IN THE LABOUR COURT OF SOUTH AFRICA
SITTING IN DURBAN
OF INTEREST
CASE NO D279/02
DATE HEARD 2003/04/22
DATE DELIVERED
2003/05/02
In the matter between:
FELTEX FOAM CONVERTING, a division of
FELTEX LIMITED Applicant
and
SACTWU First Respondent
COMMISSION FOR CONCILIATION,
MEDIATION AND ARBITRATION Second Respondent
P STONE N.O. Third Respondent
JUDGMENT DELIVERED BY THE HONOURABLE MS JUSTICE
PILLAY
ON 2 MAY 2003
FOR THE APPLICANT : MICHAEL MAESO OF
SHEPSTONE &
WYLIE ATTORNEYS
FOR THE RESPONDENT : BRETT PURDON OF BRETT
PURDON
ATTORNEYS
TRANSCRIBER
SNELLER RECORDINGS (PROPRIETARY) LTD - DURBAN
JUDGMENT 2 MAY 2003
PILLAY J
[1] The background to this review is that the applicant and first
respondent, the South African Clothing and Textile Workers
Union ("SACTWU") entered into a collective agreement on
24 February 2002. The material terms of this agreement
were the following:
"1. Scope of agreement
This agreement shall be applicable to all
employees in grades A3 to B4 employed in
the following operations situated in Jacobs:
*Feltex Automotive Trim - Components
- Altex
*Feltex Foam
*Security
2. ....
3. Grades
The parties agree to the implementation of
a new entry-level, unskilled grade for all
new employees. This grade will become a
permanent grade for all new unskilled
employees. Only if an employee is
promoted to a position that has a higher
skill requirement that has been vacated by
a higher graded employee, will that
employee move to the appropriate higher
grade and the equivalent rate of pay.
All new employees will be subject to the
same conditions of employment as current
employees.
Job descriptions are to be provided upon employment for new employees
employed into the entry level grade.
4. ...."
[2] At a pre-trial conference, the issues in dispute for arbitration
were agreed in the following terms:
"SACTWU will furthermore ask for an order that
Feltex breached the Substantive Wage Agreement
dated 24 February 2000 by employing casual
employees at a lower rate than the minimum wage
prescribed in the agreement. It will further claim
that Feltex breached the agreement by allowing
casual employees to be so employed by Employ-
Rite. This relief is claimed only in respect of the
Feltex Foam Converters division at Jacobs."
[3] The grounds of review were based on the submission that
there was no evidence of any breach of the substantive wage
agreement by the applicant. This was so because the
agreement was not applicable to casual employees as they
were not employed by the applicant but by a labour broker,
the second respondent in the arbitration.
[4] The reference to "all new employees" in the agreement could
only have been to persons employed by the applicant direct.
In amplification, the applicant submitted that at the
arbitration, SACTWU's witnesses had testified that wage
rates prescribed in the agreement were not paid to casual
employees. The applicant had objected because it was not
possible for it to admit or deny that evidence as the casuals
had not been identified and SACTWU had provided no further
details of their employment, grades or rates of pay.
[5] In these circumstances, it was submitted as a first ground of
review, the Commissioner's finding that the applicant was in
breach of the agreement was neither rational nor justifiable
in relation to the evidence before him.
[6] At the arbitration, SACTWU's failure to identify the casuals
and establish that they were its members was raised as an
objection to its locus standi to claim a benefit for them. The
applicant disputed that SACTWU had a direct and substantial
interest in the relief it claimed.
[7] The thrust of SACTWU's evidence about the casuals was that
the applicant had engaged persons directly as its own
employees or through the labour broker, and paid them rates
lower than those paid to permanent employees and agreed
to in clause 4 of the wage agreement. This the applicant did,
despite the fact that casuals did substantially the same work
and worked the same hours as permanent employees in the
equivalent grade.
[8] The purpose of leading the evidence about the casuals was
to establish that the applicant had made use of a labour
broker as a stratagem to avoid its obligations in terms of the
wage agreement. That evidence for SACTWU was sufficient
to put the applicant to its defence to that limited extent.
[9] The cause of action was the alleged breach of the wage
agreement. SACTWU's concern was for the implications of
that for collective bargaining in respect of the Feltex Foam
Converters division at Jacobs. Its cause of action was not to
claim the underpayment of wages to the individual casuals.
Whether they were members of SACTWU or not was
therefore irrelevant to the case made out by SACTWU.
[10] On the evidence, the Commissioner concluded as follows:
"I, firstly, find that the scope of the agreement in
question refers to 'all employees', irrespective of
union membership. This is in keeping with the
provisions of section 23(1)(d) of the Labour
Relations Act, and therefore, I find that the
applicant union does have a 'direct and
substantial interest' in this matter. The purpose of
such an Agreement is not only to secure fair
wages for the applicant union's members, but also
to regulate the internal labour market at the
Jacobs site to prevent the over or underpayment,
in terms of the negotiated rate, of employees
undertaking the same or similar work as
undertaken by union members which, in either
case, would be detrimental of the applicant union
and its members. MR GORDON's evidence
regarding the 'temporary or casual' nature of the
persons concerned is unconvincing. The
agreement clearly refers to ‘graded’ employees,
but clause 3 also states 'The parties agree to the
implementation of a new entry level unskilled
grade for all new unskilled employees'. This
grade is clearly the product of collective
bargaining and has nothing to do with the
Paterson grading scheme. The purpose was to
reduce the first respondent's labour costs but
according to MR GORDON’s evidence the first
respondent attempted to reduce these costs still
further by creating a 'casual or temporary'
designation and subsequently by utilising a
temporary employment services agency, the
second respondent. There is no collective
agreement in place which defines employee
beyond 'all new unskilled employees'. The
evidence before me is that whether directly
employed by the respondent or indirectly through
the second respondent, the persons concerned
have been utilised as unskilled workers by the first
respondent in its Feltex Foam Converters division
and must properly be classified as 'new unskilled
employees'. The arrangement with the second
respondent cannot be utilised as a mechanism to
undermine or bypass the first respondent's legal
obligations in terms of the Agreement concluded
on 24/02/2000."
[11] In my view, these conclusions of the Commissioner speak for
themselves. His interpretation of the agreement is literal. If
its effect is more generous than the applicant intended then
the latter should have crafted the agreement to restrict its
application to its own employees. It is not as though the
applicant had no control over the employees of the labour
broker. It could, for instance, have refused to engage its
services unless it met the minimum wage rates.
[12] The Commissioner's reference to labour market "at the
Jacobs site" is, however, loose and an overstatement, as
other divisions of the applicant for which SACTWU enjoys no
recognition also operate there. The Commissioner
nevertheless restricted his award to Feltex Foam Converters
division, which was consistent with his terms of reference.
[13] The casualisation of labour was a disincentive to
implementing the new entry level unskilled grade in terms of
clause 3 of the agreement. My view in this regard is fortified
by the fact that the applicant provides no evidence that by
the time of the arbitration it had employed people in the
entry grade. Its evidence is that "currently", that is at the
time of delivering its replying affidavit in this review, 25
employees received payment at the entry level grade. This
was in response to the evidence in SACTWU's answering
affidavit filed in the review, that it had never paid the entry
level grade.
[14] The conclusions of the Commissioner, I find, are eminently
rational and justifiable on the basis of the material before
him. The first ground of review therefore fails.
[15] The award is in the following terms:
"On the second issue, I find that the first
respondent is in breach of the Agreement
concluded on 24/02/2000 and order the first
respondent to implement the 'new entry
grade' for all new unskilled employees
employed by the second respondent at its
Feltex Foam Converters division."
[16] The first part of the award is consistent with the
Commissioner's terms of reference. The second part is not.
His terms of reference were merely to issue a declarator. It
was not to order specific performance.
[17] Furthermore, the second part is but one of the remedies
available on breach. Another remedy could have been to
terminate the contract of the labour broker altogether or to
restrain the applicant from employing any unskilled casuals
directly or indirectly.
[18] The Commissioner should have simply issued the declarator
and left it to the parties to bargain the remedy. However,
this was not argued before me.
[19] The second leg of the ultra vires ground, which I uphold, is
that the applicant did not have a contract with the
employees of the labour broker. As Mr Maeso for the
applicant points out, in terms of section 198(2) of the Labour
Relations Act 66 of 1995 (the "LRA"), the labour broker is the
employer. The applicant would therefore not have been able
to give effect to the award, except with the co-operation of
the labour broker.
[20] In the circumstances, the award falls to be reviewed and
corrected by the deletion of the second part. Accordingly,
the award is substituted with the following:
"On the second issue I find that the
first respondent is in breach of the
agreement concluded on 24/02/2000."
[21] As the applicant is only partially successful, I make no order
as to costs.
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_______________
PILLAY D, J
21 June 2003.