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[2018] ZALCJHB 385
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National Union of Mineworkers and Others v Anglo Gold Ashanti Limited and Another (J3627/18) [2018] ZALCJHB 385; [2019] 1 BLLR 54 (LC); (2019) 40 ILJ 407 (LC) (19 October 2018)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case
No: J3627/18
In
the matter between:
NATIONAL
UNION OF MINEWORKERS
LIST
OF AFFECTED NUM MEMBERS
First
Applicant
Second
to further Applicants
and
ANGLO
GOLD ASHANTI LIMITED
ANGLO
GOLD ASHANTI HEALTH (PTY) LTD
First
Respondent
Second
Respondent
Heard
:
11 October 2018
Delivered:
19 October 2018
Summary:
Section 197(6) of the LRA agreement is a collective agreement in
terms of section 123 – when concluded with trade
unions with
majority representation in the workplace pursuant to negotiations or
consultation process and can be extended in terms
of
section
23(1)(d)
.
JUDGMENT
NKUTHA-NKONTWANA.
J
Introduction
[1]
The crisp
issue for determination in this urgent application is whether an
agreement concluded in accordance with section 197(6)
of the Labour
Relations Act
[1]
(LRA) is a
collective agreement capable of extension in terms of section
23(1)(d) of the same Act.
[2]
The first applicant, the National Union of Mineworkers (NUM) is one
of the trade unions recognised by the first respondent,
Anglo Gold
Ashanti Limited (Anglo Gold). The second to further applicants
(applicant employees) are the members of NUM who are
in the employ of
the second respondent, Anglo Gold Ashanti Health (Pty) Ltd (the
Hospital) which is part of Anglo Gold’s
business units that
fall within the South African Region. On 21 May 2018, Anglo Gold
issued a notice in terms of section 189(3)
of the LRA, to commence a
process of consultation in terms of section 189A of the LRA in
respect of all its underground and surface
units, including the
Hospital.
[3]
It is important to mention that the ongoing consultation process is
conducted in accordance with the collective agreements between
Anglo
Gold and trade unions NUM, AUSA, Solidarity and AMCU (organised
labour), respectively, known as the Labour Relations Recognition
and
Procedural Framework Agreement (‘Recognition Agreement’).
In terms of the Recognition Agreement, a Regional
Steering
Committee constituted by the members of organised labour acts as its
constative and advisory forum. The consultation process
is
facilitated by the Commission for Conciliation Mediation and
Arbitration (CCMA) in terms of section 189A(3) of the LRA.
[4]
During the consultation held on 4 June 2018, the sale of Anglo Gold’s
distressed assets, including the Hospital, in order
to potentially
keep some of the jobs of the affected employees was discussed and
accepted. Anglo Gold managed to secure a buyer,
JMCA Phodiclinics
(JMCA) and concluded a sale agreement that would enable a transfer of
the Hospital as a going concern. However,
the transaction was subject
to a section 197(6) agreement as JMCA did not wish to take transfer
of all employees in the employ
of the Hospital.
[5]
On 4 October 2017, a meeting was held between the respondents, JMCA
and organised labour specifically to sign the section 197(6)
agreement in order to give effect to the sale of the Hospital. NUM
advised the plenary that it agrees with the agreement in principle
but sought an indulgence to secure a mandate from its members. NUM
members objected to the section 197(6) agreement for reasons
I deem
unnecessary to mention herein. However, NUM advised the respondents
that, even though it was not going to sign the section
197(6)
agreement, it would participate in the implementation thereof in
order to enable the transfer to be effected on 12 October
2018.
[6]
On 5 October 2018, the applicant employees disrupted the briefing
session which sought to finalise the A-list (employees to
be
transferred) and B-List (employees to be retrenched), threating to
boycott the implementation of the section 197(6) agreement.
Thereafter, the applicant employees embarked on an unprotected
strike. The respondents approached this Court for an order
interdicting
the unprotected strike. This Court, issued a
rule
nisi
on 9 October 2018, returnable on 12 December 2018, granting
the respondents interim relief.
[7]
In these proceedings, the applicants seek an order interdicting the
dismissal of the applicant employees on 11 October 2016.
Legal
principles and application
[8]
The employees would ordinarily transfer automatically to the new
employer in terms of section 197(2) and the old employer would
be
substituted by the new employer as the employer in respect of all
contracts of employment in existence immediately prior to
the
transfer, except where there is an agreed variation in terms of
section 197(6) which states:
‘
(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.
(b) In any negotiations
to conclude an agreement contemplated by paragraph (a), the employer
or employers contemplated in subparagraph
(i), must disclose to the
person or body contemplated in subparagraph (ii), all relevant
information that will allow it to engage
effectively in the
negotiations.
(c) Section 16(4) to (14)
applies, read with the changes required by the context, to the
disclosure of information in terms of paragraph
(b).’
[9]
In
SAMWU
and Another v SALGA and Others
,
[2]
the court aptly expounded the reference to parties that must be
consulted in terms of section 189, stating that:
‘
Section 197(6)
contemplates the variation of the consequence of the substitution of
the transferee employer for the transferor contemplated
by section
197(2), and establishes the means by which any variation might be
achieved. The subsection requires any variation to
be in writing, and
concluded between the transferor, the transferee, or the two of them
acting jointly on the one hand, and “the
appropriate person or
body referred to in section 189(1), on the other.”
Section
189(1) establishes a hierarchy of parties that must be consulted
prior to any dismissal effected for a reason related to
an employer’s
operational requirements. The parties who are entitled to be
consulted rank as follows – a person required
to be consulted
in terms of a collective agreement
, a workplace forum, and a
registered trade union whose members are likely to be affected by the
proposed dismissals, and the employees
likely to be so affected.
In the context of
retrenchment procedures, this Court has held that section 189(1)
defines a hierarchy of entities and that there
is generally no
obligation on an employer to consult with a person or body placed any
lower in the hierarchy… In other words,
the person or body
that ranks first in the defined hierarchy has the exclusive right to
be consulted on the terms of any proposed
retrenchment. In the
present instance, of course, the right is not one of consultation –
section 197(6) defines a hierarchy
of bargaining partners’
.
(Emphasis added)
[10]
In the
present case, the applicants have no qualm with the above
construction. They could not, even if they wanted to, because the
sale of the Hospital and the impugned section 197(6) agreement are
the products of the ongoing section 189A consultation process
in
accordance with section 189(1)(a).
[3]
[11]
The applicants are, however, unwavering in their submission that the
section 197(6) agreement is not a collective agreement
in terms of
section 123 and therefore could not be extended to bind its members
in terms of section 23(1)(d). This contention is
pegged on the
assertion that the Hospital is a workplace and that NUM is a majority
trade union in the workplace.
[12]
The
respondents’ dispute that the Hospital is a workplace. Counsel
for the respondents submitted that NUM is opportunistic
in merely
alleging that the Hospital as a workplace without engaging the
definition or demonstrating that the Hospital is independent.
In
Association
of Mineworkers and Construction Union and others v Chamber of Mines
of South Africa and Others
,
[4]
referred to by the respondents, the Constitutional Court held that
the definition of ‘workplace’ is more focused on
employees as a collective and that a location is relatively
immaterial. In that regard it was stated:
‘
[27]
The first
part of the definition creates a default rule that, regardless of the
places, one or more, where employees of an employer
work, they are
all part of the same workplace. The second part superimposes a
proviso in the form of an exception - regardless
of how many places
where employees work, different "operations" may be
different workplaces only if they meet the criteria
the definition
specifies. The key is whether an operation is independent - not where
it is located
. Yet again, no significance is attached to the
"places" where employees work, since the term features in
both parts of
the definition. Each independent operation, which
constitutes a separate "workplace", may itself be at one or
more separate
locations.
[28] Hence
the proviso
determines not so much whether separate physical places of work are
separate workplaces, but rather whether independent
"operations",
however geographically dispersed, are separate workplaces. The
pivotal concept is independence
. If there are two or more
operations and they are "independent of one another by reason of
their size, function or organisation"
then "the place or
places where employees work in connection with each independent
operation, constitutes the workplace for
that operation".
This
is a test of functional organisation, and not geography or location
.’
(Emphasis added)
[13]
In the present case, the Hospital is one of Anglo Gold’s
business units affected by the restructuring within the South
African
Region which is the subject matter in the Section 189A consultation
process underway. The respondents are adamant that
the South African
Region is a workplace with 7620 employees and that NUM is a minority
union, representing only 32.5% of the total
number of employees. It
is telling that NUM raises the issues of workplace right at the end
of the negotiations and when the section
197(6) agreemnt has already
been concluded with the majority trade unions.
[14]
Counsel for
NUM submitted that the section 197(6) agreement is not a collective
agreement capable of extension in terms of section
23(1)(d) of the
LRA irrespective of the consultation process that preceded it and
undertaken specifically within the context of
collective bargaining
relations. In
National
Union of Metalworkers of South Africa (NUMSA) obo Members v South
African Airways SOC Ltd and Another
,
[5]
the LAC held that an agreement which meets or satisfies the
requirements set out in section 213
[6]
constitutes a collective agreement and as such retrenchment agreement
between an employer and a trade union settling a retrenchment
dispute
is therefore a collective agreement.
[15]
In this instance, similarly, the section 197(6) agreement between the
respondents and JMCA as employers and majority unions
to opt out of
section 197(2) transfer is a collective agreement as it was informed
by their mutual interest to save some of the
jobs in the Hospital.
The new employer made it a condition of the sale transaction that the
transfer of employment contracts as
going a concern should not be
automatically and that was acceptable to all the parties to the
section 197(6) agreement.
[16]
The applicants are ill-advised in thinking that the contracts of
employment of the applicant employees would still be transferred
automatically once the deal is off as contended by their counsel.
Conversely, instead of saving some jobs, as contemplated
in the
section 197(6) agreement, all employees in the employ of the Hospital
would be retrenched.
[17]
In
SAA
[7]
,
the LAC referred with approval to the Constitutional Court’s
judgment in
Chamber
of Mines
where it was held that ‘there was nothing in the definition to
support the appellant's contention that only collective agreements
resolving "matters of mutual interest" could be extended
under section 23(1)(d). That phrase covers both interest and
rights
disputes. A matter of mutual interest is one in which employee and
employer parties have a material and simultaneous interest
relating
to the employment relationship.’
[18]
The
applicants are not overtly challenging the majoritarianism principle
contained in section 23(1)(d). In any event, the Constitutional
Court
has confirmed, on several occasions, that the right to extend
collective agreements to non-parties is consistent with the
principle
of majoritarianism aimed at promoting orderly collective
bargaining.
[8]
Pertinently, in
SAA
the
LAC stated:
‘
The short answer
to the contention that the Constitutional Court limited itself to
instances of collective bargaining, is that the
principle of
majoritarianism finds expression in section 23(1)(d) as well as in
section 189(1) and 189(A) of the LRA.
The application of section
23(1)(d) of the LRA to the process set out in section 189 of the LRA
is necessary and justifiable to
ensure orderly and peaceful
consultation process aimed at minimising dismissals and contributing
to economic viability
.
To allow a situation where a minority
party would, right at the end of the consultation process, not be
bound by a product of a
legitimate and fair process, particularly
where it was part of that process, would lead to chaotic situations.
It would be difficult,
if not impossible, for a consultation process
under section 189 of the LRA to be concluded.
’ (Emphasis
added)
[19]
In the present case, the section 197(6) agreement cannot be excised
from the ongoing section 189A consultation process between
Anglo Gold
and organised labour, including the NUM. Clearly, the negotiations
contemplated in section 197(6)(a) were undertaken
within the context
of section 189A consultation process. In my view, the reasoning in
SAA
is applicable in this instance as the application of
section 23(1)(d) to the process set out in section 197(6) is equally
unassailable
in the light of the fact that a circumscribed transfer
in terms of section 197 would absolutely minimise retrenchments and
contribute
to economic sustainability of both the new and old
employers.
[20]
It is therefore impermissible for NUM to seeks to bail out from the
section 197(6) engagement under the pretext of a business
unit based
majoritarianism. In fact, in
Chamber of Mines
, it was NUM that
correctly labelled this approach a facade or ‘something of a
phantom’ as AMCU, like NUM in this instance,
impugned the
application of the majoritarianism principle to a sector-wide
agreement under section 23(1)(d) when it also sought
to enforce its
majority at each individual mine. No wonder NUM mounted a tepid
assail in this regard.
[21]
Recently,
the LAC, in
Association
of Mineworkers and Construction Union and Others v Royal Bafokeng
Platinum Ltd and Others
,
[9]
emphasised
the importance of collective agreements
in
the scheme of the LRA and the fact that they are allowed to trump its
provisions. It was pertinently stated:
‘
The voluntary
nature of our labour relations system is held together by collective
agreements. Collective agreements are part of
the package.
The
gains made by collective bargaining which lead to collective
agreements should not be unravelled easily. The risk, of course,
being that the unravelling of one thread might lead to the
destruction of the entire garment
.’
[10]
(Emphasis
added)
Conclusion
[22]
To sum up, I am satisfied that the impugned section 197(6) agreement
is a collective agreement in terms of section 123, capable
of being
extended in terms of section 23(1)(d).
Urgency
[23]
I accept that the matter is urgent hence I have dealt with it as
such. The parties to the impugned section 197(6) agreement
could not
have waited for a hearing in due course before they could avail
themselves to the indulgences that were collectively
bargained.
Whilst still on this point, I hasten to mention that the respondents
abandoned their non-joinder
point
in limine
in respect
all the other parties to the impugned section 197(6) agreement. They
have since filed their confirmatory affidavits
in support of the
respondent’s opposition and I was advised by counsel for the
respondents that they would abide by the Court’s
decision.
Costs
[24]
On the issue of costs, it is well known that costs do not necessarily
follow the result in this Court, especially if the parties
are in a
persisting relationship as typified in the present case.
[25]
In the circumstances, I make the following order:
Order
1. The application is
dismissed.
2. There is no order as
to costs.
__________________
P Nkutha-Nkontwana
Judge of the Labour Court
of South Africa
Appearances
For
the Applicant: Advocate C Orr
Instructed
by: Cheadle Thompson and Haysom
For
the Respondent: Advocate A Myburgh SC
Instructed
by: Fasken, incorporated as Bell Dewar Inc.
[1]
Act
66 of 1995 as amended.
[2]
[2010] 8 BLLR 882 (LC);
(2010)
31 ILJ 2178 (LC) at paras 6 to 7.
[3]
Section
189(1)(a) states: ‘When an employer contemplates dismissing
one or more employees for reasons based on the employer’s
operational requirements, the employer must consult… any
person whom the employer is required to consult in terms of a
collective agreement; . . .’ In this instance, the collective
agreement is the Recognition Agreement.
[4]
[2017] 7 BLLR 641
(CC) at para 24.
[5]
[2017]
9 BLLR 867 (LAC).
[6]
Section
213 states ‘"collective agreement" means a written
agreement concerning the terms and conditions of employment
or any
other matter of mutual interest concluded by one or more registered
Trade Unions on the one hand, and on the other by
one or more
registered employers' organisations; or one or more employers
and one or more registered employer’s organisations.’
[7]
Supra
n 5.
[8]
Chamber
of Mines
supra
n
4 at paras 41 to 58;
SAA
supra
n
5 at paras 34 to 39;
Transport
and Allied Workers Union of South Africa v PUTCO Ltd
2016 (4) SA 39
(CC) at para 61;
Association
of Mineworkers and Construction Union (AMCU) and Others v Royal
Bafokeng Platinum Limited and Others
(2018)
39 ILJ 2205 (LAC) paras 19 to 24;
[9]
(2018)
39 ILJ 2205 (LAC) at paras 24 and 25.
[10]
Supra
at
para 26.