Various small  employers in the Western Cape failed on Monday in their application to the High Court to set aside the Minister of Labour’s decision to extend a collective agreement concluded in a bargaining council to them as non-parties.   After considering various earlier judgments and declining to follow a judgment of the High Court in Gauteng, Justice Davis held that they should have applied to the Labour Court.   This has important implications for litigants because there is now considerable doubt about whether cases that originate in the Labour Court, as opposed to the High Court, may be appealed beyond the Labour Appeal Court.

This is what Justice Davis stated in para [36] in O Thorpe Construction v Minister of Labour (9380/2013) [2014] ZAWCHC 140 (9 September 2014):

“It is important to emphasise the following: the conclusion to which I have arrived does not deprive a litigant of a remedy.    Its claim does not fall away merely because this is a matter which is to be heard in the Labour Court.    The finding of this Court is to assert that a clear purpose of the LRA which was to create a specialist court; that is the Labour Court being of similar status to the High Court which is required to deal with all matters arising from the LRA in terms of claims which are based thereon”.

Extracts from the judgment with footnotes omitted

Introduction

[1]          The applicants seek an order setting aside a decision of the first respondent to extend a collective agreement concluded in the Building Industry Council for the Building Industry Cape of Good Hope (BIBC) to non-parties within its registered scope, including those located in the Overstrand Region for the period 27 December 2012 to 31 October 2013 (‘the Ministers decision’).

[2]          To this end the applicants have raised the following grounds of review:

1.            The Minister failed to extend the agreement to non-parties within 60 days of BIBC requesting her to do so in terms of s 32(2) of the Labour Relations Act 66 of 1995 (‘LRA’)

2.            The Minister did not herself determine the date for commencement of the extension notice published in the Government Gazette as required in terms of s 32(2) of the LRA.

3.            The extension date is rendered invalid by reason of a fact that the notice published by the Minister in the Government Gazette which was intended to cancel the previous extension notice in fact cancelled the wrong notice; and

4.            The Minister could not reasonably have satisfied herself that the employer representativeness requirements of s 32(3) of the LRA were met.

. . . .

Jurisdiction

[5]          In a most instructive argument Mr Freund, who appeared for second respondent together with Ms Cronje, developed his argument in a series of stages each of which requires a careful analysis of certain provisions of the LRA; in particular s 157(1) and (2) which, in his view, must be interpreted through the prism of the LRA read as a whole.     The preamble to the LRA provides, inter alia, that the purpose of the Act is, ‘to establish the Labour Court and the Labour Appeal Court as superior courts, with exclusive jurisdiction to decide matters arising from the Act.’  Section 3(a) of the LRA provides that any person applying this Act must interpret its provision to give effect to its primary objects.

. . . .

[12]        Putting these provisions together, Mr Freund contended, particularly on the basis of the interpretation given to s 157 by the Constitutional Court in Chirwa, that it was clear that disputes which turned on  a specific provision of the LRA, such as s 32 of the LRA, were disputes relating to matters which fell directly within the LRA.    In other words, the present dispute was a matter which turned exclusively on a provision of the LRA and hence it was the Labour Court which was clothed with exclusive jurisdiction to determine the dispute.    So much, in Mr Freund’s view was clear from the dicta which I have cited of Ngcobo J in Chirwa.

[13]        By contrast, Mr Stelzner contended that there were areas of concurrent jurisdiction which were to be sourced in s 157(2) of the Act.    Thus, when an employee brings a contractual claim, she can elect to proceed to the High Court or the Labour Court for the purposes of enforcing her contractual claim.     This proposition finds support in s 77(3) of the Basic Conditions of Employment Act 5 of 1997.     Mr Stelzner further submitted that, in a case where the Minister acts contrary to the principle of legality, this principle is so fundamental a constitutional value underlying the very basis of law that it must follow that the High Court would have jurisdiction to enforce this core principle.      In the present case he contended that the case brought by the applicants turned on the principle of legality, that is the Minister had failed to comply with the law and accordingly the High Court was possessed of the requisite jurisdiction.     In particular, s 157(2) of the LRA provides expressly for concurrent jurisdiction where the applicants seek to invoke s 33 of the Republic of South Africa Constitution Act 108 of 1996 (‘the Constitution’) or the Promotion of Administrative Justice Act 3 of 2000 (PAJA) to sustain its case.

. . . .

[17]        Accordingly the court held that, as the claim in Makhanya was for the enforcement of a common law right of a contracting party to exact performance of the contract, it was a claim which fell within the ordinary powers of the High Court and accordingly the jurisdictional objection stood to fail.

Evaluation

[18]        In my view, even if this approach can be sustained by a narrow view of the ratio in Chirwa, it does not appear to accord any weight to the clear statement of Ncgobo J at para 124 a, passage which is so important that it bears comprehensive reproduction:

‘Where, as here, an employee alleges non-compliance with provisions of the LRA, the employee must seek the remedy in the LRA.    The employee cannot, as the applicant seeks to do, avoid the dispute resolution mechanisms provided for in the LRA by alleging a violation of a constitutional right in the Bill of Rights.    It could not have been the intention of the legislature to allow an employee to raise what is essentially a labour dispute under the LRA as a constitutional issue under the provisions of s157(2).    To hold otherwise would frustrate the primary objects of the LRA and permit an astute litigant to bypass the dispute resolution provisions of the LRA.     This would inevitably give rise to forum shopping simply because it is convenient to do so or as the applicant alleges, convenient in this case ‘for practical considerations’.    What is in essence a labour dispute as envisaged in the LRA should not be labelled a violation of a constitutional right in the Bill of Rights simply because the issue raised could also support a conclusion that the conduct of the employer amounts to a violation of a right entrenched in the Constitution.’

[19]        Clearly, when confronted by the judgment in Makhanya and by this dictum in Chirwa, this court needs to reconcile these two passages, to the extent that it is possible as it is bound by the jurisprudence of the higher courts.     But the problem was easily solved in that case.   The essence of Makhanya’s case was that if there was a contractual claim, a High Court has jurisdiction to hear this claim.     But in the present case, the factual matrix upon which the application rests differs markedly.   Accordingly, the finding in Makhanya is manifestly distinguishable.     In brief, in Makhanya, supra, the case was essentially about an employee who had unsuccessfully pursued an unfair dismissal claim before the CCMA.     It was argued that he had no right to pursue a contractual common law claim before the High Court.    The SCA dismissed this argument, with respect correctly.    It held that separate causes of action arising from the same incident could coexist and that the fact that the LRA had created a cause of action falling within the jurisdiction of the Labour Court did not mean that contractual remedies before the civil courts had been destroyed.    This has little, if anything to do with the present dispute.

[20]        I therefore do not have to engage with the implications of the omission by Nugent JA to consider the weight of the passage in Chirwa set out at para 124 and further whether this formed part of the ratio for the order that was made in Chirwa, however interesting a debate that might prove.

[21]        There is an exclusive power which is granted to the Labour Court.    So much is clear from s 157 (1) of the LRA.    Furthermore in para 123, the court in Chirwa clearly indicated that s 157(2) had to be confined to instances ‘where a party relies directly on the provisions of the Bill of Rights.    This of course is subject to constitutional principle that  …  where legislation is enacted to give effect to a constitutional right to, the litigant may not bypass that legislation relied directly on the constitution without challenging that legislation as falling short of the constitutional standard.’

[22]        The animating idea captured herein is the recognition of the principle of constitutional subsidiarity.     The dictum further eschews an argument that would so expand the range of constitutional litigation, otherwise constrained by the ambit of s 157(1), with the result that parallel jurisdiction would invariably be created.     In almost any case, in which the LRA applied, an applicant could then argue that there was a breach of legality; that is of a provision of the LRA and by extension of the Constitution.    In short, a breach of legality would occur in almost every case where it was alleged that there was a breach of or non-compliance with a provision of the LRA.

[23]        In Makhanya, supra Nugent JA sought to resolve this potential problem by mandating Courts to examine the nature of the cause of action or claim which is before the Court.    This examination is critical to the determination of whether a Court may hear the particular case.     Nugent JA appears to take issue with the incisive analysis of Chirwa by Professor Halton Cheadle (2009 (30) ILJ 741) for reasons which are not entirely clear to me.    When Cheadle at 754 writes that the Court in Chirwa characterised the decision to terminate Ms Chirwa’s employment as a labour practice rather than as administrative action, he confirmed the key point that a Court is required to examine upon what the applicant basis her claim and this finding in turn unlocks the door to the dilemma of jurisdiction.     Cheadle at 745-746 makes the further important point which supports the approach I have adopted in this judgment, namely that the LRA was passed in response to the design of s 23 of the constitution which envisaged a designated, carefully calibrated legislative system to deal with labour law and give content to the rights set out in s 23 of the Constitution.

[24]        In the present case, the claim made by the applicants was that the Minister failed to comply with the LRA and, in particular with s 32; hence the relief sought by the applicants was for an order reviewing and setting aside the decision made by the Minister, pursuant to s 32 of the LRA.    The very act of extension of a collective agreement to non-parties in the building industry constitutes the performance of a function provided for expressly in the LRA.     The Constitutional Court in Gcaba, supra, far from adopting a different approach to that set out by Ngcobo J in Chirwa, reinforced this conclusion, as is apparent from the following passages at para 70 – 72:

‘[70]       Section 157(1) confirms that the Labour Court has exclusive jurisdiction over any matter that the LRA prescribes should be determined by it.    That includes, amongst other things, reviews of the decisions of the CCMA under s 145.     Section 157(1) should, therefore, be given expansive content to protect the special status of the Labour Court, and s 157(2) should not be read to permit the High Court to have jurisdiction over these matters as well.

[71]        Section 157(2) confirms that the Labour Court has concurrent jurisdiction with the High Court in relation to alleged of threatened violations of fundamental rights entrenched in Ch. 2 of the Constitution and arising from employment and labour relations, any dispute over the constitutionality of any executive or administrative act or conduct by the State in its capacity as employer and the application of any law for the administration of which the minister is responsible.    The purpose of this provision is to extend the jurisdiction or the Labour Court to disputes concerning the alleged violation of any right entrenched in the Bill of Rights which arise from employment and labour relations, rather than to restrict or extend the jurisdiction of the High Court.    In doing so, s 157(2) has brought employment and labour relations disputes that arise from the violation of any right in the Bill of Rights within the reach of the Labour Court.    This power if the Labour Court is essential to its role as a specialist court that is charged with the responsibility to develop a coherent and evolving employment and labour relations jurisprudence.    Section 157(2) enhances the ability of the Labour Court to perform such a role.

[72]        Therefore, s 157(2) should not be understood to extend the jurisdiction of the High Court to determine issues which (as contemplated by s 157(1)) have been expressly conferred upon the Labour Court by the LRA.     Rather, it should be interpreted to mean that the Labour Court will be able to determine constitutional issues which arise before it, in the specific jurisdictional areas which have been created for it by the LRA, and which are covered by s 157 (2) (a), (b) and (c).’

[25]          It follows from this holding that, if as in this case, the cause of action concerns an alleged breach of provision of the LRA, it is a matter which falls within the exclusive jurisdiction of the Labour Court.

. . . .

[26]        It remains for me to canvass the one judgment which directly favours the applicants, namely Valueline CC [sic] and others v Minister of Labour and others (2013) 34 ILJ 1404 (KZP).

[27]        In Valueline [sic] Koen J adopted the approach that the High Court did have jurisdiction to review and set aside a decision of the Minister to extend a collective bargaining agreement to non-parties.     To the extent that I understand the learned judge’s approach it may be set out as follows: Relying on the Constitutional Court decision in Fredericks and others v MEC for Education and Training, Eastern Cape and Others 2002 (2) SA 693 (CC), in was held that s 157 (1) of the LRA ‘does not purport to confer exclusive jurisdiction upon the Labour Court generally in respect of employment related matters’ (at para 25).

[28]        The express requirement in s 157, that the subject matter of the dispute must be one of a range of ‘matters’ which stands to be determined by the Labour Court, is to be contrasted to powers conferred on the Labour Court in which it may exercise jurisdiction.    Thus, s 158(1)(b) does not provide expressly that such a review is a matter which is to be determined by the Labour Court but merely that it is a matter that ‘the Labour Court may’ review.     Thus, Koen J finds: ‘as the provisions of the LRA do not expressly or by necessary implication, provide that such a review is to be determined by the Labour Court, the jurisdiction of the High Court to determine such a review is not ousted and the jurisdiction of the Labour Court is therefore not exclusive’.   (at para 27)

[29]        For Koen J, s 158(1)(g) provides that where the Labour Court has jurisdiction in a particular matter, whether in terms of exclusive or concurrent jurisdiction with the High Court and the dispute concerns a review and relief which follows upon this review, the Labour Court is granted the power to review the performance or purported performance of any function which is the subject of the review.     Koen J then continues:

‘If the respondent’s interpretation of s 158(1)(g) of the granting of the permissive power to review contained in s 158(1)(g) constitutes a direction that any matter involving a review ‘is to be determined’ by the Labour Court , whether express or by necessary implication,  as contemplated in s 157(1), thus conferring exclusive jurisdiction on the Labour Court, then by parity of reasoning, any dispute in respect of which ‘any appropriate order’ may be granted would also confer exclusive jurisdiction on the Labour Court.    That would entail exclusive jurisdiction being conferred on the Labour Court in probably almost all matters that could conceivably come before it with reference to the kind of relief that may be granted, rather than with reference to the cause of action relied upon.’ (at para 31)

[30]        In summary therefore, the reasoning adopted by the learned judge appear to be the following:  If s 158(1)(g) which grants a power of review to the Labour Court as read together with s 157(1), in the expansive manner contended for by second respondent in this case, then in any dispute, any appropriate order which may be granted would be subject to the exclusive jurisdiction of the Labour Court, notwithstanding the cause of action upon which the applicant relied.

[31]        By contrast, the implication of the judgment in Valueline [sic] is that s 157(1) of the LRA has a very narrow scope and almost all matters of a labour nature are potentially, at least, subject to the concurrent jurisdiction of the High Court and the Labour Court.    This conclusion follows from the statement in the Valueline [sic] judgment that s 157(1) ‘does not confer exclusive jurisdiction generally in respect of employment related matters’.   (para 24)

[32]        Not only does this conclusion compromise the very purpose of s 157(1) of the LRA  as I have outlined it but it stands in stark contrast to two critical judgments which Koen J did not canvass in the Valueline [sic] case, namely the Constitutional Court judgments in Chirwa and Gcaba, supra, to which extensive reference has been in this judgment.     In addition, the idea that s 158(1)(g) is a jurisdiction conferring provision appears to have been ignored.    This section needs to be read together with s 157(1).    If s 158(1)(g) did not exist, the question would arise as to how the Labour Court would possess jurisdiction to review a ministerial decision which the judgment in Valueline [sic] accepts it does have, albeit concurrently with the High Court (see in particular para 32 of Valueline [sic]).

[33]        In summary, in my view, the decision in Valueline [sic] is not in accordance with Constitutional Court jurisprudence and therefore can be rejected for the purposes of this judgment.

Conclusion

[34]        The conclusion to which I have arrived renders it unnecessary to deal with the remaining point in limine dealing with unreasonable delay and, in particular, the significant argument raised by the second respondent that delay in this case was unreasonable, not only before of noncompliance with the 180 day period provided for in s 7 (1) of the Promotion of Administrative Justice Act 3 of 2000 but because of an absence of a basis to condone a delay which exceeded 180 days.    In this connection, the argument was raised that the period of operation of the extension of the collective agreement was from 17 December 2012 to 31 October 2013.     Applicants brought the application about six months into its operation and about four months before it was due to expire.     It is common cause that the entire industry arranges its affairs, including wage rates in accordance with extensions to the collective agreement from time to time.    Accordingly a lengthy delay of the kind which was alleged in this case by second respondent, would constitute an unreasonable delay.

[35]        There is also no reason to examine the various grounds of review which has been raised by the applicants in that, absent the necessary jurisdiction this court cannot deal with the merits thereof, neither is there a need to address with the interesting question as to the implications of the judgment of the Constitutional Court in Allpay Consolidated Investment Holdings (Pty) Ltd and others v Chief Executive Officer of the South African Social Security Agency and others 2014 (1) SA 604 (CC) at para 28, that an irregularity must be legally evaluated to determine whether it amounts to a justifiable ground of review under PAJA and the further question of whether this legal evaluation must take into account the materiality of any deviation from any legal requirements.    The Court suggests that this be done by linking the question of compliance to the purpose of the relevant provision before concluding that the review ground has been established.    That is not a determination to be undertaken by this Court.

[36]        It is important to emphasise the following: the conclusion to which I have arrived does not deprive a litigant of a remedy.    Its claim does not fall away merely because this is a matter which is to be heard in the Labour Court.    The finding of this Court is to assert that a clear purpose of the LRA which was to create a specialist court; that is the Labour Court being of similar status to the High Court which is required to deal with all matters arising from the LRA in terms of claims which are based thereon.

[37]        For all of these reasons therefore, the application is dismissed with costs, including the costs of two counsel.