This case is important because it shows that while constitutional rights must be enjoyed, such enjoyment must be in accordance with the established due process. It also has implications for the rights to fair labour practices and access to courts.
The case was brought as an appeal by the National Union of Metalworkers of South Africa (NUMSA). NUMSA asked the court to join two employers – Intervalve (Pty) Ltd (Intervalve) and BHR Piping Systems (Pty) Ltd (BHR) – as parties to an unfair dismissal case in the Labour Appeal Court between NUMSA and Steinmüller Africa (Pty) Ltd (Steinmüller).
The facts of the case are that 204 employees were dismissed after participating in a strike at an industrial site known as the ‘Pretoria Works’. The premises houses three associated engineering companies – Steinmüller, Intervalve and BHR – which have interlinked shareholders and directors. The companies were collectively referred to as the ‘Steinmüller group of companies’ and shared HR services. Accordingly, the strike had been handled by these HR services since the dismissed employees were each employed by one or the other of the three companies. Furthermore, the dismissal letters issued to the employers were identical.
NUMSA, acting on behalf of the employees, instituted legal proceedings against Steinmüller and referred the dismissals to conciliation in April 2010. After the conciliation proceedings, NUMSA brought an action for unfair dismissal in the Labour Court in March 2011. The Labour Court allowed NUMSA to join Intervalve and BHR as parties to the proceedings, a decision which was overturned by the Labour Appeal Court. NUMSA then appealed to the Constitutional Court.
In deciding the appeal, the court noted that the issue was whether the Labour Court had jurisdiction to hear an unfair dismissal dispute which had not been referred to conciliation and whether NUMSA had complied with section 191, requiring an unfair dismissal to be referred for conciliation before being brought before the Labour Court.
Affirming the decision of the Labour Appeal Court, the Constitutional Court held that referral for conciliation is indispensable because it is a precondition to the jurisdiction of the Labour Court. Although the court agreed that the three companies acted jointly, it held that there were separate disputes concerning each employee. On whether NUMSA had complied with section 191, the court noted that the real question was whether NUMSA had fulfilled the purpose of the provision regardless of whether the exact statutory requirement had been met or not. This, the court held, requires a four-step approach:
- What is the purpose of the statute as a whole, as well as the specific provision at issue?
- What steps did the party take to comply with the provision?
- Did the steps taken achieve the purpose of the statute and of the specific provision, even if the precise requirements were not met?
- Was there any practical prejudice because of non-compliance?
The court held that in determining the purpose of section 191, a court must consider the entire provision. It held that the broad aim of section 191 is to enable an employer to participate in the conciliation proceedings and if necessary prepare for legal action. The court further observed that the other purpose of section 191 as embraced in section 191(3) – which requires a party to serve a copy of the conciliation referral on the employer concerned – is to specifically notify each employer that it may be liable for legal consequences if the dispute is not resolved through conciliation. To this end, informal notice of the referral is insufficient – the employer must be formally notified of the referral. In view of this the court found that although the three companies were closely associated, each of them had to be served with the notice because they remained separate legal personalities. It concluded that Intervalve and BHR were not involved in the legal process because NUMSA had only mentioned and served Steinmüller in its action. In addition, the court held that the fact that the three companies dealt with the strike jointly did not mean that that they had abandoned their right to be separately notified of any legal action arising from the dismissals. As a result, the disputes relating to Intervalve and BHR had not been referred to conciliation.
This case stresses the importance of conciliation in the resolution of labour disputes. The decision also reiterates that parties must comply with court processes in challenging an alleged breach of the right to fair labour practices in section 23(1) of the Constitution. The mandatory conciliation also means that a court’s caseload is reduced, thus ensuring greater access to justice. In particular, it shows that an employer has a right to be properly served with all relevant documents to enable it participate in conciliation proceedings and to prepare a defence.
By Esther Gumboh, Intern: Centre for Constitutional Rights