THE LABOUR APPEAL COURT OF SOUTH AFRICA, DURBAN

Reportable
Case No: DA 19/2023

In the matter between:
NATIONAL BARGAINING COUNCIL FOR THE ROAD FREIGHT AND LOGISTICS INDUSTRY Appellant
and
COMMISSIONER A DEYSEL N.O. First Respondent
COMMISSION FOR CONCILIATION, MEDIATION
AND ARBITRATION Second Respondent

INTERMODAL CARGO SOLUTIONS (PTY) LTD Third Respondent

Heard: 14 November 2024
Delivered: 7 April 2025
Coram: Savage ADJP, Van Niekerk JA et Govindjee AJA


JUDGMENT

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VAN NIEKERK, JA
Introduction

[1] The appellant is a bargaining council, registered in term s of s 29 of the La bour
Relations Act (LRA)1 for the road freight and logistics industry . The appellant’s
certificate of registration defines its r egistered scope in the following terms :
‘“Road freight and logistics Industry” or “Industry” means the industry in
which employers and employees are associated for carrying out one or more of
the following activities for hire or reward:
(i) The transportation of goods by means of motor transport.
(ii) The storage of goods, including the receiving, opening, unpacking,
packing, despatching and clearing or accounting for all of goods where these
activities are ancillary or incidental to paragraph (i) ;
(iii) The hiring out by temporary employment services of employees for
activities or operations which ordinarily or naturally fall within the transportation or
storage of goods as contemplated by paragraphs (i) and (ii) of this definition.’
(own emphasis)

[2] The appellant contends that the activities of the third respondent (Intermodal) are
such that they fall within the appellant’s registered scope. Intermodal ’s sole activities are
those described in paragraph (ii), i.e. the storage of goods. Intermodal is not engaged in
the activity described in paragraph (i) of the definition, i.e. the transportation of goods by
means of motor transport . The appellant submits that Intermodal’s storage activities fall
within its registered scope because these activities are ancill ary or incidental to the
transportation of goods by means of motor transport , even though Intermodal is not
itself engaged in the activity of transporting goods. Intermodal contends for a

1 Act 66 of 1995.
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conjunctive reading of paragraphs (i) and (ii), meaning that the ‘ancillary and incidental’
storage activities to which the paragraph refers are limited to those of the same
employer engaged in the activity of the transportation of goods described in paragraph
(i). Put another way, Intermodal submits that because it is not engaged in the activity of
the transportation of goods by means of motor transport, the storage of goods activity
that it undertakes cannot be ancillary or incidental to th e transportation of goods activity
referred to in paragraph (i) .

[3] The dispute between the parties was referred to arbitration. In his award, the first
respondent (the arbitrator ) held that the storage activities referred to in paragraph (ii) of
the definition meant storage undertaken by the same employer that carries on the motor transport activity referred to in paragraph (i). Because Intermodal i s not engaged in road
transportation, its storage activities are not ancillary or incidental to the activity of road
transportation. The arbitrator concluded that the appellant’s main agreement and other
agreements are thus not binding on Intermodal .
[4] On review, t he arbitrator’s award was upheld by the L abour Court on the basis
that the arbitrator’s award met the threshold of reasonableness . With the leave of the
Labour Court, the appellant appeals against that order.

Factual background

[5] The dispute between the parties proceeded to arbitration based on a stated case.
The stated case records that Intermodal is a licensed container depot and, in the course
of its business, receives , unpacks, stores, packs and despatches freight, which i s
delivered to or collected from its premises by “ various road transportation operators ”. It
is not in dispute that these operators, whose primary activities comprise the
transportation of goods by means of motor transport, fall within the ambit of the appellant’s registered scope.

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[6] The stated case refers to a number of entities that are registered with the
appellant , entities that respectively operate warehouses and offer transport services for
reward and also road transporters, with their own vehicles, which operate warehouses.
It is not in dispute that Intermodal falls into neither category and is engaged solely in the
activity of storage. Intermodal has a customer base comprising various manufacturers,
importers, clearing agents and the like, all of whom utilise Intermodal’s storage facilities,
without Intermodal being engaged in the manner or mode in which its customers’ goods
are conveyed to or dispatched from its storage facilities.
[7] The stated case also refers to Thrutainers Intercontinental CC (Thrutainers),
which the appellant contended i s an entity associated with Intermodal , whose vehicles
(with those of other entities) are loaded by Intermodal employees. It is not in dispute
that Thrutainers transports goods by means of motor transport , and as such, it is
registered with the appellant. While the fact of the close commercial, business and
operational relationship between Intermodal and Thrutainers appears initially to have
been the basis on which the appellant sought to br ing Intermodal’s activities within its
registered scope, this fact was not determinative of the issue that served before the
arbitrator , nor did it assume any significance in subsequent proceedings .

[8] The parties further recorded that they were ‘not convinced’ that in the present
circumstances, the publication of a notice as contemplated in s 62 (2) of the LRA was
necessary , a matter that assumed some relevance in the review proceedings before the
Labour Court . Section 62 provides that if the Commission for Conciliation, Mediation
and Arbitration ( CCMA) believes that a demarcation issue is of substantial importance,
the CCMA must publish a notice in the Gazette regarding the particulars of the
application and invit e written representations by interested parties. Section 62 (9)
requires the presiding commissioner to ‘consult NEDLAC’ before making a demarcation award.

[9] It is common cause that the CCMA did not designate the present dispute as
being one of ‘substantial importance’ and that in consequence, the CCMA did not
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publish a notice in the Gazette inviting written representations. It is also not disputed
that the cover page of the arbitrator’s award reflects the date of the award as 19 May
2019. The record also reflects that on 29 May 2019, the national director of the CCMA
received correspondence from the acting executive director of NEDLAC, stating that
NEDLAC supported the award. At the foot of the first page of the award, it is recorded
that the document was last saved at 15:17 on 3 June 2019. The CCMA delivered the
award to the parties by email on the same date.

The arbitration award
[10] The primary issue to be decided by the arbitrator was whether Intermodal’s
activities , being solely the activity of the storage of goods , fell within the appellant’s
registered scope. Intermodal’s opposition to the appellant’s contention that its activities
fell within the appellant’s registered scope was based on the assertion that it was solely engaged in the activity of storage in circumstances where that activity was neither ancillary nor incidental to the transportation of goods by means of motor transport. In
response, the appellant submitted that it was sufficient that the transportation of goods
by means of motor transport was conducted by a different , third-party employer. One of
the issues that the arbitrator was thus required to decide was whether on a proper interpretation, the appellant’s registered scope contemplated that the ‘storage of goods’ activity undertaken by an employer and referred to in subparagraph (ii) of the definition,
need necessarily be undertaken in relation to t he transportation of goods conducted by
the same employer .
[11] The appellant contended that the reference in the definition to storage activities
that are “ancillary or incidental ” to the transportation of goods by means of motor
transport, means the storage activities ancillary or incidental to either an employer’s own transportation of goods, or the storage activities ancillary or incidental to motor
transport services provided by another employer. Intermodal ’s storage activities are
ancillary or incidental to motor transport , so the submission went, because goods are
delivered to and dispatched from Intermodal’s warehouses by means of motor transport .
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In this sense, Intermodal’s storage activities support the activity of the transportation of
goods by motor transport.

[12] Intermodal submitted that the appellant’s defined scope excluded its activities ,
since it is a ‘stand- alone’ business , engaged only in the storage of goods, and not in the
transportation of goods by means of motor transport, nor in any storage activities that
are ancillary or incidental to the transport of goods by motor transport.
[13] The arbitrator records:
‘[23] On my interpretation the purpose of the definition is to indicate that under
certain specified conditions an employer providing a storage service would be regarded as also providing a motor transport service i.e. such an employer would
only be regarded as providing a motor transport service, if the storage service provided by the employer is ancillary or incidental to the motor transport service provided by the employer.
[24] The definition refer (sic) to at least two activities that the employer and it
(sic) employees operating in the industry could be carrying out i.e. transportation
of goods and storage of goods. The storage activity includes a number of other
activities i.e. receiving, opening, unpacking, packing, despatching and clearing or
accounting for goods subject to the proviso that these activities are ancillary or incidental to the transportation of goods by means of motor transport. An employer and its employees need not carry on all activities before their activities would fall within the industry. Their activities would fall within the industry as
defined if they carry out one or more of these activities including logistics
activities referred to as “despatching and clearing or accounting” subject to the
proviso referred to above. Giving the wording of the definition and the contextual and purposive meaning, the reference to motor transport that the activities of the employer and its employees must be ancillar y to or incidental to before it would
fall within the industry, can only be a reference to motor transport that the
employer is carrying on…’ (own emphasis )

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[14] The arbitrator went on to conclude that “ [A]ncillary business operations are
business operations rendering service to existing customers or clients of the main
business ”; a “ service that is subsidiary or auxiliary or supplementary to the main or
primary service ”… “The fact that part of an employer’s business is ancillary to its main
business is not per se conclusive. It must further be considered whether the ancillary part of the business is of such a magnitude that it can be fairly said that the employer is
carrying out mor e than one industry ”. The arbitrator considered that an ‘incidental
business’ is “ business carried on in connection with or resulting from the main or
primary business and includes casual or insignificant activities ”. He concluded:
‘31. Because the activities of Intermodal and its employees do not fall within
the road freight and logistics industry they also do not fall within an industry that
is ancillary or incidental to the road freight and logistics industry.
32. I have considered the argument advanced on behalf of the Council to the
effect that the definition means that an employer performing a logistics function for a client is operating in the Road Freight Industry. Such a meaning can only be ascribed to the definition if the logistics function is part of the storage function referred to in the definition and if it is ancillary or incidental to a motor transport
activity carried on by the employer and its employees .’ (own emphasis)
[15] In short, the arbitrator considered whether Intermodal’s storage activities , for the
purposes of paragraph (ii) of the definition of the appellant’s registered scope, could be
said to be ancillary or incidental to the transportation of goods by means of motor
transport. While the arbitrator did not discount the prospect of an employer engaged in
the activity of storage of goods falling within the appellant’s registered scope, he considered that it did so if and only if the storage activity was ancillary or incidental to the main activity of the transportation of goods by motor transport , conducted by the
same employer. Since Intermodal did not transport goods by means of motor transport ,
its storage activity could not be ancillary or incidental to the transportation of goods .
Intermodal was accordingly not bound by the appellant’s main and other collective agreements .

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The review

[16] The appellant filed an application to review and set aside the award. The grounds
for review include the contentions that the arbitrator was wrong in his interpretation of the appellant’s scope as defined in its certificate of registration. Although the appellant
did not unambiguously articulate a more specific ground for review in either its founding or supplementary affidavit, the replying affidavit makes clear that the appellant’s case is that the arbitrator incorrectly interpreted the appellant’s registered scope and thus
committed a reviewable irregularity , in the form of a material error of law.
[17] In its supplementary affidavit, the appellant contended further that the arbitrator
had failed to consult with NEDLAC as required by s 62(9) of the LRA, and that the award stood to be set aside on this basis. At the same time, the appellant filed an application for a declaratory order in the following terms:
‘Declaring that an employer and its employees associated for carrying on the storage of goods ancillary or incidental to the transportation of goods by means
of road transport fall under the Applicant’s registered scope irrespective of whether that transportation of goods is conducted by that employer or a third
party.’
[18] The deponent to the supplementary affidavit explains that the appellant has a
material interest in seeking clarity on its registered scope and, in particular, confirmation
whether the activities mentioned in paragraph (ii) of the definition must be ancillary or incidental to the same employer’s transportation transport operations. On this basis, and
apart from the merits of the review, the appellant sought the declaratory order “so that,
at least, there can be certainty in the industry on the interpretation of Part (ii) of the Applicant’s registered scope” .
The Labour Court’s judgment

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[19] The Labour Court dealt first with the application for the declaratory order and
held that it was the function of the Court to resolve concrete disputes and “ not to deal
with academic matters or give legal advice” and that , in any event , demarcation
disputes were a matter to be dealt with by the CCMA. In relation to the merits of the
review, without the appellant having pleaded the unreasonableness of the outcome of
the arbitration proceedings as a ground for review , the Labour Court concluded that the
arbitrator’s decision was “ correct and one that a reasonable decision maker may reach” .
Regarding the alleged breach of s 62(9) of the LRA, the Court held that since the CCMA
had not considered the matter to be one of sufficient importance to trigger an invitation
to the public to make written representations in terms of s 62(7), the arbitrator was
under no obligation to have consulted NEDLAC prior to issuing the award.

[20] The Labour Court accordingly dismissed the review application, with no order as
to costs.
Grounds for appeal
[21] On appeal, the appellant submits that the Labour Court erred both in respect of
the interpretation of the scope of its certi ficate of registration and its findings in relation
to the application of s 62(9). Regarding the interpretation of the appellant’s registered scope, the appellant repeats the submissions made at arbitration and contends that the Labour Court ought to have found that the third respondent did not itself have to be involved in the transportation of goods for its activities to fall within subparagraph (ii) of the definition of the appellant’s registered scope. The appellant contends further that ,
properly interpreted, its registered scope extends to an employer that carries on the activity of the storage of goods, where this activity is ancillary or incidental to the transportation of goods by means of road transport, irrespective of whether the transportation is conducted by that employer or a third party.
[22] Regarding the Labour Court’s finding on the application of s 62(9), the appellant
submits that the Court erred in finding that consultation with NEDLAC is required only
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where the CCMA had published a notice in the Gazette in terms of s 62(7). The
appellant submits that consultation with NEDLAC is required before every demarcation
award is issued and that in the present instance, on the facts, there was a failure to consult, with the consequence that the award stands to be set aside. In relation to the
declarator, the appellant submits that the Labour Court ought to have found that in
terms of section 62(3) of the LRA, the court was not precluded from determining the
application and, given the fact of a live controversy, ought to have granted the
declaratory order sought.
Analysis
[23] There are t wo issues to be decided. The first is whether the Labour Court was
correct to conclude that the arbitrator’s decision was not reviewable. The second issue
is whether the Labour Court is correct to conclude that the arbitrator was under no
obligation to consult NEDLAC in terms of section 62(9) prior to issuing his award and if
so, whether he did consult .
Is the arbitrator’s interpretation of the appellant’s registered scope reviewable?

[24] Much of the argument before us concerned the basis on which demarcation
awards might be reviewed and the threshold for review in these circumstances. A prior enquiry relates to the scope of intervention by a review court in respect of a demarcation award, if only on account of the various references to what is averred to be an error of law committed by the arbitrator and the loose reference, both during argument and in the judgment of the Labour Court, to the application of a reasonableness threshold for review.

[25] In Bargaining Council for the Civil Engineering Industry v C ommission for
Conciliation, Mediation and A rbitration and others ,
2 this Court endorsed the following

2 (2022) 43 ILJ 2702 (LAC) ; [2022] ZALAC 108.
11

passage from the Labour Court’s judgment in National Bargaining Council for the Road
Freight Industry v Marcus NO and others :3
‘It should… be recalled that Coin Security is also authority for the point that a
demarcation involves considerations of fact, law and social policy and that in
these circumstances, due deference ought to be given to a commissioner making
a demarcation award. .. As I understand the judgment, in demarcation judgments
there will be, more often than not, no single correct judgment, and that a wide
range of approaches and outcomes is inevitable. A reviewing court should be
attuned to this reality , and recognise it by interfering only in those cases where
the boundary of reasonableness is crossed.’

[26] In Coin Security (Pty) Ltd v C ommission for C onciliation, Mediation and
Arbitration and others4 the Labour Court said, at paragraph 63 of the judgment:
‘The demarcation process is one entrusted to a specialist tribunal in terms of the
provisions of the Act. The demarcation decision is one involving facts, law and policy considerations. In demarcation decisions, there will, more often than not, be no one absolutely correct judgment. Particularly in decisions of this sort, and
given the provisions of the Act, there must of necessity be a wide range of
approaches and outcomes that would be in accordance with the behests of the Act. Due deference should therefore be given to the role and functions and resultant decisions of the CCMA in achieving the objects of the Act…’
[27] And at paragraph 64:
‘The case for judicial deference becomes all the more competing in this matter given that NEDLAC agreed to support the provisional award. ’
[28] As Myburgh points out ,
5 the Constitutional Court has described demarcation
awards as ‘polycentric and policy -laden’, where the decision- maker is a specialised

3 (2011) 32 ILJ 678 (LC) ; [2011] 2 BLLR 169 (LC) at para 22.
4 (2005) 26 ILJ 849 (LC) ; [2005] 7 BLLR 672 (LC) .
12

body with specialist expertise.6 Indeed, as counsel for the third respondent pointed out ,
when a demarcation issue arises in the course of proceedings before the Labour Court,
that Court may not itself exercise a discretion to decide the demarcation issue in the
interests of expediency, as it may do with other arbitrable issues.7 The Labour Court is
obliged to hold the proceedings concerned in abeyance and refer the issue to the CCMA to be dealt with in terms of the prescribed process.
8 All of this requires the
review court to show a heightened deference toward the arbitrator and to apply a ‘light
touch’ on review.9
[29] This approach is undoubtedly correct where the demarcation award concerns the
application of an agreed interpretation of a bargaining council’s registered scope to a given set of facts, and the challenge to the award assumes the form of a reasonableness review.
10 But where, as in the present instance, the issue is the

5 A Myburgh SC ‘Reasonableness Review – the Quest for Consistency’ (2024) 45 ILJ 1377 at 1383.
6 See National Union of Metalworkers of SA v Commission for Conciliation, Mediation & Arbitration &
others (2022) 43 ILJ 530 (CC) ; [2022] 3 BLLR 209 (CC) . In Coin Security (Pty) Ltd v CCMA & others
(2005) 26 ILJ 849 (LC) ; [2005] 7 BLLR 672 (LC) the Labour Court held that whether an employer and it
employees fall within a particular sector for the purposes of a demarcation is a question to be determined
in the light of all the surrounding circumstances, and that the character of an industry is to be determined
by the nature of the enterprise in which the employer and its employees are associated for a common
purpose, a question that involves considerations of fact, law and policy. This may involve the history of
the enterprise, the skills of the employees, the location of the enterprise in any value chain, the nature of
any competitors and whether the enterprise may fall under any other industry ( National Textile Bargaining
Council v De Kock NO & others (2014) 35 ILJ 1017 (LC) ; [2013] ZALCCT 37 ).
7 See s 158 (2)(b) of the LRA.
8 See s 62 (3) of the LRA.
9 Myburgh ‘Reasonableness Review – the Quest for Consistency’ (2024) 45 ILJ 1377 at 1383.
10 For example, see National Union of Metalworkers of SA v Commission for Conciliation, Mediation &
Arbitration & others (20 22) 43 ILJ 530 (CC); [2022] 3 BLLR 209 (CC) - whether the activities of the
affected employers fell within the jurisdiction of the Bargaining Council of the Civil Engine ering Industry v
Commission for Conciliation, Mediation & Arbitration & others (2022) 43 ILJ 2702 (LAC) ; [2022] ZALAC
108 – whether the activities of the employer in relation to tailings dams and tailings storage facilities fall
within the jurisdiction of the applicant bargaining council.
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interpretation of the appellant’s registered scope and a ground for review that relies on a
material error of law committed by the arbitrator , there is no room for deference. This
raises the question whether a material error of law can in itself serve as a ground for
review under s ection 145 of the LRA, divorced from any considerations of
reasonableness.11
[30] While the intention of the drafters of s ection 145 may have been to limit the
scope of review (as evidenced by the limitation of the grounds for review in s 145 to those recognised by s ection 33 of the Arbitration Act
12), the subsequent enactment of
section 33 of the Constitution, which guarantees the right to administrative action that is
lawful, reasonable and procedurally fair, has had the effect of considerably expanding the scope for review. In Sidumo and another v Rustenburg Platinum Mines Ltd and
others
13 (Sidumo) , the Constitutional Court held that a CCMA arbitration constituted
administrative action but was not subject to the Promotion of Administrative Justice
Act14 (PAJA), and that s ection 145 of the LRA was to be interpreted as encompassing
the constitutional standard of reasonable administrative action. The test for

11 The review application was argued as an application in terms of s 145 of the LRA, as are most reviews
of demarcation rulings (see, for example, National Union of Metalworkers of SA v Commission for
Conciliation, Mediation & Arbitration & others (2024) 45 ILJ 2608 (LC) ; [2024] 9 BLLR 991 (LC) , Intasol
Tailings (Pty) Ltd v Commission for Conciliation, Mediation & Arbitration & others (2021) 42 ILJ 2204 (LC) ;
[2021] 10 BLLR 1027 (LC) ). Section 62 (4) provides that when the CCMA receives a demarcation dispute,
it must appoint a commissioner to determine the issue, and that s 138 (which deals generally with arbitration proceedings) applies, with the necessary changes. In National Union of Metalworkers of SA v
Commission for Conciliation, Mediation & Arbitration & others (2022) 43 ILJ 530 (CC) ; [2022] 3 BLLR 209
(CC), the Constitutional Court noted that the Labour Court derived its powers to review demarcation
awards from s 158 (1)(g) of the LRA. That section provides that the Labour Court may “subject to section
145, review the performance or purported performance of any function provided for in [the LRA] on any
grounds that are permissible in law ”. This formulation does not preclude a review of a demarcation award
in terms of s 145 (on the grounds established by that section, suffused by reasonableness), as was done
in the present instance.
12 Act 42 of 1965.
13 [2007] 12 BLLR 1097 (CC) ; (2007) 28 ILJ 2405 (CC) .
14 Act 3 of 2000.
14

reasonableness to be applied in an application for review under section 145 i s whether
the decision reached by the arbitrator is one that a reasonable decision- maker could not
reach.

[31] It should be recalled that the issue that served before the court in Sidumo was
the “moral or value judgment to established facts and circumstances ”15 applied by a
commissioner when determining the fairness of the penalty of dismissal. The ‘threshold
of reasonableness’ established by the judgment recognises that in relation to the penalty of dismissal, value choices may differ in relation to the same factual matrix but nonetheless fall within a range of decisions to which a reasonable decision- maker could
come. The metaphor of an elastic band has been usefully employed to illustrate the applicable threshold – the function of the review court is to determine the point to which
the elastic of reasonableness can stretch without snapping.
16

[32] Post-Sidumo reviews seeking to rely on material errors of fact or law committed
by the arbitrator were met with the response that errors of th at nature did not in
themselves constitute grounds for review. In Herholdt v Nedbank Ltd (Congress of
South African Trade Unions as amicus curiae) , (Herholdt)17 the Supreme Court of
Appeal held that material errors of fact, as well as the weight to be attached to particular
facts “are not in and of themselves sufficient for an award to be set aside, but are only
of any consequence if their effect is to render the outcome unreasonable” .18 Following
Herholdt , a similar view was adopted by this Court in Head of the Department of
Education v Mofokeng and O thers (Mofokeng) ,19 where Murphy AJA said in an often-
quoted passage:

15 National Union of Metalworkers of SA v Vetsak Co -operative Ltd & others (1996) 17 ILJ 455 (A) ; [1996]
6 BLLR 697 (AD) .
16 Myburgh supra at 1379.
17 [2013] 11 BLLR 1074 (SCA) ; (2013) 34 ILJ 2795 (LAC) .
18 Ibid at para 25.
19 (2015) 36 ILJ 2802 (LAC) ; [2015] 1 BLLR 50 (LAC) .
15

‘Mere errors of fact or law may not be enough to vitiate the award. Something
more is required. To repeat: flaws in the reasoning of the arbitrator, evidenced in
the failure to apply the mind, reliance on irrelevant considerations or the ignoring of material factors etc. must be assessed with the purpose of establishing
whether the arbitrator has undertaken the wrong enquiry, undertaken the enquiry
in the wrong manner or arrived at an unreasonable result.’
20

[33] Cases such as Herholdt and Mofokeng recognise that the limited grounds
established by s 145 admit a review based on a material error of fact or law only when
the ensuing result is an unreasonable award. Mofokeng, in particular, establishes a structure within which an alleged material error of fact or law engages with the threshold of reasonableness. The court said in a well -known passage:
‘Irregularities or errors in relation to the facts or issues, therefore, may or may not produce an unreasonable outcome or provide a compelling indication that the arbitrator misconceived the enquiry. In the final analysis, it will depend on the materiality of the error or irregularity and its relation to the result. Whether the irregularity or error is material must be assessed and determined with reference to the distorting effect it may or may not have had upon the arbitrator’s
conception of the enquiry, the delimitation of the issues to be determined and the
ultimate outcome. If but for an error or irregularity a different outcome would have
resulted, it will ex hypothesi be material to the determination of the dispute. A
material error of this order would point to at least a prima facie unreasonable
result.’
21
[34] What t his formulation requires is the review court first to identify errors or
irregularities committed by the arbitrator and then to determine materiality, a requirement that is satisfied if but for the error or irregularity, the arbitrator would have come to a different result. If this is established, the incorrect result arrived at by the

20 Ibid at para 32.
21 Mofokeng at para 33.
16

arbitrator is prima facie unreasonable. The enquiry then moves to a consideration of
whether the result is nonetheless capable of justification, having regard to the totality of
the evidence.

[35] In Gold Fields Mining SA (Pty) Ltd (Kloof Gold Mine) v Commission for
Conciliation, Mediation and A rbitration and others22 this Court suggested that to the
extent that Sidumo established that the constitutional standard of reasonableness
suffuses the application of s 145 of the LRA, it was not sufficient for an applicant to
establish one or more of the grounds for review specified in s 145 (misconduct, gross irregularity in the proceedings, exceeding powers); the applicant must always establish that the result of the award is unreasonable.
23 In other words, reasonableness is to be
applied as a universal threshold.
[36] The application of this approach soon gave rise to difficulties when the subject of
the review admitted a single, correct answer. These were typically interlocutory rulings made by arbitrators, often concerning what were described as ‘jurisdictional’ issues –
e.g. whether the referring party was an ’employee’ as defined in s 213 of the LRA, the existence of a ‘dismissal’ for the purposes of s 186(1), and the like. The response by the
Labour Courts was to recognise and apply a ‘correctness’ standard of review,
notwithstanding the fact that in most instances, the review had been sought on grounds of unreasonableness.
24 The enquiry on review in this instance is not whether the
arbitrator’s ruling was justifiable, rational or reasonable, but whether objectively speaking, the facts that would give the CCMA or bargaining council the jurisdiction to

22 (2014) 35 ILJ 943 (LAC) ; [2014] 1 BLLR 20 (LAC) .
23 Ibid at para 14.
24 A Myburgh ‘The Correctness Standard of Review’ (2023) 44 ILJ 724. SA Rugby Players Association &
others v SA Rugby (Pty) Ltd & others (2008) 29 ILJ 2218 (LAC) ; [2008] 9 BLLR 845 (LAC) ; De Milander v
Member of the Executive Council for the Department of Finance: Eastern Cape & others (2013) 34 ILJ
1427 (LAC) ; [2012] ZALAC 37, Solid Doors (Pty) Ltd v Commissioner Theron & others (2004) 25 ILJ 2337
(LAC) ; [2004] ZALAC 14.
17

entertain the dispute existed.25 This approach reflects the general view adopted by the
courts over many years in administrative law matters relating to what were termed
‘jurisdictional errors of law’. Jurisdictional errors of law were once considered
reviewable; non- jurisdictional errors were not.26 In the former instance, the principle
underlying a review is that where the jurisdiction is dependent on the existence of a
particular state of affairs, the administrative authority cannot give itself jurisdiction by
incorrectly finding that the conditions for the exercise of jurisdiction are satisfied.27 In the
development of the ‘correctness review ’, the Labour Courts showed no Sidumo -like
deference to the arbitrator; the approach assumed that the award under review may be set aside if it is incorrect – nothing more need be established. A perusal of the case law
suggests that the ’correctness’ standard in this sense was regularly applied by the
Labour Courts, often in the face of reviews relying only on unreasonableness as a
ground for review, and without reference to the circumstances in which a material error
of law ought to be recognised as a discrete ground for review.
[37] Uncertainty as to the universality of the reasonableness standard and the role of
reasonableness where the standard for review called for a determination of the correctness of the award under review led to the development of what this Court termed
a ‘bifurcated review standard’. In this approach, the nature of the issue in dispute
determines which of the standards of correctness or reasonableness ought to be
applied.
28 In some instances, both thresholds were found to apply, giving the applicant
an election to rely on either or both. For example, in National Union of Metalworkers of
SA v Assign Services and others ,29 the Court expressed the view that a material error of
law will result in both an incorrect and unreasonable award, and that a party seeking to

25 SA Rugby Players Association (SARPA) & others v SA Rugby (Pty) Ltd & others; SA Rugby (Pty) Ltd v
SARPU & another (2008) 29 ILJ 2218 (LAC); [2008] 9 BLLR 845 (LAC) .
26 Hoexter and Penfold Administrative Law in South Africa 3 ed (Juta 2021) at p 391- 2.
27 Ibid at 390 -392.
28 Jonsson Uniform Solutions (Pty) L imited v Brown and others [2014] JOL 32513 (LAC ); [2014]
ZALCJHB 32 .
29 (2017) 38 ILJ 1978 (LAC) ; [2017] 10 BLLR 1008 (LAC).
18

review and set aside the award may do so either on the basis of its correctness or for its
being unreasonable.30 In MacDonald’s Transport Upington (Pty) Ltd v Association of
Mineworkers and Construction Union and others (MacDonald’s Transport) ,31 this Court
considered the basis for review in a case involving circumstances similar to the present.
The dispute concerned an award in which the arbitrator had interpreted a trade union’s
constitution. The Court engaged in an exhaustive analysis of the relevant authorities,
and concluded ultimately that it was not necessary to decide whether the appropriate
test was whether the decision reached by the arbitrator was ‘correct’ rather than
‘reasonable’, since the award was reviewable on either basis.32 This approach was
confirmed, in the context of the review of a demarcation award, in SBV Services (Pty) Ltd v National Bargaining Council for the Road Freight and Logistics Industry & others
33
where this Court held:
‘[26] The other issue raised by the parties is the test that should apply in
reviewing a demarcation dispute particularly when the dispute is about the interpretation of words or phrases in a certificate of registration or similar instruments. The issue was finally resolved in the matter of National Union of
Mineworkers of SA (sic)
34 v Assign Services & others where this court held that:
“An incorrect interpretation of the law by a commissioner is, logically, a material
error of law which will result in both an incorrect and unreasonable award. Such an award can either be attacked on the basis of its correctness or for being unreasonable.” [27] In matter such as the present, the test that is of application is that of
correctness or reasonableness…’


30 Ibid at para 32.
31 (2016) 37 ILJ 2593 (LAC) ; [2017] 2 BLLR 105 (LAC) .
32 Ibid at para 31.
33 (2018) 39 ILJ 1290 (LAC).
34 The appellant was the National Union of Metalworkers of SA. See the report at (2017) 38 ILJ 1978
(LAC) ; [2017] 10 BLLR 1008 (LAC) .
19

[38] While it may be so that an incorrect award on a question of law is axiomatically
unreasonable and thus reviewable in terms of s 145 of the LRA on that basis, the legal
basis for the application of the correctness standard has never been clearly articulated by the Labour Courts. As I have indicated, i n those cases that concerned jurisdictional
errors, the Labour Courts implicitly recognised a material error of law as a ground for review, independently of any assessment of the reasonableness of the award or ruling
under review.

[39] In the constitutional era, the proper basis for a correctness challenge brought in
terms of s ection 145 of the LRA is s ection 33 of the Constitution of the Republic of
South Africa 1996, and in particular, the right to administrative action that is lawful.
Section 6 of PAJA establishes a material error of law as a ground for the review of administrative action. Sidumo holds that PAJA does not apply to arbitration awards
issued in terms of the LRA – at least in the case of the CCMA and bargaining councils,
the permitted grounds for review are those reflected in s ection 145 of the LRA. But
Sidumo also holds that s ection 145 is to be read subject to s ection 33 of the
Constitution. In that instance, the Constitutional Court held that “ … section 145 is now
suffused by the constitutional standard of reasonableness ”. But reasonableness is not a
universal standard, nor should it be applied as such. Section 33 (1) treats lawfulness separately from reasonableness.
35 In Duncanmec (Pty) Ltd v Gaylard NO and others36
the Constitutional Court held:
‘Since an award like the one we are concerned with here constitutes administrative action, the Constitution requires it to be procedurally fair, lawful and reasonable. This means that an award that fails to meet these requirements
is liable to be set aside on review. These requirements are in addition to the
grounds of review listed in s 145 of the LRA . However, to some extent the latter
grounds may overlap …’ (own emphasis)


35 Hoexter and Penfold (supra) at 400.
36 (2018) 39 ILJ 2633 (CC) ; [2018] 12 BLLR 1137 (CC) at para 40.
20

[40] Reading down s ection 145 to incorporate a requirement of reasonableness is
wholly appropriate in a case such as Sidumo , concerned as it was with the exercise of a
value judgment by an arbitrator in relation to fairness as a penalty for misconduct, a
judgment that by definition admits a range of responses. Matters such as the present,
where the administrative action in issue involves a question of law that can produce a
single correct answer, are best understood and assessed when s ection 145 of the LRA
is read as suffused by the constitutional standard of lawfulness. Put another way, just as the constitutional standard of reasonableness was found in Sidumo to have suffused
section 145, the constitutional standard of lawfulness does likewise.
37
[41] This Court alluded to this principle in MacDonald’s Transport , whe n it referred to
Democratic Nursing Organisation of SA on behalf of Du Toit and another v Western
Cape Department of Health and others ,
38 where the Court, per Davis JA, said the
following:
‘[21] Since the advent of the Constitution of the Republic of South Africa 1996
(the Constitution) , the concept of review is sourced in the justifications provided
for in the Constitution and, in particular, that courts are given the power to review every error of law provided that it is material; that is that the error affects the
outcome…
[22] To recap, Navsa AJ said in Sidumo at para 105 that the review powers in
terms of s 145 “must be read to ensure that administrative action by the CCMA is
lawful, reasonable and procedurally fair ”. Given that the section must be
interpreted to be in compliance with the Constitution, it would appear that the concept of error of law is relevant to the review of an arbitrator’s decision within
the context of the factual matrix as presented in the present dispute; that is a
material error of law committed by an arbitrator may, on its own without having to
apply the exact formulation set out in Sidumo , justify a review and setting aside

37 Myburgh and Bosch Reviews in the Labour Court s (LexisNexis 2016) at 244.
38 (2016) 37 ILJ 1819 (LAC) ; [2016] ZALAC 15 at paras 21-22.
21

of the award depending on the facts as established in the particular case.’ (own
emphasis)

[42] What this approach recognises is that the right to review established by s 145,
where the applicant seeks to review an arbitration award on the basis of a material error of law committed by an arbitrator, is not limited to circumstances where the alleged error resulted in an unreasonable award.
39 A material error of law is a discrete, substantive
ground for review under s 145 of the LRA. It follows that a reviewing court, when faced
with what is alleged to be an error in law in relation to the interpretation of an
instrument, is empowered to interpret the relevant text itself, rather than assessing
whether the arbitrator’s decision was reasonable.40
[43] In short : although a material error of law may previously have been viewed as no
more than a side car on the motorcycle of reasonableness,
41 the constitutional right to
administrative action that is lawful requires that the grounds for review established by s 145 of the LRA be understood as admitting a material error of law as a discrete, legitimate ground for review.

Did the arbitrator commit a material error of law?


39 At least in relation to an irregularity in the conduct of arbitration proceedings, this Court has,
reasonableness aside, previously acknowledged the remaining s 33 requirements as suffusing s 145 of
the LRA. In Arends & others v SA Local Government Bargaining Council & others (2015) 36 ILJ 1200
(LAC) ; [2015] 1 BLLR 23 (LAC) at para 19, Murphy AJA found: “ the undertaking of the enquiry in the
wrong or in an unfair manner by an arbitrator is an irregularity in the conduct of the proceedings
reviewable in terms of s 145 of the LRA as suffused by the constitutional right to administrative action that
is lawful and procedurally fair ”.
40 Hoexter 3 ed at 400.
41 The image is drawn from Alan Hyde “What is Labour Law?’ in Davidov and Langille (eds) Boundaries
and Frontiers of Labour Law ( Hart 2006 ) at p 60, in relation to the relationship between subordinate
employment and labour law as a collection of regulatory techniques.
22

[44] The question to be decided then is whether by interpreting the appellant’s
registered scope as he did, the arbitrator committed a material error of law. Errors of law
arise in relation to questions of law. To qualify as a question of law, the issue must constitute neither a question of fact nor the exercise of judicial discretion. An error of law
traditionally refers to a wrong or mistaken interpretation of a legislative provision.
42 More
broadly, questions of law are all issues that are determined by authoritative legal
principles and include questions which a court is bound to answer in accordance with a
particular rule or law, and questions as to what the law is.43 Questions of interpretation
and construction are clearly questions of law.44 Reasonableness is not a sufficiently
exacting standard when it comes to reviewing statutory interpretations . The rule of law
does not permit two contradictory, yet potentially reasonable, interpretations of a statute or other regulatory measure by which citizens order their lives.
[45] Intermodal does not dispute that the interpretation of the appellant’s registered
scope raises a question of law or that what is in issue is what the appellant contends to be the wrong or mistaken interpretation of its registered scope. There is also no dispute that if the arbitrator is found to have adopted an erroneous interpretation, the error would be material, if only because the result or outcome would have been different.
[46] During argument, Mr Beckenstrater, who appeared for the appellant, submitted
that the words “ ancillary and incidental to ” motor transport introduced a degree of
flexibility into the definition, in terms of which short -term storage for the purposes of
distribution by means of motor transport would fall within the appellant’s registered scope but other, longer -term forms of storage, or storage at a seaport prior to goods
being shipped, for example, would not. He submitted that i t was the fact that goods
were delivered to Intermodal ’s storage facilities by means of road transport and

42 Hoexter and Penfold at 389.
43 Media Workers Association of SA and others v Press Corporation of SA Ltd (1992) 13 ILJ 1391 (A) ;
[1992] 2 All SA 453 (A) at 1396F -H.
44 General Life Assurance Co v Moyle 1919 AD 1 at 9; Coertzen v Gerard NO and Another 1997 (2) SA
836 (O) at 845H.
23

dispatched from those facilities by the same means, which brought Intermodal’s storage
activity within the appellant’s registered scope.

[47] The appellant challenged the arbitrator’s interpretation of its registered scope
(and the Labour Court’s upholding of the arbitrator’s award) on three specific grounds.
The first is a contextual argument that relies on a change in the appellant’s name,
effected during 2010. The appellant submits that this has significant bearing on the interpretation of its registered scope, given that the change inserted the words “and
Logistics ” into to “Road Freight Indus try” thus signifying, so the appellant submits, that
an employer engaged only in the logistics could, potentially at least, fall within its
registered scope. The second and third submissions advanced by the appellant are to
the effect that the interpretation adopted by the arbitrator leads to the redundancy of the
introductory words to the definition, ‘one or more of the following activities…’ , and also
to the whole of paragraph (ii) . In particular, t he appellant submits that the words ‘ one or
more ’ in the definition should be read disjunctively to mean that an enterprise falls within
its registered scope if it engaged in the activities , either singly or in any combination,
described in paragraphs (i) to (iii) , respectively . On the arbitrator’s interpretation, it
would be impossible for an employer to be engaged only in the activity of storage, since
an employer could be engaged in that activity only if that employer is already engaged
in the activity of transport.

[48] Further, the appellant relies on what it term s general principles of demarcation,
which require that an employer’s activity that is ancillary to that employer’s main activity
be demarcated together with it s main activities.

[49] The appellant submits that there would be no purpose to paragraph (ii) if it meant
that an employer’s storage activity only falls within t he appellant’s registered scope if it
is ancillary to that employer’s road transport activity. As Mr Beckenstrater put it, ancillary
activities go with the main activity . If the main activity is transportation by road, all of the
employer’s ancillary activities are demarcated into that industry. On this basis, the
arbitrator’s interpretation, paragraph (ii) would have no meaning beyond that which
24

would already apply , thus enabling paragraph (ii) to be removed from the definition with
no consequence to the scope of the industry.

[50] The appellant thus contends that contrary to what the arbitrator found, the
definition of its registered scope simply requires the storage of goods activity to support
road transport activities, regardless of the identity of the employer that conducts those
road transport activities.

[51] The principles of interpretation are well -established. In University of
Johannesburg v Auckland Park Theological Seminary and Another45, the Constitutional
Court summarised the approach to be adopted, recording that the approach to interpretation post -Endumeni
46 requires that the context and the language of the
instrument concerned be viewed holistically, simultaneously considering text, context
and purpose. In other words, context and purpose must be considered as a matter of course, and not only when there is a lack of clarity or any ambiguity in the text. In the
present instance, it should be recalled that the arbitrator was not concerned with the application of principles governing demarcation; the dispute before him related solely to the interpretation of the appellant’s registered scope.
[52] I deal first with the appellant’s submission regarding its change of name effected
in 2010, and its reference to what it contends to be the significance of that change for
the interpretation of its registered scope. The difficulty with this submission is that there was no evidence that served before the arbitrator, or the review court for that matter,
regarding the purpose of or reasons for the change in the appellant’s name. The stated
case makes no mention of it; this is a matter raised for the first time on appeal. The lack
of any evidence to support the significance that the appellant seeks to attach to the change in name aside, it does not necessarily follow that ‘transport’ on the one hand

45 2021 (6) SA 1 (CC); [2021] ZACC 13 at paras 64 -66.
46 Natal Joint M unicipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) ; [2012] ZASCA
13.
25

and ‘logistics’ on the other hand are distinct concepts. The definitions to which the
appellant refers can equally be interpreted to mean that transport is an integral part of
logistics and that the appellant’s name change, if it has any bearing on the matter, simply recognises that many road freight companies perform an overall logistics
function, as the stated case indicates, by virtue of the ‘ancillary’ or ‘incidental’ functions
set out in paragraph (ii) of the definition. It is also by no means clear that, as the
appellant contends, ‘transport’ and ‘logistics’ are discrete activities , or that ‘ logistics ’
necessarily equates with storage activities. The OED defines ‘ logistics ’ to mean, among
other things, the commercial activity of transporting goods to customers. Logistics , as
an activity, is concerned with the management of the flow of goods ; it is not a synonym
for storage. I thus fail to appreciate how the appellant’s change in name, effected in
2010, is of any relevance to the interpretation of its registered scope.

[53] Turning next to the appellant’s submission based on the wording of the preamble
to the definition (“one or more of the following activities …”), read with paragraph (ii) ,
what is clear is that the definition of the appellant’s registered scope contemplates the
activity of storage as a discrete activity falling within that scope, in all the manifestations
listed (receiving, opening, unpacking, dispatching, clearing or accounting) and more,
given that the list is illustrative rather than exclusive. But it does not follow , as the
appellant contends, that paragraph (ii) of the definition is redundant if the definition is
interpreted as it was by the arbitrator. T he preamble does not refer to one or more
‘employers ’; the reference is to one or more of the listed activities. There is no indication
from the definition that the activities need to be conducted by different employers, nor
does it follow that paragraph (ii) is redundant if paragraphs (i) and (ii) are to be read as
referring to a single employer. The context of demarcation disputes, as the arbitrator
recogni sed, is an acceptance that an employer may employ employees in different
industries. On this reading, paragraph (ii) of the definition of the appellant’s scope is
intended to provide clarity as to which classes of employees of any particular employer
would fall within the appellant’s registered scope by virtue of their employment being
ancillary or incidental to the transportation of goods by road.

26

[54] The appellant submits that on the arbitrator’s reasoning, paragraph (ii) is
redundant because on an application of general principle, any storage activity that is
ancillary to transportation activities undertaken by the same employer would, in any
event , be demarcated into the activity of road transport . As I understand the submission ,
paragraph (ii) contemplates that the employer undertaking the secondary activity of
storage need not be the same employer that undertakes the primary activity of road
transport , because an employer undertaking storage as a secondary activity would in
any event be demarcat ed into the road transport industry. In my view, p aragraph (ii) of
the appellant’s registered scope does no more than recognise that, at least in certain
circumstances, not all employees of an employer necessarily fall into the same industry.
Some employees might thus fall within the appellant’s registered scope by virtue of paragraph (i); other employees of the same employer might fall within the registered scope by virtue of their being involved in the storage activities described in paragraph
(ii), where these are ancillary or incidental to the activity of motor transport conducted by
their employer . For example, an employer that operates transport services might
simultaneously and incidentally offer storage facilities to its clients. Indeed, operations of
this nature are acknowledged in the stated case. Paragraph 23 of the stated case lists
entities that both operate warehouses (where storage activities would no doubt be
undertaken ) and conduct transport services for reward.

[55] Viewed thus, on the arbitrator’s interpretation of t he appellant’s registered scope,
the provisions of paragraph (ii) are not redundant.
[56] The arbitrator’s conclusion that the employer engaged in storage for the
purposes of paragraph (ii ) must necessarily be the same employer engaged in the
activity of motor transport described in paragraph (ii), finds further support in the plain
meaning of the words ‘ancillary or incidental to’, as well as the context in which the
definition falls to be interpreted. What is obvious fro m the definition is that the
association of employers and employees in the activity of storage is a form of
association that is qualified – not all storage activity falls within the appellant’s
registered scope. The appellant’s scope extends only t o those employer s and
27

employees who associate for the purpose of carrying out the activity of storage that is
“ancillary or incidental ” to the transportation of goods by motor transport.

[57] Put another way, employers and employees engaged only in the storage of
goods, if that activity cannot be said to be ancillary or incidental to the primary activity of
the transportation of goods by road, are excluded from the definition. I understood Mr
Beckenstrater to submit as much when he stated that the appellant has no interest in
storage activities attached to ports, railway sidings , or the personal use of storage units,
and the like.
[58] An ancillary business activity , as the arbitrator observed, comprises a service
that is subsidiary or auxiliary or supplementary to a main or primary service (in this
case, the transportation of goods by road). The appellant submits that the words
“ancillary or incidental to the transport of goods by means of motor transport ” do not
connote a primary and a secondary activity (the former being trans portation and the
latter storage); what the definition contemplates is storage as a primary activity, at least
in circumstances where that activity i s related to road transportation. That condition i s
satisfied in the present instance, so the submission went, because goods a re delivered
to Intermodal’s storage facilities by means of road transportation and dispatched by the
same means.

[59] In my view, th e concept of an ancillary or incidental activity , by definition,
connot es the existence of a secondary activity in support of a primary activity . It is
difficult to conceive, in the context of a demarcation dispute, how the secondary activity
of one employer can be ancillary or incidental to the primary activity of another
employer . On the appellant’s interpretation of its registered scope, a simple storage
facility, performing no other function, would fall within its registered scope if its activities
were ancillary to road transport operations other than its own. This would create an
untenable anomaly in that the demarcation question would be determined not by an
entity’s own business activities but by the business activities of that entity’s clients or the
contractors engaged by those client s. Further, it will be difficult, if not impossible, to
28

distinguish long term storage (which t he appellant concedes is not contemplated by
paragraph (ii) ) with shorter term storage, which the appellant contends falls within its
registered scope. I n both instances, goods are delivered and removed by motor
transport ; the distinction is one that goes only to the contemplated period of storage. At
what point does short term storage become long term storage? What is the position of
an employer that offers both? Thes e are not matters , as Mr Beckenstrater submitted,
that can simply be addressed in due course, with an application of demarcation
principles in each case. A sensible, business -like interpretation of the appellant’s
registered scope would exclude that prospect.
[60] Finally, and f undamentally, the link between the activities of storage and motor
transport that the appellant seeks to draw , a link that relies ultimately and only on the
fact that goods arrive at Intermodal’s storage facilit ies by means of road transport and
are dispatched f rom those facilities by the same means, is not sufficient to sustain the
submission that Intermodal’s activities are ancillary and incidental to the activity of transport by road. That transport is engaged at the instance of Intermodal’s customers,
who make the necessary arrangements for the transportation of their goods to and from
Intermodal’s storage facility . To bring Intermodal’s activities within the appellant’s
registered scope, more is required.

[61] In the result, t he arbitrator did not commit any material error of law in his
interpretation of the appellant’s registered scope. There is no basis on which to interfere
with th e outcome of the arbitration hearing under review , and the application to review
the award was cor rectly dismissed.

Consultation with NEDLAC
[62] Section 62(7) of the LRA requires the CCMA to invite written representations by
way of a notice published in the Government Gazette when it believes that a
demarcation question referred to it is of ‘substantial importance’. Section 62(9) follows
on from that and reads:
29

‘Before making an award, the commissioner must consider any written
representations that are made, and must consult NEDLAC.’

[63] The Labour Court concluded that given that the dispute between the parties
concerned the interpretation of the appellant’s registered scope, and in the absence of the publication of a notice in the Gazette inviting representations on a demarcation
matter deemed by the CCMA to be of substantial importance, there was no obligation
on the arbitrator to consult NEDLAC prior to issuing his award. This conclusion overlooks the decision by this Court in SA Municipal Workers Union v Syntell (Pty) Ltd
and others
47 (Syntell), where the Court affirmed that s 62(9) of the LRA contemplated
two sources of input in the making of a demarcation award. First, in cases where the CCMA has published a notice in the Gazette inviting written representations, the arbitrator would have available those representations, since a hearing cannot be
convened until after the date for the submission of representations has elapsed. The
obligation to consult NEDLAC is a discrete requirement, was context specific, and
contemplated NEDLAC furnishing the commissioner with its views. The Court said the following:
48
‘As regards the consultation with NEDLAC, s 62(9) does not define consultation
for these purposes nor does it prescribe any formalities or stipulate at what stage
the commissioner must consult NEDLAC, other than it must, axiomatically, be
before ‘making an award’. No indication is given in the record of the usual practice followed in consulting NEDLAC. Notably, the duty imposed on the commission er is not to invite NEDLAC to participate in the hearing, which, it is
plain from the text of the section, is a distinct happening. Thus, there is no contemplation apparent from the text of the section that there would be any interaction between the immediate disputants and NEDLAC.’


47 (2014) 35 ILJ 3059 (LAC) ; [2014] ZALAC 18.
48 Ibid at para 26.2.
30

[64] As this Court pointed out in Syntell, NEDLAC undertakes the initial demarcation
of sectors over which bargaining councils exercise jurisdiction. NEDLA C, as the
decision- maker originally responsible for the demarcation of a sector, clearly has an
interest in the outcome of proceedings in which demarcation disputes are determined.
The nature and extent of this interest supports an interpretation of s 62(9) that requires
the arbitrator to consult NEDLAC prior to making any demarcation award, and not only
in relation to those disputes where the CCMA has elected to invite written
representations by way of a notice published in the Gazette.
[65] In National Union of Metalworkers of SA v Commission for Conciliation,
Mediation and Arbitration and others
49 (National Un ion of Metalworkers of SA) the
Constitutional Court held that the requirement that a commissioner consult NEDLAC
was ‘significant’ and that this was a ‘peremptory requirement’, one that distinguishes demarcation arbitrations from conventional arbitrations contemplated in the LRA.
50 In
the course of its judgment, t he Constitutional Court endorsed the decision by this Court
in Syntell on the nature and timing of consultation.

[66] In Syntell, this Court considered the meaning of ‘consult’ in s 62(9) and held that
the word must necessarily bear a meaning that is context specific and functional to the overall objectives of s 62. The Court said:
51
‘The intrinsic nation of ‘consultation’ embraces a solicitation about a
contemplated course of action or decision. In this section it contemplates NEDLAC, the decision maker which initially demarcated the sector, furnishing the
commissioner with its views about a decision to be taken by him. Accordingly, it would seem wholly appropriate that the timing of this peremptory consultation be
the moment when a prima facie view can be expressed by the commissioner and comment can be solicited about that prima facie view. Self -evidently, it cannot be

49 (2022) 43 ILJ 530 (CC) ; [2022] 3 BLLR 209 (CC) .
50 Ibid at para 53.
51 Ibid at para 27.
31

the commissioner’s final view because that would render the consultation a
sham. Lastly, it bears emphasis that the role of NEDLAC is not to ‘approve’ an
award; the decision, from first to last, is that of the commissioner.‘

[67] In sum: where in demarcation dispute the CCMA takes the view that the matter is
one of substantial importance, the CCMA must invite written representations by way of
a notice in the Gazette. Any representations must be made available to the arbitrator
presiding at the demarcation hearing. Regardless of whether the CCMA has invited written representations, the arbitrator in any demarcation dispute must consult with NEDLAC before an award is issued and served on the parties. Consultation in this context contemplates that the arbitrator makes available to NEDLAC a prima facie view,
in the form of a draft award or otherwise, inviting comment before the award in its final form is issued and served on the parties by the CCMA. The Labour Court was bound by
this Court’s decision in Syntell and the Constitutional Court’s decision in National Union
of Metalworkers of SA that consulting NEDLAC is a peremptory requirement. The
Labour Court thus erred in finding that NEDLAC had no interest in the present
demarcation and that the arbitrator was under no obligation to consult NEDLAC.

[68] The question that remains is whether by submitting his award to NEDLAC at the
time and in the circumstances that he did, there was compliance with the provisions of s
62(9). It is not disputed that the award is signed and dated 19 May 2019, but that it was
served on the parties only on 3 June 2019. In the interim, on 29 May 2019, NEDLAC
wrote a letter to the CCMA stating its support for the demarcation award. It follows that
the award had been forwarded to NEDLAC between 19 May 2019 and 29 May 2019,
prior to service of the award on the parties as contemplated by s 138(7)(b). It is not in
dispute that NEDLAC took no issue with the process that had been followed when the award was forwarded to that body. The only reasonable inference to be drawn is that despite applying the date and his signature to the award before forwarding the award to
NEDLAC, the CCMA held back on service of the award until NEDLAC’s response was
32

received. On receipt of NEDLAC’s endorsement, the release of what then in effect
became a final award was authorised, and the award served on the parties.52

[69] In these circumstances, there was substantial compliance with s 62(9), and there
is no merit in the appellant’s contention that the award ought to be set aside on the basis of a failure to comply with that section.
[70] The question of the declaratory order sought by the appellant in its amended
notice of motion was faintly pursued in the appellant’s heads of argument. The Labour
Court was correct to observe that it is not the function of the court to grant orders
divorced f rom the concrete facts of a specific dispute and further, in terms of section 62
(4), the correct forum for the determination of demarcation disputes is the CCMA. The
fact that the Labour Court has the power under section 158 (1)( a)(iv) to make
declaratory orders does not extend jurisdiction to the Court to undertake what amounts
to a demarcation by way of a declaratory order , in circumstances where that jurisdiction
has specifically been vested elsewher e. The application for a declaratory order seeking
to extend the appellant’s jurisdiction to employers and employees associated for
carrying on the storage of goods ancillary and incidental to the transportation of goods
by means of motor transport , regardless of whether that transportation of goods is
conducted by that employer or a third party, was nothing less than an attempt by the
appellant to seek through the back door what had been explicitly refused by the
arbitrator .
Costs


52 Section 138(7) provides that the commissioner must issue and award with brief reasons and that the
CCMA must serve a copy of the award on each party to the dispute. For the purposes of s 62(9), an
award is ‘made’ once it has been served on the parties in terms of s 138(7) – merely signing an award is
not tantamount to making it.
33

[71] Section 179 of the LRA provides that this Court may make orders for costs
according to the requirements of the law and fairness. This formulation has the
consequence that the rule ordinarily applicable in the civil courts, that costs follow the result, does not apply. In the present instance, the interpretation of the bargaining
council’s registered scope is a matter of some importance to the parties, and to the road
freight sector more broadly. The appeal was not brought frivolously nor vexatiously. The
requirements of s 179 are best satisfied by each party bearing its own costs.

[72] I make the following order:
Order
1. The appeal is dismissed.
2. There is no order as to costs.

van Niekerk JA
Savage ADJP concurs.

GOVINDJEE, AJA

[73] I have had the benefit of reading and considering the judgment of my colleague
(the main judgment). I agree with the learned exposition of the issues and applicable legal position detailed in the main judgment , save only for the interpretation of the
appellant’s registered scope (paragraphs 5 2–61, above) and the question of a
declaratory order (paragraph 70, above).
[74] The main judgment accurately records one of the key issues to be determined by
the arbitrator: whether, on a proper interpretation, the appellant’s registered scope contemplated that the “ storage of goods ” activity undertaken by an employer and
referred to in subparagraph (ii) of the definition, need necessarily be undertaken in
34

relation to the transportation of goods conducted by the same employer. For reasons
that follow and are aligned with the crux of the appellant’s arguments on this point , my
view is that the arbitrator erred in answering that question in the affirmative.

[75] On the arbitrator’s approach, the definition permits a single employer to fall within
the ‘industry’ based on its association with its employees for two broad activities:
transportation of goods by means of motor transport (transportation) and storage of
goods. But only when the employer and its employees are already engaged in the primary activity of transportation would ‘supplementary’, ancillary or incidental storage
work carried out by other employees of the same employer be encompassed (storage
activit y). Put differently, those employees engaged in storage activity for a
transportation company would not have been covered by the definition were it not for
the inclusion of subparagraph (ii).

[76] That approach, which is endorsed by the main judgment, respectfully appears to
deviate from an established principle of demarcation. The character of an industry is
determined not by the occupation of the employees engaged in the employer’s business
but by the nature of the enterprise in which employees and employer are associated for
a common purpose. Once the character of the industry is determined, all employees are
engaged in that industry. The precise work allotted to each employee by the employer is
insignificant.
53 The implication is that once an employer and employees are associated
primarily by virtue of the character of their industry being transportation, so that their
activities fall within subparagraph (i) of the definition, any ancillary activities performed by other employees are subsumed by the primary activit y for purposes of
demarcation.
54


53 R v Sidersky 1928 TPD 109 at 112– 113. There appears to be no need, for present purposes, to
consider old authorities pertaining to employers engaged in more than one industry.
54 Attorney -General, Transvaal v Moores (SA) (Pty) Ltd 1957 (1) SA 190 (A) at 196H –197B . Also see the
facts of Coin Security (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and others (2005)
26 ILJ 849 (LC) ; [2005] 7 BLLR 672 (LC) , especially paras 29– 30.
35

[77] This means that an employer engaged in the primary activity of transportation
and who, in ancillary or incidental manner, happens to also associate with some other
employees in respect of storage activity , is fully covered by subparagraph (i) of the
definition already. There is no need to have recourse to subparagraph (ii) of the
definition to arrive at this outcome. If this is so, the arbitrator’s approach reads
subparagraph (ii) as simply confirmatory of what is the usual position. While th e
possibility o f subparagraph (ii) having been inserted ex abundant cautela (out of an
abundance of caution) cannot be excluded, this would conflict with the principle of
interpretation that language is not used unnecessarily . It has not been suggested that
any one of the exceptions to this rule are applicable.
[78] To be meaningful, the separate inclusion of subparagraph (ii) of the definition
must relate to a different scenario from that already covered by subparagraph (i). As
indicated, on my understanding, subparagraph (i) already includes employees carrying
on ancillary storage activity for an employer primarily engaged in transportation. Read in
context, subparagraph (ii) , which must be capable of sensible and business -like
application on its own, could only refer to an employer and employees associated for
carrying on storage activity where this is ancillary or incidental to transportation by a
different employer . If that is so, the key question posed by the arbitrator was answered
incorrectly.
[79] The main judgment does not dispute that the definition of the appellant’s
registered scope contemplates storage as a discrete activity falling within that scope.
On my reading, there is simply no textual or contextual basis to restrict storage activity ,
in subparagraph (ii) of the definition, to employers/employees also involved primarily
with transportation, as defined in subparagraph (i). The appellant’s argument is
supported when the definition is read in its entirety and in context, bearing in mind the
appellant’s name change and the circumstances that resulted in the inclusion of
‘Logistics’ in addition to ‘Road Freight’. Warehousing and distribution are key
components of road logistics. An interpretation of the definition that effectively includes
only companies engaged primarily in the actual transportation of road freight , whether
36

they are also engaged in ancillary storage work or not , under -emphasises both the
name change and the use of the words ‘one or more’ in the definition.

[80] As the definition is worded, it must be accepted that there is a ‘storage of goods
industry’, including the various activities described.55 When employers and employees
associate for carrying out any of these activities, they form part of this ‘storage’ industry,
subject to a crucial limitation: their activities must be demarcated as (predominantly)
ancillary or incidental to the primary activity of transportation of goods by means of
motor transport. The language used, read in context, seems clear and will ensure that
the preferred interpretation does not open the floodgates . Employers and employees
engaged primarily in the activity of pure storage of goods, or storage predominantly
disconnected from transportation by means of motor transport, are excluded from the
definition. This is because such forms of storage cannot be said to be ancillary or
incidental to the primary activity of transportation of goods by motor transport and,
therefore fall outside the definition.
[81] Whether or not the storage activity is ancillary or incidental to motor
transportation is the purview of demarcati on proceedings. As m y colleague rightly points
out, this requires investigation and resolution by commissioners with specialist
expertise. While I accept that circumstances such as the present pose a challenge for
demarcation commissioners , I fail to appreciate the untenable anomaly highlighted by
the main judgment .
56
[82] It follows that I am of the view that the Labour Court erred in upholding the
arbitrator’s interpretation. In the circumstances, it is tempting to uphold the appeal and
grant the alternative relief sought by the appellant , namely, to set aside the award and

55 This includes the receiving, opening, unpacking, packing, dispatching and clearing or accounting for of
goods where these activities are ancillary or incidental to the transportation of goods by means of motor
transport.
56 See, for example, the facts of N ational Union of M etalworkers of SA v C ommission for C onciliation,
Mediation and Arbitration and others (2022) 43 ILJ 530 (CC) ; [2023] 2 BLLR 159 (LC) .
37

remit the matter for determination by a different commissioner . The lengthy period that
has elapsed since the demarcation award was issued makes this unpalatable. In
addition, w hile I agree with the appellant’s interpretation of the definition, I am
unconvinced that the stated case does enough to demonstrate that Intermodal’s storage
activit y was properly classified as ‘ancillary or incidental to the transportation of goods
by means of motor transport’, as opposed to being only partly linked to motor
transportation, but predominantly related to other forms of storage.

[83] What remains is to consider the declaratory relief sought. This was one of the
three grounds of appeal specified in the notice of appeal and motivated as follows in the
appellant’s heads of argument :
‘For the sake of certainty in the industry, the appellant presses upon the court the advantage of a determination of the interpretation of part (ii) of its registered
scope. It was for the sake of such clarity that the appellant had sought a declarator from the Court below on the interpretation of part (ii). The appellant
simply emphasises the advantage to the appellant and the industry in general of a binding finding on the interpretation issue. ’

[84] The Labour Court summarily dismissed this aspect of the review without any
reference to s 158(1)( a)(iv) of the LRA .
57 On my interpretation of the definition , the court
did so without good reason. T he fact that demarcations are the purview of the CCMA
was certainly not a good basis for not considering the point properly. Given the various
occasions in the past where the issue has tested arbitrators and the Labour Court, it
also cannot be said that the interpretation of the definition was academic or abstract.58
Instead, as the appellant argues, th e case present ed an opportunity for clarification. The

57 ‘S 158(1) : The Labour Court may
(a) make any appropriate order, including – …
(iv) a declaratory order ;…’
58 Minister for Public Service & Administration & another v Solidarity & others (2007) 28 ILJ 1747 (LAC) ;
[2007] ZALAC 28 at paras 16– 18, including the authorities cited.
38

Labour Court failed to exercise its discretion judicially on the point , and I would replace
its order with the following:
‘It is declared that an employer and its employees associated for carrying on the
storage of goods ancillary or incidental to the transportation of goods by means
of motor transport fall under the applicant’s registered scope irrespective of
whether that transportation of goods is conducted by that employer or a third
party.’

Govindjee AJA

APPEARANCES
FOR THE APPELLANT: Mr C Beckenstrater
Instructed by Moodie and Robertson
FOR THE THIRD RESPONDENT: Adv P Schumann
Instructed by Mooney Ford and Partners