IN THE LABOUR COURT OF SOUTH AFRICA
(Held in Cape Town)
Case No C237/04
In the matter between: Reportable
CADEMA INDUSTRIES (PTY) LTD Applicant
And
U BULBRING NO 1st Respondent
SACTWU 2nd Respondent
J HEYNES 3rd Respondent
NATIONAL BARGAINING COUNCIL FOR THE CLOTHING
MANUFACTURING INDUSTRY (WESTERN CAPE SUB-
CHAMBER)
4th Respondent
JUDGMENT
STELZNER AJ
1. This is an application in terms of section 145(2)(a)(ii) of the Labour Relations Act
of 1995 (“the Act”) read with clause 37(6)(l) of the Main Collective Agreement for
the Western cape Region of the Bargaining Council as published under
Government Notice No. R322 in Regulation Gazette No. 7590 of 7 March 2003 in
terms of which the Applicant seeks to review and set aside the arbitration award
of the 1st Respondent dated 5 April 2004.
2. There was no dispute between the parties before me that this Court has the
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power to review and set aside arbitration awards if the arbitrating body lacks
jurisdiction either in terms of the Act or the gazetted agreement. Furthermore,
jurisdiction needs to be objectively established. By virtue of clause 37(6)(l) of the
Main Agreement this Court has the power to review the arbitration award which is
the subject of this application.
3. The crisp point that the Applicant relies on is that the 1 st Respondent did not
have jurisdiction to arbitrate the dispute because it related to an unfair dismissal
which the Applicant alleged was on the grounds of its operational requirements
and the dispute resolution provisions of the Main Agreement deprived her of
jurisdiction in such circumstances. The relevant clause of the Main Agreement is
clause 37(4)(a)(i)(ac)(aA), which reads as follows:
“37(4) Adjudication of certain disputes by the Council
a) If the dispute remains unresolved after conciliation, the Council or
Regional Chamber shall –
(i) arbitrate the dispute if any party to the dispute has
requested the Council or Regional Chamber in writing that
it be resolved through arbitration and;
aa) the dispute has been referred within 90 days after
the date on which that dispute’s certificate of
outcome in conciliation was issued. However, the
Council or Regional Chamber on good cause shown,
may condone a party’s non-observance of that
timeframe and allow a request for arbitration filed by
the party after the expiry of the 90-day period; or
(ab) the Act requires arbitration; or
(ac) the dispute relates to an unfair dismissal for which
the Act permits the dispute to be referred to the
Labour Court, save in respect of a dismissal which
the employer alleges is:
(aA) based on the employer’s operational
requirements; or
(aB) for participating in or supporting or indicating an intention to participate in or
support, a strike or protest action;
(aC) which must be dealt with in terms of paragraph (ii) below; or;
(aC) which must be dealt with in terms of paragraph (ii) below; or;
(aD) the dispute relates to the interpretation or application of this collective
agreement or any collective agreement concluded in the Council; or
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(aE) all the parties to the dispute consent, in writing, to arbitration being conducted
under the auspices of the Council or Regional Chamber in terms of sub-clause (6) below;
(ii) subject to paragraph (a)(i)(ab) above, refer the dispute to
the Labour Court if the Act requires the dispute to be
referred to the Labour Court and any party to the dispute
has requested the Council or Regional Chamber in writing
to refer the dispute on its behalf to the labour Court.
(b) Parties shall not be entitled to refer the disputes identified in
paragraphs (a)(i)(ab) and (a)(i)(ac) to the Labour Court or
Labour Appeal Court.”
4. The background to the matter was as follows. The 3 rd Respondent had been
employed by Applicant since 27 May 1999 on various fixed term contracts the last
of which expired on 20 October 2003. The contracts ranged in duration from 1
month to 6 months and ran on an uninterrupted and continuous basis. When on
the last occasion the contract was not renewed (as had been the case on expiry of
all the previous contracts) the 2 nd and 3rd Respondents referred a dispute to the
4th Respondent alleging that the failure to renew the contract amounted to a
dismissal as contemplated by the provisions of section 186(1)(b) of the Act.
5. The matter came before the 1st Respondent by way of arbitration. It was
accepted that the 3rd Respondent bore the onus of proving that there had been a
dismissal and therefore 3rd Respondent (Applicant in the arbitration proceedings)
commenced giving evidence. The Applicant (Respondent in the arbitration
proceedings) was represented by Ms Penelope Arendse, its Personnel Officer. Ms
Arendse indicated that the Applicant’s case was that there was no dismissal – this
was a matter of a fixed term contract coming to an end. The contract had
expired. The 3rd Respondent’s case was that she had a legitimate or reasonable
expectation of renewal. Ms Arendse said at the arbitration: ” And the company
expectation of renewal. Ms Arendse said at the arbitration: ” And the company
feels that because there wasn’t any work at the time when they were terminated,
there wasn’t – we couldn’t accommodate them for another – for her for another
period of time. ” Then she said: “ The defence of the company is that the
company has made the employer aware, employee aware that she will only be
employed on a contract basis.” The 3rd Respondent’s representative argued that
this should be deemed an unfair dismissal.
6. The 1st Respondent agreed that there had been a dismissal as contemplated by
section 186(1)(b) of the Act and then went on to consider whether the dismissal
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was procedurally and substantively fair. She found that the Applicant had not
discharged its onus in this regard. Clearly no procedure was followed because the
Applicant had viewed the matter simply as expiry of a contract and had taken the
view that no procedure was necessary. On substantive fairness the 1 st
Respondent found that “no details were given as to the operational requirements
of the company or as to why Heynes was on a fixed term contract for a period of
4 1/2 years. The averment that there was ‘no work’ at the time of the expiry of
her contract is not proof of substantive fairness.” Having found then that there
was a dismissal which was both procedurally and substantively unfair, the 1 st
Respondent ordered Applicant to reinstate the 3rd Respondent.
7. It is common cause that the Applicant’s complaints about the jurisdiction of the
1st Respondent to arbitrate the dispute were not raised at either the conciliation
or arbitration stages of the dispute resolution process.
8. The 1st Respondent assumed jurisdiction without consciously considering the
issue. In terms of clause 7.1 of the 4 th Respondent’s Dispute Resolution Code of
Conduct she was obliged to faithfully observe the limitation and inclusions of her
jurisdiction as conferred inter alia by the Agreement. In any event, she had an
obligation to ascertain whether she had jurisdiction. See Tier Hoek v CCMA [1999]
1 BLLR 63 (LC) at paragraphs 5 and 9 on page 64 and IMATU v CCMA & another
[2000] 5 BLLR 583 (LC). In Fidelity Guards Holdings (Pty) Ltd v epstein & others
(2000) 21 ILJ 2009 (LC) and BHT Water Treatment (A division of Afchem (Pty) Ltd
Incorporating PWTSA) v CCMA & others [2002] 2 BLLR 173 (LC) this Court also
held that jurisdiction should be determined at the arbitration stage of
proceedings.
9. Jurisdiction is something which has to exist and be established objectively. See
NUMSA v CCMA & others [2000] 11 BLLR 1330 (LC) at page 1337 paragraph 25.
NUMSA v CCMA & others [2000] 11 BLLR 1330 (LC) at page 1337 paragraph 25.
“[25] This however, was said in the context, not of deciding the law,
but of whether the commissioner’s finding on the law was reasonable
and justifiable. The question whether a valid referral has been made
which entitles the CCMA to conciliate a dispute is a jurisdictional fact. A
jurisdictional fact is one which must objectively exist unless the statutes
entitle the decision-maker to make a subjective appreciation of the facts.
See Pinetown Town Council v President of the Industrial Court 1984 (3)
SA 173 (N) at 179B-D where it is said:
“Where the jurisdiction of a tribunal is dependent on the existence
of a particular state of affairs, it cannot give itself jurisdiction by
incorrectly finding that the conditions for the exercise of jurisdiction
are satisfied. The conditions precedent to jurisdiction are known as
‘jurisdictional facts’ (see Anisminic Ltd v Foreign Compensation
Commission [1969] 2 AC 147 (HL) at 208 per Lord Wilberforce)
which must objectively exist before the tribunal has power to act;
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consequently a determination on the jurisdictional facts is always
reviewable by the Courts because in principle it is not part of the
exercise of the jurisdiction but logically prior to it. (See also Theron
en Andere v Ring van Wellington van die NG Sendingkerk in SA en
Andere 1976 (2) SA 1 (A) at 15).”
10. The Applicant argued that jurisdiction to arbitrate did not lie with the 1 st
Respondent once the employer (Applicant) alleged that the dismissal was on the
grounds of the Applicant’s operational requirements.
11. The 2 nd and 3 rd Respondents argued that applying the golden rule of
interpretation to clause 37 of the Main Agreement I should find that effectively
any dispute may be arbitrated. This is the consequence of the use of the word
’or’ at the end of sub-clause (aa) rather than the use of ‘and’ in that place. This
would effectively exclude the need for the rest of the clause and, in my view, is an
unsustainable interpretation thereof. It is more likely that the use of the word ‘or’
was a mistake and that instead one should read it as an ‘and’ (as contended for
by the Applicant).
12. The 2nd and 3 rd Respondents also argued that the interpretation of the clause
contended for by the Applicant effectively also ousts the jurisdiction conferred by
the Act since its amendment in 2002 - through section 191(12) - in relation to
retrenchments involving a single employee. I do not find such a consequence to
be bizarre or absurd. Clause 37 is part of the Main Agreement collectively
bargained at the Bargaining Council to which, incidentally, the 2 nd Respondent is
a party. The Agreement in its current form was gazetted in 2003 after the
amendments to the Act and it must therefore be presumed the parties knew of
the change wrought by the amendment to the Act in relation to retrenchments
involving single employees but nevertheless chose to retain a regime in terms of
involving single employees but nevertheless chose to retain a regime in terms of
which all retrenchment disputes must be dealt with by the Labour Court.
13. I find therefore that under the provisions of clause 37(4)(a)(i)(ac)(aA) of the Main
Agreement jurisdiction over a dismissal in respect of which the employer has
alleged operational requirements is reserved for the Labour Court. The fact that
the Applicant’s primary argument at arbitration was that there was in fact no
dismissal does not alter this position because the 1 st Respondent was obliged
once she found that a dismissal had taken place (albeit a deemed dismissal) to
move on to the next stage of the enquiry which was to consider whether or not
that dismissal was procedurally and substantively fair.
14. The Act is quite clear, that in regard to the issue of fairness the onus is on the
employer to prove the fairness of the dismissal. The substantive fairness thereof
has to be proved with reference to either the employee’s conduct or capacity or
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the employer’s operational requirements (section 188 of the Act). It is clear that
this much was appreciated by the 1 st Respondent in the manner in which she
considered the issue after having found that there was a dismissal. She also
clearly appreciated that the Applicant’s case was that it did not renew the
contract because it had no work. Clearly the Applicant was alleging operational
requirements as the reason for the (deemed) dismissal. One cannot escape this
fact simply because the Applicant’s main argument was that there was no
dismissal, but rather the expiry of a contract. When this became apparent the 1 st
Respondent should immediately have realised that she did not have jurisdiction
and should have referred the parties to the Labour Court. In failing to do so and
in continuing to arbitrate she exceeded her powers. This is a reviewable
irregularity.
15. The decision in SACCAWU v Garden Route Chalets (Pty) Ltd [1997] 3 BLLR 325
(CCMA) referred to me by the 2 nd and 3rd Respondents, which held that it is not
permissible for a collective agreement to limit the right of a party to have its
dispute determined through the dispute resolution mechanisms contained in the
Act, is not on point as the alternative to arbitration in that case was no remedy at
all whereas in the matter before me the Respondents are not left without a
remedy. Their remedy simply lies with the Labour Court and not with a
Bargaining Council arbitrator.
16. This is a case where this Court is clearly in as good a position as any to decide the
issue of jurisdiction and no purpose would be served by referring the matter back
to the 4th Respondent for hearing before another arbitrator.
17. On the issue of costs I am inclined to exercise my discretion against making an
award of costs against the 2 nd and 3 rd Respondents even though the Applicant
has succeeded in the review. This is because in my view the 2 nd and 3 rd
has succeeded in the review. This is because in my view the 2 nd and 3 rd
Respondents were entitled to defend the ruling made in their favour when the
review application was brought on a highly technical (albeit correct) ground. I
also take cognisance of the fact that the jurisdictional point was not raised until
the review stage. If it had been raised earlier by the Applicant (i.e. at arbitration)
the 3rd Respondent would not have been put to the expense of the review or the
delay in finalisation of the matter which is the inevitable consequence of the
outcome of this review. There is also the issue of an ongoing relationship
between the Applicant and the 2nd Respondent.
18. The Applicant indicated at the hearing of the matter (and in its papers) that it
would not oppose the application for condonation that would be required in
respect of a referral of the dispute to this court in the event of the review being
successful. This was an appropriate concession and helpful in contributing to this
matter moving with as much expedition as possible towards finality, in
accordance with the objectives of the Act.
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19. In the circumstances I make the following order.
19.1 The arbitration award of the 1 st respondent on 5 April 2004 is reviewed
and set aside.
19.2 In its place is substituted a ruling that the 1 st Respondent does not have
jurisdiction in respect of the dispute.
19.3 The 3rd Respondent is ordered to refer her dispute to this Court within
14 days of date hereof by way of a statement of claim. If the statement
of claim is filed within the aforesaid time frame then it is recorded that
by agreement with the Applicant there will be no opposition to
condonation for the late referral of the dispute being granted.
19.4 There will be no order as to costs in relation to this application.
………………………………
Stelzner AJ
Date of hearing 26 April 2005
Appearance for Applicant Mr H Niewoudt of Deneys Reitz Inc
Appearance for 3rd Respondent Mr J Whyte of Cheadle Thompson and
Haysom
Date of judgment 6 May 2005