IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
CASE NO: J4611/00
In the matter between:
DAVID BRAMLEY Applicant
and
JOHN WILDE t/a ELLIS ALAN ENGINEERING First
Respondent
GENERAL EMPLOYERS AND MANAGEMENT
ASSOCIATION Second Respondent
J U D G M E N T
CORAM FARBER AJ:
This judgment is in the main concerned with the proper
interpretation of section 158(1)(c) of the Labour Relations
Act, No. 66 of 1995, prior to its amendment by Act 12 of
2002.
To facilitate an understanding of the point in issue, a short
summary of the facts has been rendered necessary. They
are relatively straightforward and may be detailed thus:-
1. The applicant is an erstwhile employee of the first
respondent.
2. On 30 June 2000 the first respondent dismissed the
applicant for what is described in the papers as "operational
requirements".
3. Arising therefrom, a dispute arose between the applicant
and the first respondent, which dispute, so it would appear,
related to the fairness of the dismissal.
4. The dispute was settled on 16 July 2000, pursuant to the
conclusion by the applicant and the first respondent, represented
by the second respondent, of a written agreement, the body of
which reads as follows:-
"Memorandum of Agreement
This is an Agreement entered into in full and final settlement
between Ellis Alan Engineering (`the Company') and David
Bramley (`the Employee').
(1) The Company shall pay to the employee a sum equal to two (2)
months salary for July and August 2000 = 2 x R17 000
= R34 000-00
(2) This sum shall be paid in two (2) equal instalments, one at the end
of July and one payment at the end of August 2000.
(3) The above sum is in full and final settlement of any dispute arising
from the termination of service of the employee. The employee
waives his rights to contest his termination of service and may
not contest his termination of service in any form whatsoever.
(4) The employee warrants that he has read, understands and agrees
with the contents of this document. This Agreement
supercedes[sic] all other Agreements entered into.
DATED & SIGNED ON THIS 16TH DAY OF JULY 2000 AT
JOHANNESBURG"
5. Given the conclusion of the agreement, there was no need
for the applicant to invoke the dispute resolution mechanisms
under the Act.
6. The first respondent failed to make good his obligations in
terms of the agreement, and on 4 October 2000 the applicant
instituted proceedings in this Court for relief in the following
terms:-
"1. That the settlement agreement dated 6 July 2000 and entered into
between Ellis Alan Engineering represented by the General
Employers & Management Association acting as a lawful agent of
First Respondent and David Bramley attached hereto marked
Annexure "A" be made an order of court in terms of Section
158(1)(c) of the Act; and
2. That the costs of this application be paid by the Respondents jointly
and severally the one to pay the other to be absolved.
3. Further and/or alternative relief."
(The reference in prayer 1 of the notice of motion to "6 July"
is mistaken and ought to be a reference to "16 July".)
7. The first respondent's answering affidavit in the matter was
delivered during October 2000. It raised a number of defences to
the relief sought by the applicant. Reliance was not placed on
any of them when the matter was argued and counsel for the first
respondent advanced an entirely new ground as a basis for
thwarting the relief claimed.
The sole contention advanced on behalf of the first
respondent was that the written agreement in question did
not constitute a "settlement agreement" within the meaning
of section 158(1)(c), and that in consequence the Court had
no power to make it an order of court. Counsel's
fundamental premise was to the effect that section 158(1)
(c) only applied to a "settlement" of a dispute which had
been made the subject of dispute resolution under the Act.
Counsel stressed that the dispute which had culminated in
the conclusion of the agreement in casu had not been
referred for resolution in terms of the Act and that, in the
result, section 158(1)(c) did not apply to the situation.
The representatives of the parties seem to have approached
the matter on the basis that because proceedings had been
instituted prior to 1 August 2002, the matter fell to be
considered on the basis of section 158(1)(c) as it read
before its amendment by section 36 of the Labour Relations
Amendment Act, No. 12 of 2002, which amendment only
became operative on 1 August 2002. I say this because
neither argued the matter with reference to the recently
introduced section 158(1A) of the Act.
In diffidence to them, and because I discern no intention on
the part of the Legislature when enacting Act No. 12 of 2002
to interfere with already established rights, I will approach
the matter on the basis that the situation is governed by
section 158(1)(c), as it then read. I will thereafter ex
abundanti cautela consider whether the position has in any
way been altered by the amendment which, as I have
already said, became operative on 1 August 2002.
Prior to that date, section 158(1)(c) was couched in the
following terms:-
"158. Powers of Labour Court
(1) The Labour Court may -
(a) ..........
(b) ..........
(c) make any arbitration award or any settlement agreement, other
than a collective agreement, an order of the Court."
The words "any settlement" were not defined in the Act. In
the result, they must be given their ordinary grammatical
meaning, with obvious reference to the scope, purpose and
ambit of the Act.
The words in question are undoubtedly of very wide import.
Clearly, however, the Legislature could never have intended
that every "settlement agreement", irrespective of its
character, was open to be made an order of court. To
ascribe that intention to the Legislature would in my
judgment give rise to consequences which it never
envisaged. As counsel for the first respondent put it, the
Legislature could hardly have intended to confer a
competence to make an agreement of settlement between
husband and wife in a matrimonial dispute an order of court.
This submission is clearly correct. The wide meaning which
would otherwise fall to be ascribed to the words in question
must be curtailed. To that end, the scope, policy and
purpose of the Act is of decisive importance. On this score,
it is self-evident that the Act has established structures and
mechanisms for, inter alia , the resolution of disputes
between employers and employees, and in my judgment it
is plain that section 158(1)(c) is concerned with the
settlement of disputes of that kind. And it seems to me to
be irrelevant to the exercise of the competence under
section 158(1)(c) that the machinery of the Act had not
been invoked when the dispute in question was settled.
There is nothing in the Act which suggests a constraint of
this type, and there appears to me to be no rational basis,
whether rooted in policy or otherwise, for ascribing to the
Legislature an intention to differentiate between
settlements which are concluded before a dispute has, for
instance, been referred for conciliation to the Commission
for Conciliation, Mediation and Arbitration ("the
Commission") and those which are only settled thereafter.
On the contrary, a differentiation of the kind contended for
would give rise to so high a degree of artificiality that it
could never have been contemplated by the Legislature. It,
after all, has sanctioned legislation to resolve disputes
efficiently, expeditiously and inexpensively, and I am unable
to discern why it would seek to treat those who resolve their
disputes at an early stage differently from those who have
been required to invoke the machinery of the Act before so
doing.
In my judgment then, and leaving aside that which has been
expressly excluded (the collective agreement), the words
"any settlement" in section 158(1)(c) (as it then stood) refer
to a settlement concluded in respect of a dispute which is
justiciable in terms of the Act, irrespective whether such
dispute is settled prior to the need to invoke the dispute
resolution machinery of the Act or at some point in time
thereafter.
It is plain that the settlement in casu stemmed from a
dispute which was, in its very nature, justiciable in terms of
the Act. The settlement consequently falls within the scope
and ambit of section 158(1)(c), as it then read. In the result,
the applicant is entitled to the relief sought.
The amendments to which I have referred do not in my
judgment alter the position.
Section 158(1)(c) now reads as follows:-
"158. Powers of Labour Court
(1) The Labour Court may -
(a) ..........
(b) ..........
(c) make any arbitration award or any settlement agreement an order
of the Court."
It must be read with the provisions of section 158(1A) which
was introduced into the Act at the same time. This provision
is cast in the following terms:-
"(1A) For the purposes of subsection (1)(c), a settlement
agreement is a written agreement in settlement of a dispute that
a party has the right to refer to arbitration or to the Labour Court,
excluding a dispute that a party is only entitled to refer to
arbitration in terms of section 22(4), 74(4) or 75(7)."
The Legislature has, by way of the amendments in question,
sought both to define and limit the type of settlement which
might properly be made an order of court. Certain disputes
are expressly excluded. For the rest, "settlement
agreements" which are so subject must have as their
genesis disputes of a particular kind, namely disputes which
a party "has the right to refer to arbitration or the court"
under the provisions of the Act.
In the context of the facts of this case, section 191 of the
Act is of importance. It is manifest from the provisions
thereof that, strictu sensu, a party's right to refer a dispute
relating to the fairness of a dismissal based on operational
requirements is not absolute and will only arise in
circumstances where such dispute has been referred to the
Commission and it has certified that it remains unresolved,
or a period of thirty days has lapsed from the referral,
whichever is the earlier.
In Secretary for Inland Revenue v Kirsch 1978(3) SA 93 (T)
at 94E-H, Coetzee J (as he then was), on behalf of the Full
Bench, dealt with the meaning of the word "right" in the
following terms:-
"The word `right', in legal parlance, is not necessarily
synonymous with the concept of a `legal right' which is the
correlative of duty or obligation. On the contrary, legal literature
abounds with `right' being used in a much wider sense and, as is
pointed out in Salmond on Jurisprudence 11th ed at 270, in a
laxer sense to include any legally recognised interest whether it
corresponds to a legal duty or not. An owner, for instance, has at
common law the right to use or abuse his property. The problem,
in casu, is simply to determine whether the Legislature employed
this term only in its strictest sense as the correlative of a legal
duty or whether its wider meaning could be included.
There are many cases in which `right' when used in a statute has
been interpreted in the wider sense - see, eg, R v Tamblin 1911
TPD 772 at 779-780; United Dominions Corporation Ltd v Nel
1962(3) SA 64 (SR) at 67. More significant is the common use of
`right', in the wider sense, in the very field of financial activity
covered by s 8A."
The words "right to refer", as used in section 158(1A), may
at first blush, on a strictly literal and narrow construction,
invite the consequence that only a settlement which has
been concluded after the right to refer to arbitration or to
the Court, as the case may be, has arisen, falls within the
scope of section 158(1)(c). Applying this approach, and
again in the context of the facts in casu , the settlement
agreement was not open to be made an order of court, as
the applicant had not referred the dispute to the
Commission, which in turn had not been required to fulfil
any functions in regard thereto.
On closer analysis, this construction does not bear scrutiny.
The words "right to refer" in section 158(1A) postulate
futurity and thus in a strictly literal sense connotes a point in
time between the accrual of the right and its actual
exercise. On this basis, and once the right has been
exercised, a settlement which might then eventuate could
not be made an order of court as, having already been
referred, the dispute would no longer be open to referral.
On this basis, the Court would be precluded from exercising
its competence in terms of section 158(1)(c) in relation to a
settlement concluded after the referral of the matter. This
is so because there would at that point be no right to refer
the dispute as such referral would already have taken place.
An intention to confine the competence of the Court to a
settlement which has been concluded during the
subsistence of the right to refer, and not thereafter, cannot
be imputed to the Legislature. On this score, the
Legislature, it would seem to me, would hardly have sought
to distinguish between a settlement which has been
concluded within that period and one which is only
concluded thereafter. This, to my mind, would give rise to a
wholly unjustified and artificial distinction. Surely, the
intention must be to confer the competence on the Court to
make a written settlement agreement an order once the
referral in question had already taken place. And, if that be
so, there appears to me to be no reason why a settlement of
a dispute which would otherwise fall within the scope of
section 158(1A) should not be made an order in
circumstances where it is concluded before the dispute
resolution machinery of the Act has been invoked at all.
In short, I am of persuasion that the words "the right to
refer" in section 158(1A) are not to be construed in a
narrow, literal sense so as to equate to a right which is open
to immediate exercise. In my judgment, it connotes a far
wider concept, such as an entitlement which may only fall to
be exercised once the pre-requisites for doing so have been
satisfied. Thus, provided only that the dispute is of a kind
which is amenable to adjudication by the Commission or the
Court in terms of the structure of the Act, albeit not as a
matter of immediacy, but once the pre-requisites for such
adjudication have been satisfied, a settlement in relation
thereto may be made an Order in terms of section 158(1)(c),
irrespective of the date of its conclusion.
This construction does no violence to the wording of section
158(1A). As previously indicated, it has been recognised
that the word "right" in the language of the law may be used
in a wider and laxer sense and not in the sense that it is
synonymous with the concept of a "legal right", correlating
to a duty or obligation.
It is in this wider sense that the word "right" is in my
judgment used in 158(1A) of the Act. It follows, in my view,
that the character of the right referred to in section 158(1A)
is such that it need not be open to immediate exercise, but
may be invoked at some time in the future when the pre-
requisites therefor have been fulfilled. It nonetheless is
something which is extant in the sense that, bar a
subsequent resolution of the matter, the machinery of
referral may be resorted to.
In summary, both under the old and new regimens, the
Labour Court has the competence to make the written
agreement of settlement in casu an order of court.
In the result, the written agreement referred to in prayer 1
of the applicant's notice of motion of 4 October 2000 is
made an order of court. The costs of the application are to
be paid by the first respondent.
G FARBER
ACTING JUDGE OF THE
LABOUR COURT
DATE OF HEARING:
15 NOVEMBER 2002
DATE OF JUDGMENT:
28 NOVEMBER 2002
ADVOCATE R.G. BEATON
Applicant's Attorney Third Respondent's
Counsel
c/o Thompson Attorneys Instructed by:
1st Floor, Hutton Court Leon Maré & Michiel Erasmus Inc
Jan Smuts Ave & Summit Rd 10th Floor, Sanlam Centre
252 Andries Street
PRETORIA
Tel: (012)322 6156
Fax: (011)327 0448 Fax: (012)322 6179
Cell: 082 600 3633