Lufil Packaging (Isithebe) (A division of Bidvest Paperplus (Pty) Ltd) v CCMA and Others (LAC) (unreported case no DA8/2018, 13-6-2019) (Murphy AJA with Musi JA and Savage AJJA concurring).

For purposes of claiming organisational rights, can a trade union recruit as members, employees who work in an industry, which falls outside the registered scope of the trade union’s activities?

This formed the central question before the Labour Appeal Court (LAC).

The appellant employer works within the printing and packaging sector and falls under the Statutory Council of the Printing, Newspaper and Packaging Industry. The third respondent National Union of Metalworkers of South Africa (NUMSA), wrote to the employer seeking organisational rights. NUMSA’s demand was premised on the notion that it had, as members, the majority of employer’s workforce. In a letter denying NUMSA’s demand, the employer took the view that because NUMSA’s constitution did not include organising in the paper and printing industry, it was prevented from recruiting any of its employees as members.

Although it was common cause that NUMSA’s constitution stated that all employees working in the metal and related industries are eligible for membership, as well as the fact that the employer operated outside this scope; NUMSA nevertheless referred a dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) in terms of s 21 of the Labour Relations Act 66 of 1995 (LRA). (Any dispute about whether a registered trade union is entitled to any organisational rights is determined by referring a dispute to the CCMA in terms of s 21 of the LRA – if not settled at conciliation, an arbitrator would determine whether the union is entitled to the organisation right or not.)

At arbitration, the employer raised the same argument as set out in its reply to NUMSA and argued further that because NUMSA’s constitution did not permit it to recruit any employee working outside its registered scope; it did not have locus standi to bring a dispute under s 21 of the LRA. The arbitrator dismissed this point and directed the CCMA to set the matter down for arbitration. NUMSA succeeded at arbitration whereafter the employer sought to review both the ruling and the award at the Labour Court (LC).

The LC dismissed both review applications and held that having 70% of the workforce as members entitled NUMSA to organisational rights.

On appeal the employer argued that NUMSA was bound by its own constitution that prevented it from recruiting members who ‘fall outside of the eligibility for membership requirements contained in its constitution’. On the argument, so the employer continued, employees who are not eligible for membership cannot be said to be members of the union when assessing the union’s representation in an organisational right dispute. Therefore, any purported member whose admission is contrary to the union’s constitution is invalid on the basis that such employees are incapable of becoming members of the union.

In respect of the preliminary ruling NUMSA argued that the fact that it is a registered trade union with majority of employees in the workforce as members, gave it the right to refer a dispute in terms of s 21. Addressing the award, NUMSA argued that one must assess the employer’s argument against the constitutional right to join a trade union, as well as the right of freedom of association. While NUMSA acknowledged that s 4(1)(b) of the LRA, which states that every employee has the right to join a trade union subject to the union’s constitution, imposed a limitation on joining a trade union – it argued that such a limitation should be interpreted restrictively while the constitutional rights should be interpreted ‘generously’.

NUMSA further argued that s 4(1)(b) regulated the relationship between the union and any prospective member and, therefore, it is the union and not the employer, who can object to an employee becoming a member of the union. Put differently, membership is a contract between the employee and the union and while the parties to the contract can agree not to adhere to every term of the contract, it is not open for a third party (the employer in casu) to raise the point that certain terms of the contract have not been met.

The LAC found that NUMSA did have locus standi to challenge the employer’s refusal to grant it organisational rights, however, noted that both the ruling and award turned on the question of whether a trade union could admit as a member an employee who worked in an industry, which fell outside the scope of the union’s constitution.

In answering this question, the LAC turned to the provisions of the LRA.

For a trade union to be registered it must set out in its constitution, in terms of s 95(5)(b) of the LRA, qualifications for admission as a member. The registrar would only register a trade union once all statutory requirements, including that prescribed in s 95(5)(b), have been met.

The provisions of s 4(1)(b) implies that membership is subject to the qualifications determined by the union’s decision-making body and set out in its constitution, which the registrar has registered.

Although the argument that s 4(1)(b) unduly infringed the constitutional right to join a trade union was not on the papers before the LAC, the court nevertheless addressed this argument. It began by stating that s 23(5) of the Constitution provides that national legislation may be enacted to regulate collective bargaining – the LRA was such legislation. On this basis, any limitation to the right to join a trade union or freedom of association, as contained in the LRA, must meet the requirements of s 36(1) of the Constitution and be reasonable and justifiable in an open and democratic society.

The LAC was satisfied that the limitation of the right to join a trade union or freedom of association, as contained in s 4(1)(b) met the requirements of s 36(1) of the Constitution.

The LAC went on to say that a decision to admit a member who is not eligible for membership is not an internal decision immune from attack by the employer. The decision would be ultra vires and invalid, which in turn gives the employer the right to challenge such a decision as a party from whom the organisational right is sought.

The LAC went on to state:

‘The ultra vires rule is of both practical and policy value. There is a direct relationship between the conception of the trade union as a distinct legal entity and the rule that it may not legal carry out any activity which it is not authorised by the LRA and the powers and capacities provided in its constitution. The LRA grants trade unions specific powers and capacities to act within a particular scope and does so in furtherance of a contemplated constitutional and policy framework. The principle of legality requires observance of that framework and its purposes may not be arbitrarily dissipated. NUMSA is accordingly not permitted in terms of the common law or the LRA to allow workers to join the union where such workers are not eligible for admission in terms of the union’s own constitution. As such it is not entitled to any of the organisational rights contained in respect of Lufil’s workplace.’

Following the above the LAC stated that NUMSA could not have demonstrated that it was sufficiently represented at the employer’s workplace – the employees it relied on to show its representation were not eligible to be members of the union.

The LAC upheld the appeal and substituted the LC’s finding with an order that the arbitration award be set aside.

Moksha Naidoo BA (Wits) LLB (UKZN) is a legal practitioner holding chambers at the Johannesburg Bar (Sandton), as well as the KwaZulu-Natal Bar (Durban).

This article was first published in De Rebus in 2019 (Aug) DR 33.