Association of Private Security Owners of South Africa v Registrar of Labour Relations (C688/19) [2021] ZALCCT 68 (20 September 2021)

IN THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN

Not Reportable

Case no: C688/19

In the matter between:

THE ASSOCIATION OF PRIVATE SECURITY OWNERS

OF SOUTH AFRICA Appellant

and

REGISTRAR OF LABOUR RELATIONS Respondent

Date heard: 13 May 2021 by virtual hearing

Delivered: 20 September 2021 by means of email. Deemed to be received on the 21 September at 10.00 hrs.

JUDGMENT

RABKIN-NAICKER J

[1] The appeal is before me in terms of Section 111(3) of the LRA. It was brought after the respondent (the Registrar) refused to register the appellant (TAPSOSA). He did so on the basis that TAPSOSA is not a genuine employer’s organization. It is trite that an appeal under this section of the LRA is one ‘in the wide sense’.

[2] Section 95 of the LRA deals with the registration of trade unions and employers’ organisations. It provides:

“95 Requirements for registration of trade unions or employers' organisations

(1) Any trade union may apply to the registrar for registration if-

(a) it has adopted a name that meets the requirements of subsection (4);

(b) it has adopted a constitution that meets the requirements of subsections (5) and (6);

(c) it has an address in the Republic; and

(d) it is independent.

(2) A trade union is independent if-

(a) it is not under the direct or indirect control of any employer or employers' organisation; and

(b) it is free of any interference or influence of any kind from any employer or employers' organisation.

(3) Any employers' organisation may apply to the registrar for registration if-

(b) it has adopted a constitution that meets the requirements of subsections (5) and (6), and

(c) it has an address in the Republic.

(4) Any trade union or employers' organisation that intends to register may not have a name or shortened form of the name that so closely resembles the name or shortened form of the name of another trade union or employers' organisation that it is likely to mislead or cause confusion.

(5) The constitution of any trade union or employers' organisation that intends to register must-

(a) state that the trade union or employers' organisation is an association not for gain;

(b) prescribe qualifications for, and admission to, membership;

(c) establish the circumstances in which a member will no longer be entitled to the benefits of membership;

(d) provide for the termination of membership;

(e) provide for appeals against loss of the benefits of membership or against termination of membership, prescribe a procedure for those appeals and determine the body to which those appeals may be made;

(f) provide for membership fees and the method for determining membership fees and other payments by members;

(g) prescribe rules for the convening and conducting of meetings of members and meetings of representatives of members, including the quorum required for, and the minutes to be kept of, those meetings;

(h) establish the manner in which decisions are to be made;

(i) establish the office of secretary and define its functions;

(j) provide for other office-bearers, officials and, in the case of a trade union, trade union representatives, and define their respective functions;

(k) prescribe a procedure for nominating or electing office-bearers and, in the case of a trade union, trade union representatives;

(l) prescribe a procedure for appointing, or nominating and electing, officials;

(m) establish the circumstances and manner in which office-bearers, officials and, in the case of a trade union, trade union representatives, may be removed from office;

(n) provide for appeals against removal from office of office-bearers, officials and, in the case of a trade union, trade union representatives, prescribe a procedure for those appeals and determine the body to which those appeals may be made;

(o) establish the circumstances and manner in which a ballot must be conducted;

(p) provide that the trade union or employers' organisation, before calling a strike or lock-out, must conduct a ballot of those of its members in respect of whom it intends to call the strike or lock-out;

(q) provide that members of the trade union or employers' organisation may not be disciplined or have their membership terminated for failure or refusal to participate in a strike or lock-out if-

(i) no ballot was held about the strike or lock-out; or

(ii) a ballot was held but a majority of the members who voted did not vote in favour of the strike or lock-out;

(r) provide for banking and investing its money;

(s) establish the purposes for which its money may be used;

(t) provide for acquiring and controlling property;

(u) determine a date for the end of its financial year;

(v) prescribe a procedure for changing its constitution; and

(w) prescribe a procedure by which it may resolve to wind up.

(6) The constitution of any trade union or employers' organisation which intends to register may not include any provision that discriminates directly or indirectly against any person on the grounds of race or sex.

(7) The registrar must not register a trade union or an employers' organisation unless the registrar is satisfied that the applicant is a genuine trade union or a genuine employers' organisation.”

[3] Section 95(7) comprises a peremptory provision. The Registrar must not register an employer’s association unless he is satisfied it is genuine. In determining whether a trade union or employers' organisation is a genuine trade union or employers' organisation, the Minister published certain guidelines in terms of s 95(8) of the LRA. Clause 1 of the guidelines provides as follows:

'This document contains guidelines published by the Minister of Labour, in consultation with Nedlac, that are to be applied by the Registrar of Labour Relations in determining whether an applicant for registration in terms of the Labour Relations Act (LRA) is a genuine trade union or a genuine employers' organisation. In terms of section 95(7) of the Labour Relations Act, I the Registrar may only register a trade union or an employers' organisation if the Registrar is satisfied that it is a genuine trade union or a genuine employers' organisation. In addition, in terms of section 106(2A) of the LRA, the Registrar may cancel the registration of a trade union or an employers' organisation that is not, or has ceased to function as, a genuine trade union or employers' organisation, as the case may be.'

[4] Clause 3 of the guidelines provides as follows:

'In order to determine whether an organisation is genuine, it will be necessary for the Registrar to examine the actual operation of the organisation. In the case of an applicant, particular attention will have to be paid to the manner in which the organisation was established and formed. In the case of an existing organisation, attention will have to be paid to its actual activities and

functioning. In evaluating whether a trade union or employer's (sic) organisation is genuine, the Registrar must take into account all relevant factors.'

[5] Clause 32 of the guidelines deals with the fact that an employers' organisation may not be an organisation for gain. The purpose of this requirement is to prevent employers' organisations from being used as vehicles to enrich individuals or as a cover for profit making in business. In evaluating whether an employers' organisation has a genuine financial operation, it is important to examine its actual financial operation. The factors which the registrar may take into consideration that may indicate that an employers' organisation is in fact operating for the gain of individuals are that unrealistically high salaries or allowances are paid to the officials, office-bearers or employees of the employers' organisation; interest free or low interest loans are made to officials, office-bearers or employees, and those loans are not repaid; family members of office-bearers or officials are employed by the employers' organisation and income earned by the employers' organisation is not used for the benefit of the organisation and its members, but is paid out to officials, office-bearers or employees.[1]

[6] Clause 34 of the Guideines reads follows:

'Usually the major source of revenue for employers' organisation is likely to be a subscription paid on a regular basis. The financial arrangements made with members of an employers' organisation in respect of litigation, particularly dismissal disputes, may be an indicator whether the employers' organisation is in fact operating for the gain of certain individuals.' The LAC has stated that:

“[35] In deciding whether a trade union or employers' organisation is genuine, the registrar must inter alia give particular attention to the manner in which the organisation was established and formed. In the case of an existing organisation, attention must be paid to its actual activities and functioning. In evaluating whether a trade union or employers' organisation is genuine, the registrar must take into account all relevant factors.

[36] The functions of the registrar are set out in s 109 of the LRA. This includes keeping a register of registered employers' organisations

etc. He fulfils an important regulatory and custodial function in terms of the LRA and is responsible for protecting members of the public against some of the serious consequences which they may suffer when dealing with unscrupulous trade unions and employers'

organisations which either do not comply with the provisions of the LRA and/or are not genuine organisations but, in fact, profit making enterprises. The registrar has a discretion when exercising his powers in terms of s 106(2A) of the LRA. He has wide powers and must still act within the confines of the law and give reasons for his decision. He must allow an applicant to make representations before making his decision. He does not have unfettered powers in terms of the LRA.”

[7] It is common cause that the application for registration in this case is the third application made by the appellant, although there has been a change of name in that the organization sought to be registered - it has changed from TAAPSOSA to TAPSOSA. In the previous applications, the Registrar requested requisite information which was not forthcoming. On the 12 June 2019, in this the third application, the Registrar informed the appellant that it did not meet the requirements for registration in terms of section 96(4) of the LRA.

[8] The appellant was asked to provide supporting information by the Registrar in order to satisfy him that it was genuine. The record reflects that 15 items were requested by him. I first deal with the request for minutes.

[9] The Minutes requested were those of the meeting where the organization was established, as well as all other minutes held along with attendance registers including the names of members, their contact details and signatures and the names of the companies they own.

[10] The appellant did submit the Minutes of Meetings dated 24 July 2018, 6 September 2018, 20 September 2018 and 28 October 2018. Those dated 24 July 2018 had no signed register. The Registrar submits that it was thus impossible for him to determine whether the persons attending were in fact employers associated together. In addition, the minutes reflect the appointment of an acting president and an acting secretary at the meeting. It is pointed out by the Registrar that the constitution of the appellant does not make provision for interim appointments and there is no information contained in the minutes as to when and how these persons were elected.

[11] There was also no signed register for the minutes dated 6 September 2018 when the appellant was formed. It appears from them that 8 people were in attendance. The name and logo of the association were adopted as well as the constitution. There is no reflection of any deliberation over the adoption of the constitution. In this meeting seven of the eight people appear to have assigned positions to themselves. The Registrar submits that while the appellant has a membership of 18 paid up members, there is no indication that there was a democratic decision making process characteristic of a genuine employers’ organization.

[12] The minutes of the meeting dated 20 September 2018 were not accompanied by an attendance register. They reflect that the previous minutes were adopted and that a lawyer on retainer would secure office space and a bank account. There is no indication that the meeting was quorate. The final set of minutes received by the Registrar dated 24 October 2018 were of an ‘exco’ meeting. These also did not have an attendance register.

[13] It is indicated on behalf of the Registrar that additional minutes were filed on behalf of the appellant (for January, February and March 2019). These had not been placed before the Registrar although he requested the following in his section 96(4) notice wherein he asked for: “minutes of meetings where the organization was established and all other minutes of meetings held along with attendance registers which include the names of members, their contact details and signatures as well the names of companies they own.”

[14] In addition to the request for minutes, information was duly requested as to the office bearers, their companies and their officials, along with CVs of their officials. An incomplete list was submitted with only 5 CVs attached. There was no indication of the companies they own but a separate document was submitted listing 17 companies. The minutes do reflect that a certain lawyer one Jackson Simon would be “the National coordinator of TAPSOSA on a contract basis”. No CV, contract or further information was submitted in respect of the appointment. However, what was evident from the minutes was that each of the 8 members present were required to pay R15,000.00 each towards a retainer for his fees.

[15] Despite being asked by the Registrar to submit certified bank statements and confirmation of signatories of same, these were not forthcoming. Instead of submitting proof of income and expenses as required the appellant sent a financial statement for the year ended February 2019. The Registrar submits that this served to deepen his concerns over the whether the respondent was a genuine employers’ organization. The statement reflects that the respondent operates as Trust formed by “Mrs X dated 1 March 1900”. The trustee report is signed on 31 March 2019 by one Robert Ndivhuwo, an executive, whose further details are unknown to the Registrar.

[16] A further request made by the Registrar was proof of evidence of an address within the Republic as required by section 95 (3)(c). A copy of a lease agreement was forwarded to him. On its face the lessor appears to be the Appellant’s treasurer-general, Mr Nemutandana. The appellant’s signatory to the lease agreement is one Zandile Nkosi. The witnesses who signed the agreement are not identifiable since they did not provide their full names The agreement states that the Lessor shall furnish the lessee with written receipt for all payments made by the Lessee, but no evidence was provided that rent was regularly paid. The Registrar called for supporting documents to establish that the lease agreement was genuine in his section 94(4) notice but to date of the appeal none had been submitted. The Registrar does not therefore accept that the Appellant has a legitimate address in the Republic.

[17] The notice of appeal against the Registrar’s decision essentially states that he erred in his determination that the organization was not a genuine employer’s organization. Representation of the appellant changed during the course of this Appeal. I rely on the submissions made on behalf of the appellant at the hearing of this matter. These do not differ markedly from the first submissions that had been filed of record, save for submitting that there was a procedural defect in the decision-making of the Registrar.

[18] The appellant submits that the Registrar did not comply with his statutory obligations in terms of section 96 by failing to provide the appellant with 30 days to meet any purported requirements. His decision should thus be set aside. Section 96 of the LRA provides:

“96 Registration of trade unions or employers' organisations

(1) Any trade union or employers' organisation may apply for registration by submitting to the registrar-

(a) a prescribed form that has been properly completed;

(b) a copy of its constitution; and

(c) any other information that may assist the registrar to determine whether or not the trade union or employers' organisation meets the requirements for registration.

(2) The registrar may require further information in support of the application.

(3) The registrar-

(a) must consider the application and any further information provided by the applicant; and

(b) if satisfied that the applicant meets the requirements for registration, must register the applicant by entering the applicant's name in the register of trade unions or the register of employers' organisations.

(4) If the registrar is not satisfied that the applicant meets the requirements for registration, the registrar-

(a) must send the applicant a written notice of the decision and the reasons for that decision; and

(b) in that notice, must inform the applicant that it has 30 days from the date of the notice to meet those requirements.

(5) If, within that 30-day period, the applicant meets the requirements for registration, the registrar must register the applicant by entering the applicant's name in the appropriate register.

(6) If, within that 30-day period, an applicant has attempted to meet the requirements for registration but the registrar concludes that the applicant has failed to do so, the registrar must-

(a) refuse to register the applicant; and

(b) notify the applicant in writing of that decision.

(7) After registering the applicant, the registrar must-

(a) issue a certificate of registration in the applicant's name; and

(b) send the certificate and a certified copy of the registered constitution to the applicant.”

[19] It is the appellant’s argument (not contained in the initial Notice of Appeal) that in asking for further information on the 12 June 2019, the Registrar was acting in terms of section 96(2) of the LRA and not section 96(4). This is despite the fact that the letter sent by the Registrar on the 12 June 2019 in its final paragraph states that:

“..you are hereby given written notice that you application does not meet the requirements for registration and you are given 30 days from the date of this letter to meet those requirements in terms of section 96(4).”

[20] This approach is misconceived given that section 96(2) is discretionary in nature. The statute does not make it mandatory for the Registrar to first send a letter in terms of section 96(2) before he can send out the section 96(4) Notice requesting further specific information, and put an applicant on 30 days’ notice to provide same. In circumstances, such as the matter before me, when persons are making a third attempt to register an organization, it is highly unlikely that the Registrar would exercise his discretion to request additional information in terms of section 96(2). That the organization had been attempting registration before is acknowledged by the appellant in its submissions where it states:

“The respondent expressed concern that there was already a leadership in place when the appellant was formed on 6 September 2018 However, it is clear from the minutes of the 24 July 2018 Meeting that an unsuccessful attempt had been made to register an employers’

organisation called “TAAPSOSA”. If so, that organization would have been formed and would have had a leadership that is reflected in the minutes of the 24 July 2018 Meeting.”

[21] Over and above its reliance on a procedural defect in the Registrar’s decision, dealt with above, the appellant, with reliance on some further bank statements and minutes as new evidence, answers the Registrar’s grounds for refusal to register in the following way:

21.1 That there was nothing untoward in those present at the 24 July 2018 meeting deciding that each of them would contribute financially to contribute to secure the services of an expert legal adviser;

21.2 That it is difficult to understand the respondent’s concern that there were only seven members present at the adoption of the constitution. Membership forms show that most members joined after the meeting of the 6 September 2018 and could thus not have been party to that decision. There is no requirement that an employer’s organization has a minimum number of members.

21.3 The lack of attendance registers should be of no moment as “the minutes signed by the President go a long way to showing that the appellant is a genuine employer’s organization and there is insufficient reason to doubt the veracity of the minutes.

21.4 The names of companies that are owned by the office-bearers appears in the minutes of the meeting of 6 September and in the CVs of certain of the office bearers.

21.5 There cannot be a complaint regarding employment contracts for officials as the appellant has no officials.

21.6 Mr Simon provides an expert service as a consultant “and is not necessarily an employee of the organization”.

21.7 Appellants bank accounts show that there have been regular payments by its members into it. “It should also be recalled that certain members paid a large lump sum upfront which thus negate the need for ongoing monthly payments.”

21.8 “Rent payments in respect of office space were made. Whether or not rent payments were made does not affect the fact that the appellant has a registered address within the republic as set out in the lease agreement.”

21.9 “The fact that the appellant has spent money on consulting and professional fees is not of concern. It is a new organization that required assistance in the process of establishing itself.”

[22] The above submissions go nowhere towards dispelling the concerns expressed by the Registrar as to whether the appellant is genuine. It may be worth revisiting the Labour Relations Amendment Bill, 2000 Explanatory Memorandum drawn up before the amendments to the LRA were enacted in 2002 which dealt with the reasons behind amendments to section 95 of the LRA:

“19 Registration of Trade Unions and Employers' Organisations - Amendments to Section 95

19.1 The 1995 Labour Relations Act introduced a simplified registration procedure. The Registrar must register a trade union or employer's organisation that has applied for registration in the prescribed manner if he is satisfied that it is a trade union or employers' organisation as defined in the Act, that its constitution complies with the Act and that it is non-discriminatory and is appropriately named. In addition, trade unions must be independent of employer influence.

19.2 Significant benefits flow from registration of trade unions and employers' organisations, in particular, the right to refer disputes to the CCMA and the Labour Court and to represent their members in these disputes.

19.3 Since the enactment of the 1995 Labour Relations Act there has been a significant increase in the number of trade unions and employers' organisations. A significant number of these are no more than disguised labour consultancies that have registered for the sole purpose of gaining appearance rights at the CCMA and Labour Court…….

19.6 The operation of certain labour consultancies that have registered as employers' organisations undermine effective dispute resolution. These organisations tend to recruit their members from small businesses that are inexperienced in respect of labour relation's matters. Once gullible employers have joined, they are frequently faced with exorbitant fees.

19.7 This creates a negative impression of the Labour Relations Act and its dispute resolution institutions and undermines the efforts of genuine organisations participating in collective bargaining structures to recruit such employers. This in turn negatively impacts on the participation by certain employers, including small employers in bargaining councils.

19.8 The proposed amendments to section 95 are intended to discourage the formation and registration of trade unions and employers' organisations that are not genuine, by introducing a requirement that they be genuine or bona fide and giving the registrar of labour relations the power to refuse to register organisations which are not. The Minister will have the power to issue guidelines concerning whether or not a trade union or employers' organisation is bona fide. Any refusal to register a trade union on these grounds will be subject to appeal to the Labour Court.

19.9 The International Labour Organisation has expressed the view that this is in keeping with its standards concerning the promotion of collective bargaining and freedom of association.”

[23] I am satisfied that the Registrar’s decision that the organization cannot be registered is correct, given the numerous deficiencies in the application for registration he has considered, as well as the reservations expressed as to the role of the ‘consultant’, the nature of the rental agreement, and the information given as to the establishment of the ‘trust’. His decision that the organization is not a genuine employers’ organization must be upheld.

[24] In all the circumstances, I make the following order:

Order

1. The appeal under section 111 of the Labour Relations Act is dismissed.

H.Rabkin-Naicker

Judge of the Labour Court

APPEARANCES:

Appellant: ACJ van Dyk instructed by AH Stander Attorneys

Respondent: Advocate Veronique Barthus instructed by the State Attorney

[1] Registrar of Labour Relations v Consolidated Association of Employers of SA Region (2015) 36 ILJ 182 (LAC)