Employment law update – Joinder v Jurisdiction

March 1st, 2015
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National Union of Metalworkers of South Africa v Intervalve (Pty) Ltd and Others (CC) (unreported case no CCT 72/14, 12-12-2014) (Cameron J)

By Moksha Naidoo

Can an employee who alleges his dismissal was automatically unfair, join another employer, which had not been cited in the initial referral to the Conciliation, Mediation and Arbitration (CCMA) or bargaining council, nor was a part of the conciliation process; to proceedings at the Labour Court?

This was the question before the Constitutional Court.

204 National Union of Metalworkers of South Africa (Numsa) members were dismissed for allegedly participating in an unprotected strike. Acting on behalf of its members, Numsa referred a dismissal dispute to the bargaining council citing the third respondent (Steinmüller Africa (Pty) Ltd) as the employer. At conciliation the representatives of Steinmüller disputed that it was the employer of all 204 employees. The matter remained unresolved and a certificate of non-resolution was issued.

Three months after their members were dismissed Numsa referred a second dismissal dispute, together with condonation, on behalf of the same members but this time cited Steinmüller, alternatively Intervalve (Pty) Ltd, alternatively BHR Piping Systems (Pty) Ltd as the employer. The bargaining council refused condonation.

On the strength of the certificate of outcome (consequential to the initial referral), Numsa filed a statement of claim at the Labour Court and then made an application, in terms of r 22 of the Labour Court Rules, to join Intervalve and BHR as employers.

It was not disputed that Steinmüller, Intervalve and BHR were subsidiaries of the same holding company, had common directors and shareholders, operated from the same site and shared a common human resources service and legal representative.

Litigation

The Labour Court, in National Union of Metalworkers of South Africa obo its Members v Steinmüller Africa (Pty) Ltd and Others [2012] 7 BLLR 733 (LC), as per Steenkamp J, granted joinder having found that Intervalve and BHR had a substantial as well as a sufficient legal interest in the subject matter of proceedings. The court held that the rule permitting joinder would serve little purpose if Numsa was required to refer disputes against the individual employers and then later consolidate proceedings at court.

LAC

On appeal in Intervalve (Pty) Ltd and Another v National Union of Metalworkers of South Africa obo Members (LAC) (unreported case no JA 24/2012, 26-3-2014) Waglay JP (with Francis AJA and Dlodlo AJA concurring) held that s 191(5) of the Labour Relations Act 66 of 1995 imposes, as a jurisdictional precondition, that an employee refer a dispute to conciliation before such dispute can be adjudicated by the Labour Court. In this case the court a quo did not have jurisdiction to hear any claim against BHP or Intervalve because no dispute had been conciliated wherein either of these two entities were cited as the employer. The Labour Appeal Court (LAC) went onto say that ‘the discretion to join parties to proceedings cannot trump the clear jurisdictional requirements of the LRA’.

The Constitutional Court

In the majority judgment penned by Cameron J (Mogoeng CJ, Moseneke DCJ, Khampepe J, Leeuw AJ and Zondo J concurring), the court began by confirming the legal position, (as held in the majority decision in National Union of Metalworkers of South Africa and Others v Driveline Technologies (Pty) Ltd and Another 2000 (4) SA 645 (LAC)), that as a jurisdictional precondition to the Labour Court adjudicating an unfair dismissal dispute, was that the dispute must first be referred to conciliation and either a certificate of non-resolution be issued or a 30 day lapse from when the dispute was referred.

Having arrived at this conclusion the next question was whether it could be argued that by sending the referral to the shared human resources department, the referral to conciliation against Steinmüller encompassed both Intervalve and BHR.

In answering this question the court turned its attention to s 191 of the LRA, in particular s 191(3) which stipulates that when an employee refers a dispute for conciliation, the employee must satisfy the CCMA or bargaining council that a copy of the referral has been served on the employer.

Was this statutory requirement fulfilled?

When dealing with an issue of this nature a court will firstly ascertain, among other things, the purpose for the statutory requirement and then examine whether such purpose has been fulfilled – in casu whether the referral against Steinmüller to the shared human resources services, fulfilled the requirement of s 191(3) in respect of Intervalve and BHP.

Applying this principle and dealing firstly with the purpose of s 191(3), the court held:

‘The objective cannot be just to let the employer know that a dispute, related to the dispute that affects it, is being conciliated. It must be to put each employer party individually on notice that it may be liable to legal consequences if the dispute involving it is not effectively conciliated. Those consequences may be severe. They may include enterprise-threatening implications: trial proceedings, reinstatement orders, back pay and costs orders. So the notice must be directly targeted.’

The next question was whether this purpose had been fulfilled. The court’s view can be gleaned from the following extract of the judgment:

‘So the purpose of the statutory provision – to tell those on the line that the impending legal process might make them liable to adverse consequences – was not fulfilled. That the three companies’ shared HR services, and the companies’ attorney, knew about the referral against Steinmüller did not mean that they knew, or should have concluded, that the dispute against Intervalve and BHR had also been referred for conciliation. On the contrary, the referral against Steinmüller alone told them the opposite. Intervalve and BHR were left out. The ensuing legal process did not encompass them.’

The appeal was dismissed with no order as to costs.

In a dissenting judgment by Nkabinde J (Froneman J, Jafta J, Madlanga J and Van der Westhuizen J concurring), the minority agreed with the importance of conciliation but differed in regard to whether there had been substantial compliance with s 191.

Relevant to the matter were the following factors; all the employees were collectively dismissed over the same strike action by the three entities shared human resources services and received identical dismissal letters, a representative from the shared human resources services and the same attorney representing all three entities both attended the conciliation, the conciliated dispute involved Intervalve and BHR.

When interpreting these factors purposively (having regard to the primary purpose to the LRA, the constitutional right to fair labour practice (s 23), the right to have a dispute resolved by a court or tribunal (34) and the s 39(2) of the Bill of Rights, which obliges a court to interpret legislation having regard to the spirit and purpose of that legislation); the minority found that there had been substantial compliance with s 191.

Nkabinde J held:

‘I agree that conciliation requires the referral of a dispute and that parties to the dispute should be granted the opportunity to represent themselves. Driveline confirms this position when it distils the components of a dispute. The facts of this case are in conformity with this position. Intervalve and BHR rely on the lack of initial service and their citation. However, the three companies must have been aware of the dispute. I find it difficult to maintain that with the shared HR services and legal representation, Intervalve and BHR were unaware of the referred dispute. The three companies’ argument regarding non-service is a technical one based on the formal requirement to cite and serve employer companies with the referral form. This, in my view, elevates form over substance.’

Do you have a labour law-related question that you would like answered?

Send your question to derebus@derebus.org.za

Moksha Naidoo BA (Wits) LLB (UKZN) is an advocate at the Johannesburg Bar.

This article was first published in De Rebus in 2015 (March) DR 39.

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