Case Law & Legislation Review:
Edgars Consolidated Stores Ltd v Federal Council of Retail & Allied Workers Union
Case No. JA35/02
Judgment Date 23 April 2004
Jurisdiction Labour Appeal Court, Braamfontein
Judge Zondo, Judge President, Mogoeng, Judge of Appeal, Comrie, Judge of Appeal
Subject Practice and Procedure Appeal and review
Issue: When an employer seeks to withdraw organisational rights from a trade union on the basis that the union is no longer sufficiently representative in the workplace, that withdrawal may only take place in terms of the provisions of section 21(11) of the Labour Relations Act 66 of 1995 ("the Act"), even in circumstances where those rights had been acquired by the union ex contractu prior to the coming into operation of the Act.
Summary of Facts: Although the respondent has never enjoyed majority representation within the appellant's employ, the respondent and the appellant were involved in collective bargaining from 1986 until 2002, and the appellant allowed the respondent to elect shop stewards at workplaces where the respondent represented less than 50% plus one of the workforce. During early 2002 the appellant informed the respondent that it intended to increase its representivity threshold. This idea was again raised in the appellant's draft relationship agreement which was circulated to the appellant's collective bargaining partners. Eventually, that threshold was set. At the time, the respondent represented 11% of the appellant's workforce. The agreement between the two parties contained a termination clause stating that "The agreement shall remain in force and effect until either party shall give to the other 3 months written notice in writing of its intent to withdraw from the agreement. On 4 March 2002 the appellant gave the respondent a notice of its intention to terminate the recognition agreement. The collective agreement was terminated three months later. On 26 June 2002 the respondent launched an application in the Labour Court on an urgent basis seeking an order which would ensure that, pending an arbitration of the dispute by the CCMA, the respondent continued to exercise all the organisational rights it used to enjoy in terms of the recognition agreement. This application was successful.
Summary of Judgement: The main question in this appeal is whether the effect of section 21(11) of the Act is to prevent the normal operation of the principle that, where a contract stipulates a mode for its termination, that mode of the termination of the contract (eg the giving of notice for the termination of such agreement) is effective to terminate the contract. Another question is whether; if the recognition agreement containing the organisational rights could be terminated by the giving of notice without complying with section 21(11), the notice that was given in this case had the effect of terminating the agreement.
There is a distinction that must be drawn between the organisational rights regulated by a collective agreement and those regulated by an arbitration award. The distinction is that, in the case of those regulated by a collective agreement, the provisions of section 23, which apply to all collective agreements, apply to the collective agreement in which they are contained whereas those provisions do not apply to an award that regulates the manner in which a union must exercise organisational rights conferred on it by an arbitration award in terms of section 21(7). This makes a major difference in regard to the termination of such organisational rights. Section 23(4) deals with the termination of a collective agreement that had been concluded for an indefinite period. Of course, organisational rights that are contained in a collective agreement fall away when the collective agreement in which they are contained is validly terminated. The exception is where the collective agreement itself provides otherwise. In other words a collective agreement cannot be terminated in the manner provided for in section 23(4) if it itself precludes that. Section 21(11) only applies to those organisational rights which are regulated by an arbitration award issued in terms of section 21(7) whereas 23(4) applies to those organisational rights contained in a collective agreement regulating such rights. the recognition agreement in this case, together with the organisational rights contained therein, was terminable by the giving of written notice without following the procedure set out in section 21(11) of the Act.
On the basis that the appellant should have given three calendar months' notice, the agreement was validly terminated but only at the end of June 2002 rather than on 4 June 2002. If the recognition agreement was due to come to an end at the end of June 2002, then there was no justification really for the respondent to launch the proceedings that it launched four days before the actual termination of the agreement.
Appeal is upheld with costs