Association of Mineworkers and Construction Union and Others v Ngululu Bulk Carriers (Pty) Limited (In Liquidation) and Others (CCT15/18) [2020] ZACC 8; 2020 (7) BCLR 779 (CC); (2020) 41 ILJ 1837 (CC) (6 May 2020)
- The fundamental issue which is referred to conciliation is the unfairness of the dismissal, regardless of whether the unfairness concerned was automatic or otherwise. It is not reasons for a dismissal which must be referred to conciliation but the unfairness of the dismissal.
- Once a claim is pending in a competent court, a litigant is not allowed to initiate the same claim in different proceedings. For a lis pendens defence to succeed, the defendant must show that there is a pending litigation between the same parties, based on the same cause of action and in respect of the same subject matter.
The employer dismissed 476 workers as a result of their participation in an unprotected strike. An unfair dismissal dispute was immediately referred to the relevant bargaining council by AMCU. The dispute was conciliated without success and a certificate of non-resolution was issued by the relevant council. The Court referred to this as the first dispute.
At the same time, the employer re-employed some of the dismissed employees although it did not re-employ a single member of AMCU. AMCU and its members considered that the employer had embarked upon a process of selective reemployment. This was regarded as a second act of further dismissal to which AMCU members had been subjected.
A referral to the same bargaining council was made for conciliation. It was contended that selective reemployment constituted an unfair dismissal as set out in s 186(1)(d) of the LRA. The court referred to this as the second dismissal.
The employer disputed that the bargaining council had jurisdiction to conciliate the second dismissal but the council rejected this objection and conciliation continued. Again a resolution was unsuccessful and a certificate of non-resolution was thus issued. Aggrieved by this ruling, the employer launched a review application in the Labour Court impugning the ruling on jurisdiction and hence the validity of the certificate of non-resolution. Thereafter AMCU and its members initiated a claim for unfair dismissal in the Labour Court. With regard to the first dismissal, it was contended that members of AMCU had been dismissed for their affiliation to the union and for this reason, in terms of s 187(1)(f) of the LRA, these dismissals were automatically unfair.
The employer defended this action and raised two preliminary points, namely, that, as this dismissal was based on the assertion that it was automatically unfair, the Labour Court lacked jurisdiction in that an automatically unfair dispute had not been referred to conciliation. It also raised the defence of lis pendens contending that the issues raised by the second claim were the subject matter of a review application then pending before the Labour Court.
This case involved the Constitutional Court considering an application for leave to appeal against a judgment and order of the Labour Court and an order of the Labour Appeal Court refusing the applicants' petition for leave to appeal. This application concerned the proper interpretation of section 191 of the LRA together with whether lis alibi pendens (pending legal action) was properly raised in relation to the dismissal based on selective re-employment when what was pending was a review of a ruling on jurisdiction and the validity of the certificate of non-resolution.
In the Constitutional Court, the applicants argued that the automatically unfair dismissal and the ordinary unfair dismissal constituted one dismissal dispute. Further that the automatically unfair dismissal pleaded did not introduce a new or different dispute but only another reason or another label for the same dispute.
On the issue of lis alibi pendens, the applicants submitted that the review of the jurisdictional ruling did not stay the employees right to refer a dispute to the Labour Court. The respondent argued the applicants were dismissed for participating in an unprotected strike action and their trade union membership had nothing to do with their dismissals. On the issue of lis alibi pendens, the respondents submitted that there was pending litigation arising out of the same dispute.
The Constitutional Court held that the LRA is structured in a manner that obliges parties to disputes to first make use of non-litigation dispute resolution mechanisms, before approaching courts. Section 191 of the LRA requires dismissed employees to refer disputes about the "fairness of a dismissal to conciliation" and what is referred to conciliation is the dispute and not causes of action or claims which may arise from that dispute. The Constitutional Court then upheld the appeal relying on the interpretation of section 191 that a reason for a dismissal does not itself constitute a dispute. The Constitutional Court held that the Labour Court's judgment stemmed from its characterisation of an automatically unfair dismissal as a dispute separate from an unfair dismissal dispute that was referred to conciliation and as a result overlooked the fundamental issue which is that what was referred to conciliation was the unfairness of the dismissal, regardless of whether the unfairness concerned was automatic or otherwise. The Constitutional Court held that the Labour Court did have jurisdiction to adjudicate the automatically unfair dismissal claim.
On the issue of lis alibi pendens, the Constitutional Court held that the review application by Ngululu was directed at impugning the council's ruling and the certificate of non resolution. It had nothing to do with the unfairness of the second dismissal. It followed therefore that the causes of action and subject matters in the two proceedings were different. Therefore Ngululu had failed to establish the defence of lis alibi pendens. The Constitutional Court held that the appeal must be upheld and since the merits of the claim were not determined, the matter must be remitted to the Labour Court and that Ngululu should pay the costs.
Extract from the judgment:
Jurisdiction of the Labour Court
[16] Although unfair dismissal disputes such as the ones we are concerned with here fall within the jurisdiction of the Labour Court, the exercise of that jurisdiction is deferred until a dispute has been conciliated. The LRA is structured in a manner that obliges parties to disputes to first make use of non-litigation dispute resolution mechanisms, before approaching courts. Of importance in this regard is section 191, which requires dismissed employees to refer disputes about the "fairness of a dismissal to conciliation."
[17] Depending on the reason for the dismissal, once conciliation fails to resolve the dispute, the affected employee has two options if she wishes to pursue the matter further. If the employee has alleged that the reason for the dismissal is one of those listed in section 191(5)(b), then she may ask the relevant bargaining council or the Commission for Conciliation, Mediation and Arbitration to arbitrate the dispute. That is if the body asked to arbitrate is the one that conciliated the dispute. The other option is that the employee may refer the dispute to the Labour Court for adjudication.
[18] It is important to keep in mind that what is referred to conciliation is the dispute and not causes of action or claims which may arise from that dispute. Moreover, conciliation involves both sides to the dispute, that is the dismissed employee and the employer that dismissed her. Both parties are usually familiar with the dispute sought to be resolved through conciliation. However, while the reasons for a dismissal are always known to the employer, the employee may not know them at the time the referral is made. Those reasons may be revealed to the employee during conciliation.
[19] If the reasons so revealed include those mentioned in section 191(5)(b) and conciliation fails, the employee has a choice to pursue arbitration or adjudication in the Labour Court. But here the Labour Court read the relevant provisions differently. That Court held the view that a referral to conciliation of an unfair dismissal dispute does not include an automatically unfair dismissal. Proceeding from this premise, the Labour Court concluded that the claim of an automatically unfair dismissal needed to be conciliated first before that Court could entertain it. It took that stance despite the fact that an unfair dismissal dispute had been referred to conciliation and had been conciliated.
[20] To bolster its reasoning, the Labour Court called in aid section 157(4) of the LRA which empowers that Court to refuse to adjudicate a dispute if not satisfied that the dispute was conciliated. This was incorrect and inconsistent with established authority. Section 157(4) did not apply here because there was sufficient proof that there was an attempt to resolve the dispute by conciliation. A certificate of non-resolution was furnished to the Court. In rejecting a similar argument in Intervalve this Court said:
"And the Driveline minority's approach to section 157(4) seems wrong to me. Section 157(4)(a) confers upon the Labour Court the power to refuse to determine a dispute if it is not satisfied that an attempt has been made to resolve the dispute through conciliation. Section 157(4)(b) then provides that a certificate issued by a commissioner that a dispute remains unresolved is sufficient proof that an attempt has been made to resolve that dispute through conciliation. This means that, in a case where a certificate of non-resolution has been issued at the end of the conciliation process, the Labour Court may not, on the strength of section 157(4)(a), decline to determine the dispute. This is because section 157(4)(b) says that the certificate is sufficient proof that an attempt was made."[21] The flaw in the Labour Court's reasoning stems from its characterisation of an automatically unfair dismissal as a dispute separate from an unfair dismissal dispute that was referred to conciliation. That Court overlooked the fundamental issue which is that what was referred to conciliation was the unfairness of the dismissal, regardless of whether the unfairness concerned was automatic or otherwise. And that it is not reasons for a dismissal which must be referred to conciliation but the unfairness of the dismissal.
[22] In this regard, Driveline tells us that a reason for a dismissal does not itself constitute a dispute. In that matter the Labour Appeal Court declared:
"In my view, a reading of section 191(1) - (5) leaves one in no doubt that the phrase 'operational requirements' as used in the Act does no more than give a reason for a dismissal the fairness of which may be in dispute between the parties as contemplated at the beginning of section 191(1) where the Act refers to 'a dispute about the fairness of a dismissal'. It does not itself constitute a dispute on its own. The same applies to a situation where an employee alleges or seeks to allege that his dismissal constitutes an automatically unfair dismissal. This refers simply to a reason for dismissal the fairness of which may be the subject of a dispute between the parties as contemplated in section 191(1) of the Act.[23] This interpretation of section 191 was affirmed by this Court in Intervalve. Therefore before the Labour Court had construed section 191 here, this Court and the Labour Appeal Court had already proclaimed what that provision means. Accordingly it was not open to the Labour Court to prefer a different meaning of the provision. The correct meaning had already been authoritatively settled.
It follows, therefore, from what I have said above in regard to a dismissal for operational requirements that also the reference to a dismissal as an automatically unfair dismissal is nothing more than giving a reason for the dismissal. That this is the case is confirmed by a reading of the provisions of section 187(1) which deal with automatically unfair dismissals. It is clear from section 187(1) that whether a dismissal is automatically unfair depends on the reason for the dismissal. Of course, once the reason for dismissal has been established, this may have various implications in terms of the Act which may differ from the implications which would flow from the establishment of another reason as the reason for dismissal."
[24] Judicial precedent is a principle of our law. It obliges lower courts to follow decisions of higher courts, for as long as those decisions remain in operation. In Walters this Court observed:
"High Courts are obliged to follow legal interpretations of the [Supreme Court of Appeal], whether they relate to constitutional issues or to other issues, and remain so obliged unless and until the [Supreme Court of Appeal] itself decides otherwise or this Court does so in respect of a constitutional issue."[25] It follows that the Labour Court erred in holding that it had no jurisdiction to adjudicate the automatically unfair dismissal claim.
Lis alibi pendens
[26] The purpose of lis pendens is to prevent duplication of legal proceedings. As its requirements illustrate, once a claim is pending in a competent court, a litigant is not allowed to initiate the same claim in different proceedings. For a lis pendens defence to succeed, the defendant must show that there is a pending litigation between the same parties, based on the same cause of action and in respect of the same subject matter. This is a defence recognised by our courts for over a century.
[27] Having correctly noted the requirements of the defence, the Labour Court here overlooked that not all requirements were met. That Court held:
"In this case, the applicants did not dispute that the parties in this matter were the same as those that were before the bargaining council in respect of disputes under case number NELRFBC 40165 and further that the review proceedings are pending in this Court under case number JR 919/16. When the applicants filed the statement of claim in which they required this Court to determine whether the individual applicants were unfairly dismissed in terms of section 186(1)(d) of the LRA, it essentially brought the same claim under a different guise and they are effectively seeking the same relief that was determined by the bargaining council. I agree with the respondent's view that this amounts to forum shopping and it is indefensible. To the extent that the review proceedings are pending in this Court, it follows that the matter is lis pendens."[28] Only one of the three requirements of lis pendens was satisfied here. That is the litigation was between the same parties in the two sequential proceedings. The others were not. It will be recalled that with regard to the second claim, the dispute was referred to the bargaining council for conciliation where Ngululu objected to the council's jurisdiction. A ruling rejecting the objection was made and as the dispute was not resolved, a certificate of non-resolution was issued by the council.
[29] The review application by Ngululu was directed at impugning the council's ruling and the certificate of non-resolution. It had nothing to do with the unfairness of the second dismissal. It follows that the causes of action in the two proceedings were different. And so were the subject matters. ThereforeNgululu had failed to establish the defence of lis alibi pendens.
[30] ...
[31] Here the review court could only determine whether the relevant bargaining council had jurisdiction to conciliate the dispute and whether the certificate issued by that council was valid. The review court could not enquire into the fairness of the dismissal in question because that was not an issue before it. Similarly the Labour Court here could not adjudicate the issues that were before the review court. Consequently the Labour Court erred in upholding lis pendens in present circumstances.
[32] The appeal must be upheld and since the merits of the claim were not determined, the matter must be remitted to the Labour Court.
Costs
[33] Although this is essentially a labour matter, the rule that ordinarily applies to labour matters is not appropriate here. The rule that costs orders should not be granted in labour matters is based on the special relationship that exists between employees and employers. In most cases that relationship continues even after the resolution of a dispute by a court. Here the circumstances are different. The employer-employee relationship has ended. Therefore, the usual rule that costs follow the result should apply.
Order
[34] In the result the following order is made:
- It is declared that the liquidators of Ngululu Bulk Carriers (Pty) Limited have replaced it as respondents.
- Leave to appeal is granted.
- The order of the Labour Court is set aside.
- The matter is remitted to the Labour Court for determination of the merits.
- The liquidators of Ngululu Bulk Carriers (Pty) Limited are ordered to pay costs in the Labour Court and in this Court.