Lenmed Ethekwini Hospital v Commission for Conciliation,Mediation and Arbitration(CCMA) and Others (D1001/19) [2022] ZALCD 27 (8 July 2022)

IN THE LABOUR COURT OF SOUTH AFRICA, DURBAN

Not Reportable

Case No: D1001/19

In the matter between:

LENMED ETHEKWINI HOSPITAL

APPLICANT

And

COMMISSION FOR CONCILIATION, MEDIATION

AND ARBITRATION (CCMA)

FIRST RESPONDENT

COMMISSIONER PERUMAL MERVYN NAIDOO SECOND RESPONDENT

HOSPERSA

Third Respondent

Heard: 18 May 2022

Delivered: This judgment was handed down electronically by circulation to the parties and / or their legal representatives by email. The date and time for handing-down is deemed 10h00 on 8 July 2022.

Summary: Opposed review

EX-TEMPORE judgment

LAWRENCE AJ

[1] This is an application to review and set aside the finding of the second respondent dated the 30 June 2019. The arbitration award issued by the arbitrator related to an application brought by the third respondent, in terms of Section 21 of the Labour Relations Act 66 of 1995 (“the act”), to obtain organisational rights on the basis of the third respondent being sufficiently

representative within the workplace of the applicant in this matter.

[2] It is common cause that the representatives of the applicant and third respondent elected to submit written arguments to the arbitrator and no evidence was adduced during the conduct of the arbitration proceedings. The argument submitted to the arbitrator are

contained in the index to the record at pages 7 to 39.

[3] The crisp issue before the arbitrator was essentially whether the applicant was sufficiently representative of employees to qualify for organisational rights in terms of Section 12 and 13 of the Act.

[4] In the survey of submissions and argument by the arbitrator, it was noted that the applicant had attempted since 2017 to recruit members from amongst the workforce of the applicant. On the 27 October 2017, subsequent to the third respondent having referred a dispute to conciliation before the CCMA relating to the issue of organisational rights, a settlement agreement was reached between the parties which also appears in the index to the record.

[5] A verification exercise was conducted by the CCMA subsequently to assess the representativity of the applicant.

[6] In his award the arbitrator refers to the relevant aspects of that settlement agreement and refers specifically to the following

excerpt:

“The respondent affirms that the law in respect of freedom of association and undertakes to ensure that its management does not interfere with the rights of employees of the hospital to join any Trade Union or of their choices subject to the provisions of Section 12 of the LRA”.

[7] It was further common cause between the parties that the applicant employed a total workforce of some 538 employees. The total

employee membership of the applicant numbers 102 employees according to the common cause facts.

[8] According to the applicant’s closing argument the third respondent had a representativity of some 18.9 percent. After receiving the submissions from the applicant and third respondent the arbitrator proceeded to refer to the provisions of Section 21(8) of the Act and found inter alia that:

“The Labour Relations Act does not provide a statutory definition of what would constitute sufficient representation for a Trade Union to acquire organisational rights.

While the respondent referred me to SACTU v Sheraton Textiles (Pty) Ltd (1997) by stating that the case places sufficient representation at 30 percent, it must be noted that this figure is provided for in Section 39 of the Act where unions want to establish statutory

councils at sectoral level.

It is further important to note that Commissioner Murphy in the very case confirmed that determination of sufficient representativity

is not about numbers. The arbitrator is required to have regard to the interest represented by a Trade Union and not exclusively by the numerical representativeness of employees.

The applicant in this matter is a major player in the Private and Public Health Sector. There is no other Trade Union activity in the workplace. The applicant commenced organising at the respondent since the 2017. Had the respondent engaged with it in a constructive manner the matter would have been resolved between themselves in that very year instead of the applicant asking for the CCMA to intervene on a number of occasions.”

[9] In his analysis of the evidence and argument, which included the submissions rendered by both the applicant and third respondent, the arbitrator proceeded to grant the third respondent Trade Union access to the workplace in terms of Section 12 of the act and deduction of Trade Union subscriptions in terms of Section

[10] After receipt of the award, the applicant launched the present review proceedings in this court on the 3 July 2019. In the initial affidavit filed by the applicant, in support of its review application, it sought to impugn the award on the grounds as are listed in Section 145(2)(a)(i) to (iii). The applicant also contended that the award was not a reasonable and objective

decision that could have been properly derived by an arbitrator.

[11] In essence it was contended that the award was reviewable in that the findings by the arbitrator that the representative is not the sole factor, is flawed and the CCMA was obliged to consider the factors set out in Section 21(8)(a)-(b)of the act. Further contentions by the applicant are that: -

(i) The CCMA created a practise whereby sufficient representivity was based upon unions having in excess of 25 percent representation of employees in the workplace.

(ii) The CCMA traditionally referred to Section 39 of the act in terms of which it had utilised the threshold for establishment of statutory councils, namely 30 percent as a guideline.

(iii) The arbitrator had ignored years of precedent in regard to effectively granting the third respondent organisational rights when its representativity was only at the level of 18.9 percent.

[12] In a supplementary affidavit, subsequently filed by the applicant on the 10 October 2019, reference was made to the decision of NUMSA v Lufil Packaging (2019) 40 ILJ 2306 (LAC). In referring to the judgment the applicant contended that the Labour Appeal Court had emphasised that the union is required to act in accordance with its constitution in regard to various issues including membership. In this regard it was further contended that the 102 employees which the applicant had previously accepted as members of the third respondent were not actually members of the third respondent. In supporting this submission, the applicant made reference to the constitution of the third respondent which was attached to the supplementary affidavit. In attached constitution of the third respondent, the applicant made reference to clauses 6.5 to 6.7 thereof. I will not read the full details of those references, but it is included in my judgment.

[13] In making reference to the above, the applicant went on to contend that until the first membership fee is paid commencement of the employees’ membership is deferred. The applicant further stated that it had come to its attention subsequent to the award that certain of the 102 employees had resigned from the third respondent and in fact the applicant had also learnt that they had never been members of the third respondent. In this regard confirmatory affidavits of 13 employees were attached to the supplementary affidavit in support of this.

[14] The applicant also went onto to contend that it had instructed its attorneys to proceed with a variation application in regard to the award handed down by the arbitrator on the strength of these 13 confirmatory affidavits that it had procured.

[15] As such the applicant, in its heads of argument, seeks to distance itself from what it had originally accepted as common cause, namely the representativity of the third respondent being at 102 employees.

[16] Its argument presently is that from the outset the third respondent did not have locus standi at the CCMA by virtue of the non-payment of the third respondent’s membership fees and as such cannot act in its own capacity on behalf of non-existing members.

[17] This submission is generally made in respect of all 102 employees and beyond the 13 employees whose confirmatory affidavits were attached to its supplementary affidavit.

[18] The applicant relies, in its heads of argument, on a contention by the third respondent at paragraph 33 of its replying affidavit where the following is stated”

“It is self-evident that membership dues would only be received once the applicant processes the membership forms with which it has been presented and grants the stop order facilities that has been ordered …”

[19] This culminates in the applicant arguing that the award of the arbitrator is reviewable on account of the fact that he failed to take into account relevant considerations as are set out in Section 21(8)(a) to (b) of the act. According to the applicant, at best the employee membership of the third respondent would be at 16.54 percent and at worse 0 percent (if it were to be accepted as a general proposition that none of the 102 employees had paid their membership fees in terms of the third respondent’s constitution).

[20] The third respondent, in opposing the review application, took issue with the applicant allegedly impermissibly seeking to adduce material after the fact of the arbitration award.

[21] In its heads of argument, the third respondent contends that:

(i) It was common cause that the applicant employs 538 employees.

(ii) The third respondent’s total membership was 102 persons representing 19 percent of the workforce.

(iii) No other Trade Union enjoyed organisational rights at the applicant’s workplace.

(iv) The applicant is not entitled on review to rely on arguments and issues that were not raised in its founding affidavit.

[22] The third respondent goes on to contend that a review application is not an opportunity to lead fresh evidence and this Court is limited to consider only the evidence of that has been placed before the arbitrator.

[23] As regards the issue of sufficient representativity, the third respondent maintains that a representative Trade Union is not defined

in the Act and that the arbitrator properly and correctly took into account the circumstances of the applicant in determining to award Section 12 and 13 organisational rights as per the act.

Analysis

[24] The Lufil Packaging case supra, referred to by the applicant in its supplementary affidavit, went to the Constitutional Court. The Constitutional Court upheld the decision of the Labour Appeal Court confirming that NUMSA was bound by the limitations it had placed on itself in its own constitution as to the scope of its organising reach. In the course of the judgment the Constitutional Court reasoned that if NUMSA merely

amended its constitution to widen its scope of organising, to include the paper and packaging industry, in which Lufil operates, it would not have encountered the problems it did.

[25] I have had regard to the provisions of the third respondent’s constitution, particularly clauses 6.5 to 6.7, to which I have

already referred and the fact that employee members’ membership (and entitlement to enjoy the benefits of membership) may, subject to certain exceptions be deferred until the date of payment of the particular employee’s membership fees.

[26] These clauses may very well have had a bearing on the determination of the matter before the arbitrator, but this was not an issue that the arbitrator was required or for that matter able to determine.

[27] In fact, the parties specifically agreed common cause facts which included the fact that the third respondent enjoyed representativity

of some 102 employee members which in essence constituted representativity of around 18,9 percent. The arbitrator was essentially called upon to decide whether or not the representativity of 18.9 percent (on the applicant’s own version in its closing argument) was sufficient to pass muster of sufficient representativity.

[28] In the founding affidavit that was filed by the applicant, in this matter, it went on to persist with the line of argument that

representativity of 18.9 percent is not sufficient and the arbitrator did not properly apply his mind in coming to the outcome that he did.

[29] It was only at the juncture of filing its supplementary affidavit, which occurred proximate to the time that the Labour Appeal Court issued its judgment in the Lufil Packaging case, that the applicant seized upon the opportunity to alter its case.

[30] In its supplementary affidavit, it seeks to speculatively raise issue that the 102 employees may not have paid their first membership fees in terms of the third respondent’s constitution and as such the third respondent has no locus standi to contend for organisational rights as it is done. This contention in itself, of the third respondent not having locus standi in terms of the constitution, is not supported by any evidence that was placed before the arbitrator. At best the applicant as part of its supplementary affidavit puts up 13 affidavits, after the fact of the arbitration, in terms of which the deponents state that they had not paid their first membership fees to the third respondent and had in fact resigned their membership.

[31] The applicant later on its heads of argument grasped that at contents of the solitary statement made at paragraph 33 by the third respondent, in the replying affidavit, to reinforce its otherwise threadbare speculation that the third respondent had no membership at the applicant.

[32] The Lufil Packaging decision, both at the Labour Appeal Court and subsequently by the Constitutional Court, has limited bearing on this matter. The facts between the Lufil packaging matter and this case are different and distinguishable for a host of reasons including, but not limited to the fact that:

(i) In the Lufil Packaging decision, the argument about the locus standi of NUMSA was raised before the arbitrator not subsequent to the arbitration proceedings.

(ii) The issue raised in Lufil Packaging was about NUMSA “swimming outside of its pool and recruiting members outside of its specified

scope in its constitution”.

[33] It is with respect impermissible for this Court to take into account facts and information that were not placed before the arbitrator.

[34] This is generally the position except in instances, for example, where evidence of bias or corruption emerges subsequently and would likely have had an impact or bearing on the regularity or proper assessment of the matter. It bears mentioning further in this regard that the 13 affidavits that the applicant has attempted to introduce into the context of this review proceeding have not been tested as evidence. Notwithstanding this, in my view these affidavits even if accepted after the fact of the arbitration and at face value, would not have had any material impact upon the assessment of sufficient representativity.

[35] On the applicant’s own version this would merely mean that the third respondent’s representativity would be reduced from 18.9 percent to 16.5 percent. The difference is negligible and having regard to the facts of this matter it would appear that even at 16.5 percent this ought to be sufficient to pass master as sufficient representativity.

[36] The reliance on paragraph 33 of the replying affidavit of the third respondent is with respect ill-conceived and cannot be speculatively

assumed to categorically establish that the third respondent had no members within the applicant.

[37] In regard to the remaining grounds upon which the applicant has sought to impugn the award of the arbitrator, this similarly is without substance. Contrary to what was contended by Mr Kirby Hurst, is apparent that from an examination, of the outcome of the arbitration award, that the arbitrator properly took into account the factors that he is enjoined to consider under Section 21 of the act.

[38] The fact that he may not have mentioned each specific fact he took into account does not necessarily detract from the reasonableness of his award.

[39] The case law is replete with decisions that indicate the approach that the reviewing court must adopt in assessing reasonableness of an award and it is not necessary for me to repeat those decisions in this judgment. Materially the arbitrator had regard to the fact that the third respondent had for some time been attempting to gain organisational rights from the applicant and was the only union organising within the applicant.

[40] For the reasons set out above I am not satisfied that the award of the second respondent is reviewable.

[41] As to costs, it was argued by Mr Schuman that the costs should follow the result bearing in bind the conduct of the applicant who in bringing this review had purposefully stymied the third respondent from exercising its organisational rights for close on three years and this had significant financial and other implications for the third respondent. Mr Kirby Hurst has correctly argued that one needs to be mindful of preserving the prospect of a relationship between the applicant, the third respondent and its members. It would no doubt have a chilling effect on the relationship if costs were to be awarded. Other than what Mr Schuman has pointed to about the effect that the conduct of review has had, there are no other facts that have been placed before me that merit punishing the applicant with a costs order.

[42] I am further mindful of the dicta of the Constitutional Court in National Union of Mineworkers obo Masha and others v Samcor Ltd Eastern Chrome Mines and others 2021 (10) BCLR 1191 (CC) where the following is stated:

“It is a trite principle of our law that a Court considering an order of costs exercise a discretion. This discretion is to be exercised

judiciously and in accordance with the correct principles of law”

[43] I make the following order:

1) The applicant’s application to review and set aside the award of the second respondent is dismissed.

2) There is no order as to costs.

I Lawrence

Judge of the Labour Court of South Africa

APPEARANCES:

ON BEHALF OF APPLICANT:

MR G KIRBY-HIRST

ON BEHALF OF RESPONDENT:

ADVOCATE P SCHUMANN