J648/03-NB/CD - 1 -JUDGMENT
IN THE LABOUR COURT OF SOUTH AFRICA
SITTING IN JOHANNESBURG
CASE NO J648/03
DATE OF HEARING : 2003/12/09
DATE OF JUDGMENT:
In the matter between:
SOLIDARITY AND OTHERS Applicants
and
MINISTER OF PUBLIC SERVICE
AND ADMINISTRATION Respondent
JUDGMENT DELIVERED BY
THE HONOURABLE MR ACTING JUSTICE NGCAMU
ON
ON BEHALF OF APPLICANTS: ADV J G GROGAN
ON BEHALF OF RESPONDENT: ADV M S M BRASLEY SC
TRANSCRIBER
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J648/03-NB/CD - 2 -JUDGMENT
SNELLER RECORDINGS (PROPRIETARY) LTD - DURBAN JUDGMENT
NGCAMU AJ
[1] This is an application brought by the applicants to declare null and
void the agency shop agreement concluded by the parties to the Public
Service Co-ordinating Bargaining Council. The applicant has not
pursued the second order prayed. The application is opposed by the
second respondent.
[2] During May 1998 eleven registered trade unions entered into an
agency agreement with the State as the employer. Resolution No 1 of
1998, creating the agency, was signed on behalf of the unions and the
State as the employer on 26 May 1998. The agreement was effective
from 1 July 1998.
[3] In terms of the agreement the employer was required to deduct an
agency fee equal to 1% of the employees' basic salary to a maximum
of R60. Since 1998 the employer has been deducting the amount of
R60 per month from the employees who are not members of the
unions party to the agency agreement. The money is deducted and
transmitted monthly to the second respondent who, in turn, distributes
it amongst the unions who are party to the agreement.
[4] The majority of the State employees pay subscriptions to their
unions and therefore are not affected by the agency agreement.
[5] The second respondent has, in addition to its opposition on the
merits, raised two points in limine. The first point is that the applicants
have no locus standi to bring this application. The second point is that
no basis has been made out for the exercise of the discretion sought
by the applicants.
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[6] I now deal with the question of the locus standi. The first
applicant, a trade union, is not a party to the agency agreement. It
was submitted that the payment of the agency shop agreement
creates problems for the workers. This results from the fact that a
worker would have to pay his normal subscription fee, as well as the
agency fee. It has not been suggested that the payment of the double
fee is unlawful and/or illegal. I therefore need not deal with this.
[7] The respondent has submitted that the first applicant has failed to
establish that it acts on behalf of any of its members or that it seeks to
vindicate any rights enjoyed by its members. It is common cause that
the first applicant is a registered trade union. Section 200 of the
Labour Relations Act entitled a registered trade union to intervene on
behalf of its members and also act in its own interest. The interest of
the first applicant in this application has not been demonstrated on the
papers before the Court.
[8] The second and the third applicants are members of the first
applicant. The first applicant is entitled to act on behalf of these
members. Section 200(2) of the Labour Relations Act entitles a
registered trade union to be a party to any proceedings if one or more
of its members is a party to those proceedings. Accordingly, the first
applicant does not have to prove any harm in order to have locus
standi.
[9] The second applicant was a member of one of the unions who are
signatories to the resolution. He resigned from that union and joined
the first applicant. As a result of this he is paying his normal
subscription fee, as well as the agency fee. The second applicant
accordingly has locus standi as the agency agreement affects him.
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[10]The position of the third applicant is different. The third applicant
is a member of SAPU. SAPU is a beneficiary to the agency agreement.
As the third applicant is still a member of SAPU, he is bound by the
agency agreement in terms of section 23(2) of the Labour Relations
Act. This section provides:
"A collective agreement binds for the whole period of the collective
agreement every person bound in terms of sub-section 1(c) who was a
member at the time it became binding or becomes a member after it
became binding, whether or not that person continues to be a member
of the registered trade union or registered employees organization for
the duration of the collective agreement."
In the light of this, the third applicant has no locus standi to bring this
application. The third applicant has not paid any agency fee.
[11]The next question that the Court has to decide is whether
resolution No 1 of 1998 is invalid. Section 25(3) sets out the
requirements for the agency agreement to be binding and it provides,
"An agency shop agreement is binding only if it provides that -
(a) employees who are not members of the representative trade union
are not compelled to become members of that trade union;
(b) The agreed agency fee must be equivalent to or less than -
(i) the amount of the subscription payable by the members of the
representative trade union;
(ii) if the subscription of the representative trade union is calculated
as a percentage of an employee's salary, that percentage; or
(iii) if there are two or more registered trade unions party to the
agreement, the highest amount of the subscription that would apply to
an employee;
(c) the amount deducted must be paid into a separate account
administered by the representative trade union; and
(d) no agency fee deducted may be -
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(i) paid to a political party as an affiliation fee;
(ii) contributed in cash or kind to a political party or a person standing
for election to any political office; or
(iii) used for any expenditure that does not advance or protect the
socio-economic interests of employees."
[12]The agency shop agreement is annexed to resolution No 1 of 1998
as schedule No 1. Clear provisions have been made in the agreement
to comply with section 25(3)(b),(c) and (d). What is in issue is whether
it complies with section 25(3)(a) of the Act.
[13]The applicants submit that it does not and is therefore invalid. It is
necessary for me then to set out what the resolution provides:
"Agency Shop Agreement
(1) Noting that section 25 of the Labour Relations Act No 66 of 1995
(the LRA) enables an employer and the representative trade
union/unions to conclude an agency shop agreement;
(2) The parties to the Public Service Co-ordinating Council (the PSCBC)
hereby resolved to conclude an agency shop agreement which is
attached to this resolution (schedule 1).
(3) This agreement binds:
(i) the employer;
(ii) the employees of the employer who are members of the trade
union parties to this agreement; and
(iii) the employees of the employer who are not members of any
trade union parties to this agreement but who fall within the registered
scope of the council;
(iv) this agreement shall come into effect on 1 July 1998."
The resolution is signed by eleven trade unions. Clause 1 of schedule
1 to the resolution provides that:
"This is an agency shop agreement for the purposes of section 25 of
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the Labour Relations Act. The object of this agreement is to ensure
that all employees who receive the benefits of collective bargaining
contribute towards its cost."
[14]I have mentioned that the agreement makes reference to the
provisions of section 25(3)(b), (c) and (d). Besides this reference to
section 25 in paragraph 1 of the resolution in clause 1 of schedule 1,
there is no other reference to section 25(3)(a) of the Act. It is for this
reason that the applicants submit that the resolution is void ab initio.
[15]It was submitted on behalf of the respondent that there is
substantial compliance with section 25(3) of the Act. It was further
submitted that if the agreement was invalid it was capable of
rectification.
[16]Resolution No 1 of 1998 has since been amended by resolution
No 4 of 2003 dated 19 June 2003. The amendment was effected after
the applicants had launched this application. The amendment has
been made to clause 3 of schedule 1 by the insertion of clause 3(2),
which provides:
"No employee is or can become obliged to join a trade union that is or
becomes a party to this agreement. Employees who are not members
of a trade union party to this agreement are not compelled to become
members of any trade union party to this agreement."
[17]Paragraph 1.2 of the introduction of resolution 4 of 2003 states
that the parties intended to comply with all the applicable
requirements of section 25 of the Act. It further states that the parties
believe that the agreement properly interpreted makes this clear. It
further acknowledges that some employees appear to doubt that the
agreement provides that the employees who are not members of a
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trade union party are not compelled to become members of any trade
union party.
[18]Mr Brasley, who appeared for the respondent, submitted that
clauses 1 and 5 of the agreement make it clear that no one is forced to
become a member of the union. Clause 5 provides:
"Each month the employer must deduct the agency fee from the basic
salary of each of its employees who are not members of any one of the
trade union parties to the council."
[19]Clause 1 and clause 5 of resolution 1 of 1998 do not make this
clear. These two clauses cannot be interpreted to mean that members
are not compelled to join unions. The agency agreement is an
agreement sui generis , in that it is an agreement entered by two or
more parties but also binding on parties not parties to it. It is therefore
necessary that its terms be made clear.
[20]In Greathead v SA Commercial Catering and Allied Workers Union
2001 (3) SA 464 (SCA), the Court was confronted with section 25(3) of
the Act. In that case the agency agreement did not make provisions
for the requirements of section 25(3). The Court held that the contract
was invalid for want of compliance with the statutory formalities. The
Court further held that the contract was incapable of rectification.
[21]The respondent in the present matter submitted that the Court has
to see if the agreement produces the message intended by the
parties, either expressly or impliedly. Differently put, the Court has to
see if the agreement substantially complies with section 25 of the Act.
[22]I have stated that the clauses 1 and 5 do not expressly refer to
section 25(3)(a) and that the agreement expressly made provisions for
the requirements of section 25(3)(b), (c) and (d). The agreement
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contained in schedule 1, clause 1, makes reference to section 25. The
agreement goes on to set out what the parties agreed. They clearly
expressed what they had agreed upon. The terms agreed fully
complied with section 25(3)(b), (c) and (d). The terms were fully set
out.
[23]In the circumstances, the question is whether the Court can
assume that the inclusion in the agreement of other requirements of
section 25 includes the others not specifically mentioned.
Alternatively, can the Court assume that the inclusion of other
requirements automatically excludes the others? The respondent has
submitted that the provision has been made in substance and not in
the express manner. Clause 1 of the schedule merely states that the
agency shop agreement is for the purposes of section 25 of the Labour
Relations Act. Clause 5 states that the agency fee must be deducted
from the employees who are not members of any one of the trade
union parties to the council. This cannot be relied upon when the
agreement goes further to specifically set out what has been agreed.
[24]I therefore cannot agree that this reference to section 25 is
sufficient. In my view, the setting out of specific terms agreed leads to
the conclusion that what has not been spelled out has not been
agreed. What was therefore agreed and intended is what appears in
the body of the agreement. The Act specifically requires the
agreement to provide for what is set out in section 25(3). It goes
further to state that the agency shop agreement is binding only if it
makes provision for what is set out therein. Consequently an
agreement not complying with section 25(3) is not valid and therefore
not binding.
[25]In my view the agreement substantially complied with statutory
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requirements. However, that does not make the agreement valid for
reasons that the agency agreement interferes with a person's
constitutional right of freedom of association, as contained in section
18 of chapter 2 of the Bill of Rights. It therefore becomes an unfair
labour practice to force the employee to join a trade union by making
deductions on his salary to make him join the union. The Legislature
was aware of this and therefore sought to provide that the agreement
should make provision for the fact that non-union members are not
compelled to become members. This is a fundamental requirement
necessary to make the agreement valid.
[26]The requirements of section 25(3) are few and are clearly set out
in the Act. What the Act requires is that they have to be included in
the agreement. These requirements are compulsory and need not be
discussed or agreed by the parties. Full compliance is therefore a
necessary requirement. As the agreement does not comply fully with
section 25(3), the agreement is not binding. The Act does not make
the agency agreement not complying with section 25(3) invalid but
merely states that it is not binding. In other words, it cannot be
enforced in a court of law. If therefore it is only not binding, it is
capable of being amended or supplemented to make it binding.
[27]In the present case the agency agreement after the amendment
by resolution 4 of 2003, in my view, complies with section 25(3) and is
therefore valid. Having said that, I am bound by the judgment in the
Greathead case in which the Court held that non-compliance with the
provisions of section 25(3) gives rise to an agreement which is formally
invalid and rectification is not competent when the agreement is
invalid for want of compliance with the statutory formalities. (See
paragraph 13 of the judgment.) In other words, the failure to comply
paragraph 13 of the judgment.) In other words, the failure to comply
with section 25(3) does not only make the agreement not binding but
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also invalid. If the agreement is invalid ab initio , there can be no
rectification.
[28]It was submitted on behalf of the respondent that the only basis
for the declaratory order will be for the purpose of claiming the past
payments. Counsel relied on the case of NAPTOSA and Others v
Minister of Education, Western Cape, and Others 2001 (2) SA 112 (C).
On page 125, paragraphs C to E the Court stated:
"A declaratory order is an order by which a dispute over the existence
of some legal right or entitlement is resolved. The right can be
existing, prospective or contingent. ( Suid-Afrikaanse Onderlinge
Brand- en Algemene Versekeringsmaatskappy Beperk v Van den Berg
en 'n Ander 1976 (1) SA 602 (A).) A declaratory order need have no
claim for specific relief attached to it but it would not ordinarily be
appropriate where one is dealing with events which occurred in the
past. Such events, if they gave rise to a cause of action, would entitle
the litigant to an appropriate remedy."
[29]The applicants have not indicated in these papers what they would
like to claim, whether they would like to claim the past payment. I
would not want to speculate about their next line of action. The
dispute which caused the applicant to approach the Court is that
resolution 1 of 1998 is invalid ab initio. The order they seek is for the
resolution of this dispute. The dispute still exists despite the alleged
amendment of resolution 1 by the respondent. The applicants do not
have to attach a specific relief to the declaratory order they seek.
[30]In the light of the view I hold in regard to the agency agreement, I
am of the view that the Court is not dealing with an event that
happened in the past. In the circumstances, I am satisfied that the
applicants have made a case for the relief sought in prayer 1 of the
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order prayed.
[31]In the circumstances I make the following order:
(a) The first and second respondents have locus standi to bring this
action.
(b) The third respondent has no locus standi.
(c) Resolution No 1 of 1998 concluded between the State, as
employer, and the representative unions, signed on 26 May 1998 is
void ab initio.
(d) The respondent is ordered to pay the costs.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DATE OF HEARING: 9 DECEMBER 2003
DATE OF JUDGMENT: 21 APRIL 2004
FOR APPLICANTS: ADV J G GROGAN
FOR RESPONDENT: ADV M S M BRASLEY SC
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