South African Municipal Workers Union v South African Local Government Bargaining Council and Others (JR 409/12) [2013] ZALCJHB 261 (8 October 2013)

REPUBLIC OF SOUTH AFRICA

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Reportable

Case no: JR409/12

In the matter between:

SOUTH AFRICAN MUNICIPAL WORKERS UNION .......................................Applicant

and

THE SOUTH AFRICAN LOCAL GOVERNMENT

BARGAINING COUNCIL ....................................................................First Respondent

TIM GRAHAM N.O. ........................................................................Second Respondent

SOUTH AFRICAN LOCAL GOVERNMENT

ASSOCIATION ...................................................................................Third Respondent

INDEPENDENT MUNICIPAL AND ALLIED

TRADE UNION ................................................................................Fourth Respondent

Heard: 12 July 2013

Delivered: 8 October 2013

MASIPA, AJ

Introduction

[1] The Applicant approached court for an order declaring the dispute that it referred to the First Respondent on 15 November 2011 under case number HQ111105 as a dispute of mutual interest over which the First Respondent has jurisdiction. Secondly, that the advisory award issued by the Second Respondent under the same case number on 12 January 2012 be reviewed and set aside and lastly, for a cost order against any of the Respondents who opposes the Application.

[2] To the extent that the Applicant seeks to have the advisory award reviewed and set aside, the application is made in terms of Section 158(1)(g) of the Labour Relations Act.

Background

[3] It is important to mention that the Applicant and the Fourth Respondent are both registered trade unions and parties to the Bargaining Council. They are the only recognised trade unions in this Bargaining Council.

[4] On 15 November 2011, the Applicant referred a dispute to the First Respondent regarding the Third Respondent’s refusal to accede to a demand to accept a Job Evaluation Agreement it had proposed together with the Fourth Respondent.

[5] The dispute referred by the Applicant was set down for conciliation on 12 December 2011. At conciliation, it was contended by the Third Respondent that the parties were precluded by legislation and by the First Respondent’s Main Collective Agreement from negotiating about the content of a Job Evaluation Agreement. It contended that the dispute was therefore not one of mutual interest and that the First Respondent lacked jurisdiction.

[6] The Second Respondent after hearing an objection to the jurisdictional point being raised in breach Rule 2.31 of the First Respondent’s Main Collective Agreement directed the parties to make oral and written submissions. Subsequently, oral submissions were made and were supported by written submissions. On 12 January 2012, the Second Respondent issued his advisory award.

[7] The Applicant in its founding affidavit averred that the Second Respondent recorded the dispute as relating to the Third Respondent’s refusal to bargain on the terms of the draft job evaluation collective agreement. This, the Applicant said, was manifestly incorrect and averred that it was apparent from the referral form that the dispute was about the Third Respondent’s refusal to accede to a demand it made together with the Fourth Respondent to accept the Job Evaluation Agreement from the two trade unions.

[8] The Applicant further averred that it was pointed out both during the oral and written submissions that the parties had in fact bargained about the issue further that this was not disputed and was recorded as such in the advisory award.

The Advisory Award

[9] The jurisdictional challenge raised before the Third Respondent was that the subject matter on which the Applicant sought to bargain on was regulated by legislation being the Municipal Systems Act and the Municipal Systems Amendment Act, Section 66 thereof.

[10] The Third Respondent in his analysis of evidence stated that the best approach to deal with the jurisdictional points was to decide whether the Applicant’s dispute was one of interest or a rights dispute. He relied on the decision of Sithole v Nogwaza NO & others1 which he said accepted that a hold all or residual category capturing all disputes other than those referred to the CCMA in terms of the Act, that was concerned with a creation of new rights rather than existing rights.

[11] The Second Respondent stated in the advisory award that the issue concerned a refusal to bargain as provided in section 67(2)(d)(iii) of the LRA and that an advisory award must have been made in terms of section 135(3)(c) before notice is given in terms of subsection (1)(b) or (c). He stated that subsection (2)(iii) provided that a refusal to bargain included bargaining subjects. The Second Respondent ordered his ruling to be rendered as an advisory award and found that the First Respondent lacked jurisdiction to preside over the matter.

The Applicant’s contention

[12] The Applicant contends that Clause 1.2 and 1.3 of Part C1 of the SALGBC main collective agreement which the Second Respondent relied on simply records the parties’ agreement that certain topics may be bargained only at National level and others at Divisional level. The Applicant contends further that the causes do not purport to set out an exhaustive list of bargaining subjects. The Applicant referred to clause 2.8.2 of Part C and submitted that in terms of this clause, bargaining may even take place at municipal level through local labour forums on matters that are not the subject matter of negotiations at National or Divisional level.

[13] It was submitted that in terms of the Labour Relations Act, the term ‘matters of mutual interest’ refers to anything within the relationship between employer and employee. It was submitted that the second Respondent incorrectly categorised the nature of dispute referred to conciliation as it did not concern a refusal to bargain but a refusal to accede to the union’s demands. Further that it was common cause before the Second Respondent that the parties had negotiated on the issue before a dispute was declared.

[14] It was further contended that the subject matter of the issue in dispute i.e. job evaluation clearly related to a matter of mutual interest and there was no legislation or collective agreement prohibiting bargaining on the subject matter of the issue in dispute. It was submitted that the fact that legislation gave employers in the public sector certain powers in relation to matters of mutual interest between employers and employees did not mean that such topics were removed from collective bargaining. Sections 66 and 67 of the Municipal System’s Act expressly indicate that the powers are subject to any applicable law or in accordance with applicable law. There was no provision that bargaining on these topics was not permitted.

[15] It was submitted that the Minister’s powers in terms of section 72 were subject to applicable labour legislation and can only be exercised after consultation with the bargaining council. Nothing in section 72 prohibits collective bargaining on any specific matter in that section. It was conceded that the parties had no legal power to amend the regulations but that this did not mean collective bargaining was prohibited.

[16] It was submitted that the provisions of Part C of the Main Agreement did not limit bargaining topics and did not support the ruling of the second Respondent. The Applicant was therefore entitled to a declaratory order to the effect that the dispute referred to conciliation concerned a matter of mutual interest falling under the jurisdiction of the First Respondent. It was further submitted that the advisory award should be set aside.

[17] It was further submitted that there was no merit on the Second Respondent’s contention that it could not be contended in review proceedings that the jurisdictional ruling was wrong. When a jurisdictional issue is on review, the matter must be determined on objectively justiciable grounds. It was argued that the Second Respondent had, in any event, based his conclusion on irrelevant considerations and failed to apply his mind to relevant considerations and that in the circumstances, the Applicant was entitled to the relief it sought.

Third Respondent’s Contention

[18] It was contended by the Third Respondent that section 66 set out deliverables of the Municipal Manager and if the Applicant’s contention was to be upheld, it would erode the responsibility and accountability of the municipal manager. To this extent, issues prescribed in section 66(1) could not be subject to collective bargaining and there was no legal basis to contend otherwise. This was equally true in respect of section 67.

[19] Section 72 set out matters regulated by the Minister after consultation with the First Respondent. This included the establishment of the job evaluation system. There is no requirement for the Minister to reach agreement on this issue. No collective agreement fetters the Minister’s discretion. There is no evidence that the Minister has elected to subject the issue to collective bargaining. The scheme of section 72 does not lend itself to the interpretation contended by the Applicant that job evaluation is a matter competent for collective bargaining.

[20] The parties to the Main Agreement regulate matters identified in the agreement. It is not apparent from Part C that the parties did not intend to exhaustively prescribe the topics that are subject to collective bargaining. The contrary appears to be the case. This interpretation is consistent with the provisions of section 72(1) which empowers the Minister to make regulations or guidelines on the establishment of uniform standards for job evaluation systems. The fact that job evaluations were previously the subject of collective bargaining did not in the circumstances create precedence that the issue is competent for collective bargaining. This is particularly so where such conduct was not authorised by law.

[21] It was submitted that the Applicant’s case properly construed was that they disagreed with the Second Respondent’s conclusion. This was not sufficient for the Applicant to succeed on the relief sought. The Applicant must, therefore, fail and must also fail in its claim for a declaratory relief. It was argued that the Applicant was effectively seeking to appeal the decision of the Second Respondent under the guise of a declaratory order. The Applicant has not shown that the Second Respondent’s decision is unreasonable or one which a reasonable decision maker would not make under the circumstances.

Analysis

[22] Section 67(2) of the Labour Relations Act 66 of 1995, the LRA provides as follows:

‘If the issue in dispute concerns a refusal to bargain, an advisory award must have been made in terms of section 135 (3) (c) before notice is given in terms of subsection (1) (b) or (c). A refusal to bargain includes-

(a) a refusal-

(i) to recognise a trade union as a collective bargaining agent; or

(ii) to agree to establish a bargaining council;

(b) a withdrawal of recognition of a collective bargaining agent;

(c) a resignation of a party from a bargaining council;

(d) a dispute about-

(i) appropriate bargaining units;

(ii) appropriate bargaining levels; or

(iii) bargaining subjects.’

[23] Section 135(3)(c) of the LRA provides as follows:

‘The commissioner must determine a process to attempt to resolve the dispute, which may include-

(a) mediating the dispute;

(b) conducting a fact-finding exercise; and

(c) making a recommendation to the parties, which may be in the form of an advisory arbitration award.’

[24] In Pretorius v Rustenburg Local Municipality and Others,2 Zondo JP (as he then was) stated that:

‘The fact that the award is an advisory one means that it is not binding on any of the parties thereto. One of the issues on which the arbitrator had been asked to give an opinion was whether or not the NP1 agreement is a collective agreement. The arbitrator concluded that the NP1 agreement is not a collective agreement. Obviously, no court is bound by that conclusion. Indeed, as I have said, that conclusion is not binding even on the parties to that advisory award.’

[25] The issue which the Second Respondent dealt with was a point in limine on whether or not the Bargaining Council had jurisdiction to deal with the nature of dispute referred by the Applicant. In line with this, oral and written submissions were made by the parties on his request. At no stage was the Second Respondent required to issue an advisory award. It is apparent from a reading of the ‘advisory award’ that although it was termed as such, it is clearly a jurisdictional ruling. The Second Respondent concludes the ‘advisory award’ with the words the Bargaining Council has no jurisdiction. This was his ruling on the jurisdictional point raised by the parties.

[26] It is clear from the Pretorious judgment that an advisory award seeks to give advice/opinion to the parties and is not binding on the parties. The nature of the Second Respondent’s ruling is such that the parties cannot proceed further with the dispute. It is binding on them. In view of this, despite naming it an advisory award, I find that it is in fact a jurisdictional ruling.

[27] In view of the above, the next issue that arise is whether the ruling falls to be reviewed or set aside. In order to determine whether to grant the declaratory order sought by the Applicant, it is necessary to first deal with the ruling.

[28] In the Applicant’s referral for conciliation it is specifically recorded that the nature of the dispute relates to mutual interest. The relief sought was for the Third Respondent (SALGA) to agree with the Applicant and the Fourth Respondent’s proposal. The proposal was labelled ‘Job Evaluation Collective Agreement.

[29] Despite the Applicant recording the nature of dispute as a mutual interest dispute, in his analysis, he recorded it as a refusal to bargain. The basis for this is unclear as it is apparent from the referral papers that the Applicant’s case related to an issue of mutual interest. It was common cause that the parties had already bargained on the matter and could not reach agreement, hence the demand by the Applicant.

[30] In view of the Applicant’s categorisation of its dispute, it is proper to consider what is meant by the term ‘matter of mutual interest’. In Ceramic Industries Ltd t/a Betta Sanitary Ware v National Construction Building and Allied Workers Union and Others,3 Landman AJ (as he then was) stated that a matter of mutual interest has long and consistently been given a wide interpretation. In that judgment, the court relied on Rand Tyres and Accessories v Industrial Council for the Motor Industry (Transvaal) 1941 TPD 108 at 115 where it was said:

‘Whatever can be fairly and reasonably regarded as calculated to promote the well-being of the trade concerned, must be of mutual interest to them; and there can be no justification for restricting in any way powers which the legislation has been at the greatest pains to frame in the widest possible language. The court concluded that a matter of mutual interest was one which could be regarded as tending to promote the well being of the industry’

[31] Pillay AJ, (as she then was) said in De Beers Consolidated Mines Ltd v CCMA and Others,4 that the term mutual interest must be interpreted literally to mean any issue concerning employment. The term would include dispute of rights as well as of interest. It follows that some disputes about matters of mutual interest may be referred to arbitration or to the Labour Court while others may be resolved through industrial action. This view is fortified by reference to section 51(1) and (3)(iv) of the Act which contemplates that a council may arbitrate a dispute about a matter of mutual interest if the Act requires arbitration.

[32] The Labour Appeal Court has now on more than one occasion described a dispute of mutual interest as one relating to proposals for the creation of new, or fresh rights, or the diminution of existing rights.5

[33] The Applicant’s dispute relates to the employer’s refusal to accede to a demand to accept their proposed Job evaluation Agreement. The agreement is one which, if concluded, would create new or fresh rights or reduce existing rights. In view of the above authorities, I find that the Applicant’s dispute is a mutual interest dispute.

[34] The Third Respondent’s argument relating to jurisdiction was twofold, the first being that Part C of the Main Collective Agreement and in particular clause 1.2 and 1.3 sets out the nature of disputes which can form issues of mutual interest between the parties. The Applicant’s argument in contrast was that clause 1.2 and 1.3 sets out the levels where the disputes listed therein should be referred.

[35] Section 1, Part C of the SALGBC Main Agreement is headed Levels of Bargaining and provides the following:

1.1. Collective Bargaining may be conducted at either the national or divisional level and the appropriate forum shall be determined by having regard to the matter that is the subject of collective bargaining.

1.2. The following matters shall be the subject of collective bargaining at a national level only wages and salaries; medical aid; retrenchment policy and severance pay; retirement funds; home owners’ allowance; annual leave; maternity leave; sick leave; hours of work; and family responsibility leave.

1.3. In furtherance of the intent to establish uniform conditions of service, the following matters shall be the subject of collective bargaining at a divisional level only special leave; acting allowance; night work allowance; standby allowance; shift allowance; long service bonus; emergency work; legal indemnification; additional paid sick leave; administrative measures for the taking of sick leave; and measures to manage the taking and accrual of sick leave.

[36] It is clear from a reading of Section 1 that it sets outs out the levels where different types of disputes may be referred i.e. the national level or divisional level. It then lists those disputes. None of the lists include Job Evaluation. The Third Respondent’s argument was that the lists are exhaustive and that the fact that job evaluations were previously the subject of collective bargaining did not in the circumstances create precedence that the issue is competent for collective bargaining.

[37] The Third Respondent relied on the decision of Lagrange J in Independent Municipal and Allied Trade Union on behalf of Verster (IMATU) v Umhlatuze Municipality and Others6 where the court said that it stands to reason that an unfair labour practice dispute over an acting allowance, in which an employee is making the claim on the basis that it was granted to him or others in similar circumstances on other occasions, is a claim that the employer has unfairly refused to confer the benefit on the occasion in question. This does not amount to a demand to make the benefit obligatory in the future. The latter claim would properly be the subject-matter of collective bargaining.

[38] The IMATU decision dealt with the creation of a right in the form of a benefit through precedence. The Applicant’s case relates to a demand which as the court correctly stated is a subject matter of collective Agreement. In view of the broad definition of mutual interest dispute and the fact that parties have in the past collectively bargained on the matter, I find that it is a competent matter for collective bargaining.

[39] The Third Respondent’s contention was that if the Applicant’s contention was upheld, it would erode it would erode the responsibility and accountability of the municipal manager set out in sections 66 and 67 of the Municipal System’s Act. Further that Section 72 set out matters regulated by the Minister after consultation with the First Respondent which included the establishment of the job evaluation system. There is no requirement for the Minister to reach agreement on this issue. No collective agreement fetters the Minister’s discretion.

[40] The general aim of the LRA is to encourage employers and unions to regulate their affairs as comprehensively as possible by collective agreements. While certain rights conferred by the LRA and the BCEA may be overridden by collective agreement, such powers are limited.7

[41] In SA National Defence Union v Minister of Defence and Others,8 O'Regan J held that:

‘Although it may be appropriate for a public-sector employer to consult relevant unions on the subject-matter of regulations that will affect the collective bargaining relationship between the employer and the unions, it cannot be said that the lawmaker is obliged to bargain over the content of the law with the union. Nor is there any provision in the regulations to suggest otherwise. No matter how broadly the term 'collective bargaining' is construed in s 23(5), it cannot include the right of a union to bargain with a legislator on the content of law.’

[42] The relevant parts of the Municipal System’s Act 32 of 2000, the MSA read as follows:

‘Section 66 Staff Establishments

1) A municipal manager, within a policy framework determined by the municipal council and subject to any applicable legislation, must-

a) develop a staff establishment for the municipality; and submit the staff establishment to the municipal council for approval;

b) provide a job description for each post on the staff establishment;

Section 67 Human Resource Development

1) A municipality, in accordance with the Employment Equity Act, 1998, must develop and adopt appropriate systems and procedures, consistent with any uniform standards prescribed in terms of section 72(1)(c), to ensure fair, efficient, effective and transparent personnel administration,

Section 72 Regulations and Guidelines

The Minister may, subject to applicable labour legislation and after consultation with the bargaining council established for municipalities and the Minister for the Public Service and Administration, for the purposes of this Chapter make regulations or issue guidelines in accordance with section 120 to regulate the following matters;

….

(f) the establishment of job evaluation systems.’

[43] As O’Regan J found in the SANDU matter, the lawmaker is not obliged to bargain on the content of the Law. The MSA confers certain powers on the Municipal Manager and on the Minister. These powers may not be restrained by collective agreements. However, as between the employer and employee, there is no prohibition to self-regulate and conclude collective agreements. In this instance, it was common cause that parties had previously done so.

[44] In another dispute between the parties to the SALGBC heard under the auspices on the First Respondent herein, the Bargaining Council before Professor Alan Rycroft under case number HQ 111105, it was ruled that clause 1.1 of Part C of the Main Collective Agreement provides for collective bargaining to be conducted at either the national or divisional level on a host of matters which potentially fall within the Minister’s power to regulate and that that the Third Respondent had no difficulties to bargain on such issues. It was argued before Rycroft that as the Minister had not regulated on the issues, there was no prohibition for the parties to self-regulate. The fact that parties bargain over an issue does not in any way restrict or interfere with the Minister’s powers conferred by Section 72. Should the Minister decide to exercise those powers, he may do so in consultation with the relevant parties.

[45] I am satisfied that the Applicant’s case meets the requirements for a review in terms of Section 158(1)(g) in respect of reviewing a ruling. The test applicable in the present matter is that formulated in SA Rugby Players Association and Others v SA Rugby (Pty) Ltd and Others,9 where Tlaletsi AJA, as he then was, mentioned that:

‘The question before the court a quo was whether on the facts of the case a dismissal had taken place. The question was not whether the finding of the commissioner that there had been a dismissal of the three players was justifiable, rational or reasonable. The issue was simply whether objectively speaking, the facts which would give the CCMA jurisdiction to entertain the dispute existed. If such facts did not exist the CCMA had no jurisdiction irrespective of its finding to the contrary.’

[46] On a consideration of all facts which were before the Second Respondent, it is clear that the dispute between the parties is a mutual interest dispute. The Second Respondent’s ruling therefore failed to adequately consider the facts before him and can therefore not stand.

Costs

[47] In respect of costs, I believe that the matter concerns an important issue. In the circumstances, I do not think costs should follow the result.

[48] In the premises I make the following order.

Order

The dispute that the applicant referred to the first respondent on 15 November under case number HQ 111105 is declared to be a matter of mutual interest over which the first respondent has jurisdiction.

The advisory award under case number HQ 111105 issued by the second respondent is reviewed and set aside.

There is no order as to costs.

____________

Masipa, AJ

Acting Judge of the Labour Court

Appearances:

For the Applicant: Advocate Van Der Riet SC

Instructed by: Cheadle Thompson & Haysom Attorneys

For the Third Respondent: Advocate M Makola

Instructed by: Routledge Modise (Eversheds)

1(1999) 20 ILJ 2710 (LC)

2(2008) 29 ILJ 1113 (LAC) at para 17.

3(1997) 18 ILJ 716 (LC).

4[2000] 5 BLLR578 (LC) at paras 16 and 17.

5See Gauteng Provinsiale Administrasie v Scheepers and Others (2000) 21 ILJ 1305 (LAC) at para 8; HOSPERSA and Another v Northern Cape Provincial Administration (2000) 21 ILJ 1066 (LAC) at paras 11 and 12.

6(2011) 32 ILJ 2144 (LC) at para 23.

7Grogan J ‘Workplace Law’ 9th Edition Juta 2009 at 359.

8 2007 (5) SA 400 (CC); (2007) 28 ILJ 1909 (CC) at para 68.

9(2008) 29 ILJ 2218 (LAC) at para 41.