IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT CAPE TOWN
REPORTABLE
CASE N0: C1061/02
In the matter between
NUMSA & OTHERS Applicants
and
SA FIVE ENGINEERING & OTHERS Respondents
JUDGMENT
MURPHY AJ
1. On the 11 October 2002 the applicants filed a notice of motion in terms of section 189A(13) of
the Labour Relations Act (“the LRA”) seeking an order declaring that the dismissal of the
individual applicants was procedurally unfair and directing the respondents to reinstate the
applicants retrospective to the date of dismissal pending a fair consultation procedure being
complied with.
2. The individual applicants were employed by the respondents to upgrade a vessel, the Glas
Dowl, in June 2002. The contracts of employment did not contain a specific termination
date, but in relation to some applicants, it is alleged, they were intended to terminate at the
end of the refurbishment and upgrading project. During SeptemberOctober 2002
correspondence was entered into between the first respondent and first applicant, which
culminated in the dismissal of the 110 individual applicants on operational requirement
grounds. Within a matter of a few days, the applicants filed this application seeking relief in
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terms of section 189A(13), which in general terms permits employees to seek interdictory
relief or compensation where an employer does not comply with a fair procedure when
effecting operational requirement dismissals.
3. The matter was initially enrolled for hearing before my colleague Waglay J on 27 January 2002
and then postponed sine die . On 24 January 2003 Ntsebeza AJ granted an order joining the second
to sixth respondents. Thereafter the matter again came before Waglay J on 6 March 2003, at which
stage he made the following order:
1. The matter is removed to the trial roll for the determination of the fairness of the dismissal
both on procedural and substantive grounds.
2. The parties are required to file a pretrial minutes within 21 days of today.
3. The parties are not required to refer this dismissal dispute for conciliation noncompliance
with this requirement is condoned.
4. Costs to stand over for later determination.
On the basis of this order, the matter was set down before me on the trial roll of 1 November 2004.
At the commencement of the proceedings, I raised with the parties’ legal representatives the
question of whether it was competent for this court to condone noncompliance with the
requirements of conciliation in disputes concerning the substantive fairness of an operational
requirements dismissal. Mr Jacobs, who appeared on behalf of respondents, relying on the
provisions of section 189A(18) and (19), then also argued that the court was not entitled to
adjudicate a dispute about procedural fairness when seised with a referral of a dispute about
substantive fairness in terms of section 191(5)(b)(ii) of the LRA. His point begs the question of
whether the court was indeed so seised, an issue to which I revert presently. Nonetheless, at the
hearing I ruled that the court indeed lacked jurisdiction to determine the dispute regarding
substantive fairness, but was competent to proceed with the adjudication of the dispute about
substantive fairness, but was competent to proceed with the adjudication of the dispute about
procedural fairness in terms of section 189A(13), and reserved my reasons for the ruling. Mr.
Whyte, on behalf of the applicants, then sought a postponement in respect of the section 189A(13)
application and indicated his intention to refer the dispute about substantive fairness to the CCMA,
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where he presumably intends to seek condonation for any delay in that regard, on grounds that he
had proceeded in good faith on the basis of Waglay J’s order, which I have found for the reasons
stated below to have been mistaken. I accordingly granted the request for a postponement. These
are the reasons for my rulings.
4. A proper understanding of my ruling requires a careful analysis of the provisions of section
189A of the LRA, inserted by section 45 of the Labour Relations Amendment Act 12 of 2002
(“the amendments”), which became effective on 1 August 2002. The dismissals of the individual
applicants occurred on 4 October 2002 and are therefore subject to the amendments.
5. Before turning to a discussion of the amendments, it is necessary to comment briefly on
the pleadings in this matter. Litigation between the parties was commenced by way of
application proceedings in terms of rule 7, which requires a notice of motion in compliance
with Form 4 and a supporting affidavit setting out the information detailed in rule 7(3).
Bearing in mind that the applicants initially sought relief under section 189A(13), it was
entirely in keeping with the prescriptions of that section for the applicants to have proceeded
on notice of motion. Such procedure stands in contrast to that applicable to disputes about
substantive fairness. Disputes about substance must be referred to adjudication in terms of
section 191(5)(b)(ii) read with section 191(11). Referrals to the Labour Court are initiated by
a statement of claim in terms of rule 6. The order of Waglay J of 6 March 2003, therefore,
aimed at two procedural consequences. Firstly, the removal of the procedural dispute
between the parties to the trial roll was in effect an exercise of the learned judge’s discretion
under section 7(8)(b) to refer the factual disputes appearing on the papers for the hearing of
oral evidence. Secondly, by referring the dispute about substantive fairness to the trial roll,
he purported to exercise his discretion under rule 11(4) to do what he considered expedient
in the circumstances to achieve the objects of the Act, in particular expediting the
proceedings by allowing the motion pleadings to stand as the statement of claim and
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response under rule 6 and directing the parties to bring the pleadings to a close by means of
a pretrial minute in terms of rule 6(4). There can be no objection to a judge following such a
route in general. The difficulty, as will appear, is whether the referral of a dispute about
substantive fairness on such a basis will be competent without a prior referral to conciliation,
and whether the learned judge was correct in his assumption that he was entitled to condone
noncompliance with the requirement of conciliation.
6. Section 189A was inserted into LRA by the amendments with the aim of meeting the demands
of various stakeholders for a more efficient method for handling disputes about operational
requirement dismissals. Its structure and objective are commendable. Therefore it comes as
something of a surprise that two years after its enactment there exists little in the way of judicial
commentary on its purpose, scope and application. As this case demonstrates, litigants will
accordingly be well advised to proceed with caution when embarking upon a journey through its
unchartered waters.
7. Section 189A sets out to accomplish several objectives. First and foremost it bestows on
employees in significant operational requirement dismissals a choice between industrial action and
adjudication as the means of attempting to resolve the dispute. To minimize avoidable strikes and
litigation, the section allows for the possibility of compulsory facilitation by the CCMA, if either
the employer or a consulting party representing the majority of employees targeted for dismissal
requests it. Otherwise the parties are free to agree to voluntary facilitation (189A(3) and (4)). The
appointment of a facilitator suspends the employer’s right to dismiss for 60 days. After the period
has expired the employer may give notice of termination of employment. Once the notice of
termination is given, the employees have the choice of either embarking on lawful industrial action
or referring a dispute regarding substantive fairness to the Labour Court – section 189A(7). Once
there is a referral to the Labour Court the right to strike is no longer available. Equally, if no
facilitator is appointed, neither party may refer a dispute to the relevant bargaining council or the
CCMA for 30 days from the date of a section 189(3) notice. Thereafter the employer is free to give
notice of termination and the employees are compelled to opt for industrial action or a referral of
the dispute about substantive fairness to the Labour Court.
What is most notable about this scheme for present purposes, is that referrals to the Labour Court
are overtly restricted by subsections 189A(7)(b)(ii) and 189A(8)(b)(ii)(bb) to disputes
“concerning whether there is a fair reason for the dismissal”, in other words disputes about
substantive fairness. Moreover, both provisions state expressly that the referral is to be made in
terms of section 191(11), the provisions of which appear below. Disputes about procedure in cases
falling within the ambit of section 189A cannot be referred to the Labour Court by statement of
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claim, but must be dealt with by means of motion proceedings as contemplated in section
189A(13), the exact scope of which I will return to presently. Suffice it now to say that the
intention of section 189A(13), read with section 189A(18), is to exclude procedural issues from
the determination of fairness where the employees have opted for adjudication rather than
industrial action, providing instead for a mechanism to preempt procedural problems before the
substantive issues become ripe for adjudication or industrial action.
8. It must be kept in mind, however, that this novel scheme is not of universal application.
The section will only apply if the total number of employees employed by the employer
exceeds 50, and the employer proposes dismissing a certain number of employees in
accordance with the sliding scale contained in section 189A(1). It could arguably follow that
dismissals for operational requirements not falling within the ambit of section 189A should
continue to be processed as they were before the introduction of the amendments, meaning
that both disputes about procedural and substantive fairness may continue to be referred to
the Labour Court in terms of section 191(5)(b)(ii) read with section 191(11). However, a
compelling argument can equally be made that the general language used in section
189A(18) operates to restrict all procedural disputes to application proceedings and thus
excludes the referral of disputes about procedural fairness to the Labour Court for trial by
means of a statement of claim. The section provides:
The Labour Court may not adjudicate a dispute about the procedural fairness of a dismissal based on the
employer’s operational requirements in any dispute referred to it in terms of section 191(5)(b)(ii).
I do not for present purposes need to make a decisive pronouncement on this issue. I make the
observations I do merely as an admonition to litigants to proceed with caution.
observations I do merely as an admonition to litigants to proceed with caution.
9. Section 189A(13) reads as follows:
If an employer does not comply with a fair procedure, a consulting party may approach the Labour Court by way of
an application for an order
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a) compelling the employer to comply with a fair procedure;
b) interdicting or restraining the employer from dismissing an employee prior to complying with a fair
procedure;
c) directing the employer to reinstate an employee until it has complied with a fair procedure;
(d) make an award of compensation, if an order in terms of paragraphs (a) to (c) is not appropriate.
10. As explained earlier, the applicants initially moved the court in terms of this section for an
order of reinstatement and to compel compliance with a fair procedure. As also explained, the
order of Waglay J of 6 March 2003 can be interpreted as having referred that dispute to oral
evidence under rule 7(8)(b). However, with the effluxion of a considerable period of time since the
dismissals, the applicants are less interested in the adjudication of the procedural dispute and
would prefer resolution of the dispute about substantive unfairness. Certainly, in practical terms,
the time for a preemptive interdict has long passed. But section 189A(13) does not limit the
applicants to interdictory relief, despite such a remedy being central in the preemptive approach
envisaged in the overall scheme of the provision. Section 189A(13)(d) also bestows on the
applicants the right to seek compensation for procedural irregularities where interdictory relief or
specific performance is not appropriate. Moreover, section 189A(14) preserves the court’s general
power to award compensation under section 158(1)(a) in such cases. Hence, even though the horse
has long since bolted the stable, there is no reason why the applicants should be barred from
proceeding with their claim for relief in respect of any procedural irregularities that may have
tainted their dismissals. For that reason, I was prepared to grant a postponement for the
adjudication of the procedural dispute under section 189A(13).
11. The dispute about substantive fairness is however another matter altogether. Section 189A(8)
(b)(ii)(bb) provides that where the parties have not opted for facilitation or industrial action, and
once the applicable time periods have expired, the union and the employees may “refer a dispute
concerning whether there is a fair reason for the dismissal to the Labour Court in terms of section
191(11)”. The applicants contend that this is precisely what they have done and in that regard rely
on paragraphs 3 and 4 of the pretrial minute, which read:
3. The parties then agreed that the matter will go to full trail where the substantive and procedural fairness
of the dismissals of the second to further applicants will be adjudicated upon. This agreement is reflected in
the Court Order of 6 March 2003.
4. This pretrial minute is therefore drafted pursuant to the abovementioned Court Order.
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12. On such a basis, the issue crystallizes into a consideration of whether the order of
Waglay J and the pretrial minute constitute a valid referral of a dispute concerning whether
there is a fair reason for the dismissal in terms of section 189A(8)(b)(ii)(bb) read with
section 191(11). For the reasons that follow I regret that I am unable to conclude that they
do.
13. At a formalistic level, I have no difficulty with a ruling under rule 11(4) that it is expedient to
consider papers filed in motion proceedings, supplemented by a pretrial minute, as substituting
for the rule 6 statement of claim and response, if that indeed was what my colleague intended. The
difficulty for me is rather one of jurisdiction. Section 189A(8)(b)(ii)(bb) makes it clear that the
referral of a dispute about substantive fairness must be in terms of section 191(11) which
reads as follows:
(a) The referral, in terms of subsection (5)(b), of a dispute to the Labour Court for adjudication, must be made
within 90 day after the council or (as the case may be) the commissioner has certified that the dispute remains
unresolved.
(b) However, the Labour Court may condone nonobservance of that timeframe on good cause shown.
14. The section incorporates by reference the provisions of section 191(5)(b), which sub
section confers substantive jurisdiction on the Labour Court for various causes of action
including operational requirement dismissals. Although its primary purpose is to set a 90 day
time limit with reference to the certification that conciliation has failed, and to provide for
condonation of noncompliance with the time frame, provided good cause is shown, the
reference to section 191(5) is important in that such provision operates to confer jurisdiction
on the Labour Court only if the bargaining council or the CCMA commissioner has certified
that the dispute remains unresolved, or if 30 days have expired since the referral of the
that the dispute remains unresolved, or if 30 days have expired since the referral of the
dispute to conciliation in terms of section 191(1) and it remains unresolved . In Numsa v
Driveline Technologies (Pty) Ltd & another [2000] 1BLLR 20 (LAC) @ 38F, Zondo AJP
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(as he then was) stated in relation to the requirement of conciliation:
“To me it is as clear as daylight that the wording of section 191(5) imposes the referral of a
dismissal dispute to conciliation as a precondition before such a dispute can either be
arbitrated or be referred to the Labour Court for adjudication”.
15. I find myself in respectful agreement with the Judge President, and hence the issue resolves
into the question of whether this court has the authority to condone noncompliance with the
precondition of conciliation. It is clear that the power of condonation granted by section 191(11)
(b) is restricted to condoning the lateness of a referral to the court and there appears to be no other
provision conferring a general power to condone noncompliance with the other jurisdictional pre
conditions. In the Driveline case, Conradie JA, in a minority judgment was of the opinion that
section 157(4)(a) grants the court discretion to dispense with the requirement of conciliation. And
given the tenor of his order, I imagine Waglay J concurs with that view. Section 157(4)(a)
provides:
The Labour Court may refuse to determine any dispute, other than an appeal or review before the Court, if the
Court is not satisfied that an attempt has been made to resolve the dispute through conciliation.
Although one sees the prudential merits of the interpretation preferred by Conradie JA, and
presumably Waglay J, that section 157(4)(a) confers a discretion to determine a dispute
which has not been submitted to conciliation, I cannot agree that such is the correct
construction of the section. Even if I were of the view that it was, I would in any event be
bound by the majority decision in Driveline, which has unequivocally put the matter to rest.
The majority held that section 157(4)(a) will only apply in a dispute when no certificate of
The majority held that section 157(4)(a) will only apply in a dispute when no certificate of
outcome was issued but where the employee acquired the right to refer the dispute to the
Labour Court by virtue of the expiry of the 30 day period stipulated for conciliation. I can
put it no better than the Judge President when he said:
“The long and the short of the above is therefore that, in my view, section 157(4)(a) provides no
basis for the proposition that the Labour Court has jurisdiction to adjudicate a dismissal dispute
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which has not been referred to conciliation. It is only a basis for the proposition that, in a case
where no certificate of outcome stating that a dispute remains unresolved has been issued and the
dispute was referred to conciliation but no attempt was made to conciliate the dispute, the Labour
Court may in its discretion refuse to determine the dispute”.
16. From this line of reasoning it follows that this court has no jurisdiction to adjudicate a dispute
about the substantive fairness of a dismissal referred to it in terms of section 189A(8)(ii)(bb), read
with sections 191(11) and 191(5)(b), unless it has first been referred to conciliation and the council
or the CCMA has certified that the dispute remains unresolved. There is moreover no power on the
part of this court to condone noncompliance with this jurisdictional precondition. Absent
conciliation there is no jurisdiction.
17. In the premises, the order of Waglay J contains an obvious error or was granted as a result of a
mistake common to both parties. Therefore, in terms of section 165 of the LRA, acting of my own
accord, I may vary that order. It is also necessary to make additional orders for the further conduct
of the proceedings. The order of Waglay J should therefore be regarded as varied to the extent of
the differences between the two orders. Accordingly, on 2 November 2004 I ordered as follows:
17.1. The applicant’s application in terms of section 189A(13) is referred to the trial roll in terms
of rule 7(8) for the hearing of oral evidence in relation to the disputes of fact appearing on the
papers.
17.2. It is declared that this court lacks jurisdiction to adjudicate the dispute concerning whether
there is a fair reason for dismissal until such time as the applicants comply with the provisions of
the Act relating to the conciliation of the dispute.
17.3. The application in terms of section 189A(13) and the referral to oral evidence in terms of
rule 7(8) is postponed sine die.
rule 7(8) is postponed sine die.
17.4. There is no order as to costs.
Date of judgment: 2 November 2004
Date of reasons: 5 November 2004
Applicant’s Representative: Mr. J Whyte, Cheadle, Thompson & Haysom
Respondent’s Representative: Mr. W Jacobs, W Jacobs & Associates.
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