IN THE LABOUR COURT OF SOUTH AFRICA, …

1 IN THE LABOUR COURT OF SOUTH africa , JOHANNESBURG Case no: JR 2228-13 Reportable In the matter between : SOUTH AFRICAN MUNICIPAL WORKERS UNION (SAMWU) First Applicant INDEPENDENT MUNICIPAL AND ALLIED WORKERS UNION (IMATU) Second Applicant and CITY OF JOHANNESBURG First Respondent MD ALLY, Second Respondent SOUTH AFRICAN LOCAL GOVERNMENT BARGAINING COUNCIL (SALGBC) Third Respondent Heard: 31 May 2017 Delivered: 2 February 2018 Summary: Transfer of business - collective agreements - sections 197(5) and 197(6) of the LRA Main/Sectoral Agreements trump plant level collective agreements covered by section 197(5) 2 JUDGMENT WHITCHER, J: Introduction [1] The applicant seeks to have reviewed and set aside the arbitration award issued by the second respondent on 2 September 2013.

2 [2] The first respondent submitted in its answering affidavit that the review application stands to be dismissed because of a significant and unexplained delay in its prosecution from when it was instituted on 16 October 2013. An incomplete record was filed 14 months late on 9 March 2015 and the missing part was filed 5 months later on 19 August 2015, with no condonation application. [3] In response, the applicants did not file a substantive condonation application and instead tendered an explanation for the delay in its replying affidavit, which is not a proper way to apply for a condonation. [4] They further failed to provide a detailed and reasonable explanation for the delay.

3 [5] Moreover, as submitted by the respondent, the applicants conduct of this review is seriously prejudicial to the respondent because the issue which gave to the dispute occurred more than 4 years ago, in June 2013, and any decision which will require the respondent to alter that decision will have serious repercussions the nature of the dispute is such that it ought to have been prosecuted throughout with a sense of urgency to avoid the consequences of the respondent having to alter a major decision it took more than 4 years ago. [6] I decided, however, to consider the merits of the review, considering it deals with an important and novel subject matter .

4 The material facts 3 [7] The affected employees were previously employed by one of two municipal entities, City Power (Pty) Ltd or Johannesburg Water (Pty) Ltd (the MOEs ) which were wholly owned by the first respondent. At the time, the affected employees terms and conditions of employment were governed by collective agreements concluded between the applicants and City Power or Johannesburg Water, as the case may be (the old collective agreements ). [8] During 2006, the first respondent decided to integrate all its revenue collection and customer relations management functions. This decision led to the transfer of the affected employees from the MEO s to the first respondent.

5 During December 2009, the first respondent sent letters to the employees informing them that they would be transferred to the first respondent on terms and conditions of employment that are on the whole not less favourable to the employees than those on which they were employed by the old employer with effect from 1 January 2010. [9] The affected employees were transferred to the first respondent in January 2010, in accordance with section 197 of the LRA. Their terms and conditions of employment continued to be governed by the old collective agreements. [10] On 17 September 2012 the first respondent gave formal notice to the applicants that the terms and conditions of employment of the transferred employees would be determined by the SALGBC s Main Collective Agreement from the 1st January 2013.

6 However, implementation was delayed to allow the parties to negotiate at the Local LABOUR Forum. The discussions deadlocked. [11] On 18 April 2013 the first respondent issued a further notice of its intention to impose the SALGBC s Main Collective Agreement on the applicants members. [12] During June 2013, the affected employees terms and conditions of employment were altered so as to conform to those under the Main Agreement. 4 [13] A table indicating the differences between the old collective agreements and the Main Agreement, which formed part of the evidence before the arbitrator indicates, for instance, that City Power and Johannesburg Water female employees enjoyed 4 months paid maternity leave whereas at the first respondent female employees are entitled to only 3 months paid maternity leave.

7 [14] It is important to note that the parties to this dispute are parties to the Main Agreement and their members immediately on their transfer fell within the registered scope of the Main Agreements of the SALGBC and SALGBC. [15] On perusal thereof, I noted that a stated objective in all the Main Agreements concluded from 2007 through to 2015 is to establish common and uniform conditions of service for employees falling within the registered scope of the Council and to establish common and uniform procedures and monitoring processes for employers and employees falling within the registered scope of the Council. [16] The Agreements further provide that all previous conditions of service relating to matters covered by the agreements are replaced by the conditions of service contained in the agreements.

8 The award [17] The arbitrator formulated the issues for determination, as set out in the pre-arbitration minute: The CoJ contends that the affected employees terms and conditions of employment are those determined by the collective agreements of the SALGBC [SALGBC s Main Collective Agreements]. The applicants contend that on a proper interpretation of section 197, in particular section 197(5), the terms and conditions of the affected employees should be determined by the collective agreements applicable to the [MOEs]. Which of the terms and conditions of employment and/or collective agreements are applicable to the employees transferred from the MOE s to the CoJ?

9 5 [18] The arbitrator concluded that the terms and conditions of the transferred employees are determined by the SALGBC s Main Agreement, that the SALGBC s Main Agreement has application. [19] He reasoned that if regard is had to the factors listed below, the SALGBC s Main Agreement supersedes the transferred collective agreements: (i) Sections 23(3) and 31 of the LRA. (ii) The primary objective of the LRA, as enshrined in Section 1, namely to provide a framework within which orderly collective bargaining can take place, with preference being given to collective bargaining at a sectoral level. (iii) The stated objectives of the sectoral collective agreements which is to ensure uniformity and consistency of conditions of employment, procedures and monitoring processes in an organized industry.

10 (iv) The fact that the parties to the dispute are parties to the SALGBC s Main Agreement and their members fall within the registered scope of the agreement and the SALGBC. [20] The arbitrator reasoned that the stated objectives of the LRA and the Main Agreements would be negated where employees who fall under the scope of the Main Agreement and bargaining council were governed by different collective agreements. [21] He reasoned that the employees terms and conditions of employment became varied once they fell within the scope of the Agreement and council. The grounds of review [22] The applicants contend that the arbitrator wrongly interpreted the LRA.