Food and Allied Workers Union v Ngcobo NO and Another

• Jurisdiction: South Africa
• Judge: Moseneke DCJ, Cameron J, Froneman J, Jafta J, Madlanga J, Mhlantla AJ, Nkabinde J, Skweyiya J, Van Der Westhuizen J and Zondo J
• Judgment Date: 09 October 2013
• Citation: 2014 (1) SA 32 (CC)
• Docket Number: CCT 50/13 [2013] ZACC 36
• Hearing Date: 29 August 2013
• Counsel: M Pillemer SC (with R Pillemer) for the applicant. C Nel for the respondents.
• Court: Constitutional Court

Cameron J (Moseneke DCJ, Froneman J, Jafta J, Madlanga J, Mhlantla AJ, Nkabinde J, Skweyiya J, Van der Westhuizen J and Zondo J concurring):

[1] The issue is whether a trade union can invoke its constitution, H together with its constitutional right to determine its own administration, [1] to assert special protection against a claim arising from its failure properly to prosecute a claim for unfair dismissal on behalf of its members. Two employees dismissed by their employer, who entrusted their case to the applicant trade union (the Union), claimed damages I from it when it failed to lodge their claims in time. The KwaZulu-Natal

Cameron J (Moseneke DCJ, Froneman J, Jafta J, Madlanga J, Mhlantla AJ, Nkabinde J, Skweyiya J, Van der Westhuizen J and Zondo J concurring)

A High Court, Durban [2] (the high court), and the Supreme Court of Appeal [3] found in their favour. The Union now applies for leave to appeal against those decisions.

Factual background

[2] The reported judgments of the earlier courts set the facts out fully. In B addition the focus narrowed considerably in this court, since the Union abandoned most of its previous defences to concentrate on a single argument: that it enjoys special constitutional protection from damages claims by members it undertakes to represent. So the facts can be stated briefly.

C [3] In May 2002 Nestlé South Africa (Pty) Ltd dismissed two employees after 20 years of service. They were Mr Mandla Ndlela (who has died and who is represented by his life partner, the executor of his estate, the first respondent) and Mr Michael Mkhize, the second respondent (employees). Aggrieved, they sought help at the Union's Durban offices. D The Union undertook to represent them in their unfair dismissal claims. And it did indeed refer the dispute for conciliation before the Commission for Conciliation, Mediation and Arbitration (CCMA). [4] On 18 June 2002 one of its officials appeared before the CCMA on behalf of the employees. But that is about all it did. Its constructive involvement in E their cause ended there.

[4] After conciliation failed at the June 2002 meeting, the CCMA certified formally that the dispute had not been resolved. [5] This meant that the employees' claims were ripe for referral to the labour court for adjudication. However, there was a deadline. The dispute had to be referred F within 90 days. [6] The Union told the employees it would do this. But it never did. The 90-day window closed. And the employees' claims for unfair dismissal lapsed. To revive them would require climbing the stone-strewn hill of a condonation application.

[5] The Union never attempted that ascent. All its officials did, for nearly G a year, was to assure the employees that their matter was being attended to. After months with no concrete news, the employees decided in May 2003 to seek help from the law clinic at the University of Durban-Westville. Only then did they discover the truth: the Union had done virtually nothing to prosecute their claims.

[6] They returned to the Union's offices. In response, the Union's H officials assigned their case to a different official. He, too, never applied

Cameron J (Moseneke DCJ, Froneman J, Jafta J, Madlanga J, Mhlantla AJ, Nkabinde J, Skweyiya J, Van der Westhuizen J and Zondo J concurring)

for condonation. After tarrying for nearly six months, what he did was to A write to the employees. He told them that it was 'imperative' to apply for condonation, and explained how he planned to do this. But instead of applying, as he had undertaken to do, he devised a different stratagem to remedy the debacle. In January 2004 he attempted to go back to the CCMA by reinitiating the proceedings there. Unsurprisingly, the CCMA rejected this attempt. B

[7] Three more months passed. By now it was nearly two years after the employees had been dismissed — and 19 months after their right to refer their claims to the labour court had lapsed. The Union asked its attorney, Mr Surju, for an opinion. He furnished one. It stated that the C employees' dismissal was not unfair, and that any attempt to pursue an unfair dismissal claim would result in an adverse costs order. Armed with this, the Union washed its hands of the employees and their case. It told them it would not proceed with their claims in the labour court.

[8] The employees approached a firm of attorneys in June 2004. Their D new advisors immediately threatened a damages claim against the Union. They gave the Union two weeks in which to file a condonation application. This demand, they said, was 'part of our clients' duty to mitigate the loss'. When the Union did not respond, summons was issued. This was in August 2004, more than 27 months after the dismissal. E

High court

[9] Seven years later, the employees' claims were tried in the high court. Trial proceedings took place over eight days in February, May and November 2011 and February 2012. At their conclusion, the high court F decided in favour of the employees. The court rejected all the Union's arguments, including many it has now abandoned. The court found that, although it was not necessary to categorise the relationship between the Union and the employees as a contract of mandate, the Union had agreed to assist them by providing legal assistance by timeously referring their dispute to the CCMA and, if necessary, to the labour court. The G agreement tacitly entitled the Union to withdraw legal assistance if it were advised that the employees' claims had no prospects of success — but in doing so it had an obligation to prevent prejudice to the employees. This meant that the Union was obliged to apply for condonation itself when, without notifying the employees, it failed to H refer the dispute to the labour court.

[10] The Union urged the high court to find that it would be contrary to public policy to impose liability on a trade union for not prosecuting members' claims because there would be ruinous financial consequences. The high court rejected this: the Union had provided no I evidence that indemnity insurance would be prohibitively expensive.

[11] The high court concluded that the employees' dismissal would have been found to be both procedurally and substantively unfair had it been referred to the labour court and adjudicated there. It awarded each of the employees 12 months' salary and commissions, amounting to R107 232, J

Cameron J (Moseneke DCJ, Froneman J, Jafta J, Madlanga J, Mhlantla AJ, Nkabinde J, Skweyiya J, Van der Westhuizen J and Zondo J concurring)

A calculated on the basis of a 'just and equitable' consolation payment (solatium) to which they would have been entitled had their employer been the defendant.

Supreme Court of Appeal

B [12] On appeal, the high court having granted leave, the majority of the Supreme Court of Appeal held that the Union had undertaken to assist the employees under a contract of mandate. That contract obliged them to represent the employees, and so the question whether the Union's constitution obliged it to represent its members was a 'red herring'. The well-established natural incidents (naturalia) of a contract of mandate C obliged the Union to perform its functions faithfully, honestly and with care and diligence. Even though the Union's officials were not trained lawyers, it was established law that a mandatary who professes a certain skill is held to that standard.

[13] The Union was therefore obliged, the Supreme Court of Appeal D found, to take the steps necessary to have the employees' dispute with their employer determined in accordance with the LRA. This it failed to do: first, by failing to refer the dispute in time to the labour court, and, second, by failing to secure condonation for that failure. In both respects, the Union 'failed to act honestly or diligently'.

E [14] That the employees themselves never applied for condonation made no difference. To succeed against the Union, they had to establish only that their dispute, had it been properly referred to the labour court, would have been resolved in their favour. And the Union was not entitled simply to walk away from its undertaking. After discovering that the Union had failed to refer their dispute, the employees elected to uphold F their agreement with it — and indeed at that point the Union once more undertook to perform it. Even after the Union had changed its mind, the employees (through their attorneys) gave it a further opportunity to perform. Only at that point did the employees finally cancel the agreement and sue for damages for breach of contract.

G [15] The majority upheld the findings of the high court on the unfairness of the employees' dismissal and the compensation to which they were entitled. The court dismissed a cross-appeal by the employees against the amount awarded.

[16] The dissenting judgment would have upheld the appeal and H reversed the high court's findings. The employees had failed to prove that they suffered their loss as a result of the Union's breach of contract. It was their own failure to apply for condonation that factually caused their loss. Hence, it was self-inflicted. They therefore had to allege and prove that, had they applied for condonation, it would have been I refused. But condonation would probably have been granted had they applied. So their cause of action was incomplete.

In this court

[17] In this court the Union accepted the following propositions, most of which it had previously contested: the employees were its members; their J employer dismissed them unfairly; the Union agreed to represent them

Cameron J (Moseneke DCJ, Froneman J, Jafta J, Madlanga J, Mhlantla AJ, Nkabinde J, Skweyiya J, Van der Westhuizen J and Zondo J concurring)

in pursuing their claim; it acted remissly in doing so; had their claims A been properly pursued, the labour court would have awarded...