Minimum wage exemption: Expired provision

Note: Footnotes omitted and emphasis added

O’REGAN J:

[108] I have had the opportunity of reading the judgment prepared in this matter by my colleague, Ngcobo J. Unfortunately I cannot concur in it.

In my view, although leave to appeal should be granted, the appeal should be dismissed. I set out my reasons for this conclusion in this judgment.

[109] The facts are set out in the judgment of Ngcobo J and there is no need to repeat them fully here. In brief, the applicant, the Commercial Workers Union of South Africa (CUSA) seeks leave to appeal against a decision of the Supreme Court of Appeal upholding an appeal to it by the first respondent, Tao Ying Metal Industries (Pty) Ltd.

The case concerns a dispute as to whether Tao Ying Metal Industries was obliged as at August 1998 to pay to its workers the minimum wages provided for in the main bargaining council agreement for the metal and engineering industries which came into effect on 14 April 1998 (1998 Main Agreement).

CUSA is a trade union now representing some of the workers at Tao Ying Metal Industries (the employer). The dispute was originally declared on behalf of the workers by the Hotel, Liquor, Commercial and Allied Workers Union of South Africa. Since then, CUSA has replaced that union as the union representing the workers of Tao Ying Metal Industries in this dispute.

[110] On 5 November 1998, a dispute between the union and the employer was referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) in terms of the Labour Relations Act 66 of 1995. After the obligatory, but failed, conciliation attempt, the dispute was referred to a commissioner of the CCMA for arbitration.

[111] The employer’s case was that it was not obliged to pay the minimum wages as the bargaining council had on 7 April 1997 issued an exemption to it. The thrust of the union’s response was that that exemption had been adopted without any consultation with the union.

[112] A preliminary point was taken by the bargaining council and the employer that the CCMA did not have jurisdiction to determine the dispute, because the Main Agreement provided that disputes concerning its interpretation and application be determined by arbitrators nominated by the bargaining council. The Commissioner dismissed this preliminary point and ruled that the bargaining council could not be a party in the proceedings before her.

[113] After hearing evidence, the Commissioner reserved her decision. Her award was received by the employer on 30 March 2000. She held that the employer was obliged to pay the wages stipulated in the 1998 Main Agreement. She held that it was “common cause” that the exemption had lapsed with the 1980 Main Agreement and did not apply to the new 1998 Main Agreement.

[114] After receiving the Commissioner’s award, the employer wrote to the bargaining council to enquire whether the exemption was still in force, and was informed that it was. Indeed, after the request, the bargaining council furnished a further licence of exemption dated 12 April 2000 stating that exemption had been granted from both the 1980 and the 1998 Main Agreements, pursuant to a decision on 7 April 1997. In the light of this letter, the employer did not immediately seek to review the Commissioner’s award.

However, once the union made application to the Labour Court for the award to be made an order of court, the employer sought to review the award in that Court. The only remaining relevant ground for the review was the failure by the Commissioner to apply her mind to the provisions of the exemption granted during March 1997. Because the employer was now out of time to lodge a review, it filed an application for condonation for its late filing of the review application.

[115] The Labour Court refused the application for condonation. The employer then sought leave to appeal to the Labour Appeal Court.

The Labour Appeal Court set aside the decision of the Labour Court refusing condonation but dismissed the appeal on the merits.

The Labour Appeal Court reasoned that the question that had been before the Commissioner was whether the employer was bound to pay the wage rates established in the 1998 Main Agreement.

The Court held that the Commissioner had not applied her mind to the argument of the employer that it was exempted from paying the wage rates in the 1998 Main Agreement; but it held that, properly construed, the exemption did not excuse the employer from paying the rates set in the 1998 Main Agreement, and that therefore the award should stand.

[116] The employer then sought leave to appeal to the Supreme Court of Appeal.

The majority in that Court held that the issue before the Commissioner had not been whether the exemption remained in force, but whether it had been validly adopted in the first place in view of the fact that the union had not been consulted prior to its adoption by the bargaining council. The majority of the Court held that the Commissioner did not have jurisdiction to determine whether the exemption was valid or not on the basis of the conduct of the bargaining council and that the Commissioner should therefore have found that she had no jurisdiction to resolve the dispute.

[117] The majority furthermore found that the Commissioner’s belief that it was common cause that the exemption had expired was erroneous, that indeed it had been common cause at the arbitration that the exemption had not expired and that as a result the award was both a gross irregularity and had no rational basis.

[118] Two dissenting judgments were written in the Supreme Court of Appeal:

• the first by Jafta JA in which he reasoned similarly to the Labour Appeal Court. He held that the Commissioner had applied her mind to the currency of the exemption and that she had correctly concluded that it did not exempt the employer from the 1998 Main Agreement.
• The other judgment was written by Musi AJA who held, on somewhat different reasoning, that the exemption had expired when the 1980 Main Agreement expired and he found what he considered to be evidence in the appeal record to suggest that this had been common cause between the parties during the arbitration.

[119] The union now seeks leave to appeal to this Court. I agree with Ngcobo J for the reasons given by him that we should grant condonation for the late filing of this application. In order for leave to appeal to be granted, the first question that arises is whether the case raises a constitutional issue.

To answer that question we need to identify the issues in this application for leave to appeal.

They are:

(a) Whether the majority in the Supreme Court of Appeal erred in identifying, of its own accord, as an issue for determination the question whether the Commission had jurisdiction to determine the dispute that was in fact referred to it;
(b) What the issue was for determination by the Commissioner and whether the Commissioner had jurisdiction to decide it;
(c) Whether the award falls to be set aside because the Commissioner failed to apply her mind to the terms of the exemption; and
(d) Whether on a proper construction of the exemption it had expired by the time the 1998 Main Agreement came into force.

[120] The applicant argues that these issues raise constitutional issues because they implicate rights guaranteed by the Constitution: the right to fair labour practices (section 23(1)) and the right to administrative justice (section 33).

It seems to me that only two issues can be said directly to raise constitutional issues.

• The first is whether a reviewing court is entitled of its own accord to raise a question regarding the jurisdiction of a CCMA commissioner to determine a particular dispute; and
• the second is whether the award falls to be set aside because the Commissioner failed to apply her mind to the terms of the exemption.

[121] In Sidumo and Another v Rustenburg Platinum Mines Ltd and Others, five members of this Court firmly held that an arbitration before the CCMA constitutes administrative action within the meaning of section 33 of the Constitution.

Section 33 provides that everyone is entitled to administrative action that is “lawful, reasonable and procedurally fair” and in Sidumo, those five members of the Court held that section 145 of the 1995 Labour Relations Act must be read consistently with the provisions of section 33.

I remain convinced that this approach is correct.

A court, therefore, in considering a review (or an appeal in respect of a review) of the CCMA in terms of the 1995 Labour Relations Act is obliged to interpret its powers in the light of section 33 of the Constitution.

[122] The question relating to the power of the Supreme Court of Appeal, of its own accord, to raise an issue that appears on the face of the record before it and which goes to the jurisdiction of the CCMA needs to be considered in the light of section 33 of the Constitution.

Similarly, the question whether an arbitrator has applied her mind to an issue before her is a question that needs to be considered in the light of that section. Both these questions thus raise constitutional matters within the jurisdiction of this Court.

[123] I should add that, although a review of a decision of the CCMA will always need to be undertaken in the light of the right entrenched in section 33, and will therefore generally involve a constitutional matter, it will often not be in the interests of justice for this Court to entertain such an appeal.

This Court must take cognisance that one of the primary purposes of the 1995 Labour Relations Act is to provide for the expeditious resolution of labour disputes.

In so doing, this Court will refuse to entertain a matter concerning the review of a CCMA decision unless it raises a matter of particular constitutional importance.

[124] In this case, my colleague, Ngcobo J, has dealt briefly

• with the first constitutional issue I identify (the right of an appellate court in a review matter to raise an issue going to jurisdiction of its own accord) and
• at some length with the second (the question whether the Commissioner applied her mind to the meaning of the exemption).

I respectfully disagree with his approach in respect of the second of those issues.

In the circumstances, therefore, I accept that it is in the interests of justice for this application for leave to appeal to be granted, although I do wish to emphasise that this Court should be alert to the purpose of the 1995 Labour Relations Act and should not undermine it by entertaining labour appeals without careful consideration of whether it is in the interests of justice for the appeal to be heard.

[125] Before turning to deal with these two constitutional issues, I wish to express a point of disagreement between Ngcobo J and me as to what constitutes a constitutional matter.

Ngcobo J states that because this case concerns the enforcement of a bargaining council agreement, and because there is a right in section 23(5) of the Constitution to engage in collective bargaining, the enforcement of a bargaining council agreement raises a constitutional matter.

I am not persuaded that this is correct.

[126] If it is clear that the enforcement of the bargaining agreement materially affects the right to engage in collective bargaining or any other right in the Bill of Rights, its interpretation will give rise to a constitutional issue.

Where, however, the interpretation is concerned with a provision that does not affect the right to engage in collective bargaining nor any other right entrenched in the Bill of Rights, but concerns substantive terms and conditions which have been negotiated (which by and large are the stuff of bargaining council agreements), it does not seem to me that a constitutional issue is automatically engaged.

[127] In this case, the primary dispute insofar as it relates to the bargaining council agreement turns on whether the wage provisions of the 1998 Main Agreement apply to the employer or whether the exemption granted on 7 April 1997 exempts the employer from those provisions.

This does not seem to me to raise a constitutional matter.

There is no provision in the Constitution which is directly relevant to the interpretation of either the 1998 Main Agreement or the exemption; nor can it be said that either of the interpretations for which the parties contend gives greater or lesser effect to the provisions of the Bill of Rights.

I should add that the exemption itself at which the interpretive debate is really directed is not “legislation” that falls to be interpreted in a manner consistent with the spirit, purport and objects of the Bill of Rights.

[128] Ngcobo J suggests that the enforcement of collective agreements is crucial to a society founded on the rule of law. I agree.

I do not think, however, that the consequence of this assertion is that the enforcement of all collective agreements automatically raises a constitutional matter, for the reasons I have given above.

The rule of law of course requires that all binding obligations be enforced. It does not mean, however, that the enforcement of all binding obligations necessarily raises a constitutional matter.

The 1995 Labour Relations Act carefully provides procedures to ensure that collective agreements are enforced. Those procedures have not been challenged as inadequate or unconstitutional.

This Court should recognise that the Constitution establishes it as a court that has jurisdiction in constitutional matters only; not as a general court of appeal in all matters.

This Court must respectfully observe those limits placed on its jurisdiction.

[129] I now consider the two constitutional issues that I have identified in turn.

The first issue: May a reviewing court raise a point going to jurisdiction of its own accord?

[130] The applicant argues that a reviewing court is not permitted to raise a point going to jurisdiction that has not been raised by one of the parties. It argues that when the Supreme Court of Appeal wrote to the parties in January 2007 requesting argument on the issue of the specific ambit of the dispute before the Commissioner, the Supreme Court of Appeal acted in a manner that a reviewing court may not, because, in effect, it raised an issue that the party seeking to review the CCMA decision had not.

[131] The proposition for which the applicant argues is, in my view, not correct.

Where a material irregularity or other defect appears on the face of the record before the reviewing court, which defect would mean that the proceedings before the tribunal were either unlawful, or procedurally unfair or unreasonable, the reviewing court is not obliged to overlook that defect.

Of course, the court must act in a manner that is fair to the parties and ensure that they have an opportunity to address the issue the court has identified.

This approach is consistent with the approach adopted by our courts in relation to the raising of new matters on appeal by litigants.

[132] In Carmichele, this Court held that it is the duty of all courts to uphold the Constitution and that a court may thus raise a constitutional issue of its own accord.

In the context of labour disputes, it is important to recall that parties are often not legally represented in proceedings before the CCMA and even in the Labour Court and Labour Appeal Court.

It might well be that a material irregularity could thus be overlooked by the parties themselves.

In these circumstances it would especially not be appropriate or consistent with the principle of legality that underlies our constitutional order to insist that the reviewing court ignore such material error.

When such an error is identified on the record by the reviewing court, the parties’ attention should of course be drawn to it and they should be given an opportunity to present either written or oral argument on it.

This course was followed in the present case by the Supreme Court of Appeal.

[133] In my view, therefore, the applicant’s objection to the judgment of the majority of the Supreme Court of Appeal, on the basis that it raised a point of its own accord, must fail.

The further issue for this Court to consider which is connected to this decision is the question regarding the ambit of the dispute before the CCMA.

This question does not itself raise a constitutional issue. It is concerned only with the ambit of the dispute before the Commissioner – a factual issue.

Nevertheless, it is an issue connected with a decision on the first constitutional matter and so does fall within our jurisdiction to determine.

However, I do not find it necessary to investigate this matter given the conclusions that I come to on the second constitutional issue as shall become plain in the next portion of this judgment.

The second issue: Did the Commissioner apply her mind to the meaning of the exemption?

[134] The second constitutional issue is the question whether the Commissioner applied her mind to the period of operation of the exemption. It is clear, as Ngcobo J holds, that a commissioner is obliged to apply his or her mind to the issues in a case.

Commissioners who do not do so are not acting lawfully and/or reasonably and their decisions will constitute a breach of the right to administrative justice.

[135] In answering this question it is necessary first to set out the terms of the relevant exemption:

“License of Exemption
This is to certify that under the powers conferred upon it, the Council has been pleased to grant exemption from the provisions of Part 2 of the Main Agreement published under Government Notice R1329 dated 27 June 1980 as amended and/or extended and/or replaced from time to time by any succeeding Agreement, and/or any amendments and/or extensions thereof to: Tao Ying Metal Industries (Pty) Ltd, PO Box 7791 Bloemfontein, 9300; to That the national percentage increase negotiated annually be enforced on the company with the inception of the 1998/1999 Main Agreement. Period from 19 March 1997 to: duration of Agreement.

Note: This exemption may be varied or withdrawn at any time at the discretion of the Council. (Signed) Secretary. Date: 7 April 1997.”

[136] It is not clear from the text of this licence of exemption that it was intended to lapse once the 1998 Main Agreement came into force. Indeed, the contrary is suggested by the second portion of the exemption which states that from the inception of the 1998 Main Agreement the employer will be required to pay the “national percentage increase negotiated annually”.

It should be emphasised that the exemption does not require the employer to pay the actual wages set in the 1998 Main Agreement. It is merely required to award its employees the national percentage increase on the basis of their existing wages.

The exemption also recognises that it relates not only to the 1980 Main Agreement but also to “any succeeding Agreement” which may replace the 1980 Main Agreement.

Despite its inelegant formulation, it seems to me that the meaning of the licence of exemption on a reading of its terms is that an exemption from Part 2 of the Main Agreement, and Part 2 of any succeeding agreement, is being afforded, subject to a requirement that once the 1998 Main Agreement comes into force, the employer will be required to pay the negotiated annual percentage increase.

[137] During the arbitration proceedings it was the employer’s case that this exemption continued to exempt it from paying the wage rates stipulated in the 1998 Main Agreement promulgated by the bargaining council even once that Agreement came into force.

Indeed, the Commissioner states as much in her discussion of the background to the issue as follows:

“The Respondent then raised the Exemptions issued under the Main Agreement which was concluded in 1980 and published in Government Notice R1329 dated 27 June 1980. The Respondent was, in terms of the said Exemptions … exempted from paying and giving its employees the minimum wages and conditions of service negotiated in the Bargaining Council.”

I should add for clarity that the 1980 Main Agreement related to wages and conditions of service that had been negotiated at the industrial council, not the bargaining council.

The employer’s argument as recorded by the Commissioner makes clear that the employer considered it was exempted from the minimum wages and conditions of service negotiated in the bargaining council, which wages and conditions of service were set out in the 1998 Main Agreement.

[138] Despite this, the Commissioner goes on to state in her reasons that:

“It is also common cause that by the time the dispute arose in August 1998 the exemptions under discussion were no longer valid having ceased to be so when the main Agreement in terms of which they were issued terminated and a period of eighteen months referred to in item 12(1) had also expired.”

She continues:

“Notwithstanding the above, I do agree with Adv. Beaton that I am excluded from enquiring into the period during which the exemptions were valid because they were issued under the agreement promulgated in terms of the 1956 Act.”

[139] These two comments seem to make plain that the Commissioner not only thought that it was common cause between the parties that the exemption had expired once the 1980 Main Agreement had expired and a period of 18 months from the promulgation of the 1995 Labour Relations Act had lapsed, but also that she could not enquire into the period of validity of the exemption because it had been granted under the 1956 legislation.

Both these dicta are consistent with the Commissioner not having applied her mind to the meaning of the exemption, as the employer argues.

[140] The first obligation on an arbitrator in determining a matter is to set out the reasons, even if only briefly, for any decision.

However, beyond the dicta referred to above, there is no further discussion in the Commissioner’s award of the text of the exemption and its meaning.

Compare this to the lengthy paragraphs devoted to an interpretation of the text of the exemption by the Labour Appeal Court, both Nugent and Jafta JJA in the Supreme Court of Appeal and Ngcobo J in this Court.

If the Commissioner had in fact applied her mind to the question of the meaning of the exemption, one would have expected at least some discussion of its text. This is nowhere evident in the award.

[141] In my view, it cannot be concluded that the Commissioner did apply her mind to the meaning of the exemption. This is consistent with her view that it was common cause that the exemption was no longer valid once the 1998 Main Agreement came into effect, and her conclusion that she in any event did not have jurisdiction to determine the matter.

Nevertheless, she held that as no exemption was in operation, the employer was obliged to pay the wages set out in the 1998 Main Agreement.

[142] There is no doubt, in my view, that it was not common cause that the exemption had lapsed, despite Musi AJA’s reasoning to the contrary.

A reading of the record before the Commissioner makes it plain that the evidence tendered by the regional manager for the bargaining council, Mr Coetzee, on behalf of the employer was that the exemption was still in operation, and would remain so indefinitely, unless withdrawn by the council.

The evidence was that:

“all exemptions issued stating a duration of an agreement will remain in force for ever and ever more . . . . So it is not only my opinion and my council’s opinion, it was also the opinion of the Exemptions and Arbitrations Board, that while this agreement is running the exemption is issued to the company for the duration of the agreement until such time as the exemption is [with]drawn, as you can see in the footnote, the council will have the right to withdraw [the] exemption at any time giving one week’s notice.”

After this statement was made, Mr Coetzee was asked the following question by counsel for the union:

“As at today, it is now the year 2000, it is almost three years later, these exemptions are still in place?”

Mr Coetzee answered affirmatively.

[143] The Labour Appeal Court took the view that even if the Commissioner had not applied her mind to the terms of the exemption, the award should stand because on an interpretation of the exemption, it had indeed lapsed.

I have set out at [29] above my preliminary reading of the exemption on its own terms. The Labour Appeal Court ruled it would have been ultra vires had the bargaining council extended the exemption beyond the currency of the 1980 Main Agreement to the provisions of the 1998 Main Agreement.

With respect, I do not think that this is a matter that can be determined on the record before us.

Section 30(1)(k) of the 1995 Labour Relations Act provides that the constitution of a bargaining council must provide for the procedure to be followed for exemption from collective agreements.

We do not have before us, as Nugent JA for the majority in the Supreme Court of Appeal pertinently remarked, a copy of the constitution of the relevant bargaining council.

[144] In the absence of that constitution (and indeed in the absence of the bargaining council which was excluded from the proceedings by the Commissioner) it is neither appropriate nor possible to determine whether or not the council acted ultra vires to the extent that it purported to exempt the employer from the terms of both the 1980 Main Agreement, and its successor agreements, including the 1998 Main Agreement.

It cannot be said, therefore, that we must strive for an interpretation of the licence of exemption to avoid this meaning. Nor can it be said that the licence of exemption, without doing damage to the language it contains, clearly lapsed before or when the 1998 Main Agreement came into force.

[145] I cannot, therefore, accept that the interpretation placed on the licence of exemption by Ngcobo J is the correct one.

Ngcobo J gives a narrow meaning to the licence of exemption by giving a narrow meaning to the words “replaced from time to time by any succeeding Agreement” contained in the licence of exemption.

In my view, given the express reference to the 1998 Main Agreement in the second half of the licence of exemption relating to Part 2 of the Main Agreement, it is inappropriate to give a narrow meaning to the word “replaced”.

Similarly, I consider that Jafta JA’s proposal that the words “or any succeeding agreement” are meaningless cannot be accepted.

[146] Both these approaches contort the ordinary meaning of the exemption and appear to have been guided by either the assumption that the bargaining council cannot have intended to grant an indefinite exemption beyond the life of the 1980 Main Agreement; or the assumption that it could not do so as a matter of vires.

In my view, neither assumption is warranted.

• The first is a petitio principii, in that it assumes as correct the very proposition that needs to be established: Did the exemption purport to relieve the employer of its obligations under the 1998 Main Agreement as well as the 1980 Main Agreement?
• The second, as I have demonstrated, is not a conclusion that we can draw on the papers as we do not have the constitution of the bargaining council before us.

[147] A related suggestion is the one made by Ngcobo J that the exemption

“must thus have been enacted under section 51 of the 1956 LRA read with schedule 7 of the new LRA.”

There is nothing to support this assertion. There is no reason apparent from the record to suggest why in April 1997 the bargaining council could not have acted both under schedule 7 of the 1995 Labour Relations Act to grant exemptions for the remaining life of the 1980 Main Agreement, and under its constitution as contemplated by the 1995 Labour Relations Act to extend the operation of the exemptions to the provisions of the 1998 Main Agreement as well.

Indeed, the record makes clear that that is what they intended as is evident, amongst other things, from the testimony of Mr Coetzee set out at [142] above and the bargaining council letter of 12 April 2000.

In that letter, the bargaining council assured the employer that the exemptions granted on 7 April 1997 continued to operate under the 1998 Main Agreement.

[148] Finally, Ngcobo J states in one sentence that the exemption should be read in the way he proposes

“because, on the facts of this case, a labour regime that enabled the greater exploitation of black people in the homelands as part of the apartheid scheme . . . would . . . be kept in force for longer”.

With respect, this argument ignores the undisputed facts on the record before us.

Those facts make plain that when the leather industry required leather companies in Botshabelo to pay the wages provided for in its main agreement and did not issue exemptions, all the leather companies in Botshabelo closed, with the devastating consequence of job losses.

Accordingly, when the Department of Labour realised that the metal and engineering industries bargaining council was about to register employers in Botshabelo, it requested the bargaining council to explore ways of ensuring that businesses were not forced to close as a result of being required to pay wages beyond their means.

It was at least partly as a result of this intervention that the council appointed a team of investigators to visit the employer’s premises and, in particular, to investigate the financial circumstances of the employer.

It was after this visit that the exemptions were granted.

In the light of the intervention by the Department of Labour, it seems likely that the exemptions were granted to avoid further job losses in Botshabelo.

In my view, the one-sentence argument relied upon by Ngcobo J ignores this complex economic and social background.

This Court should be slow to base its reasoning on such arguments, particularly when they have not been raised either by the union or the employer, and when they are likely to mask complex social and economic realities, possibly with harmful consequences, such as job losses.

[149] I should make clear, however, that I do not finally determine the meaning of the licence of exemption in this judgment.

In my view, as held by the majority of the Supreme Court of Appeal, that cannot properly be done without the constitution of the bargaining council.

My purpose is merely to make plain that it is not self-evident that the exemption bears the meaning proposed by Ngcobo J.

Accordingly, it is not possible to reason along the lines, as the Labour Appeal Court did, that the misdirection by the Commissioner need not result in her award being set aside because it was in any event correct in law. This is not a conclusion we can or should reach on this record.

[150] In conclusion, therefore, it is my view that the majority of the Supreme Court of Appeal was correct when it concluded that the failure by the Commissioner to apply her mind to the question of the exemption and its validity deprived the award of rationality and that it should be set aside on that ground.

[151] Given this conclusion, it is not necessary to consider the question whether the real issue before the Commissioner concerned the process by which the exemption had been granted.

I accept that in the informal and expeditious proceedings that take place before a commissioner of the CCMA, as Ngcobo J describes, issues are not as crisply and clearly identified as they ordinarily are after the exchange of pleadings and it is undesirable to expect that of proceedings before the CCMA.

[152] I proffer two points of caution.

• First, it is, at the end of the day, essential for the decision-maker in a fair adjudicative process to understand what the issues for decision are. Moreover, when that process is adversarial, it is necessary that the parties understand the issues as well, so that those issues may be properly engaged. We must be careful that, in attempting to acknowledge the informality of the processes before the CCMA, we do not lose sight of the essentialia of an adjudicative process.
• Secondly, in this case, a reading of the record does suggest that the key issue debated before the Commissioner was whether the union had been consulted by the bargaining council before it granted the exemption and whether, to the extent that it had not, that was fair.

It is quite clear that the Commissioner did not have jurisdiction to set aside the licence of exemption on the basis that it had been improperly made.

There is much, therefore, to be said for the conclusion of the majority in the Supreme Court of Appeal on this issue. Given that it is not necessary for me to decide this matter, however, I refrain from doing so.

[153] In conclusion, then, it is my view that the application for leave to appeal should be granted, but that the appeal should be dismissed. I would make no order as to costs on the ordinary rule that pertains in this Court.

Media summary

The following explanatory note is provided to assist the media in reporting this case and is not binding on the Constitutional Court or any member of the Court.

“Today the Constitutional Court handed down judgment in a case involving a dispute between the Commercial Workers Union of South Africa (CUSA) and Tao Ying Metal Industries (Tao Ying). Certain industry-wide minimum wages were set in a 1998 bargaining council agreement applicable to the parties. (A bargaining council is a forum for the collective negotiation of labour matters within a specific industry.)

At issue was whether Tao Ying is obliged to pay the minimum wages set out in the 1998 agreement or whether it has been validly granted exemptions from this obligation.

The relationship between the parties was previously regulated by a 1980 agreement. Employers were permitted to apply for exemptions from some of its provisions. Tao Ying
applied for and was granted certain exemptions, including one permitting it to pay wages lower than the minimum wages set out in that agreement. On 14 April 1998, the 1980 agreement was replaced by the 1998 agreement. CUSA claimed that Tao Ying was now obliged to pay the minimum wages set out in the 1998 agreement. Tao Ying’s position was that the exemptions granted remained in force. CUSA claimed that the exemptions were invalid because it had not been consulted prior to their being granted.

A Commissioner in the Commission for Conciliation, Mediation and Arbitration (CCMA) found that the minimum wage exemption relied upon by the Tao Ying had expired and held that it was obliged to pay the workers the wages set out in the 1998 agreement.

The Labour Court declined Tao Ying’s application to have this decision reviewed.

The Labour Appeal Court [per R Zondo JP] heard the matter and upheld the decision of the Commissioner.

On appeal, the Supreme Court of Appeal [per R Nugent JA] raised, of its own accord, the issue of the Commissioner’s jurisdiction and held by majority that the Commissioner lacked jurisdiction to consider the validity of the exemptions.

It also held, by majority, that the exemptions were still valid and applied to the 1998 agreement.

CUSA applied to this Court for leave to appeal against this decision.

In this Court, CUSA argued that the Supreme Court of Appeal was not entitled to raise the issue of jurisdiction of its own accord, and that the Commissioner had correctly found that the exemptions had expired.

Tao Ying argued that the dispute did not raise a constitutional issue and that the Commissioner’s decision should be set aside on review because she had failed to apply her mind to the issue of the validity of the exemptions.

The majority judgment written by Ngcobo J, in which all the judges except O’Regan J concurred, found that the case raised important constitutional issues which affect the
resolution of labour disputes and that leave to appeal should be granted.

He held that, whilst a reviewing court is ordinarily limited to deciding issues raised by the parties, a reviewing court is entitled, of its own accord, to raise a point of law and require the parties to deal with it if the parties have proceeded on the wrong perception of what the law is.

However, even if the Supreme Court of Appeal was entitled to raise the issue of jurisdiction, Ngcobo J held that the Commissioner had resolved the dispute on a point she clearly did have jurisdiction to decide, namely that the exemptions had expired.

Ngcobo J then examined whether the Commissioner had properly applied her mind to this question.

He held that she had, and that the exemption had indeed terminated when the 1980 agreement expired. Ngcobo J therefore upheld the Commissioner’s decision and concluded that Tao Ying was not exempted from the 1998 agreement’s provisions on minimum wages.

O’Regan J dissented.

She held that this Court should only hear disputes concerning the enforcement of collective bargaining agreements where they materially concern the right to engage in collective bargaining.

This dispute did not affect that right, but in her view two other constitutional issues were raised.

• The first concerned the power of a reviewing court to raise issues of its own accord. O’Regan J held that a court may of its own accord raise a point going to jurisdiction in review proceedings where a material irregularity appears on the face of the record, provided that parties are given a fair opportunity to address the issue.
• The second issue was whether the Commissioner had properly applied her mind to the validity of the exemptions.

O’Regan J held that she had not. Further, she held that this Court could not reach a finding that the exemptions were invalid without considering the bargaining council rules in terms of which the exemptions were granted, which were not part of the record before this Court. O’Regan J would therefore have dismissed the appeal.

The appeal was accordingly upheld.”