Unitrans Passenger (Pty) Ltd t/a Megabus and Coach v Association of Mineworkers and Construction Union (AMCU) obo Members and Others (JR2157/2020) [2024] ZALCJHB 358 (3 September 2024)

FLYNOTES: LABOUR – Collective agreement – Interpretation – Provision of transport allowance dispute – Tripartite agreement – Intention of agreement to end strike and to uniformly regulate terms and conditions of employment – Arbitrator failed to give effect to intention of agreement – All aspects of agreement demonstrate that tripartite agreement was envisaged – Incorrectly concluded that agreement recorded a bilateral agreement – Failed to properly engage in process of interpretation – Award reviewed and set aside.

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Reportable

Case no: JR2157/2020

In the matter between:

UNITRANS PASSENGER (PTY) LTD t/a MEGABUS AND COACH Applicant and ASSOCIATION OF MINEWORKERS AND CONSTRUCTION UNION (AMCU) obo MEMBERS First Respondent DINEO PALESA SELELANE N.O Second Respondent SOUTH AFRICAN ROAD PASSENGER BARGAINING COUNCIL Third Respondent

Heard: 27 August 2024

Delivered: 3 September 2024

This judgment was handed down electronically by consent of the parties’ legal representatives by circulation to them via email. The date for hand-down is deemed to be 3 September 2024.

JUDGMENT

PRINSLOO, J

Background

[1] The Applicant operates in the passenger transport industry and conducts business from several depots within South Africa. It provides bus transport services to commuters and to enterprises which provide transport for their employees.

[2] This matter concerns a dispute between the Applicant and AMCU (and its members) at the Applicant’s Virginia depot. The Applicant provides free transport in the form of staff busses for all its bargaining council employees at the Virginia depot.

[3] The dispute between the Applicant and AMCU, the minority union at the Virginia depot, relates to the provision of a transport allowance. In March 2018, AMCU’s members demanded to be paid a transport allowance of R 500 on the basis that such an allowance was paid to employees at the Applicant’s Kloof depot in Gauteng, where the Applicant does not provide bus transport to its employees, but instead pays them a travel allowance.

[4] The dispute was referred to the Third Respondent (SARPBAC) in April 2018 and after it was not resolved, AMCU’s members embarked on a strike from 21 November – 10 December 2018.

[5] On 10 December 2018, the Applicant and AMCU signed a settlement agreement, which became the subject of a dispute that was subsequently referred to the SARPBAC and that resulted in an arbitration award, which is the subject of this review application.

The settlement agreement

[6] The settlement agreement recorded that it was an agreement between Mega Bus Virginia, AMCU and NUMSA. NUMSA is the majority union at the Virginia depot.

[7] In terms of the agreement, the parties agreed inter alia that the ‘transport allowance’ would be settled on the basis that the Applicant would implement and effect the payment of a monthly ‘staff transport allowance’ of R 500 to all affected employees of the Applicant at the Virginia depot, with effect from 1 January 2019, that there would be a permanent cessation of the provision of staff transport by the Applicant as from 28 February 2019, that all other applicable terms and conditions of employment would remain applicable and in force and that the agreement was accepted by all bargaining council employees at the Virginia operation.

[8] The agreement was signed by the Applicant and AMCU on 10 December 2018, but it was not accepted and signed by NUMSA. The Applicant’s position was that the acceptance of the agreement by all bargaining council employees was a condition precedent to the conclusion of a valid agreement and its implementation. NUMSA refused to sign the agreement and to accept the payment of the transport allowance and therefore no valid agreement was entered into. The Applicant stated that as there was no valid agreement entered into between the parties, it did not implement the settlement agreement, the status quo was maintained and it continued to provide staff busses to all its employees at the Virginia depot.

[9] AMCU referred a dispute about the application and interpretation of the settlement agreement to SARPBAC and the dispute was arbitrated on 30 October 2020.

The arbitration

[10] The arbitrator recorded that the issue she had to decide was whether the Applicant had failed to implement the settlement agreement reached on 10 December 2018 and if so, to determine the appropriate remedy.

[11] The parties did not lead evidence but instead submitted written submissions for the arbitrator’s consideration.

[12] In AMCU’s submissions, reference was made to the terms of the settlement agreement and it was submitted that the agreement is valid and binding on the parties to the agreement, that the agreement settled a matter of mutual interest and that its implementation is with retrospective effect.

[13] The Applicant on the other hand submitted that the agreement was between the employer and the two main unions operating at the Virginia depot, namely NUMSA (the majority union) and AMCU (the minority union). However, NUMSA did not sign the agreement and the condition recorded in the agreement, namely that the agreement be accepted by all bargaining council employees at the Virginia operation, was not met and the agreement could not be implemented. The Applicant was not frustrating the implementation of the agreement, but was committed to implementing it immediately, as soon as all the parties were on board. However, NUMSA had not signed the agreement and therefore the Applicant was unable to implement it.

[14] The Applicant explained in its submissions that it could not implement different rules for employees who are members of different unions as it would lead to chaos, would result in conflict between the two rival unions, which could have dire consequences and

would result in the Applicant paying a transport allowance to some employees and providing bus transport to others, doubling the

Applicant’s costs.

[15] The Applicant elaborated that implementing different rules for employees in the same operation would be impossible, logistically and administratively. It was explained that the Applicant would have to operate staff busses to accommodate non-AMCU members and there would be no benefit for the Applicant in paying the transport allowance. Furthermore, employees would benefit both ways – they would be paid the transport allowance and have the benefit of using a staff bus because it would be impossible to differentiate between the members of the unions. Furthermore, employees often migrate from one union to another. It would be impossible to prohibit AMCU members from boarding the busses, which would create a great possibility of conflict. Effectively the Applicant’s position was that it was either providing staff transport or it was paying a travel allowance, but not both and whichever one it was, it had to be uniform for all employees.

[16] The Applicant submitted that once the agreement is implemented, it would stop the staff busses from operating and employees would have to get to work and back on their own, but it had not been done yet and the employees were still enjoying the benefit of being transported to work and back for free. The agreement could not be implemented retrospectively because the staff busses were still in operation and no employee was prejudiced.

The arbitration award

[17] The arbitrator found that it was common cause that NUMSA, the majority union, did not sign the settlement agreement, that it was signed by the Applicant and AMCU and that the Applicant did not implement the R500 transport allowance, as per the agreement.

[18] The arbitrator considered that a collective agreement is a written contract, negotiated through collective bargaining “for employees by one or more trade unions with the management of the company” and that such an agreement regulates the terms and conditions applicable to the employees. She recorded that a collective agreement is binding on the members of the trade union and the employer, who are party to the agreement and they are so bound for the duration of the agreement.

[19] The arbitrator held that the collective agreement “was birthed as a result of AMCU members who went on strike from 21 November until 10 December 2018” and as a result, the implementation of the collective agreement between AMCU and the Applicant was not dependent on NUMSA as the majority union. The purpose of the agreement was to “set aside a matter of mutual interest, which was referred under the auspices of the CCMA and remained unresolved”.

[20] The arbitrator rejected the Applicant’s argument that it waited for NUMSA to sign the collective agreement before implementing the payment of the R500 transport allowance to AMCU members. She referred to clause 1.1 of the collective agreement which provided that the Applicant would “implement and effect the payment of monthly staff transport allowance of R 500 to all affected employees employed by the company at the Virginia depot” and reasoned that the ‘affected employees’ were the AMCU members.

[21] With further reference to clause 1.1, the arbitrator found that the said clause suggested that there was “a consensus, a meeting of the minds between Megabus and Coach and AMCU. There was capacity, offer and acceptance, certainty, possibility of performance and lawfulness between the two parties”. Based on this, the arbitrator found that the collective agreement remained valid and binding.

[22] The arbitrator found that the issues raised by the Applicant were “peripheral to the issue in dispute” and that, on a balance of probabilities, the Applicant failed to implement the collective agreement. She ordered the Applicant to pay the AMCU members a R500 transport allowance retrospectively from 25 January 2018 until 30 October 2020.

The applicable legal principles:

[23] The courts have considered the issue of interpretation on several occasions and the applicable principles are by now set as trite. In my view, a brief overview of the principles will be useful in casu.

[24] The Supreme Court of Appeal in Natal Joint Municipal Pension Fund v Endumeni Municipality[1] affirmed the principles applicable to the interpretation of legislation and contracts. What the judgment underscores is that the exercise of interpretation does not require a court to discern the intention of the legislature or the parties to a contract only by reference to the plain meaning of words with a deferential nod, if necessary, in the direction of the Oxford English Dictionary. The following was said:

'The present state of the law can be expressed as follows: interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, or contract, having regard to the context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attendant upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production. Where more than one meaning is possible each possibility must be weighed in the light of all these factors. The process is objective, not subjective. A sensible meaning is to be preferred to one that leads to insensible or unbusinesslike results or undermines the apparent purpose of the document…. The "inevitable point of departure is the language of the provision itself" read in context and having regard to the purpose of the provision and the background to the preparation and production of the document…’

[25] And at paragraph 26 it was held that:

'In between these two extremes, in most cases the court is faced with two or more possible meanings that are to a greater or lesser degree available on the language used. Here it is usually said that the language is ambiguous, although the only ambiguity lies in selecting the proper meaning (on which views may legitimately differ). In resolving the problem, the apparent purpose of the provision and the context in which it occurs will be important guides to the correct interpretation. An interpretation will not be given that leads to impractical, unbusinesslike or oppressive consequences or that will stultify the broader operation of the legislation or contract under consideration.'

[26] In Bothma-Batho Transport (Edms) Bpk v S Bothma & Seun Transport (Edms) Bpk[2], the Supreme Court of Appeal also considered the principles applicable to the interpretation of legislation and contracts and held that:

'Whilst the starting point remains the words of the document, which are the only relevant medium through which the parties have expressed their contractual intentions, the process of interpretation does not stop at a perceived literal meaning of those words, but considers them in the light of all relevant and admissible context, including the circumstances in which the document came into being. The former distinction between permissible background and surrounding circumstances, never very clear, has fallen away. Interpretation is no longer a process that occurs in stages but is “essentially one unitary exercise”.’

[27] In Coopers & Lybrand and Others v Bryant[3], it was held that:

‘The matter is essentially one of interpretation. I proceed to ascertain the common intention of the parties from the language used in the instrument. Various canons of construction are available to ascertain their common intention at the time of concluding the cession. According to the ‘golden rule’ of interpretation the language in the document is to be given its grammatical and ordinary meaning, unless this would result in some absurdity, or some repugnancy or inconsistency with the rest of the instrument….

[28] In Food and Allied Workers Union v Commission for Conciliation, Mediation and Arbitration and Others[4], the interpretation of a collective agreement was considered and it was held that:

‘What is accordingly very clear is that, where a court, or a commissioner of the CCMA for that matter, is tasked to interpret a written

contract, or as in the present case, a collective agreement, it must give to the words used by the parties their plain, ordinary and popular meaning and if there is no ambiguity in the words of the contract, they must be given their plain, ordinary and popular

meaning.’

[29] In Herbert v Head Education: Western Cape Education and Others[5] (Herbert), the Labour Appeal Court (LAC) dealt with a matter that concerned the interpretation and application of a collective agreement. It was held that:

‘[13] In University of Johannesburg v Auckland Park Theological Seminary and Another, the Constitutional Court stated that the approach to interpretation adopted in Endumeni had “updated” the previous position, which was that context could be resorted to if there was ambiguity or lack of clarity in the text. In cases subsequent to Endumeni, the Constitutional Court noted that the Supreme Court of Appeal “has explicitly pointed out that context and purpose must be taken into account as a matter of course, whether or not the words used in the contract are ambiguous.”

[14] In Capitec Bank Holdings Limited and Another v Coral Lagoon Investments 194 (Pty) Ltd and Others, the Supreme Court of Appeal stated that:

“…Endumeni has become a ritualised incantation in many submissions before the courts. It is often used as an open-ended permission to pursue

undisciplined and self-serving interpretations. Neither Endumeni, nor its reception in the Constitutional Court, most recently in University of Johannesburg, evince skepticism that the words and terms used in a contract have meaning.”

[15] The Court noted that what Endumeni does is that it –

“… simply gives expression to the view that the words and concepts used in a contract and their relationship to the external world are not self-defining. The case and its progeny emphasise that the meaning of a contested term of a contract (or provision in a statute) is properly understood not simply by selecting standard definitions of particular words, often taken from dictionaries, but by understanding the words and sentences that comprise the contested term as they fit into the larger structure of the agreement, its context and purpose. Meaning is ultimately the most compelling and coherent account the interpreter can provide, making use of these sources of interpretation. It is not a partial selection of interpretational materials directed at a predetermined result.”

[16] In interpreting the collective agreement in this matter, the arbitrator was required to have regard to the aim and purpose of the collective agreement, the words and language used in it, having regard to ordinary rules of grammar and syntax, and the context in which the disputed terms appear in the agreement….’

[30] In short: the correct approach to the application of the ‘golden rule’ of interpretation after having ascertained the literal meaning of the word or phrase in question, is to have regard to the context in which the word or phrase is used with its interrelation to the contract as a whole, including the nature and purpose of the contract and the background circumstances which explains the purpose of the contract.[6] The point of departure is that words and terms used in a contract have meaning.

The test on review

[31] In SA Municipal Workers Union v SA Local Government Bargaining Council and Others[7], the LAC dealt with a review application concerning the interpretation or application of a collective agreement and noted that the question to be answered was not whether the award in issue was correct but whether the arbitrator had acted fairly, and considered and applied his mind to the issues before him. It is accepted that the reasonableness test is applicable in a review concerning the interpretation or application of a collective agreement.

[32] However, in Herbert[8], the LAC considered the test to be applied and held that:

‘[24] In MacDonald’s Transport[9] it was found that the Labour Relations Act (‘the LRA’) did not contemplate that a CCMA or bargaining council arbitrator, both statutory roles, would have the last word on the proper interpretation of an instrument as this would mean that a patently wrong interpretation would be left intact, which “would be absurd”. The wrong interpretation of an instrument by an arbitrator could therefore constitute a reviewable irregularity as envisaged by section 145 of the LRA, in the sense that a reasonable arbitrator does not get a legal point wrong. The Court concluded that either “the

reasonableness test is appropriate to both value judgments and legal interpretations. If not, ‘correctness’ as a distinct test is necessary to address such matters”. This view was echoed in NUMSA[10], in which it was stated that an incorrect interpretation of the law by a commissioner constitutes a material error of law which “will result in both an incorrect and unreasonable award”, which “can either be attacked on the basis of its correctness or for being unreasonable”.

[25] The arbitrator in this matter incorrectly interpreted the relevant appointment provisions contained in annexure C3 to the OSD agreement insofar as they related to the appellant. This error was of such a material nature that it resulted in a decision which, on a proper interpretation of the OSD agreement, was one that a reasonable arbitrator on the material before them could not reach.’

The grounds for review

[33] In casu, it was common cause that the Applicant had failed to implement the collective agreement. In fact, in the Applicant’s submissions

to the arbitrator, it was stated that the agreement was not implemented because the condition in paragraph 1.4 of the agreement

was not met.

[34] The arbitrator found, on a balance of probabilities, that the Applicant failed to implement the collective agreement and the Applicant took issue with this finding. The Applicant’s case is that in reaching her conclusion, the arbitrator failed to consider and interpret the terms of the agreement and she erred in finding that a valid agreement had been concluded between the Applicant and AMCU.

[35] The Applicant’s primary ground for review is that in the absence of an agreement with NUMSA, no collective agreement came into being in the first place and any finding to the contrary, is unreasonable.

[36] In my view, there is merit in the Applicant’s ground for review. On the facts before the arbitrator, it was already common cause that the collective agreement was not implemented and the arbitrator misdirected herself as to the nature of the enquiry and the issue she had to decide. The arbitrator had to consider and interpret the terms of the agreement and decide whether a valid

agreement was concluded, which was capable of implementation and enforcement.

[37] The Applicant takes issue with the arbitrator’s interpretation of the terms of the agreement and submitted that it was her incorrect interpretation of its phrases or her failure to consider relevant clauses that led to her incorrect and unreasonable conclusion.

[38] The only evidence before the arbitrator was the written settlement agreement and the parties made submissions on its interpretation and application for the arbitrator to consider. As already alluded to, the point of departure is that words and terms used in a contract have meaning and the arbitrator should have applied the principles of interpretation to first determine whether a collective agreement came into being in the first place.

[39] The settlement agreement is titled ‘Settlement Agreement between Mega Bus Virginia and AMCU and NUMSA’. Clause 1 recorded that: “Parties hereby agree to settlement of the transport allowance on the following basis” and clause 1.1 provided that “the Company will implement and effect the payment of a monthly ‘staff transport allowance’ of R 500 to all affected employees employed by the Company at the Virginia depot” and this was to commence from 1 January 2019. Clause 1.2 provided that there would be a permanent cessation of the provision of staff transport by the Applicant as from 28 February 2019. Clause 1.4 provided that: “this agreement is being accepted by all bargaining council employees of the Virginia operation”. At the end of the document, provision has been made for the signatures of the Applicant and acceptance by AMCU and NUMSA.

[40] The aforesaid provisions clearly indicate that the proposed settlement agreement was a tripartite one between the Applicant, AMCU and NUMSA, in which all the parties had to agree to the withdrawal of the staff transport provided by the Applicant and for the payment of a travel allowance instead. The effect of the settlement agreement would be that the terms and conditions of all the employees at the Virginia depot would be varied with respect to the provision of transport.

[41] Notwithstanding all the aspects of the settlement agreement which demonstrate that a tripartite agreement was envisaged, the arbitrator concluded that the agreement recorded a bilateral agreement between the Applicant and AMCU.

[42] It is evident that the arbitrator had no regard for the heading of the settlement agreement, where the parties to the agreement were recorded as the Applicant, AMCU and NUMSA. She further failed to consider clause 1.4 of the settlement agreement, which provided that the agreement be accepted by all bargaining council employees of the Virginia operation. The clause is conditional –

the agreement would be binding and enforceable if the condition that it be accepted by all was met. NUMSA refused to sign the agreement

and as such it was not accepted, as contemplated in the terms of the settlement agreement.

[43] The arbitrator interpreted the phrase ‘affected employees’ in clause 1.1 to be the AMCU members “hence they embarked on an industrial action”. The arbitrator’s interpretation is not reasonable and she failed to apply the trite principles of interpretation. Clause 1.1 should be read with clause 1.2, which provides for the permanent cessation of the provision of staff transport as from 28 February

2019, as well as clause 1.4, which provides that all bargaining council employees should accept the terms of the agreement. The

cessation of the provision of staff transport would affect all the employees at the Applicant’s Virginia depot and not only the members of AMCU. To interpret the phrase ‘affected employees’ to mean only AMCU members, would create an absurd and ambiguous situation.

[44] In interpreting the collective agreement, the arbitrator was required to have regard to the aim and purpose of the collective agreement, the words and language used in it, having regard to ordinary rules of grammar and syntax, and the context in which the disputed terms appear in the agreement.

[45] The Applicant’s case was that the aim of the settlement agreement was not only to bring an end to the strike embarked upon by the AMCU members, but it was also to vary the terms and conditions of employment of all its employees at the Virginia depot and to ensure uniformity. In terms of the settlement agreement, the Applicant was to cease the provision of staff transport and

instead, pay a transport allowance. This would affect all employees and as such, they had to agree to the variation of the terms and conditions of their employment and therefore, it was necessary for NUMSA to sign the agreement and to agree to the terms thereof.

[46] The Applicant provided sound and valid reasons as to why it was not possible to implement different terms and conditions for members of the two different trade unions. The arbitrator failed to consider those and found that it was no more than “peripheral to the issue in dispute”.

[47] The arbitrator failed to give effect to the intention of the agreement, namely to end a strike and to uniformly regulate the terms and conditions of employment.

[48] It is trite that where an arbitrator is tasked to interpret a collective agreement, he or she must give the words used by the parties their plain, ordinary and popular meaning. The ‘golden rule’ of interpretation applies where a collective agreement is to be interpreted. It is evident from the award, read holistically, that the arbitrator did not have a sound understanding of the rules of interpretation and what was required of her in applying those in an interpretation or application dispute.

[49] The arbitrator misconceived the nature of the enquiry when she failed to properly engage in the process of interpretation. She took an overly simplistic view when she found that the affected employees were only AMCU members and that the settlement agreement was effectively no more than an instrument to end a strike in which NUMSA did not participate. As a result, NUMSA was not a necessary party to sign the agreement, and a binding agreement came into existence between the Applicant and AMCU.

[50] Evidently, there was more to be considered and other factors to be reflected upon in the process of interpreting the context and application of the settlement agreement.

[51] A proper consideration of all the facts and interpretation of the settlement agreement shows that the agreement not only intended to end the strike but also intended to vary the terms and conditions of all the Applicant’s employees at the Virginia depot who would be affected by the provision of staff transport and the cancellation thereof. The cancellation of staff transport and the implementation of a transport allowance instead, had to be accepted by all the bargaining council employees, including the members of NUMSA and in the absence of NUMSA’s acceptance, no binding agreement came into existence. In short: no collective

agreement exists that regulates staff transport or a transport allowance at the Applicant’s Virginia depot.

[52] The Applicant conceded that in the absence of a valid agreement with AMCU, the issue of the travel allowance remains in dispute as a matter of mutual interest, over which AMCU’s members are still entitled to strike.

[53] The arbitrator incorrectly interpreted the terms of the settlement agreement and this error was of such a material nature that it resulted in a decision which, on a proper interpretation of the settlement agreement, was one that a reasonable arbitrator on the material before her, could not reach. The arbitration award is not rational or reasonable and is to be interfered with on review.

Costs

[54] This Court has a wide discretion in respect of costs and in my view, this is a matter where the interest of justice will be best served by making no order as to cost. The parties have an ongoing collective bargaining relationship and counsel for both parties, submitted that each party was to pay its own costs.

[55] In the premises, I make the following order:

Order

1. The arbitration award issued on 13 November 2020 under case no: RPNT6071 is reviewed and set aside.

2. There is no order as to costs.

Connie Prinsloo

Judge of the Labour Court of South Africa

Appearances:

Applicant: Advocate C Orr SC Instructed by: Bowman Gilfillan Attorneys First Respondent: Adv A Cook Instructed by: Larry Dave Attorneys

[1] [2012] ZASCA 13; 2012 (4) SA 593 (SCA) at para 18.

[2] [2013] ZASCA 176; [2014] 1 AII SA 517 (SCA) at para 12.

[3] [1995] ZASCA 64; 1995 (3) SA 761 (A) (Coopers) at 767D-E.

[4] (2007) 28 ILJ 382 (LC) at para 35.

[5] [2022] ZALAC 9; (2022) 43 ILJ 1618 (LAC) at paras 13 – 16.

[6] Coopers supra.

[7] [2011] ZALAC 22; (2012) 33 ILJ 353 (LAC).

[8] Herbert supra at paras 24 – 25.

[9] MacDonald’s Transport Upington (Pty) Ltd v Association of Mineworkers and Construction Union and others [2016] ZALAC 32; (2016) 37 ILJ 2593 (LAC).

[10] National Union of Metalworkers of SA v Assign Services & others [2017] ZALAC 44; (2017) 38 ILJ 1978 (LAC) at para 32.