Scaw South Africa (Pty) Ltd v National Union of Metalworkers of Soth Africa and Others (Leave to Appeal) (J 296/2023) [2023] ZALCJHB 92 (17 April 2023)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case No: J 296/2023

In the matter between:

SCAW SOUTH AFRICA (PTY) LTD Applicant and NATIONAL UNION OF METALWORKERS OF SOUTH AFRICA First Respondent THE INDIVIDUAL WHOSE NAMES APPEAR LISTED IN ANNEXURE “A” Second and Further Respondents

Decided in Chambers

Delivered: 17 April 2023

(This judgment was handed down electronically by circulation to the parties’ representatives, by email. The date on which the judgment is delivered is deemed to be 17 April 2023.)

RULING: APPLICATION FOR LEAVE TO APPEAL

VAN NIEKERK, J

[1] The applicants seek leave to appeal against the whole of the judgment delivered by this court on 9 March 2023, when the court granted, with no order as to costs, an order in relation to a proposed strike action called by the first applicant, declaring it to be unprotected.

[2] The facts are common cause, and have been succinctly summarised by the respondent in its submissions opposing the application. In 2017, the respondent (SCAW) and the first applicant (the union) concluded a collective agreement, referred to as the ‘founding agreement’. Agreement provides for a dispute resolution process in terms of which in respect of disputes of mutual interest, the parties are required to hold for mediation meetings and to obtain an advisory arbitration award before either can embark on industrial action. In the years following the conclusion of the agreement, SCAW has ‘corporatised’ several of its former divisions. The businesses of certain divisions were transferred in terms of section 197 of the LRA, and the transferee corporate entities became the employers of those employees engaged by the transferred businesses. By virtue of the provisions of section 197(5)(b)(iii), the funding agreement became binding on the new employers. During September 2022, the union referred a dispute to

the bargaining council incorporating some 32 discrete demands. The dispute was referred only as against SCAW, and did not extend to any of the new corporatised entities. However, certain of the demands made relate to matters of mutual interest between employees and one or more of the corporatised entities. The dispute remained unresolved at the bargaining council and the union called for an instigator to strike action at SCAW. SCAW brought an application to interdict the strike on the basis that the strike was unprotected, because the issue in dispute was regulated by a collective agreement, and that the parties were bound by a collective agreement which prohibited a strike until the completion of the mediation and arbitration process provided in the founding agreement. It is also not in dispute that at the first mediation meeting, SCAW contended that since it was the only employer party to the dispute, mediation was thus limited to issues in dispute between the union and SCAW and did not extend to those issues or demands that concerned the corporatised employer entities. The union contended that the funding agreement was intended to establish procedures at ‘group level’ and that the mediation process established by the collective agreement extended not only to SCAW, but also to the corporatised employer entities. On 21 February 2023, the union wrote to SCAW and averred that to the extent that SCAW had contended that the mediation process was limited only to SCAW, SCAW had evinced a clear and unequivocal intention to no longer to be bound by the collective agreement which, so the union contended, constituted a repudiation of the agreement. The union recorded that it accepted the repudiation of the agreement and that the agreement was therefore canceled.

[3] The central legal issue at the hearing was thus whether the strike on the 32 issues in dispute was unprotected because of the union’s failure to comply with the dispute resolution provisions contained in the funding agreement. The union contended that the funding agreement had been canceled as a result of SCAW’s repudiation of the agreement, while SCAW contended that there had been no repudiation or valid cancellation of the agreement, which remained in force

[4] The central finding of the court is that nothing that SCAW said or did disclosed any intention not to be bound by the founding agreement, and that there was no repudiation of the agreement. In the absence of any repudiation capable of acceptance, the founding agreement accordingly subsists, and in the absence of compliance by the union with the agreement, the strike was unprotected.

[5] The union has raised a number of grounds for leave to appeal. At paragraph five of its submissions, the union submits that the court is in finding that the dispute related to an interpretation and application of the founding agreement. This is a mischaracterization of the court’s finding. The only issue for decision was whether the strike was unprotected on account of the union’s failure to comply with the provisions of the founding agreement. As I have indicated, in so far as the union contended that the founding agreement had been cancelled consequent on a repudiation by SCAW, for the reasons recorded above, this submission has no merit.

Insofar as the union submits that SCAW repudiated the founding agreement by its insistence that consequent on the corporatisation of certain of its divisions it cannot negotiate in respect of demands concerning other employers, SCAW has submitted that it cannot do so since it has no authority to act on behalf of other employers. SCAW has stated that in so far as the union pursues demands affecting other employers, those employers should be incorporated into the negotiations. For the reasons recorded in the judgment, no reasonable person could conclude from SCAW’s position any intention not to be bound by the terms of the agreement. There are no facts from which any entrance can be drawn that SCAW repudiated its obligations under the agreement.

[7] To the extent that the union submits that there are conflicting judgments by the LAC on the issue of whether union is obliged to comply with internal dispute procedures established by a collective agreement before making any reference to the statute of dispute resolution mechanisms, the union refers to County Fair Foods (2001) 22 ILJ 1103 (LAC) in support of this proposition. The later decision by the LAC in BMW SA (Pty) v Numsa & others 2012) 33 ILJ 140 (LAC) expressly overrules this view, a position that has been endorsed and followed by the LAC in a number of subsequent decisions.

In short, there are no conflicting decisions.

[8] The balance of the grounds for appeal concern issues that did not play any role in the ration of the judgment or concern alleged findings that were not made by the court. In particular, the union makes much of what it contends was the failure to apply strict interpretation of the term ‘regulates’ in section 65 (3)(a)(i) of the LRA. This provision has no relevance. The court found the strike unprotected because the union and its members were bound by a collective agreement that prohibits a strike in respect of the issue in dispute, a finding predicated on the provisions of section 65(1)(a).

[9] The union has failed to advance any cogent grounds to establish any reasonable possibility that another court would come to a different conclusion on appeal. The application thus stands to be dismissed.

I make the following order:

1. Leave to appeal is refused.

André van Niekerk

Judge of the Labour Court of South Africa