Civil and Power Generation Projects (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (JR2473/16) [2019] ZALCJHB 58 (22 March 2019)

Principle:

When interpreting an agreement, consideration must be given to the clear language used, applying ordinary rules of grammar and syntax. A particular provision should be interpreted in the light of the document as a whole, and its overall purpose. Where more than one meaning is possible, each possibility must be objectively weighed in the light of these factors, and a sensible meaning should be preferred to one that undermines the apparent purpose of the document.

Facts:

The dispute in this case concerned the interpretation of a collective agreement providing for the forfeiture of a project bonus payable to employees, if they embarked upon unprotected strike action.

In terms of the collective agreement, it was agreed that employees would only be paid a project bonus if the employees did not embark upon unprotected strike action. Another clause provided: 'Rolling unprotected industrial action (where employees embarking upon unprotected industrial action, return to work only to go out on further unprotected industrial action as the result of the same event) will result in the individuals losing their project bonus in terms of this PLA.'

A clause in the agreement created specific exceptions where employees would not forfeit their project bonus: first, in the case of employees returning to work within the cooling off period; and second, where the unprotected strike action takes place as a result of provocation by the employer.

When this dispute was referred to the CCMA the commissioner determined that the clause in the collective agreement only contemplated the forfeiture of the project bonus in the month in which the employees embarked upon the unprotected strike, and not the entire project bonus for the year.

On review the Labour Court held that when objectively interpreting these clauses, where employees embark upon unprotected strike action, they forfeit their entire project bonus for the year, even if it is only a single instance. The only way to have avoided this was for employees to show that they returned to work in the cooling off period, that they were provoked into striking by the employer, and that this was not 'rolling' industrial action. The employees failed to establish any of these events.

The lesson of this case is more about how to interpret agreements than 'no-strike' bonuses. The LC found that the arbitrator had failed to properly apply principles relating to interpretation of agreements, and criticised the arbitrator for being influenced by the view that an unprotected strike can be seen as being simply part of employees' fundamental right to collective bargaining.

The LC confirmed that when interpreting an agreement, consideration must be given to the clear language used, applying ordinary rules of grammar and syntax. A particular provision should be interpreted in the light of the document as a whole, and its overall purpose. Where more than one meaning is possible, each possibility must be objectively weighed in the light of these factors, and a sensible meaning should be preferred to one that undermines the apparent purpose of the document. Effect must be given to every clause in the document and, if two clauses appear to be contradictory, the proper approach is to reconcile them so as to do justice to the intention of the document. It is not necessary to resort to other evidence, if the meaning of the document can be gathered from its contents.

Extract from the judgment:

Snyman, AJ

Analysis

[40]   As an opening remark, I am unfortunately compelled to say that this is a case where the interpretation of an agreement is unduly influenced by subjective considerations of the second respondent as a decision maker, rather than him remaining objective as required. A proper consideration of the reasoning of the second respondent in his award leaves me convinced that what materially influenced the second respondent in his reasoning is that he simply found it unpalatable that employees should forfeit their entire project bonus for the year for one incident of unprotected strike action. It just did not sit right with him, and he adapted his interpretation of the PLA accordingly.

[41]   But needless to say, these kind of subjective considerations and personal views of what is fair is not a permissible basis upon which to interpret an agreement. This is especially so where it comes to broader based collective agreements such as the PLA, which has much wider implications to other unions, employers, employees and the industry itself. In dealing with the interpretation specifically of an industry collective agreement, the Court in Commercial Workers Union of SA v Tao Ying Metal Industries and Others said:

'The proper approach to the construction of a legal instrument requires consideration of the document taken as a whole. Effect must be given to every clause in the instrument and, if two clauses appear to be contradictory, the proper approach is to reconcile them so as to do justice to the intention of the framers of the document. It is not necessary to resort to extrinsic evidence if the meaning of the document can be gathered from the contents of the document.'

[42]   In his award, the second respondent in fact correctly identified all the legal principles applicable to the interpretation of agreements. But unfortunately, where it came to the manner in which he applied these principles, it is clear to me that he just paid lip service to these principles, and did not in reality properly or rationally apply the same. It is perhaps best, as a point of departure, to now summarize these principles. What is now often referred to as the 'modern' basis of the interpretation of agreements, was enunciated in Endumeni Municipality as follows:

'Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, or contract, having regard to the context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attendant upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production. Where more than one meaning is possible each possibility must be weighed in the light of all these factors. The process is objective, not subjective.A sensible meaning is to be preferred to one that leads to insensible or unbusinesslike results or undermines the apparent purpose of the document. Judges must be alert to, and guard against, the temptation to substitute what they regard as reasonable, sensible or businesslike for the words actually used. To do so in regard to a statute or statutory instrument is to cross the divide between interpretation and legislation; in a contractual context it is to make a contract for the parties other than the one they in fact made. The "inevitable point of departure is the language of the provision itself", read in context and having regard to the purpose of the provision and the background to the preparation and production of the document.'

[43]   The Constitutional Court in Association of Mineworkers and Construction Union and Others v Chamber of Mines of SA and Others applied the aforesaid dictum in Endumeni Municipality, and said:

'All interpretations of law are themselves in a sense 'factual': certain textual and other sources (for example, statutes, common and customary law) are excavated and marked out as factually 'law', in contradiction to non-law. But this process itself involves a contextual analysis of those sources. See in this regard Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; 2012 (4) SA 593 (SCA)at para 18. Indeed, interpretation and application are simultaneous and intricated. The most imaginative exponent of this insight is Ronald Dworkin. See Dworkin Law's Empire (Harvard University Press Cambridge 1986) at vii: 'legal reasoning is an exercise in constructive interpretation', in which we advance 'the best justification of our legal practices as a whole'.'

[44]   I wish to make a final reference to the following useful dictum in Democratic Nursing Organisation of SA on behalf of Du Toit and Another v Western Cape Department of Health and Others where the Labour Appeal Court made the following observations, after considering the dictum in Endumeni Municipality:

'... Of course, context is not a secondary consideration but is part of the very process required to resolve any linguistic difficulty. The words employed and the purpose of the speaker are inextricably linked. This follows inherently from the very concept of the language. In the same manner, the content of an ordinary conversation cannot, in general, be divined from the meaning of the sentences employed or even with the conversationalist's goals in saying what they did, so the content of a legal text cannot, in general, simply be determined by the ordinary or technical meanings of the sentences in the text or indeed with the policy goals motivating the drafting thereof. As Scott Soames has noted: 'The content of a legal text is determined in essentially the same way that the contents of other texts or linguistic performances are, save for complications resulting from the fact that the agent of a legislative speech act is often not a single language user but a group, the purpose of the speech is not usually to contribute to the cooperative exchange of information but to generate behaviour modifying stipulations, and the resulting stipulating contents are required to fit smoothly into a complex set of existing stipulations generated by other actors at other times.'

[45]   I now return to the matter at hand, and apply what is set out above. One issue must be immediately disposed of. The second respondent's reasoning that the conduct of the individual respondents must in some way be mitigated or understood because unprotected strike can be seen as being simply part of their fundamental right to collective bargaining, is completely unsustainable and a misdirection. Where fundamental rights under the Constitution are regulated by statute, those rights must be determined based on the content of the statute concerned, and direct reliance on the constitutional provision is not permissible. In this case, the right to collectively bargain is regulated by the LRA, which has as one of its core objectives orderly and legitimate collective bargaining. An unprotected strike action is in breach with what the LRA requires and is simply not consistent with it. It therefore follows that where employees strike in a manner prohibited by the LRA, it simply cannot be seen as being part of their right to collective bargaining as collective bargaining in terms of the LRA envisages only legally permissible conduct, and not unlawful behaviour.

[46]   By adopting the approach referred to above, the second respondent negated an important context. This context is that unprotected strike action is very serious misconduct, not functional to collective bargaining, and may justify dismissal. It is also the kind of conduct that causes material prejudice to an employer. The object of the LRA is clearly to dissuade employees from strike action that is not in compliance with the provisions of the LRA. In turn, this constitutes a proper context in terms of the LRA for treating this misconduct far more seriously in the PLA, namely by way of the forfeiture of the entire project bonus. So therefore, and contrary to what the second respondent believed, an interpretation of clause 13.25 to the effect that employees forfeit their entire project bonus for the year is fully in line with the objectives of the LRA.

[47]   My view in this regard is cemented by the manner in which clause 13.25.3.2 is structured. As dealt with earlier in this judgment, the provision in fact contemplates that, at the risk of exaggerating, it is not every little strike of a few minutes that will lead to forfeiture of the project bonus. Employees are given the opportunity to save their project bonus by returning to work within the cooling off period defined in the PLA itself. There is thus a balance, as envisaged by the LRA, that a strike of short duration does serve as mitigation. Also, the clause specifically recognizes the concept of provocation by the employer as a mitigating factor. In that instance as well, employees do not forfeit their project bonus. This is fully in line with the objective of fair dealing under the LRA, and an important factor the second respondent did not contemplate at all.

[48]   A proper interpretation of clause 13.25.3.2, by simply considering the clear language in the clause, can in my view only have one result. This result is that the clause provides, as a general principle, that where employees embark upon an unprotected strike, they forfeit their project bonus. This is not their project bonus for only a month, but their project bonus for the year. However, if they go back to work immediately (within the cooling off time) or if they are provoked by their employer, this would serve as an exception to losing their project bonus. This is the only construction that fully accords with the clear language of the provisions.