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[2000] ZASCA 49
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Greathead v South African Commercial & Allied Workers Union (290/98) [2000] ZASCA 49; 2001 (3) SA 464 (SCA); (2001) 22 ILJ 595 (SCA) (29 September 2000)
THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Case No: 290/98
In the appeal between:
GREATHEAD, BRIAN COURTNEY
Appellant
and
SOUTH
AFRICAN COMMERCIAL
CATERING & ALLIED WORKERS
UNION
Respondent
Coram
:
F H Grosskopf, Nienaber,
Streicher, Zulman, JJA and Melunsky AJA
Heard
:
19
September 2000
Delivered
:
29 September
2000
Summary
:
Invalidity of agency shop agreement -
failure to comply with provisions of s 25(3) of
Labour
Relations Act 66 of
1995
.
__________________________________________________________________
JUDGMENT
__________________________________________________________________
F
H Grosskopf J A
:
[1]
The respondent is a trade union duly
registered in terms of the Labour Relations Act 66 of 1995 (“the
Act”), and
hereinafter called “the union”. On 2 July 1997 the
union and Metcash Trading Limited (“Metcash”) concluded
an
“agency shop agreement” (“the agreement”) provided for
in s 25 of the Act. Since the agreement was a
“collective
agreement” it had to be in writing (see the definition of
“collective agreement” in s 213 of
the Act). The agreement required
Metcash as the employer to deduct an agreed monthly agency fee from the wages of
those of its employees
who were not members of the union and to remit the agency
fees so deducted to the union. (I shall assume that the parties to the
agreement intended that all those employees who were non-union members should
fall within the obscure definition of “affected
employees” contained
in the agreement.)
[2]
The appellant is employed by Metcash as
a retail adviser. He is one of the affected employees who is strongly opposed
to the
union and its policies and affiliations. He objects to the imposition
upon him of the agreement on the grounds that it contravenes
his constitutional
right to:
1. freedom of association in terms of s 18 of Chapter 2 (“Bill of
Rights”) of the Constitution of the Republic of South
Africa 108 of 1996;
and
2. freedom of political choice in terms of s 19(1) of the Bill of
Rights.
[3]
The appellant launched
an application in the Witwatersrand Local Division for an order against Metcash
as first respondent and
the union as second respondent:
“1. Declaring that the agreement entered into between the first
respondent and the second respondent on 2 July 1997 (hereinafter
referred to as
“the agency shop agreement”) infringes upon the applicant’s
rights to:
1.1 freedom of
association;
1.2 freedom to make political choices;
1.3 freedom from
servitude or forced labour.
2. Declaring the agency shop agreement to be unenforceable.
3.
Alternatively to paragraph 2 above
, declaring the agency shop
agreement to be of no application to the
applicant.”
The
appellant’s notice of motion also contained prayers for costs and
alternative relief.
[4]
Metcash abided the decision of the
court
a quo
and is not a party to the present appeal.
[5]
The court
a quo
(Blieden J) dismissed the application with costs on the
ground that the application was limited to an attack only on the concluded
agreement and not also on the constitutionality of s 25 of the Act. The court
a quo
nonetheless granted the appellant leave to appeal to this
court.
[6]
The parties were asked by this court in advance to file
supplementary heads of argument on the question whether the agreement complies
with s 25(3) of the Act, and if not, as to the effect of the non-compliance.
This aspect thereupon became the central issue on appeal
and we intend deciding
the matter without considering the constitutional issue. The Constitutional
Court has in fact laid it down
as a general principle that “where it is
possible to decide any case, civil or criminal, without reaching a
constitutional
issue, that is the course which should be followed”
(
per
Kentridge AJ in
S v Mhlungu and Others
1995(3) SA 867 (CC) at
895E; and followed in
S v Vermaas; S v Du Plessis
1995(3) SA 292 (CC) at
298 F-I;
Zantsi v Council of State, Ciskei, and Others
1995(4) SA 615(CC)
at 617H-618C;
Motsepe v Commissioner for Inland Revenue
1997(2) SA 898
(CC) at 908D-E).
[7]
S 25(3) of the Act provides as
follows:
“(3) An agency shop agreement is binding only if it provides
that -
(a)
employees
who are not members of the representative
trade
union
are not compelled to become members of that
trade union;
(b) the agreed agency fee must be equivalent to, or less than
-
(i) the amount of the subscription
payable by the members of the representative
trade
union;
(ii) if the subscription of the representative
trade
union
is calculated as a percentage of an
employee’s
salary,
that percentage; or
(iii) if there are two or more registered
trade
unions
party to the agreement, the highest amount of the subscription that
would apply to an
employee
;
(c) the amount deducted must be paid into a separate account administered by
the representative
trade union
; and
(d) no agency fee deducted may be
-
(i) paid to a political party as
an affiliation fee;
(ii) contributed in cash or kind to a political party
or a person standing for election to any political office; or
(iii) used for any expenditure that does not advance or protect the
socio-economic interests of
employees
.”
[8]
It is
common cause that the agreement does not expressly provide for the matters
referred to in s 25(3)(a) and (c). In my view
the agreement is also silent
about the requirements stated in s 25(3)(d)(i) and (ii). It is evident from the
wording of s 25(3)
that the agreement is binding “only if” it
complies with all the requirements of the section, and that if it does not
so
comply it is invalid. The respondent seeks to meet the problem of the apparent
invalidity of the agreement by relying on one
or more of the following
arguments:
1. The agreement complies substantially with s 25(3) of the
Act.
2. The agreement is capable of being rectified.
3. Factual issues cannot be raised for the first time on appeal.
4. The appellant waived his right to rely on
non-compliance.
I shall consider these points in the
same order.
Substantial Compliance
:
[9]
The
respondent submits that the requisite provisions of s 25(3) need not be
expressly recorded in the agreement, but may also be incorporated
by
implication. Reliance is placed in this regard on clauses 6 and 8 of the
agreement. It should however be pointed out that these
clauses are not
contained in the actual terms of the agreement but in the introductory section
which records the events leading up
to the agreement. The actual terms of the
agreement are set forth in clause 9 and following under the heading
“Agreement”.
[10]
Clause 6 refers to a
memorandum, dated 9 June 1997, which was circulated to the affected employees.
The memorandum summarised the
requisite provisions of s 25(3) and requested
written comment from the affected employees. I cannot, however, agree with the
submission
that the parties to the agreement, by a mere reference to the
memorandum, intended to incorporate the requisite provisions of
s 25(3) which
are summarised in that memorandum.
[11]
Clause 8 sets out that
Metcash and the union have agreed to enter into an agency shop agreement
pursuant to the provisions of s 25
of the Act. The respondent’s
submission is that the reference to s 25 incorporates, by implication, all the
requisite provisions
of s 25 which are not expressly recorded in the agreement.
In my view clause 8, properly construed, leads to a different conclusion.
The
concluding part of clause 8 actually records that the parties have agreed to
enter into an agency shop agreement “pursuant
to the provisions of section
25 of the Act
in accordance with the terms and conditions more fully recorded
in this agreement
”. (Emphasis supplied). In my view clause 8 shows
that the parties to the agreement intended to record the terms of their
agreement expressly in the body of the agreement. This was done in the section
under the heading “Agreement” which followed
upon clause
8.
[12]
The Act requires the agreement to be in writing and
to “provide” specifically for those matters prescribed by s 25(3).
In my judgment the agreement in the respects referred to failed to comply with
the requirements of s 25(3). In the result it never
became a binding agreement.
Rectification
:
[13]
The
respondent submits that if the issue of non-compliance had been raised before
the court
a quo
the respondent would have been entitled to seek
rectification of the agreement to accord with the true agreement of the parties.
The problem facing the respondent in this regard is that non-compliance with the
provisions of s 25(3) gives rise to an agreement
which is formally invalid and
rectification is not competent where the agreement is invalid for want of
compliance with statutory
formalities. (
Magwaza v Heenan
1979(2) SA 1019
(A) at 1025H-1026D and 1029A-C;
Intercontinental Exports (Pty) Ltd v Fowles
1999(2) SA 1045 (SCA) at 1051C-G.) For these reasons the agreement is
incapable of rectification.
Factual issues raised on appeal
:
[14]
The respondent further submits that it would be substantially unfair to the
respondent to allow the issue of non-compliance to be
raised for the first time
on appeal. The respondent relied in this regard on the following
dictum
of Innes J in the case of
Cole v Government of the Union of South Africa
1910 AD 263
at 272-3:
“[I]t has been suggested that the appellant should not be allowed to take
advantage of the point on appeal. But there seems
no reason, either on
principle or on authority, to prevent him. The duty of an appellate tribunal is
to ascertain whether the Court
below came to a correct conclusion on the case
submitted to it. And the mere fact that a point of law brought to its notice
was
not taken at an earlier stage is not in itself a sufficient reason for
refusing to give effect to it. If the point is covered by
the pleadings, and if
its consideration on appeal involves no unfairness to the party against whom it
is directed, the Court is bound
to deal with it. And no such unfairness can
exist if the facts upon which the legal point depends are common cause, or if
they are
clear beyond doubt upon the record, and, there is no ground for
thinking that further or other evidence would have been produced
had the point
been raised at the outset. In presence of these conditions a refusal by a Court
of Appeal to give effect to a point
of law fatal to one or other of the
contentions of the parties would amount to the confirmation by it of a decision
clearly wrong.”
(See further
Paddock Motors (Pty) Ltd v Igesund
1976(3) SA 16 (A) at 23D-G.)
[15]
The law point was raised for the first time in this
court in response to the court’s query. The validity thereof depends upon
the question whether the contents of the agreement comply with the requirements
of s 25(3). A copy of the agreement was appended
to the appellant’s
founding affidavit and the contents thereof are not in dispute. I have already
held that the agreement
is incapable of rectification and that there are no
further tacit terms which ought to be incorporated into the agreement. In the
absence of any additional terms or other new facts the validity of the agreement
depends upon the contents of the agreement which
are common cause. In these
circumstances I fail to see how a consideration of the law point involves any
unfairness to the respondent.
[16]
The court is in any event
bound by the provisions of s 25(3) and therefore not only entitled, but also
obliged, to raise the point.
Waiver
:
[17]
There is nothing to show that the appellant either expressly or by conduct
waived or agreed to abandon the law point. Moreover, senior
counsel for the
appellant informed the court that the point did not occur to counsel who argued
the matter for the appellant in the
court below. The appellant could not have
considered abandoning his rights if he (and his legal advisers) had not
appreciated it.
(See
Laws v Rutherfurd
1924 AD 261
at 263;
Hepner v
Roodepoort-Maraisburg Town Council
1962(4) SA 772(A) at 778D-779A;
Borstlap v Spangenberg en Andere
1974(3) SA 695 (A) at
704F-H.)
[18]
In any case, a party cannot, by abandoning a
law point as to statutory validity in effect compel the court to condone
non-compliance
with the statutory requirements. (Cf
Paddock Motors,
supra,
at 23G-H.)
[19]
As pointed out above the appellant
in the notice of motion, albeit on different grounds, asked for an order
declaring the agreement
to be unenforceable. I intend granting that
order.
[20]
There remains the question of costs. The
appellant has been successful in this court and the general rule is that costs
should
follow the result. (
Mahomed v Nagdee
1952(1) SA 410 (A) at
420D-E.) This is also the case where a court on appeal
mero motu
raises
a new point which determines the outcome of the appeal. (
Western Johannesburg
Rent Board and Another v Ursula Mansions (Pty) Ltd
1948(3) SA 353(A) at
355.)
[21]
The respondent did not concede the law point and
would in all probability have relied on the same defence if the point had been
taken in the court
a quo
. But if the point had been raised there it
would most likely have been the end of the matter. The question is whether the
general
rule that costs follow the event should be applied in such
circumstances. In my view the order in this case should follow the order
as to
costs which was made in the case of
Argus Printing and Publishing Co Ltd v
Die Perskorporasie van Suid-Afrika Bpk; Argus Printing and Publishing Co Ltd v
Rapport Uitgewers
(Edms) Bpk
1975(4) SA 814 (A) at 823E-824D, where the
appellant succeeded in an appeal on a new ground not raised in the court
a
quo
. In that case the court made no order as to the costs of appeal, but
ordered that the costs in the court
a quo
be paid by the respondent.
(See also
Estate Maree v Redelinghuis
1943 AD 547
at
557-8.)
[22]
The following order is made:
1. The appeal is upheld with no order as to the costs of appeal.
2. The order of the court
a quo
is set aside and replaced by the
following order:
“(a) The agency shop agreement entered into between the first and second
respondents on 2 July 1997 is declared to be
unenforceable.
(b) The second respondent is ordered to pay the applicant’s costs, such
costs to include those consequent upon the employment
of two
counsel.”
_______________
F H GROSSKOPF
Judge of Appeal
Nienaber, JA)
Streicher, JA)
Zulman, JA)
Melunsky,
AJA) concur