SERJEANT AT THE BAR
When the Labour Relations Act was passed in 1995, a system of specialist labour courts was introduced as part of the new dispensation.
It was hoped that these courts, staffed by specialist judges, would create a coherent body of law in keeping with the principles of the Act.
The new system got off to a promising start. Under the energetic leadership of John Myburgh, the Labour Appeal Court in particular delivered a number of groundbreaking judgements that set the basis for an enlightened labour dispensation.
Myburgh was succeeded by two fine jurists, Sandile Ngcobo and Ray Zondo. However, the model upon which the system was based has proved to be a failure. Increasingly, the judge president of the court, Zondo, has battled to staff the court with judges who have knowledge of the subject. As the complement of permanent judges is small he has been required to rely on acting appointments most, if not all, of whom have little knowledge or feel for this area of law.
Take a recent offering from the Labour Appeal Court. In 1999 the University of Cape Town resolved to outsource certain of its non-core activities such as cleaning, gardening and sports-ground maintenance. The work was contracted out to a number of independent organisations. About 267 employees were laid off by the university and retrenchment benefits were paid.
The National Education, Health and Allied Workers’ Union instituted proceedings in terms of Section 197 of the Act for a declaration that the contracts of the affected employees were to be transferred automatically to those organisations that had taken over the performance of the so-called non-core activities pursuant.
The manifest purpose of Section 197 was to ensure that if a business is transferred from one employer (A) to another employer (B) as a going concern, then, unless otherwise agreed, all the rights and obligations between employer A and the affected employees at the time of the transfer would continue as rights and obligations of employer B.
Applied to this case, it would have seemed fairly clear that such a transfer from A (UCT) to B (the independent organisations) had taken place and, in the absence of any contrary agreement, B would have become the employer of the affected employees. Not so, said Judge Kees Van Dijkhorst, writing for the majority of the court. He found that a going concern must have employees thus if B bought a business without employees, any sale between A and B would not be a sale of a going business concern. Such a sale would, to use the florid language of the judge, “be to equate a bleached skeleton with a vibrant horse”.
The majority of the court held that, unless A and B agree to a sale of an undertaking which sale includes the transfer of existing employers, the latter could claim no protection in terms of Section 197. By contrast, Zondo interpreted the section as to meet its purpose, namely “to protect employees from losing their jobs when their employer transfers his business or part thereof as a going concern”.
The contrast between the two judgements could not be starker. The majority proceeds from the premise of laissez fairer principles given to the common law; the minority judgement from a basis of the purpose of the Act to give effect to the Constitution and the aim of establishing a fair labour dispensation designed to protect employees from the unfettered power of employers.
Not only did the majority in effect reject an earlier decision of the court in the case of Foodgro v Keil as to the interpretation of Section 197 but they have weakened any protection that the section may have afforded employees.
Was this the only such case, there may not be much more to say about the decision. But the majority decision has, arguably, become the norm. This in turn raises the question of the need for a specialist court that has (Zondo and a couple of other judges apart) little specialisation and is not producing a jurisprudence in keeping with the Act. There is the further argument that the country does not have the resources to staff a range of specialist tribunals.
Within this context, the time has surely come to scrap the system of labour courts, allow the high courts to do the work and make the Supreme Court of Appeal the ultimate court of appeal for labour disputes. Ironically, there are more distinguished labour lawyers at the Supreme Court of Appeal than in the labour appeal court. The scrapping of the system will not only save money, it will, in all likelihood, produce better labour law.