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[1994] ZASCA 55
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National Automobile and Allied Workers' Union (now known as National Union of Metalworkers of South Africa) v Borg-Warner SA (Pty) Ltd. (726/91) [1994] ZASCA 55; 1994 (3) SA 15 (AD); (1994) 15 ILJ 509 (A) (30 March 1994)
CG CASE NUMBER: 726/91
IN THE SUPREME COURT OF SOUTH AFR
ICA
(APPELLATE
DIVISION)
In the matter between:
NATIONAL AUTOMOBILE AND ALLIED WORKERS'
UNION (now
known as NATIONAL UNION OF
METALWORKERS OF SOUTH
AF
R
ICA)
Appellant
and
BORG-WARNER SA (PTY) LIMITED
Respondent
CORAM
: JOUBERT, NESTADT ct VAN DEN HEEVER JJA
HEARD O
N: 15
NOVEMBER 1993
DELIVERED ON
: 30 MARCH 1994
J U D G M E N T VAN DEN HEEV
E
R JA
2
On 14 January 1986 an agreement was concluded
between a registered trade union, the National
Automobile and
Allied Workers Union, now known as the
National Union of
Metalworkers of South Africa ("the
Union"), and Borg-Warner SA (Pty)
Ltd, now known as
Gearmax Pty Ltd ("the Company"). This agreement is at
the root of the present appeal. It reads:
"R
E-HIRING AGREEMENT BETWEEN BORG-WAGNER S.A. (PTY) LIMITED AND THE
NATIONAL AUTOMOBILE AND ALLIED WORKER'S
UNION
1.) Following negotiations with
the National Automobile and Allied Worker's Union, Borg-Warner S.A. (Pty.)
Limited agrees to re-hire
164 of the N.A.A.W.U members dismissed as a result of
illegal strike action on 17 October 1985.
2. ) The 164 members will commence work on Monday, 20 January
1986.
3.) The administrative arrangements for rehiring are as
follows:-
a)
The first 82
members on the list of the 164 members to be re-hired must report to the
Personnel Office between 8.00 a.m. and 3.30
p.m. on Tuesday, 14 January,
1986.
b)
The remaining 82
members on the
list
3
of the 164 members to be re-hired must report to the Personnel Office
between 8.00 a.m. and 3.30 p.m. Thursday, 16 January 1986.
c) In the event that members do not report for re-hiring during the course
of this week (week ending 17/1/86) it will be assumed that
they do not want
re-employment at Borg-Warner and another person from those mentioned in item 5
below will then be employed in their
place. (Genuinely ill members will be
excluded from the above proviso provided that a doctor's certificate be
furnished in each case).
d) At the Personnel Office, the necessary administrative work such as
signing of conditions for reemployment, taking of I.D. Cards
etc. will be
performed.
4. ) Members will be re-hired in
their old
jobs as far as possible (all things being equal) but will start at the
minimum rate for the applicable Borg-Warner grade.
5. )
The balance of the 57 dismissed members
together with employees previously retrenched during 1984/85 will be
considered for re-employment as and when the need arises. Provided
where skills
are required which the aforesaid don't have, the company shall have the right to
employ outside persons having the necessary
skills.
4
6.) Re-instatement of service related benefits excepting pay be deferred
for a period ending concurrently with the annual factory
shutdown in December
1986 on condition that negotiated procedures are followed and that Borg-Warner
S.A. (Pty.) Limited experiences
no strike action, overtime bans, go-slow work
periods or any other form of industrial action during this period.
7.) The employees to be re-hired will be required to sign a "conditions
for reemployment" form.
The National Automobile and Allied Workers Union signs and agrees that they
understand the contents of this agreement fully and are
fully satisfied in all
respects with each and every aspect mentioned in the
agreement."
Among the employees referred to
in clause 5 as having been retrenched, were workers who were members of other
unions. In what follows
I refer to this mixed group of previously retrenched and
recently dismissed employees, as "the pool".
As time went by the
Company re-employed many of those who had been earlier retrenched and a few of
those who had been dismissed. It
also employed persons
5 from
outside the pool. There were queries and intermittent protests about this in
letters to the Company from the Union and at meetings
of the Shop Stewards'
Committee. On 19 August 1988, the Union asked the Secretary of the National
Industrial Council of the Iron,
Steel, Engineering and Metallurgical Industry
for the Eastern Province, of which both the Union and the Company were members,
to
convene a meeting to consider and attempt to settle "an Unfair Labour
Practice dispute" between the parties. The dispute was described
as "arising out
of the Company's breach alternatively unfair implementation of the rehiring
agreement", a copy of which was attached.
Failing settlement, the Union intended
referring the dispute to the Industrial Court for determination under section
46(9) of the
Labour Relations Act No 28 of 1956 ("the Act"). Subsection (c) of
that enjoins the Industrial Court to determine a dispute concerning
an alleged
unfair labour practice which the Industrial Council has not succeeded
in
6 settling, "on such terms as it may deem reasonable, including
but not limited to the ordering of reinstatement or
compensation".
It was common cause that the Act as it stood before
certain amendments came into operation in September of 1988, was the touchstone
against which the validity of the Union's charge against the Company, based on
past events, should be tested. Sec 1 of the Act as
it then read provided that,
unless the context indicated otherwise,
"'employee' means any person who is employed by or working for any employer
and receiving or entitled to receive any remuneration,
and
... any other person whomsoever who in
any manner assists in the carrying on or conducting of the business of an
employer; and
'employed' and 'employment' have corresponding meanings."
"'employer' means any person whomsoever who employs or provides work for
any person and remunerates or expressly or tacitly undertakes
to remunerate him
or who ... permits any person whomsoever in any manner to assist him in the
carrying on or conducting of his business;
and 'employ' and 'employment' have
corresponding meanings."
7
"'unfair labour practice' means -
(a) any labour practice or any change in any
labour practice
other than a strike or a
lockout which has or may have the
effect
that -
(i)
any employee or class of employees is
or may be unfairly affected or that his
or
their employment opportunities, work,
security or
physical, economic, moral or
social welfare is or may be prejudiced
or
jeopardised thereby;
(ii) the business of any employer of
class of
employers is or may be unfairly
affected or disrupted thereby;
(iii) labour unrest is or may be created
or promoted thereby;
(iv) the relationship between employer
and
employee is or may be detrimentally
affected thereby;
(b) or any other labour practice or other
change in any labour
practice which has or may
have an effect which is similar or related
to
any effect mentioned in paragraph
(a)."
In referring the dispute to the
Industrial Court, the Union (acting on behalf of its members) in its "Statement
of Case" set out the
contents of clause 5 of the re-hiring agreement, stated
that the Company had
8
engaged persons in casual employment from outside the
pool,
and alleged that -
"The respondent has accordingly breached, alternatively unfairly
implemented, the rehiring agreement ... which breach, alternatively
which unfair
implementation, constitutes an unfair labour practice in that:
1. the employees who are beneficiaries of the
agreement have
had their job security and
employment opportunities unfairly
affected;
2.
labour unrest
has been promoted
thereby;
3.
the relationship
between employer and employee has been detrimentally
affected."
It sought an order compelling
specific performance of the undertaking in future, and for further relief
including compensation for
all and reemployment of some of the beneficiaries
under the rehiring agreement.
The Company opposed the Union's demands. In its reply to the Union's
statement of case, it admitted engaging persons from outside
the pool in
permanent positions and not only by way of casual employment. It however denied
that in doing so it breached the
9
agreement since according to its plea it -
"1. ... did consider the applicant employees and/or
2. the applicant employees have become employed, reached retirement age, or
left the area and no longer qualify for
reemployment."
It also denied each and
every component part of the Union's allegation, quoted above, that its conduct
constituted an unfair labour
practice.
Before evidence was led, the
Company challenged the jurisdiction of the Industrial Court on the grounds that
the dispute, not being
one between employees and employers, was not a labour
dispute. It was based on a contract between the Company and the Union, relating
to persons who had ceased to be employees.
The Industrial Court dismissed the attack on its jurisdiction, commenting
that "the Act clearly envisages that relief can be granted
... to an employee
who is no longer employed by his employer".
10
The Union then led the evidence of a number of men who had been dismissed
in 1985, and of a shop steward still in the employ of the
Company. After
discussions between the parties' representatives, two documents were handed up
to the court which disposed of ancillary
issues which had clouded the main ones.
Exhibit A is a list of the individuals agreed upon as being represented by the
Union in the
matter. The 104 names listed are those of members of the pool but
do not constitute the entire pool (presumably because that contained
members of
other unions also). Against each name appears the age of the man, his period of
service with the Company, whether he had
been retrenched or dismissed, and his
employment status at the time of the trial. Some were back with the Company,
many were employed
elsewhere, 35 were at that stage unemployed. In exhibit B the
Company admitted that the facts set out in exhibit A were correct,
and further
that some of the individuals listed had applied for re-
11
employment with the Company, without success; all those mentioned in A
who had been re-hired by the Company, had been approached by
the Company; none
of those not reemployed, had been so approached; when vacancies occurred in
certain listed job categories, there
had been a person or persons in the pool
who qualified for consideration by the Company, having previously been employed
by the Company
in the same or a higher job category. Despite this, the Company
had employed persons from outside the pool in those vacancies on
certain
occasions.
The Company tendered no evidence, confining its opposition to the order
sought by the Union to argument: that clause 5 imposed on
the Company only an
obligation to "consider" re-employing members of the pool; and that neither the
evidence led by the Union nor
the admissions made by the Company brought the
conduct of the latter within the definition of an unfair labour practice as
alleged
in the Union's statement of
12
Case.
The Industrial Court ruled against the
Company. It did not deal with the position of any
specific individual listed in exhibit A. There was
no
evidence to justify a finding that
"... the persons mentioned in clause 5 would all have been accommodated had
(the Company) looked to the 'pool' solely and not to outside
workers. Further it
appeared that more than one person in the 'pool' was eligible for a position
which became vacant and ... (i)t
is impossible for the Court to decide which one
of the two or more persons from those mentioned in clause 5 would have been
appointed
to a particular position which became
vacant".
Accordingly the claim for
compensation was refused. The company was however directed to comply with the
rehiring agreement. It was
told how to go about this, namely
"2. The (Company) is directed to advise the (Union) and the Industrial
Council in writing of all vacancies arising from time to time
which will enable
the (Union) to communicate the existence of a vacancy to such employees as are
qualified to fill such vacancies
in order that such person or persons may apply
for
13
such position or positions. If no application is received by (the
Company) from a qualified ex employee within seven days from the
notification of
a vacancy, the Respondent will be free to employ any other person or
persons."
It was directed that there be no order as to costs.
The Company appealed to the Eastern Cape Local
Division of the Labour Appeal Court against the judgment
and
order of the Industrial Court. The appeal was
upheld with costs. The
judgment of Erasmus J is
reported in (1991) 12 ILJ 549. He upheld the
Company's
objection to the jurisdiction of the Industrial
Court.
The effect of his judgment is that under the Act, the
relationship between employer and employee comes to an
end when the contract between them is lawfully
terminated. A dispute between the parties to the
contract after its termination is a labour dispute only
when
the dismissal is the very subject of the dispute.
The present dispute does not fall within that category.
No
employer-employee relationship existed between the
14
Company and the members of the pool when the agreement was concluded
between the Company and the Union. The definitions of "employer"
and "employee"
do not extend to include a prospective employer nor an ex-employee. An act of
employment or re-employment is therefore
not a labour practice and falls outside
the domain of the Industrial Court. And appellant could not take refuge in par
(a) (iii)
of the definition of an "unfair labour practice". There was no proof
of actual "labour unrest" as envisaged in the definition.
The approach of the Labour Appeal Court (which granted leave to appeal)
appears to be in accordance with the view of Tindall JA in
DHANABAKIUM v
S
UBRAMANIAN
& ANOTHER
1943 AD 160
at p 167 that "(i)t is a sound
rule to construe a statute in conformity with the common law rather than against
it". it did not however
take sufficient cognisance of the rider immediately
following on this statement: "except where and so far as the statute is plainly
intended to alter the common law".
15 When it is clear that the very
object of the Act is to alter or modify the common law, then full effect must be
given to this object.
(
GLEN ANIL FINANCE (PTY) LTD v JOINT LIQUIDATORS, GLEN
ANI
L DEV
ELOPMENT CORPORATION LTD
(in liquidation),
1981 (1) SA 171
(A) 183-4).
Under the common law, parties conclude a contract under which one of them
is to provide services in return for payment. Their agreement
determines when
the relationship so constituted starts; what reciprocal rights and duties are
acquired and incurred by each; and,
if it is to be of indefinite duration, how
it may be terminated. The unmistakeable intent of labour legislation generally,
is to
intrude, or permit the intrusion of third parties, on this relationship in
innumerable ways. The intrusion as regards the content
of the relationship is
readily apparent in statutes such as the Basic Conditions of Employment Act No 3
of 1983 and the Wage Act
No 5 of 1957. The Act we are concerned with - the
primary purpose of which is to ensure
16 industrial peace by the
promotion of collective bargaining - does that, and more. It goes beyond
intruding, or permitting intrusion
by others, as regards the terms which govern
the relationship while it lasts. It envisages intrusion as regards the very
duration
of the relationship, regardless of common-law notions of
consensus
between the individual employer and employee on that
score.
The Labour Appeal Court recognized that a termination of the relationship
which would be unassailable under the common law, does not
terminate the
applicability of the definitions "employer" and "employee" to the parties to the
relationship for purposes of the Act.
That has been recognized by our courts for
sixty years and more, in relation to predecessors of the Act. For example
CITY COUNCIL OF CAPE TOWN v UNION GOVERNMENT
1931 CPD 366
, dealt with the
Industrial Conciliation Act no 11 of 1924 which defined
employee
as
17
"... any person engaged by an employer to perform for hire or reward manual,
clerical or supervision work in any undertaking, industry,
trade or occupation
to which this Act applies ..." (except for persons dealt with under other,
named, statutes).
A literal interpretation
consonant with the common law
would exclude a worker properly dismissed from this
definition. Qui haeret in littera haeret in cortice.
Gardiner JP had no hesitation in stating, at p 380,
that
"... it does not follow that (a) man dismissed may not be an employee in
terms of the Act. It seems to me that to hold that once a
man is dismissed he
ceases to be an employee would defeat the whole object of the Act, because
anyone with knowledge of labour history
knows that such disputes constantly
arise and that serious strikes often take place owing to the fact that a person
has been dismissed."
Mr
Brassey, who appeared before us for the
Union, traced the definition of "employee" through the
Industrial Conciliation statutes from 1924 until now.
The heart of the definition has for practical purposes
remained the same though exclusions have varied and the
18
scope been broadened. History confirms that to read
the
definition literally and in the light of the common
law
would not accord with the intention of the legislature
(Cf
HLEKA v JOHANNESBURG CITY COUNCIL
1949 (1) SA 842
(A) ) . To interpret "employee" as defined in Act 11 of
1924 to mean an employee by virtue of a common law
contract, in 1930 already would have been incompatible
with
the use of the word in section 16 of the then
Industrial Conciliation (Amendment) Act No 24 of 1930.
That provided that a court could order an
employer
to
reinstate an
employee
whose dismissal was lawful, but
effected for reasons set out in subsection (1) and
obviously regarded as unfair.
Mr Brassey then also traced the history of the
definition of "strike". In s 24 of Act 11 of 1924 it
read
"'Strike' means a suspension or temporary cessation of work of any number
of employees in order to compel their employer or to assist
other employees in
compelling the employer of such employees to agree to specific terms or
conditions of employment."
19
In
R v MACDONALD AND OTH
E
RS
1935 TPD 153
the court
overturned the conviction of workers who resigned en
bloc and
as a result were charged with contravening sec
12 of Act 11 of 1924.
The court held that their lawful
resignation resulted in their no
longer falling within
the definition of "employees" in the Act. The
definition of
strike was soon amended. That contained
in the Industrial Conciliation Act No 36 of 1937, made
it clear that the parties the legislature had in mind,
were
not "employer" and "employee" in a common-law
contractual context. "Strike" was said to mean
"any one or more of the following acts or omissions by any body or number
of persons who are
or have been employed
, either by the same employer
or by different employers
-
(a) the refusal or failure by them to
continue to work ... or to resume work
or to accept re-employment
... or;
(b) the breach
or termination by them of
their
contracts of employment if
-
(i) that refusal ...
or termination
is in consequence of a dispute
regarding conditions of employment
20
or other matters
and is in pursuance of any combination, agreement
or understanding, whether expressed or not, entered into between them; and (ii)
the purpose of that refusal ... or termination is to induce or compel any person
by whom they
or any other persons
are or
have been employed
to
agree to or comply with any demands concerning conditions of employment
or
re-employment or other matters
made by or on behalf of them or any of them
or any other persons
who are or
have been employed
." (emphasis
added)
And sec 65 forbade
employees
to take part in a strike or the
continuation of a strike for defined periods or unless preconditions had been
satisfied, so clearly
"employees" were to include persons who would have not
qualified as such under the common law.
Mr Brassey in my view correctly submitted that in referring in other
sections of the Act to emp
loyees
21
on strike, or forbidden to strike, the definition of "strike" cannot be
ignored. The first part of the definition of "strike" in the
Act is identical to
that under its 1937 precursor; though the conditions under which the actions set
out in (a) and (b) constitute
a strike, have been rewritten. They still refer to
persons who are not presently employees according to the common law.
Section 65 of the Act still prohibits incitement of
any employee
to take part in or continue a strike, again for defined periods or unless the
conditions in the section have been fulfilled. Subsection
(1) (c) refers to
employees
in essential services being on strike. "Employee" must clearly
include persons referred to in the definition of "strike" who would
certainly
not qualify as such under the common law - amongst others ex-employees to be
persuaded to once again provide their labour,
as much as ex-employees who want
their jobs back.
22
A further indication that the legislature intended to use "employee" in a
wider meaning than it would have under the common law, is
found in the
provisions of sec 35 (5) (b) of the Act.
Employee
there at least includes
an ex-employee seeking re-employment. This section provides that under certain
circumstances a conciliation
board may be established on the application of an
individual employee to deal with "the refusal or failure of the employer to
re-employ
that individual". The establishment of a conciliation board is a
necessary precursor to a dispute being referred to the Industrial
Court. It
would be an exercise in futility to establish a conciliation board that may not
succeed in settling a particular dispute,
if the matter were not then able to be
referred to the Industrial Court for the dispute to be determined.
The Act therefore envisages that a conciliation board may be called upon
to try to settle a dispute between a former employee claiming
re-
23
employment. It follows as a necessary corollary that the Industrial Court
would have jurisdiction in matters relating to a refusal
to re-employ. Cf
CONSOLIDATED FRAME COTTON CORPORATION LTD v PRESIDENT OF THE INDUSTRIAL COURT
AND OTHERS
1985 (3) SA 150
(N) 158 A-B.
The relationship
envisaged by the Act between "employer" and "employee" is therefore clearly not
one that terminates as it would at
common law. Cases accepting that the
provisions of the Act do not relate solely to the enforcement of legal (common
law) rights,
are legion. Cf
MARIEVALE CONSOLIDATED MINES LTD v PRESIDENT OF
THE INDUSTRIAL COURT AND OTHERS
1986 (2) SA 485
(T), 498I-499H; and
CONSOLIDATED FRAME COTTON CORPORATION LTD v P
RESI
DENT OF THE
INDUSTRIAL COURT AND OTHERS
1986 (3) SA 786
(A) . The fact that the
definition is framed in the present tense (by the use of the phrase "is
employed") cannot alter the fact
that other sections of the Act already referred
to make it
24
clear that ex-employees are also included within its terms.
I
did not understand Mr Brassey to argue that members of the pool would have a
call on the Company to consider them for employment
indefinitely in the future.
Sec 3 (c) of the agreement makes clear that members of the most favoured class
of employees, those to
be taken on forthwith, lost their claim once and for all
by deciding (or being deemed to have decided) that their relationship with
the
Company was at an end. There is no indication that pool members standing further
back in the queue, were to be treated any differently.
It is therefore
sufficient that the legislature clearly had in mind that once a particular
employment relationship is established,
the parties to it remain "employee" and
"employer" as defined, beyond the point of time at which the relationship would
have terminated
under the common law. Where it includes also former employees
seeking re-employment or re-instatement, it has placed no
25
limitation suggesting when - or why - a former employee no longer falls
within the definition. What is clear, is that when both parties
so agree, or
when equity permits, the relationship does come to an end.
The Company and the Union used the same language as the statute does, in
the agreement they concluded. Clause 7 speaks of the
employees
, not the
ex-employees or persons, to be rehired.
Once it is accepted that
members of the pool may fall under the definition of "employee" in the Act,
there can be no doubt that the
Industrial Court had a labour dispute before it.
That agreement was the result of collective bargaining between the Company and
the
Union, par excellence a labour practice - "action adopted in the labour
field" (
MARIEVALE CONSOLIDATED MINES v PRESIDENT OF THE INDUSTRIAL COURT AND
OTHERS
1986 (2) SA 485
(T) at 498B-499H). It does not purport to be a
contract concluded at common law between the Company and defined individuals but
records
the
26
understanding arrived at between employer and ex-employees (represented
by the Union) as to how the interests of each side were to
be served. And in it
the Company undertakes an obligation to afford employment to unidentified
members of a defined group of (ex)
employees whose interests as regards job
opportunities were being taken care of by the Union.
In short, the
Industrial Court did have jurisdiction in the matter. The Labour Appeal Court
was wrong in holding the contrary. That
brings me to the issue whether it was
established that an unfair labour practice had been committed. That depends on
whether the
re-hiring agreement had been breached, which in turn depends on the
interpretation of that document.
Mr Fabricius who appeared before us for the Company, pursued the
contention that the Company was obliged in terms of clause 5 to do
no more than
"consider" pool members for re-employment as and when the need arose, and that
there was no evidence that that
27
had not been done.
That contention ignores the proviso
contained in the clause. By necessary implication it limits the right an
employer has at common
law to select his employees at will. Admittedly the rule
of construction of written instruments, expressio unius est exclusio alterius,
should be applied with caution (
SOUTH AFRICAN ESTATES AND FINANCE
CORPORATION, LTD v COMMISSIONER FOR INLAND REVENUE
1927 AD 230
, 236;
SOUTH AFRICAN ROADS BOARD v JOHANNESBURG CITY COUNCIL
1991 (4) SA 1
(A)
16 G). However, were it not applied here, the proviso must be deleted entirely.
Clause 5 is part of an overall agreement arrived
at between the Company and the
Union. Clause 3 (c) of this lends support to the view that the obligation
undertaken by the Company
went further than "I'll think about it". Clause 3 (c)
read with (d) provides that if dismissed strikers who were to be taken on
forthwith
did not arrive for the paper-work to be done, "another person from
those mentioned in item 5
28
below will then be employed in their place". Where the Company expressly
in clause 5 reserves the right (which at common law would
be completely
unrestricted) to employ people outside the pool but undertakes to exercise that
right only "where skills are required
which the aforesaid don't have", the
unavoidable inference is that where the required skills
are
so available,
the Company's right to employ outside persons is excluded. What the Company then
retains is only the right to choose
which individual out of a group with the
necessary qualifications - if there is more than one -it wishes to
engage.
The Labour Appeal Court, having held that the Industrial Court had no
jurisdiction, found it unnecessary to deal with the finding
of the Industrial
Court that the Company's breach of its undertaking to the Union constituted an
unfair labour practice as defined
in the Act.
There would in my view be no purpose
in
29
remitting the matter to the Labour Appeal Court for it to do so. The
admission by the Company in exhibit B that it had employed persons
from outside
the pool to fill vacancies when suitable applicants were available to take those
posts, is an admission that it breached
its undertaking. That breach of
necessity "affected ... (the) employment opportunities" of employees on the list
who had not succeeded
in getting work elsewhere since the agreement was
concluded. Breach of such an undertaking is prima facie unfair, as the
Industrial
Court assessed it to be. The Company offered no evidence to indicate
otherwise. There was no evidence which would bring the Company's
conduct under
paragraphs 2 or 3 of the Union's statement of case. Those are limited to actual
unrest, actual disaffection and did
not rely on potential results under those
headings. But the Company's admitted conduct falls squarely within sub-paragraph
(i) of
the definition of an "unfair labour practice."
30 Mr
Fabricius conceded that if his argument is not upheld, remittal to the Labour
Appeal Court is unnecessary. There is no reason
why the order for specific
performance which is widely framed cannot be implemented. When the Company
determines that it has vacancies,
the Company and the Union between them should
be able to discover which members of the pool have retained their relationship
with
the Company. Whether non-employment of any remaining pool member in future
would constitute an
unfair
labour practice must depend, as it did here,
on the facts of each case.
The appeal is allowed with costs. The
order of the Labour Appeal Court is altered to read "appeal dismissed with
costs".
L VAN DEN HEEVER JA
CONCUR:
JOUBERT JA) NESTADT JA)