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Pretorius v Rustenburg Local Municipality and Others (JA20/05) [2007] ZALAC 16; [2007] ZALC 15 (21 December 2007)

.RTF of original document

IN THE LABOUR APPEAL COURT OF SOUTH AFRICA

HELD IN JOHANNESBURG
Case no: JA20/05
In the matter between

Nicholas Pretorius                                                    Appellant
And
        
Rustenburg Local Municipality    1st respondent
Munimed  2nd respondent
Municipal Gratuity Fund  3rd respondent

JUDGMENT
ZONDO JP
[1]      I have had the benefit of reading the judgment prepared by Comrie AJA in the matter. Regrettably I am unable to agree with his conclusion that the appellant has made out a case that he is entitled to the order that he seeks. My approach to the matter is rather different from the approach adopted by Comrie AJA. In my view the appellant is not entitled to any relief and the appeal should be dismissed with costs.
[2]      In order to determine whether or not the appellant is entitled to the relief that he seeks, it is necessary to set out the material facts as well as the history of the dispute. In the course of doing so it will be necessary to also refer to the legislative measures that were taken during that history which will have a bearing on whether the appellant is entitled to the relief he seeks. I start off with the facts.
         The facts
[3]      Since the advent of democracy in this country in 1994 many changes have occurred and, yet, still more changes need to occur. Local government and how it operates have been no exception in this regard. In 1998 the first democratically elected government enacted the Local Government: Municipal Demarcation Act, 1998 (Act 27 of 1998) which created the Demarcation Board. The Demarcation Board’s main function was to demarcate territorial boundaries of various local government authorities throughout the Republic. Once established, the Demarcation Board went ahead and did this. After this had been done, it was necessary to establish local government authorities in accordance with the demarcations made by the Board. This meant that some of the local government authorities which had been established under apartheid would have to be disestablished. Furthermore, the territorial jurisdiction of the new local government authorities would not necessarily be the same as those which had existed in the respective areas under apartheid. Accordingly, in some cases a new local government authority could have under its jurisdiction areas that previously fell under different local government authorities.
[4]      Another piece of legislation that was enacted in 1998 was the Local Government: Municipal Structures Act 118 of 1998 (“the MSA”). In terms of sec 12(1) of the MSA a Member of the Executive Council for local government in a province was required to establish by notice in the Provincial Gazette, “a municipality in each municipal area which the Demarcation Board demarcates in the province in terms of the Demarcation Act”. In terms of sec 12(2)(a) and (b) of the MSA the establishment of a municipality was required to be “consistent with the provisions” of the MSA and would “take effect at the commencement of the first election of the council of that municipality.”
[5]      In terms of sec 14(1)(a) of the MSA “(a) municipality established in terms of section 12 in a particular area, supersedes the existing municipality or municipalities to the extent that the existing municipality or municipalities fall within the area.” In terms of sec 14(1)(b) “(t)he superseding municipality becomes the successor in law of the existing municipality subject to paragraph (c).” Sec 14(2), in so far as it is relevant herein, provides:
“(2)(a)If subsection (1) is applicable, the section 12 notice or any amendment of the section 12 notice, must –
a)      
provide for the disestablishment of the existing municipality or, if only part of the existing municipality’s area is affected, the disestablishment of the existing municipality in the affected area; and
b)      
regulate the legal, practical and other consequences of the total or partial disestablishment of the existing municipality, including –
(i)     
the vacation of office by councillors of the exiting municipality;
(ii)    
the transfer of staff from the existing municipality to the superseding municipality, or, if there is more than one superseding municipality, to any of the superseding municipalities;
(iii)   
the transfer of assets, liabilities, rights and obligations, and administrative and other records, from the existing municipality to the superseding municipality or if there is more than one superseding municipalities, taking into account the interests of creditors of the existing municipality;
(iv)    
……………..
Provided that if the superseding municipality is a district or local municipality a transfer referred to in subparagraph (ii) or (iii) must be effected in a way that would enable the superseding municipality to perform the functions or exercise the powers assigned to it in terms of section 84(1) or (2).
[6]      Sec 12(3) of the MSA provides:
“(a)      The transfer of a staff member in terms of a section 12 notice must be –
i)      
on conditions of service not less favourable than those under which that staff member served in the existing municipality; and
ii)     
in accordance with the Labour Relations Act, 1995 (Act 66 of 1995)
(b)      A section 12 notice transferring staff of an existing municipality to a superseding municipality may determine that -
(i)      the staff transferred from the existing municipality to the superseding municipality form an administrative unit that functions as such unit until the superseding municipality has established a staff structure and has appointed staff to positions on the staff structure; and
(ii)     such administrative unit functions under the control of the municipal manager or acting municipal manager of the superseding municipality.”
[7]      The appellant was at some stage employed by the Rustenburg City Council. That City Council later became or later formed part of the Rustenburg Local Transitional Council. That Council was later disestablished in terms of sec 12 of the MSA. The Rustenburg Local Municipality, the first respondent, was established by way of a notice issued by the Member of the Executive Council responsible for local government in the North -West Province. The notice was notice NO 316 of 2000 which was published in the Provincial Government Gazette No 5574 of 29 September 2000. Such notice will be referred to herein as “the sec 12 notice”. The Rustenburg Transitional Local Council was only one of three municipalities which were disestablished and replaced by the Rustenburg Local Municipality. This means that the personnel that had been employed by the municipalities or local councils concerned were all to be transferred to the new Rustenburg Local Municipality, the first respondent.
[8]      In the sec 12 notice the relevant MEC stated: “Under sec 12(1) and (3) and 14(1) and (2) of the Local Government: Municipal Structures Act, 1998 (Act NO 117 of 1998), I hereby establish the Rustenburg Local Municipality as set out in the Schedule hereto” That was on the 26th September 2000. However, as would have been noted earlier in this judgment, in terms of sec 12 of the MSA the establishment of the Rustenburg Local Municipality was only going to take effect at the commencement of the local government election that was to follow. It is also at that time that the Rustenburg Transitional Local Council was going to cease to exist.
[9]      The local government election that was held after the issuing of the sec 12 notice was held on the 6th December 2000. That is also the date on which the Rustenburg Transitional Local Council ceased to exist and the date on which the first respondent was established. The question which arises is: on the 6th December 2000 what happened to the personnel and all employees previously employed by the Rustenburg Transitional Local Council and the other local municipalities which were disestablished on that date?

[10]     In terms of sec 14(2)(b)(ii) of the MSA, if sec 14(1) of the MSA applied to a particular situation, the sec 12 notice or any amendment of a sec 12 notice was required to regulate the legal, practical and other consequences of the total or partial disestablishment of an existing municipality, including “the transfer of staff from the existing municipality to the superseding municipality, or if there is more than one superseding municipality, to any of the superseding municipalities”. For the sake of completeness it can also be mentioned that what a sec 12 notice was required by sec 14(2)(b)(ii) to do in regard to staff was also required by sec 14(2)(b)(iii) of the MSA in respect of “assets, liabilities, rights, obligations and administrative and other records.” In other words just as an MEC for local government could under sec 14(2)(b)(ii) transfer an employee from a disestablished municipality to any one of a number of superseding municipalities - where there was one or more superseding municipalities – which seems to suggest to me that the MEC could do this even against the employee’s will – the MEC could also transfer an asset or liability of a disestablished municipality to any one of the superseding municipalities even against the wishes of either the councillors or the personnel. One assumes that this would be permissible where to do so was in the public interest.
[11]     The question which arises is whether the MEC for Local Government in the North-West Province did transfer the personnel previously employed by the Rustenburg Transitional Local Council, which included the appellant, to the superseding Rustenburg Local Municipality by way of a sec 12 notice as contemplated in sec 14(1)(b)(ii) of the MSA. Item 8 of the sec 12 notice dealt with the transitional provisions relating to personnel. I think that the transition contemplated therein was to be the period from the entry of the personnel of a disestablished municipality in the employ of the superseding municipality pending the rationalisation or restructuring of the superseding municipality to the end of such rationalisation. The end of the transitional period would, as far as personnel were concerned, end when all the positions that had to be filled pursuant to the rationalisation were filled.

[12]     In paragraph 3 of his founding affidavit the appellant stated that “all assets and liabilities as well as all personnel of the erst- while Rustenburg Transitional Local Council (hereinafter referred to as the TLC were transferred to the First Respondent.” In the same paragraph he said that “(t)his had been done (i)n terms of section 3 contained in the schedule to notice NO 428 of 2000 as published in the North West Extraordinary Government Gazette NO 5634 dated 21 December 2000 as well as in terms of sections 7(1) and 7(2) contained in the schedule to Notice No 316 of 2000, as published in the North West Extraordinary Government Gazette, No 55 74 dated 29 September 2000 proclaimed in terms of Section 14(2)(b)(iii) of the mentioned Act on Local Government: Municipal Structures …”. In par 18 of its answering affidavit the first respondent stated that these allegations are not in dispute. This means that it is common cause between the parties that all the personnel who were employed by the Rustenburg Transitional Local Council – which included the appellant – were transferred into the first respondent’s employ. That is a transfer of personnel that the MSA and the sec 12 notice referred to. Accordingly, this matter must be approached on the basis that upon the disestablishment of the Rustenburg Transitional Local Council and the coming into existence and operation of the first respondent, the appellant was transferred into the employ of the first respondent.
[13]     Item 8(1) of the sec 12 notice reads:
“Any person in the employ of the disestablished municipalities referred to in section 2(2) shall, in accordance with a determination by the responsible member made after consultation with the affected municipalities and with effect from a date mentioned in such determination, be transferred and placed in the service of the local municipality within the district area, on such terms and conditions of service as are not less favourable under which such person previously served; Provided that –
a)      
……
b)      
…….
c)      
…….
d)      
Such person shall not, as a consequence of such transfer, acquire a right to retire or to be offered a severance or retrenchment package;
e)      
…..
f)      
…..
g)      
…..
h)      
Any person who refuses or withholds his or her consent to be transferred as contemplated by this section, shall not be entitled to any severance benefit or benefits.
Provided, further, that the provisions of this subsection shall not prevent the municipality concerned from implementing a scheme to re-organise its personnel subject to the Labour Relations Act, 1995 (Act No 66 of 1995).”
         Item 8(2) of the sec 12 notice reads:
“(2)The employment of personnel referred to in subsection (1)-
a)      
must be regularised in accordance with any collective agreement reached between the municipality concerned and the trade unions representing those employees; and
b)      
is subject to section 197 of the Labour Relations Act, 1995 (Act No 66 of 1995).
Item 8(3)(a) provides that a determination contemplated in subsection (1) shall be published in the Provincial Gazette for information. Item 8(3)(b) and (c) read thus:
“(b)      The effective date of a determination referred to in paragraph (a) may be a date prior to the date of publication of a notice for information as contemplated in this subsection.
c)      
The responsible Member may amend a determination contemplated in subsection (1)”
Item 8(4) reads thus:
“(4)      The local municipality referred to in section 2(1) may, by agreement with the relevant district municipality or any other local municipality within the district municipal area and with effect from a date determined by such agreement, after due consultation with the relevant trade union and with the consent of the employee concerned, transfer or second any of its employees to or place the services of any such employee at the disposal of the district or local municipality concerned: Provided that in the event of a transfer such employee shall be employed on such rights and privileges as are not less favourable than those applicable to him or her at the time of such transfer.”
[14]     Subsequent to the establishment of the first respondent, the first respondent embarked upon a re-organisation or rationalisation or restructuring to create posts which would be filled by employees. The employees who would fill such posts would include the former employees of the Rustenburg Transitional Local Council. One does not need much imagination to understand that, as there were two other municipalities which had been disestablished and were replaced by the first respondent, this was a situation where for any post there could be two or three people who had previously occupied similar or corresponding posts in the disestablished municipalities each of whom may have hoped to get either the corresponding post in the first respondent or a post as close as possible to the one they had occupied in the disestablished municipalities. Obviously, the first respondent had to deal with the challenge of how to accommodate all the employees from all the three disestablished municipalities. In most cases it would be impossible to give each employee exactly the same post or position that he or she had occupied in the relevant disestablished municipality. All that the first respondent could realistically be expected to do was to make employees reasonable offers of employment in certain positions. It would never succeed if it sought to satisfy every employee in respect of every issue. It is now necessary to consider the events which occurred subsequent to the disestablishment of the three municipalities and the establishment of the first respondent in so far as they are relevant to this matter.
[15]     In 1973 the appellant was employed by the Rustenburg Town Council. Later the Rustenburg Town Council was disestablished and replaced by the Rustenburg Transitional Local Council. This was in the post – 1994 period. The capacity in which the appellant had been employed by the Rustenburg Town Council was that of Assistant Town Engineer (Water and Sewerage Section) until 1974 when he was promoted to the position of Deputy Town Engineer. In 1989 he was promoted to the position of City Engineer: Civil Services. That was the position that the appellant occupied on the 5th or 6th December 2000 at the time of the disestablishment of the Rustenburg Transitional Local Council and the establishment of the first respondent.
[16]     In his founding affidavit the appellant referred to an agreement that was concluded on the 31st October 2000 between, on the one hand, the North-West Government Association (“NORWELOGA”), of which the first respondent was, at all material times, a member, and, on the other, the South African Municipal Workers Union (“SAMWU”) and the Independent Municipal Association of Trade Unions (“IMATU”). The appellant was at all material times a member of IMATU. A copy of that agreement was annexed as “NP1” to the appellant’s founding affidavit.

[17]     In the record there is an advisory arbitration award that was issued by an arbitrator who had been asked by either all or at least some of the parties who had signed the “NP1” agreement to give an advisory arbitration award on a number of issues. The fact that the award is an advisory one means that it is not binding on any of the parties thereto. One of the issues on which the arbitrator had been asked to give an opinion was whether or not the “NP1” agreement is a collective agreement. The arbitrator concluded that the “NP1” agreement is not a collective agreement. Obviously, no court is bound by that conclusion. Indeed, as I have said, that conclusion is not binding even on the parties to that advisory award.
[18]     The arbitrator who issued the advisory award based his conclusion in this regard on the provisions of the constitution of the South African Local Government Bargaining Council, particularly clause 3.2 thereof read with clause 3.1. In terms of clause 3.2 collective agreements in the bargaining council must be concluded at a certain level. The arbitrator stated that this had not been complied with in the case of the “NP1” agreement. For this reason he concluded that the “NP1”       agreement was not a collective agreement.
[19]     I am not certain whether the terms of reference of the arbitrator required him to give his opinion on whether the “NP1” agreement is a collective agreement on the basis of the constitution of the bargaining council or whether no restriction was placed with regard to what could form the basis of his opinion. What is conspicuous by its absence from the matters that the arbitrator took into account in arriving at his conclusion that the “NP1” agreement is not a collective agreement is a consideration of whether the “NP1” agreement falls within the definition of a collective agreement contained in sec 213 of the Labour Relations Act, 1995 (Act 66 of 1995) (“the Act”). That definition reads as follows:
“Collective agreement’ means a written agreement concerning terms and conditions of employment or any other matter of mutual interest concluded by one or more registered trade unions, on the one hand and, on the other hand –
                  (a)      one or more employers
(b)      one or more registered employers’ organisations; or
(c)      one or more employers and one or more registered employers’ organisations.”
[20]     Once an agreement is a collective agreement as defined in sec 213 of the Act, such agreement is binding on the employers’ employers’ organisations and their members and the trade unions which signed the agreement as well as their members. This is so by virtue of the provisions of sec 31 of the Act. In my view the fact that such an agreement may not have complied with any domestic or internal requirements of a particular organisation does not affect the question whether or not, for purposes of the Act, it is a collective agreement.   I am unable to agree with the conclusion that the “NP1” agreement is not a collective agreement as defined in sec 213 of the Act. IMATU, the union of which the appellant is a member, is a registered trade union and it is party to the “NP1” agreement. SAMWU is a registered trade union and it was a party to that agreement. NORWELGA is an employers’ organisation. The provisions of the “NP1” agreement clearly relate to terms and conditions of employment and other matters of mutual interest between employer and employee. In my view the “NP1” agreement meets the requirements of the definition of a collective agreement in sec 213 of the Act and is, indeed, a collective agreement for purposes of the Act.
[21]     Annexure “NP1” was one of the first steps, if not the first step, taken by the parties to that agreement to put in place structures and processes that would be necessary for, among others, the first respondent, once established, to manage and regulate the restructuring and reorganisation that had to be undertaken after the disestablishment of some of the old local authorities and the establishment of certain new municipalities.
[22]     It is not necessary to refer to all the provisions of the “NP1” agreement. It will suffice to note some of its provisions. The preamble to the “