National Union of Metal Workers of South Africa v Eskom Holdings SOC Ltd and Others (J735/21) [2021] ZALCJHB 182; [2021] 10 BLLR 1049 (LC) (6 July 2021)

IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Reportable

case no: J735/21

In the matter between:

NATIONAL UNION OF METAL

WORKERS OF SOUTH AFRICA Applicant

and

ESKOM HOLDINGS SOC LTD First Respondent

NATIONAL UNION OF MINEWORKERS Second Respondent

SOLIDARITY UNION Third Respondent

THE CCMA Fourth Respondent

Heard: 01 July 2021 (via videoconferencing)

Delivered: 06 July 2021 (via email to the parties)

Summary: Application seeking to interdict the implementation of a final offer pending the outcome of an interest dispute. Application of the doctrine of stare decisis et non quieta movere considered. Interpretation of section 74 (4) of the Labour Relations Act, 1995. Requirements of an interdict pendente lite considered. The applicant failed to demonstrate a clear right. Absent a clear right an applicant for an interdict must fail. Change of terms and conditions of employment dealt with in terms of section 64 (4) of the LRA. The section provides a temporary remedy without the need for an order of Court. Where a party has alternative adequate remedy, a court shall not grant an interdict. Held: (1) The application is heard as one of urgency (2) The application is dismissed. (3) There is no order as to costs.

JUDGMENT

MOSHOANA, J

Introduction

[1] Almost ten years ago, this Court was faced with a novel and difficult question at the time. The question was can a Court prevent an employer to implement an increment offer whilst interest arbitration dispute is pending. This Court per myself serving as an acting justice of this Court at the time in the matter of National Union of Mineworkers and Others v Eskom Holdings[1], reached the following conclusion on the question:

“[18] Both representatives seem to be ad idem that going to arbitration is part of collective bargaining. I disagree. Arbitration is a process where a deadlock is broken. Likewise mediation is a process intended for that. On the other hand collective bargaining simply means negotiation at the collective level. Whilst negotiations are continuing, there will be no dispute to be resolved through any agreed process. Parties bring their own mental faculties to bear in order to find each other. Once they fail to find each other in negotiations parlance they deadlock and should find a deadlock breaking mechanism. Arbitration is one such mechanism. Once the parties reach an impasse, there is a temporary cessation of the bargaining process due to lack of parties’ negotiating efforts. During the pre-impasse period, the duty to bargain in good faith necessarily operates to preclude the employer from undertaking unilateral change, in order that bargaining be given a suitable opportunity to succeed. However, once the impasse is reached both the bargaining process in good faith are superseded by the overriding need for more drastic measures to resolve the impasse. Lawful unilateral action constitutes one such measure, and may be utilised only once the parties have exhausted the duty to bargain in good faith. Interest arbitration was never designed to displace collective bargaining; it was intended to be a substitute only of particular forms of industrial warfare such as strike and lockout. The parties have deadlocked, bargaining time is over.”

[2] The above judgment was never disturbed by a higher Court. Today, the question is, is this Court bound to follow that judgment in this particular matter? The applicant, NUMSA this time around launched this application seeking the following urgent reliefs:

2.1 …

2.2 Declaring that the first respondent’s decision to unilaterally implement a 1.5 % wage increase is unlawful;

2.3 Declaring that the first respondent’s decision to unilaterally implement a downward variation of any of the conditions of service is unlawful;

2.4 Directing that the first respondent is interdicted and restrained from implementing any wage increase prior to the completion of the arbitration under case number HO 69-21.

2.5 Directing that the first respondent is interdicted and restrained from implementing any downward variation of the conditions of service prior to the completion of the arbitration under case number HO 69-21.

[3] Eskom challenged the issue of urgency only in as far as NUMSA suggested that it had failed to deal with certain allegations made in the founding affidavit. On that score it contends that because the application was launched on an extreme urgent basis it never had an opportunity to adequately deal with all the allegations made. The application was launched on or about 29 June 2021 and Eskom had to answer the following day on 30 June 2021. Literally, Eskom had one day to answer to the application. With regard to urgency, a judge hearing a matter has discretion to hear the matter as one of urgency in instances where a party seeking to be heard on an urgent basis can show why the matter is urgent and why an urgent relief is necessary at that stage. At this juncture the merits of the application play no role. It was not in dispute that Eskom had advised that it intended to unilaterally implement the 1.5% wage increase and vary the conditions of service from 1 July 2021. Owing to the fact that NUMSA alleged that the implementation and the variation was unlawful, there existed a basis in law to hear the application as one of urgency. The overriding consideration for hearing a matter as one of urgency is not the comfort of the opposing party but whether the need for an urgent relief does exist and that a party may not have an adequate remedy in due course. An assumption must be made at this stage that the actions of Eskom are unlawful. Given the provisions of section 172 of the Constitution of the Republic of South Africa, 1996 (the Constitution) a Court cannot fold its arms and not champion the rule of law contemplated in section 1 (c) of the Constitution. It was for these reasons that I judiciously exercised my discretion and heard this matter as one of urgency.

Background facts

[4] For the purposes of this judgment, it is not necessary to punctiliously recite the factual matrix of this matter. A brief exposition of the relevant factual matrix may be indispensable. As per the collective agreement in place, NUMSA and Eskom bargain at a Central Bargaining Forum (CBF) over issues of annual salary increment and other conditions of employment. In April 2021, the process of collective bargaining commenced. Various bargaining meetings took place at the CBF. On or about 1 June 2021, Eskom informed NUMSA that it had reached its dead end and it shall be implementing its final offer. At that time, NUMSA was looking to be provided with certain information. On the following day, 2 June 2021, Eskom opted to refer a dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) alleging a dispute of mutual interest. In the referral forms Eskom exposed the following facts:

“The Parties have engaged in negotiations at their Central Bargaining Forum and have not been able to reach agreement on the implementation of salary increases, changes to conditions of service and on trade union organisational rights for the period 1 July 2021 to 30 June 2021. Kindly note that the parties are in an ESSENTIAL SERVICE ENVIROMENT.”

[5] On 10 June 2021, a conciliation meeting happened which failed to resolve the impasse and a certificate confirming that was issued. On 11 June 2021, Solidarity Union on behalf of NUM and NUMSA requested that the unresolved dispute be resolved through arbitration. On 23 June 2021 Eskom sent a notice indicating that it shall be implementing its final offer of 1.5% and the changes of the conditions of service as set out in the attachment to the notice on 1 July 2021. On 25 June 2021, the GCEO of Eskom Mr Andre de Ruyter advised the employees in writing of the intention to implement. Such prompted NUMSA to conceive the present application.

Evaluation

[6] In opposing the application, Eskom raised the defence of res judicata on the basis that the judgments of the Labour Appeal Court in Eskom v National Union of Mineworkers of SA and others[2] and the one of this Court quoted above finally resolved the issue that had arisen in this matter. In a sense, Eskom raised an issue estoppel. I do not believe that this is a res judicata case and/or issue estoppel case. It is actually a case of invoking the stare decisis et non quieta movere principle. A Court has in the past decided on the issue and a Court must follow its previous decisions. Thus I agree with Mr Mooki SC who appeared for NUMSA that res judicata finds no application in this regard. Parties are different. Although this time around NUM switched roles from being an applicant to being a respondent. In truth, NUM is a co-applicant in this matter. It may well be the case that the Labour Court had dealt with a similar cause of action but the parties are different in that sense. The principle of res judicata and issue estoppel are concerned with finality of disputes. The parties before me had never litigated on the dispute before. Actually it is impossible for them to have done so because the current dispute was born on or about 1 June 2021. Thus the preliminary points as raised by Eskom are not upheld.

The doctrine of stare decisis et non quieta movere

[7] The literal meaning of this doctrine expressed in Latin is to stand by things decided and not disturb settled points. In modern days, the doctrine is named binding precedent. The legal position around this doctrine is that the doctrine not only binds lower Courts but also binds the Court of final jurisdiction to their own decisions, Courts can depart from a previous decision of their own only when satisfied that the decision is clearly wrong. This is a manifestation of the rule of law which is the founding value of our Constitution. To deviate from this rule is an invitation of legal chaos. Further anything in a judgment that is subsidiary is considered to be ‘said along the way side’ or ‘stated as part of the journey’ (obiter dictum) is not binding on subsequent Courts.

[8] As a point of departure the decision of the Labour Court referred to above constitutes binding authority and unless this Court is satisfied that it is wrong it cannot depart from it. Faced with such valid legal position Mr Mooki SC did not suggest that the Labour Court was wrong at the time but suggested that what was said was said obiter dictum. It bears mentioning that what a Court states in passing may be persuasive but not binding. However, I disagree with Mr Mooki SC that what I quoted above was said in obiter dictum. It actually constitutes the ratio decidendi of the Labour Court and it is binding. Simply put, a ratio decidendi is the principles of law formulated by the judge for the purposes of deciding the problem before him or her. At the time, the problem was formulated exactly the same way as the current problem. When I listened to the argument I had a déjà vu feeling. In an attempt to flower the present argument, Mr Mooki SC engineered what he had termed a nuanced approach by stating that the challenge is on breach of section 74 (4) this time around. I remain unpersuaded. If it walks like a duck and quacks like a duck it is probably a duck.

[9] Therefore, the question as formulated in this current dispute has been decided and settled. To answer it again in this matter by implementing its final offer, Eskom is not acting unlawfully. Of course that judgment did not pertinently deal with the unilateral implementation of the varied conditions of employment. Mr Mooki SC in an obvious attempt to avoid application of the judgment argued that the parties had not deadlocked. This can simply not be correct. In the referral for conciliation Eskom pertinently states that parties failed to reach an agreement. When Solidarity union requested arbitration on behalf of NUMSA and NUM it did so because the parties were in dispute. In Williams v Benoni Town Council[3], Roper J said:

“A dispute exists when one party maintains one point of view and the other party a contrary view or a different one. When that position has arisen, the fact that one of the disputants, while disagreeing with his opponent, intimates that he is prepared to listen to further argument, does not make it any less a dispute.”[4]

[10] It is beyond question that even if NUMSA was still awaiting certain information as at 1 June 2021, the parties were in a dispute. By definition a deadlock means a state in which progress halts due especially to intransigence of opposing forces. It is a stalemate. Therefore, the argument by Mr Mooki SC that there was no deadlock is rejected.

The issue of varied terms and conditions of employment

[11] There is no dispute that Eskom is intent on varying certain terms and conditions of employment. In a power play situation, which the situation herein is one, the legislature has designed a process that parties in a power play may use. Section 64 (4) allows a trade union to refer a dispute about a unilateral change to the terms and conditions of employment to the Commission. The section does not only allow the referral but allows by mere request for the employer not to implement unilaterally the change to the terms and conditions of employment or if the employer has implemented request the employer to restore the terms and conditions. Most importantly, section 64 (5) provides that the requested employer is obligated to comply with the request within 48 hours of the referral. With this strong statutory protection, it is unnecessary for a party to trouble this Court by seeking an order on an urgent basis. Ordinarily, this protection must last for the period of 30 days whilst conciliation over the issue is pending. This in my view is an adequate protection. In an instance where the employer breaches the provisions of section 64 (5), the aggrieved party may approach this Court for an appropriate relief.

[12] It is common cause in casu that NUMSA has not referred a dispute in terms of section 64 (4) of the LRA. The common law position is such that a change of the terms of a contract without consent is impermissible in law[5]. In Mazista Tiles (Pty) Ltd v NUM and others[6], it was confirmed that a unilateral change of the terms and conditions by an employer is impermissible in law. In terms of section 23 of the Constitution, everyone has a right to fair labour practices. The LRA was passed with the purpose to give effect to section 23.

[13] Section 39 (2) of the Constitution provides that when interpreting any legislation and when developing the common law every Court must promote the spirit, purport and objects of the Bill of Rights. Therefore, the Labour Court in developing the common law with regard to the terms and conditions of employment must do so within the spirit, purport and objects of the Bill of Rights and by extension the provisions of section 64 (4) of the LRA since that section was passed with the purpose of giving effect to section 23 of the Constitution.

[14] To the extent that it may be argued, which was not argued before me that NUMSA has a choice between invoking the protection in section 64 (4) of the LRA and enforcing the common law right by way of an interdict in the Labour Court. The answer to that argument lies in the final requirement in an interdict relief, which is that an applicant has no other relief[7]. There can be no doubt that section 64 (4) of the LRA does provide an adequate remedy. The remedy that NUMSA seeks pends the outcome of the interest arbitration. It is common cause that the said arbitration is set down for 17 August 2021 or thereabout. It is so that the LAC in the Eskom v Num supra concluded that the protection set out in section 64 (4) endures for a period of 30 days or any extended periods agreed upon. Once that period expires, an employer may unilaterally vary as it were. Of course the question may be whether after 30 days or the agreed extended period expires, a party may invoke the common law protection or not. I prefer to leave that question open since it does not arise in this matter. Ultimately, the conclusion I reach is that the protection on the variation issue lies in section 64 (4) of the LRA.

[15] Before I conclude on this issue and for the sake of posterity, it has been decisively held that where an employee refuses to accept the changes terms and conditions of employment necessitated by the operational requirements of an employer, an employer may invoke the provisions of section 188 read with 189 of the LRA.[8]

The provisions of section 74 (4) of the LRA

[16] Mr Mooki SC argued that the protection NUMSA seeks emanates from the provisions of section 74 (4) of the LRA if properly interpreted. He developed this unique argument by stating that since the parties involved herein are in essential services and cannot invoke power play to resolve an impasse, once a matter is referred to arbitration within the contemplation of section 74 (4), a party to that arbitration is prevented “as a matter of law” to proceed with whatever its bargaining position is until arbitration. I am unable to agree with this unique proposition. Section 74 of the LRA deals with disputes in essential services. Subsection (4) pertinently provides that if the dispute remains unresolved, any party to the dispute may request that the dispute be resolved through arbitration by the council or the Commission. Contrary to Mr Mooki SC’s earlier submission invocation of this section anticipates an existence of a dispute. In other words, absent a dispute the section may not be invoked. In this instance, Solidarity Union observed a dispute and requested its resolution through arbitration.

[17] In Courts of law there is a policy that where the parties have referred a dispute to a Court they better await the resolution of that dispute by the Court before taking any of their contended positions. In Saamwerk Southwerke (Pty) Ltd v Minister of Mineral Resources and another[9], Van der Merwe JA, writing for the majority, aptly stated the following:

“[66] After its initial prevarication, the Department formally withdrew its opposition… The policy of the Department was not to finalise a mining right whilst litigation was pending regarding the validity of that right. It was in my view perfectly in keeping with public and legal policy not to undermine the legal process by determining that which courts were called upon to decide.

[67] In my view, policy and legal consideration do not regard the omissions as unlawful conduct… As Saamwerk failed to prove that the omissions were wrongful, its claim against the Minister must fail.

[18] It is doubted whether that policy finds application in an arbitration process. The LRA does not compel parties to participate in an arbitration proceeding. For that matter section 138 (5) (b) (i) of the LRA provides that if a party fails to appear at the arbitration proceedings and that party has not referred the dispute, the commissioner may continue with the arbitration proceedings in the absence of that party. Accordingly, Solidarity Union as the referring party may proceed with the arbitration in the absence of Eskom and obtain an arbitration award. Section 143 (1) of the LRA provides that an arbitration award issued by a commissioner is final and binding and it may be enforced as if it were an order of the Labour Court. Under those circumstances, it shall be incongruent to interpret section 74 (4) to be creating a legal obligation to subject oneself to arbitration and not to act in a collective bargaining situation, moreso when bargaining is over. Finally, because an arbitration award is final and binding, if the implemented 1.5% wage increment is not upheld by the commissioner then it shall be gone and forgotten dead and buried. The argument that as a matter of law, Eskom is gagged to implement pending the interest arbitration is rejected.

Clear right

[19] Absent a clear right, an applicant for an interdict must fail. As submitted, NUMSA contends that its right is located in section 74 (4) of the LRA. Properly construed, the right in section 74 (4) first anticipates a dispute and once a dispute exists then any party acquires the right to refer that dispute for arbitration. That right is under no threat and has actually been exercised by Solidarity Union on behalf of NUMSA and another. I agree with Mr Boda SC that absent a clear right an interdict cannot be granted. The right to refer a dispute to arbitration does not give rise to any right to be protected in the interim.[10] The law as codified in City of Tshwane Metropolitan Municipality v Afriforum and another[11] was aptly stated in the following terms:

“[55] Before an interim interdict may be granted, one of the most crucial requirements to meet is that the applicant must have a reasonable apprehension of irreparable and imminent harm eventuating should the order not be granted…

[56] Within the context of a restraining order, harm connotes a common-sensical, discernible or intelligible disadvantage or peril that is capable of legal protection… And that disadvantage is capable of being objectively and universally appreciated as a loss worthy of some legal protection…

Conclusions

[20] In summary, on application of the stare decisis et quieta non movere, this Court is bound to follow its previous decision which settled the question whether an employer acts unlawfully by implementing its final offer in wage negotiations. The protection that NUMSA seeks with regard to the unilateral variation lies in section 64 (4) of the LRA. The parties involved herein have deadlocked and bargaining is over. Properly interpreted section 74 (4) of the LRA does not give NUMSA any further rights than that of referral to arbitration, which right is not under threat and has been exercised. The section does not gag Eskom from implementing its offer or vary the conditions. The doctrine of res judicata and issue estoppel finds no application in this matter. Thus NUMSA has failed to demonstrate a clear right protectable by an interdictory relief nor a declaratory relief. Accordingly, the application is bound to fail with no order as to costs owing to the continuing bargaining relationship between the parties.

[21] In the results, the following order is made:

Order

1. The application is heard as one of urgency.

2. The application is dismissed.

3. There is no order as to costs.

G.N. Moshoana

Judge of the Labour Court of South Africa

Appearances:

For the Applicant: Mr O Mooki SC

Instructed by: Ngako Attorneys, Parktown.

For the Respondent: Mr F Boda SC

Instructed by: Anderson Mmamadi Salane Attorneys Inc, Lynwood.

[1] (2012) 33 ILJ 669 (LC).

[2] (2002) 23 ILJ 2208 (LAC).

[3] 1949 (1) SA 501 (W)

[4] Followed in Newu v Sithole & Others [2004] 11 BLLR 1085 (LAC). In Edgars Stores Ltd v SACCAWU and another [1998] 5 BLLR 447 (LAC) the Labour Appeal Court approved of a dictum in Durban City Council v Minister of Labour and others 1953 (3) SA 708 (A) at 712A namely, a dispute “must as a minimum …postulate the notion of the expression by parties, opposing each other in controversy, of conflicting views, claims or contentions”.

[5] See: Bedderson v Sparrow Schools Education Trust [2010] 31 ILJ 1325 (LC) and Evans v Japanese School of Johannesburg (2016) 27 ILJ 2607 (LC)

[6] (2004) 25 ILJ 2156 (LAC)

[7] See: L F Boshoff Investments (Pty) Ltd v Cape Town Municipality 1969 (2) SA 256 (C).

[8] NUMSA and others v Aveng Trident Steel and another (2021) 42 ILJ 67 (CC).

[9] (1098/2015, 206/2016) [2017] ZASCA 56 (19 May 2017).

[10] See National Treasury and others v OUTA and others 2012 (6) SA 223 (CC).

[11] 2016 (9) BCLR 1148 (CC).