IN THE LABOUR COURT OF SOUTH AFRICA
CASE NO: J 1898/02
In the matter between:
ANNANDALE BUILDING MATERIALS (PTY) LTD
First Applicant
SOUTH AFRICAN BUILDING AND ALLIED
Second Applicant
and
Respondent
JUDGMENT
FRANCIS J
Introduction
1. This is an unopposed application to rectify an agency shop agreement that was
entered into between the applicants. The respondent (“NUM”) was cited as an
interested party and no relief is sought against it.
Background
2. The first applicant (“the company”) manufactures cement brick from ash and fly
ash at two factories situated in Vereeniging and Vanderbijlpark respectively. The
company produces approximately 650 000 bricks per day.
1.
3. The relationship between the second applicant (“SABAWO”) and the company
has matured and the parties have entered into numerous collective bargaining
agreements governing salaries and conditions of employment of all employees
employed in the bargaining unit.
4. During 1996 the company and SABAWO entered into a Recognition and
Procedural Agreement in pursuance of their joint support for the principles of
collective bargaining and with a view to supporting industrial stability and
favourable conditions of employment.
5. The company’s view is that a union wishing to be recognised by it should acquire
an appropriate level of representativity amongst the company’s employees so that
it, inter alia , during collective bargaining, can place demands in respect of
significant groups of employees. The company is of the view that it is
impracticable and inefficient for it to have to deal with as many unions as may
manage to secure one or more members, but whose representativity in the
workplace is insubstantial.
6. The bargaining unit for purposes of the company’s collective bargaining
arrangements with SABAWO consists of the hourly paid employees employed by
the company at its two factories. The company employs 233 hourly paid
employees and 13 monthly employees. SABAWO currently has members
comprising approximately 74% of the company’s hourly paid employees. The
respondent is a minority union and has organised approximately 56 members or
24% of the company’s hourly paid employees.
7. Initially, during or about 1996, the Construction and Allied Workers’ union
(“CAWU”) organised and recruited a number of hourly paid employees employed
by the company. More recently CAWU’s members were taken over by NUM in
terms of arrangement and agreements between the two unions (“the takeover”).
8. The company previously granted CAWU and had, since the takeover, granted
NUM, limited recognition in specific instances and circumstances. However,
neither CAWU, nor since the takeover, NUM has had sufficient support to warrant
the granting of collective bargaining rights to it. NUM’s shop stewards are
entitled to represent its members during the course of any grievance raised by that
member or during the course of disciplinary proceedings instituted by the
company against a member.
9. The company supports the policy that it is preferable and in the interest of sound
collective bargaining that there should exist only one union per industry for
purposes of centralised bargaining. The company has at all relevant times adopted
the collective bargaining practice that the outcome of collective bargaining with
SABAWO is extended to all employees in the bargaining unit, including NUM
members. In the company’s experience, its collective bargaining system is
efficient and obviates the necessity for the company to engage in collective
bargaining in a multitude of collective bargaining fora.
10. The company and SABAWO during 1998 negotiated an agency shop agreement
which was signed on 4 May 1998. At that time, SABAWO had more than 80% of
the company’s hourly paid employees as its members. SABAWO was the only
union that enjoyed checkoff facilities in respect of its members. The company
had at that stage not been approached by any other union for such checkoff
facilities in the bargaining unit consisting of the hourly paid employees.
11. SABAWO furnished the company with its proposals on the broad principles of
such an agency shop agreement, which principles were accepted by the company.
The company and SABAWO agreed that the agency shop agreement would only
cover the bargaining unit and would not affect monthly paid employees employed
by the company. Throughout the negotiations that culminating in the signing of
the agency shop agreement, it was both parties intention that the hourly paid
employees who were not SABAWO members, would be obliged to make agency
shop contributions. The rationale for this approach was that SABAWO would
otherwise be providing nonmembers in the bargaining unit with the benefits of its
collective bargaining on their behalf, without receiving any membership dues in
return for its efforts.
12. During the course of July 1998, CAWU approached the company and requested
stop order facilities in respect of members recruited by the union. The company
subsequently implemented stop order facilities in favour of CAWU members. The
company currently affects stop order facilities in respect of such former CAWU
members, who are now members of NUM, in favour of NUM.
13. At the first meeting held between the company and CAWU on 28 September
1998, the company indicated that SABAWO as majority union had entered into an
agency shop agreement with it and that the terms of that agreement covered
CAWU members. During subsequent meetings and discussions CAWU was
supplied with a copy of the agency shop agreement.
14. At a meeting with the company during May 1999 CAWU questioned SABAWO’s
spending of the agency shop fees. CAWU was subsequently furnished with the
auditor’s statement on agency shop funds and did not take the issue any further.
15. At a meeting in April 2000 with the company, CAWU indicated to the company
that it required assistance from SABAWO for training expenses of five CAWU
shop stewards from the agency shop fees. SABAWO refused to make any agency
shop funds available to CAWU for that purpose.
16. During the course of February 2002 and acting on a complaint from NUM on
behalf of its members employed by the company, the Department of Labour,
notified the company that its deductions made from NUM members were unlawful
in terms of section 34 of the Basic Conditions of Employment, Act 1997.
17. During the course of March 2002, NUM’s members employed by the company,
participated in an unprocedural and unprotected industrial action in support of a
demand that the agency shop deductions be discontinued. Thereafter NUM
declared a dispute against the company with the Commission for Conciliation,
Mediation and Arbitration (“the CCMA”) for unlawful and irregular deductions of
agency fee contributions. NUM requested the company to suspend the deductions
of agency fee contributions from its members pending the resolution of the
dispute. The company informed NUM by letter on 15 March 2002 that it would
not comply with its demand.
18. On 27 March 2002 the Department of Labour informed both the company and
NUM that after further consideration the deductions of agency shop contributions
from the wages of NUM members did not constitute unlawful deductions.
19. This dispute has since been conciliated by the CCMA, but no resolution was
possible and NUM has requested arbitration.
20. The applicants have entered into an agreement to effect certain amendments to the
agency shop agreement (“the addendum”). The purpose and scope of the
addendum included the correction of those clauses which did not correctly record
the common intention of the parties and the correction of certain typographical
and related inaccuracies in the agency shop agreement. The applicants did not
intend that hourly paid employees who may have been or would in the future
become members of another trade union, would be excluded or exempted from the
agency shop agreement. There was no reason to exempt members of other unions,
who fell within the bargaining unit, from paying an agency fee to SABAWO.
Such employees would be beneficiaries of SABAWO’s collective bargaining
arrangements. The common intention of the parties was that the nonSABAWO
members employed in the bargaining unit would be covered by the agency shop
agreement.
21. The applicants are seeking the relief that is set out in the Notice of Motion.
The applicants contentions
22. The applicants contended that certain of the wording of the agency shop
agreement prima facie not their true intention.
23. The term “Agency Fee” is defined in the agency shop agreement as follows:
“the fee deducted from the remuneration of employees who are not members of
the majority union as defined in the Act and employed by the company excluding,
other union members, fixed term contract employees and casual employees.”
24. Clause 3.1 of the agency shop agreement, inter alia, provides that:
“39.1 The company will deduct an agency fee from basic wages of identified non union
members in the SABAWO bargaining unit.”
25. Clause 3.2 of the agency shop agreement, inter alia , provides that:
“40.1 When increased, the agency fee for nonunion members will be increased by an
equivalent amount as for union members, after written notification has been
received by the company from an union official in terms of its constitution.”
26. Clause 4.1 of the agreement, inter alia , provides that:
“38.1 Agency Shop Trust Account/Fund
The agency fee deductions will be made from the identified nonunion member
employees on a monthly basis and will be paid into a separate trust
account/fund.”
27. The applicant contended further that the reference to “other union members” in the
definition of “Agency Fee” quoted above was in all probability a reference to
employees who fell outside the bargaining unit, since those were the only other
employees, who, to the knowledge of the parties, were members of one or more
other unions.
28. Further that the reference to “nonunion members” in clause 3.2, quoted above,
was to employees who were not members of SABAWO but who did not fall
within the bargaining unit. At the time and to the knowledge of the parties, there
were no unionised employees in the bargaining unit who did not belong to
SABAWO.
29. The reference to “nonunion members” in clause 38.1 and “identified nonunion
member employees” in clause 4.1, was intended to have the same import as in
clause 3.2, referred to above.
30. The wording adopted in the clauses of the agency shop agreement as reflected
above do not correctly reflect the common intention of the parties at the time of
entering into the agreement.
31. The parties at the relevant time understood and were of the bona fide , but
mistaken belief, that the wording of the abovementioned clauses in the agency
shop agreement would give effect to the common intention of the parties that non
SABAWO members employed in the bargaining unit, would be obliged to make
agency fee contributions, notwithstanding such employees becoming a member of
a union other than SABAWO.
32. It was further contended that the agency shop agreement, if rectified in accordance
with the notice of motion in this application, would reflect the true common
intention of the parties at the time of concluding the agreement.
Analysis of the facts and arguments raised
33. The first question that needs to be determined is whether the agency shop
agreement that is sought to be amended complies with the provisions of section
25(3) of the Act. The second issue is whether this Court has jurisdiction to grant
the relief sought.
34. In Greathead v SA Commercial Catering and Allied Workers Union (3) SA 464
(SCA), the Court heard an appeal from a decision of the High Court concerning
the validity of an agency shop agreement. The applicant had sought an order
declaring that the agency shop agreement infringed certain of his constitutional
rights. The Court found that the agency shop agreement was invalid ab initio
want of compliance with section 25(3) of the Act. It found that the agreement did
not expressly provide for the matters referred to in section 25(3)(a) and (c), and
that the agreement appeared to be silent on the matters referred to in section 25(3)
(d(i) and (ii). The result of the aforegoing omissions was that the agreement was
invalid, and as such it was incapable of the rectification sought by the respondent
at the appeal hearing.
35. The agency shop agreement that the applicants seek to rectify must be examined
to ascertain whether it complies with the provisions of section 25(3) of the Act.
Section 25(3) sets out what it is that an agreement must provide for. In terms of
section 25(3)(a) employees who are not members of a representative trade union
like SABAWO is not compelled to become members of that trade union. Clause
6(1) of the agency shop agreement states that the agreement does not compel any
employee to become a member of the union.
36. Section 25(3)(b) of the Act sets the limitation on the agreed agency fee. This is
also reflected in clause 3.1 of the agency shop agreement which states that the
company will deduct an agency fee from basic wages of identified nonunion
members in the SABAWO Bargaining Unit. This deduction will be the equivalent
to the union subscriptions paid by union members as may be determined from
time to time.
37. Section 25(3)(c) of the Act provides that the amount that is deducted must be paid
into a separate account which is administered by the representative trade union.
Clause 4.1 of the agency shop agreement states that the agency fee deduction will
be made from the identified nonunion employees on a monthly basis and will be
paid into a separate trust account/fund.
38. The provisions of section 25(3) of the Act specify the purposes for which the
agency fee may be used. Clause 4.2 of the agency shop agreement states that no
moneys from the agency shop account will be used toward the payment of
political party affiliation, contributing in cash or kind to a political party or a
person standing election to a political office, any expenditure that does not
advance or protect the socioeconomic interest of employees.
39. I am satisfied that the agency shop agreement complies fully with the provisions
of section 25(3) of the Act. It is therefore valid and capable of rectification.
40. This brings me to the question whether this Court does have jurisdiction to rectify
the agency shop agreement. In terms of section 24(6) of the Act, a dispute over
the interpretation of an agency shop agreement must be referred to the CCMA
which must attempt to conciliate the dispute and if it fails to do so, the dispute
must be resolved by the CCMA in arbitration. Where it is the validity of an
agency shop agreement that is challenged, the CCMA would lack jurisdiction to
entertain the dispute. The Labour Court would have to exercise jurisdiction over
that dispute in terms of section 157(1) of the Act. That section confers on the
Labour Court “exclusive jurisdiction of all maters that elsewhere in terms of this
Act or in terms of any other law are to be determined by the Labour Court”. The
Labour Court has general supervisory powers and appellate jurisdiction in terms
of section 24(7) of the Act in regard to some portions of an award dealing with an
agency shop agreement. It follows that it may pronounce on the validity of the
agreement.
41. I am of the view that the Labour Court does have jurisdiction to rectify an agency
shop agreement if it is capable of rectification. An invalid agency shop agreement
cannot be rectified if it falls foul of section 25(3) of the Act. Even if section
157(1) of the Act, concerning the exclusive jurisdiction of the Labour Court, is not
sufficiently broad to confer upon the Labour Court the right to rectify an agency
shop agreement, such power are also derived from section 158(1)(j) of the Act
which provides that the Labour Court may deal with “all matters necessary or
incidental to performing its functions in terms of this Act or any other law”. The
power to rectify such agreements on application by the parties thereto is a matter
of incidental to the performance of its supervisory and appellate functions in terms
of the Act.
42. I am satisfied that it was the common intention of the parties that nonSABAWO
members employed in the bargaining unit would be covered by the agency shop
agreement, regardless of whether they actually were, or may become members of
another union. The parties signed the agency shop agreement on 4 May 1998 in
the bona fide mistaken belief that the document recorded the true agreement
between the parties. The wording adopted in the clauses of the agency shop
agreement referred to in paragraphs 23 to 26 above do not correctly reflect the
common intention of the parties at the time when the agreement was concluded.
The parties at the relevant time understood and were of the bona fide , but
mistaken belief, that the wording of the abovementioned clauses in the agency
shop agreement would give effect to the common intention of the parties that non
SABAWO members employed in the bargaining unit, would be obliged to make
agency fee contributions, notwithstanding such employees becoming a member of
a union other than SABAWO.
43. In the circumstances it is ordered that:
1 The agency shop agreement entered into between the first and second applicant is
rectified as follows:
1.1 By the substitution of the words “monthly paid employees” for the words “other
union members” contained in clause 2.3 of the agency shop agreement;
1.2 By the substitution of the words “hourly paid employees who are not SABAWO
members” for the words “identified nonunion member in the SABAWO
Bargaining Unit” in clause 3.1 of the agency shop agreement;
1.3 By the substitution of the words “hourly paid employees who are not SABAWO
members” for the words “nonunion members” in clause 3.2 of the agency shop
agreement.
1.4 By the substitution of the words “hourly paid employees who are not SABAWO
members” for the words “identified nonunion member employees” contained in
paragraph 4.1 of the agency shop agreement.
2. There is no order as to costs.
FRANCIS J
JUDGE OF THE LABOUR COURT OF SOUTH AFRICA
FOR THE APPLICANTS : P R JAMMY INSTRUCTED BY J D VERSTER LABOUR LAW
OFFICES
FOR THE RESPONDENT : NO APPEARANCE
DATE OF HEARING : 18 JULY 2002
DATE OF JUDGMENT : 20 AUGUST 2002