CUSA v Tao Ying Metal Industries and Others (CCT 40/07) [2008] ZACC 15; 2009 (2) SA 204 (CC); 2009 (1) BCLR 1 (CC) ; [2009] 1 BLLR 1 (CC) ; (2008) 29 ILJ 2461 (CC) (18 September 2008)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Constitutional Court
SAFLII
>>
Databases
>>
South Africa: Constitutional Court
>>
2008
>>
[2008] ZACC 15
|

|

CUSA v Tao Ying Metal Industries and Others (CCT 40/07) [2008] ZACC 15; 2009 (2) SA 204 (CC); 2009 (1) BCLR 1 (CC) ; [2009] 1 BLLR 1 (CC) ; (2008) 29 ILJ 2461 (CC) (18 September 2008)

Links to summary

CONSTITUTIONAL COURT OF
SOUTH AFRICA
Case CCT 40/07
[2008] ZACC 15
CUSA
Applicant
versus
TAO YING METAL INDUSTRIES
First Respondent
POOE, M
NO
Second Respondent
THE COMMISSION FOR
CONCILIATION,
MEDIATION AND ARBITRATION
Third Respondent
THE METAL AND ENGINEERING
INDUSTRIES
BARGAINING COUNCIL
Fourth Respondent
Heard on : 28 February 2008
Decided on : 18 September 2008
JUDGMENT
NGCOBO J:
This
is an application for leave to appeal against the decision of the
Supreme Court of Appeal. It raises important questions
concerning
the role of commissioners of the Commission for Conciliation,
Mediation and Arbitration (CCMA) in resolving labour
disputes and
that of the courts in overseeing the arbitration process. These
questions arise from the refusal by Tao Ying
Metal Industries (the
employer) to comply with wage provisions of the applicable
bargaining council agreement claiming that
it had been exempted
from complying with the relevant provisions. This refusal gave
rise to a dispute between the employer
and its workers who
comprised 250 workers out of a workforce of 300. The Commissioner
who arbitrated the dispute found that
the exemptions relied upon by
the employer had expired and ordered the employer to comply with
the applicable bargaining council
agreement.
The
employer instituted proceedings in the Labour Court to review the
award of the Commissioner. The application was unsuccessful.
So
too was an appeal to the Labour Appeal Court. But a further appeal
to the Supreme Court of Appeal succeeded. That Court,
by a
majority of three to two, found that the exemptions relied upon by
the employer had not expired and held that the Commissioner
did not
have jurisdiction in respect of the dispute because it concerned
the validity of a bargaining council agreement. Neither
the Labour
Court nor the Labour Appeal Court considered whether the
Commissioner had jurisdiction to consider the validity
of the
exemptions as this was not one of the grounds of review urged by
the employer. However, this question featured in the
Supreme Court
of Appeal.
To
put the factual background and the issues in this case into
context, it is desirable to describe, in broad outline, the
statutory framework within which the dispute between the employer
and the representatives of the workers arose. Initially the

workers were represented by the Hotel, Liquor, Catering, Commercial
and Allied Workers’ Union of South Africa. The workers
are
now represented by the Commercial Workers’ Union of South
Africa (CUSA).
The
legal framework
Section
23(5) of the Constitution guarantees to every trade union,
employers’ organisation and employer “the right
to
engage in collective bargaining.” To this end, Parliament is
required to enact legislation “to regulate collective

bargaining”.
1
The
Labour Relations Act, 1995
2
(the LRA) is the legislation which, among other things, gives
effect to this right. The LRA puts in place a scheme for

concluding, enforcing and resolving disputes arising from
collective bargaining agreements.
3
Broadly speaking, this scheme provides for the establishment of a
system of bargaining councils in respect of different sectors
and
areas.
4
Bargaining councils are established by registered trade unions and
employers’ organisations. Parties to a bargaining
council
are therefore indirectly representatives of workers and employers.
Bargaining councils constitute forums for negotiating,
concluding
and resolving disputes concerning collective agreements.
Collective
agreements concluded in a bargaining council are binding on the
parties of the bargaining council. And they may,
by ministerial
decree, be extended to apply to all workers and employers in the
sector and area in respect of which the bargaining
council has been
established. These agreements generally deal with minimum wages
and other conditions of employment applicable
to employers and
workers in a particular industry. They therefore set the floor
beneath which wages and other conditions of
employment should not
drop. Parties generally conclude the main agreement which deals
comprehensively with the terms and conditions
of employment. The
main agreement generally remains in force for a period of one year
in anticipation of the periodical re-negotiation
of some of the
terms, in particular those that deal with wages, which are reviewed
annually. Upon the expiration of its period,
the main agreement
may be extended as amended by newly negotiated terms and conditions
of employment.
As
some employers might find complying with the provisions of a
bargaining council agreement unbearable, the LRA makes provision

for exemption from some of the provisions of the collective
agreement.
5
The authority to grant an exemption rests with the bargaining
council. The LRA contemplates that the authority to grant
exemptions from bargaining council agreements will derive from the
constitution of the bargaining council.
6
In addition, a bargaining council agreement that is imposed upon
non-parties must provide for an appeal to an independent
body from
a refusal to grant an exemption to non-parties.
7
Prior
to the enactment of the LRA, the position was regulated by the
Labour Relations Act, 1956
8
(the 1956 LRA), which had in place a substantially similar scheme.
Section 51 of the 1956 LRA conferred the authority to grant

exemptions from industrial council agreements. The terms and
conditions of an exemption had to be incorporated in a “licence

of exemption”.
9
The parties to an industrial council would conclude the main
agreement which would deal comprehensively with terms and

conditions of employment in the industry in respect of which the
industrial council had been established. And this agreement
could
be extended to non-parties within the industry by ministerial
decree. These agreements could be extended annually with
or
without amendments.
Schedule
7 to the LRA provides for the transition from the old to the new
scheme. An industrial council agreement that was
registered under
the 1956 LRA is deemed to be a bargaining council agreement under
the LRA. An industrial council agreement
that was binding in the
industry prior to the commencement of the LRA remains in force “for
a period of 18 months after
the commencement of the [LRA] or until
the expiry of that agreement . . . whichever is the shorter
period”.
10
This is subject to certain exceptions which do not apply in this
case.
11
After the commencement of the LRA, exemptions could be granted
from an agreement which remained in force pursuant to the
transitional provisions.
12
However, these exemptions had to be made and dealt with under the
provisions of section 51 of the 1956 LRA and not under the
LRA.
While
an exemption that was in force at the commencement of the LRA
remained “in force for a period of 18 months after
the
commencement of [the LRA] or until the period for which the
exemption had been granted”, whichever occurred first,
13
the transitional provisions did not deal with the termination of
exemptions granted after the commencement of the LRA. Presumably,

exemptions granted after the commencement of the LRA were to
terminate upon the expiry of the period for which they were

granted. What is immediately apparent from the transitional
provisions is that both the agreements and the exemptions that were

in force at the commencement of the LRA had a limited life. They
were either to remain in force for a period of eighteen months

after the commencement of the LRA or until their expiry date,
whichever occurred first.
During
1980 the parties to the industrial council for the Iron, Steel,
Engineering and Metallurgical Industry (now the Metal
and
Engineering Industry) concluded an industrial council agreement.
That agreement was published in Government Notice R1329
of 27 June
1980 (the industrial council main agreement). This agreement has
been amended, extended and re-enacted from time
to time. It was
last re-enacted on 8 November 1996 and published in Government
Notice R1802 of the same date. It was due
to expire on 30 June
1997. This agreement was re-enacted just three days prior to the
coming into effect of the LRA on 11
November 1996. And all this
occurred under section 48(1)(a) of the 1956 LRA. It is this
agreement that was in force at the
time when the employer became a
member of the bargaining council. The employer subsequently
applied for and was granted exemptions
from wage and other
provisions of this agreement. As these exemptions were granted in
April 1997, they were not operational
at the commencement of the
LRA. They must thus have been enacted under section 51 of the 1956
LRA read with Schedule 7 of
the LRA.
On
31 March 1998 a new agreement, concluded in the bargaining council,
was published in Government Notice R404 of the same date
(the
bargaining council main agreement). This agreement was promulgated
under section 32(2) of the LRA. It came into effect
on 14 April
1998 and expired on 30 June 1998. There is nothing on the record
to show whether any other agreement was promulgated
after 30 June
1997 and before 31 March 1998 when the bargaining council main
agreement was published. Counsel were unable
to refer us to any
other agreement that covered this period. None of the courts below
dealt with this aspect. In the light
of this, the finding by the
courts below that the industrial council main agreement expired on
14 April 1998 does not appear
to be borne out by the record. But
nothing turns on this.
It
is the minimum wages provided for in the bargaining council main
agreement that the workers, through their union, sought
to enforce
but which the employer sought to avoid by relying on the exemptions
granted to it in relation to the industrial
council main agreement.
It is undisputed that the employer did not apply for any
exemptions from the provisions of the bargaining
council main
agreement.
14
The
matter must therefore be approached on the footing that the
employer did not apply for any exemptions from the provisions
of
the bargaining council main agreement. At the time when the
dispute arose the employer claimed that the exemptions granted
to
it in relation to the industrial council main agreement also
applied to the provisions of the bargaining council main agreement.

To counter this claim, the workers disputed the validity of these
exemptions. They claimed that these exemptions were invalid

because they were granted without prior consultation with them or
their representatives. It is this claim and the counter-claim
that
resulted in the dispute that was eventually submitted for
arbitration under the provisions of the LRA.
It
is within this legal framework that the background facts and the
issues raised in this application must be understood and

considered.
Background
facts
The
employer conducts a manufacturing business which falls within the
metal and engineering industry. It therefore falls within
the
jurisdiction of the Metal and Engineering Industries’
Bargaining Council (the bargaining council). Botshabelo, the
town
where the employer conducts its business, previously fell within an
area which was designated a homeland under the apartheid
legal
order. The bargaining council did not have jurisdiction in those
areas. Employers who operated in those areas were
not, therefore,
bound by the bargaining council agreements. As a consequence, they
generally offered their workers wages and
conditions of employment
which were less favourable than those required by the bargaining
council agreements. These and other
incentives made conducting
business in the homelands attractive.
However,
with the advent of our constitutional democracy and the new
constitutional order, the employer’s business, like
similar
businesses, fell within the jurisdiction of the bargaining council.
The employer subsequently became affiliated to
the bargaining
council. This only occurred in 1997 after the employer was
informed by the bargaining council that it was by
law required to
be affiliated to it.
But
the wages and the conditions of employment which the employer
offered to its workers were, as already stated, less favourable

than those required by the industrial council main agreement. In
order to continue paying these wages, the employer therefore

applied for exemptions from the provisions of the main agreement,
in particular, those relating to annual leave (clause 12(3)),

payment of a holiday bonus (clause 14(1)(a)) and minimum wages
(Part 2). It also applied for an exemption from the provisions

dealing with pension and provident funds. A committee was
appointed to investigate the conditions in the employer’s

factory and thereafter make recommendations on the application for
exemptions. Following the recommendations of this committee,
the
employer was granted exemptions.
These
exemptions and the terms on which they were granted were recorded
in full in standard form licences of exemption. The
exemption that
is in issue in these proceedings is that which relates to minimum
wages. This exemption is reproduced below:
It
is necessary at this stage to draw attention to certain aspects of
this licence of exemption. The first is that in the space
for
recording the period of the exemption, the licence records a period
of exemption as “from: 19 March 1997 to: duration
of
Agreement” (the period of exemption clause). What is
immediately apparent from this clause is that this licence of

exemption contemplated that the exemption would last for the
“duration of the agreement” while another exemption

relating to pension and provident funds was to last until a
specified date, namely, 7 March 2000. The second matter is that

the exemption applied to the industrial council main agreement “as
amended and/or extended and/or replaced from time
to time by any
succeeding Agreement and/or any amendments and/or extensions
thereof” (the survival clause). The exemption
would continue
to apply to the industrial council main agreement if the main
agreement was amended, extended or replaced.
The
final matter to note is that this exemption was granted on the
condition “[t]hat the national percentage increase
negotiated
annually be enforced on the company with the inception of the
1998/1999 Main Agreement.” The reference to
the 1998/1999
main agreement is a reference to the agreement that was promulgated
on 31 March 1998 and came into effect on
14 April 1998: the
bargaining council main agreement. The licence of exemption
contemplated that the industrial council main
agreement would
expire and a new bargaining council agreement would come into
force. This is understandable as the exemptions
were granted after
the LRA had come into force, albeit under the 1956 LRA. It was
anticipated that a new main agreement would
be concluded under the
new scheme set up by the LRA.
During
August 1998, a dispute arose between the employer and the workers
regarding whether the employer was exempted from the
provisions of
the newly promulgated bargaining council main agreement, in
particular those provisions dealing with the payment
of minimum
wages. The workers claimed that the employer was obliged to comply
with the new main agreement whereas the employer
maintained that
the exemptions granted to it under the industrial council main
agreement still applied to, and were operational
under, the new
main agreement. The employer’s stance had, as its
foundation, the survival clause. The workers took
the view that
the exemptions upon which the employer was relying had expired when
the industrial council main agreement terminated
with the coming
into effect of the new bargaining council main agreement. The
workers further maintained that the exemptions
relied upon by the
employer were invalid because they were granted without prior
consultation with the workers or their representatives.
Conciliation
proceedings
This
dispute was eventually submitted to the CCMA for conciliation
during November 1998. In the form required to be completed
in
these matters, the union described the dispute as being “Tao
Ying Metal Industries’s failure to comply with
minimum wages
and conditions [in terms of the] Metal and Engineering Industries’
Bargaining Council”. The outcome
it sought was the
employer’s compliance “with minimum wages [and]
conditions [in terms of] the bargaining council
agreement.
Prohibition of unilateral exemptions by bargaining council”.
The
CCMA was unable to resolve the dispute and issued a certificate to
that effect in December 1998. The union requested that
the dispute
be submitted to arbitration under the auspices of the CCMA. In its
request for arbitration, the union described
the issue which was
still in dispute as being the “application of [the]
collective agreement” and indicated that
the decision sought
from the Commissioner was one that the “agreement of
bargaining council [was] to be applied”.
The
arbitration proceedings
At
the commencement of the arbitration proceedings, the bargaining
council, which was initially a party to the proceedings,
objected
to the jurisdiction of the CCMA. It argued that the bargaining
council agreement had its own dispute resolution mechanism,
which
included arbitration of disputes concerning the application and the
interpretation of a collective agreement by a panel
of arbitrators
established by the bargaining council. The bargaining council
submitted that the dispute, which concerned the
application of a
bargaining council agreement, should not have been referred to the
CCMA for arbitration but should have instead
been referred to the
bargaining council.
The
Commissioner dismissed the objection and held that she had
jurisdiction to arbitrate the dispute. She reasoned that the

bargaining council agreement did not apply to a dispute which, like
the one before her, was initially conciliated under the
auspices of
the CCMA and which was not processed in terms of the bargaining
council agreement. The bargaining council did
not take this point
further.
When
the proceedings later resumed to deal with the merits, the employer
objected to the jurisdiction of the CCMA on the ground
that the
exemptions concerned were issued in respect of an agreement made in
terms of the provisions of the 1956 LRA. The
employer argued that,
in terms of the transitional provisions of the LRA, disputes
concerning these exemptions should be dealt
with either by the High
Court or the Industrial Court and not by the CCMA. The
Commissioner, after hearing evidence and argument,
dismissed this
point too. She held that the agreement which the workers sought to
enforce was the bargaining council main
agreement which was
concluded under the provisions of the LRA and not under the 1956
LRA. The employer did not take this ruling
on review to the Labour
Court.
On
the merits, the Commissioner found that the exemptions relied upon
by the employer expired when the industrial council main
agreement
terminated. She held that the industrial council main agreement
terminated on 14 April 1998, this being the date
when the
bargaining council main agreement came into effect. She
accordingly issued an award ordering the employer “to
pay to
its employees who are members of the Applicant . . . the wages
negotiated in the Metal and Engineering Industries Bargaining

Council since 14 April 1998 unless exemptions were granted to the
Respondent under the New Collective Agreement concluded in
terms of
the
Labour Relations Act, 1995
.” She did not make an order
as to costs. The new collective agreement referred to in the award
is the bargaining council
main agreement.
The
proceedings in the Labour Court
The
employer took the arbitral award on review to the Labour Court
pursuant to the provisions of
section 145(1)
of the LRA.
15
The employer raised two grounds of review. In the first place, it
alleged that the Commissioner had exceeded her powers by
entering
the merits of the dispute in that the CCMA had no jurisdiction to
deal with the dispute in issue. This was so because
the bargaining
council agreement made provision for and set out procedures for
dealing with disputes arising out of a bargaining
council
agreement. This was a revival of a point that had been taken by
the bargaining council at the commencement of the
arbitration
proceedings and which the Commissioner had rejected. Nothing more
need be said about this ground of review because
by the time the
matter reached the Labour Appeal Court this ground of review had
been abandoned.
In
the second place, the employer contended that the Commissioner
failed to apply her mind to the provisions of the exemptions

previously granted to the employer. The employer submitted that
“the exemptions previously granted still enure to its
benefit
since they were granted in respect of the wage provisions of the
Main Agreement published on 27 June 1980: ‘as
amended and/or
extended and/or
replaced
from time to time by any succeeding
agreement’.” (The emphasis is original.)
The
application for review was late; it was not brought within the
period of six weeks contemplated in
section 145
of the LRA. The
employer therefore had to apply for condonation. This was refused.
The consequence was the dismissal of
the application for review.
The employer appealed to the Labour Appeal Court.
The
proceedings in the Labour Appeal Court
On
appeal, the Labour Appeal Court condoned the employer’s
non-compliance with the six week period envisaged in
section 145
of
the LRA. In that Court the employer expressly abandoned its
objection to the jurisdiction of the Commissioner and contented

itself with the attack based on the failure of the Commissioner to
apply her mind to the provisions of the exemptions.
16
The Labour Appeal Court found that the question which the
Commissioner had to consider was whether the employer was obliged

to comply with the bargaining council main agreement.
17
This question in turn required the Commissioner to decide whether
or not the licences of exemption exempted the employer from
the
provisions of the bargaining council main agreement, said the
Court.
18
The
Court held that on a proper interpretation of the provisions of the
licences of exemption, the exemptions were operational
only for the
duration of the industrial council main agreement. It accordingly
concluded, unanimously, that the exemptions
relied upon by the
employer expired when the industrial council main agreement
terminated.
19
Before
leaving this aspect, it is necessary to deal with the finding of
the Labour Appeal Court that the Commissioner did not
apply her
mind to one of the arguments advanced by the employer in that
Court. This was the employer’s argument based
“on the
exemption issued under the new collective agreement”.
20
The reference to the “exemption” is a reference to an
exemption issued to the employer on 12 April 2000, while
the
reference to the new collective agreement is a reference to the
bargaining council main agreement. The Labour Appeal Court
held
that, to the extent that this “exemption” operated
retrospectively, it was ultra vires but, to the extent
that it
operated prospectively, “such exemptions were of force and
effect and operational.”
21
It concluded that it seemed “abundantly clear that the
commissioner did not apply her mind to [this argument by the

employer]”.
22
Now
these “exemptions” were issued on 12 April 2000 and
after the Commissioner had rendered her award. They could
not
therefore have been the subject of the enquiry before the
Commissioner. These “exemptions” were granted at
the
request of the employer after the award was issued. The employer
sought to have proof that the exemptions previously granted
to it
applied to the bargaining council main agreement. And this request
by the employer was apparently prompted by the award
which ordered
the employer to pay the wages prescribed in the bargaining council
main agreement “unless exemptions were
granted to the
[employer] under the New Collective Agreement concluded in terms of
the
Labour Relations Act, 1995
.” It follows therefore that
the Labour Appeal Court erred in its finding that the Commissioner
had not applied her mind
to the argument based on the exemptions
granted on 12 April 2000. It is not necessary to express any
opinion on the validity
or otherwise of these exemptions.
However,
despite this finding, the Labour Appeal Court upheld the award,
dismissed the application for review and made no order
as to costs.
The
proceedings in the Supreme Court of Appeal
The
employer appealed to the Supreme Court of Appeal with the leave of
that Court. Prior to the hearing of the appeal, the
Supreme Court
of Appeal issued a direction requiring the parties to respond to a
series of questions. These questions included
the question whether
the Commissioner had jurisdiction to consider the validity of the
exemptions relied upon by the employer.
This question was
apparently based on the stance taken by the union in the
arbitration hearing that the exemptions relied
upon by the employer
were invalid for lack of prior consultation. However, in the
Supreme Court of Appeal the union expressly
abandoned this stance.
The
majority of the Supreme Court of Appeal found that it was accepted
by both parties that the exemptions relied upon by the
employer
were still operative at the time of the arbitration.
23
Although it found that the proper meaning of the exemptions was of
secondary importance in the appeal, the Supreme Court of
Appeal
held that, upon a proper construction, the exemptions had not
expired. It also found that what was in dispute between
the
parties in the arbitration proceedings was whether the exemptions
relied upon by the employer had been validly issued.
24
It held that the Commissioner had no jurisdiction to decide
whether the conduct of the bargaining council was invalid for

failure to consult the workers or their representatives.
Jafta
JA, in a dissenting judgment, found that the real dispute between
the parties, and which was submitted for arbitration,
was the
failure by the employer to comply with the bargaining council
agreement. This dispute, Jafta JA held, required the
Commissioner
to construe the exemptions. He found that the employer’s
defence was that the exemptions, properly construed,
relieved it of
its obligations under the bargaining council main agreement. Like
the Labour Appeal Court, he held that, upon
a proper construction,
the exemptions had expired when the industrial council main
agreement had terminated. He found that
the Commissioner had
applied her mind to the exemptions and had correctly concluded that
the exemptions lapsed when the industrial
council main agreement
had terminated.
25
Musi
AJA, like Jafta JA, found that the real dispute before the
Commissioner was the enforcement of the bargaining council
agreement.
26
He held that the question of the validity of the exemptions which
was raised by the union did not detract from the real dispute.
He
found that the question of the validity of the exemptions and the
jurisdiction of the Commissioner to decide this question,
had not
been raised by the employer in its review application, but was
raised for the first time in the Supreme Court of Appeal.
He held,
however, that the question of the validity of the exemptions
“became water under the bridge” because
the union
accepted the validity of the exemptions.
27
He
further held that the sole issue which was pursued by the employer
in the Supreme Court of Appeal, both in oral and written
argument
was whether the exemptions applied to the bargaining council main
agreement. He also found that the question of the
expiry of the
exemptions had been properly put before the Commissioner and that
this issue was canvassed in the arbitration
proceedings.
28
He concluded that the Commissioner had applied her mind to this
question and had come to the conclusion that the exemptions
expired
when the industrial council main agreement terminated and the
bargaining council main agreement came into operation.
29
In
the result, the Supreme Court of Appeal set aside the award and
replaced it with one declaring that “the arbitrator
has no
jurisdiction to make an award in respect of the dispute that is the
subject of this arbitration.”
The
present application for leave to appeal is the sequel.
The
proceedings in this Court
Contentions
of the parties
In
this Court the workers attacked the decision of the Supreme Court
of Appeal on two main grounds. First, they contended that
the
question of the validity of the exemptions and the related question
whether the Commissioner had jurisdiction was never
raised by the
employer in the courts below. They submitted that this question
was raised for the first time in the Supreme
Court of Appeal and in
response to the directives issued by the Supreme Court of Appeal.
To raise a new ground of review seven
years after the dispute had
arisen detracts from the object of the LRA to have labour disputes
resolved speedily and expeditiously,
the workers argued.
Second,
they contended that the sole ground of review relied upon by the
employer in the Labour Appeal Court and in its written
argument in
the Supreme Court of Appeal was the failure by the Commissioner to
apply her mind to the question whether the exemptions
had expired.
They submitted that the question was properly before the
Commissioner. It was canvassed before the Commissioner
and the
Commissioner found that the exemptions had expired, the workers
argued. They submitted that the industrial council
main agreement
and the exemptions granted in respect of that agreement expired 18
months after the LRA came into operation
in terms of the
transitional provisions of the LRA. The 18 month period expired on
11 May 1998 and that is the date when the
industrial council main
agreement and the exemptions expired, said the workers.
Apart
from what was described by the employer as “potential
attacks”, the employer advanced three main arguments
in this
Court. In the first place it contended that the Commissioner did
not apply her mind to the question whether the exemptions
had
expired. In this regard the employer submitted that the finding of
the Commissioner that it was common cause between the
parties that
the exemptions had expired effectively precluded the Commissioner
from considering the question whether the exemptions
had in fact
expired. In particular, it was submitted that the Commissioner
failed to apply her mind to the survival clause
of the exemptions.
Upon a proper construction, the survival clause of the exemptions
governed the existence of the industrial
council main agreement as
well as the bargaining council main agreement, so the argument
went. In short, the survival clause
survived the industrial
council main agreement and applied to the bargaining council main
agreement. The employer was therefore
exempted from complying with
the wage provisions of the bargaining council main agreement.
In
the second place the employer contended that the expiry of the
exemptions was not an issue in the arbitration proceedings.
By
deciding this issue against the employer in these circumstances,
the Commissioner effectively denied the employer the opportunity
to
address this issue in the arbitration proceedings. It should be
mentioned here that this is, however, not how the attack
on the
award was formulated in the review application. Indeed none of the
courts below addressed this issue. In the third
place, the
employer contended that the misconstruction or proper construction
of the exemptions does not raise a constitutional
matter. Nor do
any of the arguments raised by the workers concern an issue which
is connected with a constitutional matter,
argued the employer.
This, it was said, was fatal to the application.
I
did not understand the employer to contend that the Commissioner
had no jurisdiction in respect of the dispute. The employer

conceded, quite properly in my view, that this is not a ground of
review which the employer had raised in the courts below.
The
Commissioner made no finding adverse to the employer on this point
and, as the employer put it, in consequence the employer
was not
called upon to make it the subject of a challenge in the ensuing
review proceedings. In addition, the question of
the validity of
the exemptions was expressly abandoned in the Supreme Court of
Appeal. As a consequence the workers have to
stand or fall by
their claim that the exemptions relied upon by the employer expired
when the industrial council main agreement
expired and did not
apply to the bargaining council main agreement.
Issues
for consideration
The
decision of the Supreme Court of Appeal and the contentions by the
parties raise three questions:
Should leave to appeal be
granted; in particular does the application raise a constitutional
matter or an issue connected
with a decision on a constitutional
matter.
The real dispute that the
Commissioner had to resolve.
Whether the Commissioner
applied her mind to the dispute between the parties, in
particular, to the question whether the exemptions
had expired.
Before
considering the main issues raised in this case, it is necessary to
dispose of certain preliminary issues. These relate
to the failure
by the workers to file the record timeously and, in particular,
whether such failure should be condoned.
Condonation
The
workers filed the record on 13 September 2007 instead of on 31
August 2007 as the directions issued by the Chief Justice
required.
They sought condonation for the late filing of the record citing
difficulty in obtaining sufficient funds. However,
as it turned
out, that record was not complete. This led to the postponement of
the matter by agreement between the parties.
Fresh directions were
issued directing the workers to file the record by 15 November
2007. That was done. There was no application
for the condonation
of the period from 13 September to 15 November 2007 when a complete
record was finally filed. Counsel
for the workers urged us to have
regard to the allegations made in the application for leave to
remove the matter from the
roll which, he submitted, explained this
delay.
It
should be mentioned that the parties initially sought to have the
matter removed from the roll without a substantive application
for
leave to do so. They were called upon to launch a substantive
application for the removal of the matter from the roll
which was
in effect a request for postponement. That was done. In essence
the reason for the postponement was a lack of agreement
between the
parties as to what should be included in the record for the
proceedings in this Court. Counsel for the workers
urged us to
have regard to the contents of this application as supplementing
the application for condonation.
I
am satisfied that the union has provided a sufficient explanation
for the delay in filing the record. On this basis alone
it should
be entitled to an order condoning its failure to file the record
timeously. The prospects of success, an important
factor in
considering an application for condonation, are dealt with in the
context of the application for leave to appeal.
The
application for leave to appeal
The
question whether leave to appeal should be granted depends on
whether: (a) the application raises a constitutional matter;
and
(b) whether it is in the interests of justice to grant leave to
appeal. The interests of justice require this Court to
consider,
among other issues, the importance of the questions raised and the
prospects of success of the application. The
main contention
advanced by the employer in opposing the application for leave to
appeal was that the issues that arise in
this application do not
raise a constitutional matter or an issue connected with a
constitutional matter.
In
these proceedings the workers are challenging the authority of the
Supreme Court of Appeal to decide the question whether
the
Commissioner had jurisdiction in respect of the dispute between the
parties. In addition, they challenge the finding by
the majority
of the Supreme Court of Appeal that the real dispute between the
parties was whether the exemptions relied upon
by the employer had
been validly granted by the bargaining council. The findings and
the conclusions of the Supreme Court
of Appeal as well as the
challenges to such findings and conclusions raise important
questions concerning the role of commissioners
in resolving labour
disputes and that of the courts in overseeing the arbitration
process. These questions go to the jurisdiction
of commissioners
to resolve labour disputes and that of the courts to review
arbitral awards. And these questions manifestly
raise important
constitutional issues which affect the resolution of labour
disputes. The question whether the Commissioner
adjudicated the
real dispute between the parties is an issue connected with a
decision on a constitutional matter.
The
issues raised in this case are matters of public interest. This
case also concerns the enforcement of a bargaining council

agreement which sets out minimum wages and other conditions of
employment and requires us to apply the provisions of the LRA.
The
right of every trade union and every employers’ organisation
and employer to engage in collective bargaining is
entrenched in
section 23(5) of the Constitution.
30
The concomitant of the right to engage in collective bargaining is
the right to insist on compliance with the provisions of
the
collective agreement which is the product of the collective
bargaining process.
Compliance
with a collective bargaining agreement is crucial not only to the
right to bargain collectively through the forum
constituted by the
bargaining council, but it is also crucial to the sanctity of
collective bargaining agreements. The right
to engage in
collective bargaining and to enforce the provisions of a collective
agreement is an especially important right
for the workers who are
generally powerless to bargain individually over wages and
conditions of employment. The enforcement
of collective agreements
is vital to industrial peace and it is indeed crucial to the
achievement of fair labour practices
which is constitutionally
entrenched.
31
The enforcement of these agreements is indeed crucial to a society
which, like ours, is founded on the rule of law.
And
what is more, this case concerns a claim brought on behalf of 250
of about 300 workers who are complaining that their employer
has
failed to comply with a binding collective agreement. But the
importance of resolving the issues involved in this case
goes
beyond the employer and the 250 workers concerned. As the Supreme
Court of Appeal correctly observed, this case raises
important
questions concerning the role of arbitrators and that of courts in
overseeing the arbitration process. These questions
go beyond the
litigants in this case.
Finally
on this aspect, if this Court were to conclude that the
Commissioner did not apply her mind to the question of the expiry

of the exemptions as contended by the employer, this Court would
still be required to consider the appropriate order to make.
32
There is a compelling argument for the view that, on a proper
construction, the exemptions had expired and did not apply to
the
bargaining council main agreement. This view commanded the support
of two judges of the Supreme Court of Appeal and three
judges of
the Labour Appeal Court. There are therefore prospects that this
Court might interfere with the order of the Supreme
Court of
Appeal. The application therefore bears prospects of success.
This fact must also mean that the failure by the workers
to file
the record timeously must be condoned.
For
all these reasons, I am satisfied that: (a) the application for
leave to appeal raises a constitutional matter; (b) the
application
bears prospects of success; and (c) it is in the interests of
justice that leave to appeal should be granted.
Accordingly, an
order condoning the late filing of the record and granting leave to
appeal will be made at the end of this
judgment.
And
now to the merits of the appeal.
What
is the dispute that the Commissioner had to resolve?
What
divided the Supreme Court of Appeal was what the real dispute was
that the Commissioner had to resolve. The debate in
this Court
also focused on this issue. This debate raised three related
questions: the first is the role of commissioners
in resolving
labour disputes; the second is the proper characterisation of
labour disputes; and the third is the role of courts
in overseeing
the arbitral process. The answers to these questions lie, in the
main, in the objects of the LRA.
The
role of commissioners in resolving labour disputes is set out in
section 138(1) of the LRA which provides:
“
The commissioner may
conduct the arbitration in a manner that the commissioner considers
appropriate in order to determine the
dispute fairly and quickly,
but must deal with the substantial merits of the dispute with the
minimum of legal formalities.”
The
LRA introduces a simple, quick, cheap and informal approach to the
adjudication of labour disputes.
33
This alternative process is intended to bring about the
expeditious resolution of labour disputes. These disputes, by

their very nature, require speedy resolution. Any delay in
resolving a labour dispute could be detrimental not only to the

workers who may be without a source of income pending the
resolution of the dispute, but it may, in the long run, have a
detrimental
effect on an employer who may have to reinstate workers
after a number of years. The benefit of arbitration over court
adjudication
has been shown in a number of international studies.
34
The
absence of appeal from arbitral awards was intended to speed up the
process of resolving labour disputes and free it from
the legalism
that accompanies other formal judicial proceedings. By adopting
this simple, quick, cheap and informal approach
to the adjudication
of labour disputes, Parliament intended that, as far as it is
possible, arbitral awards should be final
and should only be
interfered with in very limited circumstances.
35
In order to give effect to these objectives, Parliament
deliberately decided against appeals from arbitral awards and opted

for the narrowest species of review, namely, that specified in
section 145 of the LRA.
Consistent
with the objectives of the LRA, commissioners are required to “deal
with the substantial merits of the dispute
with the minimum of
legal formalities.”
36
This requires commissioners to deal with the substance of a
dispute between the parties. They must cut through all the claims

and counter-claims and reach for the real dispute between the
parties. In order to perform this task effectively, commissioners

must be allowed a significant measure of latitude in the
performance of their functions. Thus the LRA permits commissioners

to “conduct the arbitration in a manner that the commissioner
considers appropriate”.
37
But in doing so, commissioners must be guided by at least three
considerations. The first is that they must resolve the real

dispute between the parties. Second, they must do so
expeditiously. And, in resolving the labour dispute, they must act
fairly to all the parties as the LRA enjoins them to do.
38
A
commissioner must, as the LRA requires, “deal with the
substantial merits of the dispute”. This can only be done
by
ascertaining the real dispute between the parties.
39
In deciding what the real dispute between the parties is, a
commissioner is not necessarily bound by what the legal
representatives
say the dispute is. The labels that parties attach
to a dispute cannot change its underlying nature. A commissioner
is required
to take all the facts into consideration including the
description of the nature of the dispute, the outcome requested by
the
union and the evidence presented during the arbitration. What
must be borne in mind is that there is no provision for pleadings

in the arbitration process which helps to define disputes in civil
litigation. Indeed, the material that a commissioner will
have
prior to a hearing will consist of standard forms which record the
nature of the dispute and the desired outcome. The
informal nature
of the arbitration process permits a commissioner to determine what
the real dispute between the parties is
on a consideration of all
the facts. The dispute between the parties may only emerge once
all the evidence is in.
Subject
to what is stated in the following paragraph, the role of the
reviewing court is limited to deciding issues that are
raised in
the review proceedings. It may not on its own raise issues which
were not raised by the party who seeks to review
an arbitral award.
There is much to be said for the submission by the workers that it
is not for the reviewing court to tell
a litigant what it should
complain about. In particular, the LRA specifies the grounds upon
which arbitral awards may be reviewed.
A party who seeks to review
an arbitral award is bound by the grounds contained in the review
application. A litigant may
not on appeal raise a new ground of
review. To permit a party to do so may very well undermine the
objective of the LRA to
have labour disputes resolved as speedily
as possible.
These
principles are, however, subject to one qualification. Where a
point of law is apparent on the papers, but the common
approach of
the parties proceeds on a wrong perception of what the law is, a
court is not only entitled, but is in fact also
obliged,
mero
motu
, to raise the point of law and require the parties to deal
therewith. Otherwise, the result would be a decision premised on
an incorrect application of the law. That would infringe the
principle of legality.
40
Accordingly, the Supreme Court of Appeal was entitled
mero motu
to raise the issue of the Commissioner’s jurisdiction and to
require argument thereon. However, as will be shown below,
on a
proper analysis of the record, the arbitration proceedings in fact
did not reach the stage where the question of jurisdiction
came
into play.
Against
this background, I now turn to consider what the real dispute
between the parties was and whether the Commissioner applied
her
mind to this dispute.
What
was the dispute between the parties that the Commissioner had to
decide?
The
workers sought to have the employer comply with the bargaining
council main agreement. The employer resisted this effort
claiming
that it had been exempted from complying with the wage provisions
of the agreement. In response, the workers disputed
the validity
of the exemptions relied upon by the employer saying that they were
invalid for want of prior consultation before
the exemptions were
granted. The dispute between the workers and the employer was,
therefore, as the workers put it in the
documents submitted to the
CCMA, failure by the employer to comply with the bargaining council
agreement.
In
determining the real dispute between the parties, the Supreme Court
of Appeal appears to have placed much emphasis on the
counter-claim
by the workers that the exemptions relied upon were invalid for
lack of prior consultation. This approach to
the identification of
the real dispute between the parties does not take sufficient
account of the substantial dispute between
the parties. That
dispute was whether the employer was exempted from complying with
the provisions of the bargaining council
main agreement. What
matters is not the form of a dispute, but rather the substance of a
dispute. The characterisation of
the dispute by the parties is not
necessarily conclusive as to the nature of the dispute. It is
necessary for a commissioner
to look at the substance of the
dispute in order to ascertain the real dispute between the
parties.
41
The
defence advanced by the employer and the workers’ response to
that defence did not detract from what was the real
dispute between
the parties, namely, whether the employer was obliged to comply
with the provisions of the bargaining council
main agreement. The
resolution of this dispute required the determination of two
related questions: first, whether there were
exemptions which were
in operation at that time; and second, if there were, whether those
exemptions were invalid for want
of prior consultation. If there
were no exemptions in operation at the time, then the employer’s
defence should have
failed and the employer should have been
ordered to comply with the agreement. In that event, the question
of the validity
of the exemptions would not arise. On the other
hand, if there were exemptions which were in operation at that
time, then
the question of their validity would arise. This in
turn may well have raised the question of whether the Commissioner
had
jurisdiction to determine the validity of an exemption. Counsel
for the employer did not contend otherwise.
The
proper approach that the Commissioner was required to follow was
therefore first to consider whether there were any exemptions

currently in operation. If she should conclude that there were no
such exemptions currently in operation, that would have
been the
end of the dispute as the employer would then have been obliged to
comply with the bargaining council agreement.
And the question
whether the Commissioner had jurisdiction to determine the validity
of the exemption would not have arisen.
The question of the expiry
of the exemption was therefore properly before the Commissioner.
This is in effect the approach
that the Commissioner followed in
this case.
The
Commissioner considered whether there were exemptions that were
currently in operation. She concluded that there were none.
She
accordingly ordered the employer to comply with the main agreement.
The question of the validity of the exemptions did
not therefore
arise. I consider that it would have been a dereliction of duty on
the part of the Commissioner to have refused
to determine the
dispute simply because the workers disputed the validity of the
exemptions. It was incumbent upon her first
to consider whether
there were exemptions in place. Only if there were exemptions in
place would she have been required to
consider the response of the
workers, in which event the question of her jurisdiction would have
arisen. This approach to
the dispute by the Commissioner is
consistent with the duty of a commissioner to “deal with the
substantial merits of
the dispute with the minimum legal
formalities”
42
and to do so “fairly and quickly”.
43
I
did not understand counsel for the employer to suggest a different
approach. Instead, he contended that the Commissioner
failed to
apply her mind to the question whether the exemptions had expired.
It is to that question that I now turn.
Did
the Commissioner apply her mind to the question whether the
exemptions had expired?
It
is by now axiomatic that a commissioner is required to apply his or
her mind to the issues properly before him or her. Failure
to do
so may result in the ensuing award being reviewed and set aside.
Recently, in
Sidumo
, the matter was put thus:
“
It is plain from these
constitutional and statutory provisions that CCMA arbitration
proceedings should be conducted in a fair
manner. The parties to a
CCMA arbitration must be afforded a fair trial. Parties to the CCMA
arbitrations have a right to have
their cases fully and fairly
determined. Fairness in the conduct of the proceedings requires a
commissioner to apply his or
her mind to the issues that are
material to the determination of the dispute. One of the duties of
a commissioner in conducting
an arbitration is to determine the
material facts and then to apply the provisions of the LRA to those
facts in answering the
question whether the dismissal was for a fair
reason. In my judgment, where a commissioner fails to apply his or
her mind to
a matter which is material to the determination of the
fairness of the sanction, it can hardly be said that there was a
fair
trial of issues.”
44
The
contention that the Commissioner failed to apply her mind to the
question of whether the exemptions had expired rests primarily
on
the statement by the Commissioner that it was common cause that the
exemptions had expired. In her decision, the Commissioner
said:
“
It is
also common cause that by the time the dispute arose in August 1998
the exemptions under discussion were no longer valid
having ceased
to be so when the main Agreement in terms of which they were issued
terminated and a period of eighteen months
referred to in item 12(1)
had also expired.”
It
is difficult to fathom how the Commissioner could have arrived at
the finding that the exemptions had expired without first
applying
her mind to that question. Nor does the statement relied upon in
itself demonstrate that the Commissioner did not
apply her mind to
the question of the expiry of the exemptions. While the
Commissioner may not have engaged in a detailed
analysis of the
survival clause and the period of the exemption clause, it is clear
from her analysis of the arguments of the
employer that she applied
her mind to the question of the expiration of the exemption.
But
there are further considerations which militate against the
contention advanced by the employer. The passage relied upon
by
the employer must be understood in the context of the decision of
the Commissioner as a whole. In particular, it must be
understood
in the light of the findings and the conclusions of the
Commissioner and the evidence that was before her in relation
to
the expiry of the exemptions.
In
the first place, before the Commissioner it was apparently argued
on behalf of the employer that the exemptions were valid
for a
period of 18 months after the coming into operation of the LRA.
This argument was apparently based on the transitional
provisions
in Item 12(5A) of Schedule 7 of the LRA. The Commissioner
addressed this argument squarely in her decision and
held that
“these exemptions were not, with due respect to Adv. Beaton,
valid for a period of eighteen months.”
She went on to hold
that the exemptions “remained valid for the duration of the
main agreement.” Here the Commissioner
was referring to the
period of the exemption clause, which provided that the exemption
would be in operation “from: 19
March 1997 to: duration of
Agreement.”
The
reasoning of the Commissioner on the expiry of the exemption
appears from the following passage:
“
It is common cause that
the period during which the exemptions were valid is well within the
eighteen months referred to in item
12(1) of the Act. It is also
common cause that the exemptions were granted in terms of an
agreement that was concluded in the
Industrial Council. The said
agreement (Main Agreement) was promulgated in terms of section 48 of
the 1956 Act and published
in the Government Notice R1329 dated 27
June 1980. These exemptions were not, with due respect to Adv.
Beaton, valid for a period
of eighteen months. They remained valid
for the duration of the Main Agreement. The agreement terminated
with the coming into
operation of a collective agreement concluded
in the Metal and Engineering Industries Bargaining council. The
said collective
agreement was published in the Government Notice
R404 dated 31 March 1998 and came into effect on 14 April 1998.”
The
Commissioner reasoned that, upon a proper construction of the
period of the exemption clause, the exemptions were to remain
in
operation for the duration of the industrial council main
agreement. The main agreement terminated on 14 April 1998 when
the
bargaining council main agreement came into operation. The
exemptions therefore expired when the industrial council main

agreement terminated on 14 April 1998. In holding that the
exemptions were not to remain in operation for 18 months, the
Commissioner was right, for these exemptions were granted after the
commencement of the LRA and were therefore not subject to
the
provisions of Item 12(5A) of the transitional provisions. These
findings by the Commissioner draw their essence from both
the LRA
and the provisions of the exemptions. It is therefore plain from
this reasoning of the Commissioner and the passage
cited above that
the Commissioner applied her mind to the question of the expiry of
the exemptions.
The
findings and the conclusions of the Commissioner on the expiry of
the exemptions must of course be understood in the light
of the
arbitration record. The question of the duration of the exemptions
was canvassed in the arbitration proceedings. Mr
Coetzee, the
regional manager of the bargaining council, testified on the effect
of the exemption clause and the survival clause.
He was
specifically asked about how long the period “from March 1997
for the duration of the agreement” was.
He replied that “if
the exemption was issued on 19 March 1997 then while the agreement
is in force that exemption would
be in force.” This appears
from the following exchange in the record:
“
How long is that? - - -
Can I just refer you to the previous one to make myself clear
please? We were referring in the previous
one to paragraph 2,
Engineering Industries Pension Fund agreement which was published
under government notice R627 of 19 April
1996, which is a completely
different agreement to the one that we are referring to in the
exemption . . . (intervenes)
I’m quite aware of that.
- - - If you look at the list that we distributed a little while ago
you will find that the council’s
main agreement started off in
1980 and it was not rescinded in the sense that there is no such
agreement in force any more therefore
the agreement which was in
force in 1980 is currently today still in force so, to answer your
question, if the exemption was
issued on 19 March 1997 then while
the agreement is in force that exemption will be in force.”
What
is also significant is that the Commissioner herself canvassed the
meaning of the survival clause in the course of the
proceedings.
She canvassed it in the context of the exemption relating to Part 2
of the main agreement and, in particular,
what was meant by
“status-quo currently prevailing be retained.” The
following transpired:
“
Yes this one on page 12.
On page 11 is the exoneration from the council’s compulsory
holiday bonus, and on page 10 it says
the status quo currently
prevailing be retained. That status quo, what was the status quo? -
- - The status quo is that the
council will agree if the company
continues on the way they did before the council registered this
company, we weren’t
going to disrupt anything.
You were not going to disrupt
anything. So that means if a member of the council, let’s
take Tao Ying here, had been following
a certain procedure prior to
approaching applying for your membership, my understanding you say
that council would then not interrupt
whatever processes and what
have you this new member had been following, is that my
understanding? - - - If we are referring
to Tao Ying . . .
(intervenes)
. . . .
No, no, no, no that with the
historical background, I’m quite happy, I don’t have any
confusion there, I’m quite
happy with your explanation, but
I’m particularly interested in your response that upon Tao
Ying joining the bargaining
council this status quo currently
prevailing can be retained, how long was the status quo currently
prevailing with the way the
company, the new member Tao Ying, had
been doing its business and that view would be retained. And the
period of this retention
would be from March 1997 for the duration
of the agreement and the question was put which agreement, and then
it was the main
agreement. - - - That’s correct.”
It
is within this context that the statement by the Commissioner that
it was common cause that, by the time the dispute arose
in August
1998, the exemptions were no longer in operation as they had
expired when the main agreement, in terms of which they
had been
issued, terminated and a period of 18 months referred to in Item
12(1) had also expired, should be understood. What
the
Commissioner sought to convey here was that, whether the exemptions
were to expire 18 months after the LRA had come into
operation as
suggested on behalf of the employer or upon the expiry of the
industrial council main agreement, the exemptions
had expired by
the time the dispute arose in August 1998 since both these events
had occurred. The 18 month period expired
in May 1998 while the
industrial council main agreement expired on 14 April 1998, on the
reasoning of the Commissioner. By
all accounts therefore the
exemptions had expired.
Whatever
the Commissioner sought to convey by her statement, this does not
detract from the key findings of the Commissioner,
namely, that:
(a) the exemptions remained in operation for the duration of the
industrial council main agreement as the survival
clause provides;
(b) the industrial council main agreement terminated when the
bargaining council main agreement came into
effect on 14 April
1998; and (c) the exemptions terminated on 14 April 1998 when the
industrial council main agreement terminated.
These findings amply
demonstrate that the Commissioner applied her mind to the question
of the expiry of the agreement. And
these findings and conclusions
rendered it unnecessary for the Commissioner to consider whether
the exemptions relied upon
by the employer were invalid for want of
prior consultation as the union claimed or whether she had
jurisdiction to consider
such a claim.
It
follows therefore that the contention that the Commissioner did not
apply her mind to the question of the expiry of the agreement
and,
in particular, to the survival clause, must be rejected. The same
goes for the argument that the employer was denied
the opportunity
to deal with the question of the expiry of the agreement.
In
support of the contention that the Commissioner did not apply her
mind to the exemption, it was submitted that, had she done
so, she
would have found that the exemptions had not expired. Put
differently, the suggestion was that the finding that the

exemptions had expired does not draw its essence from the terms of
the exemptions and this therefore is the evidence that the

Commissioner failed to apply her mind to the exemptions.
45
The question which arises from this contention is whether the
Commissioner’s conclusion that the exemptions had expired

draws its essence from the terms of the exemption. This contention
was considered by the Labour Appeal Court and the Supreme
Court of
Appeal and it formed a large part of the debate in this Court. It
is therefore appropriate to consider it in the
context in which it
was advanced.
The exemptions had expired
The
exemptions in issue are contained in a standard form licence of
exemption. They “grant exemption from the provisions
of Part
2 of the main agreement published under Government Notice R1329
dated 27 June 1980 as amended and/or extended and/or
replaced from
time to time by any succeeding Agreement and/or any amendments
and/or extensions thereof to [the employer]”.
This is the
survival clause. Then the licence sets out the period of exemption
and provides that it is the “Period
from: 19 March 1997 to:
duration of Agreement.” It is the survival clause that has
given rise to the view that the exemption
had a life beyond that of
the industrial council main agreement.
The
proper approach to the construction of a legal instrument requires
a consideration of the document taken as a whole.
46
Effect must be given to every clause in the instrument and, if two
clauses appear to be contradictory, the proper approach
is to
reconcile them so as to do justice to the intention of the framers
of the document. It is not necessary to resort to
extrinsic
evidence if the meaning of the document can be gathered from the
contents of the document. What needs to be done
in this case is to
make sense of the survival clause in the light of the period of
exemption that is specifically set out in
the exemption. The
period of exemption is stipulated as running from 19 March 1997
until the duration of the agreement. This
portion of the exemption
cannot be ignored because it specifies the period during which the
exemptions would be operational.
What
the survival clause recognises is that the industrial council main
agreement and its provisions may be amended, extended
and/or
replaced by a succeeding agreement. It provides that when the
provisions of the main agreement are amended, replaced
and/or
extended, the exemption continues to apply to such amendment or
replacement or extension of the main agreement. This
is so because
the main agreement continues in force in its amended, replaced
and/or extended form.
The
words “amended” or “extended” do not give
rise to the problem of construction. It is the words
“replaced”
and “any succeeding” which might be thought to give
some difficulty. According to the
Oxford English Dictionary
Online
,
47
the word “replace” can be used in at least four
senses. Only two of those are relevant for present purposes. In
the first place, it can be used to mean “to restore to a
previous place or position: to put back again into a place.”

In the second sense, it can be used to mean “to take the
place of, become a substitute for (a person or thing).”
In
the first sense, it means to renew. It is trite that the context
in which a word occurs may colour the meaning to be given
to a
word. The meaning of the word “replaced” as used in
the exemption must therefore depend on the context in
which it
occurs.
The
words “amended” or “extended” presuppose
the continued operation of the same agreement and the continued

application of the exemption granted in respect of that agreement.
The exemptions apply to the agreement in respect of which
they were
granted if the agreement is “amended” or “extended”.
The meaning of the word “replaced”
which fits into
this context is “renewal”, which is consistent with the
continued operation of the same agreement.
To my mind the word
“replace”, as used in the context of the exemption is
used in the first sense, namely, to
put back again in place or to
restore to a previous place or position. In relation to the
industrial council main agreement
it means to renew or re-enact the
main agreement. This meaning of the word “replace” is
consistent with the context
in which it occurs. It envisages the
continued operation of the industrial council main agreement.
Indeed, if one has regard
to the various government notices that
have been published in relation to the industrial council main
agreement, they use words
such as “re-enactment”,
“amendment”, “extension” and “renewal”
of the main
agreement.
To
construe this word otherwise would lead to an anomaly. The LRA
envisaged that the agreements that were in force at its
commencement would remain in force for a period of 18 months after
the commencement of the LRA or until their expiry date, whichever

occurred first. Similarly, exemptions that were in operation when
the LRA came into effect had a limited lifespan; they remained
in
operation either for a period of 18 months after the LRA came into
effect or for the period for which they were granted,
whichever
occurred first. The legislature clearly intended that both the
main agreement and the exemptions granted in respect
of that
agreement that were in operation when it came into operation, would
have a limited lifespan.
Given
this clear legislative purpose, it could not have been the
intention of the legislature that exemptions granted after
the
commencement of the LRA and in respect of an agreement whose
lifespan was limited by the transitional provisions would

nevertheless remain beyond the life of the main agreement in
respect of which they were granted. And indeed to have a life

beyond those exemptions that were in operation when the LRA
commenced. This would be absurd. A legislative intention cannot

be construed to bring about an absurdity. It would be inconsistent
with the clear intention of the legislature to have exemptions,

granted after the commencement of the LRA, continue for an
indefinite or indeterminable period. And in construing the
exemptions,
where possible, they must be construed in a manner that
brings them within the terms of the statute that governs them.
That
is what the requirement of the doctrine of legality, which is
an aspect of the rule of law, requires nowadays.
Thus
construed, the survival clause can be reconciled with the period of
the exemption clause in the exemption. These clauses
are therefore
fully compatible and, read together, signify that the exemption,
subject to it not being withdrawn at an earlier
date, is to
continue throughout the life of the industrial council main
agreement. If the main agreement is not extended or
re-enacted or
renewed the exemption lapses; if it is, the exemption continues for
the extended period or the period of renewal.
The “duration
of Agreement” therefore means the duration of the industrial
council main agreement. Consequently,
the exemption in issue here
did not therefore have a life beyond that of the industrial council
main agreement.
When
the exemptions were granted on 7 April 1997, the industrial council
main agreement was still in operation, having been
re-enacted by
Government Notice R1802 of 8 November 1996. And in terms of clause
2 of the industrial council main agreement
as so re-enacted, the
main agreement was due to “remain in force until 30 June 1997
or for such period as the Minister
may determine.” There is
no suggestion that the Minister determined any such period. It
follows therefore that, by
its own terms, the main agreement
terminated on 30 June 1997. And similarly, by its own terms, the
exemption in issue in this
case also expired on that date, that
being the “duration of [the industrial council main]
Agreement.” This was
the period for which the exemption had
been granted. There were therefore no exemptions in operation at
the time the dispute
arose in August 1998.
During
oral argument, the employer understandably emphasised and relied on
the condition in the exemption “[t]hat the
national
percentage increase negotiated annually be enforced on the company
with the inception of the 1998/1999 Main Agreement.”
The
employer contended that this condition could lead to no other
conclusion other than that the exemption would apply to
the new
bargaining council agreement that had yet to be concluded during
the following year. This contention was not dealt
with by the
courts below. I am unable to agree with this contention.
First,
as pointed out earlier, in terms of the transitional provisions of
the LRA, all industrial council agreements concluded
under the 1956
LRA and exemptions granted in
respect of
those agreements that were in force at the commencement of the LRA
were to remain in force until they
expired
or for a period of 18 months after the commencement of the LRA,
whichever occurred first.
48
It is apparent from the transitional provisions of the LRA that
the intention of the legislature was to give industrial council

agreements and the exemptions issued in relation to those
agreements a limited lifespan.
It
is true that the exemption in issue in this case was issued after
the commencement of the LRA. It is also true that the
transitional
provisions do not contain an express provision dealing with the
expiry of exemptions issued after the commencement
of the LRA but
granted under the 1956 LRA. What must be stressed is that this
exemption was issued under section 51 of the
1956 LRA pursuant to
the transitional provisions of the LRA. It seems inconceivable
that the legislature, while providing
for a limited lifespan for
all industrial council agreements and exemptions issued under those
agreements, would nevertheless
exclude from this limitation
exemptions issued after the commencement of the LRA even though
these exemptions were granted
under the 1956 LRA and were issued in
respect of industrial council agreements. There is no basis for
treating these exemptions
differently to those that were in force
at the time of the commencement of the LRA.
Like
all exemptions that were issued in respect of industrial council
agreements, exemptions granted after the commencement
of the LRA
but in respect of industrial council agreements that were in force
at the commencement of the LRA had a limited
lifespan. They
remained in force, as the exemption in issue here makes it plain,
for the duration of the industrial council
agreement in respect of
which they were issued. They could not have been intended to have
an unlimited lifespan which goes
beyond the lifespan of the
industrial
council agreement in respect
of which they were issued. The period of the exemption in issue in
this case must be construed
in the light of this legislative
intention. The exemption must be construed in conformity with the
intention of the legislature.
It seems to me that, where an
exemption is capable of a construction that conforms to the
statute, that construction should
be preferred to one that would
conflict with the intention of the legislature.
Second,
at the time the exemption under consideration was granted, there
was at the very least a possibility that fresh exemptions
would be
applied for by the employer after this exemption expired at the
termination of the industrial council main agreement.
The 1997
exemption simply makes it clear that, at the very least, the
employer would be bound to pay the national percentage
increases
agreed on for the 1998/1999 year and that no exemption would be
granted for that year that would relieve the employer
of this
obligation. At any rate, the condition cannot serve to negate the
unequivocal terms that the exemption would not last
beyond the
termination of the industrial council main agreement.
Third,
even if it were to be so (and I do not accept that this is the
case) that the existence of the condition renders the

interpretation contended for by the employer a reasonable one, it
would, in my view, not be the only reasonable construction.
At
best, the construction contended for by the employer would be as
reasonable as that urged by CUSA. In my view, the meaning

preferred in this judgment accords better with the values of our
Constitution. This is so because, on the facts of this case,
a
labour regime that enabled the greater exploitation of black people
in the homelands as part of the apartheid scheme, to
the detriment
of the workers in these areas, would, on the employer’s
interpretation, be kept in force for longer than
the interpretation
preferred in this judgment.
Conclusion
In
the event, the conclusion by the Commissioner that the exemption
relied upon by the employer had expired at the time when
the
dispute arose in August 1998, must be upheld. So too must her
conclusion that the employer was not exempted from the wage

provisions of the bargaining council main agreement at the time
when the dispute arose. The order of the Labour Appeal Court
must
therefore be restored.
Remedy
In
her award, the Commissioner ordered the employer to pay to its
workers wages negotiated in the Metal and Engineering Industries’

Bargaining Council since 14 April 1998, unless exemptions were
granted to the employer under the bargaining council main

agreement. The bargaining council main agreement, which was
published in Government Notice R404 of 31 March 1998, came into

operation on 14 April 1998. In terms of section 2 of the agreement
it was due to remain in force until 30 June 1998. On 27
November
1998, the main agreement was re-enacted and published in Government
Notice R1491 of 27 November 1998. The award of
the Commissioner
must be understood to refer to the main agreement for Metal and
Engineering Industries published in Government
Notice R404 and
promulgated on 31 March 1998 as re-enacted or amended from time to
time.
Costs
I
agree with the Supreme Court of Appeal that the costs must be
allowed to lie where they fall in all courts and that no order
for
costs should be made. This was indeed also the attitude of the
Labour Appeal Court. There is no reason to depart from
this.
Order
In the event the following
order is made:
The failure by the applicant
to file the record timeously is condoned.
The application for leave to
appeal is granted.
The appeal is upheld.
The order of the Supreme
Court of Appeal is set aside and is replaced with the following
order: “The appeal is dismissed.”
The application by Tao Ying
Metal Industries to review the arbitral award made on 27 July
1999 is dismissed.
There is no order for costs
either in this Court or in the courts below.
Langa
CJ, Kroon AJ, Madala J, Mokgoro J, Skweyiya J, Van der Westhuizen J
and Yacoob J concur in the judgment of Ngcobo J.
O’REGAN J:
I
have had the opportunity of reading the judgment prepared in this
matter by my colleague, Ngcobo J. Unfortunately I cannot
concur in
it. In my view, although leave to appeal should be granted, the
appeal should be dismissed. I set out my reasons
for this
conclusion in this judgment.
The
facts are set out in the judgment of Ngcobo J and there is no need
to repeat them fully here. In brief, the applicant,
the Commercial
Workers Union of South Africa (CUSA) seeks leave to appeal against
a decision of the Supreme Court of Appeal
upholding an appeal to it
by the first respondent, Tao Ying Metal Industries (Pty) Ltd.
1
The case concerns a dispute as to whether Tao Ying Metal
Industries was obliged as at August 1998 to pay to its workers the

minimum wages provided for in the main bargaining council agreement
for the metal and engineering industries which came into
effect on
14 April 1998 (1998 Main Agreement).
2
CUSA is a trade union now representing some of the workers at Tao
Ying Metal Industries (the employer). The dispute was originally

declared on behalf of the workers by the Hotel, Liquor, Commercial
and Allied Workers Union of South Africa. Since then, CUSA
has
replaced that union as the union representing the workers of Tao
Ying Metal Industries in this dispute.
On
5 November 1998, a dispute between the union and the employer was
referred to the Commission for Conciliation, Mediation
and
Arbitration (CCMA) in terms of the
Labour Relations Act 66 of 1995
.
After the obligatory, but failed, conciliation attempt, the
dispute was referred to a commissioner of the CCMA for
arbitration.
3
The
employer’s case was that it was not obliged to pay the
minimum wages as the bargaining council had on 7 April 1997
issued
an exemption to it. The thrust of the union’s response was
that that exemption had been adopted without any consultation
with
the union.
A
preliminary point was taken by the bargaining council and the
employer that the CCMA did not have jurisdiction to determine
the
dispute, because the Main Agreement provided that disputes
concerning its interpretation and application be determined
by
arbitrators nominated by the bargaining council. The Commissioner
dismissed this preliminary point and ruled that the bargaining

council could not be a party in the proceedings before her.
After
hearing evidence, the Commissioner reserved her decision. Her
award was received by the employer on 30 March 2000.
4
She held that the employer was obliged to pay the wages stipulated
in the 1998 Main Agreement. She held that it was “common

cause” that the exemption had lapsed with the 1980 Main
Agreement and did not apply to the new 1998 Main Agreement.
After
receiving the Commissioner’s award, the employer wrote to the
bargaining council to enquire whether the exemption
was still in
force, and was informed that it was. Indeed, after the request,
the bargaining council furnished a further licence
of exemption
dated 12 April 2000 stating that exemption had been granted from
both the 1980 and the 1998 Main Agreements, pursuant
to a decision
on 7 April 1997. In the light of this letter, the employer did not
immediately seek to review the Commissioner’s
award.
However, once the union made application to the Labour Court for
the award to be made an order of court, the employer
sought to
review the award in that Court. The only remaining relevant ground
for the review was the failure by the Commissioner
to apply her
mind to the provisions of the exemption granted during March 1997.
Because the employer was now out of time to
lodge a review, it
filed an application for condonation for its late filing of the
review application.
The
Labour Court refused the application for condonation.
5
The employer then sought leave to appeal to the Labour Appeal
Court. The Labour Appeal Court set aside the decision of the

Labour Court refusing condonation but dismissed the appeal on the
merits. The Labour Appeal Court reasoned that the question
that
had been before the Commissioner was whether the employer was bound
to pay the wage rates established in the 1998 Main
Agreement. The
Court held that the Commissioner had not applied her mind to the
argument of the employer that it was exempted
from paying the wage
rates in the 1998 Main Agreement; but it held that, properly
construed, the exemption did not excuse the
employer from paying
the rates set in the 1998 Main Agreement, and that therefore the
award should stand.
The
employer then sought leave to appeal to the Supreme Court of
Appeal. The majority in that Court held that the issue before
the
Commissioner had not been whether the exemption remained in force,
but whether it had been validly adopted in the first
place in view
of the fact that the union had not been consulted prior to its
adoption by the bargaining council. The majority
of the Court held
that the Commissioner did not have jurisdiction to determine
whether the exemption was valid or not on the
basis of the conduct
of the bargaining council and that the Commissioner should
therefore have found that she had no jurisdiction
to resolve the
dispute.
6
The
majority furthermore found that the Commissioner’s belief
that it was common cause that the exemption had expired
was
erroneous, that indeed it had been common cause at the arbitration
that the exemption had not expired and that as a result
the award
was both a gross irregularity and had no rational basis.
7
Two
dissenting judgments were written in the Supreme Court of Appeal:
the first by Jafta JA in which he reasoned similarly to
the Labour
Appeal Court. He held that the Commissioner had applied her mind
to the currency of the exemption and that she
had correctly
concluded that it did not exempt the employer from the 1998 Main
Agreement. The other judgment was written by
Musi AJA who held, on
somewhat different reasoning, that the exemption had expired when
the 1980 Main Agreement expired and
he found what he considered to
be evidence in the appeal record to suggest that this had been
common cause between the parties
during the arbitration.
The
union now seeks leave to appeal to this Court. I agree with Ngcobo
J for the reasons given by him that we should grant
condonation for
the late filing of this application. In order for leave to appeal
to be granted, the first question that arises
is whether the case
raises a constitutional issue. To answer that question we need to
identify the issues in this application
for leave to appeal. They
are:
Whether the majority in the
Supreme Court of Appeal erred in identifying, of its own accord,
as an issue for determination
the question whether the Commission
had jurisdiction to determine the dispute that was in fact
referred to it;
What the issue was for
determination by the Commissioner and whether the Commissioner had
jurisdiction to decide it;
Whether the award falls to be
set aside because the Commissioner failed to apply her mind to the
terms of the exemption; and
Whether on a proper
construction of the exemption it had expired by the time the 1998
Main Agreement came into force.
The
applicant argues that these issues raise constitutional issues
because they implicate rights guaranteed by the Constitution:
the
right to fair labour practices (section 23(1)) and the right to
administrative justice (section 33).
8
It seems to me that only two issues can be said directly to raise
constitutional issues. The first is whether a reviewing
court is
entitled of its own accord to raise a question regarding the
jurisdiction of a CCMA commissioner to determine a particular

dispute; and the second is whether the award falls to be set aside
because the Commissioner failed to apply her mind to the
terms of
the exemption.
In
Sidumo and Another v Rustenburg Platinum Mines Ltd and Others
,
five members of this Court firmly held that an arbitration before
the CCMA constitutes administrative action within the meaning
of
section 33 of the Constitution.
9
Section 33 provides that everyone is entitled to administrative
action that is “lawful, reasonable and procedurally
fair”
and in
Sidumo
, those five members of the Court held that
section 145 of the 1995
Labour Relations Act must
be read
consistently with the provisions of
section 33.
10
I remain convinced that this approach is correct. A court,
therefore, in considering a review (or an appeal in respect of
a
review) of the CCMA in terms of the 1995
Labour Relations Act is
obliged to interpret its powers in the light of section 33 of the
Constitution.
The
question relating to the power of the Supreme Court of Appeal, of
its own accord, to raise an issue that appears on the
face of the
record before it and which goes to the jurisdiction of the CCMA
needs to be considered in the light of section
33 of the
Constitution. Similarly, the question whether an arbitrator has
applied her mind to an issue before her is a question
that needs to
be considered in the light of that section. Both these questions
thus raise constitutional matters within the
jurisdiction of this
Court.
I
should add that, although a review of a decision of the CCMA will
always need to be undertaken in the light of the right entrenched

in section 33, and will therefore generally involve a
constitutional matter, it will often not be in the interests of
justice
for this Court to entertain such an appeal. This Court
must take cognisance that one of the primary purposes of the 1995
Labour Relations Act is
to provide for the expeditious resolution
of labour disputes. In so doing, this Court will refuse to
entertain a matter concerning
the review of a CCMA decision unless
it raises a matter of particular constitutional importance.
In this case, my colleague,
Ngcobo J, has dealt briefly with the first constitutional issue I
identify (the right of an appellate
court in a review matter to
raise an issue going to jurisdiction of its own accord) and at some
length with the second (the
question whether the Commissioner
applied her mind to the meaning of the exemption). I respectfully
disagree with his approach
in respect of the second of those
issues. In the circumstances, therefore, I accept that it is in
the interests of justice
for this application for leave to appeal
to be granted, although I do wish to emphasise that this Court
should be alert to
the purpose of the 1995
Labour Relations Act and
should not undermine it by entertaining labour appeals without
careful consideration of whether it is in the interests of justice

for the appeal to be heard.
Before
turning to deal with these two constitutional issues, I wish to
express a point of disagreement between Ngcobo J and
me as to what
constitutes a constitutional matter. Ngcobo J states that because
this case concerns the enforcement of a bargaining
council
agreement, and because there is a right in section 23(5) of the
Constitution to engage in collective bargaining, the
enforcement of
a bargaining council agreement raises a constitutional matter. I
am not persuaded that this is correct.
If
it is clear that the enforcement of the bargaining agreement
materially affects the right to engage in collective bargaining
or
any other right in the Bill of Rights, its interpretation will give
rise to a constitutional issue. Where, however, the
interpretation
is concerned with a provision that does not affect the right to
engage in collective bargaining nor any other
right entrenched in
the Bill of Rights, but concerns substantive terms and conditions
which have been negotiated (which by
and large are the stuff of
bargaining council agreements), it does not seem to me that a
constitutional issue is automatically
engaged.
In
this case, the primary dispute insofar as it relates to the
bargaining council agreement turns on whether the wage provisions

of the 1998 Main Agreement apply to the employer or whether the
exemption granted on 7 April 1997 exempts the employer from
those
provisions. This does not seem to me to raise a constitutional
matter. There is no provision in the Constitution which
is
directly relevant to the interpretation of either the 1998 Main
Agreement or the exemption; nor can it be said that either
of the
interpretations for which the parties contend gives greater or
lesser effect to the provisions of the Bill of Rights.
I should
add that the exemption itself at which the interpretive debate is
really directed is not “legislation”
that falls to be
interpreted in a manner consistent with the spirit, purport and
objects of the Bill of Rights.
11
Ngcobo
J suggests that the enforcement of collective agreements is crucial
to a society founded on the rule of law. I agree.
I do not think,
however, that the consequence of this assertion is that the
enforcement of all collective agreements automatically
raises a
constitutional matter, for the reasons I have given above. The
rule of law of course requires that all binding obligations
be
enforced. It does not mean, however, that the enforcement of all
binding obligations necessarily raises a constitutional
matter.
The 1995
Labour Relations Act carefully
provides procedures to
ensure that collective agreements are enforced. Those procedures
have not been challenged as inadequate
or unconstitutional. This
Court should recognise that the Constitution establishes it as a
court that has jurisdiction in
constitutional matters only; not as
a general court of appeal in all matters. This Court must
respectfully observe those limits
placed on its jurisdiction.
12
I
now consider the two constitutional issues that I have identified
in turn.
The
first issue: May a reviewing court raise a point going to
jurisdiction of its own accord?
The
applicant argues that a reviewing court is not permitted to raise a
point going to jurisdiction that has not been raised
by one of the
parties. It argues that when the Supreme Court of Appeal wrote to
the parties in January 2007 requesting argument
on the issue of the
specific ambit of the dispute before the Commissioner, the Supreme
Court of Appeal acted in a manner that
a reviewing court may not,
because, in effect, it raised an issue that the party seeking to
review the CCMA decision had not.
The
proposition for which the applicant argues is, in my view, not
correct. Where a material irregularity or other defect appears
on
the face of the record before the reviewing court, which defect
would mean that the proceedings before the tribunal were
either
unlawful, or procedurally unfair or unreasonable, the reviewing
court is not obliged to overlook that defect. Of course,
the court
must act in a manner that is fair to the parties and ensure that
they have an opportunity to address the issue the
court has
identified.
13
This approach is consistent with the approach adopted by our
courts in relation to the raising of new matters on appeal by

litigants.
14
In
Carmichele
, this Court held that it is the duty of all
courts to uphold the Constitution and that a court may thus raise a
constitutional
issue of its own accord.
15
In the context of labour disputes, it is important to recall that
parties are often not legally represented in proceedings
before the
CCMA and even in the Labour Court and Labour Appeal Court. It
might well be that a material irregularity could
thus be overlooked
by the parties themselves. In these circumstances it would
especially not be appropriate or consistent
with the principle of
legality that underlies our constitutional order to insist that the
reviewing court ignore such material
error. When such an error is
identified on the record by the reviewing court, the parties’
attention should of course
be drawn to it and they should be given
an opportunity to present either written or oral argument on it.
This course was followed
in the present case by the Supreme Court
of Appeal.
In
my view, therefore, the applicant’s objection to the judgment
of the majority of the Supreme Court of Appeal, on the
basis that
it raised a point of its own accord, must fail. The further issue
for this Court to consider which is connected
to this decision is
the question regarding the ambit of the dispute before the CCMA.
This question does not itself raise a
constitutional issue. It is
concerned only with the ambit of the dispute before the
Commissioner – a factual issue.
Nevertheless, it is an issue
connected with a decision on the first constitutional matter and so
does fall within our jurisdiction
to determine. However, I do not
find it necessary to investigate this matter given the conclusions
that I come to on the second
constitutional issue as shall become
plain in the next portion of this judgment.
The
second issue: Did the Commissioner apply her mind to the meaning of
the exemption?
The
second constitutional issue is the question whether the
Commissioner applied her mind to the period of operation of the

exemption. It is clear, as Ngcobo J holds, that a commissioner is
obliged to apply his or her mind to the issues in a case.
16
Commissioners who do not do so are not acting lawfully and/or
reasonably and their decisions will constitute a breach of the

right to administrative justice.
In
answering this question it is necessary first to set out the terms
of the relevant exemption:
17
“
License of Exemption
This is to certify that under
the powers conferred upon it, the Council has been pleased to grant
exemption from the provisions
of Part 2 of the Main Agreement
published under Government Notice R1329 dated 27 June 1980 as
amended and/or extended and/or
replaced from time to time by any
succeeding Agreement, and/or any amendments and/or extensions
thereof to: Tao Ying Metal Industries
(Pty) Ltd, PO Box 7791
Bloemfontein, 9300; to That the national percentage increase
negotiated annually be enforced on the company
with the inception of
the 1998/1999 Main Agreement. Period from 19 March 1997 to:
duration of Agreement. Note: This exemption
may be varied or
withdrawn at any time at the discretion of the Council. (Signed)
Secretary. Date: 7 April 1997.”
18
It
is not clear from the text of this licence of exemption that it was
intended to lapse once the 1998 Main Agreement came into
force.
Indeed, the contrary is suggested by the second portion of the
exemption which states that from the inception of the
1998 Main
Agreement the employer will be required to pay the “national
percentage increase negotiated annually”.
It should be
emphasised that the exemption does not require the employer to pay
the actual wages set in the 1998 Main Agreement.
It is merely
required to award its employees the national percentage increase on
the basis of their existing wages. The exemption
also recognises
that it relates not only to the 1980 Main Agreement but also to
“any succeeding Agreement” which
may replace the 1980
Main Agreement. Despite its inelegant formulation, it seems to me
that the meaning of the licence of
exemption on a reading of its
terms is that an exemption from Part 2 of the Main Agreement, and
Part 2 of any succeeding agreement,
is being afforded, subject to a
requirement that once the 1998 Main Agreement comes into force, the
employer will be required
to pay the negotiated annual percentage
increase.
19
During
the arbitration proceedings it was the employer’s case that
this exemption continued to exempt it from paying the
wage rates
stipulated in the 1998 Main Agreement promulgated by the bargaining
council even once that Agreement came into force.
Indeed, the
Commissioner states as much in her discussion of the background to
the issue as follows:
“
The Respondent then
raised the Exemptions issued under the Main Agreement which was
concluded in 1980 and published in Government
Notice R1329 dated 27
June 1980. The Respondent was, in terms of the said Exemptions …
exempted from paying and giving
its employees the minimum wages and
conditions of service negotiated in the Bargaining Council.”
I
should add for clarity that the 1980 Main Agreement related to wages
and conditions of service that had been negotiated at the
industrial
council, not the bargaining council. The employer’s argument
as recorded by the Commissioner makes clear that
the employer
considered it was exempted from the minimum wages and conditions of
service negotiated in the
bargaining council
, which wages and
conditions of service were set out in the 1998 Main Agreement.
Despite
this, the Commissioner goes on to state in her reasons that:
“
It is also common cause
that by the time the dispute arose in August 1998 the exemptions
under discussion were no longer valid
having ceased to be so when
the main Agreement in terms of which they were issued terminated and
a period of eighteen months
referred to in item 12(1) had also
expired.”
She
continues:
“
Notwithstanding the
above, I do agree with Adv. Beaton that I am excluded from enquiring
into the period during which the exemptions
were valid because they
were issued under the agreement promulgated in terms of the 1956
Act.”
These
two comments seem to make plain that the Commissioner not only
thought that it was common cause between the parties that
the
exemption had expired once the 1980 Main Agreement had expired and
a period of 18 months from the promulgation of the 1995
Labour
Relations Act had
lapsed, but also that she could not enquire into
the period of validity of the exemption because it had been granted
under
the 1956 legislation. Both these dicta are consistent with
the Commissioner not having applied her mind to the meaning of the

exemption, as the employer argues.
The
first obligation on an arbitrator in determining a matter is to set
out the reasons, even if only briefly, for any decision.
However,
beyond the dicta referred to above, there is no further discussion
in the Commissioner’s award of the text
of the exemption and
its meaning. Compare this to the lengthy paragraphs devoted to an
interpretation of the text of the exemption
by the Labour Appeal
Court, both Nugent and Jafta JJA in the Supreme Court of Appeal and
Ngcobo J in this Court. If the Commissioner
had in fact applied
her mind to the question of the meaning of the exemption, one would
have expected at least some discussion
of its text. This is
nowhere evident in the award.
In
my view, it cannot be concluded that the Commissioner did apply her
mind to the meaning of the exemption. This is consistent
with her
view that it was common cause that the exemption was no longer
valid once the 1998 Main Agreement came into effect,
and her
conclusion that she in any event did not have jurisdiction to
determine the matter. Nevertheless, she held that as
no exemption
was in operation, the employer was obliged to pay the wages set out
in the 1998 Main Agreement.
There
is no doubt, in my view, that it was not common cause that the
exemption had lapsed, despite Musi AJA’s reasoning
to the
contrary. A reading of the record before the Commissioner makes it
plain that the evidence tendered by the regional
manager for the
bargaining council, Mr Coetzee, on behalf of the employer was that
the exemption was still in operation, and
would remain so
indefinitely, unless withdrawn by the council. The evidence was
that:
“
all exemptions issued
stating a duration of an agreement will remain in force for ever and
ever more . . . . So it is not only
my opinion and my council’s
opinion, it was also the opinion of the Exemptions and Arbitrations
Board, that while this
agreement is running the exemption is issued
to the company for the duration of the agreement until such time as
the exemption
is [with]drawn, as you can see in the footnote, the
council will have the right to withdraw [the] exemption at any time
giving
one week’s notice.”
After
this statement was made, Mr Coetzee was asked the following question
by counsel for the union:
“
As at today, it is now
the year 2000, it is almost three years later, these exemptions are
still in place?”
Mr
Coetzee answered affirmatively.
The
Labour Appeal Court took the view that even if the Commissioner had
not applied her mind to the terms of the exemption,
the award
should stand because on an interpretation of the exemption, it had
indeed lapsed. I have set out at [29] above my
preliminary reading
of the exemption on its own terms. The Labour Appeal Court ruled
it would have been ultra vires had the
bargaining council extended
the exemption beyond the currency of the 1980 Main Agreement to the
provisions of the 1998 Main
Agreement. With respect, I do not
think that this is a matter that can be determined on the record
before us. Section 30(1)(k)
of the 1995
Labour Relations Act
provides
that the constitution of a bargaining council must provide
for the procedure to be followed for exemption from collective
agreements.
We do not have before us, as Nugent JA for the
majority in the Supreme Court of Appeal pertinently remarked, a
copy of the
constitution of the relevant bargaining council.
In
the absence of that constitution (and indeed in the absence of the
bargaining council which was excluded from the proceedings
by the
Commissioner) it is neither appropriate nor possible to determine
whether or not the council acted ultra vires to the
extent that it
purported to exempt the employer from the terms of both the 1980
Main Agreement, and its successor agreements,
including the 1998
Main Agreement. It cannot be said, therefore, that we must strive
for an interpretation of the licence
of exemption to avoid this
meaning. Nor can it be said that the licence of exemption, without
doing damage to the language
it contains, clearly lapsed before or
when the 1998 Main Agreement came into force.
I
cannot, therefore, accept that the interpretation placed on the
licence of exemption by Ngcobo J is the correct one. Ngcobo
J
gives a narrow meaning to the licence of exemption by giving a
narrow meaning to the words “replaced from time to time
by
any succeeding Agreement” contained in the licence of
exemption.
20
In my view, given the express reference to the 1998 Main Agreement
in the second half of the licence of exemption relating
to
Part 2
of the Main Agreement, it is inappropriate to give a narrow meaning
to the word “replaced”. Similarly, I consider
that
Jafta JA’s proposal that the words “or any succeeding
agreement” are meaningless cannot be accepted.
21
Both
these approaches contort the ordinary meaning of the exemption and
appear to have been guided by either the assumption
that the
bargaining council cannot have intended to grant an indefinite
exemption beyond the life of the 1980 Main Agreement;
or the
assumption that it could not do so as a matter of vires. In my
view, neither assumption is warranted. The first is
a
petitio
principii
, in that it assumes as correct the very proposition
that needs to be established: Did the exemption purport to relieve
the
employer of its obligations under the 1998 Main Agreement as
well as the 1980 Main Agreement? The second, as I have
demonstrated,
is not a conclusion that we can draw on the papers as
we do not have the constitution of the bargaining council before
us.
A
related suggestion is the one made by Ngcobo J that the exemption
“must thus have been enacted under
section 51
of the 1956 LRA
read with schedule 7 of the new LRA.”
22
There is nothing to support this assertion. There is no reason
apparent from the record to suggest why in April 1997 the

bargaining council could not have acted both under schedule 7 of
the 1995
Labour Relations Act to
grant exemptions for the remaining
life of the 1980 Main Agreement, and under its constitution as
contemplated by the 1995
Labour Relations Act to
extend the
operation of the exemptions to the provisions of the 1998 Main
Agreement as well. Indeed, the record makes clear
that that is
what they intended as is evident, amongst other things, from the
testimony of Mr Coetzee set out at [142] above
and the bargaining
council letter of 12 April 2000.
23
In that letter, the bargaining council assured the employer that
the exemptions granted on 7 April 1997 continued to operate
under
the 1998 Main Agreement.
Finally,
Ngcobo J states in one sentence that the exemption should be read
in the way he proposes “because, on the facts
of this case, a
labour regime that enabled the greater exploitation of black people
in the homelands as part of the apartheid
scheme . . . would . . .
be kept in force for longer”.
24
With respect, this argument ignores the undisputed facts on the
record before us. Those facts make plain that when the leather

industry required leather companies in Botshabelo to pay the wages
provided for in its main agreement and did not issue exemptions,

all the leather companies in Botshabelo closed, with the
devastating consequence of job losses. Accordingly, when the
Department
of Labour realised that the metal and engineering
industries bargaining council was about to register employers in
Botshabelo,
it requested the bargaining council to explore ways of
ensuring that businesses were not forced to close as a result of
being
required to pay wages beyond their means. It was at least
partly as a result of this intervention that the council appointed

a team of investigators to visit the employer’s premises and,
in particular, to investigate the financial circumstances
of the
employer. It was after this visit that the exemptions were
granted. In the light of the intervention by the Department
of
Labour, it seems likely that the exemptions were granted to avoid
further job losses in Botshabelo. In my view, the one-sentence

argument relied upon by Ngcobo J ignores this complex economic and
social background. This Court should be slow to base its
reasoning
on such arguments, particularly when they have not been raised
either by the union or the employer, and when they
are likely to
mask complex social and economic realities, possibly with harmful
consequences, such as job losses.
I
should make clear, however, that I do not finally determine the
meaning of the licence of exemption in this judgment. In
my view,
as held by the majority of the Supreme Court of Appeal, that cannot
properly be done without the constitution of the
bargaining
council. My purpose is merely to make plain that it is not
self-evident that the exemption bears the meaning proposed
by
Ngcobo J. Accordingly, it is not possible to reason along the
lines, as the Labour Appeal Court did, that the misdirection
by the
Commissioner need not result in her award being set aside because
it was in any event correct in law. This is not a
conclusion we
can or should reach on this record.
In
conclusion, therefore, it is my view that the majority of the
Supreme Court of Appeal was correct when it concluded that
the
failure by the Commissioner to apply her mind to the question of
the exemption and its validity deprived the award of rationality

and that it should be set aside on that ground.
25
Given
this conclusion, it is not necessary to consider the question
whether the real issue before the Commissioner concerned
the
process by which the exemption had been granted. I accept that in
the informal and expeditious proceedings that take place
before a
commissioner of the CCMA, as Ngcobo J describes, issues are not as
crisply and clearly identified as they ordinarily
are after the
exchange of pleadings and it is undesirable to expect that of
proceedings before the CCMA.
I
proffer two points of caution. First, it is, at the end of the
day, essential for the decision-maker in a fair adjudicative

process to understand what the issues for decision are. Moreover,
when that process is adversarial, it is necessary that the
parties
understand the issues as well, so that those issues may be properly
engaged. We must be careful that, in attempting
to acknowledge the
informality of the processes before the CCMA, we do not lose sight
of the essentialia of an adjudicative
process. Secondly, in this
case, a reading of the record does suggest that the key issue
debated before the Commissioner was
whether the union had been
consulted by the bargaining council before it granted the exemption
and whether, to the extent that
it had not, that was fair. It is
quite clear that the Commissioner did not have jurisdiction to set
aside the licence of exemption
on the basis that it had been
improperly made. There is much, therefore, to be said for the
conclusion of the majority in
the Supreme Court of Appeal on this
issue. Given that it is not necessary for me to decide this
matter, however, I refrain
from doing so.
In
conclusion, then, it is my view that the application for leave to
appeal should be granted, but that the appeal should be
dismissed.
I would make no order as to costs on the ordinary rule that
pertains in this Court.
For
the Applicant: Advocate Leon Halgryn instructed by Lovius Block
Attorneys
For
the First Respondent: Advocate MSM Brassey SC and Advocate PA
Buirski instructed by Hlatshwayo Du Plessis Van Der Merwe
Nkaiseng.
1
Section 23(5) of the Constitution. The interim Constitution
contained a comparable provision in section 27.
2
Act 66 of 1995.
3
Id at section 28(1)(a)-(c).
4
Id at section 27(1).
5
Id at section 30(1)(k) and 32(3)(e).
6
Id at section 30(1)(k).
7
Id at section 32(3)(e).
8
Act 28 of 1956.
9
Id at section 51(4).
10
Item 12(1)(a) of Schedule 7 states:
“
Any
agreement promulgated in terms of section 48, any award binding in
terms of sections 49 and 50, and any order made in terms
of
section
51A
, of the
Labour Relations Act and
in force immediately before the
commencement of this Act, remains in force and enforceable, subject
to paragraphs (b) and (c)
of this subitem, and to subitem (5B), for
a period of 18 months after the commencement of this Act or until
the expiry of that
agreement, award or order, whichever is the
shorter period, in all respects, as if the
Labour Relations Act had
not been repealed.”
11
These exceptions deal with the extension or cancellation of
collective agreements prior to the expiry of the 18 month period.
12
Item 12(8)(a) of Schedule 7 provides:
“
After the commencement of this Act and despite
the repeal of the
Labour Relations Act—
(a
) any person or class of persons bound by an
agreement or award remaining in force in terms of subitem (1), may
apply in accordance
with the provisions of
section 51
of the
Labour
Relations Act for
an exemption from all or any of the provisions of
that agreement or award (as the case may be). Any application so
made, must
be dealt with in terms of the provisions of
section 51
and, whenever applicable, any other relevant provisions, of the
Labour Relations Act, in
all respects as if the provisions in
question had not been repealed”.
13
Item 12(5A) of Schedule 7 states:
“
Any
exemption from an agreement or award, or from an order, contemplated
in subitem (1), that was in force immediately before
the
commencement of this Act, will remain in force for a period of 18
months after the commencement of this Act or until the
period for
which the exemption had been granted has expired, whichever is the
shorter period, as if the
Labour Relations Act had
not been
repealed.”
14
It is true that, during April 2000, the bargaining council purported
to grant certain exemptions to the employer. But this was
after the
CCMA award had been issued. Upon the receipt of the award, the
employer enquired from the bargaining council as to
whether the
exemptions previously granted “were still valid and
enforceable.” This enquiry was apparently prompted
by the
award which ordered the employer to comply with the provisions of
the bargaining council main agreement unless it is exempted
from its
provisions. The bargaining council responded by saying that these
exemptions were still valid as they had not been
withdrawn. Despite
this assurance, the employer insisted on being issued “with a
licence of exemption for the period in
question.” Although it
considered the request “a little unusual”, the
bargaining council purported to issue
a licence of exemption in
favour of the employer on 12 April 2000. This exemption purported
to exempt the employer from “
Part 2
wages and/or earnings”
of the 1980 and 1998 main agreements. Clearly these “exemptions”
do not purport to
be exemptions granted under the bargaining council
main agreement. They were intended to provide proof that the
exemptions previously
granted in respect of the industrial council
main agreement also applied to the bargaining council main
agreement.
15
Section 145(1)
and (2) of the LRA states:
“
(1) Any party to a
dispute
who alleges a defect in any arbitration
proceedings under the auspices of the Commission may apply to the
Labour Court for an
order setting aside the arbitration award—
within
six weeks of the date that the award was
served
on the applicant, unless the alleged
defect involves the commission of an offence referred to in
Part 1
to
4
, or
section 17
,
20
or
21
(in so far as it relates to the
aforementioned offences) of Chapter 2 of the
Prevention and
Combating of Corrupt Activities Act, 2004
; or
if
the alleged defect involves an offence referred to in paragraph
(a),
within six
weeks of the date that the applicant discovers such offence.
. . . .
(2) A defect referred to in subsection (1), means—
(a)
that
the commissioner—
committed
misconduct in relation to the duties of the commissioner as an
arbitrator;
committed
a gross irregularity in the conduct of the arbitration
proceedings;
or
exceeded
the commissioner's powers; or
(b)
that
an award has been improperly obtained.”
16
Tao Ying Metal Industry (Pty) Ltd v Pooe NO and Others
JA
1/03, Labour Appeal Court, 28 November 2005, unreported, at para 8.
17
Id at para 32.
18
Id.
19
Id at para 39.
20
Id.
21
Id.
22
Id at para 40.
23
Tao Ying Metal Industry (Pty) Ltd v Pooe NO and Others
[2007]
3 All SA 329
(SCA);
[2007] 7 BLLR 583
(SCA) at para 37.
24
Id at paras 32 and 37.
25
Id at para 103.
26
Id at para 115.
27
Id at para 116.
28
Id at paras 117-21.
29
Id at para 122.
30
Section 23(5) of the Constitution states:
“
Every
trade union, employers’ organisation and employer has the
right to engage in collective bargaining. National legislation
may
be enacted to regulate collective bargaining. To the extent that
the legislation may limit a right in this Chapter, the
limitation
must comply with section 36(1).”
31
Section 23(1) of the Constitution states: “Everyone has the
right to fair labour practices.”
32
Section 145(4) of the LRA provides:
“
If the award is set aside, the Labour Court may—
determine the
dispute in the manner it considers appropriate; or
make any order it
considers appropriate about the procedures to be followed to
determine the dispute.”
33
Explanatory Memorandum to the Draft Labour Relations Bill, 1995
(1995) 16
ILJ
278 at 318.
34
Id
at 326.
35
Sidumo and Another v Rustenburg Platinum Mines Ltd and Others
[2007] ZACC 22
;
2008 (2) SA 24
(CC);
2008 (2)
BCLR 158
(CC);
(2007) 28
ILJ
2405 (CC) at paras 244-5.
36
Above at [62].
37
Id.
38
Id and above n 35
at paras
266-7.
39
National Union of Metalworkers of South Africa and Others v Bader
Bop (Pty) Ltd & Another
[2002] ZACC 30
;
2003 (3) SA 513
(CC);
2003 (2) BCLR 182
(CC);
(2003) 24
ILJ
305 (CC)
at para 52.
40
See for example
Carmichele v Minister of Safety and Security
(Centre for Applied Legal Studies Intervening)
[2001] ZACC 22
;
2001 (4) SA 938
(CC);
2001 (10) BCLR 995
(CC) at paras 33-9;
Telkom
Suid-Afrika Bpk v Richardson
[1995] ZASCA 31
;
1995 (4) SA 183
(A) at 195B-D;
Paddock Motors (Pty) Ltd v Igesund
1976 (3) SA 16
(A) at
23-4; Gerritsen
v Dorpsbestuur, Aurora
1969 (4) SA 556
(A) at
558; and
Rosebank Mall (Pty) Ltd and Another v Cradock Heights
(Pty) Ltd
2004 (2) SA 353
(W);
[2003] 4 All SA 471
(W) at para
11.
41
Coin Security Group (Pty) Ltd v Adams & Others
[2000] 4
BLLR 371
(LAC) at para 15; (2000) 21
ILJ
925 (LAC) at para
16.
42
Above n 2 at section 138(1).
43
Id.
44
Above n 35 at para 267.
45
The employer was careful not to contend that the conclusion reached
by the Commissioner was wrong and to advance this contention
as a
stand-alone argument. Had the employer done so the contention would
have had to fail because it would be tantamount to
treating the
review as an appeal. This cannot be done under the LRA as there is
no appeal against the decision of the kind involved
in this
application. See above n 35
at para 186.
46
Above n 23 at para 86.
47
Oxford English Dictionary Online
http://dictionary.oed.com/entrance.dtl
(Accessed on 28 August 2008).
48
Above at [8]-[9].
1
Tao Ying Metal Industry (Pty) Ltd v Pooe NO
and Others
[2007] 3 All SA 329
(SCA);
[2007] 7 BLLR 583
(SCA).
2
Government Notice R404 published in
Government
Gazette
No 18745 dated 31 March 1998.
This agreement replaced the main industrial council agreement (1980
Main Agreement) which was
initially given legal effect by
ministerial decree in 1980 (Government Notice R1329 of 27 June 1980
published in
Regulation
Gazette
No 3137). The practice was to re-promulgate the agreement on an
annual basis with the relevant annual changes. It appears that
this
was last done on 8 November 1996 (Government Notice R1802 published
in
Government Gazette
No
17548).
3
Section 133(2)
of the
Labour Relations Act 66 of 1995
provides:
“
If a dispute remains unresolved after
conciliation, the Commission must arbitrate the dispute if—
(a) this Act requires the dispute to be arbitrated and
any party to the dispute has requested that the dispute be resolved
through
arbitration; or
(b) all the parties to the dispute in respect of which
the Labour Court has jurisdiction consent in writing to arbitration
under
the auspices of the Commission.”
4
There is a lack of clarity on the record as to
the date of the Commissioner’s award. The award itself is
dated 23 July
1999, but the employer states in its written
submissions that this date is incorrect. In a letter written by the
employer to
the bargaining council, it stated that it received the
award on 30 March 2000.
5
Tao Ying Metal Industry (Pty) Ltd v
Commissioner May Pooe and Others
, Case
No. J4031/00, Labour Court, 29 November 2002, unreported.
6
Above note 1 at para 38.
7
Id at para 45.
8
Section 23(1) of the Constitution states—
“
Everyone
has the right to fair labour practices.”
Section 33(1) of the
Constitution states—
“
Everyone
has the right to administrative action that is lawful, reasonable
and procedurally fair.”
9
[2007] ZACC 22
;
2008 (2) SA 24
(CC);
2008 (2) BCLR 158
(CC) at para
88. A sixth, Sachs J, held that the norms contained in section 33
may have application (see paras 146-7 and 158).
It is not necessary
for the purposes of this judgment to identify the precise ratio of
Sidumo
.
10
Id at paras 89 and 105.
11
Section 39(2) of the Constitution provides—
“
When
interpreting any legislation, and when developing the common law or
customary law, every court, tribunal or forum must promote
the
spirit, purport and objects of the Bill of Rights.”
12
See section 167 of the Constitution.
13
See the discussion in
Plumbago
Financial Services (Pty) Ltd t/a Toshiba Rentals v Janap Joseph t/a
Project Finance
2008 (3) SA 47
(C) at
para 18.
14
See, for example,
Bank
of Lisbon and South Africa Ltd v The Master and Others
1987 (1) SA 276
(A) at 290, and
Donelly
v Barclays National Bank Ltd
1990 (1)
SA 375
(W) at 380-1 (per Kriegler J).
15
Carmichele v Minister of Safety and Security (Centre for Applied
Legal Studies Intervening)
[2001] ZACC 22
;
2001 (4) SA 938
(CC);
2001 (10) BCLR 995
(CC) at paras 33 and 39.
16
At [76].
17
Four exemptions were granted relating to the holiday bonus, the
annual leave entitlement, the metal industries’ pension
fund
agreement and wages. Three of the exemptions were for indefinite
periods “for the duration of this agreement”
and one
relating to the pension fund was for a period of three years. The
exemption that is of primary importance in these proceedings
is the
one set out in the text of the judgment. The reasoning relating to
it, however, relates also to the other exemptions
which were for
indefinite periods.
18
For a pictorial reproduction of this exemption,
see [18] of Ngcobo J’s judgment above.
19
See the further discussion of the proper
interpretation of the exemption at [145]-[148] below.
20
At [92] and [100].
21
Above note 1 at para 87.
22
At [10].
23
See [33]-[34] in the judgment of Ngcobo J.
24
At [103].
25
Above note 1 at para 45.