Eskom Holdings SOC Ltd v National Union of Mineworkers on behalf of Coetzee & others (2018) 39 ILJ 828 (LC)

Principle:

  1. Jurisdiction is determined on the basis of the pleadings, and not the substantive merits of the case.
  2. A claim for a higher salary as a matter of right through a regrading exercise is not an 'interests dispute' - this is distinguishable from a situation in which employees attempt to create fresh rights rather than relying on claimed existing rights The fact that the remedy sought is an increase in salary does not change the character of the dispute.

Facts:

The way we frame a dispute can have serious implications. Is a dispute about grading a dispute over 'mutual interests' which can only be resolved by industrial action? Or is a grading dispute closer to a promotion dispute which falls within the arbitral jurisdiction of the CCMA as an unfair labour practice? These issues surfaced in a recent case.

The five employees were warehouse personnel employed by Eskom at its Koeberg nuclear power station. Eskom undertook a 'transformation and migration process' in terms of which it sought to harmonise grading structures across its divisions and regions. The employees were aggrieved that Eskom failed to upgrade them as part of the process, and appealed to a body established to deal with such disputes. The body agreed with the employees, but management declined to alter the employees' grades.

Their union referred an unfair labour practice dispute to the CCMA on their behalf in terms of s 186(2)(a) of the LRA. Eskom argued that the CCMA lacked jurisdiction because the dispute related to the interpretation and application of the transformation and migration process, a collective agreement. The commissioner rejected that argument; he was satisfied that the dispute over regrading was one about benefits and could be categorised as an unfair labour practice dispute in terms of s 186(2)(a). The commissioner found that Eskom had committed an unfair labour practice and ordered it to upgrade the employees.

On review to the Labour Court, Eskom once again raised the jurisdiction point and also contended that the award was unreasonable. The Court noted that jurisdiction is determined on the basis of the pleadings and that, in this matter, it was clear from the pleadings that the union had referred an unfair labour practice dispute relating to promotion to the CCMA - its case was that its members had been upgraded and were entitled to be promoted to the higher grades and be paid accordingly. The court rejected the argument that a grading dispute was a matter of mutual interest which could only be resolved by industrial action. The employees were not attempting to create fresh rights, they were relying on an existing right to be properly graded. The Court was therefore satisfied that the CCMA had jurisdiction to arbitrate the dispute.

The Court then considered whether the arbitration award was sustainable on the merits. It noted that the commissioner had accepted that, according to the minutes of the hearing of the complaints body, local management and human resources had agreed that the employees were carrying out the duties of higher graded jobs. However, the commissioner had ignored the evidence of Eskom that that body did not have final authority. It could only make a recommendation, and the final authority to make any decision rested with senior management at national level. The commissioner had also ignored evidence that the employees' job grades had remained unchanged, and that the migration principles in the policy were not applicable to them. Furthermore, the commissioner's finding that the employees had been treated differently to another group of employees who were upgraded was not supported by evidence.

The Court accordingly found that the commissioner had come to a conclusion that was disconnected from the evidence before him and the outcome was unreasonable. The court declined to remit the matter for fresh arbitration and found that Eskom had not committed an unfair labour practice.

While this case turned ultimately on the errors of the CCMA commissioner, it nevertheless confirms that the CCMA will have jurisdiction to hear a grading matter referred as a promotion dispute, particularly where the employees were not attempting to create fresh rights but were relying on an existing right to be properly graded.

Extract from the judgment:

Steenkamp J:

Jurisdiction

[24]   Mr Boda argued that the CCMA did not have jurisdiction. On questions of jurisdiction, the reasonableness test in Sidumo does not apply. The question is simply whether the arbitrator was right or wrong when he ruled that the CCMA did have jurisdiction.

[25]   Did the CCMA have jurisdiction? The first point of departure is the union's referral of the dispute. Although the referral form in the CCMA does not constitute pleadings like a statement of claim in a referral to this Court does, I think the following dictum of the Constitutional Court in Gcaba addresses the same principle when considering the question of jurisdiction rather than the merits of the claim:

"[75]   Jurisdiction is determined on the basis of the pleadings, as Langa CJ held in Chirwa, and not the substantive merits of the case. If Mr Gcaba's case were heard by the High Court, he would have failed for not being able to make out a case for the relief he sought, namely review of an administrative decision. In the event of the Court's jurisdiction being challenged at the outset (in limine), the applicant's pleadings are the determining factor. They contain the legal basis of the claim under which the applicant has chosen to invoke the court's competence. While the pleadings - including in motion proceedings, not only the formal terminology of the notice of motion, but also the contents of the supporting affidavits - must be interpreted to establish what the legal basis of the applicant's claim is, it is not for the court to say that the facts asserted by the applicant would also sustain another claim, cognisable only in another court. If however the pleadings, properly interpreted, establish that the applicant is asserting a claim under the LRA, one that is to be determined exclusively by the Labour Court, the High Court would lack jurisdiction. An applicant like Mr Gcaba, who is unable to plead facts that sustain a cause of administrative action that is cognisable by the High Court, should thus approach the Labour Court."

[26]   In this case, the union referred an unfair labour practice dispute to the CCMA in terms of s 186(2)(a) of the LRA and, as set out above, it described the dispute as follows in the referral to conciliation:
"The company refuses to upgrade our members as per the migration principles. Please note that our members are redoing the work at the higher grade."
[27]   The union asked that "the employer must upgrade our members." When conciliation failed and the union requested arbitration, it described the issues in dispute as follows:
"Promotions was [sic] not effected after the transformation process as guided by the migration principle document."
[28]   The union requested that the arbitrator make a ruling that "the company must promote our members".

[29]   It is clear from these referrals that the union referred an unfair labour practice dispute "relating to promotion" to the CCMA in terms of s 186(2)(a) of the LRA. That subsection reads:
' "Unfair labour practice" means any unfair act or omission that arises between an employer and an employee involving-
  1. unfair conduct by the employer relating to the promotion, demotion, probation (excluding disputes about dismissals for a reason relating to probation) or training of an employee or relating to the provision of benefits to an employee;'

[30]   It is beyond doubt that the CCMA has jurisdiction over a dispute involving a promotion. But, argued Mr Boda, this was a dispute over grading. It does not fall into the definition of an unfair labour practice. It is either a mutual interest dispute that is not arbitrable, or it is a dispute over the interpretation and application of a collective agreement that must be dealt with in terms of s 24 of the LRA.

[31]   Mr Boda referred to Public Servants Association v National Prosecuting Authority and to MEC, Department of Sports, Recreation, Arts & Culture, Eastern Cape v GPSSBC in support of his argument that a grading dispute is a matter of mutual interest and thus not arbitrable as a promotion dispute.

[32]   In NPA the Labour Appeal Court accepted that "[i]n the normal course of mutual interest disputes such as this one was alleged to be, upon the failure of conciliation, industrial action in the form of a strike or lockout would have ensued. However, no strike action was initiated as the employees of the NPA involved in this matter are precluded from engaging in strike action as they have been designated in terms of s 71 of the LRA to be engaged in an essential service." And it further accepted:
"The arbitrator's conclusion that the dispute was one of interest is, in my view, rationally connected to the material before him and his analysis of the facts before him. In this regard, he properly took account of the fact that if the recommendations for job upgrades had become legal entitlements in the form of rights, then the regulations provided no shield to the respondents to avoid total implementation until they had found money. Recommendations are just that and nothing more. They are required to be effected and/or implemented before crystallising into substantive rights. It cannot be that the appellants were entitled to the higher salaries but could not enjoy them until the NPA found money."
[33]   In MEC, Department of Sport the facts were distinguished from those in Mathibeli v Minister of Labour. There was no evidence that a job grading was done and that approval was granted for the upgrading of his post and that his claim was that he should be paid at the upgraded post. He was simply seeking to upgrade his salary level.

[34]   As Ms Ralehoko pointed out, the authority in NPA is also questionable in the light of the more recent authority of the LAC in Mathibeli. In that case the Department employed the applicant as a legal officer at grade 10. After a job evaluation exercise, the grading team recommended that his post be upgraded to grade 11. The Department of Public Service and Administration told the Department that it could not be implemented as it had been done in error. He referred an unfair labour practice dispute to the Bargaining Council. At the arbitration the question arose whether it was a dispute of interest rather than a dispute of right. The arbitrator found that he did have jurisdiction. The Labour Court set that decision aside on review and held that it was an interest dispute. The Labour Appeal Court overturned the decision of the Labour Court. Sutherland AJA held that the arbitrator did have jurisdiction to arbitrate the matter, with reference to the decision by Freund AJ in Potterill:
"[15]   In my view there is no merit in this point. The substance of the dispute pertained to the employees' complaint that their posts had been regraded but, despite the fact that they had continued to be employed in the same posts and despite the requirements of regulation 24, their salaries had not been increased. In my view this is a complaint about alleged unfair conduct 'relating to the promotion' of the employees.

[16]   In my view regulation 24 requires one to draw a distinction between a decision to regrade a post and a decision to allow the incumbent employee in the regraded post to continue to occupy that post. Where the incumbent employee is permitted to continue to occupy the regraded post and is afforded the appropriate higher salary, the employee is, in my view, 'promoted'. In my view such a situation falls within the first meaning given for the word 'promote' in The Concise Oxford Dictionary (9 ed), namely:

'V.tr.1 (often foll. by to) advance or raise (a person) to a higher office, rank, etc (was promoted to captain).'

[17]   ................

[18]   The employees' complaint that regulation 24(6) had not been applied with regard to their posts and their request that their salaries be increased to the salary level of directors must, in my view, be construed as a complaint that they were entitled to be, but had not been, promoted. By alleging that their employer was guilty of an unfair labour practice they impliedly alleged unfair conduct on its part 'relating to' its failure to promote them. Having regard to the substance of the dispute as the parties understood it I am satisfied that this was a dispute about alleged unfair conduct relating to promotion.

[19]   ....................

[20]   I do not accept the argument that the dispute was a 'dispute of interests' which, for this reason, fell beyond the jurisdiction of the arbitrator. The employees' case was that they were the victims of an unfair labour practice and that, as a matter of law, they were entitled to salary increases. This was a 'dispute of rights'. The fact that the remedy sought was an increase in salary does not change the character of the dispute. A claim for a higher salary as a matter of right is not an 'interests dispute'."
[35]   The LAC agreed with these sentiments and held that the arbitrator did have jurisdiction, although Mr Mathibeli's claim was meritless on the facts.

[36]   Much the same pertains to this case. The union referred an unfair labour practice relating to promotion. Its case was that its members had been upgraded to levels T10 and T12 respectively and that they were entitled to be paid accordingly. That is a rights dispute over which the CCMA did have jurisdiction in terms of s 186(2)(a) of the LRA. That also distinguishes it from NPA, where the employees attempted to create fresh rights rather than relying on claimed existing rights.

[37]   The fact that the arbitrator in this case decided instead that he had jurisdiction because it was an unfair labour practice relating to 'benefits', rather than relating to promotion, is, in my view, a bit of a red herring. Even if he was mistaken in that view, he still had jurisdiction to decide an unfair labour practice dispute in terms of s 186(2)(a). Whether his award can be sustained on the merits is a different question.

[38]   Ms Ralehoko also referred to Parliament of the Republic of South Africa v NEHAWU in support of the argument - with which I agree - that the CCMA did have jurisdiction in this case. In that case, the trade union referred a dispute about an alleged unilateral change to the terms and conditions of employment after they had been appointed to new positions but kept on the same grades. The court found that the dispute concerned an alleged failure to promote and thus an unfair labour practice dispute.

[39]   Ms Ralehoko quite properly pointed out that, before the decision in Potterill, the Labour Court had reached a different decision in Polokwane Local Municipality v SALGBC. in that case, the employee applied to have her job upgraded. The employer created a new position and she applied for it. She was unsuccessful. She claimed that the employer had committed an unfair labour practice. The Commissioner agreed but on review, the court disagreed and found that the dispute was one of mutual interest.

[40]   Firstly, the Polokwane case is distinguishable as it related to the creation of a new job. The employee in that case unsuccessfully applied for a new job - something that may well be seen as a dispute of interest. In the case before me (and before the commissioner), the employee's claim that they were entitled to be paid at the higher level. And secondly, I agree with Ms Ralehoko that, in the light of the LAC decision in Mathibeli, the decision of the Labour Court in Polokwane may no longer be good rule. And she pointed out that, in Thiso v Moodley NO, this Court also expressed the view that Polokwane is no longer good law in the light of the LAC judgement in Apollo Tyres.

[41]   That brings me to the question whether the Commissioner's decision that he had jurisdiction because the dispute related benefits could in any event be sustained. In Thiso, the employees were employed in job category A3 and a job evaluation committee recommended that the position be upgraded to level A2. The employer appealed successfully against the decision and it was not implemented. The employees referred an unfair labour practice dispute relating to promotion. The Commissioner ruled that the CCMA did not have jurisdiction because it concerned a matter of mutual interest. On review, the Court held:
"[15]   The parties agreed that the employer in this case had a discretion whether to upgrade the positions. If that is so, the arbitrator is correct that the applicants could strike in support of that demand. It is a matter of mutual interest. But where he is wrong, is in finding that that option excludes arbitration of an unfair labour practice dispute in terms of s 186(2)(a).
As the LAC clarified in Apollo Tyres:

'As pointed out above employees will have an election to strike or go the arbitration/adjudication route in respect of many rights disputes. In my view, the better approach would be to interpret the term 'benefit' to include a right or entitlement to which the employee is entitled (ex contractuor ex lege including rights judicially created) as well as an advantage or privilege which has been offered or granted to an employee in terms of a policy or practice subject to the employer's discretion.

...

An employee who wants to use the unfair labour practice jurisdiction in section 186 (2) (a) relating to promotion or training does not have to show that he or she has a right to promotion or training in order to have a remedy when the fairness of the employer's conduct relating to such promotion (or non-promotion) or training is challenged."

[16]   In this case, it may be that the applicants could have elected to follow the collective bargaining route. But they elected to refer an unfair dismissal dispute to the CCMA in terms of s 186(2)(a) of the LRA. It is clear from the dictum in Apollo Tyres that they were entitled to do so.

[17]   The CCMA does have jurisdiction to arbitrate the unfair labour practice dispute that the applicants referred in terms of s 186(2)((a) of the LRA. The commissioner's award to the contrary must be reviewed and set aside."
[42]   In this case, the Commissioner's decision that the CCMA did have jurisdiction could be sustained on this basis as well; but in any event, as discussed above, the CCMA did have jurisdiction to decide the dispute as one of an unfair labour practice in terms of s 186(2)(a).

[43]   Lastly, albeit argued faintly, Eskom did not abandon its argument that the dispute concerned the interpretation and application of a collective agreement. But that is not the dispute that the union referred to the CCMA. The fact remains that the CCMA did have jurisdiction to arbitrate the unfair labour practice dispute that the union referred to it in terms of s 186(2)(a).

[44]   As the learned authors in Labour Relations Law: A Comprehensive Guide point out:
"[T]he closed nature of the list of unfair labour practices that are actionable in terms of s 186(2) obliges employees who are aggrieved by other forms of conduct to seek to fit them into one of the statutory categories or to rely on an alternative cause of action. ... Alternatively, the LRA may provide a remedy if the dispute is governed by a collective agreement [s 24]. ...

The 'remedy-shopping occasioned by the closed definition of an 'unfair labour practice' may be problematic, given the cost and delay associated with approaching the High Court or Labour Court on a contractual or constitutional basis on the one hand and the artificiality that may be involved in seeking to protect a non-statutory cause of action (such as transfer) in a statutory guise (such as demotion). An assessment of the unfair labour practice provision in a concept paper prepared for the President's Office in 2005, indeed, questioned the need for several of the statutory forms of unfair labour practice and recommended a far-reaching overhaul of s 186(2). These recommendations ... have not yet been addressed by government and did not feature in the LRA [Amendment Act] 6 of 2014."
[45]   I conclude that the arbitrator did have jurisdiction to deal with the dispute before him as one of an alleged unfair labour practice in terms of s 186(2)(b) of the LRA. This ground of review fails.

............

Conclusion

[64]   I find that the CCMA did have jurisdiction; Eskom's first ground of review fails. However, the review application succeeds on the merits. The arbitrator came to a conclusion that is disconnected from the evidence that was before him and the outcome was unreasonable.

[65]   It would serve little purpose to remit the dispute for a fresh arbitration. All of the evidence was before Court. On that evidence, I am persuaded that Eskom did not commit an unfair labour practice.

Costs

[66]   The individual applicants are still employed by Eskom. And there is an ongoing relationship between their trade union, NUM, and Eskom. They had an arbitration award in their favour. It was not unreasonable to oppose the review application. Eskom was successful on its second review ground but unsuccessful on the first. Taking into account the requirements of both law and fairness, I do not think a costs award is appropriate.

Order

[67]   I therefore make the following order:
67.1.   The late filing of the review application and the answering affidavit is condoned.
67.2.   The arbitration award issued by the second respondent, Commissioner CM Bennett, under the auspices of the third respondent, the CCMA, under case number WECT 15971 - 2015 on 6 August 2016 is reviewed and set aside.
67.3.   The award is replaced with an award that the applicant, Eskom Holdings SOC Ltd, did not commit an unfair labour practice.
67.4.   There is no order as to costs.