CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 192/20
In the matter between:
UNION FOR POLICE SECURITY AND
CORRECTIONS ORGANISATION Applicant
and
SOUTH AFRICAN CUSTODIAL MANAGEMENT
(PTY) LIMITED First Respondent
KENSANI CORRECTIONS MANAGEMENT Second Respondent
ROYAL MNANDI (PTY) LIMITED Third Respondent
TEC-TRON MAINTENANCE (PTY) LIMITED Fourth Respondent
JFE SECURITY Fifth Respondent
NATIONAL COMMISSIONER, DEPARTMENT
OF CORRECTIONAL SERVICES Sixth Respondent
Neutral citation: Union for Police Security and Corrections Organisation v
South African Custodial Management (Pty) Ltd and Others [2021]
ZACC 26
Coram: Mogoeng CJ, Jafta J, Khampepe J, Madlanga J, Majiedt J,
Mhlantla J, Pillay AJ, Theron J, Tlaletsi AJ, and Tshiqi J
Judgment: Khampepe J (unanimous)
Decided on: 7 September 2021
2
Summary: Appeal from the Labour Court — costs — no reasons from the
Labour Court for departure from the general rule that costs do not
follow the result in labour matters — appeal on costs upheld and
costs order set aside
ORDER
On appeal from the Labour Appeal Court (hearing an appeal from the Labour Court):
1. Leave to appeal on the merits is refused.
2. Leave to appeal against the costs order of the Labour Court is granted.
3. The appeal against the costs order of the Labour Court is upheld.
4. The costs order of the Labour Court is set aside.
5. There is no order as to costs in the application for leave to appeal in this
Court.
JUDGMENT
KHAMPEPE J (Mogoeng CJ, Jafta J, Madlanga J , Majiedt J, Mhlantla J, Pillay AJ,
Theron J, Tlaletsi AJ, and Tshiqi J concurring):
Introduction
[1] Few things are as sacrosanct to a constitutional democracy founded on the rule
of law as the peaceful resolution of disputes in an accessible legal forum. Thus, where
that democracy entrenches labour rights, thereby appreciating the unique and significant
nature of matters involving a person’s livelihood , and creates fora in which labour
disputes are to be ventilated and peacefully resolved, it is of utmost importance that the
right of access to those for a is safeguarded. It is precisely this recognition tha t is
KHAMPEPE J
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embedded in the rule that costs in labour disputes do not follow the result. Regrettably,
the Labour Court in this matter departed from this cardinal rule without providing any
reasons for doing so, and this Court is now called upon to correct that departure.
Factual background
[2] This is an applicatio n for leave to appeal against a judgment and order of the
Labour Court . The applicant is the Union for Police Security and Corrections
Organisation, a trade union registered in terms of the L abour Relations Act (LRA),1
which acts on behalf of its members in the employ of the first to fifth respondents.
[3] The first respondent is South African Custodial Management (Pty) Limited
(SACM), a company that provides prison services to the Department of Correctional
Services (the Department) in terms of a public-private partnership with the Department.
The second to fifth respondents are Kensani Corrections Management (Pty) Limited ,
Royal Mnandi (Pty) L imited, Tec-Tron Maintenance (Pty) Limited and JFE Security.
They are SACM’s subcontractors in its provision of services to the Department under
the partnership. The sixth respondent is the National Commissioner of Correctional
Services.
[4] Only the first and second respondents participated in the proceedings in the
Labour Court and have filed papers in the application for leave to appeal to this Court.
Therefore, where I refer to the respondents in this judgment, the reference is to those
respondents.
[5] At the heart of the dispute is an audit report containing the findings and
recommendations of a Task Team comprising the applicant, the first to fifth
respondents, and the Department. The Task Team was established to address various
employment-related issues at the Kutama Sinthumule Correctional Facility , which is
one of the Department’s correctional facilities serviced by the first to fifth respondents.
1 66 of 1995.
KHAMPEPE J
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The report was rendered by the Task Team pursuant to the signature by the partie s of
two documents styled “Project Plan with Source Documents Required” and “Task Team
Rules of Engagement” (the relevant documents) . The applicant submits that the
relevant documents establish that the findings and recommendations contained in the
report were meant to be binding on, and implemented by, the first to fifth respondents.
[6] In substance, the report deals with the first to fifth respondents’ remuneration
structures, and various other matters concerning the employment terms and conditions
of the applicant’s members in the employ of the first to fifth respondents.
Litigation history
[7] The applicant, acting on behalf of its members, launched proceedings in the
Labour Court seeking to enforce the obligations imposed by the relevant documents and
the findings and recommendations contained in the report.
[8] The Labour Court upheld an exception by the respondents that it had no
jurisdiction to adjudicate the matter , because the relevant documents on which the
applicant based its claims constituted a collective agreement. The Court reasoned that
this was so because the relevant documents were agreements between the applicant, a
trade union, and employers, and dealt with the terms and conditions of the employment
of the applica nt’s members, including procedures for ensuring their implementation.
The Court held that , since the relief sought by the applicant was the enforcement of a
collective agreement, section 24 of the LRA 2 unequivocally placed the dispute outside
of its juris diction and within the jurisdiction of the Commission for Conciliation,
Mediation and Arbitration (CCMA). It therefore dismissed the application with no
order as to costs.
2 Section 24(1) of the LRA provides that—
“[e]very collective agreement . . . must provide for a procedure to resolve any dispute about the
interpretation or application of the collective agreement. The procedure must first require the
parties to attempt to resolve the dispute through conciliation and, if the dispute remains
unresolved, to resolve it through arbitration.”
KHAMPEPE J
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[9] The applicant sought leave to appeal , but its application was dismissed by the
Labour Court in a separate judgment. In that judgment, th e Court rejected the
applicant’s arguments to the effect that it had erred in characterising the relevant
documents as a collective agreement, and held that it could find nothing to disturb its
findings in that regard. The Court further dismissed an attempt by the applicant to rely
on its right of access to courts enshrined in section 34 of the Constitution. 3 It held that
section 34 could not extend the jurisdiction of the Labour Court beyond its boundaries,
and that the CCMA is an independent and impartial forum as envisaged in section 34,
where the applicant can exercise its right to have its dispute resolved. The Court
therefore dismissed the application for leave to appeal. It is worth noting, at this stage,
that in dismissing the application for leave to appeal , the Labour Court ordered costs
against the applicant. It provided no reasons for doing so other than a terse statement
that it “could find no reason for costs not to follow the result”.
[10] A late attempt by the applicant to petition the Labour Appeal Court was
dismissed by that Court for want of reasonable prospects of success or any compelling
reason for it to be heard. Significantly, the Labour Appeal Court made no order as to
costs.
[11] The applicant now approaches this Court for leave to appeal.
Parties’ submissions in this Court
Applicant’s submissions
[12] The applicant seeks leave to appeal against both the Labour Court’s order on the
merits and that Court’s costs order.
[13] On the merits, the applicant repeats many of the arguments that failed in the
preceding courts. It argues that the Labour Court was incorrect to find that the relevant
3 Section 34 of the Constitution provides that “[e]veryone has the right to have any dispute that can be resolved
by the application of law decided in a fair public hearing before a court or, where appropriate, another independent
and impartial tribunal or forum”.
KHAMPEPE J
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documents constituted a collective agreement and that it had no jurisdict ion to
adjudicate the dispute. The applicant also asserts, apparently on the authority of this
Court’s decision in Fredericks,4 that even if the dispute concerned the enforcement of
a collective agreement, section 24 of the LRA does not oust the jurisdict ion of the
Labour Court. It says that this is so because the Legislature could only have ousted that
Court’s jurisdiction to adjudicate disputes over the interpretation and application of
collective agreements if it had assigned the determination of such disputes to another
court of equivalent status, which the CCMA is not.
[14] On costs, the applicant takes issue with the Labour Court’s costs order in the
application for leave to appeal. It says that that order failed to follow the correct
approach in labour and constitutional matters, which is that the losing party should not
be mulcted in costs.
Respondents’ submissions
[15] The respondents submit that the application lacks prospects of success , because
it is clear from the documents attached to the applicant’s statement of claim in the
Labour Court that what the applicant sought to enforce in its statement of claim is a
collective agreement. They say that the Labour Court’s findings in this regard, and its
conclusion that it lacked jurisdiction to adjudicate t he dispute, are unassailable. The
respondents argue that the applicant’s reliance on Fredericks is inapposite because ,
unlike in that case, the applicant did not seek to rely on a constitutional right in its
statement of claim, but merely sought to enforce a collective agreement.
[16] On costs, the respondents submit that the Labour Court was entitled to award
costs in the application for leave to appeal under the circumstances because its decision
in the main application was unassailable and leave was refused for lack of prospects of
success.
4 Fredericks v MEC for Education and Training Eastern Cape [2001] ZACC 6; 2002 (2) SA 693 (CC); 2002 (2)
BCLR 113 (CC) at para 33.
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[17] This Court has decided to determine the matter without oral argument, and its
decision on each of the issues raised follows.
Jurisdiction and leave to appeal
[18] It is perspicuous that not all those who knock on our doors a re let in. For this
Court to entertain an application, its jurisdiction must be engaged and it must be in the
interests of justice for leave to appeal to be granted.
[19] This Court has on numerous occasions affirmed that matters that concern the
interpretation and application of the LRA raise a constitutional issue , and therefore
engage this Court’s jurisdiction. 5 Axiomatically, then, this application engages this
Court’s jurisdiction on that ground. But should leave to appeal be granted?
[20] Whether or not it is in the interests of justice to grant leave to appeal depends on
a variety of factors which I need not get into, save to say that reasonable prospects of
success carries significant weight.6 In assessing what the interests of justice d ictate in
this case, I am compelled to distinguish between the applicant’s appeals on the merits
and on costs, for they are destined for different outcomes.
[21] There are simply no prospects of success in the applicant’s appeal on the merits,
and leave to appeal must therefore be refused. I can find no reason to interfere with the
Labour Court’s assessment of the relevant documents and the report in its two
judgments, or its characterisation of the dispute . That Court’s conclusion, that the
applicant’s claim is concerned with the interpretation and enforcement of an alleged
collective agreement, is indeed unassailable.
5 See, for example, Member of the Executive Council for Health, Western Cape v Coetzee [2020] ZACC 3; 2020
(41) ILJ 1303 (CC); 2020 (6) BCLR 674 (CC) at para 36 and National Education Health and Allied Workers
Union v University of Cape Town [2002] ZACC 27; 2003 (3) SA 1 (CC); 2003 (2) BCLR 154 (CC) at paras 16
and 20.
6 See, for example, S v Ramabele [2020] ZACC 22; 2020 (2) SACR 604 (CC); 2020 (11) BCLR 1312 (CC) at
para 35, where the Court relies on General Council of the Bar of South Africa v Jiba [2019] ZACC 23; 2019 JDR
1194 (CC); 2019 (8) BCLR 919 (CC).
KHAMPEPE J
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[22] It follows, then, that the Labour Court was correct to conclude it had no
jurisdiction to determine the matter. T his Court’s decision in Fredericks,7 and
numerous decisions of the Labour Appeal Court and the Labour Court,8 make plain that
section 24 of the LRA places disputes concerning the interpretation and application of
collective agreements within the jurisdiction of the CCMA. The Labour Court’s power
over such disputes is limited to one of review, which may be exercised if a party
challenges the award emanating from the relevant arbitration proceedings before the
CCMA.9 That the Labour Court has no jurisdiction to entertain disputes of this nature
is therefore uncontroversial, and there are no reasonable prospects of this Court finding
otherwise. Leave to appeal on the merits is therefore refused.
[23] But what of the appeal against the Labour Court’s costs order? On my
assessment, that appeal stands on a different footing. As the ensuing discussion reveals,
the applicant’s argument that the Labour Court failed to follow the correct approach to
costs in labour matters has prospects of success. Leave to appeal against the
Labour Court’s costs order is therefore granted.
The proper approach to costs in labour matters
[24] The established rule in litigation that costs follow the result does not apply in
labour matters. This Court has made that abundantly clear on a number of occasions ,
not least in its often-quoted decision in Zungu.10 Despite this, however, there is now a
concerning pattern of this Court being requested to overturn decisions of the Labour
Court and the Labour Appeal Court applying the general rule that costs follow the result,
7 Fredericks above n 4 at para 31.
8 See in this regard the cases referred to in the discussion at para 39 of Aucamp v SA Revenue Service 2014 (35)
ILJ 1217 (LC), at the end of which the learned Judge concludes that “there surely can be no doubt that where it
comes to the interpretation and application of a collective agreement, the dispute can only be determined by
arbitration, and not by the Labour Court”.
9 Fredericks above n 4 at para 31.
10 Zungu v Premier of the Province of KwaZulu-Natal [2018] ZACC 1; 2018 (39) ILJ 523 (CC); 2018 (6) BCLR
686 (CC). See also South African Commercial, Catering and Allied Workers Union v Woolworths (Pty) Limited
[2018] ZACC 44; 2019 (3) SA 362 (CC); 2019 (3) BCLR 412 (CC).
KHAMPEPE J
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without more, to matters before those courts.11 I deem it vital, then, to clarify in some
detail in this judgment that it is not merely out of overzealous generosity on this Court’s
part that we say that costs do not fol low the result in labour matters. We are
constitutionally and statutorily obliged to do so.
[25] Indeed, the rule that costs do not follow the result in labour matters honours key
imperatives that flow directly from the Constitution and the LRA. Two constitutional
provisions are particularly relevant here.
[26] The first is section 23 of the Constitution, which entrenches various labour rights,
including the right to fair labour practices. Rights alone, however, often ring hollow,
and are seldom capa ble of meaningful realisation without institutions where they may
be ventilated and enforced, and in which disputes about their scope and content may be
resolved. This is why one of the primary purposes of the LRA, which is intended to
give effect to the labour rights in section 23 of the Constitution ,12 is “to promote the
effective resolution of labour disputes ”.13 The LRA achieves this by “[p roviding]
simple procedures for the resolution of labour disputes through statutory conciliation,
mediation and arb itration” and “ [establishing] the Labour Court and Labour Appeal
Court as superior courts, with exclusive jurisdiction to decide matters arising from the
Act”.14
[27] It is clear from a holistic reading of the LRA that the dispute resolution
mechanisms that it creates were meant to be a “one stop shop” for the resolution of
11 Since Zungu, we have been requested to do so on at least three occasions, including the present one. See
National Union of Mineworkers v Samancor Limited (Eastern Chromes Mines) [2021] ZACC 16; 2021 JDR 1249
(CC) (NUM) and Long v South African Breweries (Pty) Ltd [2019] ZACC 7; 2019 (40) ILJ 965 (CC); 2019 (5)
BCLR 609 (CC).
12 AMCU v Royal Bafokeng Platinum Ltd [2020] ZACC 1; 2020 (3) SA 1 (CC); 2020 (4) BC LR 373 (CC) at
para 103; Transport and Allied Workers Union of South Africa v PUTCO Ltd [2016] ZACC 7; 2016 (4) SA
39 (CC); 2016 (7) BCLR 858 (CC) at para 28; and Equity Aviation Services (Pty) Ltd v Commission for
Conciliation, Mediation and Arbitration [2008] ZACC 16; 2009 (1) SA 390 (CC); 2009 (2) BCLR 111 (CC) at
para 22.
13 Section 1(d)(iv) of the LRA.
14 Preamble to the LRA.
KHAMPEPE J
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labour disputes.15 These mechanisms were intended to be simple and accessible, so that
those to whom the labour rights enshrined in our Constitution are conferred can
vindicate those righ ts speedily and cost -effectively. This laudable statutory goal is
eroded when the bearers of labour rights are faced with the threat of adverse costs orders
if their claims are, for whatever reason, unsuccessful. That brings us to the second, and
closely related, constitutional right that the rule against costs in labour matters is meant
to fulfil.
[28] Section 34 of the Constitution enshrines the right to have one’s disputes resolved
by the application of law “in a fair public hearing before a court or, wher e appropriate,
another independent and impartial tribunal or forum”. In the labour context, section 34
affords those who enjoy labour rights in terms of the Constitution and the LRA the right
of access to the statutory dispute resolution mechanisms crafted by the LRA. And it is
trite, of course, that the right of access to legal dispute resolution mechanisms in the
context of our democracy is closely linked to the rule of law, a core foundational value
on which that democracy is grounded.16 This Court put it thus in Barkhuizen:
“Our democratic order requires an orderly and fair resolution of disputes by courts or
other independent and impartial tribunals. This is fundamental to the stability of an
orderly society. It is indeed vital to a s ociety that, like ours, is founded on the rule of
law. Section 34 gives expression to this foundational value.”17
[29] In essence, then, the section 34 guarantee of peaceful and orderly dispute
resolution before legal fora is a critical bulwark against resort to unlawful methods of
settling disagreements and, crucially, prevents self -help. Thus, in Chief Lesapo, this
Court said that section 34—
“ensures the peaceful, regulated and institutionalised mechanisms to resolve disputes,
without resorting to self-help. [It] is a bulwark against vigilantism, and the chaos and
15 Chirwa v Transnet Limited [2007] ZACC 23; 2008 (4) SA 367 (CC); 2008 (3) BCLR 251 (CC) at para 54.
16 Section 1(c) of the Constitution.
17 Barkhuizen v Napier [2007] ZACC 5; 2007 (5) SA 323 (CC); 2007 (7) BCLR 691 (CC) at para 31.
KHAMPEPE J
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anarchy which it causes. Construed in this context of the rule of law and the principle
against self-help in particular, access to [courts or other independent and impartial
tribunals] is indeed of cardinal importance.”18
[30] In the labour context, the right of access to the statutory dispute resolution
mechanisms created by the LRA guarantees t hat labour disputes, which are not
infrequently fraught and contested, are resolved in peaceful, regulated and
institutionalised fora. It ensures that parties do not resort to unlawful means of resolving
disputes that should be ventilated in the specialised institutions envisaged by the LRA.
Indeed, the priority given by the LRA to the dispute resolution mechanisms that it
creates is no more evident than in its proscription of industrial action if the issue in
dispute “is one that a party has the right to refer to arbitration or to the Labour Court”.19
When the very same institutions created by the LRA shut their doors to litigants by too
keenly mulcting them in costs, they encourage recourse to industrial action and other
proscribed means to air disputes that the LRA demarcates for resolutio n in those
institutions. Zondo JP, as he was then, on behalf of a unanimous Labour Appeal Court
in Dorkin, explained the position thus:
“In making decisions on cost s orders this Court should seek to strike a fair bala nce
between, on the one hand, not unduly discouraging workers, employers, unions and
employers’ organisations from approac hing the Labour Court and this C ourt to have
their disputes dealt with, and, on the other, allowing those parties to bring to the
Labour Court and this Court frivolous cases that should not be brought to court. That
is a balance that is not always easy to strike but, if the court is to err, it should err on
the side of not discouraging parties to approach these courts with their dispute s. In
that way these courts will contribute to those parties not resorting to industrial action
on disputes that should properly be referred to either arbitral bodies for arbitration or
to the courts for adjudication.”20 (Emphasis added.)
18 Chief Lesapo v North West Agricultural Bank [1999] ZACC 16; 2000 (1) SA 409 (CC); 1999 (12) BCLR 1420
(CC) at para 22.
19 Section 65(1)(c) of the LRA.
20 Member of the Executive Council for Finance, KwaZuluNatal v Dorkin N.O. [2007] ZALAC 41; 2008 (29) ILJ
1707 (LAC) (Dorkin) at para 19.
KHAMPEPE J
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[31] Lest I be misunderstood, I must make this clear: the right to pursue industrial
action, which is protected by both the LRA and section 23 of the Constitution, is
indispensable to our democracy . It is “ of both historical and contemporaneous
significance”; it enables workers “ to assert bargaining power in industrial relations ”;
and is a key “component of a successful bargaining system” of the nature contemplated
in the Constitution and the LRA .21 Nothing said in this judgment must be taken as
suggesting otherwise. The crisp point I am making, rather, is th is: when costs orders
are too readily made against those who seek to vindicate their
constitutionally-entrenched labour rights in the specialist institutions created by the
LRA, employers and employees alike may be left with no option but to resort to
industrial action to remedy disputes that the LRA places beyond the purview of
protected industrial action . That would cultivate unlawfulness and be inimical to the
foundational value of the rule of law underpinning our democratic order.
[32] It is therefore imperative for our democracy that the doors of labour dispute
resolution institutions be kept wide open for litigants to air their grievances , so that
unlawful industrial action, and all its potential consequences, is generally avoided. That
accords with the scheme of the LRA , which contemplates industrial action only where
no other avenues are readily available .22 The rule against automatic costs orders is an
integral part of that scheme in that it ensures access to labour dispute resolution
institutions and no doubt enlarges the width by which the doors of those institutions are
kept open.
[33] The principles set out above form the bedrock of how the question of costs
should be understood in labour matters in the context of our democracy . The se
principles find expression in section 162 of the LRA,23 which rejects the ordinary rule
21 National Union of Metal Workers of South Africa v Bader Bop (Pty) Ltd [2002] ZACC 30; 2003 (3) SA 513
(CC); 2003 (2) BCLR 182 (CC) at para 13.
22 See [30] and above n 19.
23 Section 162 of the LRA provides:
“(1) The Labour Court may make an order for the payment of costs, according to the
requirements of the law and fairness.
KHAMPEPE J
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of litigation that costs should follow the result in favour of a n approach based on “law
and fairness”. When we pay heed to this fairness standard, we do so because we are
obliged by the LRA and the above constitutional imperatives. Hence, I repeat: when
making costs orders in labour matters, courts are enjoined to apply the fairness standard
in the LRA as a matter of constitutional and statutory obligation.
[34] What, then, are the implications of what I have said in this judgment ? Do the
principles I have enunciated dictate that costs can never be ordered against a party in
labour matters? I think it is clear from this Court’s jurisprudence that the answer to this
question is a resounding “no”. This Court has previously affirmed the principle that
costs are discretionary to the court adjudicating a matter.24 That applies no differently
to labour matters. But, like all exercises of discretion, a court exercising its discretion
to award costs must do so judicially.25
[35] In the labour context, the judicial exercise of a court’s discretion to award costs
requires, at the very least, that the court must do two things. First, it must give reasons
for doing so and must account for its departure from the ordinary rule that costs should
not be ordered.26 Second, it must apply its mind to the dictates of the fairness standard
in section 162, and the constitutional and statutory imperatives that underpin it. Where
(2) When deciding whether or not to order the payment of costs, the Labour Court may
take into account—
(a) whether the matter referred to the Court ought to have been referred to
arbitration in terms of this Act and, if so, the extra costs incurred in referring
the matter to the Court; and
(b) the conduct of the parties—
(i) in proceeding with or defending the matter before the Court; and
(ii) during the proceedings before the Court.
(3) The Labour Court may order costs against a party to the dispute or against any person
who represented that party in those proceedings before the Court.”
24 Public Protector v South African Reserve Bank [2019] ZACC 29; 2019 (6) SA 253 (CC); 2019 (9) BCLR 1113
(CC) at para 144.
25 NUM above n 11 at para 32; Long above n 11 at para 29; and Zungu above n 10 at para 26.
26 NUM id at paras 30-1 and Zungu id at para 25.
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a court fails to do so, it commits an error of law and thus misdirects itself. This Court
explained this in Long:
“[W]hen making an adverse costs order in a labour matter, a presiding officer is
required to consider the principle of fairness and have due regard to the conduct of the
parties. This, the Labour Court failed to do. There is no reasoning on the question of
costs beyond an indication that costs are to follow the result. This is a misdirection of
law and it follows that the Labour Court’s discretion in respect of costs was not
judicially exercised and must be set aside.”27
[36] An instructive approach to a court’s exercise of its discretion on the question of
costs can be found in the Labour Appeal Court’s decision in Bester.28 In determining
the question of costs in that case, the Court held:
“The appellant seeks a costs order. The question falls to be decided with reference to
law and equity. As an individual, bearing her own costs without the help of a trade
union, it is appropriate to give consideration thereto, even though the usual approach is
that costs do not simply follow the result. It seems to us that fairness dictates that she
be granted costs in the review and in the appeal because of the burden such costs would
be on an individual. Moreover, the appellant is a single parent with three children.
In defending the award in the review proceedings and in prosecuting the appeal, the
appellant has represented herself. To the extent that she has incurred legal costs, she
can recover them, including, in principle, the value of her own legal expertise, as a legal
practitioner, devoted to the case. It is unnecessary to specify what these costs might
include. Thus, the appropriate cos ts order is one that is subject to taxation in the
absence of an agreement between the parties about a sum.” (Footnotes omitted.)29
[37] Here, the Labour Appeal Court demonstrated its cognisance of the correct point
of departure when dealing with costs in labour matters, being Zungu, and provided
detailed reasons for its costs award. This approach to costs is an example of a court that
27 Long above n 11 at para 29.
28 Bester v Small Enterprise Finance Agency SOC Ltd [2019] ZALAC 73; (2020) 41 ILJ 877 (LAC).
29 Id at paras 16-7.
KHAMPEPE J
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has applied its mind to the constitutional and statutory principles enunciated in this
Court’s jurisprudence, which are affirmed in this judgment. This naturally brings me
to the critical question in this case: did the Labour Court exercise its discretion judicially
when mulcting the applicant in costs?
Did the Labour Court exercise its discretion judicially?
[38] The answer to this question must, I regret, also be a resounding “no”. It is evident
from the Labour Court’s curt statement that it “could find no reason for costs not to
follow the result” that the Court’s point of departure was informed by an incorrect
understanding of the applicable legal principles. Put plainly, the Labour Court ignored
this Court’s jurisprudence and simply assumed the application of the default rule that
costs were to follow the result unless there was a reason for them not to. That flies in
the face of everything this Court has said about costs in labour matters, 30 which has
been, yet again, set out extensively in this judgment.
[39] The Labour Court’s decision on costs therefore must fail at the first hurdle. The
correct premise from which the Court ought to have departed was that the applicant
would not be ordered to pay costs unless there was a reason to deviate from the Zungu
general rule that a losing party in labour matters should not be mulcted in costs. The
inevitable consequence of this application of the wrong default rule meant that the
Labour Court was not minded either to provide reasons for deviating from Zungu, or to
30 In particular, see this Court’s recent decision in NUM above n 11 at paras 30-1 which I quote, in relevant part,
for the principles espoused bear emphasis:
“It appears that the Labour Appeal Court simply adopted the rule that costs follow the result.
There is nothing to indicate why the applicant was ordered to pay the costs in both Courts. This
is compounded by the fact that the Labour Court had made no order as to costs in its
judgment. . . . [The Labour Appeal Court gave] no explanation for order number three, which
had the effect of overturning the Labour Court’s finding that there should be no order as to costs.
The applicant’s role is to defend the rights of its members. It cannot be argued that challenging
a dismissal alone justifies a costs order. Mulcting the applicant in costs in a labour matter where
there is no finding of any untoward conduct on the part of the applicant is intolerable. The costs
orders will have a chilling effect on the applicant and may deter it from fulfilling its duty to
represent its members without fear of reprisal. This may affect its members’ right to access
justice and thus, may infringe sections 23 and 34 of the Constitution. However, there may be
instances where a costs order is warranted and in that case, reasons must be provided.”
KHAMPEPE J
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apply its mind to the fairness standard prescribed by the LRA and the various
constitutional imperatives set out above.
[40] It follows , then, that in arriving at its costs order, the Labour Court applied
incorrect principles of law and thus failed to exerc ise its discretion judicially.
Moreover, there is nothing forthcoming from the record of this matter that justifies a
departure from the important precedent of Zungu and Dorkin. The applicant is
mandated to safeguard its members’ labour rights and was pr esumably litigating in
pursuit of this important constitutional imperative. That its appeal before the Labour
Court bore poor prospects of success and failed is not, on its own, a sufficient reason to
ignore the clear message of Zungu: courts adjudicating labour matters must prefer an
approach to costs that will not have a chilling effect on bona fide litigation intended to
vindicate labour rights. I see no reason to dispense with this practice in this matter. The
Labour Court’s approach clearly constitutes a misdirection, and its costs order falls to
be set aside on that basis.
Conclusion
[41] Judicial precedent has no opt -out clause. Decisions of this Court bind all other
courts. They bind the Labour Appeal Cour t and the Labour Court. We expe nd
unnecessary judicial energy and resources when this Court is asked to correct departures
by other courts from routine legal principles that we have explicated time and time
again.
[42] I have penned this judgment in the hope that no more judicial resources will be
wasted on this trite issue in the future. Costs do not follow the result in labour matters.
Costs
[43] It would be a surprise if our fidelity to the principles affirmed in this judgment
did not compel me to conclude that there is no order as to costs in this Court. That is,
without hesitation, the order I make.
KHAMPEPE J
17
Order
[44] The following order is made:
1. Leave to appeal on the merits is refused.
2. Leave to appeal against the costs order of the Labour Court is granted.
3. The appeal against the costs order of the Labour Court is upheld.
4. The costs order of the Labour Court is set aside.
5. There is no order as to costs in the application for leave to appeal in this
Court.