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[2020] ZALCJHB 30
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IMATU obo Espach v Polokwane Local Municipality (J1171/17) [2020] ZALCJHB 30 (6 February 2020)
the
labour court of South Africa, JOHANNESBURG
Not
Reportable
case
no:
J
1171/17
In
the matter between:
IMATU
OBO C ESPACH
Applicant
and
POLOKWANE
LOCAL
MUNICIPALITY
Respondent
Heard
:
30 January 2020
Delivered
:
06 February 2020
Summary:
Application to make a settlement agreement an order of Court –
Legality of the Agreement – the settled dispute must be
one
that a party has acquired the
right
to refer to
arbitration or to the Labour Court. The word right denotes that the
dispute must have been referred to conciliation.
However
Fleet
Africa
followed. Held: (1) The application refused.
(2) There is no order as to costs.
JUDGMENT
MOSHOANA,
J
Introduction
[1]
This is an
application brought in terms of section 158 (1) (c) of the Labour
Relations Act
[1]
(LRA). The
applicant seeks to make a “settlement agreement”
allegedly reached on 4 April 2017 an order of this Court.
The
application is opposed, however, the answering affidavit was filed
outside the prescribed time period. In terms of the Practice
Manual,
the respondent was not required to seek condonation for the late
filling, however, the applicant objected to the late delivery
of the
answering affidavit. In terms of the Practice Manual, it is only when
there is an objection, that a party is prompted to
seek condonation.
Indeed, the applicant objected, as such the respondent was prompted
to apply for condonation for the late delivery
of the answering
affidavit. The condonation application stands opposed.
[2]
At the hearing of the application Mr De Beer, a Union official
appearing
for the applicant indicated that there was no point to
oppose the condonation application. This was after this Court pointed
out
that the respondent is nonetheless entitled to raise a point of
law, even if the Court were to refuse the condonation application.
Thus, in this judgment, the condonation application would not be
discussed any further. This judgment would depart from the premise
that the late filing of the answering affidavit is condoned. The
central issue sharply raised by the respondent implicated the
jurisdiction of this Court. The issue being that the alleged
settlement agreement is not valid. This Court is not sceptered to
make an invalid settlement agreement an order of itself. After
hearing submissions on this central issue, this Court reserved its
judgment.
Background
facts
[3]
The facts relevant to the central issue are largely common cause. In
order
to appreciate the context of this dispute, it is appropriate to
mention that there is in place a collective agreement for the period
2015 to 2020. The Main Collective Agreement (MCA), as it is known,
had in it a Grievance Procedure. The procedure was also deemed
to be
a condition of service. In terms of clause 13.1.3, the following
obtained:
“
The objective of
this grievance procedure is to ensure substantive and procedural
fairness
to resolve problems
as quickly and as close to their
source as possible and
to deal with conflict
through
procedural and
consensual means
.”
[4]
Against that background, on or about 13 May 2015, one Coenie Espach
(Espach),
an employee of the respondent, lodged a grievance in line
with the Grievance Procedure. The employee described her problem in
the
following manner: “
Long outstanding promises of post
Upgrading/Acting
”. The desired solution to the problem was
identified as follows: “
That the longstanding promises to me
be fulfilled”
. In the grievance form Espach stated the
following: “
Despite all the previous promises, e-mails,
reports, meetings, grievance of post upgrading and current promises
of acting, no action
take (sic) place. During the hearing of the
grievance, full report will be submitted”
.
[5]
As required by the Grievance Procedure, the problem as identified by
Espach
travelled through three stages. At the last stage, and on 04
April 2017, the following emerged, which the applicant terms a
settlement
agreement:
“
There was a
meeting on the 17
th
January 2017 in relation to the
grievance hearing herein. The employee was represented by Mr. M
Malinga from IMATU and there was
no appearance from HR Division. Mr
Pine Pienaar the Manager in the Electrical department (SBU) attended
and testified. There
was only one version of the grievance
and
it was the submission of the employee – union, was not
challenged.
In the premise (sic) the employee’s post must be
upgraded to post level 5 with all existing benefits and the position
be changed
accordingly in the Electrical SBU organogram.
Further
that the grievance lodged by the
employee is upheld
and that
he be placed accordingly with immediate effect”.
[6]
It must be mentioned that at this step, the Grievance Procedure
provides
the following: Clause 13.4.2, “
the Municipal
Manager or his nominee shall hear details of the grievance including
proposals to resolve the issue and shall
endeavour to reach
an agreed outcome
within ten (10) days of the referral in
terms of clause 13.4.1 above
”.
[7]
Owing to the fact that Espach was not upgraded as upheld, the
applicant
on 17 April 2017, addressed a letter to the Acting
Municipal Manager of the respondent, demanding the upgrade. The
demand was not
met. As a result, the applicant launched the present
application in May 2017. As pointed out above, the application stands
opposed.
Evaluation
[8]
In matters
involving making a settlement agreement an order of Court, this Court
retains a discretion to be exercised judiciously.
Of importance is
whether the agreement is one that is valid and that the other party
to it is refusing to comply. It is common
cause in this matter that
the respondent is refusing to comply. The contention of the
respondent is that there was no settlement
agreement in that Mr
Maleta, who signed as the nominee of the Municipal Manager made a
ruling, which ruling is invalid. There is
merit in a submission that
there was a ruling as opposed to any agreement. From what the
applicant terms a settlement agreement
emerges statements like “
one
version
”
and
upholding
of a grievance. All of this are characteristics of a ruling. The
approach taken by Maleta was more adjudicative than endeavouring
to
reach an agreed outcome as commanded by clause 13.4.2 of the
Grievance Procedure. The role of Maleta was that of being the
chairperson of a grievance hearing
[2]
.
In arriving at his ruling he took into account one version, which is
that of Espach.
[9]
In terms of clause 13.4.3, the nominee is obliged to inform an
employee
in writing of the outcome of the hearing. The plain meaning
thereof is that the product of step 3 is a written outcome of the
hearing.
It is indeed possible that in this step an agreement may be
reached. Clause 13.4.2 does contemplate an agreed outcome. However,
on the facts of this case, there can never be an agreed outcome in
the absence of the other party. Properly defined, the outcome
in this
matter was more a default hearing outcome. This prompts me to
consider the question, what is an agreement, which question
I now
turn to.
What
is an agreement?
[10]
In law an agreement comes into existence when there is an offer and
acceptance. There must
be a meeting of minds of the two contracting
parties. As to an offer, a person is said to make an offer when he or
she puts forward
a proposal with the intention that by its mere
acceptance, without more, a contract should be formed. As pointed out
above an offer
may be made out of a grievance process, which by its
mere acceptance a contract should be formed. The question is, did
Espach make
an offer? In Mr De Beer’s submission, when Espach
lodged a grievance, he made an offer to be upgraded and such an offer
was
accepted by the nominee of the Municipal Manager. I cannot agree
that an offer was accepted.
[11]
The
grievance procedure exists to resolve problems in a consensual
manner. Thus, Espach had a problem and did not strictly speaking
make
an offer. However, without being unduly semantical, when regard is
had to the desired solution to the problem, it can be said
that the
proposal made by Espach is that the long outstanding promises to him
be fulfilled. The promises were those of post upgrade
and acting
[3]
.
Thus, Espach expected the respondent in its capacity as an employer
to fulfil the promises. If the respondent accepted to fulfil
the
alleged promises, then an agreement comes into being. Clearly, there
is no evidence of acceptance to fulfil the alleged promises.
At the
last step, the other party who is to have fulfilled the promises was
absent hence a default outcome.
[12]
Assuming that the desired resolution constituted an offer, which in
my view, it was strictly
speaking not, one must consider what became
of that offer from step 1. There Mr Makoala, the immediate supervisor
of Espach stated
the following: “
There is a need to invite
Training Department in discussion of this
”. Espach recorded
that: “
Again a promise was made and there is no positive
outcomes of the promise
”. What this Court can deduct from
this step is that there was no acceptance of the offer to fulfil the
promises.
[13]
At the
level of step 2, one Pienaar, the Business Unit Manager recorded that
Espach must apply for an Engineering position when
one is
advertised
[4]
. Of importance is
that Espach recorded that he was not totally happy with the outcome.
Again, at this stage no acceptance of the
offer. At the last step, I
have already pointed out that instead of accepting the offer, if the
desired resolution constituted
an offer, Maleta made a default
ruling. Where an offer is not accepted, the general rule is that
there is no contract.
[5]
Thus,
it must follow that an acceptance was never made. Clause 13.4.5
provides that if a grievance has not been resolved to the
satisfaction of the aggrieved party the grievance may be escalated.
In my view a resolution of a grievance may include a refusal
to
accede to the demand. It cannot follow, as argued by Mr De Beer that
because Espach did not escalate the grievance, it was resolved
to a
point of acceptance of his offer. To the extent that it was argued
that Maleta was accepting the offer, his legal authority
to accept
and/or bind the respondent was challenged. It is a cardinal principle
of the law of contract that a simple contractual
offer made to a
specific person can be accepted only by that person; and that,
consequently, a purported acceptance by some other
person is
ineffective and does not bring about the conclusion of a contract.
Corbett JA in
Levin
v Driepork Properties (Pty) Ltd
[6]
,
said amongst others the following:
“
Krause J said…Now
it is trite law that an offer made by one person to another cannot be
accepted by a third…
for simple reason that there was no
intention on the part of the one person to contract with the other
person whatever the subject
matter of the contract may be.”
[14]
It can
never be said that the offer made by Espach was made to Maleta. It
was made to the applicant as a legal entity and in its
capacity as an
employer of Espach. In local government sphere, the Municipal Manger
is empowered by section 55 of the Municipal
Systems Act
[7]
(MSA) to appoint staff. Section 59 of the MSA does allow delegation
of powers. It has not been shown that Maleta was delegated
to accept
on behalf of the Municipal Manager. In terms of section 59 (2) (b) a
delegation must be in writing. Maleta was nothing
else but a nominee
of the Municipal Manager to chair and/or hear the problem. He could
not have been nominated to accept an offer
allegedly made by Espach.
The
doctrine of legality suggests that all actions must be lawful. Maleta
is not empowered to exercise statutory powers of the Municipal
Manager. The constitutional court has already clarified that by not
being challenged, any action, which lacks legality does not
attract
legality by mere failure to challenge it. An argument by De Beer that
the respondent ought to have applied to have the
illegal decision of
Maleta set aside only goes to the fact that the decision as a fact
remains in existence but does not colour
it with any validity in law.
[15]
I arrive at
a conclusion that there was no agreement in law and as such, this
Court cannot exercise its discretionary powers under
section 158 (1)
(c). Where a Court does not have powers, there is no jurisdiction. In
the absence of a valid contract – as
in offer and acceptance as
required by the common law, this Court cannot exercise its statutory
powers
[8]
.
Have
the statutory requirements of section 158 (1A) been met?
[16]
Even if I
had arrived at a conclusion that there was a valid agreement, I still
had to be satisfied that the statutory requirements
of the above
section were met. In terms of the section the settlement must
be one of a dispute that a party has the right
to refer to
arbitration. At first blush, one may wrongly assume, in my view, that
the dispute of Espach is that of an unfair labour
practice. If that
assumption is wrongly made, a party has the right to refer a dispute
involving an unfair labour practice to arbitration.
[9]
[17]
In my view,
a wrong assumption would be occasioned by the failure to have regard
to the provisions of section 186 (2) of the LRA.
If the conduct does
not amount to unfair labour practice as defined, then such a dispute
may not be referred to arbitration. I
have pointed out above that the
grievance procedure is there to deal with problems and conflict. On
the evidence before me the
problem raised by Espach was that he was
promised acting and upgrading of a post. The debate that continued
for the longest of
time was, amongst others, what conduct would
constitute an unfair labour practice in relation to either promotion,
demotion or
provision of benefits. The Labour Court in
Polokwane
Local Municipality v SALGBC and others
[10]
concluded that the grading of a post is a matter of mutual interest
and cannot amount to an unfair labour practice. In
Thiso
and 6 others v Moodley and others
[11]
,
doubt was expressed by the late Steenkamp J that
Polokwane
was still good law in the light of
Apollo
Tyres SA v CCMA
[12]
.
Thiso
concluded that even if there is no right shown an employee may opt to
refer a dispute of unfair labour practice
[13]
.
[18]
My discomfort does not necessarily lie on the question whether there
is or there is no
right but on what constitutes a promotion in
relation to this matter. For a conduct to be unfair, it must be one
to be measured
in relation to either promotion, demotion, training or
provision of benefits. Collins Dictionary defines promotion to mean
advancement
in rank, grade or position. It is clear that the
grievance of Espach has to do with promises with regard to
advancement of grade
– a promotion in plain language. In any
event, the respondent does not dispute that the grievance of Espach
is an unfair
labour practice which should have been referred to the
bargaining council. On that score, the statutory requirements have
been
met. The issue is not whether the dispute was referred but
whether Espach has as a right to refer the dispute about promotion to
arbitration. Certainly at first blush particularly when regard is had
to the nature of the dispute only, Espach had a right to
refer the
alleged promise of advancement of grade to arbitration.
[19]
However, in my view, the provision of the section ought to be
understood from the context
of the LRA as a whole. It is by now
settled law that an employee has a right to refer a dispute to
arbitration or Labour Court
if the dispute was referred to
conciliation or have been conciliated upon. To my mind, the
settlement agreements that the legislature
had in mind in this
section are those of a dispute which had already been referred to
conciliation and not those disputes that
are by only their nature and
character capable of being referred to conciliation. If I am right,
then since Espach had not referred
his dispute to conciliation, then
he had not acquired the right to refer his dispute to arbitration,
even if it may meet the definition
of an unfair labour practice. I
take a view that it was for a reason that the legislature chose to
use the word “right”.
The reason being that in terms of
the LRA a right to refer to arbitration or adjudication can only
arise once a dispute has been
referred to conciliation.
[20] Upon
proper consideration of section 142A of the LRA, the position I am
propagating above emerges.
Section 142A reads thus: -
‘
(1)
The Commission may, by agreement between the parties or on
application by a party, make
a settlement agreement in respect of
any
dispute that has been referred to the Commission
, an arbitration
award.
(2)
For the purposes of subsection (1), a settlement agreement is a
written
agreement in settlement of a dispute that a party has the
right to refer to arbitration or to the Labour Court…’
[21]
It is
curious to note that the legislature chose exactly the same wording
in subsection (2) as in section 158 (1A). The principle
of
interpretation is that same words if employed in the same statute
must be given the same meaning
[14]
.
It is clear from subsection (1) of 142A that a settlement agreement
contemplated is one of a dispute that has been referred to
the
Commission. I may add, if the legislature contemplated any dispute
that an employee has a right to refer, the legislature would
have
expressly stated so. Curiously, the legislature expressly chose
arbitration and referral to the Labour Court to the exclusion
of
referral to conciliation. This, in my view, is occasioned by the fact
that the legislature knew very well that the right to
refer to
arbitration and/or adjudication can only happen once conciliation has
failed. The scheme of the LRA is one that requires
disputes
justiciable under it to be subjected to a specific resolution route.
This point was made clear by Zondo J in a dissenting
judgment in
September
and others v CMI Business Enterprise CC
[15]
when he said:
[114] …The main
judgment and the concurrence were both majority judgments. The main
judgment said:
[31]
On the point crucial to this case, the majority (in
Driveline
)
firmly rejected the proposition that the Labour Court has
jurisdiction to adjudicate a dispute not referred to conciliation
at
al
l. It said that it was –
“
as clear as
daylight that the wording of
section 191 (5) imposes the referral
of a dismissal dispute to conciliation before such dispute can either
be arbitrated or referred
to the Labour Court for adjudication”.
[32]
The reasoning of the
Driveline
majority is, in my, convincing.
Section 191 (5) stipulates one of two preconditions
before the dispute can be
referred to the Labour Court: …If
neither condition is fulfilled,
the statute provides no avenue
through which the employee may bring the dispute to the Labour Court
for adjudication
. As Zondo J shows in his judgment, with which I
concur, this requirement has been deeply rooted in South African
labour-law history
for nearly a century. We should not tamper with it
now.
[22]
Thus I take
a firm view that when the legislature used the word
right
,
it sought to denote a right of referral acquired after the
conciliation referral. Therefore, where the settled dispute was never
referred to conciliation its settlement agreement is not, in my view,
one contemplated in section 158 (1A) of the LRA. The situation
prior
to the insertion of section 158 (1A) compelled the Labour Court in
interpreting the phrase “any settlement agreement”
to
conclude that the settlement must be in relation to a labour matter
justiciable under the LRA
[16]
.
The reason for that was obvious. The function of the Labour Court and
other dispute resolution bodies is to resolve labour disputes
as
commanded and guided by the LRA.
[23]
Despite my
views above, the Labour Appeal Court (LAC) in
Fleet
Africa (Pty) Ltd v Nijs
[17]
took an approach that all what section 158 (1A) requires is the
existence of a dispute that a party has the right to refer to
arbitration or adjudication. The LAC considered only the nature of
the dispute and respectfully did not consider the issue of a
right.
The LAC went on to say:
“
This
was a kind
of dispute
which either party was entitled to refer to the CCMA
(or accredited council) for arbitration
[24]
For the
LAC, it did not matter whether the dispute in question was referred
to conciliation in order to acquire the right to be
referred to
arbitration
[18]
. The
Constitutional Court in
September
supra
,
seem to have endorsed the principle that the Labour Court lacks
jurisdiction over a dispute that has not been referred for
conciliation.
The corollary of this conclusion, in my view, is that a
party who has not referred a dispute for conciliation has no right to
refer
the dispute to the Labour Court. The same corollary applies
mutatis
mutandis
to disputes to be referred to arbitration in terms of the LRA.
[25]
Another
point to be made, which in my view is married to the point I am
making is that once a matter is referred to conciliation,
if a
settlement is arrived at, such would be with the assistance and
guidance of a CCMA or Bargaining Council commissioner and
shall be in
line with the LRA. One is reminded of the findings by Madlanga J in
Eke v
Parsons
[19]
when he stated the law as follows:
‘
[25]
This in no way means that
anything agreed to
by the parties
should be accepted by a court
and made an order of court.
There can only be one that is
competent and proper.
A court
must thus not be mechanical in its adoption of the terms of a
settlement agreement. For an order to
be competent and proper, it
must, in the first place “relate directly or indirectly to an
issue or
lis
between the parties”. Parties
contracting outside of the context of litigation may not approach a
court and ask that their
agreement be made an order of court.’
[26]
Similarly,
in my view, if a party has not referred a dispute for conciliation,
that party has no right to arbitration or adjudication,
thus, an
order of a settlement agreement outside the context of the legislated
dispute resolution mechanism is incompetent and
improper. It does
seem that other considerations, other than the lack of rational basis
to differentiate settlement orders before
and after statutory events,
by the LAC
[20]
, in rejecting
the principles in
Molaba
and others v Emfuleni Local Municipality
[21]
and accepting those in
Bramley
v John Wilde t/a Ellis Allan Engineering and another
[22]
,
was the discouragement of early settlement of disputes, something
which is inimical to the objects of the LRA. I can only conclude
that
the LAC in
Fleet
Africa
was endorsing this consideration. However, I am bound by
Fleet
Africa
and must reluctantly
[23]
conclude that despite the fact that Espach had not referred a dispute
to conciliation, the requirements of section 158 (1A) has
been met.
[27]
Mr De Beer
placed heavy reliance on the judgment
[24]
of the Labour Court under the hand of Acting Justice Laubscher. The
Acting Justice followed the approach in
Fleet
Africa
without reservations. In dealing with the validity of the agreement,
the learned Acting Justice took a view that the desired resolution
by
Nathan was an offer within the contemplation of contract law. The
respondent’s counsel submitted that such a view is wrong.
I
disagree. As pointed out above, out of a grievance process a proposal
may be made. He further submitted that the matter was
distinguishable. I agree. In that matter, the offer, as made by
Nathan, was accepted by Mr Lubbe in his capacity as an acting
municipal
manager. Paragraph 67 of the judgment records that at step
3, Mr Lubbe agreed that the practice was not fair, that all
superintendents
had to be on the same level, and that Mr Nathan had
to be placed on post level 6 with immediate effect. The judgment
further records
that the legal authority of Lubbe was not challenged.
In the matter before me, Mr Lubbe was an acting Municipal Manger at
the time,
however, as at the step 3 process he was not a party to
this process. It appears to be common cause though that Maleta was
assigned
by Lubbe to handle the grievance. The applicant does not
allege that the agreement was concluded by the Municipal Manager
acting
on behalf of the respondent.
[28]
The respondent before me squarely placed the legal authority of
Maleta at issue. It was
pleaded that Maleta knew or reasonably ought
to have known that he had no legal authority to conclusively decide
on Espach’s
grievance. The applicant did not properly answer
this assertion. Instead it stated in reply that Maleta derived
validity and authority
from section 66 (1) (d) of the MSA. I do not
agree. Section 66 obliges a Municipal Manager and Maleta was not a
Municipal Manger.
Subsection (1) (d) obligates a Municipal Manager to
establish a process or mechanism to regularly evaluate staff
establishment
and, if necessary, review the staff establishment and
the remuneration and conditions of service. For reasons set out
above, the
judgment of the Acting Justice is not binding on me with
regard to the issue of the validity of the settlement agreement on
the
basis that the facts are distinguishable.
Conclusions
[29]
In summary, it is my view that no valid agreement came into being,
resultantly, I exercise
my discretion by refusing to make the alleged
settlement agreement an order of this Court.
[30] For
all the above reasons, the
following order is
made:
Order
1.
The application in terms of section 158 (1) (c) of
the LRA is hereby dismissed.
2.
There is no order as to costs.
_______________________
GN Moshoana
Judge
of the Labour Court of South Africa
Appearances:
For
the Applicant
: Mr P De Beer
IMATU Official.
For
the Respondent
: Advocate K Ramarumo
Instructed
by
: Popela Maake Attorneys, Johannesburg
[1]
No. 66 of 1995, as amended.
[2]
Clause 13, 4.2 requires him as the nominee of the Municipal Manager
to hear details of the problem as it were and the proposals
to
resolve the problem.
[3]
It is unclear from the papers which acting is being referred to. I
can only assume that it is acting in the upgraded post.
[4]
The court was not provided with the typed version of the outcome.
The handwriting is not legible. That which has been stated
is what
the court could decipher from the illegible handwriting.
[5]
See:
Tel
Peda Investigating Bureau (Pty) Ltd v Van Zyl
1965
(4) SA 475 (E).
[6]
1975 (2) SA 397 (A).
[7]
Act 32 of 2000.
[8]
Fleet
Africa (Pty) Ltd v Nijs
[2017] 38 1059 (LAC).
[9]
Section 191 (5) (a) of the LRA.
[10]
[2008] 8 BLLR 783 (LC).
[11]
[2014] ZALCCT 65 (2 December 2014)
[12]
[2013] 5 BLLR 434 (LAC).
[13]
Compare with:
Minister
of Labour v Mathibeli and others
[2013] 34 ILJ 1548 (LAC).
[14]
Holeni
v The Land and Agricultural Development Bank of SA
(266/08) ZASCA 9 (17 March 2009).
[15]
(2018) 39 ILJ 987 (CC).
[16]
See:
Harriawak
v La Farge (SA)
(2001) 6 BLLR 614
(LC).
[17]
[2017] 38 1059 (LAC).
[18]
This finding flows from the judgment of
Greef
v Consol Glass (Pty) Ltd
(2013) 34 ILJ 2385 (LAC) in which the court favoured an
interpretation by
Bramley
v John Wilde t/a Ellis Allan Engineering and another
[2003] 4 BLLR
360
(LC)
that gave the right to refer a wider meaning – a dispute that
once settlement fail may be referred to arbitration or adjudication
in future. The reasoning adopted by the LAC was that retardation, or
discouragement of early settlement of disputes is not consistent
with the objects of the LRA. This, in my view, is debatable.
[19]
2016 (3) SA 37(CC)
[20]
See:
Greef
v Consol Glass (Pty) Ltd
(2013) 34 ILJ 2385 (LAC).
[21]
(2009) 7 BLLR 679 (LC).
[22]
[2003] 4 BLLR 360 (LC).
[23]
To my mind although
Molaba
and others v Emfuleni Local Municipality
(2009) 7 BLLR 679
(LC) has been overruled by the LAC, it seems to
reverberate the views as expressed in
September.
There
seem to be a valid reason to afford the word right to refer a
restricted meaning.
[24]
IMATU
obo Nathan v Polokwane Local Municipality
case
J846/2017 delivered on 18 October 2019.