IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT BRAAMFONTEIN
CASE NO: J2141/2011
In the matter between:
NATIONAL EMPLOYERS ASSOCIATION OF SOUTH AFRICA First Applicant
PLASTICS CONVERTORS ASSOCIATION OF SOUTH AFRICA Second Applicant
RIVERPARK CRANE HIRE CC Third Applicant
and
MINISTER OF LABOUR First Respondent
METAL AND ENGINEERING INDUSTRIES BARGAINING COUNCIL Second Respondent
FURTHER RESPONDENTS Third and further (set out in Annexure GP1" hereto) Respondents
FOUNDING AFFIDAVIT
I, the undersigned,
GERHARD PAPENFUS
do hereby make oath and state as follows:
I am a major male, the Director of the first applicant. I am duly authorised to bring this application behalf of the applicants.
2 The facts herein contained are within my personal knowledge unless otherwise stated or apparent from the context and are to the best of my knowledge and belief, both true and correct.
3 Where submissions of a legal nature are made, they are done so on the basis of legal advice received.
4 The first applicant is the NATIONAL EMPLOYERS' ASSOCIATION OF SOUTH AFRICA ("NEASA"), an employers' organisation duly registered in terms of the provisions of section 96 of the Labour Relations Act, No 66 of 1995 (as amended) (hereinafter referred to as "the LRA') and a party to the MEIBC, with main place of business situated at 1269 Cunningham Street, Waverley, Pretoria, Gauteng.
The first applicant brings this application in its own interest and on behalf of all of its members, in terms of section 200(1) of the LRA.
5 The second applicant is the PLASTICS CONVERTORS ASSOCIATION OF SOUTH AFRICA (PCASA"), an an employers' organisation duly registered in terms of the provisions of section 96 of the LRA, with main place of business situated at 18 Gazelle Aye, Pretoria, Gauteng. The second applicant brings this application in its own interest and on behalf of all of its members, in terms of section 200(1) of the LRA.
6 The third applicant is RIVERPARK CRANE HIRE CC TRADING AS FAB SA, a closed corporation duly incorporated in accordance with the company laws of South Africa, with place of business at Three Rivers, Vereeniging. The third applicant conducts business within the registered scope of the second respondent, but is not a party to the second respondent or any employers' organisation. The third applicant employs approximately 45 employees who fall within the scope of the second respondent.
7 The first respondent is the HONOURABLE MINISTER MILDRED NELISIWE OLIPHANT, cited herein in her capacity as the Minister of Labour with address at Laboria House, 215 Schoeman Street, Pretoria. The first respondent is responsible for the administration of the Labour Relations Act 66 of 1995.
8 The second respondent is the METAL AND ENGINEERING INDUSTRIES BARGAINING COUNCIL (herein referred to as the MEIBC" or the ‘Bargaining Council"), a bargaining council duly established in terms of the provisions of section 29 of the LRA, with main place of business situated at 1st Floor, Metal Industries House, 42 Anderson Street, Johannesburg, Gauteng.
9 The third and further respondents are listed in Annexure GPI' hereto. They are parties to the MEIBC and are employers' organisations and trade unions, duly registered in terms of the provisions of section 96 of the LRA. The final respondent, Steel and Engineering Industries Federation of South Africa (SEIFSA) purports to be a federation of employer organisations. It is however not a registered employers
organisation.
AIM OF THIS APPLICATION
10 This is an application to set aside a decision by the Minister to extend the provisions of a collective wage agreement concluded at the MEIBC, to non-parties.
11 The Minister caused to be published in the Government Gazette No 34613 of 23 September 2011, Notice R748 ("the Notice"), in terms of which the collective agreement appearing in the schedule thereto was extended to non-parties falling within the scope of the MEIBC. In doing so, the Minister purported to act in terms of Section 32(2) of the LRA.
12 A copy of the abovementioned notice is attached hereto as "GP2'. The full gazetted collective agreement is attached as "GP3". The aim of the extension was to extend to non-parties the terms of a settlement agreement concluded between various of the third to further respondents, purportedly under the auspices of the MEIBC, on 18 July 2011. A copy of the settlement agreement is attached as ‘GP4".
13 The settlement agreement contains lists of wage increases for the next three years and the various amendments to terms and conditions of employment. The agreement was concluded between SEIFSA purportedly acting on behalf of certain employer associations (listed at the last two pages of the agreement), and various unions active in the industry, all of whom are cited as respondents in this application.
Certain of SEIFSA's purported members are not included in the settlement agreement, and are therefore not bound to the agreement by virtue of SEIFSA's signature thereto.
14 The first applicant did not sign the agreement and neither did the Federated Employers Organisation of South Africa (FEOSA), the thirty fourth respondent. No employers' organisation has signed the settlement agreement.
15 The applicants do not seek to challenge the validity of the settlement agreement itself in these proceedings. The applicants accept that the signatories to the agreement are bound by the terms thereof.
16 On 22 July 2011 the Bargaining Council addressed a letter to the Department of Labour in terms of which it requested the Minister to extend the contents of the settlement agreement to non-parties in the industry. A copy of the letter is attached as "GP5".
17 Despite objections (detailed below) the Minister proceeded to extend the agreement to non-parties, purportedly in terms of Section 32(2) of the LRA.
18 For the reasons set out below, the applicants contend that:
18.1. The various decision making bodies that should, in terms of the constitution of the Bargaining Council, have authority to decide on whether to request the Minister to extend a collective agreement to non-parties, are all irregularly constituted;
18.2. As a result, the parties that purported to act as a management committee, or as a council of the Bargaining Council, did so in breach of the peremptory provisions of the constitution. Such bodies who purported to make the relevant decisions in question were not properly constituted.
18.3. Any purported decisions by such bodies therefore constitute a nullity, and accordingly any request to the Minister in terms of Section 32(1) was not a request made by the Bargaining Council itself. It was fundamentally flawed and irregular and did not comply with the provisions of either the MEIBC constitution or the provisions of Section 32(1) of the LRA.
18.4.Accordingly, any decision subsequently taken by the Minister would be as invalid and fundamentally flawed as that purportedly taken by the Bargaining Council.
18.5. In addition, the applicants contend that the Notice extending the agreement to non-parties is void for vagueness and should be struck down.
19 The applicants seek an order declaring the Notice invalid and of no force or effect.
20 In the alternative, the applicants contend that the Minister failed to properly apply her mind to the prerequisites for a valid extension contained in s32 of the LRA, and for this additional reason the decision to extend stands to be set aside on review. Interim relief staying the extension to non-parties pending the outcome of such review proceedings is sought in the alternative in this application.
21 For the reasons set out below, this matter is urgent.
JURISDICTION
22 I am advised that this Court has the requisite jurisdiction (in terms of sI 57(1) of the LRA) and powers (in terms of sI 58(1) of the LRA) to determine the application and to grant the relief sought.
HISTORY OF THE DISPUTE
23 The first applicant represents approximately 1250 employers who operate within the scope of the Bargaining Council. The first applicant is a party to the Bargaining Council, as are the third to fortieth respondents. The second applicant is not a party to the Bargaining Council.
24 SEIFSA is not a registered employers' organisation. Rather it holds itself out as a federation of employers organisations, and claims to represent the employers organisations cited herein as the third to thirty third respondents (collectively SEIFSA members), who in turn largely purport to be registered employers organisations. It is disputed that all SEIFSA members are in fact genuine bona fide employers' organisations and whether they should maintain their registration as such with the Department of Labour. To this end, the Registrar of Labour Relations is currently performing an investigation on the status of these member organisations. This dispute is not presently before this court and does not require any further elaboration.
25 There is a further dispute as to whether, in terms of the Bargaining Council constitution, SEIFSA is entitled to appoint representatives to the council, management committee or regional committees of the Bargaining Council, or whether SEIFSA may continue to act as if it is a party to the Council. This is dealt with below, insofar as it is relevant to this application.
26 The National Union of Metaiworkers of South Africa (NUMSA), the thirty ninth respondent herein, is by far the most dominant union in the industry compared to other trade unions. In effect NUMSA and SEIFSA dominate the affairs of the Bargaining Council. For some time the applicant has raised complaints about the manner in which the Bargaining Council functions, and as to whether decision making bodies of the council are properly constituted.
27 The applicants' position is that the affairs of the Bargaining Council are regulated by its domestic constitution, and that the constitution regulates the composition of decision making structures and appointment of members to such structures. For many years the prescriptive provisions in the constitution have not been met when appointments have been made to the decision making bodies of the Bargaining Council,
THE ARBITRATION PROCEEDINGS
28 The first applicant has referred a dispute to the Bargaining Council relating to the interpretation and/or application of the Council's constitution. In brief, the first applicant alleges various contraventions of the Bargaining Council's constitution, in that regional structures, the Council and the Management Committee (MAN CC) are not properly constituted in accordance with the relevant peremptory provisions of the constitution and notably clauses 5 and 7 thereof. This dispute has been referred to the Bargaining Council for conciliation and has subsequently been set down for arbitration before an independent arbitrator, Adv Gerrit Pretorius SC. The arbitration is scheduled to commence on 10 November 2011.
29 I attach hereto, a copy of the statement of case filed on behalf of the first applicant together with annexures thereto, as Annexure "GP6'.
The statement of case sets out in full the first applicant's complaints regarding non-compliance with the constitution by the members to the Bargaining Council. In the arbitration, the first applicant seeks various orders (contained in paragraph 18 of the statement of claim). The Bargaining Council itself and various of the respondents have indicated their intention to oppose the referral.
30 The Minister is not a party to that dispute and the first applicant does not seek in the arbitration to have the extension to non-parties set aside. Such relief would exceed the arbitrator's jurisdiction and powers. It is inevitable that there is a degree of overlap between the content of the complaints raised in the present application and in the arbitration. I am advised and respectfully submit that the issue of extension to non-parties can only be dealt with by this court and not by an arbitrator, and that the applicants herein do not seek relief which would amount to a duplication of relief sought in the arbitration itself.
A decision of this court will obviously be relevant to and may potentially impact on the arbitration proceedings. However, the two processes are essentially unrelated.
THE DECISION TO EXTEND IS INVALID
31 For the purposes of the present application, the applicants' claim can
be summarised as follows:
32 The applicants contend that the MEIBCs purported:
32.1. Management Committee;
32.2. Regional Councils; and
32.3. Council
are all improperly constituted, in contravention of the applicable provisions of its Constitution.
33 The dispute concerns the interpretation and application of the Constitution of the MEIBC (‘the Constitution"), a copy of which is annexed to the statement of claim as "B" thereto. The clauses of most direct relevance are clauses 5(1), 5(2), 5(3), 7(1), 7(2) of the Constitution.
THE MANAGEMENT COMMITTEE
34 Between general meetings of the MEIBC's Council, its Management Committee administers its affairs.
35 Clauses 7(1) and (2) of the Constitution provide:
(1) The Council, shall appoint a Management Committee consisting of the President and Vice-President and an equal number of members from each of the employers and employees party representatives, It is specifically required that the composition of the Management Committee should reflect the national character of the Council.
(2) Members, the President and Vice-President ,will hold office until the next Annual General Meeting of the Council or until they cease to be representatives on the Council, whichever is the earlier date, and they shall be eligible for re-election for as long as they remain as representatives of parties of the Council. They may resign by giving one month's notice in writing to the Council's Secretary. "(Emphasis added)
36 It is accordingly apparent that:
36.1. The Management Committee is required to be appointed by the Council;
36.2. Members of a Management Committee cease to hold office as such at the next Annual General Meeting of the Council (if not earlier);
36.3. By necessary implication, a Management Committee must be appointed at each Annual General Meeting of the Council; and
36.4. The Management Committee must comprise an equal number of members from each of the employers' and employees' party representatives.
37 The last Annual General Meeting of the Council took place on 11 November 2010.
38 At the Annual General Meeting, which I attended, the Council did not appoint a Management Committee. Indeed, the issue of the appointment of a Management Committee was not even raised. I shall make available a copy of the transcript of the proceedings at the AGM, if what I have said is disputed, but do not annex it now to avoid burdening the papers. In fact, no appointment of a Management Committee in terms of the constitution has occurred for the last 5 years.
39 It follows that no Management Committee currently exists.
40 Further and in any event, the persons held out by the MEIBC as members of the Management Committee (to be referred to below) have never been appointed as a Management Committee by the Council.
41 Further and in any event, even if a body purporting to be the MEIBC's Council had purported, at its Annual General Meeting on 11 November 2010 or at an earlier Annual General Meeting, to appoint the current Management Committee, such appointment would have been of no force or effect, inasmuch as the Council itself has for many years not been constituted in accordance with the Constitution. (See below).
42 Pages 22 and 23 of the annual report of the MEIBC dated 30 September 2010, under the heading "Management Committee (Manco)" purported to identify the members of the Management Committee as at3O September 2010. According to the aforesaid page 23 the Management Committee, as at 30 September 2010, comprised the 55 members listed therein. Copies of pages 22 and 23, extracted from the said annual report, are attached to the statement of claim as Annexures "Dl" and "D2" thereto.
43 The aforementioned list of members is not compatible with the records as to who actually attended the last three Management Committee meetings before the 11 November 2010 Annual General Meeting.
Those who in fact attended are shown in annexure "E" to the statement of claim.
44 The aforementioned list of members is also not compatible with the names of those who actually attended the subsequent meetings of the Management Committee on 22 February, 14 April, 13 June and 30 June 2011. Those who in fact attended are shown in annexure "F" to the statement of claim.
45 At the meeting on 13 June 2011 of the ostensible Management Committee, the MEIBC's CEO requested those present to "confirm" that the current Management Committee structure comprised 19 party employer representatives and 19 party trade union representatives, broken down as follows. Party employers: "SEIFSA" 15; NEASA (the Applicant) 1; FEOSA 1; PCASA 1; CAESAR 1; and 19 trade union representatives. The CEO "noted' that, following the resignation of the PCASA as a party employer to the Council and CAESAR's deregistration, these two employer seats were "vacant'. Those present at the meeting, with the exception of the first applicant's representative, purported to "endorse" the aforegoing.
46 In terms of the Constitution, the Management Committee lacks any power to appoint itself or to determine or confirm its own composition or structure. The purported "endorsement' was accordingly of no force or effect.
47 At the meeting held on 30 June of the ostensible Management Committee, the MEIBC's CEO distributed a schedule, a copy of which is annexed to the statement of claim marked "G" thereto, purporting to list the names, and organisations represented, of the members of the Management Committee as at 29 June 2011.
48 The CEO and/or the purported Management Committee had no authority or power to constitute, reconstitute or appoint the Management Committee and the aforementioned list is accordingly of no force or effect.
49 Attached to the statement of claim as annexure "H" thereto is a schedule prepared by the applicant reflecting the MEIBC's purported lists of members of the Management Committee as at 30 September
2010 and as at 29 June 2011.
50 It is plain that both as at 30 September 2010 and as at 29 June 2011 the purported members of the Management Committee did not comprise an equal number of members from each of the employers' and employees' party representatives, as required by clause 7(1). On its own this would be a sufficient basis to declare the said purported Management Committees invalidly constituted.
51 Further and in any event, the Management Committee as at 30 September 2010 included as purported members employees of the MEIBC itself, which is impermissible in terms of clause 5(3) of the Constitution.
52 Further and in any event, the purported members of the Management Committee as at 30 September 2010 and as at 29 June 2011 (and of the Council and Regional Councils, to be referred to below) included employees, alternatively other representatives, of SEIFSA, who are not "persons engaged or employed in the Industry or full-time paid officials of the parties", as contemplated in clause 5(3) of the Constitution. The Council has not, at its Annual General Meeting by a majority vote of not less than two-thirds, agreed to permit the said persons to be admitted as representatives or alternatives (as contemplated in the said clause 5(3)). It follows that they are not permitted to be members of the Management Committee (or other structures of the MEIBC). (It may be noted that SEIFSA is neither a member of the MEIBC, nor an employers' organisation eligible to be such a member).
53 Further and in any event, only members of the Council are eligible to be appointed, in terms of clause 7(1), as members of the Management Committee. As appears below, the Council itself is and has for a long time been improperly constituted, inter alia because the Regional Councils have been improperly constituted. This too would vitiate any purported appointment by the Council of members of the Management Committee (had it taken place, which it has not).
54 Further particulars as to the invalid composition ostensible Management Committee of 30 September 2010 is set out in annexure "I" to the statement of claim.
REGIONAL COUNCILS
55 In terms of clause 7(4)(v) of the Constitution, the Management Committee is required to establish Regional Councils for the regions defined in Annexure "C" to the Constitution.
56 As appears from clause 5(1), and subject to clause 7(1), the number of employer and employee members on Regional Councils is required to conform with the numbers specified in Annexure "B" to the
Constitution.
57 The Management Committee has not purported to alter the aforesaid numbers, in terms of clause 17(1); alternatively and if it has purported to do so, it was not properly constituted when it did so and accordingly did not validly do so.
58 On 4 November 2010 the MEIBC distributed to its members (as an annexure to the agenda for the 11 November 2010 ACM) what purported to be a list of Regional Council members as at 1 November 2010, a copy of which is annexed to the statement of claim marked annexure "J" thereto.
59 The aforementioned purported Regional Councils were invalidly constituted on the following grounds (amongst others):
59.1. The employers' seats on the Regional Councils were not filled upon a basis agreed upon between all the employers' organisations belonging to the MEIBC, including the applicant, as required by clause 5(2)(a) of the Constitution.
59.2. The numbers of representatives were not consistent with the numbers required by Annexure "B" to the Constitution.
59.3. In some cases the numbers of representatives of the employers organisations did not equal the numbers of representatives of trade unions, as required by the Constitution.
(A schedule further particularising the aforementioned allegations is annexed to the statement of claim marked annexure "K" thereto).
59.4. At a purported Management Committee meeting, after the present dispute had been referred to the MEIBC, the chief executive officer of the MEIBC circulated what purported to be a list as at 29 June 2011 of (amongst others) the names and organisations represented of the members of the Regional Councils. A copy thereof is annexed to the statement of claim marked annexure "L"thereto.
59.5. The first applicant was not party to this purported reconstitution of the Regional Councils, for which no legal authorisation existed.
59.6. Attached to the statement of case marked annexures ‘Ml" to "M6" thereto are a series of schedules further particularising the first applicant's complaints as to the invalidity of the constitution of the Regional Councils, both as at 1 November 2010 and as at 29 June 2011. I ask that these complaints be read as if incorporated into this affidavit.
59.7. For the reasons set out above, the purported Regional Councils both as at 1 November 2010 and as at 29 June 2011 were and are not constituted in conformity with the requirements of the Constitution.
THE COUNCIL
60 In terms of clause 5(1) of the Constitution, the Council shall consist of the representatives appointed to the Regional Councils, as provided for in Annexure "B" to the Constitution.
61 For the reasons set out above, the Regional Councils were improperly constituted prior to and on the date of the AG M of 11 November 2010 and, unless and until that had been resolved, it was not possible to validly constitute the Council.
62 Attached to the statement of claim marked annexure "N" thereto is the attendance register at the Council's Annual General Meeting of 11 November 2010.
63 The employer representatives included persons who are not amongst those listed in annexure "J" as regional representatives. They were improperly permitted to participate in making the decisions made at
the AGM.
64 The composition of the council of the MEIBC has not complied with the requirements prescribed in clauses 5(1), 5(2) and 5(3) of the Constitution and Annexure "B" thereto, inter a/ia, in that:
64.1. The council is not comprised of the prescribed number of members, to wit, 88;
64.2. SEIFSA, not being a registered employers' organisation in terms of the provisions of the Constitution and the LRA, has acted and is acting as a party to the said council and its representatives have acted as members of the said council.
65 Further particulars appear from Annexure "0" to the statement of claim. The allegations herein are to be read as if included in this affidavit.
PURPORTED DECISION TO REQUEST EXTENSION OF COLLECTIVE AGREEMENT
66 In terms of clause 10 and clause 2 of annexure "E to the Constitution, industry wage increases and terms and conditions of employment in the industry are required to be negotiated in the Management Committee.
67 The 2011 industry negotiations were not conducted in the Management Committee, as required.
68 On 18 July 2011, at what purported to be a Management Committee meeting (which I attended), a collective agreement was signed by the trade union parties and SEIFSA, purporting to act on behalf of its members.
69 At the same meeting those present purported, by a majority, to resolve to ask the Minister to extend the aforementioned collective agreement to non-parties, as contemplated by section 32(1) of the LRA.
70 Inasmuch as those at the said meeting had no standing to make such a decision, not having been appointed by the Council as a Management Committee, whether strictly in conformity with the Constitution or at all, the purported decision to request the Minister to extend the collective agreement was a nullity.
71 It follows that any subsequent decision by the Minister to extend the collective agreement to non-parties, was irregular and a nullity, and stands to be set aside.
GENERAL
72 As there is no compliance with the mandatory provisions of clause 5(1), 5(2), 5(3) and 7(1), 7(2) of the Constitution in the respects set out above, the composition of the Regional Councils, the Council and the Management Committee of the MEIBC and/or the appointment of the members of the said Management Committee has since at least 30 September 2010 until date hereof been unlawful.
73 The first applicant, being a party to the MEIBC, has a clear right in terms of the provisions of the Constitution to require that the Regional Councils, the Council and the Management Committee of the MEIBC be composed of the representatives prescribed in terms of the aforesaid provisions of the Constitution and/or to claim that the members of the said Management Committee be appointed in accordance with the provisions of the Constitution.
74 It is submitted that the unlawful composition of the Regional Councils, the Council and the Management Committee and the unlawful appointment of the members of the said Management Committee may result in irreparable harm to the MEIBC, the parties to the MEIBC and the Industry, in that the objectives of the Constitution may not be achieved.
75 Despite the aforementioned unlawful composition of the said bodies (and the unlawful appointment of the members of the said Management Committee) being brought to the attention of the MEIBC and the parties to the MEIBC on various occasions since 11 November 2010, the MEIBC and the parties thereto have failed to remedy the aforementioned.
EVENTS PRECEEDING THE REQUEST TO THE MINISTER
76 On Friday 15 July 2011 the first applicant was informed by the facilitator in the settlement negotiations, Mr. Gavin Hartford, that SEIFSA and NUMSA has concluded, in principle, a settlement of the dispute and I was handed a copy of the draft unsigned settlement agreement.
77 A meeting of the purported Management Committee was called for the 18th of July 2011 to consider and sign the proposed settlement agreement. A copy of the notice of this meeting and agenda is attached hereto as annexure "GP7".
78 On 17 July 2011 NUMSA officially called off its nationwide industry strike.
79 The attendance register of the 18 July 2011 meeting of the purported Management Committee is attached hereto and marked annexure "GP8". I pause here to point out that many persons attended this meeting who where never before identified as members of the purported Management Committee. It is unclear on what basis many of the persons that were present, attended this meeting. A significantly unequal number of representatives for employees and employers attended the special meeting of the purported Management Committee in breach of the provisions of the MEIBC Constitution and section 55(2) of the LRA.
80 At the meeting of 18 July 2011, the chairperson requested the parties to indicate their acceptance or rejection of the proposed settlement agreement. I was present at this meeting and indicated to the chairperson N EASAs rejection of the proposed settlement agreement.
Those in favour of the settlement then signed the agreement (annexure "GP4" hereto).
81 The second respondent apparently conducted a ballot between 18 and 20 July 2011. A copy of the two pages of the ballot papers is attached hereto and marked annexure "GP9". These papers were sent to my offices by telefax. I completed the ballot paper and returned it. To my recollection, the ballot paper was unnumbered.
82 It is denied that the balloting process was conducted in compliance with the provisions of the Council's constitution, more specifically with the peremptory requirements of clause 10(3) thereof. Despite many earnest requests to the second respondent for information and transparency in relation to its balloting process, the second respondent has refused to supply the requested information. This vote remains an obscurity in itself and the second respondent refuses to divulge who was invited to vote, how many ballot papers was issued, how many ballot papers was returned, how the ballot papers were returned, and how many votes for and how many against the proposals. In substantiation of the aforesaid I annex hereto some relevant correspondence as annexure GPIO'.
83 On 22 July 2011 the second respondent requested the first respondent to extend the settlement agreement to non-parties in the industry. This request is attached hereto and marked annexure "GP5".
FURTHER RELEVANT CORRESPONDENCE
84 The following correspondence is also of relevance to this application. The applicant prays that the contents thereof be incorporated herein as if specifically pleaded. For the most part the correspondence is self- evident as to its author, addressee and content, and unnecessary repetition is avoided herein. A brief synopsis of the correspondence follows:
84.1. On 20 May 2011 the first applicant addressed a letter to all parties of the second respondent , a copy whereof I attach hereto as annexure ‘GPII", wherein it had comprehensively set out the basis of its complaints. A copy of this letter was also sent to the Department of Labour. I pause to note that I met personally with officials from the Department shortly after this correspondence was sent. The Chief Director: Collective Bargaining undertook at my request to convey the contents of this letter and the first applicant's complaints, to the Minister.
84.2. On 20 July 2011 the first applicant's previous attorneys, Geldenhuys Botha Incorporated, addressed a letter to the Minister and to various officials in the Department of Labour (copy attached as ‘GPI2") in which the first applicant requested to the Minister not to extend the settlement agreement to non-parties pending the outcome of the dispute referred to arbitration.
84.3. On 28 July 201 1 the first applicant addressed a further letter to the Minister (copy attached as "GPI 3') in which it raised in some detail the various problems and areas of nonc ompliance by the Management Committee of the Bargaining Council in reaching its purported decision to request the Minister to extend the settlement agreement to non-parties. The first applicant again called on the Minister not to extend the agreement.
84.4. On 29 July 2011 the Bargaining Council addressed a letter to the Minister (copy attached as GPI4') which briefly dealt with the history of the dispute between the applicant and other parties to the Council and the fact of referral of the dispute to arbitration. The letter contains the following statement:
‘The Council is strongly of the view that the concerns that NEASA has raised regarding the application of the MEIBC constitution has no bearing on the industry negotiations or the extension of the settlement agreement to non-parties."
84.5. The applicants maintain that the question of the validity of decision making by the Bargaining Council is obviously of crucial relevance to an assessment of the validity of the decision taken by the Minister to extend the operation of the agreement to non-parties. This is addressed in further detail elsewhere in this affidavit.
84.6, On 2 August 2011 Parker Manufacturing (Pty) Ltd addressed a letter to the Minister (copy attached as GPI 5") in which it requested the Minister for the reasons set out therein not to extend the agreement to non-parties. Parker Manufacturing is such a non-party.
84.7. On 16 August 2011 the second applicant (PCASA) addressed a letter to the Minister (copy attached as "GPI 6") raising objections to the extension of the agreement to nonp arties. PCASA is itself a non-party and represents its members. PCASA is involved in a separate demarcation dispute with the Bargaining Council as to whether the scope of activities of its members fall within the scope of registration of the Bargaining Council. This fact was made clear to the Minister in PCASA's letter.
84.8. On 22 August 2011 the applicants current attorneys of record, Anton Bakker Incorporated, addressed a letter to the Minister (copy attached as GPI 7") setting out in further detail why the agreement should not be extended to non- parties.
84.9. On 2 September 2011 Bakker addressed another letter to the Minister (copy attached as "GP18) containing further reasons why the agreement should not be extended to non- parties.
84.10. On 8 September 2011 the Minister addressed a response to the first applicant's former attorneys (copy attached as "GPI9") in which it was stated:
‘While I note your client's concerns in relation to the possible implications of the extension of the Council's collective agreement to non-parties, I wish to draw your attention to the fact that I have no discretion in the publication of agreements. The Act only requires that the Minister of Labour be satisfied that the provisions of Section 32(3) of the Act have been complied with The dispute between NEASA and the Council is regarded as a separate matter that cannot prevent the extension of the agreement to non-parties. The Minister when extending the agreement must comply with the provisions of Section 32 of the Act, which inter alia make reference to one or more registered trade unions and one or more registered employer organisations. whose members constitute the majority, being able to request that I extend that agreement. "(emphasis supplied)
84.11. On the same date the Minister addressed a letter to Parker Manufacturing (copy attached as "GP2O") setting out similar reasons for the decision to extend the settlement agreement to non-parties. In particular the Minister stated:
"The allegations of non-compliance with the council's constitution in concluding the agreement is a matter which fails outside my jurisdiction that could not be used as a basis for refusing to extend a collective agreement submitted by the Council. According to the provisions of Section 32 of the Labour Relations Act, the Minister of Labour has an obligation to extend a collective agreement to non-parties as requested by a bargaining council. This obligation applies where the Minister is satisfied that certain elements set out in Section 32(3) are present." (emphases supplied)
84.12. On 16 September 2011 Bakker addressed a further letter to the Minister containing further reasons why the agreement should not be extended to non-parties and asserted that the Minister should not simply accept that the request by the second respondent is a valid request:
"While our client value your view not to become involved with the domestic issues of the Council, if is nonetheless obligatory that you take note of the nature and exigency of the complains raised by our client and many other stakeholders in the MEIBC, At the very least, the validity of the request that the Minister extend the agreement(s) is no doubt something that you need to consider." (emphasis added)
A copy is attached hereto as annexure ‘GP2I.
84.13. On 21 September 2011 the Chief Director : Labour Relations addressed a response to Bakker (a copy attached hereto as annexure "GP22") and advised that the Minister had decided to approve the extension to non-parties.
8.4.14. On 23 September 2011 the Bargaining Council issued a circular across the industry informing members that the agreement was to be extended to non-parties and that:
"Taking into consideration the effective date of the agreement, the Council has decided to extend the deadline for the submission of exemption applications. Firms wishing to follow the exemptions process must ensure that their applications are submitted to the relevant MEIBC Regional Office by Friday 4 November 2011."
A copy of the circular is attached hereto as "GP23".
STATUTORY REQUIREMENTS FOR EXTENSION
85 Section 32 of the LRA sets out the requirements for a valid extension of a collective agreement to non-parties. The relevant provisions read as follows:
"Extension of collective agreement concluded in bargaining council:
(1) A bargaining council may as the Minister in writing to extend a collective agreement concluded in the bargaining council to any non-parties to the collective agreement that are within its registered scope and are identified in the request, if at a meeting of the bargaining council-
(a) one or more registered trade unions whose members constitute the majority of the members of the trade unions that are party to the bargaining council vote in favour of the extension; and
(b) one or more registered employers organisations. whose members employ the majority of the employees employed by the members of the employers organisations that are party to the bargaining council, vote in favour of the extension.
(2) Within 60 days of receiving the request, the Minister must extend the collective agreement, as requested, by publishing a notice in the Government Gazette declaring that, from a specified date and for a specified period, the collective agreement will be binding on the non- parties specified in the notice.
(3) A collective agreement may not be extended in terms of subsection (2) unless the Minister is satisfied that-
(a) the decision by the bargaining council to request the extension of the collective agreement complies with the provisions of subsection (1);
(b) the majority of all the employees who, upon extension of the collective agreement, will fall within the scope of the agreement, are members of the trade unions that are parties to the bargaining council;
(c) the members of the employers' organisations that are parties to the bargaining council will, upon the extension of the collective agreement, be found to employ the majority of all the employees who fall within the scope of the collective agreement;
(d) the non-parties specified in the request fall within the bargaining council's registered scope;
(e) provision is made in the collective agreement for an independent body to hear and decide, as soon as possible. any appeal brought against
i) the bargaining council's refusal of a non-party's application for exemption from the provisions of the collective agreement;
(ii) the withdrawal of such an exemption by the bargaining council:
(f) the collective agreement contains criteria that must be applied by the independent body when it considers an appeal, and that those criteria are fair and promote the primary objects of this Act; and
(g) the terms of the collective agreement do not discriminate against non-parties.
(4)
(5) Despite subsection (3) (b) and (c), the Minister may extend a collective agreement in terms of subsection (2) if-
(a) the parties to the bargaining council are sufficiently representative within the registered scope of the bargaining
council; and
(b) the Minister is satisfied that failure to extend the agreement may undermine collective bargaining at
sect oral level or in the public service as a whole."
NON-FULFILMENT OF THE JURISDICTIONAL PRECONDITION IN S32(1)
86 Since the vote and decision by the Council to request the extension of the agreement was invalid, for the reasons I have already advanced, the provisions of s32(1) have not been observed. The Minister could not validly extend the agreement in the circumstances. I submit, therefore the extension of the agreement by the Minister on 23 September 2011 is invalid and of no force and effect. In the alternative, I submit that the jurisdictional preconditions for the valid extension of the agreement by the Minister have not been observed. In the circumstances, the extension of the agreement is invalid and of no force and effect.
87 Further alternatively, it is submitted that the Minister has failed properly to apply her mind or has acted unreasonably in deciding to extend the agreement, for the reasons that follow.
NON-COMPLIANCE BY THE MINISTER OF SECTION 32
88 It is apparent from the wording of Section 32(3)(a) that the Minister may not extend the agreement to non-parties unless she is satisfied that the provisions of Section 32(1) have been complied with. It was brought to the Minister's attention in the correspondence referred to above, that there are serious irregularities in the composition of the decision making bodies of the Bargaining Council. The Minister was thus aware at the time of considering the matter of the fact of irregularities in the composition of the Bargaining Council itself. Whilst the Bargaining Council baldly denied these allegations, it is respectfully submitted that there was sufficient credible information placed before the Minister to cause serious doubt as to whether the provisions of Section 32(1) were complied with and therefore whether the request was valid.
89 In the circumstances, it would not have been possible for the Minister to satisfy herself that the request by the Bargaining Council to extend the agreement was properly taken, without at least calling for further information and submissions from the parties, and applying her mind to the complaints raised by the applicants and others.
90 Instead, the Minister seems to have adopted the view that these internal squabbles fall outside of the scope of s32, and accordingly that the Minister lacked jurisdiction to consider whether the Bargaining Council in fact requested her to extend the agreement, i.e whether the decision of the Bargaining Council complied with the internal requirements for validity as imposed by its constitution. This is evident from the Minister's correspondence to Parker Manufacturing (Annexure GP2O" above).
91 It is respectfully submitted that this amounts to a failure by the Minister to apply her mind properly to the matter and therefore a breach of the applicant and other non-parties' right to fair administrative action.
92 The Minister also failed to apply her mind to the peremptory provisions of s32(3)(f), which requires that she satisfy herself that the collective agreement "contains criteria that must be applied by the independent bodywhen it considers an appeal, and that those criteria are fair and promote the primary objects of this Act"
The agreement extended contains no such provisions on the face of it. To the extent that any criteria might be discerned from the provisions of clause 23 of the consolidated main agreement (which is incorporated by reference at clause 4), they are not fair nor promote the primary objects of the LRA as required by s32(3)(f).
93 I am advised and respectfully submit that the Minister failed to properly apply her mind to the peremptory provisions of Section 32(3) and accordingly the decision to extend the collective agreement to non- parties stands to be set aside on this basis as well.
94 The applicants will proceed with a review application to set aside the Minister's decision. In this application the applicants seek, as an alternative to the primary relief, an interim order staying extension to non-parties pending the outcome of the review.
HEARING REQUIREMENTS OF S32
95 It is submitted that it is implicit in s32 of the LRA that the Minister is obliged to notify non-parties and to provide them with an opportunity to make representations, prior to making a decision to extend a collective agreement to non-parties. Any other interpretation would violate the rights of non-parties to fair administrative action, and in particular s 4(1) of the Promotion of Administrative Justice Act 3 of 2000.
96 In the case of a party such as the third applicant, it has no involvement at all in the negotiations at the Bargaining Council which lead to the conclusion of either a general Main Agreement or an agreement on wages. The decisions made by the negotiating parties often have a profound effect on the business of a party such as the third applicant.
The extension of the Main Agreement and imposition of its terms accordingly are profound. The provision of an entirely inadequate exemptions procedure, as in the present case, is an insufficient protection of the rights of non-parties such as the third applicant. The third applicant has no input into what criteria are relevant for exemption and what process is observed for the consideration of exemptions.
97 The third applicant was never informed of the negotiations, terms of the settlement, or of the fact that the Minister was contemplating extending the agreement to non-parties such as the third applicant.
98 Non-parties such as the third applicant find themselves in the inviduous position of being informed after the fact of an agreement which has the force of legislation and is binding on them with retrospective effect, and which has a material impact on their business. Such parties are then faced with the stark option of either complying or attempting to navigate their way through an opaque, inefficient and arbitrary exemptions process, in the hope of obtaining, months after the event, some form of exemption.
99 It is submitted that the failure to grant the third applicant (and those in the same position) a hearing is therefore a violation of the right to fair administrative action in terms of s33 of the Constitution, the right to a hearing in terms of s4(1) of Promotion of Administrative Justice Act, 3 of 2000 ("PAJA"), and the right to fair labour practices in terms of s27 of the Constitution.
THE EXTENSION PROMULGATED IS VOID FOR VAGUENESS
100 Part I of the agreement promulgated by the Minister on 23 September 2011, deals with the scope of application of the agreement.
101 Section 1(1) defines the parties that fall within the scope of the agreement. Sections 1(2) & 1(3) define parties excluded from the scope.
102 Section 1(3) lists specific employers (eg. Billiton) that are expressly excluded from the scope of the agreement. This section is commonplace and uncontroversial.
103 Section 1(2) expressly excludes the application of the agreement to employers and employees who are not members of the employers' organizations and trade unions (that are parties to the agreement).
104 on the face of it, this directly contradicts the terms of the notice extending the agreement to non-parties.
105 The act of extension of the agreement grants it the status of delegated legislation. For the reasons above this legislation stands to be struck down as being void for vagueness, alternatively as unclear to such an extent that it creates real uncertainty in the industry, and prejudice to the rights of the applicants and all other non-parties to the agreement.
106 Further and in any event, the promulgation of the Notice and extension of the agreement by the first respondent is not lawful, nor is it reasonable within the meaning of s6(2)(h) of PAJA. It could never be a proper exercise of the first respondent's power to promulgate delegated legislation which is contradictory, uncertain or vague.
107 Insofar as the applicants seek to challenge the exercise by the first respondent of her statutory powers to extend the agreement to non- parties, the applicants will apply to review and set aside that exercise of power. In the interim, the applicants seek to avoid the consequences of the imposition of unlawfully promulgated agreement on employees who fail to comply with it.
GENERAL SUBMISSIONS
108 I am advised and submit that the applicants have made out a case for the relief sought. If the court upholds the applicants' contention on either of the above primary grounds (invalidity of the decision to request the Minister to extend, and failure by the Minister to apply her mind property to an extension), it must follow that the applicants are entitled to an order setting aside the extension to non-parties.
109 The extension to non-parties has already been promulgated with effect from 26 September 2011. Employers in the industry are legally obliged to comply with the extension and should they fail to do so, they will no doubt face enforcement proceedings at the behest of the Bargaining Council, and may incur expenses and penalties in the process. In a circular of the MEIBC of 3 October 2011, a copy whereof is attached hereto as annexure "GP24", the second respondent publicly announced that:
"The Honourable Minister has extended the agreement to non- parties with effect from 26 September 2011 as published in the Government Gazette No 34613 dated 23 September 2011 per Government Notices R. 747 and R. 748.
In terms of Section 32 (6) (sic) of the Labour Relations Act, the agreement is legal and binding on all party and non-party employers within the scope of the MEIBC. NEASA and PCASA members falling within the scope of the MEIBC are accordingly bound by the terms of the agreement. Therefore, the MEIBC will enforce any non-compliance of the main agreement. "(emphasis added)
110 There is also large scale confusion within the industry with both the Bargaining Council itself and constituent members such as NUMSA and SEIFSA advising their members to comply with the extension.
111 The first and second applicants are currently receiving numerous queries from member employers who are concerned and confused about their legal obligations towards employees. Some employers are implementing the increase out of ignorance of their rights or fear of being faced with potential labour unrest and enforcement proceedings.
The first and second applicants have advised their members to implement a wage increase that they consider reasonable and can afford.
112 In the nature of things, once these wage increases have been instituted they will be extremely difficult to undo and the prospects of recovering overpayment of monies is practically nil. Employers who attempt to do so would no doubt be faced with enormous labour unrest through no fault of their own.
113 As from the date of implementation, the first and second applicant's members and other employers in the industry are suffering irreparable harm, and will continue to suffer harm until such time as there is certainty as to the valid extension of the agreement.
114 I am advised and respectfully submit that there is no alternative remedy which would deliver the result sought in the present application.
115 I have made reference above to the pending arbitration proceedings. I am advised and respectfully submit that these proceedings do not constitute alternative relief which would preclude the applicants from approaching this court for an order setting aside the extension.
115.1. It would not be competent for the arbitrator to make any order in respect of the extension by the Minister to non- parties - this can only be done by a Court.
115.2. There is no guarantee that the arbitration will conclude during this year, and it may well be challenged in review proceedings in due course. It is not certain when a final result will emanate from the arbitration proceedings.
115.3. It is simply not possible given the uncertainty currently prevailing in the industry and the harm actually occurring to the applicants, the first and second applicants' members, and other employers in the industry, to wait until the outcome of the arbitration proceedings and then look to challenge an extension which by that stage would have been in place for at least several months.
115.4, The Bargaining Council's exemption process is in my experience and opinion, both arbitrary and inefficient. It has in fact formed the subject matter of debate and negotiation between parties to the Council over a lengthy period of time.
115.5. While employers are entitled to seek exemptions from provisions such as those contained in the extended collective agreement, in practise this requires that each individual employer must make application separately. Applications take months to process, and the results are often arbitrary. The Main Agreement itself sets no guidelines upon which the request for exemption will be adjudicated, or how an appeals panel will determine an appeal.
116 I respectfully submit that the first and second applicants are entitled to challenge the lawfulness of the extension to non-parties on behalf of their constituent employer members, and their members' rights are not limited to simply applying for exemption on an individual and ad hoc basis with inevitable delays, prejudice and different and arbitrary outcomes of the process. The third applicant is self-evidently entitled to litigate to protect its rights.
117 In the circumstances I am advised and submit that the applicants lack any suitable and alternative remedy for the relief sought in this application.
118 Insofar as the applicants seek an interim interdict as alternative relief, I submit that the applicants have made out a case for such relief on these papers. It is apparent that the balance of convenience favours a stay in the extension process until the review proceedings, which will be expedited, have been finalised. In the event of review proceedings ultimately succeeding, the prejudice to employers who are forced to implement wage increases in the interim far outweighs that of any of the respondents or their members. If review proceedings fail, employers will be obliged to implement wage increases retrospectively. If however the review succeeds, it will prove almost impossible in practice to recover any overpayments, and any attempts to do so will almost certainly spark industrial unrest.
URGENCY
119 This matter is brought as one of urgency, although sufficient time periods have been given to the affected parties in which to respond. The matter is set down for hearing on 25 October 2011. It is respectfully submitted that the matter is of such a nature that it warrants hearing on an expedited basis:
119.1. The urgency is not in any way self-created. The Minister's decision to extend the terms of the agreement to non- parties was only made known to the applicant on or about 22 September 2011. The Gazette itself was published on Friday 23 September 2011 and the extension took effect from Monday 26 September 2011.
119.2. The applicant immediately took urgent steps to consult with its attorneys and counsel with a view to preparing this application. The application in itself evidently is complex. Much information was required. The statement of claim in the arbitration proceedings was completed on Friday 30 September 2011. These papers were prepared by counsel other than those presently briefed in this application, and required proper consideration prior to finalising this application.
119.3. It is submitted that the application has been prepared with proper haste and that any urgency has not been self created.
119.4. The applicant has on numerous occasions requested information from the Bargaining Council, to no avail. This has further contributed to the delay in finalising this application.
119.5. The deadline for exemptions has been set by the Bargaining Council as 4 November 2011. There is much uncertainty in the industry at the moment and the applicant is dealing with constant queries from members as to whether they should apply for exemptions.
119.6. It is of crucial importance for the industry as a whole and particularly non-parties to reach clarity on their legal rights. If the relief sought in this application is granted, it will not be necessary for any non-party to implement the wage increases as per the settlement agreement (each party can implement wage increases agreed between it and its employees) or any of the other terms and conditions of employment in the extended collective agreement. If however the application fails, the parties will need to be advised and to prepare exemption applications and to submit them timeously.
119.7. Should they fail to do so, employers may find their exemption applications being dismissed for having been filed out of time through no fault of their own.
119.8. The MEIBC has made clear its intention to enforce the agreement against non-parties, and to prosecute noncompliance. The MEIBC is also using its considerable resources to spread the message that the agreement and its extension are binding and irrevocable.
119.9. Payments made in terms of the extended collective agreement will be practically impossible to recover in due course. The non-compliance will no doubt be prosecuted by the MEIBC and could lead to the issuing of arbitration awards followed by execution against non-compliant employers.
119.10. The potential for labour unrest can also not be overstated. What is required is certainty in the industry as to the validity of the extension and this is required on an urgent basis.
119.11. The industry has already faced crippling strikes earlier during the year which have had a serious detrimental impact on the economy as a whole. Recent statistics indicate that the manufacturing sector decline by 7% during the second quarter of the year, largely due to industrial action in the industries such as the metals and engineering industry. Employers simply cannot afford further labour unrest at this stage and it is submitted that it is in the interest of justice that a court pronounce on this issue which affects literally hundreds of thousands of employees and tens of thousands of employers in the industry on an expedited basis.
120 Wherefore I humbly pray for an order in terms of the Notice of Motion. WHEREFORE the applicants pray for the relief sought in the notice of motion.
DEPONENT
THUS SIGNED and SWORN to before me at on this day of 2011, the deponent having acknowledged that he knows and understands the contents of this affidavit; that he has no objection to taking the prescribed oath and that he considers the oath as binding on his conscience.
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