AFMS Group (PTY) Ltd v South African Airways (SOC) Ltd and Others (J 998/22) [2022] ZALCJHB 291 (10 October 2022)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case no: J 998/22

In the matter between:

AFMS GROUP (PTY) LTD

Applicant

and

SOUTH AFRICAN AIRWAYS (SOC) LTD

First Respondent

SOUTH AFRICAN TRANSPORT AND ALLIED

WORKERS UNION

Second Respondent

SOLIDARITY

Third Respondent

NATIONAL UNION OF METALWORKERS OF

SOUTH AFRICA

Fourth Respondent

NATIONAL TRANSPORT MOVEMENT

Fifth Respondent

EMPLOYEES OF AFMS GROUP (PTY) LTD

LISTED IN ANNEXURE "X"

Sixth and Further Respondents

Decided: In Chambers Delivered: 10 October 2022

Summary: Leave to appeal - no proper grounds made out - application for leave to appeal dismissed

JUDGMENT - LEAVE TO APPEAL

[1] In this instance, the applicant in the main application brought an application against the first respondent for declaratory relief

flowing from the application of section 197 of the Labour Relations Act (LRA)[1]. In this application, it contended that the termination of service agreements the applicant had concluded with the first respondent constituted a transfer of as business as contemplated by section 197 of the LRA and that all the employees associated with those agreements, being the sixth and further respondents, were to be considered to be transferred to the first respondent as a result. The application was brought as one of urgency.

[2] The application came before me on 23 August 2022 for argument, and in a written judgment handed down on 7 September 2022, I found against the first respondent, upheld the applicant's application, and afforded the applicant the declaratory relief it had sought.

[3] On 11 September 2022, the first respondent filed an application for leave to appeal. The first respondent then filed written submissions as contemplated by Rule 30(3A) of the Labour Court Rules and clause 15.2 of the Practice Manual, on 26 September 2022. Up to the date of finalizing this judgment, the applicant has not filed any written submissions of its own. As the time limit as contemplated by clause 15.2 of the Practice Manual has now expired, the application for leave to appeal is ripe for determination, and considering it was an urgent application in the first place, should be determined without further delay.

[4] Clause 15.2 of the Practice Manual further provides that an application for leave to appeal will be determined by a Judge in chambers, unless the Judge directs otherwise. I see no reason to direct otherwise and will therefore determine the first respondent's leave to appeal application in chambers.

Analysis

[5] In J & L Lining (Pty) Ltd v National Union of Metalworkers of SA and Others (2)[2] the Court summarized the legal position that applies when a litigant seeks leave to appeal from this Court as follows:

'Leave to appeal is not there for the asking. When deciding whether to grant leave to appeal to the Labour Appeal Court, the Labour Court must determine whether there is a reasonable prospect that another court would come to a different conclusion to that of the court a quo, or in other words, whether the appeal would have a reasonable prospect of success. This was summarised in SA Clothing & Textile Worker$ Union & others v Stephead Military Headwear CC, as follows:

'It is trite that for an application for leave to appeal to be successful, it is required of the party seeking such leave to demonstrate that there are reasonable prospects that another court, in this instance, the Labour Appeal Court, would come to a different conclusion to that reached in the judgment that is sought to be taken on appeal."

[6] As to the meaning of 'reasonable prospects of success', the Court in Member of the Executive Council for Health, Eastern Cape v Mkhitha and Another[3] said the following:

'Once again it is necessary to say that leave to appeal, especially to this Court, must not be granted unless there truly is a reasonable

prospect of success. Section 17(1)(a) of the Superior Courts Act 10 of 2013 makes it clear that leave to appeal may only be given where the judge concerned is of the opinion that the appeal would have a reasonable prospect of success; or there is some other compelling reason why it should be heard.

An applicant for leave to appeal must convince the court on proper grounds that there is a reasonable prospect or realistic chance of success on appeal. A mere possibility of success, an arguable case or one that is not hopeless, is not enough. There must be a sound, rational basis to conclude that there is a reasonable prospect of success on appeal.'

[7] The first respondent contends that there is a reasonable prospect that another Court would come to a different conclusion as contemplated by the above test, and that it has prospects of success on appeal, for a number of reasons , which I will deal with below.

[8] Firstly, and according to the first respondent, I went beyond the facts and case made out in the applicant's founding affidavit in deciding this matter. In my view, this contention is contrived so that the first respondent can escape the consequences that the facts, considered as a whole, speak for themselves in this case. I made a determination as to which facts should be considered, based on an application of the principles in Plascon Evans Paints v Van Riebeeck Paints[4]. The bulk of the facts I considered in deciding this case emanate from the first respondent's answering affidavit, which is the proper point of departure in establishing the facts to be accepted in terms of Plascon Evans. Further, there were, a number of admitted facts, which would include facts that simply cannot be denied[5]': The aforesaid principles of fact gathering are trite, and insofar as the first respondent's case when seeking leave to appeal suggest that I acted contrary to these principles, there is no reasonable prospect that another Court would decide in favour of the first respondent in this regard.

[9] In the notice of motion, the applicant asked for specific declaratory relief. In order for the applicant to be successful, the facts as a whole must support the granting of that relief. These facts are not only the facts contained in the founding affidavit. As stated above, it includes all the facts set out in the answering affidavit. Contrary to what the first respondent suggests, due regard must be had to the replying affidavit as well, insofar as it not seek to raise a new case and new material. The essential documents in this case were also all undisputed. I was satisfied that, upon a proper consideration of the evidence as established in the affidavits as well as the undisputed supporting documents submitted by both parties, the applicant had made out a case for the relief sought. I am convinced that there is no reasonable prospect that another Court would come to a different conclusion on the facts, and the first respondent simply has no prospects of success on appeal. As held by the Constitutional Court Rail Commuters Action Group and Others v Transnet Ltd t/a Metrorail and Others[6]:

'Ordinarily, the Court will consider those facts alleged by the applicant and admitted by the respondent together with the facts as stated by the respondent to consider whether relief should be granted….'

[10] In the submissions in its application for leave to appeal, the first respondent correctly accepts that the enquiry in to whether section 197 applies is objective and fact specific. That being said, what the first respondent then does is to effectively limit the required factal enquiry, by selecting only certain facts which should in its view be considered and which, obviously, suits its case. That is not appropriate. The point in this regard is that the applicant specifically relied on clause 20 of the service agreement between the applicant and the first respondent in support of case, in the founding affidavit. It is then up to this Court to interpret and apply that clause, and in doing so, the whole agreement must be considered and the principles in Natal Joint Municipal Pension Fund v Endumeni Municipality[7] applied. That is what I did, and this established that the employees were in fact assets of the business, and the business was contractually considered and treated by all parties as a discrete business and entity. That is what triggers the application of section 197. There is no prospect that another Court would follow a different approach or would come to a different interpretation of this agreement. The fact that the first respondent may disagree with my interpretation of the agreement does not create a case for leave to appeal.

[11] The first respondent also takes issue with the finding that the employees rendering the services under the service agreement between the applicant and the first respondent did not need or have unique technical expertise applicable to the applicant only. Again, the applicant bases its criticism off what is contained in the founding affidavit only. The fact is that in the founding affidavit the applicant did specifically say, as part of its case, that the employees in fact had and required that expertise. The first respondent disputed that in its answer, and the applicant countered on rely. The requisite facts for deciding this issue were therefore placed before Court by all the affidavits. Which facts to accept when deciding this point, is done by way of the Plascon Evans test referred to above. One cannot simply ignore the replying affidavit, which is effectively what the first respondent suggests. The evidence and the nature of the business of the first respondent also established that particular expertise of the employees was indeed required. I cannot see a reasonable prospect that another Court would decide otherwise.

[12] The first respondent simply cannot escape the historical context in this case, which is an issue specifically relied on by the applicant. This context leaves little

doubt as to why and then how the applicant and first respondent specifically chose to structure their relationship and the services provided by the applicant to the first respondent in terms thereof. It clearly shows that what was envisaged, and then applied, in this case, was services rendered in a discrete business in which employees were dedicated to the first respondent. The case law applicable to

this historical context, and what followed after that, must surely show that the first respondent has little prospects of success on appeal.

[13] I also remain unpersuaded by the first respondent's arguments relating to the applicant being able to retain substantial components of the business, which showed there was no transfer. In my judgment, I made an analysis of all the objective facts in this regard, which I do not intend to repeat. In the simplest of terms, the facts show that any new service provider would simply step into the shoes of everything the applicant was doing before it left. The 'snapshot’ test referred to by the first respondent, does not support its case, but contradicts it, on the facts. There is no reasonable prospect that another Court would come to a different conclusion in this regard.

[14] Finally, I conducted a proper analysis of why the facts in this case were more aligned with the judgment in Dimension Data (Pty) Ltd and Others v GWB Technologies CC t/a GWB Technologies and Others[8], rather than the judgment in Dimension Data (Pty) Ltd v Omega Digital Services (Pty) Ltd and Another[9]. In its application for leave to appeal, the first respondent is in essence repeating the same arguments raised as before, as to why this case should be aligned to Omega Digital. I remain unconvinced that the first respondent's arguments have substance, on the facts. However, and what these two-judgment’s

indeed show, is how two scenarios based on essentially the same basic factual foundation and arguments, and applying the same legal principles, can lead to two different outcomes, which outcomes are both sustainable, That is simply the nature of section 197 proceedings. These proceedings are truly uniquely case specific and fact specific. It is the kind of determination that this Court as Court of first instance is best suited to decide, with little reasonable prospect that another Court would come to a different conclusion on appeal.

[15] All the above considered, l thus conclude that the first respondent has failed to show that there, exists a reasonable prospect that another Court would come to

a different conclusion, and that the first respondent has little prospect of success

on appeal. The, application for leave to appeal falls to be dismissed. I believe the following dictum from the judgment in Martin & East (Pty) Ltd v National Union of Mineworkers and Others[10] to be appropriate in deciding to refuse leave·to appeal:

'... The Labour Relations Act was designed to ensure an expeditious resolution of industrial disputes. This means that courts, particularly courts in the position of the court a quo, need to be cautious when leave to appeal is granted….'

[16] This only leaves the issue of costs. BY the time when I had concluded this judgment, the applicant had still not engaged in the application for leave to

appeal nor filed submissions, and I will therefore consider that it would be fair that no order as to costs be made in the application for leave to appeal.

[17] In the premises the following order is made:

Order

1. The first respondent's application for leave to appeal is dismissed.

2. There is no order as to costs.

S. Snyman

Acting Judge of the Labour Court of South Africa

[1] Act 66 of 1995 (as amended).

[2] (2019) 40 ILJ 1303 (LC) at para 5.

[3] [2016] JOL 36940 (SCA) at paras 16 - 17.

[4] [1984] ZASCA 51; 1984 (3) SA 623 (A) at 634E-635C.

[5] See Gbenga-Oluwatoye v Reckitt Benckiser SA (Pty) Ltd and Another (2016) 37 ILJ 902 (LAC) at para 16.

[6] [2004] ZACC 20; 2005 (2) SA 359 (CC) at para 53.

[7] 2012 (4) SA 593 (SCA).

[8] (2022) 43 ILJ 1824 (LC).

[9] (2020) 41 ILJ 2453 (LC).

[10] (2014) 35 ILJ 2399 (LAC) at 2405J-2406A