Temba Big Save CC v Kunyuza (JA40/2015) [2016] ZALAC 36 (28 June 2016) per Waglay JP (Tlaletsi DJP and Davis JA concurring)

The LAC disallowed the appeal and upheld the judgment of Steenkamp J in the labour court.  Issues relating to the late filing of papers were considered.  There was an alleged transfer of a business as a going concern.  It is not necessary to refer such a dispute for conciliation.  The new employer steps into the shoes of the old employer.  But in principle all other disputes must be referred to conciliation.

LAC summary:

Practice and Procedure – party objecting to the late filing of the statement of response without a condonation application in a replying affidavit – other party contending that objection not proper as contemplated by the Labour Court Practice Manual – court finding a notice of objection needs not be formal document – any manner in which any party is made aware of its intention to object sufficient – Labour Court correct in accepting the notice of object and dismissing the statement of response.

Joinder – employer contending that employees’ joinder application should be dismissed because there was no conciliation – principle restated that referral for conciliation is indispensable and a precondition to the Labour Court’s jurisdiction over unfair dismissal disputes –employee alleging s197 transfer – in the context of an alleged s197 transfer, there is no need to refer the new employer to conciliation – the new employer takes the place of the old employer in all material respects – Labour Court correct in joining the employer – Appeal dismissed with costs.

Excerpts without footnotes

[24] The other ground of appeal is that the Labour Court was wrong in granting joinder because the employees had not referred their automatically unfair dispute against the appellant for conciliation.

[25] The appellant, relying on paragraph 40 read with its footnote number 53 in the Constitutional Court’s judgment National Union of Metal Workers of South Africa v Intervalve (Pty) Ltd and Others (Intervalve ), argued that it was not permissible for the Labour Court to grant the joinder because the employees had not referred their dispute to conciliation.  Paragraph 40 and footnote 53 state as follows:

‘[40] Referral for conciliation is indispensable.  It is a precondition to the Labour Court’s jurisdiction over unfair dismissal disputes.  NUMSA therefore had to refer the dispute between the employees and Intervalve and BHR for conciliation.  The question is whether it did so.’

Footnote 53 The Labour Appeal Court was therefore right (at paras 15-22) to distinguish the factual circumstances in Mokoena and Selala … and to disapprove of the erroneous view, expressed in both those judgments, that the Labour Court has a discretion to condone non-compliance with the conciliation requirement.  The Labour Appeal Court noted that the party joined in Mokoena was a transferee who had taken over the going concern of another business.  Judgment against the old business was therefore effective against the transferee, who would be jointly and severally liable for any claim.  The transferee therefore had an interest in the outcome of the dispute.  The joined party in Selala also had an interest in the outcome of the case, as he was a co-employee currently employed in a position the applicant claimed should have been his.  By contrast, SACCAWU …at para 10 rightly held that an applicant in the Labour Court “cannot rely on a joinder in terms of rule 22 to avoid its obligations to comply with section 191 of the LRA.’

[26] In considering the submissions, the court a quo had regards to the Intervalve  judgments of the Constitutional Court and this Court.  The court a quo agreed with the appellant on the principle recorded in the above quote that a party cannot be joined in proceedings if it was not party to a conciliation process.  However, the court a quo disagreed with the appellant’s interpretation of footnote 53 in the Constitutional Court judgment.

[27] The court a quo found that the appellant’s interpretation of paragraph 40 with footnote 53 of the judgment of the Constitutional Court was misconceived and correctly so.  The reading of footnote 53 evinces that the Constitutional Court had agreed with the Labour Appeal Court in distinguishing the facts in Intervalve with those in Mokoena v Motor Component Industry (Pty) Ltd (2005) 26 ILJ (LC) (Mokoena) and Selala and Another v Rand Water(2000) 21 ILJ 2102 (LC) confirming, inter alia, that where s197 transfer was in play there was no need to refer both the old and the new employer to conciliation in an unfair dismissal dispute.

[28] The appellant’s interpretation of Intervalve’s judgment of both the LAC and the Constitutional Court is spurious.  A judgment should be read in toto not as in a piecemeal fashion like the appellant seeks to do.  It does not help the appellant to extract in the judgment what it believes advances its case and leaves out the essence of the judgment.

[29] Having said that a referral for conciliation is indispensable and a precondition to Commissioner’s or the Labour Court’s jurisdiction over unfair dismissal disputes means that if a party is not part of the conciliation proceedings it cannot be joined at a later stage.  The question that arises however is whether the general principle is applicable in a case a where a dismissed employee, having referred his/her employer to conciliation for an unfair dismissal dispute, later discovers that his/her employer has changed because the business in which they were employed has changed hands.

[30] In answering this question, the LAC in Intervalve held that:

‘In Mokoena, the Labour Court allowed the joinder of one of the parties.  The party joined was a party that the Labour Court held had taken over the respondent’s business in circumstances that invoked s197 of the LRA.  In terms of this section where a business is transferred as a going concern the transferee takes over the employment responsibilities of the transferor.  The joinder was thus granted not on the basis of any exercise of a discretion of joining a party not taken to conciliation but because s197(9) of the LRA placed the new employer in the shoes of the old employer.  In the circumstances, there was no need to refer both the new and the old employer to conciliation any one would suffice as judgment against one was effective against the other.’

[31] This quote illustrates that, in the event of a party invoking the provision of section 197 of the LRA, there is no need to refer the old and the new employer to conciliation.  Any one of the parties will suffice because in terms of the section, the new employer takes the place of the old employer in all material respects, including but not limited to contracts of employment and any pending litigations.  Hence, where the old employer was taken to conciliation there is no need to also take the new employer because one is not dealing with two employers but only one.  Clearly, the appellant wrongly interpreted the Intervalve judgments.

[32] In this matter, the employees allege that the appellant has taken over the business of the former employer and for that reason they sought to join the appellant.  Since the appellant is alleged to have stepped into the shoes of the old employer it may be joined to the proceedings.  I therefore agree with the court a quo’s conclusion that in the context of an alleged s197 transfer, a successful applicant would have to hold the transferee accountable because not only has that transferee an interest in the outcome of the dispute, it may be held liable to satisfy the relief, if any, that is granted against the old employer.