actual financial operation of the
union must be considered by the Registrar. The union provided
the
Registrar with bank statements covering a period of five months. The
union also on request provided him with an accounting
of its
expenditure. However, almost half the items listed did not have
supporting vouchers. The financial documentation contained
in the
record before me (i.e. filed for the purposes of the court hearing)
contains additional items of expenditure than provided
to the
Registrar for the same period. In addition I note that the union has
submitted that the Court should consider the report
from a registered
auditor in making its decision.
[23]
While there is a report from a registered auditor, the auditor did
not perform an audit or review as indicated by him, but
a report
solely on the following:
“
1.
We examined the membership records for the period ending March 2015
(3
rd
month) and compare with the bank statement amount reflected in total.
This included a review of the bank statements for 3 month
transactions ended 31 March 2015.
2.
We examined the constitution document and confirm that PATU has a
constitution
in place.
3.
We confirmed the office bearers listed in the constitution in place
by inspecting
a copy of their Identity documents.”
[24]
In as far as the first issue was concerned, the auditor’s
finding was that:
“
The
records total contributions of R40 for their total members less
commission; the total amount was reflected in the bank statement
as
received. For the 3 months January, February and March 2015, the bank
statements reflected amounts received from members.”
[25]
The auditor’s report states that the procedures it performed
“do not constitute an audit or a review made in accordance
with
International Standards on Auditing or International Standards on
Review Engagements, we therefore do not express any assurance
on the
procedures performed above”.
[26]
The report does not in my view, given its limitations, assuage
concerns regarding the financial operations of the union.
[27]
In
Registrar
of Labour Relations v Consolidated Association of Employers of SA
Region
[3]
the LAC was concerned with
the deregistration of an employers’ organization by the
Registrar and stated that:
[27]
The registrar is a creature of statute. He derives his powers from
the LRA and the guidelines promulgated in terms of the LRA.
During
the period 1996 to 2002, the function of the registrar was restricted
to determining whether a trade union or employers'
organisation had
adopted a name that met the requirements of the LRA and certain other
requirements. If those requirements were
met, the registrar was
obliged to register the trade union or employers' organisation.
Certain amendments to the LRA came into
force in 2002 and the
registrar was then given the additional authority in terms of s 95(7)
of the LRA not to register any
trade union or employers' organisation
unless he was satisfied that the applicant was a genuine trade union
or employers' organisation.
In the explanatory memorandum to the bill
the following was stated:
'There
are also strong indications that some financial and insurance brokers
have become active in the establishment and the affairs
of trade
unions and employers' organisations in order to market financial or
insurance products. In one instance a Magistrate's
Court ordered the
transfer of a union's assets and all records (in effect the
registration and management) to an insurance
broker. This
broker then attempted to continue by cloaking its activities under
the banner of a union. The status quo was partially
restored but only
after a lengthy, resource-absorbing and time-consuming process…..
The
proposed amendments to s 95 are intended to discourage the formation
and registration of trade unions and employer's organisations
that
are not genuine, by introducing a requirement that they be genuine or
bona fide and giving the registrar of labour relations
the power to
refuse to register organisations which are not. The Minister
will have the power to issue guidelines concerning
whether or not a
trade union or employers' organisation is bona fide. Any refusal to
register a trade union on these grounds will
be subject to appeal to
the Labour Court.
The
International Labour Organisation has expressed the view that this is
in keeping with its standards concerning the promotion
of
collective bargaining and freedom of association.'
[28]
Assessing whether an organisation is genuine or authentic, even with
the assistance of the Ministerial Guidelines is a difficult
task for
the Registrar. I must decide on the record before me whether
the Registrar’s decision stands to be confirmed.
I am of the
view that it should be for inter alia, the following reasons:
28.1
There are discrepancies in certain of the documentation provided by
the union which point to materials being
drafted after the fact. In
particular I refer to the attendance registers and minutes provided;
28.2
The minutes of the inaugural meeting of the union are lacking in
particularity and while persons were mandated
to attend, these
representatives appear to have nominated each other into
office-bearer positions;
28.3
While there are clearly members of the union who work at Fidelity
Services nationally and whose wages are
subject to a subscription
deduction in favour of the union, with the blessing of the employer,
the union has not set out any detailed
submissions as to what the
members of the union are undertaking to regulate relations between
themselves and the employer;
28.4
The financial operation of the union, on the information provided by
it both before and subsequent to the
decision of the Registrar, and
the random undocumented payments made to office-bearers discernible
in the short period covered
by the information provided, does not
reflect that the union is at this stage bona fide operating in the
interests of its members.
[29]
I agree with the respondent’s submissions that the financial
information before me is inadequate and reflects the absence
of basic
checks and balances in the union’s accounting system. The trade
union in my view is not ripe for registration in
that it has been
unable to present the evidence to establish it is bona fide or
genuine and fit for purpose to be registered under
the LRA. In the
result I make the following order:
Order
1.
The decision of the Respondent to refuse to register PAWU is upheld.
2.
There is no order as to costs.
_________________________
H.
Rabkin-Naicker
Judge
of the Labour Court
Appearances:
Applicant:
C.S. Bosch instructed by Malcom Lyons & Brivic Inc
Respondent:
T Sarkas instructed by State Attorney
[1]
i.e.
Minister’s Guidelines
[2]
Staff Association for the Motor & Related Industries v Motor
Industry Staff Association & another (1999) 20 ILJ 2552
(LAC) at
paragraph 12;
[3]
(2015) 36 ILJ 182 (LAC)