THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Case No: J1882/ 2017
In the matter between:
UASA OBO JM JONKER AND OTHERS Plaintiff
and
EKURHULENI METROPOLITAN MUNICIPALITY Defendant
Heard: 13 November 2024
Delivered: 17 January 2025
Summary : Claim for contractual brought under section 77 of the BCEA. Court
having no jurisdiction. Application dismissed.
JUDGMENT
DANIELS J
Introduction
[1] Seven employees launched an action against their employer, the
defendant, the Ekurhuleni Metropolitan Municipality or the City of Ekurhuleni
2
(hereafter “the Municipality” or “the City” ). For ease of reference, the employees
will be referred to as the plaintiffs.
[2] The plaintiff s allege that this court is clothed with jurisdiction by virtue of
section 77, read with section 77 A, of the Basic Conditions of Employment Act
No. 75 of 1997 as amended ( hereafter the “BCEA”). The defendant raised a
preliminary issue relating to jurisdiction, as is discussed following a brief
summary of the facts.
Material facts
[3] The plaintiffs were all employed in senior positions until their transfer to
the City. Four of the plaintiffs were employed by the Brakpan Town Council
(“Brakpan Council”) while the other three were employed by the Kempton Park
Metropolitan Local Council (“Kempton Park Council”) . The plaintiffs explain that
their conditions of employment were considered to be “contractual to incumbent” which means that their benefits and remuneration could not be diminished or reduced during their employment.
[4] The City, initially referred to as the Greater East Rand Metro (the
“Metro”) was established in terms of section 12(1) read with section 14(2) of the
Local Government: Municipal Structures Act No. 117 of 1998. The
establishment of the Metro was promulgated in Provincial Notice No. 6768 of the Provincial Gazette Extraordinary No. 141 dated 1 October 2000 (the “Provincial Gazette”). Through the Provincial Gazette, on the effective date
1 the
Brakpan Council and the Kempton Park Council were disestablished, but
continued to perform their functions as part of the Metro, as demarcated.
[5] The Provincial Gazette provided as follows:
1 The effect date is the date on which the results of the first election of the Council are declared.
3
5.1 Part 5 clause 14(1) provided that the Metro would be the successor
in law to several disestablished municipalities including that of the
Brakpan Council and the Kempton Park Council .
5.2 Clause 21(1) provided that: “ A person who, on the effective date is
an employee of a disestablished municipality referred to in clause 11
becomes an employee of the Greater East Rand Metro”.
5.3 Clause 21(2)(b) provided that the employment of the employees transferred to the Metro from the disestablished municipalities were subject to section 197 of the Labour Relations Act No. 66 of 1995 as amended (hereafter the “LRA”).
[6] Prior to their transfer to the City, the seven plaintiffs all participated in the
transport scheme applicable in the disestablished municipalities . The four
plaintiffs formerly employed by the Brakpan Council , had participated in what
they called the Brakpan Transport Scheme. The other three plaintiffs formerly employed by the Kempton Park Council had participated in what they termed the Kempton Park Transport Scheme.
2
[7] A few years earlier, during 1997, the role players in local government,
established the Interim South African Local Government Bargaining Council
(the “Interim Council”). The parties to the Interim Council included a single employer organisation, the South African Local Government Association
(hereafter “SALGA”) and two unions, the South African Municipal Workers
Union and IMATU. The South African Local Government Bargaining Council
(the “SALGBC” or “the Bargaining Council”) was registered thereafter .
2 This Transport Scheme was established by a collective agreement concluded between the
Kempton Park Council and the Independent Municipal and Allied Trade Union (“IMATU”).
Clause 8.2 of the collective agreement provides as follows: “ Amendments of the AA – tables
and salary are automatically implemented with effect from the first day wherein such
amendments are applicable respectively .”
4
[8] The transport allowance previously applied to the plaintiffs by the two
disestablished municipalities contemplated two components, a fixed cost
component and a running cost component. The fixed cost component
corresponded with the tables released by the Automobile Association of South Africa ( hereafter “ the AA”), which was dependent on the purchase price of the
employee’s vehicle, which was dependent on the salary of the employee. When
an employee’s salary increased beyond R400 000, 00 per annum, the
employers were required to apply the formula at the bottom of the AA tables.
The AA discontinued the issuing of adjusted tables during 2001 because these tables were available on its website.
[9] The plaintiffs continued to receive their transport allowances after their
transfer to the City. Between 1998 and 2001, t heir transport allowances were
adjusted in accordance with the AA tables.
[10] However, with effect from February 2001, after the plaintiffs salaries had
increased beyond R400 000, 00 per annum the City refused to further increase
their transport allowance in accordance with the AA tables. As a result, say the plaintiffs, they suffered damages.
[11] On 15 July 2003, the City entered into a collective agreement with
IMATU and SAMWU which created the Ekurhuleni Transport Allowance Scheme. The scheme provided that those employees who had previously received an allowance from the disestablished municipalities would continue to receive such benefits.
[12] Both parties refer red to and attached a number of letters and circulars as
evidence of the resolutions which had been adopted by the SALGBC. In the
papers , reference was made to the following:
12.1 A letter issued by the SALGBC , dated 10 May 1999
3 in which the
Acting General Secretary advised that the Central Council had adopted a
3 Annexure L to the Founding Affidavit
5
resolution on 9 – 10 July 1998. The resolution stated that the transport
allowances must be adjusted twice each year, and SALGA would assist
the Council to update the allowances.
12.2 A circular dated 21 June 1999 ,
4 in which SALGA advised its
members (the municipalities ) of the resolution adopted by the Central
Council on 9 – 10 July 1998. In the circular , SALGA state d: “it is not
management’s prerogative to decide whether to adjust the scheme or not as this is a decision of a Central Council and only the Central Council can changed this decision”. The circular does not purport to convey that
the Council resolved that it (the Council) was the only body with authority
to “adjust the scheme”.
12.3 A circular issued by the Council’s Acting General Secretary dated
29 September 2000.
5 In the circular, the Secretary refer s to the
resolution of the Central Council adopted on 9 – 10 July 1998. The
Secretary advised that there was a need to review the transport allowances, which would be considered and determined by the Executive
Committee in due course.
12.4 A letter dated 20 February 2001
6 from the General Secretary to
the various divisions of the Bargaining Council, advising that the Executive Committee had resolved that : (a) the annual amendment of
transport allowances must be suspended with immediate effect, (b) the Council Secretary would arrange a meeting with Oxbridge Consultants to
advise on the development of a “personalized scheme”, and (c) in the
interim the status quo must remain. It should be noted that the
personalized scheme never came to fruition.
[13] During 2014, the plaintiffs launched a claim based on the same cause of
action against the defendant under case number JS455/14. The plaintiffs
4 Annexure M to the Founding Affidavit
5 Annexure COE1 to the A nswering Affidavit
6 Annexure N to the Founding Affidavit
6
obtained default judgment, and the judgment was satisfied. In this dispute, the
plaintiffs claim that they have suffered damages as a result of the defendant’s
refusal to pay the correct value of their transport allowance since 1 June 2014. The damages allegedly suffered by the plaintiffs are calculated from 1 June 2014 to the date when the dispute was launched in this court, on 6 October 2017.
Legal submissions
Plaintiffs’ submissions
[14] Plaintiffs claim that they have suffered contractual damages because the
City has refused to pay them in accordance with the adjusted AA tables. They further contend that the decision of the Executive Committee is not binding on them, because only the Central Council is capable of amending its own resolutions. The plaintiffs concede that, in general, the resolutions of the
SALGBC are binding on the parties to the Bargaining Council. [15] Unfortunately, the plaintiffs did not see fit to attach the constitution of the
SALGBC to its papers. This unfortunate omission creates some difficulty in resolving the dispute of whether the Executive Committee is authorised to
amend a resolution of the Central Council. As I understand it, the parties agreed
that both bodies (i.e. the Executive Committee and the Central Council) are
formal structures of the Bargaining Council with representatives of the employers (represented by SALGA) as well as the unions. The only area of
disagreement is the powers of the Executive Committee .
Defendants’ submissions
[16] The defendant denies breaching the plaintiffs employment contracts.
[17] The defendant contends that the Executive Committee is entitled amend
the resolutions of the Central Council, because it has the powers of Central Council between meetings of the Central Council. Unfortunately these details
7
are only submitted in its heads of argument. Nevertheless, in its answering
affidavit, despite the absence of detail, the defendant denied plaintiffs’ allegation
that the Executive Committee cannot amend a resolution of the Central Council.
[18] The defendant alleges that the plaintiffs are members of IMATU7 and are
therefore bound by resolutions of the Bargaining Council because IMATU is a
party to the Bargaining Council. The plaintiffs filed no replying affidavit disputing
this.
Jurisdiction of the Labour Court
[19] Plaintiffs argued that this Court has jurisdiction to hear and determine the
dispute because the dispute relates only to their employment contract s. The
plaintiffs earn above the threshold in section 6 of the BCEA and, presumably for
that reason, do not rely on section 73A(3) of the BCEA.
[20] The defendant contends that the Court has no jurisdiction to hear and
determine the dispute because the dispute is about the interpretation,
application, or enforcement of a collective agreement. Such disputes ought to
be resolved through arbitration. S ection 157(5) of the LRA provides that “… the
Labour Court does not have jurisdiction to adjudicate an unresolved dispute if this Act or any other employment law requires the dispute to be resolved through arbitration.”
[21] Two decisions of the appeal court deal directly with the jurisdiction of this
Court concerning the enforcement of conditions of employment (prior to the
introduction of section 73A) as contained in collective agreements namely
Ekurhuleni Metropolitan Municipality v SAMWU on behalf of members
(“Ekurhuleni ”)
8 and Rukwaya and others v Kitchen Bar Restaurant
(“Rukwaya”).9 In summary, the appeal court held:
7 Para. 7.1 of the Answering Affidavit
8 (2015) 36 ILJ 624 (LAC)
9 (2018) 39 ILJ 180 (LAC)
8
21.1 The Labour Court has no jurisdiction where the claim arose from a
collective agreement and, because collective agreements have primacy,
it is proper that the collective agreement is enforced. Furthermore, in that matter, the resolution of the dispute would require an interpretation of a collective agreement.
10
21.2 The Labour Court has no jurisdiction where the claim is formulated
as a breach of the employment contract, but the true dispute relates to non-compliance with a collective agreement.
11
[22] The plaintiffs, who were engaged by the Kempton Park Council appear to
have missed the fact that they rely on the collective agreement between IMATU and their former employer, the Kempton Park Council, to establish their right to
a transport allowance. In my understanding, where the alleged conditions of
employment arise from a collective agreement, Rukwaya holds that the plaintiffs
must enforce the collective agreement.
[23] The plaintiffs, while accepting that the resolutions of the Bargaining
Council are binding on municipalities, appear to have overlooked the fact that these resolutions are themselves collective agreements. The resolutions,
whether adopted by the Central Council or the Executive Committee, are written
agreements concluded between representatives of the employer organisation
and the unions relating to matters of mutual interest . It is trite that even the
constitution of a Bargaining Council may constitute a collective agreement
because it meets the definition of a collective agreement .
12
[24] In order for the plaintiffs to succeed in their claim, they would have to
show that the collective agreement, as reflected in the resolution of the
10 Ekurhuleni at paras 21, 22, 25, and 26
11 Rukwaya at para s 8 – 10
12 Wallenius Wilhelmsen Logistics Vehicle Services v National Union of Metalworkers of SA &
others (2019) 40 ILJ 1254 (LAC) at para 27
9
Executive Committee, was either invalid13 or does not apply to them. If the
collective agreement is valid, and does apply to them, issues of interpretation
arise. For example, one might ask, what does the agreement mean when it
states “in the interim” the status quo must apply? Given that the “personalised
scheme” did not come to fruition, how was the agreement to be interpreted and applied?
[25] In my view, for the above reasons, the dispute between the parties
relates both to the enforcement of a collective agreement (or collective
agreements) and the interpretation and application of such agreement (s). The
proper route for the plaintiffs to have followed (which they may still follow) was
to refer a dispute to the Bargaining Council in terms of section 33A of the LRA
and require the Bargaining Council to invoke its dispute processes to resolve
the dispute. F ortunately for the plaintiffs, an arbitrator appointed by the
Bargaining Council in terms of section 33A of the LRA may deal with
enforcement disputes as well as interpretation and application disputes . This
Court has no jurisdiction to hear and determine the dispute. Neither party
vigorously pursued costs. In any event, in labour disputes, costs do not
necessarily follow the result.
Conclusion
[26] In the circumstances, th is court has no jurisdiction to hear and determine
the plaintiffs ’ claim and the defendant ’s jurisdictional point must be upheld. The
application is struck from the roll for lack of jurisdiction and there is no order as to costs.
RN Daniels
Judge of the Labour Court of South Africa
Appearances :
13 The appeal court closely considered the constitution of the SALGBC in SALGA v IMATU and
others [2014] 6 BLLR 569 (LAC) holding at para 36 that a practice can never trump the express
and unambiguous terms of a constitution.
10
For the Plaintiff s:
Adv V Masinga
For the Defendant :
Mr C De Heus of Masilo Attorneys