National Union of Democratic and Progressive Workers (NUDPW) v Minister of Labour and Another (J2362/13) [2013] ZALCJHB 311 (19 November 2013)

REPUBLIC OF SOUTH AFRICA

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Case no: J2362/13

DATE: 19 NOVEMBER 2013

NOT REPORTABLE

NATIONAL UNION OF DEMOCRATIC AND

PROGRESSIVE WORKERS (NUDPW)....................................................................... Applicant

And

THE MINISTER OF LABOUR.........................................................................First Respondent

THE REGISTRAR OF LABOUR RELATIONS......................................Second Respondent

Heard: 5 November 2013

Delivered: 19 November 2013

TLHOTLHALEMAJE, AJ

Introduction:

[1] The applicant (Union) brought this application on an urgent basis to seek an order suspending or staying its deregistration pending an appeal. The respondents opposed the application.

[2] The Union was registered on 20 June 2009 under registration number LR2/6/2/1708. The second respondent (Registrar) has the power to deregister a trade union or employer’s organisation by virtue of the provisions of section 106 (2A) and/or (2B) of the Act. The Registrar may cancel registration if a written notice to comply with section 98, 99 and 100 of the Act within a period of 60 days was issued, and despite such notice, the trade union or employer’s organisation concerned has not complied with the provisions of the said sections. In this case, the Registrar cancelled the registration of the Union on 9 October 2013.

Background:

[3] On 21 January 2013, the office of the Registrar had caused a letter to be written to the Union, seeking that it complies with the provisions of section 98, 99 and 100 of the Act. In the letter, the Union was reminded that it had not furnished all of the information requested as far as 23 August 2012. The Union was reminded to furnish information regarding the election of its national office bearers, its bank accounts, the audited financial statements for the year ended December 2011 and for the period 20 July 2009 to 31 December 2010. More importantly, the Union was informed that the office of the Registrar was considering steps to cancel its registration, and that it should provide reasons why the provisions of section 106 of the Act should not be invoked. The Union was advised to respond in writing within 30 days from the date of that letter.

[4] The Union did not respond as advised, and instead, its shop stewards had approached the office of the Registrar for advice on how the Registrar should not proceed with the de-registration. The Registrar however insisted that audited statement should be submitted as per its letter of 31 January 2013. On the Union’s version, it could not comply with the Registrar’s request at the time due to the reason that members of its office bearers were the only ones with access to the Union’s bank account, and were not cooperating with its auditors. This had caused the Union to bring an urgent application in March 2013 at the Evander Magistrate Court to interdict the concerned national office bearers from leading it, and releasing its bank account. As a result of the court order obtained, the entire National Executive Committee of the Union was removed on 28 March 2013. An interim structure was then put in place to run the affairs of the Union pending an elective conference.

[5] On 3 May 2013 the Registrar had published its intention to cancel the registration of the Union on account of its failure to comply with the provisions of section 98, 99 and 100 of the Act, and further since the Union had ceased to function in terms of its constitution. The Registrar also called upon the Union and interested parties to make written submissions within 60 days as to why the Union’s registration should not be cancelled.

[6] On 6 May 2013, the Union had made written representations in terms of which inter alia, it had conceded that its previous National

Executive Committee had not complied with its constitution and with its obligations in terms of section 98, 99 and 100 of the Act. The Union had stated that an interim structure had been appointed; that members of its previous NEC had failed to hand over documents as requested, and that a case of fraud had since been opened against them based on the findings of the Union’s auditors. The Union also made an undertaking that minutes of its congress would be submitted to the Registrar before the end of September 2013.

[7] On 19 July 2013 the office of the Registrar had sent a letter to the Union and advised it to furnish it with the following information;

Minutes of the national congress which was to be held in August 2013; the names and work addresses of the elected NEC; an update on the criminal investigations undertaken by the Hawks against the members of the erstwhile leadership; audited financial statements since registration from 20 July 2009, and also in respect of the year ended December 2009, 2010 and 2011; and a separate audited financial statements for the agency shop which were outstanding from December 2009. The Union was given until end of August 2013 to submit the information requested.

[8] The Union had responded by handing over to the Registrar, copies of correspondence from SAPS dated 31 July 2013, which was a “Progress report” in terms of which more time was requested to thoroughly investigate the docket (Essentially there was no progress on the investigations). A letter from Stokes & Co Auditors was also sent to the Registrar, in terms of which the latter confirmed that all documents pertaining to the financial year ended 31 December 2013 were in its possession, but that they were unable to compile accounting records and/or compile financial statements and/or issue an audit report as the accounting records of the Union for the year ending 2011 were incomplete.

[9] According to the Union, its new NEC was elected at a congress held on 17 August 2013. It was however impossible for the new NEC to comply with the Registrar’s requests in terms of the latter’s correspondence of 19 July 2013 due to time constraints. On 9 October 2013 the de-registration took place. On 17 October 2013 in anticipation of the Registrar’s intention to publish the de-registration in the Government Gazette, the Union’s office bearers went to the offices of the Registrar to seek an extension of time to comply with the request to submit audited financial statements. This however proved to be a futile exercise as the register proceeded to publish a notice in the Government Gazette on 18 October 2013.

[10] On the whole, the Union conceded that it did not comply with its legal obligations in terms of the provisions of section 98, 99 and 100 of the Act. It however contended that the Interim Structure put in place in April 2013 was not responsible for the non-compliance as this had occurred between 2009 and 2012. The Union’s further contention was that the Registrar had a statutory obligation to request that information during that period, and that its office was aware of the non-compliance during the tenure of the previous NEC. It furthermore contended that the Registrar failed to take action for four years when the previous NEC was in place.

Urgency:

[10] The respondent’s main contention was that the application should be struck off the roll on account of lack of urgency. In this regard, it was contended that the Union was aware as far back as 31 January 2013 that deregistration may follow after a request was made for it to comply with the provisions of the Act. On 3 May 2013 a notice indicating intention to cancel its registration was published, and the Union had more than five months within which to comply with the provisions of the Act, and had failed to do so. Furthermore, it was argued that the Union knew as at April 2013 that it was unable to comply, and knew that deregistration was imminent. The deregistration took place on 9 October 2013 by way of notice and according to the respondents, the Union despite its knowledge of deregistration had only launched this application on 28 October 2013. In the respondent’s view, the Union could have prevented the de-registration as early as February 2013, and could have approached the court as soon as 3 May 2013 upon the publication of the intention to deregister it. In this regard, it was contended that the urgency in this case was self-created.

[11] The Union’s contention was that the matter was urgent as it had over 3 500 members across the mining, transport, manufacturing and farming industries. At the time of deregistration, over 900 of its members were involved in industrial action at Sasol Mining (Pty) Ltd in Mpumalanga Province, and since its deregistration, Sasol had refused to negotiate with it, and had on unconfirmed rumours, removed the Union’s shop stewards from their offices. The Union further argued that the application was urgent on account of the fact that the deregistration had affected its operations; it was unable to attend to matters on behalf of its members; and that if the deregistration was not stayed, it would suffer irreparable harm in that it will not only loose members, but its reputation as vanguard of the worker’s rights will suffer.

[12] This court has powers to grant urgent interim relief in terms of the provisions of section 158 (1) (a) (i) of the Act. Urgent

applications are further dealt with in terms of Rule 8 of the Rules for the Conduct of Proceedings in the Labour Court. The requirements

of this rule were explained by the Labour Appeal Court in Jiba v Minister: Department of Justice and Constitutional Development and Others 2010 31 ILJ 1121 as follows;

“Rule 8 of the rules of this court requires a party seeking urgent relief to set out the reasons for urgency, and the degree to which the ordinary applicable rules should be relaxed is dependent on the degree of urgency. It is equally trite that an applicant is not entitled to rely on urgency that is self-created when seeking deviation from the rules”.

[12] The consequences of a deregistration of a Union always have far reaching implications not only for the Union as an organisation, but also for its members and its relationship with employers insofar as those relationships were formalised by way of recognition agreements. Inasmuch as a certificate of registration issued in terms of section 96 (7) (a) of the Act is a licence for a Union to operate and serve its membership, its concomitant obligations other than to its members, are to the office of the Registrar in terms of the provisions of section 98, 99 and 100. Thus if a Union fails to comply with its obligations in terms of these provisions, it should foresee the consequences of its actions, and it thus cannot complain of unfairness when deregistration takes effect.

[13] The fact of a notice of intention to deregister the Union as issued in this case on 31 January 2013 obviously should have sounded alarm bells for it. The subsequent notice issued by the Registrar on 3 May 2013 was more than a warning as it showed the Registrar’s clear intentions in view of the Union’s non-compliance with its statutory obligations. As at 09 October 2013, it was clear to the Registrar that the Union was not in a position to comply with the provisions of section 98, 99 and 100 of the Act. In my view, if the matter was not seen to be urgent at least as at 31 January 2013, or on 3 May 2013, I fail to appreciate how it would suddenly have become urgent when on 28 October 2013, when this application was launched.

[14] Even if the Union’s contention that it only became aware of the deregistration on 16 October 2013 is to be believed, no steps were taken in approaching the court on an urgent basis between then and 28 October 2013. Worst still, the Union did not deem it expedient to approach this court at least in August 2013 when it became clear that the Registrar would not accede to a request for extension of time. What the Union however did was firstly to seek a further indulgence from the office of the register on 17 October 2013, and when that failed, to seek reasons for the de-registration, which were well known to it. All these steps were nothing short of a show of desperation in view of the inevitable.

[15] It is further acknowledged that the current leadership of the Union inherited an organisation that was clearly dysfunctional from a leadership point of view. The failure of the Union to comply with its obligations in terms of the Act since 2009 after its registration is clearly indicative of its dysfunctional nature from the beginning. This however does not in my view make the matter suddenly urgent. It did not require a notice of intention to cancel its registration for the shop stewards who ultimately took steps against the previous leadership to realise that there was rot in its own house. That notice was merely a reminder of its obligations in terms of the Act, and the current leadership cannot absolve itself from the rot created by the previous leadership.

[16] As it was correctly argued on behalf of the respondents, it was not only the responsibility of the erstwhile national leadership to ensure that the Union’s finances were properly accounted for. Clause 14.3.1 to 14.3.2 of the Union’s Constitution placed responsibilities on its Branch Secretaries and Branch Committees in respect statements of income, expenditure and financial position of each branch. To a large extent, even if members of the previous leadership played a role in the inability of the Union to comply with its legal obligations, the Union’s leadership at its branches cannot allege to be innocent in the mess the Union finds itself in.

[17] To the extent that the Union only approached the court once the deregistration had taken place, and further taking into account that the Union failed to heed the warnings issued in January and May 2013, including its failure to comply with the provisions of the Act as required by the Registrar since its registration, it is concluded that the urgency with which the Union approached the court is clearly self-created, and this application should be struck off the roll on this ground alone.

Merits of the application:

[18] However, for the sake of completeness, I will proceed to deal with the merits of the application, especially in view of some of the serious allegations made by the Union against the office of the Registrar in its founding affidavit.

[19] In the light of the nature of the relief sought by the Union, the requirements that the Union needs to meet are that it must prima facie, establish the right that forms the subject matter of the main action, even though open to some doubt; show a well grounded apprehension of irreparable harm to itself if the interim order is not granted; a balance of convenience in favour of granting the interim relief, and the absence of any other remedy2 .

[20] In order to establish a prima facie right, an applicant must provide prima facie proof of facts that establish the existence of a right in terms of the substantive law 3. The Union seeks the suspension or staying of the deregistration pending an appeal. As at the date of the hearing of this application,

the Union had not as yet filed an appeal. In fact, what the Union sought as part of its prayers, but which it later on abandoned from the bar, was an order that it file its appeal within 60 days after receipt of the reasons for deregistration from the Registrar. In UPUSA4 , Van Niekerk J in dealing with the requirement of a prima facie right stated that;

“In my view, it is incumbent on an applicant in circumstances such as these to place facts before the Court to establish in these

proceedings, at least on a prima facie basis, that there is some prospect that the appeal will succeed. This is not to suggest that it is necessary to show that the appeal will succeed, nor is it to suggest that the threshold is so low that not much more than the exercise of a right to appeal is required to sustain interim relief. The nature of interim relief is such that some preliminary assessment of the merits of the applicant’s case is essential. In my view, an applicant must at least lay a factual foundation that is sufficient for the Court to be satisfied that if the facts deposed to in the founding affidavit and the undisputed facts alleged by the respondent were to be established in an appeal hearing, there is at least a reasonable possibility that the appeal will succeed.” (at para 8)

[21] In Olympic Passenger Service (Pty) Ltd v Ramlagan5 , Holmes J (having made reference to Setlogelo v Setlogelo ,) 6stated the following:

“It thus appears that where the applicant’s right is clear, and the other requisites are present, no difficulty presents itself about granting an interdict. At the other end of the scale, where his prospects of ultimate success are nil, obviously the Court will refuse an interdict.

[22] Within the context of the Labour Relations Act, the Union, after its registration, would have been entitled to enjoy a variety of rights under Chapter III of the Act. The old adage that every right comes with responsibilities could not have been more apposite as in this case. The Unions’ responsibilities to its members and to the Registrar fell within the provisions of sections 98, 99 and 100 of the Act. Thus if the Union failed to comply with its responsibilities under those provisions, it automatically lost its rights in terms of section 106 (3) of the Act which provide that;

"When a trade unions or employers’ organisations registration is cancelled, all the rights it enjoyed as a result of being registered will end."

[23] Unions are generally established for inter alia to vigorously advance the interests of its members. The office of the Registrar through the provisions of section 98, 99 and 100 of the Act is the ultimate protector of the Union members’ interests. Accordingly, the Registrar has a responsibility to ensure that the Union operates within the confines of the law and is held accountable in respect of all its internal affairs. Thus if a Union, irrespective of the reasons that may be advanced, is incapable of meeting its statutory obligations, the Registrar is compelled to invoke the provisions of section 106 (2A) of the Act, as long as the provisions of section 2B have been complied with.

[24] The reasons for the deregistration has since been furnished by the Registrar on 29 October 2013. In fact these reasons are well known to the Union, and all that the Registrar did was to confirm them. In regards to its prima facie prospects of success on appeal, it was common cause that the Union had not complied with the provisions of section 98, 99 and 100 of the LRA since its registration in 2009. Despite a notice of intention to cancel its registration as issued in January 2013, a further notice issued on 3 May 3013, and further requests by the Registrar in July 2013 for the Union to get its house in order, the Union had failed to do so. There has not even been a tender by it that it would comply in the near future. What the Union sought instead was to blame its erstwhile leadership. This cannot count as laying the basis for a prima facie right.

[25] In the light of the above, it is clear that the Union has nil prospects of succeeding with its appeal as the reasons for its

deregistration are common cause. To this end, the Union cannot be entitled to any relief in the absence of a prima facie clear right not having been established. By virtue of its non-compliance with its statutory obligations, the Union should have foreseen the harm and prejudice it is now complaining of, which in my view is clearly self-inflicted. As it was also correctly pointed out on behalf of the respondents, the prejudice to be suffered by the Union as a result of not being granted the relief it seeks should be weighed against principles of accountability, which clearly seems foreign to the Union.

[26] The Union has also made serious allegations against the office of the Registrar. The office of the Registrar acts within the confines of its legislative mandate when taking decisions as to whether to register or to deregister unions or employer’s associations. It is expected of that office to exercise that mandate dispassionately, and with the utmost integrity and transparency. Where serious allegations of impropriety are made against that office, this court is obliged to highlight same in order for that office to appropriately deal with.

[27] The Union in its founding affidavit had alleged that the office of the Registrar, for a period of four years since July 2009, had failed to take any action or to seek compliance from the Union in terms of section 98, 99 and 100 of the Act. A further allegation is that the office of the Registrar was aware of this non-compliance and yet failed to take any steps. The insinuation is that the members of the office of the Registrar were in cohort with the members of the Union’s previous leadership in concealing malfeasance 7, and had only taken action after the new leadership was elected in order to protect the erstwhile leadership of the Union. These are serious allegations, and it is my view that the Registrar cannot as it did in its answering affidavit 8, merely note or deny them. In order to retain its integrity, the office of the registrar must investigate these allegations.

[28] Having concluded that the Union’s case falls flat on account of lack of urgency and the fact that in any event, it had failed to prima facie, establish the right that forms the subject matter of the main action, it follows that the application should be dismissed. In regards to costs, considerations of law and fairness dictate that no order should be made in that regard.

Order:

(i)The application is dismissed

(iii) There is no order as to costs.

Tlhotlhalemaje, AJ

Acting Judge of the Labour Court of South Africa

Appearances:

For the Applicants: Adv. T Tshitereke

Instructed by: Manugeni INC

For the Respondent: Adv. A M Pheko.

Instructed by: State Attorney

12010) 31 ILJ 112 at para 18

2See Eriksen Motors (Welkom) Ltd v Protea Motors, Warrenton & another 1973 (3) SA 685 (A), which was referred to with approval in (See United People's Union of South Africa (UPUSA) v Registrar of Labour Relations (2010) 31 ILJ 198 (LC).

3See Webster v Mitchell 1948 (1) SA 1186 (W) at 1189.

4Supra

5 1957 (2) SA 382

6 1914 AD 221 at 227

7See paragraph 18, 19, 20 of the founding affidavit

8At paragraphs 51 to 53 of the answering affidavit