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REPUBLIC OF SOUTH AFRICA

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Not Reportable

Case no: J2270/14

In the matter between:

TNT EXPRESS WORLDWIDE (SA) (PTY) LTD                                                         Applicant

and

SOUTH AFRICAN TRANSPORT AND ALLIED

WORKERS UNION (“SATAWU”)                                                                  First Respondent

WILLIAM LEKGOATHI                                                                             Second Respondent

CITY DELIVERIES (PTY) LTD t/a CITY COURIERS                                   Third Respondent

Heard:           16 October 2014

Delivered:     20 November 2014

Summary: Urgent application- employer refusing to engage with trade union because its representative an employee of a competitor. Employer fearing that confidential information be divulged to competitor- section 16 of the LRA providing a dispute resolution mechanism to deal with disputes regarding disclosure of information- employer having alternative remedy – application dismissed.

JUDGMENT

Nkutha-Nkontwana AJ

Introduction

[1] This is an urgent application in terms of which the Applicant essentially seeks, by way of a final interdict, an order in terms of prayer 2.1 to 2.5 of its notice of motion which is as follows:  

‘2.1      Declaring that the Applicant is entitled to refuse to engage in communications and negotiations with William Lekgoathi on behalf of SATAWU as well as any other employee of the competitor of the Applicant who seeks to perform the functions or attempt to perform the functions of an office bearer on behalf of SATAWU.

2.2       Interdicting and restraining Mr William Lekgoathi and any other person who is an employee of a competitor of the Applicant, from entering the premises of the Applicant for the purpose of representing SATAWU.

2.3       Interdicting Mr William Lekgoathi from being involved on behalf of SATAWU in the dispute referred to the National Bargaining Council for the Road Freight and Logistics Industry under case number GPRFDC 31078-14 and any other dispute that may be lodged against the Applicant by SATAWU.

2.4       Requiring SATAWU to replace Mr William Lekgoathi with an official of SATAWU in regard to all its future dealings with the Applicant.

2.5       Suspending the conciliation meeting between the National Bargaining Council for the Road Freight and Logistics Industry under case number GPRFDC31078/14 and until William Lekgoathi has been replaced with an official of SATAWU.’

[2] The Applicant abandoned relief sought paragraph 2.6 to 2.7 of the notice of motion. The application is opposed by the First and Second Respondents.

Factual background

[3] The facts in this application are greatly common cause. The Applicant is a courier company conducting business in South Africa and being part of the global transportation and distributing industry, a competitive market both locally and internationally. The Applicant’s business consists of three main sales areas, being major accounts, territory sales and special services. Most of its competitors operating in this environment perform the same or similar functions for their own customers.

[4] The business and competitive differentiators in the industry are highly strategic and confidential. As such, the operational policies and procedures implemented and marketed are aimed at reducing the time it takes to make a delivery, reduced the cost of delivery to the customers and also the conditions in which the consignment is delivered to the customer.

[5] The conditions of employment of its employees are structured in a manner which promotes productivity. The Applicant invests in skilling of its employees through training and development. The skills acquired by its employees are highly prized and sought after in the market, as a result its competitors have sought to poach them in the past.  

[6] The Applicant’s policies, processes and strategies reflect the advice provided by its head office in Amsterdam, Holland. Consequently, its subsidiaries have a competitive advantage against its competitors. The said policies include its marketing and branding strategies, plans and its operational processes which amount to confidential information that cannot be readily disclosed. 

[7] Therefore, because of confidential information and trade secrets, the Applicant’s employees, except wage earners, have entered into restraint of trade and confidentiality agreement in order to protect its proprietary interests. All its employees in terms of their contracts of employment are required to uphold the confidential aspect of the Applicant’s business and accordingly that issue is dealt with in their letters of appointment. 

[8] The Third Respondent is the Applicant’s competitor and market itself in a comprehensive nationwide distribution network and offers courier services, distribution and warehouse and logistics services to customers. 

[9] The Applicant, the First Respondent and the Third Respondent are members of the National Bargaining Council for the Road Freight and Logistic Industry (“NBCRFLI”). The Applicant and the Third Respondent are also members of the Road Freight Association, an employers’ association for the road freight industry, which is also a party to the NBCRFLI. 

[10] The second respondent (“Lekgoathi”) is employed by the Third Respondent as its regional human resources controller. His duties entail dealing with regional wages by calculating the hours of work by the employees in three different provinces and in addition he also deals with queries from the bargaining council. Lekgoathi is a member and an office bearer of the First Respondent and he has been delegated by the First Respondent in terms of its constitution to represent the First Respondent and the interest of its members. Lekgoathi is also an elected fulltime shop-steward at the Third Respondent.

Prima facie or clear right

[11] This application is pegged on section 23(1) of the Constitution which states that “everyone has a right to a fair labour practice”. In National Education, Health and Allied Workers Union (“NEHAWU”) v University of Cape Town and Others,[1] the Court referred to National Union of Metal Workers of South Africa v Vetsak Cooperative Ltd and Others[2] where the Court held that:

‘Fairness comprehends that regard must be had not only on the position and the interests of the workers, but also those of employer, in order to make a balanced and equitable assessment…The fairness required in the determination of unfair labour practice must be fairness towards both the employer and the employee. Fairness to both means the absence of bias in favour of either.  In the eyes of the LRA of 1956, contrary to what counsel for the appellant suggested, there is no underdogs.’

[12] In NEHAWU, the Court clearly endorsed the principles referred to in Vetsak and stated the following:

‘In my view the focus of section 23(1) is, broadly speaking, the relationship between the worker and the employer and the continuation of that relationship on terms that are fair to both. In giving content to that right, it is important to bear in mind the tension between the interests of the workers and the interests of the employers which is inherent in labour relations. Care must therefore be taken to accommodate, where possible, these interests so as to arrive at the balance required by the concept of fair labour practices. It is in this context that the LRA must be construed.’[3]

[13] Accordingly, the Applicant seeks to vindicate its right to protect its confidential information by refusing to bargain with Legoathi who is in the employ of the Third Respondent, its competitor.

[14] Conversely, in terms of section 23(4)(a) of the Constitution, the First Respondent has a right to determine its own administration programmes and activities. Markedly, section 23(5) of the Constitution provides that every union, employer organisation and employer has a right to engage in collective bargaining and that a National legislation may be enacted to regulate collective bargaining.

[15] The Labour Relations Act, 66 of 1995, as amended (“LRA”) is the National legislation referred to in section 23(5) of the Constitution. The whole of Chapter III of the LRA regulates collective bargaining and in particular the organisational rights of representative trade unions. As such, rights of parties to a collective bargaining relationship are accordingly regulated in terms of Chapter III of the LRA.

[16] The First and Second Respondents’ counsel submitted that Lekgoathi, as an officer bearer, has been duly mandated in terms of the First Respondent’s constitution to represent its members. Whilst, in terms of section 12(1) of the LRA, “any office bearer or official of the representative trade union is entitled to enter the employer’s premises in order to recruit members or to communicate with members or otherwise to serve members’ interest.” Therefore, the First and Second Respondents’ counsel submitted further, the word “any” in the above section should be interpreted to mean “whichever of the specific class might be chosen”.[4]

[17] Section 213 of the LRA defines an “office bearer” as “a person who holds an office in a trade union, employers’ organisation federation of trade unions, federation of employers’ organisations or council and who is not an official (i.e not employed by these organisations)”.

[18] Pertinently, the disclosure of information for purposes of collective bargaining is regulated by Section 16 of the LRA and it is key that I cite it in full.    

‘16. Disclosure of information

(1)        For the purposes of this section, "representative trade union" means a registered trade union, or two or more registered trade unions acting jointly, that have as members the majority of the employees employed by an employer in a workplace.

(2)        Subject to subsection (5), an employer must disclose to a trade union representative all relevant information that will allow the trade union representative to perform effectively the functions referred to in section 14(4).

(3)        Subject to subsection (5), whenever an employer is consulting or bargaining with a representative trade union, the employer must disclose to the representative trade union all relevant information that will allow the representative trade union to engage effectively in consultation or collective bargaining.

(4)        The employer must notify the trade union representative or the representative trade union in writing if any information disclosed in terms of subsection (2) or (3) is confidential.

(5)        An employer is not required to disclose information –

(a)        that is legally privileged;

(b)        that the employer cannot disclose without contravening a prohibition imposed on the employer by any law or order of any court;

(c)        that is confidential and, if disclosed, may cause substantial harm to an employee or the employer; or

(d)        that is private personal information relating to an employee, unless that employee consents to the disclosure of that information.

(6)        If there is a dispute about what information is required to be disclosed in terms of this section, any party to the dispute may refer the dispute in writing to the Commission.

(7)        The party who refers the dispute to the Commission must satisfy it that a copy of the referral has been served on all the other parties to the dispute.

(8)        The Commission must attempt to resolve the dispute through conciliation.

(9)        If the dispute remains unresolved, any party to the dispute may request that the dispute be resolved through arbitration.

(10)      In any dispute about the disclosure of information contemplated in subsection (6), the commissioner must first decide whether or not the information is relevant.

(11)      If the commissioner decides that the information is relevant and if it is information contemplated in subsection (5)(c) or (d), the commissioner must balance the harm that the disclosure is likely to cause to an employee or employer against the harm that the failure to disclose the information is likely to cause to the ability of a trade union representative to perform effectively the functions referred to in section 14(4) or the ability of a representative trade union to engage effectively in consultation or collective bargaining.

(12)      If the commissioner decides that the balance of harm favours the disclosure of the information, the commissioner may order the disclosure of the information on terms designed to limit the harm likely to because to the employee or employer.

(13)      When making an order in terms of subsection (12), the commissioner must take into account any breach of confidentiality in respect of information disclosed in terms of this section at that workplace and may refuse to order the disclosure of the information or any other confidential information which might otherwise be disclosed for a period specified in the arbitration award.

(14)      In any dispute about an alleged breach of confidentiality, the commissioner may order that the right to disclosure of information in that workplace be withdrawn for a period specified in the arbitration award.”

[19] The objects and purport of section 16 could only be understood within the context of the LRA and inquiry into the intention of the legislator. In terms of Section 1 of the LRA, its purpose “is to advance economic development, social justice, labour peace and the democratisation of the workplace by fulfilling the primary object of this Act, which are –

‘(a)       to give effect to and regulate the fundamental rights conferred by Section 23 of the Constitution;

(b)        to give effect to obligations incurred by the Republic as a member state of the International Labour Organisation;

(c)        to provide framework within which employees and their trade unions, employer and employers’ organisations can –

(i)         collectively bargain to determine wages, terms and conditions of employment and other matters of mutual interest; and

(ii)        to formulate industrial policy; and

(d)        to promote

(i)         orderly collective bargaining;

(ii)        collective bargaining at a sectorial level;

(iii)       employee participation in decision making in the workplace; and

(iv)       the effective resolution of labour disputes.’

[20] As stated above, the kernel of the Applicant’s case is that by using Lekgoathi as representatives at the collective bargaining chamber, the First Respondent offends its right to confidentiality of its business and trade secrets. To bolster this assertion, the Applicant states the following in paragraph 65 of its founding affidavit:

‘The Applicant has a right not to disclose confidential information.  This right inevitably will be infringed as will the Applicant’s right to fair labour the practice if the Applicant is required to engage with the union representative who is an employee of a direct competitor of the Applicant.’

In paragraph 66, the Applicant states further that:

‘There is also a risk that Mr Lekgoathi, as a SATAWU representative, will acquire and disclose whether intentionally or inadvertently confidential information that he is privy to, to the Third Respondent.’

[21] Since the Applicant is seeking a final interdict, it must prove that it has a clear right to the relief sought.

[22] The first hurdle that the Applicant faces in that regard is the reliance on direct infringement of section 23(1) of the Constitution when there is a specific statutory remedy available in terms of section 16 of the LRA. In SANDU v Minister of Defence,[5] the Court stated that where legislation is enacted to give effect to a constitutional right, a litigant may not circumvent that legislation and rely directly on the Constitution without challenging that legislation as falling short of the constitutional standard. In the final analysis, the Court stated that:

‘The employee cannot, as the applicant seeks to do, avoid the dispute resolution mechanisms provided for in the LRA by alleging a violation of a constitutional right in the Bill of Rights. It could not have been the intention of the Legislature to allow an employee to raise what is essentially a labour dispute under the LRA as a constitutional issue under the provisions of section 157(2)…What is, in essence, a labour dispute as envisaged in the LRA should not be labelled a violation of a constitutional right in the Bill of Rights simply because the issues raised could also support a conclusion that the conduct of the employer amounts to a violation of a right entrenched in the Constitution.’[6]

[23] It is my view that section 16 of the LRA provides a dispute resolution mechanism to deal with disputes regarding disclosure of information in order to give effect to section 23 of the Constitution and promote orderly collective bargaining. In essence, section 16 of the LRA seeks to balance the competing rights and interests that the parties to a collective bargaining relationship might have on disclosure of information.

[24] In light of the fact that the LRA promotes sectorial bargaining, it stands to reason that unions may be represented by its office bearers who are, invariably, employees of companies who are within the same sector and who are, as in this application, competitors. Indeed issues of confidentiality of information that is subject matter of negotiations at both the plant and sectorial bargaining chambers is bound to arise from time to time and, as such, any impasse on this subject must be dealt with in terms of Section 16 of the LRA.

[25] As a matter of fact, in terms of section 16(5)(c) of the LRA, employers are not obliged to disclose any information that may cause substantial harm to its business and employees, a fact correctly conceded by the Applicant. As such, the commissioner dealing with the unions’ request for confidential information is enjoined by section 16(11) of the LRA to balance the harm that the disclosure is likely to cause to an employer against the harm that the failure to disclose the information is likely to cause to the ability of a representative trade union to engage effectively in consultation or collective bargaining.

[26] The second hurdle that the Applicant faces in this application is to prove that its right to fair labour practice in terms of section 23(1) of the Constitution has trumped the right of the First Respondent to determine its own administration programmes and activities in terms of section 23(4)(a) of the Constitution.

[27] Without question, section 16(10) to (11) qualifications mitigate the potential prejudice of disclosure of confidential information.[7] Therefore, the Applicant’s submission that its proprietary interest cannot be effectively protected without imposing contractual duties and obligations on employees and third parties that engage with it is seriously flawed. Any attempt to impose restraint of trade on the First Respondent’s representatives would impose an unjustifiable limitation to its right to elect its representatives. 

[28] In SA Transport and Allied Workers Union and Others v Moloto NO and Another,^[8] the Court engrained the principle that the right to strike should be limited as little as possible by stating that:

‘Thus, the provisions of the Act must be interpreted purposively so as to give effect to the Constitution,[9] the objects of the Act itself and the purpose of the provisions in issue.[10]  But, this approach does not necessarily equate to an expansive construction of the provisions of the Act. This is so because the purpose of the Act may well require a restrictive interpretation of the particular provisions[11] so that the exercise of a protected right is not unduly limited. Therefore, due regard must be had to the express language used in the provisions under consideration.  Furthermore, care must be taken against unduly limiting a fundamental right which has been conferred (as in this case) without express limitation by reading implied restrictions into it.[12]’ [Footnotes numbering adapted]

[29] The counsel for the Applicant referred me to the American case of National Brotherhood of Electrical Workers, AFL-COI v National Labor Relations Board, United States Court of Appeal, Second Circuit, 1997. In that case, the employer, CBS Incorporated, refused to bargain with the union, International Brotherhood of Electrical Workers, AFL-CIO, and seven of its Local Unions ("IBEW"). IBEW had changed its constitution to allow it to designate representatives of other unions as members of its bargaining panel in the middle of the negotiations with CBS. Subsequently, IBEW introduced a member of its panel, a representative of National Broadcasting Engineering and Technician AFL-CIO (NABET). At that time NABET had no collective bargaining agreement with CBS and it represented no CBS employee. However, NABET was representing employees of CBS’ arch rivals, ABC and NBC.

[30] As such, that led to CBS objecting to NABET’s presence and refused to bargain with IBEW in the light of the possibility that its confidential information could land in the hands of its competitor.^[13] What bolstered CBS’s position is that it was common cause that the said information was confidential and that the plans in question would have given CBS a further competitive advantage. The appeal Court found in favour of CBS and in doing so, the Court distinguished the facts of that case from the rule established in the General Electric v. National Labor Relations Board.[14]  

[31] In the context of this application, it is essential that I briefly outline the General Electric principle is discussed in IBEW:

‘In General Electric the Court granted enforcement to the NLRB's finding that the Company had committed an unfair labor practice by refusing to bargain with one of its eight unions where the Union included on its panel representatives of each of the Company's seven other unions. The court ruled that management's refusal to bargain could be justified only where there were presented extreme circumstances justifying an exception to the general statutory right of the union to select its own representatives.[15] Judge Feinberg, writing for the court, set forth the exception as follows:

"There have been exceptions to the general rule that either side can choose its bargaining representatives freely, but they have been rare and confined to situations so infected with ill-will, usually personal, or conflict of interest as to make good-faith bargaining impractical. Thus, the freedom to select representatives is not absolute, but that does not detract from its significance. Rather the narrowness and infrequency of approved exceptions to the general rule emphasizes its importance. Thus, in arguing that employees may not select members of other unions as 'representatives of their own choosing' on a negotiating committee, the Company clearly undertakes a considerable burden, characterized in an analogous situation…as the showing of a 'clear and present' danger to the collective bargaining process…”’

[32] It is my view that IBEW is distinguishable as the facts in this application fall squarely within General Electric principle. As stated above, section 16 of the LRA provides an adequate mechanism to balance the conflicting interests in a manner that mitigates any prejudice inherent in the disclosure of confidential of information.

Injury actually committed or reasonably apprehended

[33] The Applicant’s counsel submitted that Lekgoathi is in a position to disclose to the Third Respondent confidential information that belongs to it simply because he is employed as a human resource controller and more so a fulltime shop-steward. However, this submission is untenable since there is no absolute bar to disclosure information simply because it is confidential. As stated above, Section 16(11) of the LRA accordingly regulates such a disclosure.

[34] It is also apparent that Second Respondent is not in possession of any business plans or trade secretes that belongs to the Applicant as would be the case with its employees. The Applicant is in control over its information and can decide and advise the First and Second Respondents when the required information is allegedly confidential. 

[35] Therefore, there is no actual injury neither committed nor reasonably apprehended in the circumstances.

Satisfactory remedy

[36] On the satisfactory remedy available to the Applicant, it is clear that section 16 of the LRA provides a clear and adequate remedy in the event that the information to be disclosed is confidential or confidential information disclosed as directed by the CCMA has been violated. Accordingly, I am of the view that that remedy is valid and satisfactory.

Conclusion

[37] Accordingly, there is no basis on which to grant the relief sought by the Applicant. In light my findings on merit, I deem it unnecessary to deal with urgency.

Costs

[38] It is my view that the interest of justice and fairness dictate that costs should not follow the results due to the persisting collective bargaining relationship between the parties.

Order

[39] In the circumstances, I make the following order:

1.            The application is dismissed.

2.            There is no order as to costs.

__________________

Nkutha-Nkontwana AJ

Acting Judge of the Labour Court of South Africa

APPEARANCES:

FOR THE APPLICANT:                   Advocate L Hollander

Instructed by Cowan-Harper Attorneys                  

FOR THE FIRST AND

SECOND RESPONDENTS:           Attorney S Mabaso                          

                                                            From Mabaso attorneys

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