IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
CASE NO:
JR
2130/02
In the matter between:
COIN SECURITY (PTY) LIMITED
Applicant
and
COMMISSION FOR CONCILIATION,
MEDIATION AND ARBITRATION
First Respondent
KATE SAVAGE N.O.
Second
Respondent
TRANSPORT & GENERAL WORKERS UNION
Third
Respondent
THE NATIONAL BARGAINING COUNCIL FOR THE
ROAD FREIGHT INDUSTRY
Fourth
Respondent
FIDELITY CASH MANAGEMENT
SERVICES (PTY) LTD
Fifth Respondent
THE NATIONAL ECONOMIC DEVELOPMENT &
LABOUR COUNCIL
Sixth
Respondent
JUDGMENT
FRANCIS J
Introduction
1. This is an application to review and set aside a demarcation award issued by the
second respondent (“the commissioner”), in terms of which she found that the
applicant’s assetsin transit (“AIT”) division is engaged in the Road Freight Industry
and falls within the jurisdiction of the fourth respondent and is bound by its collective
agreements.
2. The application was opposed by the third respondent the Transport and General
Worker’s Union (“the TGWU”), the fourth respondent the National Bargaining
Council for the Road Freight Industry (“the Road Freight Bargaining Council”) and
the fifth respondent Fidelity Cash Management Services (Pty) Ltd (“Fidelity”).
3. The applicant has abandoned its grounds of review challenging the proceedings
before the sixth respondent, the National Economic Development Labour Council
(“NEDLAC”).
The background facts
4. On 27 August 1971, a demarcation order was made by the Industrial Tribunal under
section 76 of the Industrial Conciliation Act, 1956 to the effect that the cashintransit
(“CIT”) operations of, inter alia, Fidelity was engaged in the Motor Transport
Undertaking (Goods). Fidelity has the largest CIT which is synonymous with the AIT
operation in the country. It has a market share in excess of 50%, and is registered
with the Road Freight Bargaining Council and complies with its agreements. The
result of this order was that such operations were subject to the jurisdiction of the
Industrial Council for the Motor Transport Undertaking (Goods) (“ICMTU”), whose
area of jurisdiction was then limited to the PWV and surrounding areas. The ICMTU
was the Road Freight Bargaining Council’s predecessor.
5. In approximately 1983, the applicant commenced providing an AIT service.
6. On 18 July 1984, the applicant was registered as an employer with the ICMTU. It
complied with the agreements of the ICMTU. It was one of eight CIT operators to
have registered with the ICMTU.
7. On 27 February 1989, the applicant appealed to the Minister of Labour, under section
51(6) of the Labour Relations Act 28 of 1956, against a ruling by the ICMTU refusing
the applicant an exemption. The appeal was dismissed.
8. In 1991, the applicant brought an application for demarcation in the Industrial Court
challenging the jurisdiction of the ICMTU. The application was subsequently
withdrawn.
9. In its objections dated 15 December 1995, the applicant objected, inter alia , to the
proposed variation of scope of the area of jurisdiction of the ICMTU to cover the
whole country. The applicant recorded, in its objections, that it was currently
proceeding with a Constitutional Court application about the application of the main
agreement of the ICMTU to the security industry. No such application was launched.
10. With effect from 31 May 1996, the area of jurisdiction of the ICMTU was extended to
the entire country, save for the former TBVC states and self governing territories.
11. The Labour Relations Act 66 of 1995 (“the Act”) came into operation on 11
November 1996.
12. On or about 9 December 1996, the applicant launched an application in the Transvaal
Provincial Division of the High Court for, inter alia , a declaratory order that the main
agreement of the ICMTU did not apply to it. On 8 October 1999, Van der Walt J
dismissed the applicant’s High Court application on the basis that the High Court
lacked jurisdiction. The applicant then appealed to the Supreme Court of Appeal. In
a judgment delivered on 10 May 2001, the Supreme Court of Appeal dismissed the
applicant’s appeal against the judgment of Van der Walt J.
13. On 9 February 1998 the Road Freight Bargaining Council registered under the Act,
with its area of jurisdiction being the entire country. There are two separate Road
Freight Bargaining Council agreements: the “A” agreement, which applies to the
Gauteng and surrounds; and the “B” agreement, which applies to the balance of the
country. While the applicant has, at all material times, complied with the agreement
in the “A” area, it did not comply with the agreement in the “B” area.
14. On 27 February 1998 the applicant dismissed certain of its employees for
participation in alleged unprocedural and illegal strike action. The dispute
concerning the dismissal of the employees was referred to this Court for adjudication.
The employees, represented by TGWU filed a statement of claim and the applicant
filed a reply. TGWU alleged that the Road Freight Bargaining Council had
jurisdiction in relation to the dispute and over the operations of the applicant. The
applicant pleaded in its plea dated 2 March 1999 that the Road Freight Bargaining
Council did not have jurisdiction over the matter.
15. On 11 September 1998, in an application brought by Fidelity at the CCMA in 1997,
commissioner Marcus issued a demarcation award (“the Marcus Award”) under
section 62 of the Act, in terms of which he found that the CIT activities of Springbok
Patrols (Pty) Ltd and Khulani Springbok Patrols (Pty) Ltd were engaged in the Motor
Transport Undertaking (Goods) sector as defined in the main agreement of the
ICMTU (by then the bargaining council).
16. On 7 April 1999, the Marcus award was made an order of Court under case number
J451/99.
17. On 10 June 2000, Fidelity instituted demarcation proceedings against the applicant in
the CCMA under section 62(1) of the Act. The applicant opposed these proceedings
on the basis of the pending appeal in the Supreme Court of Appeal.
18. The matter was set down before this Court on 23 October 2000. Basson J ordered that
the demarcation dispute be referred to CCMA in terms of section 62(3) of the Act.
The Registrar of this Court was directed to process the referral within three weeks of
the date of the order, failing which the necessary steps were to be taken by TGWU
and employees.
19. The CCMA set the matter down for a hearing before the commissioner on 3
September 2001. This was later changed to 7 September 2001. On 7 September 2001
the Road Freight Bargaining Council intervened in the dispute. It raised a point in
limine that the CCMA was functus officio as the CCMA had already made a binding
demarcation in a dispute between Fidelity and Springbok Patrols. The point in limine
was dismissed by the commissioner.
20. In her directive dated 7 September 2001, the commissioner called upon both the
applicant and the Road Freight Bargaining Council to discover certain documents and
make written submissions in support of their respective positions. The Road Freight
Bargaining Council duly delivered written submissions with a collection of
documents. The applicant delivered a statement of facts and bundles of documents.
Fidelity delivered written representations. TGWU filed a brief statement.
21. On 26 October 2001 a notice in terms of section 62(7) of the Act was published in the
Government Gazette.
22. On 14 December 2001, it was agreed that the “central factual document” would be the
applicant’s statement of facts and that the applicant would accept all the facts
contained in the other submissions and documents, which are not in conflict with the
applicant’s document. Where there are additional facts over and above those
submitted by the applicant, the applicants would not dispute those facts contained in
the documents.
23. The applicant went on to record that it accepted that the documents were what they
purport to be, but did not accept the correctness of every statement. The Road Freight
Bargaining Council had made its position clear before the commissioner that it
intended and would be entitled to refer to the documents filed of record in argument.
In preparation for the hearing on 18 March 2002, heads of arguments were delivered
by the Road Freight Bargaining Council on 21 February 2002 and by the applicant on
15 March 2002. It recorded in paragraph 6 of its heads of argument that no oral
evidence was led and that there were no factual disputes that required the testing of
evidence in oral hearing.
24. The status of the statement of facts and other documents submitted to the
commissioner was determined and agreed before the commissioner, immediately
preceding the hearing of argument. It was agreed that the statement of facts would be
the central factual document and in addition that any facts contained in the documents
referred to in the submissions of the Road Freight Bargaining Council and Fidelity,
which were not in conflict with the Statement of Facts, would be accepted. This
constituted the factual basis in respect of which the demarcation was to be decided. It
was called the “matrix of facts”.
25. On or about 13 or 14 May 2002 the commissioner made available to the participants
in the proceedings a document headed “Provisional Demarcation Award subject to
consultation with NEDLAC in terms of section 62 of the Act as amended”. At the
end of the document it was noted that the award had been submitted to NEDLAC for
consultation in terms of section 62 of the Act.
26. The determination was referred to NEDLAC on 6 July 2002 and was considered by
certain members of the Demarcation Standing Committee at a meeting on 8 August
2002 and was ratified at a meeting held on 1 September 2002.
27. On 13 September 2002, NEDLAC notified the CCMA that it had “agreed to support
the provisional award”. The applicant’s attorneys came to learn of this on 16
October 2002.
28. The review application was delivered on 3 January 2003.
The award
29. The commissioner found that the applicant’s AIT division, and their employees in
such division, is engaged in the transportation of goods for hire or reward by means of
road transport and therefore fell within the scope of the Road Freight Industry as
defined in the Road Freight Bargaining Council’s constitution.
30. The commissioner found that the applicant had failed to prove that the transportation
of assets by its AIT division is ancillary to the securing of such assets. Further that
the main business of the AIT division is the transportation of assets for reward.
Ancillary to such transportation is the security element, in that security is required
during the transportation given that the latter occur under circumstances often of
extreme danger and high risk. Transportation by the AIT division is not incidental to
securing the assets but central to the business of the division. The applicant’s AIT
business had not been distinguished from Fidelity which also operates within the AIT
sector defined as the transportation of goods for hire or reward by means of road
transport in the Republic of South Africa. The sector had for almost two decades
been demarcated as falling within the road transportation Industry and not the security
industry. The applicant would derive a competitive advantage against its competitors
which would not promote a system of orderly collective bargaining at sectoral level.
The issue of condonation
31. It is common cause that the review application was not brought within six weeks from
the date of service of the award. The applicant contended that the provisions of
section 145 of the Act are not applicable and that the application was brought within a
reasonable period. The application was brought in terms of section 158(1)(g) of the
Act. TWGU and Fidelity raised the issue that the application was not brought within
six weeks of the award. It was contended that since there was no application for
condonation, the application should be dismissed. The Road Freight Bargaining
Council accepted that section 158(1)(g) as opposed to section 145 of the Act was
applicable to review the application.
32. I am of the view that the provisions of section 145 of the Act are not applicable to this
application. This is not an unfair dismissal or an unfair labour practice dispute which
is governed by chapter VIII of the Act. Chapter VII of the Act which deal with
Dispute Resolution is also not applicable. This is a dispute about demarcation
between sectors and areas. Section 62 of the Act is applicable. Section 62(4) of the
Act provides that the provisions of section 138 apply read with the changes required
by the context. Section 138 deals with general provisions for arbitration proceedings.
33. The application was brought within a reasonable period and there is no need to apply
for condonation.
New issue raised
34. Before dealing with the grounds of condonation I need to deal with the new issue
raised by the applicant. The applicant has raised in a supplementary affidavit an issue
that was not raised with the commissioner namely that the commissioner had to
decide whether the items being carried by the applicant in its activities constituted
“goods”. If the items carried by the applicant did not fall within that definition, it was
not open to the commissioner to make a demarcation award that the items carried and
that the AIT activity falls within the definition of the Certificate of Registration (“the
Certificate”).
35. It was contended that cash, whether notes or coins, cheques, credit cards slips and
vouchers and other negotiable instruments do not constitute “goods” as referred to in
the Certificate. The Certificate records that the Road Freight Bargaining Council is
registered “in respect of the transportation of goods for hire or reward by means of
road transport in the Republic of South Africa.....”. The terms “transportation of
goods” is defined as meaning the undertaking in which employers and their
employees are associated for carrying out one or more activities for hire or reward,
including the transportation of goods by means of motor transport, the storage of
goods and the hiring out by labour brokers of employees for activities or operations
which ordinarily will naturally fall within the transportation of goods. Although the
scope of registration was changed on 9 February 1998, the definition of
“transportation of goods” was not changed. The word “goods” is not defined and
must accordingly bear its ordinary meaning. This would mean in interpreting the
Certificate, the language must be examined, not what the writer of the document may
have had in mind. The ordinary meaning of the word “goods” excludes money, coins
of the realm, and negotiable instruments. These are not commodities, but the means
of exchange for purchasing or selling commodities. There is nothing in the
Certificate which indicates that the word should be given any more extended a
meaning than that appearing in the dictionaries and case law.
36. It was further contended that although the commissioner did not consider this
question, apparently because it was not argued before her, it was contended that she
was nevertheless obliged to consider the question of the meaning of “goods” as a
fundamental question in the demarcation case. The issue is a legal one, and not one
on which the commissioner could exercise a discretion. The Commissioner assumed
that the items which the applicant carried in the course of its AIT activities (cash and
negotiable instruments) were “goods”, as defined in the Certificate. This meant that
she approached her task on an erroneous legal basis and failed to address her mind to
her task in accordance with the statute. On the other hand, if she simply disregarded
the issue then she failed to consider a material matter that it was essential to consider
and thereby approached her task on an erroneous basis.
37. I do not understand how it can be contended that the commissioner has committed a
reviewable defect in failing to appreciate that “money” does not constitute “goods” in
the context of the Road Freight Bargaining Council’s Certificate when the applicant
did not raise this point before the commissioner and did not raise it in its founding
papers in these proceedings. This is a review application and I am of the view that it
is impermissible for the applicant to raise this now. This was not something that was
fully canvassed in evidence before the commissioner. In any event it is in conflict
with the factual concession made during the demarcation proceedings that “goods” as
defined are transported. It is not a purely legal issue of the nature that can be raised at
this stage.
38. The commissioner should have been afforded an opportunity to deal with that issue.
The Legislature had deemed it necessary to grant the CCMA the exclusive
jurisdiction to deal with the issue of demarcation. This court does not have the
necessary jurisdiction to deal with demarcation disputes save when it deals with it in a
review application.
The grounds of review
39. The grounds of review are as follows:
39.1 The approach of the commissioner was fundamentally flawed in that she
disregarded the law relating and failed to approach her task in accordance with
the relevant authorities. She misunderstood the law as it related to
demarcations, and embarked upon the wrong inquiry. The commissioner
ought to have started from the point that the applicant operates the business of
providing security services. In the result she did not apply her mind in the
issues in accordance with the behests of the statute.
39.2 The award is unreasonable, in that no proper reasons have been provided for the
conclusion it reached. Further that the award is unreasonable in that insufficient reasons exist
for the conclusion reached. Further that the award is unreasonable, in that insufficient regard
has been taken of relevant evidence and information placed before the commissioner and
irrelevant information has been taken into account.
39.3 The commissioner imposed an onus upon the applicant in regard to the demarcation,
which, she states, it failed to discharge. In so doing, the commissioner erred and acted in
excess of her powers.
39.4 The commissioner considered that the main business of the applicant is transportation,
security, she held, was ancillary to this business. In so doing, she failed to determine that
where a business has features common to two different industries the demarcation tribunal
must decide with which industry the employer and its employees are most closely associated.
39.5 The commissioner also took into account that the applicant has been ‘demarcated’
since 1984 in the motor transport industry. This is incorrect. The applicant has not been
demarcated before.
39.6 The commissioner also found that the applicant would obtain a competitive advantage
if not demarcated into the Road Freight Industry which was an irrelevant consideration.
Analysis of the facts and arguments raised
40. The applicant’s review application is regulated by section 158(1)(g) of the Act. The
Promotion of Administrative Act 3 of 2000 (“PAJA”) does not apply to the review of
CCMA arbitration awards in this Court. The applicant’s grounds of review relate to
certain of the findings of the commissioner and the approach that she adopted in her
certain of the findings of the commissioner and the approach that she adopted in her
award under the heading “determination” . The commissioner is charged with having
made errors of fact and law, and having failed to satisfy the threshold requirement of
rationality. The applicant submitted that the demarcation award ought to be reviewed
and set aside as it fails to satisfy the threshold requirement of rationality and it is
based on errors of law and which led the commissioner to ask herself the wrong
question and apply the wrong test. In the result it was submitted that she failed to
apply her mind to the relevant issues in accordance with the behests of the Act.
41. The grounds of review chosen by the applicant are those found in common law. A
commissioner exercises a public power or performs a public function under the Act in
conducting demarcation proceedings. The commissioner’s decision must be
rationally related to the purpose for which the power was given. At common law,
errors of fact ordinarily do not give rise to a review unless the error relates to a
jurisdictional fact and even then the approach is a conservative one, as appears from
the following dictum of Corbett J in SA Defence and Aid Fund v Minister of Justice
1967(1) SA 31 (c) at 3435:
“Upon a proper construction of the legislation concerned, a jurisdictional fact may
fall into one or other of two broad categories. It may consist of a fact, or state of
affairs, which, objectively speaking, must have existed before the statutory power
could validly be exercised. In such a case, the objective existence of the jurisdictional
fact as a prelude to the exercise of that power in a particular case is justiciable in a
Court of law. If the Court finds that objectively the fact did not exist, it may then
declare invalid the purported exercise of power .... On the other hand, it may fall into
the category comprised by instances where the statute itself has entrusted to the
repository of the power the sole and exclusive function of determining whether in its
opinion the prerequisite fact, or state of affairs, existed prior to the exercise of the
power. In that event, the jurisdictional fact is, in truth, not whether the prescribed
fact, or state of affairs, existed in an objective sense but whether, subjectively
speaking, the repository of the power had decided that it did. In cases falling into this
category the objective existence of the fact, or state of affairs, is not justiciable in a
category the objective existence of the fact, or state of affairs, is not justiciable in a
Court of law. The Court can interfere and declare the exercise of the power invalid
on the ground of a non observance of the jurisdictional fact only where it is shown
that the repository of the power, in deciding that the prerequisite fact or state of
affairs existed, acted male fide or from ulterior motive or failed to apply his mind to
the matter.”
42. In the context of administrative action, a material mistake of fact may constitute
grounds for a review, but not to the extent that the distinction between a review and
an appeal is blurred. This was made clear in Pepcor Retirement Fund v Financial
Services Board 2003 (6) SA 38 (SCA) at paragraphs 46 and 47:
“In my view, a material mistake of fact should be a basis upon which a Court can
review an administrative decision. If legislation has empowered a functionary to
make a decision, in the public interest, the decision should be made on the material
facts which should have been available for the decision properly to be made. And if a
decision has been made in ignorance of facts material to the decision and which
therefore should have been before the functionary, the decision should .... be
reviewable at the suit of inter alia, the functionary would made it even although the
functionary may have been guilty of negligence and even where a person who is not
guilty of fraudulent conduct has benefited by the decision. The doctrine of legality
which was the basis of the decisions in Fedsure, Sarfu and Pharmaceutical
Manufacturers requires that the power conferred on a functionary to make decisions
in the public interest, should be exercised properly, ie on the basis of the true facts; it
should not be confined to cases where the common law would categorise the decision
as ultra vires.
Recognition of a material mistake of fact as a potential ground of review obviously has its
dangers. It should not be permitted to be misused in such a way as to blur, far less eliminate,
the fundamental distinction in our law between two distinct forms of relief: appeal and
review. For example, where both the power to determine what facts are relevant to the
making of a decision, and the power to determine whether or not they exist, has been
entrusted to a particular functionary (be it a person or a body of persons), it would not be
possible to review and set aside its decision merely because the reviewing Court considers
that the functionary was mistaken either in its assessment of what facts were relevant, or in
concluding that the facts exists. If it were, there would be no point in preserving the time
honoured and socially necessary separate and distinct forms of relief which the remedies of
appeal and review provide.”
43. The function of a CCMA commissioner in a demarcation dispute is a classic case of
the legislature entrusting a functionary with the power to determine what facts are
about the making of a decision and the power to determine whether or not they exist.
It is fundamental to the effective operation of the Act that the commissioner must be a
repository of such power.
44. At common law, the position in regard to errors of law was stated as follows in
Goldfields Investments Ltd & another v City Council of Johannesburg and Another
1938 TPD 551 at 560 561:
“And if from the magistrate’s reasons it appears that his mind was not in a state to
enable him to try the case fairly this will amount to a latent gross irregularity. If, on
the other hand, he merely comes to a wrong decision owing to his having made a
mistake on a point of law in relation to the merits, this does not amount to a gross
irregularity. In matters relating to the merits the magistrate may err by taking a
wrong one of several possible views, or he may err by mistaking or misunderstanding
the point in issue. In the latter case it may be said that he is in a sense failing to
the point in issue. In the latter case it may be said that he is in a sense failing to
address his mind to the true point to be decided and therefore failing to afford the
parties a fair trial. But that is not necessarily the case. Where the point relates only
to the merits of the case, it would be straining the language to describe it as a gross
irregularity or a denial of a fair trial. One would say that the magistrate has decided
the case fairly but has gone wrong on the law. But if the mistake leads to the court
not merely missing or misunderstanding a point of law on the merits, but to it
misconceiving the whole nature of the enquiry, or of its duties in connecting
therewith, then it is in accordance with the ordinary use of language to say that the
losing party has not had a fair trial.”
45. The overall common law position was summarised as follows by Corbett CJ in
Johannesburg Stock Exchange v Witwatersrand Nigel Ltd 1988 (3) SA 132 (A) at 152
AE:
“Broadly, in order to establish review grounds it must be shown that the president
failed to apply his mind to the relevant issues in accordance with the ‘behests of the
statute and the tenets of natural justice’..... Such failure may be shown by proof,
inter alia, that the decision was arrived at arbitrarily or capriciously or male fide or
as a result of unwarranted adherence to a fixed principle or in order to further an
ulterior or improper purpose; or that the president misconceived the nature of the
discretion conferred upon him and took into account irrelevant considerations or
ignored relevant ones; or that the decision of the president was so grossly
unreasonable as to warrant the inference that he had failed to apply his mind to the
matter in the manner aforestated.... Some of these grounds tend to overlap.”
46. Turning to rationality, Chaskalson P held, as follows, in Pharmaceuticals
Manufacturers Association of SA: In re Ex Parte President of the Republic of South
Africa & others (2) SA 674 CC at paragraphs 85 and 90:
“It is a requirement of the rule of law that the exercise of public power by the
Executive and other functionaries should not be arbitrary. Decisions must be
rationally related to the purpose for which the power was given, otherwise they are in
effect arbitrary and inconsistent with this requirement. It follows that in order to
pass constitutional scrutiny the exercise of public power by the Executive and other
functionaries must, at least, comply with this requirement. If it does not, it falls short
of the standards demanded by our Constitution for such action.
Rationality in this sense is a minimum threshold requirement applicable to the exercise of all
public power by members of the Executive and other functionaries. Action that fails to pass
this threshold is inconsistent with the requirements of our Constitution and therefore
unlawful. The setting of this standard does not mean that the Courts can or should substitute
their opinions as to what is appropriate for the opinions of those in whom the power has
been vested. As long as the purpose sought to be achieved by the exercise of public power is
within the authority of the functionary, and as long as the functionary’s decision, viewed
objectively, is rational, a Court cannot interfere with the decision simply because it disagrees
with it or considers that the power was exercised inappropriately. A decision that is
objectively irrational is likely to be made only rarely but, if this does occur, a Court has the
power to intervene and set aside the irrational decision.”
47. In Bel Porto School Governing Body & others v Premier, Western Cape & another
2002 (3) SA 265 (CC) at paragraph 89, Chaskalson P found, with reference of
Carephone (Pty) Ltd v Marcus NO & Others (1998) 19 ILJ 1425 (LAC), that “for a
decision to be justifiable .... it should be a rational decision taken lawfully and
directed to a proper purpose.”
In Carephone, Froneman DJP decided at paragraph 37 that the test for justifiability is
as follows:
“Is there a rational objective basis justifying the connection made by the
administrative decisionmaker between the material properly available to him and the
conclusion that he or she eventually arrived at?”
The Court held at paragraph 32:
“According to the New Shorter Oxford English Dictionary ‘justifiable’ means ‘able
to be legally or morally justified, able to be shown to be just, reasonable, or correct;
defensible.’ It does not mean ‘just’, ‘justified’ or ‘correct’. On its plain meaning the
use of the word ‘justifiable’ does not ask for the obliteration of the difference between
review and appeal. Neither does the LRA itself: it makes a very clear distinction
between reviews and appeals.”
48. The notion of justifiability gives rise to a range of reasonable decisions. The question
in a review is thus whether the decision falls within “the bounds of reasonableness”.
49. Where the reasoning in an arbitration award is unsustainable, this Court has,
nevertheless, adopted a flexible approach. In Shoprite Checkers (Pty) Ltd v Ramdaw
NO & others (2001) 22 ILJ 1603 (LAC) at paragraph 101, Zondo JP held:
“In my view it is within the contemplation of the disputeresolution system prescribed
by the Act that there will be arbitration awards which are unsatisfactory in many
respects but which nevertheless must be allowed to stand because they are not so
unsatisfactory as to fall foul of the applicable grounds of review, without such
contemplation, the Act’s objective of the expeditious resolution of disputes would
have no hope of being achieved. In my view the first respondent’s award cannot be
said to be unjustifiable when regard is had to all the circumstances of this case and
the material that was before him”.
50. Similarly, in Rustenburg Platinum Mines Ltd (Rustenburg Section) v CCMA & others
[2003] 7 BLLR 676 (LAC) at paragraph 19, Goldstein AJA held:
“Although the reasons that the commissioner gave for the result that the dismissal
was too harsh were unreasonable, there are, in my view, ample reasons within the
material that was properly before the commissioner which render that finding and
result justifiable.”
51. Where, in administrative law, a decisionmaker relies on both permissible and
impermissible reasons for acting, Baxter, Administrative Law (1984) at 521
postulates the following review test:
“It is submitted that the test might be formulated in the following way: would the
authority, had it not been actuated by bad reason or reasons, have reached and
been legally entitled to reach the same decision upon the basis of the remaining
permissible reasons? The question is hypothetical and its answer involves some
speculation. Nevertheless, by characterizing it in this way the public authority is not
penalised for insignificant errors when it would have decided anyway. If permissible
reasons for the decision exist, and they would still have dictated the decision, no
prejudice has been suffered.”
52. The approach advocated by
Baxter accords with the approach
adopted in the event of a finding
of a gross irregularity on review.
In SA Veterinary Council &
another v Veterinary Defence
Association 2003 (7) BLLR 697
(SCA) at paragraph 40, the
Supreme Court of Appeal held
that in such circumstances the
proceedings can be saved if it is
apparent that despite the
irregularity the applicant was not
prejudiced because the finding
would have been the same if the
correct approach had been
applied.
53. It is not disputed by the applicant that the commissioner applied her mind to and
correctly recorded in the first 12 pages of her award the background to the dispute;
the issues to be determined; the point in limine raised by the Road Freight Bargaining
Council and her findings in that regard; the reference to the applicant’s statement of
facts; a summary of TGWU’s argument; a summary of the applicant’s argument; a
summary of the bargaining council’s argument and a summary of Fidelity
representations.
54. The character of an industry is determined, not by the occupation of the employees
engaged in the employer’s business, but by the nature of the enterprise in which
employees and employer are associated for a common purpose. In this regard see
Kohler Brothers v Pio 1929 EDL 369 and R v Sidersky 1928 TPD 109 at 112. Once
the character of the industry is determined, all employees are engaged in that industry.
The precise work that each person does is not significant. The following was said by
Solomon J in R v Siderksy at pages 112 to 113:
“Dr Reitz .... argued that the character of an industry is determined, not by the kind of
occupation in which the employees are engaged, but by the nature of the enterprise in
which both employers and employees are associated for a common purpose. Once the
character of the industry is determined, all the employees are engaged in that industry,
whatever the actual work may be which the employer allots to them. I think this
argument is sound.”
55. It is possible for the same employer to be engaged in two or more industries at the
same time, and for the employer to be an employer in each one. The question is one
of fact and where it arises each of the two enterprises is to be treated as separate from
the other. See R v Sidersky , supra, at 113 and R v Giesken & Giesken 1947 (4) SA
(AD) at 566. The two or more industries may be utterly distinct, or the one may be
ancillary to the other. Where the one industry is ancillary to another, it is a matter of
degree whether a person who carries on one particular industry is also carrying on
another industry. It is a question whether the activities were of sufficient dimensions
to justify the conclusion that the employer carries on and is associated with its
employees with its employees in more than one industry. See KWW v Industrial
Council for the Building Industry and Others 1949 (2) SA 600 (A) at 608 to 610.
56. The question whether an employer is engaged in a particular trade or industry is one
of fact to be decided in the light of all the surrounding circumstances and having
regard to any relevant evidence which is put before the Court. See R v Ngcobo 1936
NPD 408 and R v Goss 1957 (2) SA 107 (T) at 110 A B. The following was said by
Centlivres CJ in AttorneyGeneral, Transvaal v Moores (SA) (Pty) Ltd 1957 (1) SA
190 (A) at 197 A B:
“I think that it is clear from the above case [KEV v Industrial Council for the
Building Industry] that the mere fact that the lithography part of the respondent’s
business is ancillary to its main business is not per se conclusive in favour of the
respondent; if it is ancillary, one must go a step further and decide on the proved
facts whether the lithography part of the business is of such magnitude that it can
fairly be said that the respondent is carrying on more than one industry (ibid p 609).
Such a decision must be made where one industry is ancillary to another and only
then does a question of degree arise: It obviously cannot arise when a person carries
on two or more distinct industries.”
57. The method used to determine whether a class of employers is engaged in a particular
industry was summarised as follows by Jansen J in Greatex Knitwear (Pty) Ltd v
Viljoen and Others 1960 (3) SA 338 (T) at 344 H 345 D:
“(a) The meaning of ‘industry’ as used in the agreement, is determined. This
usually requires the interpretation of some definition appearing in the
agreement. It seems that a restrictive interpretation is often applied, cutting
down the scope of the general words in the definition. Although not
specifically invoked, the mode of interpretation appears to be that applied in
Venter v R 1907 TS 915 (cf Rex Scapszac and Others 1929 TPD 980; Rex v
Ngcobo 1936 NPD 408; Rex v Goss 1957 (2) SA 107 (T) at 110).
(b) The activities of the employer (personal and by means of his employees) are
determined.
(c) The activities and the definition (as interpreted) are now compared. If none of
the activities fall under the definition, caedit quaestio; if some of the activities
fall under the definition, a further question arised: Are they separate from or
ancillary to his other activities? If they are separate he is engaged in the
industry (unless these activities are merely casual or insignificant Rex v
C.T.C. Bazaars (SA) Ltd 1943 CPD); if they are ancillary to his other
activities, he is not engaged in the industry (unless these ancillary activities
are of such a magnitude that it can fairly be said that he is engaged in the
industry within the meaning of the definition (AG Tvl v Moores SA (Pty) Ltd
1957 (1) SA 190 (A).
(d) Inherent in this approach is the possibility that an employer may be such in
more than one industry (Rex v Giesken & Giesken 1947 (4) SA 561 (A) at p
566), despite the difficulties that may arise from such a situation (cf. Rex v
AutoParts (Pty) Ltd and Ano 1948 (3) SA 641 (T) at 648).”
58. The approach referred to in paragraph 57 above is not the only approach capable of
surviving a review application. There are two additional points that stand to be made.
The first relates to the issue of ancillary business operations. In resolving the question
of whether operations are ancillary, it should be borne in mind that “ancillary to” has
a specialized meaning in the context of demarcation. Ancillary business operations
are business operations rendering services to existing customers or clients of the main
business. Whilst what is ancillary is a question of degree that is not the only enquiry.
Ancillary business is also required as a matter of both language and law to be
performed as ancillary to or, put differently, to support existing business within a
defined customer base. ( R v Goss 1956 (3) SA 194 (T) at 196).
59. Most of the decided cases relate to the position to the coming into operation of the
Act on 11 November 1996. Under the Act, demarcations need to be seen in the
context of the system of bargaining councils established thereunder aimed at
achieving the primary objects of the Act, including the promotion of orderly
collective bargaining and collective bargaining at a sectoral level. These statutory
imperatives require the demarcating tribunal to enquire, beyond mechanistic
comparison of jobs, into the relevant collective bargaining practices and structures.
60. NEDLAC was established in terms of the National Economic, Development and
Labour Council Act, 35 of 1994. Section 5 thereof defines its objects and purposes as
including striving “ to promote the goals of economic growth, participation in
economic decisionmaking and social equity”, amd “ continually evaluate the
effectiveness of legislation and policy affecting social and economic policy”.
61. Under these statutory imperatives:
61.1 In the event of an objection to the registration of a bargaining council (either
at the outset or in the event of a variation of scope) NEDLAC is obliged in
terms of section 29(8) of the Act to:
“(a) consider the appropriateness of the sector and area in respect of
which the application is made;
(b) demarcate the appropriate sector and the area in respect of which the bargaining
council should be registered; and
(c) report to the registrar in writing.”
In terms of section 28(10), in complying with section 29(8), NEDLAC must
seek to give effect to the primary objects of the Act.
61.2 In the event of a dispute arising about demarcation between sectors and areas,
under section 62(9) before making an award the commissioner “must consult
with NEDLAC”.
62. NEDLAC plays a presiding role over demarcations in both the prospective sense (that
obtains at registration) and the ad hoc sense (that obtains when demarcation disputes
arise). The socioeconomic intentions and effects of a demarcation accordingly range
far beyond a mechanical comparison of jobs, as mere reliance on pre1996 authorities
would suggest. There are two phases under the Act to a demarcation: the first phase
is the mechanistic stage (comparison of jobs); and the second phase involves a
consideration of collective bargaining practices and structures and socioeconomic
considerations.
63. The demarcation process is one entrusted to a specialist tribunal in terms of the
provisions of the Act. The demarcation decision is one involving facts, law and
policy considerations. In demarcation decisions, there will, more often than not, be no
one absolutely correct judgment. Particularly in decisions of this sort, and given the
provisions of the Act, there must of necessity be a wide range of approaches and
outcomes that would be in accordance with the behests of the Act. Due deference
should therefore be given to the role and functions and resultant decisions of the
CCMA in achieving the objects of the Act. This approach will not only be consistent
with these principles, but also consistent with the need for the Act to be administered
effectively.
64. The case for judicial deference becomes all the more compelling in this matter given
that NEDLAC agreed to support the provisional award.
65. The applicant contended in its heads of argument that the correct approach for the
commissioner to have adopted was as follows:
65.1 to start with the proposition that the applicant’s business was in the security
industry;
65.2 to enquire into what occurred when that business was expanded to include the
AIT division which would, it was argued, have revealed that while the AIT
division continued to provide security services and these services provided the
reasons for clients employing the applicant to undertake this work, “some of
the activities fell within the definition of the road freight industry”;
65.3 to enquire then into whether those activities that fall within the Road Freight Industry
are separate from the business or ancillary thereto which, it was argued, “the only possible
answer being that the activities of the AIT division are ancillary to the other activities of the
applicant’s business”;
65.4 to conclude that the AIT division does not fall within the Road Freight Industry
“unless it can be said that the magnitude of those activities is such that it can fairly be said
that it has gone over to that industry in respect of those activities” which enquiry, it was
argued, was never made.
66. The applicant adopted the following approach before the commissioner:
66.1 The applicant operates its AIT business as a separate division “as a semi
autonomous entity” within the security industry.
66.2 The security industry offered by the AIT division is a service which “includes but is
not exclusive to the transportation of goods”.
66.3 These are the activities of two separate industries they fall directly within
two industries.
66.4 From there the argument developed
“So what does one do? How does one deal with that kind of situation? And
here the approach of the court [in] R v Gearing is to say: well we must see
under which particular industry that case appropriately falls. And the
submission that we make and it was a similar submission that Coin made to
the Supreme Court of Appeal in the dispute that went there and that was
decided [in] 2001 was that one must look at the industry in which the
employers and employees ate most closely associated because that is the only
way of breaking the tie”.
66.5 The commissioner was then referred to paragraph 37 of the applicant’s
arbitration heads namely that
“The only appropriate method, it is submitted, for dealing with the current
situation where a business or a definable portion of a business has features
common to two different industries, the commissioner must decide with which
industry the employer and its employees are most closely associated.”
The balance of counsel’s argument involved him taking the commissioner
through the applicant’s arbitration heads under the heading “closer
association security or freight”, which conclude with the submission that
“the operations of Coin AIT are closer to the security industry than they are
to the road freight industry”.
67. The approach advocated by the applicant at the review proceedings is flawed. It was
not the approach advocated before the commissioner. It was implicit in the
applicant’s argument before the commissioner based on the “close association” test
that the applicant accepted that the focus of the enquiry was the AIT division and not
the whole of the applicant’s operation. The applicant argued, in conclusion, that
because the AIT division was more closely associated with the security industry than
the Road Freight Industry, it should not be demarcated into the latter industry. The
commissioner followed this mode of analysis, but came to a different conclusion on
the facts. Her approach was perfectly rational. The applicant’s change of tack on
review is impermissible.
68. Even if the Greatex approach is a correct approach non constat that the
commissioner’s approach is reviewable. The test on review is not whether the
commissioner’s approach was correct, but rather whether it was rational. It must be
assumed in an enquiry such as this that there is more than one acceptable mode on
analysis. It is thus both purposeless and fruitless to debate the merits of alternative
approaches. If it were an appeal, it could be argued that the Greatex approach is
wrong and that the correct approach was that adopted by the commissioner. The
Greatex matter was which was decided in 1960 does not take into account the
divisionalisation and the objects underlying the Act.
69. The approach now advocated by the applicant does not actually accord with the
Greatex approach. The applicant’s point of departure and consideration of what
happened to the business when it commenced AIT operations in 1983 is not consistent
with the dictum of Jansen J. The commissioner must be judged not simply with
reference to Greatex, but rather with reference to her duties and functions under the
Act. She was tasked with determining, under section 62(1)(a) of the Act, whether a
particular class of employees engaged in the applicant’s AIT division is employed in
the road freight industry. Her approach was that the AIT division was a separate
business and that its activities were more closely associated with the road freight
industry than the security industry and thus fell to be demarcated within the former
industry. In so doing, she properly discharged her statutory function.
70. The commissioner’s award was properly based on the evidence before her, reflects a
application of the mind to all the relevant facts and considerations including those
dealt with in argument by the applicant and is clearly rational and justifiable, and
indeed correct. It is trite that a decision that is objectively irrational is likely to be
made only rarely, that the question is not whether the award was correct but whether it
is justifiable, that this Court cannot interfere with the decision simply because it
disagrees with the functionary, and that this is a case that calls for judicial deference.
Anything short of this would obliterate the distinction between a review and an
appeal.
71. The notion of rationality comprehends more than one reasonable outcome. It also
comprehends more than one method of analysis or approach. It cannot be said that
the approach and result arrived at by the commissioner is incapable of justification.
Ultimately, the question is whether the decision of the commissioner is one that a
reasonable commissioner could not reach. The review application, which focuses its
attack on the approach adopted by the commissioner, falls short of this test.
72. The commissioner did not in her award place an onus on the applicant. She went no
further than to comment that the applicant has failed to establish in evidence a
contention raised by it in argument that the transportation of assets by its AIT division
is ancillary to the securing of such assets. The commissioner concluded that the main
business of the AIT division of the applicant is the transportation of assets of reward
and that ancillary to such transportation is the security element. She did so not by
default and operation of the onus, but rather by having proper regard to all the facts
placed before her. There is no basis for the applicant’s complaint.
73. The applicant’s points of criticism fall short of the grounds of review. The applicant’s
contention that the award is not justifiable is wholly without merit.
74. I find it necessary to conclude by referring to the following dictum of O’Regan J in
Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs & Tourism & others
2004 (7) BCLR 687 (CC) at paragraphs 44, is particularly apposite in the present
context:
“...... a court should be careful not to attribute to itself superior wisdom in relation to
matters entrusted to other branches of government. A court should thus give due
weight to findings of fact and policy decisions made by those with special expertise
and experience in the field. The extent to which a court should give weight to these
considerations will depend on the character of the decision itself, as well as on the
identity of the decisionmaker. A decision that requires an equilibrium to be struck
between a range of competing interests or considerations and which is to be taken by
a person or institution with specific expertise in that area must be shown respect by
the court. Often a power will identify a goal to be achieved, but will not dictate
which route should be followed to achieve that goal. In such circumstances a court
should pay due respect to the route selected by the decisionmaker.”
75. The application stands to be dismissed. There is no reason why costs should not
follow the result. This includes the costs of the two counsel employed by the third
respondent and the two counsel employed by the fourth respondent.
76. In the circumstances I make the following order:
1. The application is dismissed with costs including the costs of the two counsel
employed by the third respondent and the costs of the two counsel employed
by the fourth respondent.
FRANCIS J
JUDGE OF THE LABOUR COURT OF SOUTH AFRICA
FOR THE APPLICANT : MJD WALLIS SC WITH AIS
REDDING INSTRUCTED BY MACROBERT
INC
FOR THIRD RESPONDENT : AA BAVA WITH R G RAM
INSTRUCTED BY HOFMEYER HERBSTEIN
& GIHWALA INC
FOR FOURTH RESPONDENT : PJ PRETORIUS SC WITH AT
MYBURGH INSTRUCTED BY BOWMAN
GILFILLAN INC
FOR FIFTH RESPONDENT
:
S
SN
Y
M
AN
OF
SN
Y
M
AN
VA
N
DER HEEVER HEYNS
DATE OF JUDGMENT : 26 April 2005