v IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG CASE NO JR367/01
In the matter between:
NATIONAL EDUCATION HEALTH AND ALLIED
WORKERS UNION Applicant
and
PUBLIC HEALTH AND WELFARE SECTORAL
BARGAINING COUNCIL First Respondent
J LE ROUX Second Respondent
MEMBER OF THE EXECUTIVE COUNCIL:
HEALTH AND WELFARE NORTHERN PROVINCE Third Respondent
___________________________________________________________
____________
JUDGMENT
___________________________________________________________
_____________
JAMMY AJ
1. The DirectorGeneral: Commission for Administration, in the government
of the former Republic of Venda, on or about 15 May 1990, issued Circular
Number 39 of 1990 to all Heads of Department in that government titled
“Implementation of Parity in the Venda Public Service”. The circular in
essence required the implementation of identical appointment or promotion
requirements in Venda to those applicable in South Africa and, in that
regard, the application of what was known as the “Personnel
Administration Standard (‘the PAS’)”. Resultant salary scale revisions and
other measures contained in the circular were to be applied retrospectively
to 1 March 1990 and, in its terms, the circular also served “as authority for
the amendment of salary scales applicable to posts on the establishments
of departments”.
2. For some reason, the circular was not implemented and, in March 1994,
an exchange of correspondence and memoranda commenced between
the DirectorGeneral: Health and Welfare and the DirectorGeneral:
Commission for Administration relating to the translation of “Provisioning
Administration Clerks” to “Provisioning Administration Officers” in
compliance with the directive in the circular and the relevant PAS. The
union representatives of the Provisioning Administration Clerks who would
be affected by such translation brought concerted pressure to bear on the
department to effect the direction and authorisation in Circular 39, disputes
in that regard arose regarding the existence or otherwise of grounds upon
which that could be done, negotiations between the then acting Director
General and the union failed and the department was in consequence
subjected to concerted industrial disruption involving strikes, go slows and
the unlawful occupation by the Provisioning Administration Clerks of
administration offices. The PAS in question, of which the clerks and their
representatives had now become aware, was utilised in the exertion of this
pressure and the Acting DirectorGeneral in due course, and in the face of
the industrial unrest, found himself under considerable pressure in the
context of the ongoing administration and operation of the hospitals within
his jurisdiction.
3. Further attempts at mediation failed and eventually, on 6 May 1994, the
Acting DirectorGeneral: Department of Health and Welfare,
Dr McCutcheon, representing the “Department of Health and Welfare of
the Venda government” signed an agreement with “representatives of
employees of the health stores section of the Venda Department of Health
and Welfare” in terms of which, inter alia , “the Department will immediately
commence to translate to the appropriate ranks in the PAS for Provisioning
Administration Officer … those officials currently in the ranks of
Provisioning Administration Clerk, whose duties and experience qualify
them for this translation”. Implementation was to commence immediately
and in consideration thereof “the stores section of the Department of
Health and Welfare shall terminate the strike and resume their duties”. It is
not in dispute that the agreement was drafted and signed by
Dr McCutcheon in the face of what he perceived to be the imminent
collapse of the Department of Health and to ensure the ongoing
functioning of its hospitals. He had at all times stressed that the industrial
action embarked upon by the clerks was illegal and his own hope was that
in due course the agreement would be reversed.
4. Normality having thereby been restored, a new department, the Northern
Province Department of Health and Welfare, was eventually established
and Dr McCutcheon was directed and authorised to reverse the
promotions of Provisional Administration Officers back to what was
perceived as their proper status as Provisioning Administration Clerks, on
the basis that the agreement of 6 May 1994, was of no force or effect.
5. Not surprisingly, that directive was challenged and was suspended
5. Not surprisingly, that directive was challenged and was suspended
pending the determination of the issue. A Commission under the
chairmanship of Judge C S White was established for that purpose but, for
various reasons, found itself “unable to make any finding insofar as the
promotions and/or translations” in question were concerned.
6. The matter was then referred to arbitration under the auspices of the First
Respondent, with the Second Respondent as arbitrator and following a
protracted hearing, the Second Respondent, on 22 February 2001, handed
down his Award in terms of which he determined that the employees
represented by the Applicant “are not legally entitled to be regarded as
Provisioning Administration Officers”. It is an order reviewing and setting
aside that Award, which the Applicant seeks in these proceedings.
7. Advocate Mnguni, representing the Third Respondent, submits, correctly in
my view, that this dispute relates to the interpretation and application of a
collective agreement and to the legality of the purported translation or
promotion, pursuant thereto, of the Applicant’s members from one
occupational class, clerks, to another, officers. The Applicant, as will now
be apparent, contends that such translations were effected in accordance
with the then applicable PAS as well as pursuant to the agreement
concluded between its members and the Department of Health and
Welfare of the Venda Government as represented by Dr McCutcheon.
8. The grounds of review submitted by the Applicant are set out in its notice
of motion as follows:
“1 The Second Respondent committed a gross irregularity when formulating
one of the issues to be determined as ‘whether or not the employees were
legally entitled to be regarded as Provisioning Administration Officers’,
when the dispute referred by the Applicant was that the moratorium placed
on further in rank promotions by the Third Respondent be declared an
unfair labour practice.
2 The Second Respondent misdirected himself in law when finding that the
alleged pressure brought to bear on Dr McCutcheon, the then Acting
DirectorGeneral of Third Respondent, amounted to duress, rendering the
agreement of 6 May 1994 as voidable”.
A third ground, relating to the alleged acceptance by the Second
Respondent of Dr McCutcheon’s evidence and his disregard of purportedly
conflicting evidence from other witnesses is also submitted.
9. I do not propose to traverse the first of these grounds in unnecessary
detail. In an explanatory affidavit filed in these proceedings, and in which
he indicates his intention not to oppose the application but to abide the
decision of this court, the Second Respondent sets out the substance of
handwritten notes made by him at the outset of the Arbitration in which he
records that the issues as defined by him in his Award, were those agreed
upon by the parties following his request to them for concise statements of
their respective cases, and interaction between them in that regard. His
formulation of the issues, he says, was read out by him to both parties who
were requested to confirm its correctness and who did so. That
agreement is endorsed by the Third Respondent in its replying papers. I
am satisfied therefore that no substance can be attached to the first of the
grounds for review upon which the Applicant relies.
10. The question of duress, however, merits more detailed examination and
the following extract from the Second Respondent’s Award is relevant in
that context –
“In accepting the evidence of Dr McCutcheon, it was clear that a
threat of considerable evil hung, not only over his head, but also
over the heads of the various patients in the various hospitals in the
erstwhile Venda. The threat was simple and clear. If the
Provisioning Administration Clerks stopped working it would result
in suppliers not being paid and stores not working properly. The
result of that would be that suppliers would stop providing hospitals
with the necessary items and the stores would stop distributing the
items. The effect of that would be detrimental to the health of the
various patients.
Dr McCutcheon said that the Department of Health and Welfare was
close to a state of collapse. The reason for that was, as set out in the
previous paragraph the fear was reasonable, because objectively
speaking the withholding of those services and items must lead to
the conclusion, (even for a layman) that services in hospitals would
collapse to the detriment of patients.
It is because this threat was imminent, and in fact in the process of
happening that the agreement was concluded”.
11. The disregarded evidence of which the Applicant complains as an
additional ground for its application related to the disputed existence of
that threat but a review of the record of the evidence does not suggest to
me any irregularity or impropriety on the part of the Second Respondent in
evaluating the evidence, presumably on the basis of weight of probability,
in the manner in which he did so. This complaint by the Applicant would
manifestly have more relevance in appeal, as opposed to review,
proceedings. There is no valid or acceptable suggestion that in preferring
the evidence of Dr McCutcheon in that regard, the Second Respondent
failed properly and responsibly to apply his mind to the issue.
12. Of greater relevance however is the Applicant’s submission that the
threats alleged by Dr McCutcheon to have induced him to sign the
agreement of 6 May 1994 are not of such a nature as to render the
agreement voidable or invalid in law. The Applicant alludes to the
following extract from Amler’s Precedents of Pleadings: 5 th Edition ,
referred to by the Second Respondent in the following terms –
“A contract concluded as a result of duress can be voided if the following
requirements are met:
(i) a threat of considerable evil to the person concerned or his family which
induced a fear;
(ii) that the fear was reasonable;
(iii) that the threat was of an imminent or inevitable evil;
(iv) that the threat or intimidation was unlawful, and;
(v) that the contract was concluded as a result of the duress”.
The Second Respondent, as I have stated, consequently concluded that
“services in hospitals would collapse to the detriment of patients …(and) it
is because this threat was imminent, and in fact in the process of
happening that the agreement was concluded”.
13. No aspect of the evidence presented to him, the Applicant submits,
indicated the existence of any of these criteria as inducing Dr McCutcheon
to sign the agreement, as the Second Respondent found to have been the
case. In determining therefore, that the agreement was invalid and
unenforceable for that reason, the Second Respondent misdirected
himself and in doing so, committed a gross irregularity rendering his award
reviewable.
14. Relying on the same purported criteria, namely that a contract may be
vitiated by duress where intimidation or improper pressure renders the
consent of the party subjected to duress no true consent, and citing case
authority to that effect, the Third Respondent contends that all the
elements constituting duress as outlined in the authorities referred to were
properly found by the Second Respondent to have been established and
that he was accordingly correct in holding, on the facts and evidentiary
material placed before him, that they constituted duress in law which
rendered the agreement in question invalid and unenforceable.
15. The Applicant argues that even on the basis of Dr McCutcheon’s disputed,
but accepted, evidence regarding the prevailing circumstances, no threat
existed which would satisfy the legal criteria relating to the presence of
duress upon which the Second Respondent based his finding. There was
no threat of any nature to Dr McCutcheon or his family nor any reasonable
apprehension on his part that this existed. There was no imminent,
inevitable or considerable evil which would reasonably have justified the
fear which he contends that he felt and in the result the contract was not
concluded by him for those reasons.
16. In my view, the evidence presented to the Second Respondent would
16. In my view, the evidence presented to the Second Respondent would
seem to support that contention. It is conceded by the Third Respondent
that Dr McCutcheon, on his own testimony, signed the agreement not out
of fear of any danger or threat to his own person or that of any member of
his family, but because, had he not done so, health services would have
collapsed with attendant detrimental consequences to the health and
welfare of patients in the hospitals under his jurisdiction.
17. The matter however does not end there, since neither party to this dispute,
nor the Second Respondent himself, appears to have taken cognisance of
the further relevant legal concept of economic duress . This concept was
comprehensibly examined in a Note by Adolph A Landman (a Judge of this
court) published in 2001 (22)ILJ 1509 under the heading “Protected
Industrial Action and Immunity from the Consequences of Economic
Duress”.
18. The principal thrust of that article – the examination of employee immunity
and remedies and relief available to employers in that context has no
specific application in the instant case in that the Third Respondent’s
contention that the industrial action in question was unlawful and
unprotected, was not seriously challenged. What is of relevance however
is the author’s reference to the decision of the Appellate Division (as it then
was) decision in –
Malilang and Others v MV Houda Pearl 1986 (2) SA 714 (A)
in which the court, in the course of an exploration of the English Doctrine
of Consideration and its application to the facts of the matter, came to deal
with the defence of duress. At page 1511 of the Journal, this is stated –
“The court’s investigation of the defence of duress can be summarised as
follows:
• commercial pressure exerted on one party to a contract to induce that
party to enter into the contract may amount to economic duress entitling
that party to avoid the contract, provided the pressure amounts to a
coercion of the will which vitiates consent;
• the contract must have been entered into unwillingly, but not necessarily
under protest, although the absence of protest will be highly relevant. The
party must have had no realistic alternative but to submit to the demands
and the consent must have been exacted by improper pressure exerted by
or on behalf of the Defendant. The contract must have been repudiated as
soon as the pressure was relaxed.
The onus of showing that the contract was vitiated by duress, the court
held further, rests on the party who wishes to avoid the contract”.
19. There is, as I have said, little doubt that, in the context of its nature and its
illegality, the pressure exerted by the Applicants’ members on the Third
Respondent, in the person of Dr McCutcheon, was improper. I am also left
in no doubt, from the evidence submitted in the arbitration, that his
unwillingness to conclude it was made abundantly clear at the time and
whilst it is unclear at what stage formal repudiation of the contract was
indicated, there is nothing to suggest that in the political transformation
climate prevailing at the time, there was any undue delay in the signifying
by the authorities of their rejection of the May 1994 contract, once the
reconstituted Department of Health and Welfare came into being. In short,
all the elements and requirements of economic duress as identified by the
Appeal Court were to my mind present when that contract was concluded.
20. In essence therefore the Second Respondent, in determining that
Dr McCutcheon acted under duress, has misconstrued its legal character,
but not its consequence. It is unnecessary in my view for me to examine
the question of whether or not that misconstruction constitutes an error of
law which is reviewable. The fact of the matter is that, having been
concluded in the circumstances and climate which prevailed at the time,
the contract cannot be allowed to stand. In consequence, the Second
Respondent’s ultimate finding, albeit for technically the wrong reasons,
that the employees in question are not legally entitled to be regarded as
Provisioning Administration Officers, must stand and the application for its
review and setting aside cannot succeed.
21. In the ordinary course, an award of costs in matters of this nature will
follow the result but I find myself in some difficulty in that regard. The main
thrust of the challenge to the Second Respondent’s Award is sourced, as
is the core basis of opposition thereto, on an incorrect interpretation of the
legal concept of duress as it is applicable to the facts of this matter. The
application must fail because of the conclusion which I have reached,
independently of the Third Respondent’s opposition, that the Second
Respondent, albeit on a basis of flawed reasoning, has made the correct
Award. Equity suggests to me that an order for costs against any party in
these circumstances would be inappropriate.
22. The order that I make is accordingly the following:
22.1 The application is dismissed;
22.2 There is no order as to costs.
___________________________
B M JAMMY
Acting Judge of the Labour Court
30 January 2002
Representation:
For the Applicant:
Advocate G Malindi instructed by Nicholls Cambanis & Associates
For the Respondent
:
Advocate J Mnguni instructed by the State Attorney