DHL International (Pty) Ltd t/a DHL Express v Commission for Conciliation Mediation And Arbitration and Others (JR 1032/14) [2016] ZALCJHB 256 (20 July 2016)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Case No: JR 1032/14

DATE: 20 JULY 2016

Not Reportable

In the matter between:

DHL INTERNATIONAL (PTY) LTD

T/A DHL EXPRESS..................................................................................................................Applicant

And

COMMISSION FOR CONCILIATION

MEDIATION AND ARBITRATION..........................................................................First Respondent

DUMISANI NGWENYA N.O..................................................................................Second Respondent

SOUTH ARICAN TRADE AND ALLIED

WORKERS UNION...................................................................................................Third Respondent

Heard: 05 July 2016

Delivered: 20 July 2016

Summary:

MYHILL, AJ

Introduction

[1] This is an application, inter alia, to review and set aside the arbitration award issued by the Second Respondent, dated 1 November 2013, under case number GAEK 7263-13. The application was originally opposed by the Third Respondent which filed an answering affidavit and the Applicant filed a replying affidavit. On 4 July 2016 at 11h04, the Third Respondent’s representative, Mr Z. Maphanga, sent the Applicant’s attorneys an email which confirmed a telephone conversation that morning that the Third Respondent no longer intended to oppose the application but just wanted to discuss the question of costs. The matter was set down to be argued in this Court on the morning of 5 July 2016. Mr Maphanga and Mr Belger (Counsel for the Applicant) came to introduce themselves to me in chambers where Mr Maphanga confirmed that the application was no longer opposed by the Third Respondent except for the relief sought that it should pay the costs of the application.

[2] The matter thus proceeded on the basis that the relief sought by the Applicant was no longer opposed by the Third Respondent except for the relief sought that it should pay the costs of the application.

[3] The application was never opposed by either the First or the Second Respondent.

Background

[4] On 4 June 2008, the Applicant and the Third Respondent entered into a Full-Time Shop Steward Agreement (“FSS Agreement”). It is common cause that the FSS Agreement is a collective agreement as defined in the Labour Relations Act No. 66 of 1995 (“the Act”) and was concluded for an indefinite period in terms of section 23 (4) of the Act. During August 2012, the Applicant served a written notice of termination on the Third Respondent, dated 14 August 2012, which gave the Third Respondent three months’ notice of termination of the FSS Agreement. This was done in terms of section 23 (4) of the Act. During October 2012 the Third Respondent delivered a memorandum to the Applicant demanding the Applicant not terminate the FSS Agreement. The Third Respondent referred a dispute in this regard to the National Bargaining Council for the Road Freight Industry but it ended up being arbitrated by the Second Respondent under the auspices of the First Respondent on 16 April 2013. In his award, the Commissioner (Second Respondent) upheld the contention of the Third Respondent that the Applicant could not unilaterally terminate the agreement as clause 44 of such required that termination of the FSS Agreement be by agreement between the parties and in writing. He thus found that the notice of termination was unlawful and the FSS Agreement still subsisted.

[5] It is this finding by the Second Respondent that the Applicant seeks to review in terms of section 145 of the Act.

Grounds of review

[6] Mr Belger submitted that the finding of the Second Respondent was one that no reasonable decision-maker could make on the material before him. The Second Respondent made a reviewable error in finding that clause 44 of the FSS Agreement meant that the said Agreement could not be cancelled by unilateral notice. Clause 44 reads as follows:

‘No alteration, variation or cancellation by agreement of, addition or amendment to, or deletion from this Agreement shall be of any force or effect unless it is in writing and signed by or on behalf of the parties hereto.’

[7] The Second Respondent interpreted this clause in paragraph 21 of his award as follows:

‘It becomes apparent that the instrument prohibited not only unilateral cancellation but also mutual termination of the agreement (FSS) unless same is in writing and signed by or on behalf of both parties. It is clear that the FSS envisaged a cooperation of both parties to dissolve the agreement. Such cooperation must be confirmed in writing and signed by both parties otherwise the cancellation is invalid. It follows, therefore that the FSS precluded the unilateral notice of cancellation of the Agreement in terms of section 23 (4) of the Act.’

[8] Section 23 (4) of the Act reads as follows:

‘Unless the collective agreement provides otherwise, any party to a collective agreement that is concluded for an indefinite period may terminate the agreement by giving reasonable notice in writing to the other parties.’

[9] The Applicant’s case is that clause 44 of the FSS Agreement did not oust the Applicant’s right to unilaterally terminate the FSS Agreement in terms of section 23 (4) of the Act.

[10] In paragraph 32 of the Applicant’s heads of argument, it is submitted that on its plain reading, clause 44 concerns itself with cancellation by agreement of the FSS Agreement and does not deal with or govern the right to unilateral termination of a collective agreement conferred on the parties by section 23 (4) of the Act.

[11] I agree with this submission. When one removes the irrelevant words such as “alteration” and “variation” from the clause, it simply reads that ‘No … cancellation by agreement of …this Agreement shall be of any force or effect unless it is in writing and signed by or on behalf of the parties hereto’. There is no mention of unilateral cancellation of the FSS Agreement and there was no “cancellation by agreement” so clause 44 did not apply to the unilateral termination of the FSS Agreement sent to the Third Respondent by the Applicant, dated 14 August 2012.

[12] The Third Respondent thus erred in his understanding of clause 44 of the FSS Agreement and this caused him to find that the notice of termination of the FSS Agreement was of no force or effect and invalid. I agree with the Applicant that this was an error that no reasonable arbitrator could have reached on the material before him. It amounts to misconduct in relation to his duties as an arbitrator.

[13] In addition, I agree with Mr Belger that the Second Respondent’s interpretation of clause 44 of the FSS Agreement would result in it being impossible to cancel the said Agreement unless both parties agreed in writing to such cancellation. I agree with the Applicant that this interpretation is “irrational, impractical and manifestly absurd” (paragraph 35 of Heads of Argument).

[14] In paragraph 33 of the Applicant’s Heads of Argument it is submitted that in interpreting the FSS Agreement the Second Respondent was required to consider the aim, purpose and all the terms of the collective agreement and that a collective agreement is not like an ordinary contract:

‘The primary objects of the Act are better served by an approach that is practical to the interpretation of such agreement, namely to adopt an interpretation that is fair to the parties.’

[15] One of the primary objects of the Act is to promote orderly collective bargaining. The interpretation of the Second Respondent is not in keeping with this object. The Applicant pointed out in paragraph 35 of its heads that the effect of the award is that even where a party is in breach of the FSS Agreement the written agreement of such party will be required for the termination. This would be irrational.

[16] The interpretation of the said clause is also inconsistent with the principle of voluntarism. In paragraph 37 of the heads the applicant

referred to the case of National Police Services Union and Others v National Negotiation Forum and Others[1] as authority in this regard. In paragraph 39 of the heads it is submitted that binding the Applicant to a collective agreement of which it does not desire to be a party flies in the face of the fundamental principle of voluntarism underpinning the dispensation of collective bargaining.

[17] For these reasons, I agree that the award of the Second Respondent falls to be reviewed and set aside in terms of section 145 (2) of the Act as it is defective.

[18] The Applicant further seeks an order declaring lawful and valid the termination of the FSS Agreement in terms of section 23 (4) of the Act.

[19] I have found that the FSS Agreement did not preclude the Applicant from terminating the Agreement in terms of section 23 (4) of the Act so the only remaining issue in this regard is whether the said notice was reasonable. Mr Belger referred me to the case of SA Federation of Civil Engineering Contractors and Another v Union of Metal Workers of SA and Others[2] in which it was held that “reasonable notice” in terms of section 23 (4) of the Act depends on the nature of the collective

agreement in question and the facts and circumstances of each case.

[20] In the particular case before me, the object of the collective agreement was to set out the basis of the election of the full-time shop steward. In its notice of termination of service, dated 14 August 2012, the Applicant set out its reasons for wanting to terminate the FSS Agreement which included such causing friction between the full-time shop steward and other shop stewards employed by the Applicant and the Applicant no longer seeing any need for an agreement of this nature when a Recognition and Procedural agreement was in place. The latter agreement deals with the election and the rights and duties of shop stewards at the Applicant. The validity of these reasons was not contested by the Third Respondent in the correspondence attached to this application. The basis of its objection was that the termination was unilateral.

[21] In the circumstances, I find that the three months’ notice period was reasonable.

[22] I finally have to deal with the issue of whether the Third Respondent should be ordered to pay the costs of this application.

[23] Mr Belger submitted that the Third Respondent chose to oppose this application and that there is no reason why the costs should not follow the result. Mr Maphanga submitted that taking into consideration the ongoing working relationship between the parties and the fact that the Third Respondent had withdrawn its opposition to the relief sought, it would be inappropriate to order the Third Respondent pay the costs.

[24] In such matters, costs do usually follow the result unless special circumstances exist to find otherwise. I have not been persuaded that any such special circumstances exist. The Third Respondent chose to oppose this application which resulted in the filing of an answering affidavit to which the Applicant replied. The Third Respondent has not shown any reasonable basis for refusing to accept the notice of termination of the FSS Agreement during August 2012 or for opposing the relief sought in this application. It withdrew its opposition the day before the matter was heard.

[25] In the result, I make the following order:

25.1 The arbitration award issued by the Second Respondent, dated 1 November 2013, under case number GAEK 7263-13 is reviewed and set aside;

25.2 The termination of the Full-Time Shop Steward Agreement, dated 4 June 2008 in terms of section 23 (4) of the Labour Relations Act 66 of 1995 is declared lawful and valid;

25.3 The order in paragraph 25.2 above is effective from 1 December 2012;

25.4 The Third Respondent is ordered to pay the costs of this application.

Myhill, AJ

Acting Judge of the Labour Court

Appearances:

For the Applicant: Advocate P W Belger

Instructed by: Cowan Harper

For the Third Respondent: Mr Maphanga (Union Offcial)

Instructed by: SATAWU

[1] (1999) 20 ILJ 1081 (LC).

[2] (2013) 34 ILJ 2084 (LC) at para 22.