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[2020] ZALCJHB 170
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Communication Workers Union v Mobile Telephone Networks South Africa (MTN SA) (J464/20) [2020] ZALCJHB 170 (1 June 2020)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
reportable
Case
no: J 464/20
COMMUNICATION
WORKERS UNION
Applicant
and
MOBILE
TELEPHONE NETWORKS SOUTH AFRICA (MTN SA)
Respondent
Heard:
27 May 2020
Delivered:
1 June 2020
In
view of the measures implemented as a result of the Covid-19
outbreak, this judgment was handed down electronically by circulation
to the parties' representatives by email. The date for hand-down is
deemed to be 01 June 2020.
JUDGMENT
PRINSLOO, J
Background
[1]
The Applicant is the
majority trade union at the Respondent’s (MTN) workplace.
[2]
It
is common cause that MTN adopted its ‘BRC Store Transformation
2020’ (BRC) and that around September 2019 it published
a
document titled “BRC Store Transformation Journey FAQ’s’.
Through the adoption and implementation of the BRC,
MTN took a
decision to sell some of its stores as a going concern, obviously
triggering the provisions of section 197 of the Labour
Relations
Act
[1]
(LRA). The process is to
be done in three different phases and the first phase is due to be
implemented on 1 June 2020.
[3]
The Applicant was
invited to a meeting with MTN on 17 February 2020, when the BRC
document was presented and the Applicant was invited
to comment on
it. The Applicant conveyed its displeasure with the meeting in that
it was expected to comment and make submissions
without being
afforded the opportunity to interrogate the document and to engage
with its members. MTN made it clear that the BRC
implementation will
go ahead, with or without the Applicant’s consultation.
[4]
The Applicant was
invited to another meeting with MTN on 11 March 2020 and during the
meeting the Applicant was
inter
alia,
informed
that the first phase of the project is to be implemented on 1 June
2020 and that seven stores have been identified for
that purpose. The
Applicant was also informed that the objective of the BRC was to look
at MTN’s current store footprint
and to decide strategically
how to position the portfolio. The Applicant proposed that the
implementation of the BRC be postponed
until such a time that MTN has
furnished the Applicant with all the information it had requested and
that the Applicant had consulted
with its members.
[5]
On 20 April 202, the
Applicant received a response from MTN, however according to the
Applicant, this response was unsatisfactory.
The Applicant once again
indicated that it needed time to consult with its members in order to
receive a mandate. The Applicant
indicated that due to the national
lock down, it would be impossible to consult with all of its members.
[6]
On 13 May 2020, MTN
responded in a letter to the Applicant stating that the engagements
it had held with the Applicant were held
as a matter of courtesy. The
purpose of the engagement was merely to advise the Applicant of the
fact that the intended transfer
could affect some of its members and
it was to equip the Applicant with information to enable it to
respond to queries from its
members regarding to the sale of the
stores and the matters incidental thereto.
[7]
MTN made it clear
that section 197 of the LRA does not envisage any consultation and
that the Applicant does not have a right to
consultation under
section 197. MTN stated that the decision to sell part of the
business is a commercial one and falls squarely
within the
prerogative of MTN and does not require the Applicant’s
consent. The decision to sell seven stores was to be implemented
without further notice.
[8]
On 22 May 2020, the
Applicant filed an urgent application, which MTN opposed.
[9]
The matter was set down for hearing on 27
May 2020 and due to the Covid-19 lock down measures, the parties
presented arguments via
Zoom.
Urgency and authority
[10]
MTN raised two points
in limine.
[11]
The first point is
that the matter is not urgent as the catalyst for the bringing of
this application should have been the meeting
of 17 February 2020
when MTN indicated that the implementation of the BRC would go ahead
with or without further consultation of
the Applicant. Instead of
approaching this Court, the Applicant waited for three months to
bring this application and no cogent
reasons are given as to why no
urgent proceedings were instituted immediately after 17 February
2020.
[12]
There is no merit in the Respondent’s
arguments on the issue of urgency and in the ordinary course, the
Applicant would not
have crossed the hurdle of urgency. However, I am
inclined to deal with this matter notwithstanding the lack of
urgency. This matter
was enrolled for hearing in Court on 27 May
2020, when it was fully argued and received judicial attention. If it
is struck off
the roll for lack of urgency, as it should, it will in
all probability be enrolled in the normal course, meaning that
another judge
would have spent time on this matter and another Court
day will be allocated for it. Judicial resources are scarce and
limited
and in my view, this matter lacks merit to the extent that it
should be put out of its misery sooner rather than later and it
should
not make its way back to Court, be it on an urgent basis or in
the ordinary course. No other Court should be burdened to deal with
it, therefore I will deal with this matter, despite the lack of
urgency.
[13]
The second point
in
limine
is that the deponent to the
founding affidavit has no authority as the resolution was not signed
by the Applicant’s general
secretary and his name does not
appear on the resolution.
[14]
In argument before me, it was submitted
that the resolution was valid as it was signed by an executive member
of the Applicant on
behalf of the general secretary. It was also
explained in the replying affidavit that due to the current lock
down, it is impossible
to expect the general secretary to sign the
resolution as only executive members are in office and that the
general secretary is
aware of this application. Mr Ndlovu for the
Applicant submitted that the fact that the general secretary’s
name does not
appear on the resolution, does not render it invalid.
[15]
I have no intention of spending material
portion of this judgment on the point of authority. I accept that due
to the lock down,
entities are unable to function and operate as
normal and
in casu,
I
have no reason to doubt that the Applicant before me is the
Communication Workers Union (CWU). I am satisfied that the said union
indeed instituted these legal proceedings.
The relief sought
[16]
The Applicant seeks
an order that MTN be interdicted from the implementation of the BRC,
pending full disclosure of all requested
information to enable the
Applicant to consult with affected members and / or relevant
stakeholders.
[17]
It is trite than in order to succeed in
obtaining an interim interdict, the Applicant has to satisfy the
following requirements
namely to demonstrate a
prima
facie
right, a well-grounded
apprehension of irreparable harm, that the balance of convenience
favours the granting of the relief sought
and the absence of any
alternative remedy.
Prima
facie
right
[18]
Whether
or not the Applicant has a right is a matter of substantive law and
the onus is on the Applicant to establish on the facts
and evidence
placed before this Court that it has a
prima
facie
right
in terms of the substantive law. The Applicant also has to prove that
the right is a legal right and a right which can be
protected
[2]
.
[19]
It is evident from the facts placed before
me that the implementation of the BRC is to happen within the context
of section 197
of the LRA and that the Applicant has approached this
Court within the ambit of the provisions of section 197.
[20]
MTN’s case is that
section
197 of the LRA does not envisage any consultation and that the
Applicant does not have a right to consultation under section
197.
The decision to sell part of the business is a commercial one and
does not require any consensus-seeking exercise or engagement
with
the Applicant.
[21]
In its founding affidavit, it is evident
that the Applicant’s case is that MTN has ‘misinterpreted
the intended purpose
of consultation within the ambit of section 197
of the LRA.’ The Applicant placed specific reliance on the
provisions of
section 197(6) of the LRA and made it clear that based
on the provisions of the said section, it insists on being provided
with
all the relevant information and to be afforded an opportunity
to make submissions during the consultation process. The Applicant’s
case is that it is not allowed sufficient opportunity to consult with
its members, which goes against the very fabric of section
197(6) of
the LRA.
[22]
The right which the Applicant seeks to
enforce and protect, as is apparent from its pleaded case, is to be
found in section 197(6)(b)
of the LRA.
[23]
The question thus is whether the Applicant
has a legal right to
full
disclosure of the information it has requested and whether it has a
right to consult with affected members and / or relevant
stakeholders.
[24]
The question calls for a closer
consideration of the provisions of section 197(6) of the LRA, which
reads as follows:
‘
(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.
(b)
In any negotiations to conclude an agreement contemplated by
paragraph (a), the employer
or employers contemplated in subparagraph
(i), 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).’
[25]
It is evident from the wording of section
197(6) that it cannot and should not be read in isolation as it
clearly refers to an agreement
as contemplated in section 197(2). The
negotiations contemplated in section 197(6)(b) are for the purpose of
concluding an agreement
as provided for in section 197(2). Thus the
starting point should be section 197(2).
[26]
Section 197(2) of the LRA provides that:
‘
(2)
If a transfer of a business takes
place,
unless otherwise agreed in terms
of subsection (6)
-
(a)
the new employer is automatically substituted in
the place of the old employer in respect of all contracts of
employment in existence
immediately before the date of transfer;
(b)
all the rights and obligations between the old
employer and an employee at the time of the transfer continue in
force as if they
had been rights and obligations between the new
employer and the employee;
(c)
anything done before the transfer by or in
relation to the old employer, including the dismissal of an employee
or the commission
of an unfair labour practice or act of unfair
discrimination, is considered to have been done by or in relation to
the new employer;
and
(d)
the transfer does not interrupt an
employee's continuity of employment, and an employee's contract of
employment continues with
the new employer as if with the old
employer’. (My emphasis)
[27]
Section 197(2) provides for the default
position that would apply in the event of a section 197 transfer,
unless the parties agreed
otherwise in terms of a written agreement,
as contemplated in section 197(6). It is evident from a proper
reading of section 197
that parties are not compelled to enter into
any written agreement in respect of a section 197 transfer, but in
the event they
elect to do so, the provisions of section 197(6) would
apply.
[28]
In casu,
MTN
made it clear that there is no agreement and that there is no
intention to enter into any agreement, which position was not
disputed by the Applicant. That being the case means that the
provisions of section 197(6) do not find any application.
[29]
There is no general right to consultation
or to information in a section 197 transfer process. Section 197(6)
specifically provides
for negotiation to conclude an agreement,
should the parties elect to do so, and for the disclosure of
information that would allow
parties to engage effectively in the
negotiations.
[30]
The Applicant’s reliance on section
197(6) is misplaced. The Applicant does not have a right to consult
or to negotiate or
to request information in a section 197 transfer
process where there is no agreement as contemplated in section
197(6), of which
there is none
in casu.
In fact, it was conceded by Mr
Ndlovu that section 197(6) finds no application in this matter.
[31]
The Applicant dismally failed to cross the
first hurdle for an interim interdict.
Irreparable harm
[32]
The Applicant has to
show that there is a
well-grounded
apprehension of irreparable harm that
it stands to suffer in the event that the relief it seeks is not
granted.
[33]
In the founding
affidavit, the Applicant did no more than to state that it would
suffer irreparable harm because MTN is hell-bent
on implementing the
BRC without disclosing the relevant requested information and without
further engagement with the Applicant,
who is unable to consult with
its members due to the national lock down.
[34]
The irreparable harm
alleged by the Applicant is directly related to the rights which the
Applicant believes it has namely to be
provided with information and
to consult with its members. Those rights do not exist and the
Applicant failed to allege any other
harm.
[35]
I am not convinced
that the Applicant made out a case in respect of this requirement for
an interim interdict as the harm alleged
is dependent on the
existence of the rights which the Applicant seeks to protect, which
do not exist.
No alternative remedy
and balance of convenience
[36]
The Applicant’s
case is that it has no alternative remedy available but to approach
this Court. Furthermore, the prejudice
likely to be suffered by the
Applicant far outweighs the prejudice to be suffered by MTN, should
the relief sought not be granted.
[37]
Insofar as the
Applicant’s case is that its members may be affected by the
section 197 transfer in that their terms and conditions
of employment
may be less favourable compared to what they are entitled to in the
employ of MTN, there are alternative remedies
available should this
be the case.
[38]
The balance of
convenience does not favour the granting of the relief sought by the
Applicant.
[39]
MTN is implementing a
business decision, which it is entitled to do in the running of its
operations. Section 197 does not envisage
a consultative process with
a trade union and its members and absent an agreement as contemplated
in section 197(6), MTN cannot
be interdicted from implementing the
BRC and cannot be ordered to consult or to furnish information when
there is no basis in law
to do so. The prejudice that MTN stands to
suffer if the relief is granted with no sound basis in law, is
obvious.
[40]
The Applicant failed
to satisfy the requirements for an interim interdict and the relief
it seeks. It follows that the Applicant
is not entitled to the relief
it seeks.
Costs
[41]
The last issue to be
decided is the issue of costs.
[42]
Insofar as costs are concerned, this Court
has a broad discretion in terms of section 162 of the LRA to make
orders for costs according
to the requirements of the law and
fairness.
[43]
In
Zungu
v Premier of Kwa Zulu-Natal and Others
[3]
the
Constitutional Court confirmed the rule that costs follow the result
does not apply in labour matters. The Court should seek
to strike a
fair balance between unduly discouraging parties from approaching the
Labour Court to have their disputes dealt with
and, on the other hand
allowing those parties to bring to this Court cases that should not
have been brought to Court in the first
place.
[44]
This
is a case where the Court has to strike a balance, considering the
requirements of law and fairness. The general accepted purpose
of
awarding costs is to indemnify the successful litigant for the
expense he or she has been put through by having been unjustly
compelled to initiate or defend litigation.
In
Public
Servants Association of SA on behalf of Khan v Tsabadi NO and
Others
[4]
it was emphasized that:
‘…
unless
there are sound reasons which dictate a different approach, it is
fair that the successful party be awarded its costs. The
successful
party has been compelled to engage in litigation and incur legal
costs. An appropriate award of costs is one method
of ensuring that
much earnest thought and consideration goes into decisions to
litigate in the Labour Court, whether as applicant
in launching
proceedings or as respondent opposing proceedings.’
[45]
Mr July on behalf of MTN submitted that
costs should follow the result.
[46]
Mr Ndlovu on behalf of the Applicant
submitted that there should be no order as to costs because the
Applicant came to Court with
clean hands and with the aim of
protecting its members against the adverse effects of a section 197
transfer. Furthermore, the
application was not frivolous as the
Applicant was merely asserting its rights as the majority union.
[47]
In my view, this is a case where it is
appropriate to make a cost order.
A cost
order is a method of ensuring that decisions to litigate in this
Court are taken with due consideration of the law and the
prospects
of success, more so where an application is filed on an urgent basis.
[48]
In the letter addressed to the Applicant on
13 May 2020, MTN stated clearly that
section
197 of the LRA does not envisage any consultation and that the
Applicant does not have a right to consultation under section
197.
Notwithstanding the letter, the Applicant persisted with this
application on the basis that MTN misinterpreted the purpose
of
consultation within the ambit of section 197. This is astonishing as
the entire section 197 does not provide for any consultation
process.
At best, section 197(6) provides for negotiation in circumstances
where the parties agreed to enter into a written agreement.
[49]
In its answering affidavit, MTN once again
set out the law and made it clear that the Applicant’s reliance
on section 197(6)
of the LRA is misguided. Instead of considering the
legal position, the Applicant persisted and responded by stating that
MTN’s
allegation that the Applicant is not entitled to be
consulted or be provided with information is misplaced and
unfounded.
[50]
The Applicant’s reading of section
197(6) of the LRA in isolation and as a basis for this urgent
application is opportunistic
and ill-advised and indicative of a lack
of understanding of the provisions of section 197 of the LRA. The
Applicant never took
a minute to consider the law and MTN’s
attempts to set out what the legal position is, were ignored and
regarded as misplaced
and misguided.
[51]
In casu,
the
application was wholly misguided and meritless and the Applicant
dismally failed to satisfy the requirements for the interdict
it was
seeking and to place facts before this Court to support its case. If
the aim is to protect employees in a section 197 of
the LRA transfer,
this application was certainly not the way to achieve it.
[52]
The Respondent had to defend a meritless
urgent application
and fairness dictates
that it cannot be expected to endure enormous costs defending
litigation that ought not to have been brought
in the first place.
Ultimately, the Applicant is the author of
its own misfortune. CWU is a well-established trade union quite
capable of considering
the consequences of instituting meritless
litigation and it had to put in some earnest thought and
consideration into the merits
of this case before filing this urgent
application. It is not open to trade unions to file meritless urgent
applications and for
them to escape costs simply because there is an
ongoing relationship. When the collective bargaining relationship is
not threatened
by a cost order, there is no reason why a cost order
cannot and should not be imposed. No argument was put up by Mr Ndlovu
as to
how a cost order would threaten the relationship and I cannot
see any reason not to award costs against the Applicant.
[53]
In the premises, I make the following
order:
Order:
1.
The application is
dismissed with costs.
__________________
Connie
Prinsloo
Judge
of the Labour Court of South Africa
Appearances:
For the
Applicant:
Advocate Ndlovu
Instructed by:
Peter Zwane Attorneys
For
the Respondent:
Mr S July of Werksmans Attorneys
[1]
Act
66 of 1995, as amended.
[2]
The
Civil Practice of the High Courts of South Africa, Herbstein &
Van Winsen, 5
th
edition, page 1457– 1463.
[3]
(2018)
39 ILJ 523 (CC) at para 24.
[4]
(2012)
33 ILJ 2117 (LC) at 2119 I-J.