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[2017] ZALCCT 33
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Gomba v CCMA and Others (C410/2014) [2017] ZALCCT 33 (2 August 2017)
Reportable
Of interest to other judges
THE
LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
C
ase
no: C 410/2014
In
the matter between:
Vukile
GOMBA
Applicant
and
CCMA
First Respondent
COMMISSIONER
K KLEINOT
Second Respondent
NAMPAK
TISSUE (PTY) LTD
Third Respondent
TWINSAVER
HOLDINGS (PTY) LTD
Fourth Respondent
Heard
:
1 June 2017
Delivered
:
2 August 2017
Summary:
LRA s 197 – transfer of business – joinder –
application to join new employer and order
new employer to give
effect to order reinstating employee.
JUDGMENT
STEENKAMP
J
Introduction
[1]
The applicant, Mr Vukile Gomba, was dismissed by his employer, Nampak
Tissue (Pty) Ltd (the third respondent). He was reinstated
by order
of this Court, following a successful review of a CCMA award. But in
the meantime, Nampak had been sold to Twinsaver Holdings
(Pty) Ltd
(the fourth respondent) as a going concern. Twinsaver refuses to
reinstate him in its employ. The employee has brought
an application
to join Twinsaver and asks the Court to order it to give effect to
the award that was imposed by the order of this
Court.
Background
facts and chronology
[2]
Nampak dismissed the employee on 6 February 2014. He referred an
unfair dismissal dispute to the CCMA. Commissioner Karen Kleinot
(the
second respondent) found in Nampak’s favour on 29 April 2014,
finding that the dismissal was fair.
[3]
The employee brought an
application to review that award. It was argued before Rabkin-Naicker
J on 15 April 2015. Two weeks before,
on 1 April 2015, Nampak’s
“tissue business” had been sold as a going concern to
Twinsaver. The parties agreed
that it was a transfer of a going
concern as contemplated in s 197 of the Labour Relations Act.
[1]
That fact was not brought to the attention of the Court by Nampak’s
attorneys. (They are also Twinsaver’s attorneys
of record in
these proceedings).
[4]
Rabkin-Naicker J handed down her judgement on 20 August 2015. She
reviewed and set aside the arbitration award and substituted
it with
the following award:
“
1. The dismissal of the
applicant was substantively unfair;
2. The third respondent [Nampak] is
ordered to reinstate the applicant into the position he held prior to
his dismissal as from
the date of dismissal;
3. Such reinstatement is subject to a
final written warning in respect of the taking of unauthorised leave,
valid for a period of
six months from the date of this order;
4. [Nampak] is to pay the costs of
this application.”
[5]
Nampak applied for leave to appeal. It was dismissed on 30 October
2015. It petitioned the LAC. The petition was refused on
16 February
2016.
[6]
On 20 May 2016, for the first
time, Nampak’s attorney, Ms Fiona Leppan of Cliffe Dekker
Hofmeyr, told the employees then attorney,
Mr Neels van Rooyen of
Bagraims, that “the section 197 transfer of Nampak tissue to
transfer occurred on 15 February 2015.”
She alleged that “we
were not aware of this date when the matter was argued before the
Labour Court and the appeal”.
[2]
[7]
It subsequently transpired that that date was wrong and that the s
197 transfer had in fact occurred on 1 April 2015.
[8]
Lengthy correspondence ensued between the parties and their
respective attorneys. Twinsaver refused to reinstate the employee.
Ms
Leppan pointed out that Nampak had paid the employee an amount of R
327 457, 99. That amount equated to the back pay owing to
him only
from his dismissal to the date of judgement in the review
application, namely 20 August 2015. He has still not been reinstated.
[9]
In August and again in October 2016 Nampak offered the employee the
option of a vacancy at its Bevcan operation. It told him
to take up
the offer by 21 October 2016 “and to provide his updated CV and
personal details upon doing so”. It also
required proof of his
qualifications as an electrician. He did not take up that offer,
arguing that he was entitled to be reinstated
by the new employer
(Twinsaver) without more, and without having to provide any updated
details or proof of qualifications.
Evaluation
/ Analysis
[10]
Sadly, common sense has not prevailed in this matter. Both parties
have been intransigent. Twinsaver has steadfastly refused
to accept
that it was under an obligation to reinstate the employee pursuant to
the provisions of section 197 of the LRA. The employee
refused to
accept the sensible offer of an equivalent position at Nampak’s
Bevcan operation. And Nampak insisted on him providing
an updated CV
and proof of his qualifications, despite the fact that it must have
had those details of its former employee. The
intransigence of both
parties has given rise to this litigation and has resulted in a
lengthy delay and significant legal costs,
to the benefit only of
their attorneys.
[11]
Twinsaver now argues that the employee has compromised its claim
because he has accepted the money paid to him by Nampak; and
because
he, on its version, had in fact accepted the alternative position at
Bevcan. It also argues that the employee remained
dismissed at the
time of the section 197 transfer on 1 April 2015, and that this
contract of employment could not be transferred
to Twinsaver. And
finally Mr
Van As
submitted that there are no live proceedings
before court and that the application for joinder should fail on that
basis.
The
legal position
[12]
The legal position is covered by s 197 of the LRA. The relevant
subsections read as follows:
“
(a) For the purposes of this
subsection, the collective agreements and arbitration awards referred
to in paragraph (b) are agreements
and awards that bound the old
employer in respect of the employees to be transferred, immediately
before the date of transfer.
(b) Unless otherwise agreed in terms
of subsection (6), the new employer is bound by –
(i)
any arbitration award made in terms of this Act, the common law or
any other
law;
(ii)
any collective agreement binding in terms of section 23; and
(iii)
any collective agreement binding in terms of section 32, unless a
commissioner acting in terms
of section 62 decides otherwise.
(6)
(a) An agreement contemplated in subsection (2) must be
in writing and concluded
between –
(i)
either the old employer, the new employer, or the old and new
employers acting
jointly, on the one hand; and
(ii)
the appropriate person or body referred to in section 189(1), on the
other.”
[13]
Clearly, in this case, the new employer (Twinsaver) is bound by the
arbitration award against the old employer (Nampak). It
was not
“otherwise agreed” between them.
[14]
To argue, as Twinsaver does, that it is not bound because Gomba was
not an employee at the time of the transfer (he was dismissed
at the
time), would make a mockery of the intention of the legislature. This
Court ordered his retrospective reinstatement, i.e.
to a date before
the transfer. The new employer is bound by that court order and the
award, as substituted by this Court.
[15]
Mr
Field
referred in this regard to
Transport Fleet Maintenance
v NUMSA
[3]
.
In that case, the transfer of the business from the old employer to
the new employer took place before the arbitration award was
issued.
The LAC nevertheless held that the award was binding on the new
employer. And in
Edgars
Consolidated Stores (Pty) Ltd v SACCAWU
[4]
it was held that the term “immediately” includes two
factors, namely the arbitration award and the transfer of the
business. The provision is not concerned with the date when the award
was issued; it is concerned with the question whether the
old
employer “immediately before” the transfer was bound by
the award. In this case, the initial award was issued a
year before
the transfer. That award was substituted by a new one by this court,
but it applied retrospectively. It therefore bound
the old employer
immediately before the transfer, and it binds the new employer
subsequently.
[16]
The Labour Appeal Court very
recently dealt with the application of s 197(5) in
High
Rustenburg Estate (Pty) Ltd v NEHAWU
[5]
.
The issue was –
as it is in this case -- “whether s 197 (5) of the LRA applies
to an arbitration award which is
reversed by the Labour Court but
only after the transfer of the relevant undertaking had taken place”.
Davis JA noted:
“
It is clear that the purpose of
the section was intended to ensure that all rights and obligations
between the employer selling
the business and each employee at the
time of the transfer to the purchaser continue in force as if they
were rights and obligations
between the purchaser, being the new
employer, and each employee. It is the former who then bears a duty
to fulfil the relevant
obligations.
The question which arises is whether a
decision by the Labour Court to set aside an award and substitute it
with a finding that
an unfair dismissal had occurred, which would
justify the payment of compensation, takes place at the time of the
breach or, at
least, at the time of the finding of the arbitrator
which has now been set aside. If that is the case, then
clearly
the arbitration award would be binding on the old employer in
respect of employees to be transferred and accordingly would be
binding
upon the new employer.”
[17]
He concluded:
[6]
“
[19]
It cannot be that the right which the employees hold over a new
employer,
pursuant to a transfer of an undertaking as a going
concern, depends on the stage of the appeal or review at which the
litigation
finds itself at the point of transfer. The wording of the
section is clear, an arbitration award that can bind the old employer
immediately before the date of transfer in respect of the employees
to be transferred binds the new employer.
[20]
The arbitration award must bind the old employer in the circumstances
of this dispute because all that has occurred is that the Labour
Court substituted a correct award, in its view, for the incorrect
award which had previously been made. That the Labour Court has
substituted the award does not detract from the conclusion that
this
was an award which bound the old employer immediately before the date
of transfer because the substituted award must be deemed
to take
effect from that date.
[21]
Mr Joubert made much of the argument that the new employer, being
the
appellant, had to be joined to proceedings certainly before the
attachment of its property to be effected. This was the basis
of the
previous decision of this Court to which I have made reference.
The purpose of the initial order of this Court,
was that because the
new employer had not been heard, a stated case should be decided by
the court a quo in circumstances where
the appellant, being the new
employer, would have an opportunity to present its case. If an
attachment of property takes place,
it does appear that the new
employer has to be joined to such proceedings. However, the
question of joinder cannot on its
own trump the wording of s 197 (5)
of the LRA, read in terms of its purpose, namely that if an award is
binding on the old employer
it is deemed to be binding on the new
employer. The fact that the Labour Court substitutes the formulation
of the award for the
one which is set aside cannot detract from this
conclusion, for, if it did, it would ultimately damage the very
purpose of s 197,
namely to protect employee rights in the context of
a sale of a business as a going concern. These rights flowed from an
arbitration
award, albeit one that required substitution by the
Labour Court.”
[18]
It is for precisely those reasons that this application for joinder
should be granted. The arbitration award – as substituted
by
this Court – bond the old employer immediately before the date
of transfer and therefore it binds the new employer, Twinsaver.
Did
the employee compromise his claim?
[19]
But even if this is the correct legal position, Mr
Van As
argued, it does not find application on the facts of this case as the
employee has compromised his position. Firstly, he argued,
Nampak had
paid him back pay and had therefore complied with the monetary part
of the judgement. And secondly, there is a material
dispute of fact
on the papers as to whether the employee accepted the alternative
position offered to him at Bevcan. If he did,
it would compromise his
claim and constitute a waiver of any entitlement to reinstatement.
[20]
It is common cause that Nampak paid the employee R327 457, 99. But
that only covers his backpay from the date of his dismissal
to the
date of the judgment in the review application, 20 August 2015. It
does not compromise his entitlement to reinstatement.
[21]
The offer of alternative employment at Bevcan is also not in dispute.
What is in dispute, is whether the employee accepted
it. He denies
accepting it in his replying affidavit. But the fact is that he did
not report for duty at Bevcan. And in any event,
he is entitled to be
reinstated by Twinsaver (the new employer). The offer if alternative
employment at Bevcan, subject to his
providing it with an updated CV
and proof of his qualifications, was made by Nampak. It did not
extinguish or compromise his claim
against Twinsaver.
No
live dispute?
[22]
Shortly before this matter was
argued, Mr
Van As
submitted supplementary heads of argument to the effect that the
application to join Twinsaver should be refused as there is no
live
dispute before the parties. He argued that the relief the employee
seeks is compliance with a court order; that there are
no live
proceedings before this Court; and the applicant should rather have
sought to substitute Twinsaver for Nampak. He relied
for these
submissions on a judgment of Prinsloo J in
GIWUSA
v Johannesburg Foundry cc.
[7]
In considering an
application for joinder, the Court held:
“
[16]
It is trite and in accordance with the provisions of rule 22 of the
Rules
of this Court that in order for parties to be joined to
particular proceedings, they must have a direct and substantial legal
interest
in the matter such as to make them necessary parties to the
proceedings. Whether a section 197 transfer indeed took place is
relevant
to decide whether the Company has a direct and substantial
interest and whether it would be directly affected by the outcome of
the trial and the Court’s order.
[17]
In my view the question whether or not there was a transfer as
contemplated in section 197 of the Act, should only be considered
after the question whether there are proceedings to which the
Company
could be joined, has been decided.
[18]
The question whether the Company has a direct and substantial
interest,
only becomes relevant if it is competent to join the
Company to the pending proceedings.
Joinder
[19]
Rule 22 of the Rules of this Court provides for joinder as follows:
“
(1)
The court may join any number of persons, whether jointly, jointly
and severally, separately, or in the alternative, as parties in
proceedings, if the right to relief depends on the determination
of
substantially the same question of law or facts.
(2)(a)
The court may, of its own motion or on application and on notice to
every other
party, make an order joining any person as a party in the
proceedings if the party to be joined has a substantial interest in
the
subject matter of the proceedings.
(b) When making an order in terms of
paragraph (a), the court may give such directions as to the further
procedure in the proceedings
as it deems fit, and may make an order
as to costs.”
[20]
This Court may join ‘persons as parties in proceedings’
and in considering any application for joinder, the point of
departure is to establish whether there are proceedings to which
parties could be joined.
[21]
In
Du Preez v LS Pressings CC & Another
this Court
has confirmed that joinder in terms of rule 22 is in respect of
proceedings before Court and that the purpose
of a joinder is to
allow participation in live proceedings.”
[23]
I take no issue with the legal
principles as summarised by the learned judge. But the facts of that
case are to be distinguished
from the one before me. In that case,
there was a dispute over the question whether or not there had been a
s 197 transfer; and
the employer that had retrenched the employees
had been liquidated. The facts in this case are more in line with
those in
High Rustenburg
Hydro.
The s 197 transfer
is undisputed; so is the fact that the effect of this Court’s
earlier order is an award of reinstatement.
the employee has never
abandoned his claim – a far cry from
Johannesburg
Foundry
where, the Court
noted, “the status of the proceedings before this Court is and
remains ‘abandoned’.”
[8]
Conclusion
[24]
The applicant must be reinstated by the new employer, Twinsaver, in
order to give effect to the arbitration award in his favour
(as
substituted by this Court on review) against the old employer,
Nampak, in order to give effect to the provisions of s 197 of
the
LRA. And in order to give effect to that order, Twinsaver must be
joined to these proceedings.
Costs
[25]
The applicant has been successful. In law, he should be entitled to
his costs. But, as I noted above, both parties have been
intransigent. The applicant could have gone back to work at another
division of his old employer on the same terms and conditions.
All he
had to do was to provide proof of his qualifications and an updated
CV. And although it seems petty of Nampak to ask for
details that it
presumably had, it was not much to ask of someone who, according to
him, was desperate to get back to work. The
subsequent legal costs
were largely preventable and unnecessary. In fairness, as
contemplated by s 162 of the LRA, I do not believe
that a costs order
is appropriate.
Order
[26]
I therefore make the following order:
26.1 Twinsaver Holdings
(Pty) Ltd is joined as the fourth respondent in this application.
26.2 The fourth
respondent, Twinsaver, is ordered to comply with the order of this
Court [Rabkin-Naicker J] of 20 August
2015 under this case number by
no later than 18 August 2017.
_______________________
Anton
Steenkamp
Judge
of the Labour Court of South Africa
APPEARANCES
APPLICANT:
Wayne
Field of Bernadt Vukic Potash & Getz.
FOURTH RESPONDENT:
M J
van As
Instructed by Cliffe Dekker
Hofmeyr Inc.
[1]
Act 66 of
1995 (the LRA).
[2]
In these
proceedings, Ms Leppan and Cliffe Dekker Hofmeyr are the attorneys
of record for the fourth respondent, Twinsaver. The
employee is now
represented by Mr Wayne Field of Bernadt Vukic Potash & Getz.
[3]
(2004) 25
ILJ
104 (LAC).
[4]
(2010) 31
ILJ
2578 (LC).
[5]
[2017]
ZALAC 20
; (2017) 38
ILJ
1758 (LAC) (23 March 2017) paras 11 and 14-15.
[6]
Paras
19-21.
[7]
[2017] ZALCJHB 57 (17 February 2017) paras 16-21.
[8]
Par 26.