About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Cape Town Labour Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Cape Town Labour Court, Cape Town
>>
2019
>>
[2019] ZALCCT 36
|
|
Passenger Rail Agency of South Africa v Commission for Conciliation, Mediation and Arbitration and Others (C1037/18) [2019] ZALCCT 36; [2020] 1 BLLR 49 (LC); (2020) 41 ILJ 961 (LC) (14 November 2019)
IN
THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
Reportable
Case
no: C1037/18
In
the matter between:
PASSENGER
RAIL AGENCY OF SOUTH AFRICA
Applicant
and
COMMISSION FOR
CONCILIATION, MEDIATION
AND
ARBITRATION
First Respondent
DU
PLESSIS
N.O
Second Respondent
MDLULI
AND 164 OTHERS
Third to 164
TH
Respondent
Date
heard: 17 October 2019
Delivered:
14 November 2019
Summary –
Interpretation and application dispute - Commissioner cannot assume
jurisdiction to arbitrate an interpretation
and application dispute
relating to a settlement agreement outside of section 24 of the LRA.
Section
198B – Indefinite employees not entitled to rely on section
198B in seeking to secure benefits or equal treatment
with fellow
employees. Commissioner committed an error of law and/or gross
irregularity by applying the remedies available
under the unfair
labour practice provisions to a section 198B dispute.
JUDGMENT
CONRADIE,
AJ
Introduction
[1]
In this matter, the applicant (PRASA) seeks
an order reviewing and setting aside the arbitration award made by
the second respondent
(the arbitrator) in terms of which he found
that the third to 164
th
respondents (the employees) are deemed to be employed on an
indefinite basis from 1 April 2015; that PRASA must pay them an
amount
of R35 455 140.00 and that it ensures that the employees
complete the required forms to become members of it’s provident
fund.
[2]
PRASA launched its review application late
by about two months. It has applied for condonation for the
late filing of the
review. I am of the view that condonation
should be granted, given in particular, the explanation for the delay
and the prospects
of success. The matter also raises important
questions of law and as such it is in the interest of justice that it
be heard. In
addition, while the employees opposed the condonation
application in their answering papers they did not persist with their
opposition
when the matter was heard.
Background
[3]
The employees were all employed on
fixed-term contracts with PRASA.
[4]
When
section 198B
of the
Labour Relations Act 66 of 1995
came into effect,
on 1 January 2015, the employees remained in the employ of PRASA, but
were not required to sign new fixed-term
contracts of employment.
[1]
[5]
The South African Transport and Allied
Workers Union (SATAWU) and the United National Transport Union (UNTU)
referred a number of
disputes to the first respondent, the Commission
for Conciliation, Mediation and Arbitration (CCMA).
[6]
There is a dispute between PRASA and the
employees as to whether all these disputes were referred in 2016.
However, nothing turns
on this. What is important is that one
of the disputes concerned the fixed-term contract employees.
[7]
The unions’ disputes were
consolidated by the CCMA and the period for conciliation was extended
in order to allow PRASA and
the trade unions an opportunity to engage
during the week of 4 to 8 April 2016 with a view to reaching a
negotiated settlement.
[8]
The parties held a special meeting under
the auspices of the PRASA Bargaining Forum and on 7 April 2016
concluded a settlement agreement
which covered the various disputes
that the unions had referred to the CCMA.
[9]
Clause 3.8 of the settlement agreement
specifically dealt with the A
ppointment
of Fixed Term Contract Workers
”.
9.1.
Clause 4.1 of the agreement provides that
“This agreement is in full and final settlement of all disputes
and all perceived
disputes between the parties, whether arising in
contract, delict or statute.”
9.2.
Clause 4.2 provides that the parties
confirmed that they have no further claims against each other.
9.3.
Clause 5.1 deals with dispute resolution
and provides that “Any dispute about the interpretation or
application of this agreement
must be resolved by way in terms of the
provisions of PRASA Bargaining Forum Constitution” [sic].
[10]
The details of how the fixed-term contract
and other disputes were to be resolved was set out in an addendum to
the agreement. Item
8 of the addendum provides as follows:
“
FTCW’s
APPOINTMENT”:
“
A
study will be commissioned to look at:
·
Verification of numbers of current FTCW’s
to be absorbed in terms of a criteria to be agreed between the
parties.
·
Full compliance with the provisions of the
Recruitment and Selection Policy.
·
Death benefit to be extended to include
FCTWs
”
.
[11]
The first two items were to be resolved
within three months (end of June 2016) and the death benefit to be
extended within seven
days.
[12]
At
some stage UNTU brought an application in the Labour Court
[2]
to make the settlement agreement an order of court in terms of
section 158(1)(c) of the Labour Relations Act
[3]
(LRA). The order was granted on 8 August 2017. Following
on this order, the unions, on 16 February 2018, brought a
contempt
application
in
terms of which it wanted an order that PRASA was in contempt of the
court order granted on 8 August 2017.
[4]
The court declined to entertain the application. According to
Steenkamp J, with reference to the dispute resolution
clause in the
settlement agreement, the PRASA Bargaining Forum Constitution itself
“
provides
for the way in which to resolve disputes, and …..the choice to
follow a particular dispute resolution process is
a choice which, as
long as it is voluntarily made, should be respected by the courts, as
confirmed by the Constitutional Court
in
Lufuno
Mphaphuli & Associates (Pty) Ltd v Andrews and Another
2009 (4)
SA 529
(CC)
at
219.”
[13]
On 8 February 2018, a group of employees
(Mdluli and 14 Others) referred a dispute, without the assistance of
their trade unions,
to the CCMA.
[14]
On 22 February 2018, a group of employees
(Mhlakela and 152 Others) also referred a dispute, without the
assistance of their trade
unions, to the CCMA.
[15]
These two disputes were subsequently
consolidated. The disputes were dealt with at the CCMA on the basis
of a stated case. As
such, instead of leading evidence the
parties agreed that what was recorded in the stated case constituted
the evidence before
the CCMA. The relief sought by the
employees was described in the stated case as follows:
“
(a)
Declaring them to be deemed permanent employees.
(b)
Declaring that they are entitled to payment
in an amount equal the benefits (sic), i.e. provident fund
contributions and bonus payments,
for at least the period 1 January
2015 to date
”
.
[16]
At the commencement of the arbitration,
PRASA raised a point
in limine
that the dispute had been settled in terms of the settlement
agreement of 7 April 2016. The arbitrator, however, dismissed
the point
in limine
on the grounds that
the settlement agreement did not cover the issue of benefits
and
that the case had been referred to the CCMA as an unfair labour
practice dispute.
The
Award
[17]
The following paragraphs relating to the
arbitrator’s analysis of the evidence and argument are
important for this matter:
17.1.
“
This
case is more about the application of section 198B of the LRA than
the interpretation thereof. Whereas the applicants
were
integrated into the business, they are not treated equally to their
indefinitely employed colleagues and are still referred
to as
contract workers. Thus, up to these proceedings there had been
no acknowledgement by the respondent that the applicants
had become
indefinitely employed. They are still treated differently
compared to their colleagues doing the same work, particularly
in
that they are not members of the provident fund and are never
considered to be paid bonusses. The latter being reserved for
the
indefinitely employed people”.
[5]
17.2.
“
Section
198B(5) provides that a fixed-term contract ”converts”
after three months into an indefinite contract (unless
any of the
justifications are present), and the employee becomes for all intents
and purposes permanent. Terminating a fixed-term
contract to
avoid the operation of this provision constitutes a dismissal. When
an employee had been dismissed the remedies
are provided for in the
LRA. Apart from the term “application” there is no
remedy prescribed in section 198B
read with section 198D of the LRA.
Taking a purposeful approach to the interpretation of the
section it would be absurd to
simply declare an employee to be
indefinitely employed and leave it there. The employee will
then have to institute new proceedings.
This goes contrary to
the principle that employment issues are to be dealt with as quickly
as possible with the least legal
formalities. Whereas I have
sympathy for the poor finances of the respondent, I agree with Mr Du
Preez that employees cannot
be made to suffer because of
mismanagement. Examples of this are in the public domain via
newspaper reports and have not
been denied by the respondent”.
[6]
17.3.
“
The
documents Ms Nicholas presented do not constitute proof on a balance
of probabilities of the Respondent’s financial woes.
I
cannot accept the factual correctness thereof because the documents
come from a slide-show, no source documents were presented,
and the
author(s) were not called as witnesses. One is surprised that
the respondent had not taken any steps to negotiate
this issue with
the applicants and their representatives, particularly about the
pension fund and bonus issues. If there
had been such serious
financial constraints it would simply make sense for the Respondent
to come to an agreement with the Applicants.
I have no
discretion and I do not agree with Ms Nicholas’ submission.
Once an employee is deemed to have become
indefinitely employed
they are from that date onwards entitled to be treated on par with
their colleagues. Failure to do
this would constitute an unfair
labour practice or could even amount to discrimination. Therefore,
guidance in what the remedy
is, is to be found in the remedies
available in unfair labour practice cases and discrimination cases.
Section 198B(8)(a)
also provides guidance related to “equal”
treatment so to speak”.
[7]
17.4.
“
It
was common cause that from 1 April 2015 the applicants had become
indefinitely employed or “permanent”. That is the
date
from which they are entitled not to be treated less favourably than
their counterparts who had been “permanent”
at that date.
That is therefore also the date the Applicants had become
entitled to be members of the Respondent’s
provident fund and
to receive bonus payments. I agree that they do not have the benefit
of the cushion of a provident fund, should
anything happen to an
applicant’s employment. It is up to each applicant what
they do with the funds representing past
provident fund
contributions. They are also entitled to bonuses the did not
receive previously [sic]. This is to be both
with retrospective and
future effect. Thus, the applicant will from now on have to
join the provident fund and they will
be entitled to bonus payments,
when these are made. The respondent has not shown a justifiable
reason for the difference
in treatment”.
[8]
17.5.
“
The
costs to make such a retrospective order is huge in this case and
bearing in mind that there might well be cash constraints,
the
Respondent will be ordered to pay the compensation in three equal
instalments to each Applicant and to immediately take the
necessary
steps to ensure that each applicant completes the necessary
documentation to become members of the Respondent’s
provident
fund. At the time when bonus payments are made, each applicant
must also be paid the bonus if bonusses are paid”.
[9]
17.6.
“
I
used the spreadsheets presented to me to make the calculations and
determine the total compensation. As I understand from
the
submissions the spreadsheet shows the difference for each year since
each applicant became indefinitely employed and these
amounts need to
be added for each applicant to see the total due to such applicant.
According to the Respondent’s calculations
this total
difference amounts to R35 455 140,00 and on the
spreadsheet, it is broken down into the different years, showing
for
each year the difference in the remuneration of the particular
applicant compared to the counterpart”.
[10]
17.7.
“
The employment of the 166 applicants
(as per the attached list) is in terms of Section 198B(5) of the
Labour Relation Act 66 of
1995 as amended deemed to be of indefinite
duration since 1 April 2015”.
17.8.
“
Each Applicant is entitled to become
a member of the Respondent’s provident fund and the Respondent
must immediately take
the necessary steps to ensure that by 30 August
2018 each Applicant has completed the necessary forms to become a
member of the
provident fund and to ensure that these documents are
properly processed”.
17.9.
“
Each Applicant must henceforth also
be paid a bonus when the Respondent pays bonusses”.
17.10.
“
The Respondent, Passenger Road
Agency of South Africa Soc t/a Metrorail Western Cape, is ordered to
pay to each applicant, (details
reflected on the spreadsheet) the
amounts indicated on the attached spreadsheet in the column “amounts
due to each applicant”.
The total for each applicant is
to be divided by three and three equal payments are to be made to
each applicant; the first
by 31 July 2018, the second by 31 August
2018 and the third by 30 September 2018. Should any instalment
not be paid by the
date ordered, the full outstanding balance shall
become due and payable without any notice having to be given to the
Respondent”.
17.11.
“
The total to be paid to all the
applicants amounts to R35 455 140.00”.
Grounds
of Review
[18]
In total PRASA has raised six grounds of
review which are summarised below.
First
ground of review – jurisdiction
[19]
The Commissioner’s decision to
dismiss the point
in limine
that the settlement agreement precluded the employees from further
pursuing the matter before the CCMA is wrong in law and constitutes
an irregularity in the conduct of the proceedings and exceeded the
arbitrator’s powers.
[20]
According to PRASA, the dispute about the
status of the fixed-term contract workers had been referred to the
CCMA and subsequently
settled in terms of the settlement agreement.
The settlement agreement clearly deals with the question of the
status of the
fixed-term contract workers in terms of which PRASA was
required to address their situation in order to become compliant with
the
LRA. While PRASA now concedes that the settlement agreement
does not specify the issue of benefits separately, it is because
the
settlement agreement sets out a process in the form of a study, which
will start off with identifying the affected fixed-term
contract
employees and determine who should become permanent. Implicit
in the settlement agreement is that such employment
would contain all
the necessary terms, including benefits etc.
[21]
If there was any complaint that PRASA had
not complied with the settlement agreement, this ought to have been
dealt with in terms
of the PRASA Bargaining Forum Constitution as it
was a dispute about the interpretation or application of the
settlement agreement.
Such a dispute would be referred to the
CCMA or by agreement between the parties to private arbitration.
[22]
As the employees were members of the trade
unions, they were bound by the terms of the settlement agreement.
Second
ground of review - jurisdiction
[23]
As the settlement agreement had been made
an order of the Labour Court, if the employees believed that PRASA
was not compliant with
its terms, then PRASA was potentially in
contempt of the Labour Court’s order and the appropriate remedy
available to the
employees was a contempt application to the Labour
Court.
[24]
The arbitrator did not have jurisdiction to
deal with the dispute afresh in these circumstances.
Third
ground of review - the arbitrator misconceived the nature of the
enquiry
[25]
According to PRASA, both referrals, the
certificates of outcome and the facts in the stated case make it
clear that the dispute
was about the status of the employees, i.e.
whether they should be deemed to have been employed on an indefinite
basis after 1
April 2015 pursuant to the provisions of section 198B
of the LRA.
[26]
As the arbitrator ruled that the dispute
was about the interpretation of section 198B of the LRA, it ought to
have been referred
to the CCMA for conciliation within six months
after 1 April 2015 when PRASA did not declare them to be permanently
employed and
did not treat them as being permanently employed.
Application for condonation was required in the circumstances.
In
the absence of condonation, the CCMA did not have
jurisdiction to arbitrate the dispute.
Fourth
ground of review – an error of law: section 198B(8)(a)
[27]
According
to the arbitrator, once fixed-term contract workers are declared to
be permanent or deemed to be permanent, they are from
that date
onwards entitled to be treated on par with their colleagues. Failure
to do so would constitute an unfair labour
practice or could even
amount to discrimination”.
[11]
[28]
The arbitrator conflated the status of
employees covered by section198B, with employees covered by section
198B(8)(a). The
latter deals with employees who remain on fixed
term contracts for longer than three months and provides that they
must not be
treated less favourably than an employee employed on a
permanent basis performing the same or similar work in the absence of
a
justifiable reason.
Fifth
ground of review – the arbitrator treated the matter as an
unfair labour practice
[29]
The employees sought compensation for being
treated differently since 1 April 2015 and the arbitrator believed
that he had the power
to make an award for payment of such
compensation backdated to 1 April 2015.
[30]
According to PRASA, there is no legal basis
for this and certainly not one to be found in either section 198B or
section 198D of
the LRA. It is PRASA’s submission that
section 198D of the LRA provides for dispute resolution in relation
to the interpretation
or application of
inter
alia
, section 198B. This has
nothing to do with unfair labour practices or unfair discrimination
disputes which are subject to
their own dispute resolution
processes. Section 198B does not refer to the remedial powers
that a Commissioner has.
[31]
The arbitrator erroneously relied on
section 198B(8)(a) of the LRA which requires that employees employed
on a fixed term contract
for longer than three months must not be
treated less
favourably
than an employee
employed on a permanent basis performing the same or similar work,
without justification.
[32]
Even if the arbitrator had powers to make a
back-dated award, he ought to have refused to do so on the basis that
the employees
had waited almost three years before they made the
referral to the CCMA. The employees were acting in a dilatory manner
without
any explanation being furnished for the delay.
Sixth
ground of review- irregularity in the conduct of proceedings
[33]
The arbitrator ordered PRASA to pay the
employees directly and not to make a payment to the provident fund in
respect of the contributions
which he found ought to have been made.
[34]
According to PRASA, this amounts to making
an order for compensation as opposed to directing the applicants to
treat the employees
the same as other permanent employees by making
the provident fund contributions that it should have made. Nowhere in
section 198D
does a Commissioner have the power to make compensatory
awards as a form of ancillary relief after a declaration for
indefinite
employment has been made. The arbitrator exceeded
his powers and the award is thus reviewable on this basis as well.
Analysis
[35]
I will not deal with all the grounds of
review as it is not necessary for me to do so given the conclusions
that I reach below.
Lack
of jurisdiction – settlement agreement
[36]
In my view the arbitrator lacked
jurisdiction to deal with the dispute. In the settlement agreement
the parties agreed that the
way in which they would resolve the
fixed-term contract issue was to commission a study which would
verify the number of current
fixed-term contract employees to be
absorbed into PRASA in terms of an agreed criteria. This exercise had
to be completed within
a three month period of the signing of the
agreement (end June 2016).
[37]
The first part of the exercise was
therefore to establish how many fixed-term employees needed to be
absorbed as permanent employees.
The second part dealt with the
criteria for the absorption. This would have to include the terms and
conditions on which these
employees would be made permanent and
probably the timing thereof.
[38]
What was specifically agreed to, for almost
immediate implementation, was the extension of the death benefit to
include fixed-term
contract employees. This is an indication
that the settlement agreement envisaged dealing with the benefits to
which the
employees would be entitled to upon absorption.
[39]
It
is telling that the trade unions were not party to the employees’
dispute at the CCMA. Rather the employees elected
to appoint
attorneys to take the matter up on their behalf. This took place
within close proximity of the unions’ failed
contempt of court
application in this court. The employees may well have been
disillusioned with their unions’ handling
of the matter and
decided to pursue their own relief outside of the collectively
bargained process.
[12]
[40]
Even if the employees parted ways with
their unions, they remained bound by the settlement agreement by
virtue of section 23 of
the LRA.
[41]
There can also be no doubt that the dispute
was one about the interpretation and application of the settlement
agreement. As I have
mentioned, the settlement agreement provided for
a process which was designed to lead to fixed-term contract employees
being absorbed
into PRASA as permanent employees. Agreeing to
the terms and conditions applicable to these employees had to be part
and
parcel of this process. I say this because, in the absence
of any collective agreement to the contrary, there was nothing
prohibiting the parties from agreeing to a gradual or phased
implementation of benefits to newly converted permanent employees,
or
even to lesser benefits.
[42]
The arbitrator’s mind was closed to
this possibility because he interpreted section 198B to mean that
once the employees were
deemed to be permanent they were
automatically entitled to be treated equally to their permanent
colleagues. In this regard,
at paragraph 18 of his award, the
arbitrator states that “
Once an
employee is deemed to have become indefinitely employed they are from
that date onwards entitled to be treated on par with
their
colleagues
.”
[43]
He continues with this line of thinking in
paragraph 19 where he states that
“
It
was common cause that from 1 April 2015 the applicants had become
indefinitely employed or “permanent”. That
is the
date from which they are entitled not to be treated less favourably
than their counterparts who had been “permanent”
at that
date. That is therefore also the date the Applicants had become
entitled to be members of the Respondent’s
provident fund and
to receive bonus payments.
[44]
In
any event, even if it was not clear from the settlement agreement
that benefits such as provident fund and bonusses would be
covered,
this in itself would have to be resolved through an interpretation
and application dispute. In this regard, what
the arbitrator
was confronted with at the commencement of the arbitration on 25
April 2018 was, on the one hand, PRASA arguing
that the dispute
before him was covered by the terms of the settlement agreement and
on the other hand, the employees argued that
that the dispute before
the arbitrator was not covered by the settlement agreement. In
HOSPERSA
obo Tshambi v Department of Health, KwaZulu –Natal
[13]
the court stated that:
“
What
is a ‘dispute’ per se, and how one is to recognise it,
demands scrutiny. Logically, a dispute requires, at minimum,
a
difference of opinion about a question. A dispute about the
interpretation of a collective agreement requires, at minimum, a
difference of opinion about what a provision of the agreement means.
A dispute about the application of a collective agreement
requires,
at minimum, a difference of opinion about whether it can be invoked.
[45]
This is exactly what confronted the
arbitrator and he should not have entertained the dispute, by, in
effect, determining an interpretation
and application dispute.
The matter was not referred to him as an interpretation and
application dispute and he had no jurisdiction
to deal with it as
such. The parties should have been told to resolve their
interpretation and application dispute with reference
to the dispute
resolution provisions in the settlement agreement.
[46]
In addition to
the above, clause 4 of the settlement agreement provides in
unambiguous terms that it is in full and final settlement
of all
disputes and all perceived disputes between the parties whether
arising in contract, delict or statute. A dispute
about an
entitlement to benefits is a dispute arising out of statute, i.e. the
LRA. Once again, if this interpretation was
contentious the
employees should have sought to resolve the dispute with reference to
the dispute resolution clause in the settlement
agreement.
[47]
In the
circumstances the review must succeed on this basis alone.
However, even if I am wrong in this conclusion, the review
must
succeed for the further reasons below.
Section
198B
[48]
While
there are circumstances in which the use of fixed-term contracts are
justified, such contracts have often been abused by employers
to
avoid making indefinite appointments and in the process denying
employees statutory and constitutional protections. The affected
employees are thus exposed to insecurity and vulnerability and often
experience disparity in remuneration, benefits and terms and
conditions of employment when compared with their counterparts
employed on an indefinite basis.
[14]
[49]
Section
198 B was introduced into our law as part of the amendments which
came into effect on 1 January 2015. The introduction
was aimed
at protecting non-standard employees, including fixed-term
employees.
[15]
The
thrust of the protection is that an employer may employ an employee
on a fixed-term contract or successive fixed- term
contracts of
longer than three months only if the nature of the work is of a
limited or definite duration or the employer can demonstrate
any
other justifiable reason for fixing the term of the contract.
[16]
[50]
Section
198B(5) provides that “
Employment
in terms of a fixed-term contract concluded or renewed in
contravention of subsection (3) is deemed to be of indefinite
duration.”
In
National
Union of Metalworkers of South Africa obo members v Transnet SOC Ltd
and others
[17]
the
Labour
Appeal Court held that:
“…
in
order to find that the contracts are of indefinite duration, it must
be shown that they were, at least, in contravention of s198B(3).
That
subsection does not outlaw fixed-term contracts, but seeks to
regulate their conclusion. It, in essence, provides that a fixed
term
contract, may be entered into with the employee, to whom s198B
applies, for a period in excess of three months, provided certain
conditions are met, namely: (a) the nature of the work for which the
employee is employed is of a limited or definite duration;
or (b) the
employer can demonstrate any other justifiable reason for fixing the
term of the contract.”
[51]
In
the case before me, at the commencement of the arbitration, PRASA
conceded that the employees were deemed to be permanent employees
in
terms of section 198B(5) of the LRA. There was therefore no
need for the arbitrator to make any finding in this regard.
In
Masoga
and Another v Pick n Pay Retailers (Pty) Ltd and Others
[18]
the Labour Appeal Court, the underlying dispute turned around
sections 198B and D and possibly section 198A of the LRA.
In
that case, the legal representative for the respondents conceded in
his opening address that the appellants were employees of
one of the
respondents. According to the LAC, after it was confirmed that
the appellants were permanent employees that should
have been the end
of the matter.
[52]
Section 198B is concerned with fixed-term
contracts of employees earning below the earnings threshold. It has
no application to
employees employed on a permanent basis. Therefore,
once it is conceded by an employer or determined by an arbitrator
that employees
are employed on a permanent basis, section 198B has no
application to such employees. If these employees believe that
they
are being treated less favourably than their counterparts in
respect of benefits, for example, they can then simply refer an
unfair
labour practice dispute. This is the same route which
any other permanent employee would have to follow.
[53]
Section 198D(1) deals with disputes. It
provides that “
any dispute arising
from the interpretation or application of sections 198A, 198B and
198C may be referred to the Commission or
a bargaining council with
jurisdiction for conciliation and, if not resolved, to arbitration.
”
[54]
Disputes under this section will typically
relate to whether or not an employee is employed on an indefinite
basis. It is
in essence a declaration of an employee’s
status. It will also cover disputes by employees flowing from section
198B (8)
which provides that:
“
An
employee employed in terms of a fixed-term contract for longer than
three months must not be treated less favourably than an
employee
employed on a permanent basis performing the same or similar work,
unless there is a justifiable reason for different
treatment.”
[55]
Here, the complaint will be that a
fixed-term employee is being treated less favourably than an employee
employed on a permanent
basis performing the same or similar work
without there being a justifiable reason for the different treatment.
Section 198D (2)
sets out the circumstances in which different
treatment may be justifiable, which includes considerations such as
seniority, experience,
length of service, merit, etc. Section 198D
offers no other relief beyond this, and as stated above, in any
event, is not concerned
with the equal treatment or benefits of
permanent employees.
[56]
For the
reasons stated above the arbitrator could not, on the strength of
section 198B, grant substantive relief to the employees
in terms of
remuneration and benefits. In so doing he committed an error of
law and/or exceeded his powers and the award
must be reviewed and set
aside on this basis.
[57]
The employees
however also argue that the relief granted was nonetheless competent,
in that, the arbitrator was entitled to deal
with the matter as an
unfair labour practice. I deal with this argument below.
Unfair
labour practice
[58]
Mr Bosch, who
appeared on behalf of the employees, submitted that the employees’
representative, at the arbitration, indicated
that the dispute
related to an alleged unfair labour practice.
[59]
Mr Ackermann,
who appeared on behalf of PRASA, argued that the arbitrator was not
permitted to deal with the matter as an unfair
labour practice as it
was not conciliated as such and that it is clear from the evidence
that the parties agreed to arbitrate a
section 198B dispute. He
said this for the following reasons:
59.1.
The first
dispute referred to the conciliation (Mdluli and 14 others) was a
dismissal dispute in terms of section 186(1)(b) of the
LRA relating
to the non-renewal of fixed-term contracts. This was clarified
in the certificate of outcome as being a section
198B dispute. The
conciliating Commissioner therefore correctly determined the real
dispute before him, as confirmed by the parties
in the stated case as
relating to section 198B. There is no mention of an unfair
labour practice.
59.2.
The second
dispute referred to conciliation (Mhlakela and 152 others) was also
referred as a section 186(1)(b) dispute and recorded
as such in the
certificate of outcome. This accords with the issue of permanent
employment, and the only sensible interpretation
of what transpired
at conciliation is that it related to section 198B.
59.3.
The evidence
is clear that what was conciliated was a section 198B dispute. This
is what the arbitrator stated in paragraphs
4 and 5 of his award.
[60]
The
Constitutional Court in
September
and Others v CMI Business Enterprise CC
[19]
confirmed the general rule as set out in
National
Union of Metal Workers of South Africa v Driveline
[20]
,
that in order to determine what was conciliated, one must look at the
7.11 CCMA form, and the certificate of outcome. In the
September
matter the Constitutional Court came to the aid of employees who had
loosely referred what they termed a ‘discrimination
dispute’.
The actual dispute was a constructive dismissal dispute. The
Constitutional Court found that one can
look at extraneous evidence
to determine what the actual dispute was.
[61]
The
arbitration took place on 28 April 2018 and 8 July 2018. At the
first sitting, only the preliminary point relating to
the CCMA’s
jurisdiction to deal with the dispute in light of the settlement
agreement, was dealt with. An Advocate
Viljoen represented the
employees on this occasion. In his address to the arbitrator he
mentions that the matter was “
originally
referred as a section 186(2)(a). It deals with unfair labour
practices.”
[21]
He later also says that “
I
would submit that the CCMA does have jurisdiction to entertain the
dispute in terms of Section 186(2)(a), and that the settlement
agreement is not a bar to the CCMA’s jurisdiction.”
[22]
He is then asked by the arbitrator if the matter should proceed by
way of an unfair labour practice or in terms of section
198, to which
he responds that it should be heard under section 186(2)(a), but that
he also requests a ruling in terms of section
198B(3) and (5).
After the arbitrator handed down his ruling on the
in
limine
issue, the matter was postponed to 8 July 2018.
[62]
When
the matter resumed on 8 July 2018, the employees had a new
representative, an advocate Du Preez. At no stage during the
proceedings does he refer to an unfair labour practice dispute.
On the contrary, he states that as PRASA has conceded that
the
employees are permanent, the onus is on the employer to provide
reasons why the employees are being treated differently and
contrary
to section 198B(8)(a).
[23]
He
later continues by submitting that given that the employees have been
employed, contrary to the provisions of section 198B(5),
there can be
no reason why they should be treated less favourably than their
counterparts.
[24]
[63]
In the Mdluli referral, which was completed
with the assistance of their attorneys at the time, they indicate (by
ticking the relevant
box) that the nature of the dispute was an
unfair labour practice. The facts of the dispute are however
summarised as “
Successive fixed
term contracts followed by continued employment with no contract and
reasonable expectation of a permanent position.
Section 186(1)(b) of
the LRA.”
The outcome
sought from the conciliation is recorded as “
Compensation
and permanent position.”
On
the certificate of outcome, dated 6 March 2018, the commissioner
records the following in respect of the dispute – “
Incorrect
nature of dispute that is S186(2)(a) instead of S198B”
.
[64]
It is clear that the commissioner who was
appointed to conciliate the dispute identified the true dispute as
one relating to fixed-term
contracts as opposed to unfair labour
practices. This also appears from the Conciliation Outcome
Report prepared by the Commissioner
on the same day that the
certificate of outcome was issued. In the report the
commissioner indicates the issue in dispute
as being “
S198B
permanently on contract the want to be appointed permanently with
benefits (sic).”
The
following day, on 7 Mach 2018, the employees’ attorneys refer
the matter to arbitration. Consistent with
the certificate of
outcome and Conciliation Outcome Report, they now refer to the issue
in dispute as relating to section 198B.
The desired outcome of
the arbitration is recorded as “
to
be appointed permanently and be compensated plus benefits.
”
[65]
In the Mhlakela referral, which was also
completed with the assistance of their attorneys at the time, they
indicate (by ticking
the relevant box) that the nature of the dispute
was an unfair labour practice. The facts of the dispute are
however summarised
as “
successive
fixed term contracts followed by continued employment with no
contract and reasonable expectation of permanent position.
Section 186(1)(b) of LRA.”
The
outcome sought from the conciliation is recorded as “
fixed
term contracts be made permanent and maximum compensation.”
On
the certificate of outcome, dated 11 April 2018, the commissioner
records the following in respect of the dispute – “
186
1 b Fixed term contract expectation of permanency.”
In the Conciliation Outcome Report, prepared by the Commissioner on
the same day that the certificate of outcome was issued, the
commissioner indicates the issue in dispute as being “
Fixed
term contracts have been renewed expectation of permanency”.
Two days later, on 13 April 2018,
the employees’ attorneys refer the matter to arbitration.
Despite what was recorded in the
certificate of outcome and
Conciliation Outcome Report, they now refer to the issue in dispute
as relating to section 198B. The
desired outcome of the arbitration
is recorded as “
Permanent
positions and maximum compensation.
”
[66]
As indicated earlier in this judgment, the
two disputes were subsequently consolidated on the basis that they
were substantially
similar in nature.
[67]
From the above it is clear that the dispute
was never dealt with as an unfair labour practice, either at
conciliation or at arbitration.
The submission made by Advocate
Viljoen on behalf of the employees, at the first sitting of the
arbitration on 28 April 2018, that
the matter was “
originally
referred as a section 186(2)(a) and deals with unfair labour
practices”
is not correct
.
Nor was his submission that “
the
CCMA does have jurisdiction to entertain the dispute in terms of
Section 186(2)(a)”.
[68]
To the extent that the arbitrator dealt
with the matter on the basis that he was dealing with an unfair
labour practice, he committed
a gross irregularity. In any
event, if the true dispute referred to conciliation was not an unfair
labour practice dispute
then the arbitrator had no jurisdiction to
deal with the dispute as such.
[69]
Even
if I am wrong in the above conclusions, there is another compelling
reason why the arbitrator could not resolve the matter
on the basis
that it was an unfair labour practice dispute. This is because
he did not deal with the matter as if it was
an unfair labour
practice. In
Apollo
Tyres SA (Pty) Ltd v CCMA
[25]
the
court reasoned that the LRA’s prohibition of unfair labour
practices relating to benefits mainly concerns the use (or
misuse) of
discretionary power by an employer in relation to a benefit scheme.
[70]
One
of the main elements a commissioner should consider when faced with a
dispute over the exercise of an employer’s discretion
is
whether that discretion was exercised fairly. Common elements
indicating the unfair exercise of discretion are whether the exercise
of discretion fails to meet an objective standard or is arbitrary,
capricious or inconsistent, whether negligent or intended.
[26]
[71]
In
Solidarity
obo Oelofse v Armscor (SOC) Ltd & Others
[27]
this
court considered the reasons put forward by the employer in deciding
not to pay a benefit. The court further indicated
that a point
of departure was to establish why the employer decided not to pay the
benefit and thereafter to consider the reasons
provided in light of
the factors outlined in
Apollo
supra
(i.e. whether the reason put forward by the employer constitutes
arbitrary, capricious or inconsistent conduct). According
to
the court it “
takes
more than mere disagreement to upset the exercise of discretion
”
by an employer.
[28]
[72]
Further,
where an applicant relies on inconsistency the onus is on that
applicant to prove that inconsistency exists and “
the
case for inconsistency must be made out in sufficient particularity,
identifying the other employees involved, so as to enable
the
employer to provide a proper answer to it. And even then, should it
be shown that employees have been treated differently,
a number of
further requirements must still be satisfied in order to successfully
make out an inconsistency case. These are first,
that a like for like
comparison must be conducted. Even if a like for like comparison
points to possible inconsistency, it must
then still be shown that
the employer’s conduct in treating employees differently was
not motivated by arbitrariness, mala
fides, capricious conduct or a
discriminating management policy”.
[29]
[73]
The point is that in this matter the
arbitrator did not approach the matter as an unfair labour practice
and it therefore cannot
be correct that the relief which he granted
was competent under the unfair labour practice provisions of the LRA.
[74]
As far as costs are concerned,
the
underlying issue relating to the employees’ indefinite
employment and the benefits which may flow from that, is clearly
an
important issue for them. They were also not assisted by their
trade union in the CCMA or in this court in their quest
.
I can therefore see no basis in law or fairness to
burden the employees with a cost order.
[75]
In the circumstances the following order is
made:
Order
1.
Condonation
for the late filing of the review is granted.
2.
The award
issued by the second respondent on 17 July 2018 under case numbers
WECT2826-18 and WECT3271-18 is hereby reviewed and
set aside.
3.
There is no
order as to costs.
_________________
BN.
Conradie
Acting
Judge of the Labour Court of South Africa
Appearances:
For
the applicants:
Advocate L Ackermann
Instructed
by:
Maserumule Attorneys
For
the third to 167
th
respondents:
Advocate CS Bosch
Instructed
by:
Marais Müller Hendricks Attorneys.
[1]
The
last fixed-term contract expired on 31 March 2015.
[2]
The
date is unknown as the judgment was not part of the record.
[3]
No. 66 of 1995, as amended.
[4]
An
order which made the settlement agreement an order of court.
[5]
Paragraph
16 of the Arbitration Award.
[6]
Paragraph
17 of the Arbitration Award.
[7]
Paragraph
18 of the Arbitration Award.
[8]
Paragraph
19 of the Arbitration Award.
[9]
Paragraph
20 of the Arbitration Award.
[10]
Paragraph
21 of the Arbitration Award.
[11]
Paragraph
18 of the Arbitration Award.
[12]
The
settlement agreement was signed during April 2016. An update on the
settlement agreement was prepared in November 2017. The
referrals to
the CCMA were done during February 2018.
[13]
[2016]
7 BLLR 649
(LAC) at para 17.
[14]
Du
Toit
et
al Labour Relations Law: A Comprehensive Guide
(6
th
edition) at p 95.
[15]
See:
The Memorandum of Objects on Labour Relations Amendment Bill, 2012
at p. 30 clause 36.
[16]
Section
198B(3).
[17]
[2018]
5 BLLR 488
(LAC) at para 23.
[18]
Unreported
judgment. (JA14/2018)
[2019] ZALAC 59
(12 September 2019).
[19]
(2018)
39 ILJ 987 (CC).
[20]
2000
(4) SA 645 (LAC).
[21]
At
page 11 of the transcript, paragraph 2.
[22]
At
page 15 of the transcript, paragraphs 12-14.
[23]
At
page 27 of the transcript, paragraphs 5-12.
[24]
At
page 44 of the transcript, paragraphs 10-18.
[25]
[2013]
5 BLLR 434 (LAC).
[26]
At
para 53.
[27]
(JR2004/15)
[2018] ZALCJHB 87 (21 February 2018).
[28]
At
para 39.
[29]
At
para 51.