Cusa v Tao Ying Metal Industries and Others

• Jurisdiction: South Africa
• Judge: Langa CJ, Madala J, Mokgoro J, Ngcobo J, O'Regan J, Skweyiya J, Van Der Westhuizen J, Yacoob J and Kroon AJ
• Judgment Date: 18 September 2008
• Citation: 2009 (2) SA 204 (CC)
• Docket Number: CCT 40/07
• Hearing Date: 28 February 2008
• Counsel: L Halgryn for the applicant. MSM Brassey SC (with PA Buirski) for the first respondent. No appearances for the second, third and fourth respondents.
• Court: Constitutional Court

Ngcobo J: A

[1] This is an application for leave to appeal against the decision of the Supreme Court of Appeal. It raises important questions concerning the role of commissioners of the Commission for Conciliation, Mediation and Arbitration (CCMA) in resolving labour disputes and that of the courts in overseeing the arbitration process. These questions arise from B the refusal by Tao Ying Metal Industries (the employer) to comply with wage provisions of the applicable bargaining council agreement, claiming that it had been exempted from complying with the relevant provisions. This refusal gave rise to a dispute between the employer and its workers who comprised 250 workers out of a workforce of 300. The C commissioner who arbitrated the dispute found that the exemptions relied upon by the employer had expired and ordered the employer to comply with the applicable bargaining council agreement.

[2] The employer instituted proceedings in the Labour Court to review the award of the commissioner. The application was unsuccessful. So too D was an appeal to the Labour Appeal Court. But a further appeal to the Supreme Court of Appeal succeeded. That court found by a majority of three to two that the exemptions relied upon by the employer had not expired and held that the commissioner did not have jurisdiction in respect of the dispute because it concerned the validity of a bargaining E council agreement. Neither the Labour Court nor the Labour Appeal Court considered whether the commissioner had jurisdiction to consider the validity of the exemptions as this was not one of the grounds of review urged by the employer. However, this question featured in the Supreme Court of Appeal.

[3] To put the factual background and the issues in this case into F context, it is desirable to describe, in broad outline, the statutory framework within which the dispute between the employer and the representatives of the workers arose. Initially the workers were represented by the Hotel, Liquor, Catering, Commercial and Allied Workers' Union of South Africa. The workers are now represented by the G Commercial Workers' Union of South Africa (CUSA).

The legal framework

[4] Section 23(5) of the Constitution guarantees to every trade union, employers' organisation and employer 'the right to engage in collective H bargaining'. To this end Parliament is required to enact legislation 'to regulate collective bargaining'. [1] The Labour Relations Act of 1995 [2] (the LRA) is the legislation which, among other things, gives effect to this right. The LRA puts in place a scheme for concluding, enforcing and resolving disputes arising from collective bargaining agreements. [3] I

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A Broadly speaking, this scheme provides for the establishment of a system of bargaining councils in respect of different sectors and areas. [4] Bargaining councils are established by registered trade unions and employers' organisations. Parties to a bargaining council are therefore indirectly representatives of workers and employers. Bargaining councils constitute B forums for negotiating, concluding and resolving disputes concerning collective agreements.

[5] Collective agreements concluded in a bargaining council are binding on the parties of the bargaining council. And they may, by ministerial decree, be extended to apply to all workers and employers in the sector C and area in respect of which the bargaining council has been established. These agreements generally deal with minimum wages and other conditions of employment applicable to employers and workers in a particular industry. They therefore set the floor beneath which wages and other conditions of employment should not drop. Parties generally D conclude the main agreement which deals comprehensively with the terms and conditions of employment. The main agreement generally remains in force for a period of one year in anticipation of the periodical renegotiation of some of the terms, in particular those that deal with wages, which are reviewed annually. Upon the expiration of its period, the main agreement may be extended as amended by newly negotiated E terms and conditions of employment.

[6] As some employers might find complying with the provisions of a bargaining council agreement unbearable, the LRA makes provision for exemption from some of the provisions of the collective agreement. [5] The authority to grant an exemption rests with the bargaining council. The F LRA contemplates that the authority to grant exemptions from bargaining council agreements will derive from the constitution of the bargaining council. [6] In addition, a bargaining council agreement that is imposed upon non-parties must provide for an appeal to an independent body from a refusal to grant an exemption to non-parties. [7]

G [7] Prior to the enactment of the LRA the position was regulated by the Labour Relations Act, 1956 [8] (the 1956 LRA), which had in place a substantially similar scheme. Section 51 of the 1956 LRA conferred the authority to grant exemptions from industrial council agreements. The terms and conditions of an exemption had to be incorporated in a H 'licence of exemption'. [9] The parties to an industrial council would conclude the main agreement which would deal comprehensively with terms and conditions of employment in the industry in respect of which the industrial council had been established. And this agreement could be

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extended to non-parties within the industry by ministerial decree. These A agreements could be extended annually with or without amendments.

[8] Schedule 7 to the LRA provides for the transition from the old to the new scheme. An industrial council agreement that was registered under the 1956 LRA is deemed to be a bargaining council agreement under the LRA. An industrial council agreement that was binding in the industry B prior to the commencement of the LRA remains in force 'for a period of 18 months after the commencement of the [LRA] or until the expiry of that agreement . . . whichever is the shorter period'. [10] This is subject to certain exceptions which do not apply in this case. [11] After the commencement of the LRA, exemptions could be granted from an agreement C which remained in force pursuant to the transitional provisions. [12] However, these exemptions had to be made and dealt with under the provisions of s 51 of the 1956 LRA and not under the LRA.

[9] While an exemption that was in force at the commencement of the LRA remained 'in force for a period of 18 months after the commencement D of [the LRA] or until the period for which the exemption had been granted', whichever occurred first, [13] the transitional provisions did not

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A deal with the termination of exemptions granted after the commencement of the LRA. Presumably exemptions granted after the commencement of the LRA were to terminate upon the expiry of the period for which they were granted. What is immediately apparent from the transitional provisions is that both the agreements and the exemptions B that were in force at the commencement of the LRA had a limited life. They were either to remain in force for a period of 18 months after the commencement of the LRA or until their expiry date, whichever occurred first.

[10] During 1980 the parties to the industrial council for the Iron, Steel, Engineering and Metallurgical Industry (now the Metal and C Engineering Industry) concluded an industrial council agreement. That agreement was published in Government Notice R1329 of 27 June 1980 (the industrial council main agreement). This agreement has been amended, extended and re-enacted from time to time. It was last re-enacted on D 8 November 1996 and published in Government Notice R1802 of the same date. It was due to expire on 30 June 1997. This agreement was re-enacted just three days prior to the coming into effect of the LRA on 11 November 1996. And all this occurred under s 48(1)(a) of the 1956 LRA. It is this agreement that was in force at the time when the employer became a member of the bargaining council. The employer E subsequently applied for and was granted exemptions from wage and other provisions of this agreement. As these exemptions were granted in April 1997, they were not operational at the commencement of the LRA. They must thus have been enacted under s 51 of the 1956 LRA read with Schedule 7 of the LRA.

F [11] On 31 March 1998 a new agreement, concluded in the bargaining council, was published in Government Notice R404 of the same date (the bargaining council main agreement). This agreement was promulgated under s 32(2) of the LRA. It came into effect on 14 April 1998 and expired on 30 June 1998. There is nothing on the record to show G whether any other agreement was promulgated after 30 June 1997 and before 31 March 1998 when the bargaining council main agreement was published. Counsel were unable to refer us to any other agreement that covered this period. None of the courts below dealt with this aspect. In the light of this the finding by the courts below that the industrial council H main agreement expired on 14 April 1998 does not appear to be borne out by the record. But nothing turns on this.

[12] It is the minimum wages provided for in the bargaining council main agreement that the workers, through their union, sought to enforce but which the employer sought to avoid by relying on the exemptions I granted to it in relation to the industrial council main agreement. It is undisputed that the employer did not apply for any exemptions from the provisions of the bargaining council main agreement. [14]

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[13] The matter must therefore be approached on the footing that the A employer did not apply for any exemptions from the provisions of the bargaining council main agreement. At the time when the dispute arose, the employer...