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THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

 

Reportable

 

Case no: J 1449/22

 

 

In the matter between:

 

CCI SA (UMHLANGA) (PTY) LTD                               First Applicant

 

THE EMPLOYEES LISTED IN ANNEXURE ‘A’          Second to 226^th Applicants

 

and

 

MOBILE TELEPHONE NETWORKS (PTY) LTD         First Respondent

 

IBRIDGE CONTACT SOLUTIONS (PTY) LTD            Second Respondent

 

ISON EXPERIENCES SOUTH AFRICA (PTY) LTD    Third Respondent

 

 

Heard:          26 January 2023

 

Delivered:    31 January 2023

 

This judgment was handed down electronically by consent of the parties’ representatives by circulation to them by email. The date for hand-down is deemed to be 31 January 2023.

 

Summary: Application in terms of section 18(3) of the Superior Courts Act to enforce an order of the Labour Court in respect of a section 197 transfer pending appeal proceedings.

 

 

JUDGMENT

 

 

PRINSLOO, J

 

Background

 

[1]         In January 2018 the First Applicant (Applicant or CCI) and the First Respondent (MTN) concluded an “Outsourced Call Centre Services Agreement” (the agreement) in terms of which CCI contracted to provide certain specified services related to the operation of various call centres, forming a component of MTN’s larger call centre business.

 

[2]         The Applicant, Second (iBridge) and Third (iSon) Respondents are call centre service providers to MTN and they had entered into separate contracts with MTN on different dates.

 

[3]         On 9 September 2022 MTN sent correspondence to CCI, confirming that it was terminating the agreement with effect from 31 December 2022. The Applicant addressed a letter to MTN on 16 September 2022, confirming that the termination of the agreement would result in the transfer of the employees to either MTN or a replacement supplier.

 

[4]         On 17 October 2022 MTN expressed the view that section 197 of the Labour Relations Act[1] (LRA) did not apply.

 

[5]         The Respondents’ case is that no transfer in terms of section 197 of the LRA took place and that with effect from 1 January 2023 the call volumes would be split two way between iBridge and iSon, instead of three ways between CCI, iBridge and iSon. In effect, iBridge and iSon would take up the volume of calls that would otherwise have been allocated to the Applicant. MTN’s case is that the only change which would occur upon expiry of the CCI’s contract, was that the then-existing call volume will be allocated between iBridge and iSon, who were already rendering call centre services and that there was no transfer of a business.

 

[6]         The parties exchanged further correspondence but ultimately the issue over the applicability of section 197 could not be resolved. This resulted in an urgent application (the main application) in terms of which the Applicant inter alia sought a declaratory order that the employees had, by operation of law, become employed by MTN, iBridge and / or iSon respectively.

 

[7]         The main application was heard on 29 November 2022 and on 28 December 2022 judgment (the judgment) was handed down (per Mamabolo AJ) and the Court declared and ordered inter alia that:

 

7.1       The Outsourced Call Centre Services Agreement concluded between the Applicant and First Respondent dated 1 January 2018 and the consequent transfer of the call centre services to the First, Second and/or Third Respondents, whether individually or jointly, constitutes a transfer of a business as a going concern as contemplated in section 197(1)(a) of the Labour Relations Act, 1996;

 

7.2   The Fourth to 254 Respondents will by operation of law be employees of the First, Second and / or Third Respondents with effect from 1 January 2023, with no loss of benefits and services.

 

[8]         The judgment confirmed CCI’s position that the employees have become employed by MTN, iBridge and/or iSon respectively with effect from 1 January 2023, by operation of law.

 

[9]         On 30 December 2022 MTN and iBridge delivered their notices of application for leave to appeal the judgment and iSon delivered its notice of application for leave to appeal on 13 January 2023.

 

[10]     The Applicants subsequently approached this Court on an urgent basis for an order directing that the orders granted in the judgment of 28 December 2022 be of full force and effect and be executable pending the applications for leave to appeal filed by the MTN, iBridge and iSon respectively and any subsequent appeal. The cost order granted in favour of the Applicant is to be suspended pending the finalisation of the applications for leave to appeal and any subsequent appeal.

 

[11]     The Applicants further seeks an order directing the Respondents, jointly and severally, the one paying the other to be absolved, to make payment of the Second Applicant’s (the employees) remuneration on a monthly basis, as and when it falls due, in accordance with a schedule provided.

 

[12]     The Respondents opposed the application.

 

Section 18 of the Superior Courts Act[2]: general principles

 

[13]     The default position is that the operation and execution of a decision (other than a decision not having the effect of a final judgment) is suspended pending the outcome of an application for leave to appeal or an appeal. Section 18 of the Superior Courts Act regulates the circumstances under which a party may apply for an order that departs from the ordinary consequence of filing an application for leave to appeal. The court may order otherwise under exceptional circumstances, if it is established on a balance of probabilities that the applicant will suffer irreparable harm if the court does not so order, and that the other party will not suffer irreparable harm if the court so orders.

 

[14]     Section 18 of the Superior Courts Act provides that:

 

‘18    Suspension of decision pending appeal

 

(1)        Subject to subsections (2) and (3), and unless the court under exceptional circumstances orders otherwise, the operation and execution of a decision which is the subject of an application for leave to appeal or of an appeal, is suspended pending the decision of the application or appeal.

 

(2)        Subject to subsection (3), unless the court under exceptional circumstances orders otherwise, the operation and execution of a decision that is an interlocutory order not having the effect of a final judgment, which is the subject of an application for leave to appeal or of an appeal, is not suspended pending the decision of the application or appeal.

 

(3)    A court may only order otherwise as contemplated in subsection (1) or (2), if the party who applied to the court to order otherwise, in addition proves on a balance of probabilities that he or she will suffer irreparable harm if the court does not so order and that the other party will not suffer irreparable harm if the court so orders.

 

(4)    If a court orders otherwise, as contemplated in subsection (1) —

 

(i)     the court must immediately record its reasons for doing so;

(ii)    the aggrieved party has an automatic right of appeal to the next highest court;

(iii)    the court hearing such an appeal must deal with it as a matter of extreme urgency; and

(iv)   such order will be automatically suspended, pending the outcome of such appeal.

 

(5)    For the purposes of subsections (1) and (2), a decision becomes the subject of an application for leave to appeal or of an appeal, as soon as an application for leave to appeal or a notice of appeal is lodged with the registrar in terms of the rules.’

 

[15]     The Labour Appeal Court (LAC) in Road Traffic Management Corporation v Tasima (Pty) Ltd and others (Tasima)[3] considered the provisions of section 18(3) versus the common law position as follows:

 

[43] Prior to the enactment of section 18(3) of the SC Act there was no statutory provision regulating interim execution orders. In terms of the common law, the noting of an appeal automatically suspends execution of the judgment appealed against. Where the successful party wishes to execute upon the judgment, it is required to make an application for leave to do so and bears the onus to show why the judgment should be executed pending the appeal, subject, in appropriate cases to the furnishing of security de restituendo. The court had a wide discretion to grant or refuse leave to execute and was required to determine what was just and equitable in all the circumstances having regard to the potentiality of irreparable harm or prejudice to the parties, the balance of convenience and the prospects of success on appeal. At common law, an interim execution order is itself an interlocutory order and was generally not appealable on the grounds that such an order may be varied by the court granting it in the light of changed circumstances.

 

[44] Section 18 of the SC Act has significantly altered the common law in more than one respect. The court no longer has a wide discretion to do what is just and equitable or to rely exclusively on the balance of convenience or the appeal’s prospects of success. Now, before a court may order interim execution, the applicant for that relief must prove three things on a balance of probabilities. Firstly, the applicant must show that exceptional circumstances exist (perhaps including the balance of convenience and prospects of success) justifying the reversal of the ordinary principle of suspension pending appeal. Secondly, it must prove on the probabilities that it will suffer irreparable harm if interim execution is not ordered. Thirdly, it must prove that the other party will not suffer irreparable harm if an order of interim execution is granted. Should the applicant fail to discharge its onus in relation to any one of these requirements, the court may not grant an interim execution order. Additionally, in terms of section 18(4) of the SC Act, where an interim execution order is granted, the aggrieved party has an automatic right of appeal against that order to the next highest court and the order will be automatically suspended, pending the outcome of such appeal.

 

[16]     In University of the Free State v Afriforum and another (Afriforum)[4] the Supreme Court of Appeal (SCA) held:

 

[9]      What is immediately discernible upon perusing sections 18(1) and (3), is that the Legislature has proceeded from the well-established premise of the common law that the granting of relief of this nature constitutes an extraordinary deviation from the norm that, pending an appeal, a judgment and its attendant orders are suspended. Section 18(1) thus states that an order implementing a judgment pending appeal shall only be granted “under exceptional circumstances”. The exceptionality of an order to this effect is underscored by section 18(4), which provides that a court granting the order must immediately record its reasons; that the aggrieved party has an automatic right of appeal; that the appeal must be dealt with as a matter of extreme urgency and that pending the outcome of the appeal the order is automatically suspended.

 

[10]    It is further apparent that the requirements introduced by sections 18(1) and (3) are more onerous than those of the common law. Apart from the requirement of “exceptional circumstances” in section 18(1), section 18(3) requires the applicant “in addition” to prove on a balance of probabilities that he or she “will” suffer irreparable harm if the order is not made, and that the other party “will not” suffer irreparable harm if the order is made. The application of rule 49(11) required a weighing-up of the potentiality of irreparable harm or prejudice being sustained by the respective parties and where there was a potentiality of harm or prejudice to both of the parties, a weighing-up of the balance of hardship or convenience, as the case may be, was required. Section 18(3), however, has introduced a higher threshold, namely proof on a balance of probabilities that the applicant will suffer irreparable harm if the order is not granted and conversely that the respondent will not, if the order is granted.

 

[17]     In Incubeta Holdings (Pty) Ltd and another v Ellis and another[5] (Incubeta) the Court held that:

 

[16] It seems to me that there is indeed a new dimension introduced to the test by the provisions of Section 18. The test is twofold; the requirements are:

 

16.1       First ,whether or not ‘exceptional circumstances ‘exist, and

 

16.2       Second, proof on a balance of probabilities by the applicant of-

 

16.2.1     The presence of irreparable harm to the applicant/victor, who wants to put into operation and execute the order, and,

16.2.2     The absence of irreparable harm to the respondent/loser, who seeks leave to appeal.

 

[18]     The effect in short is this: the Superior Courts Act limits the discretion of a court to grant the relief of interim execution and section 18(3) introduced a higher threshold and more onerous requirements. An applicant must prove three distinct requirements on a balance of probabilities:

 

18.1   Exceptional circumstances (including the balance of convenience and prospects of success);

 

18.2   That it will suffer irreparable harm if interim execution is not ordered;

 

18.3   That the other party will not suffer irreparable harm if an order of interim execution is granted.

 

[19]     Section 18(3) places a heavy onus on an applicant and if an applicant fails to prove any one requirement, the application must fail and be dismissed.

 

[20]     It is in the context of the requirements of section 18(3) that this application is to be decided.

 

Analysis: The section 18(3) application

 

Exceptional circumstances

 

[21]     The first issue to be decided is whether there are exceptional circumstances.

 

[22]     What would constitute ‘exceptional circumstances’ had been considered in Incubeta and the Court held that exceptionality must be fact-specific and circumstances which are or may be ‘exceptional’ must be derived from the actual predicaments in which the given litigants find themselves. The Court held that:

 

‘In my view the predicament of being left with no relief, regardless of the outcome of an appeal, constitutes exceptional circumstances which warrant a consideration of putting the order into operation. The forfeiture of substantive relief because of procedural delays, even if not protracted in bad faith by a litigant, ought to be sufficient to cross the threshold of ‘exceptional circumstances.’

 

[23]     Incubeta has been quoted with approval by the SCA[6] and it is clear that the determination of whether exceptional circumstances exist, is a fact specific enquiry and each case has to be decided on its own facts as there is no definition of exceptional circumstances.

 

[24]     In Incubeta it was held that:

 

‘[18]    Significantly, although it is accepted in that Judgment that what is cognisable as ‘exceptional circumstances’ may be indefinable and difficult to articulate, the conclusion that such circumstances exist in a given case, is not a product of a discretion, but a finding of fact.’

 

[25]     In Afriforum, with regard to proving exceptional circumstances, it was held that:

 

‘[13]    Whether or not “exceptional circumstances” for the purposes of section 18(1) are present, must necessarily depend on the peculiar facts of each case. In Incubeta Holdings at paragraph 22 Sutherland J put it as follows:

 

“Necessarily, in my view, exceptionality must be fact-specific. The circumstances which are or may be ‘exceptional’ must be derived from the actual predicaments in which the given litigants find themselves.”

 

I agree. Furthermore, I think, in evaluating the circumstances relied upon by an applicant, a court should bear in mind that what is sought is an extraordinary deviation from the norm, which, in turn, requires the existence of truly exceptional circumstances to justify the deviation.’

 

[26]     The question is thus whether the circumstances in casu are truly exceptional and whether an extraordinary deviation from the normal position is justified. This question is to be answered by considering the facts and the circumstances relied upon by the Applicants. Their pleaded case in respect of exceptional circumstances is that: section 197 of the LRA was enacted inter alia to ensure the continuity of employment in circumstances where there is a transfer of a business as a going concern, with no loss of income or benefits to the affected employees. Section 197 is intended to protect employees and to ensure that they are not prejudiced when a transfer of employment takes place and that they continue to be remunerated on the same basis and to receive the same benefits as before the transfer.

 

[27]     As per the judgment of 28 December 2022, the employees have been transferred to MTN, iBridge and / or iSon and that as from 1 January 2023 they are the employers of the employees. CCI has ceased to be the employer and so too has the obligation to remunerate the employees. The Respondents refuse the employees’ tender of service and they find themselves in an untenable position where, by operation of law and as confirmed in the judgment of 28 December 2022, they are no longer employed by CCI, which has no obligation to remunerate them, but they will also not be remunerated by their new employers pending the outcome of the application for leave to appeal and any subsequent appeal proceedings. The appeal process may involve a lengthy process and in the absence of their salaries, the employees will be placed in a desperate predicament.

 

[28]     The Applicants’ case is further that section 197 is different from other labour matters where employees would also suffer financial prejudice pending the outcome of appeal proceedings. This is so because in labour matters where an employee has been dismissed for misconduct, the conduct of the employee is the cause of the dispute and in those circumstances something more than financial prejudice is required. In relation to section 197 the conduct of the employees is not in question, they transfer to new employers by operation of law and should not be prejudiced by the suspension of a judgment which confirms that their employment has so transferred by operation of law and that there should be no interruption in their employment. In short: the Applicants submitted that the aforesaid constitutes exceptional circumstances as contemplated by section 18(3).

 

[29]     The Respondents dispute that there are any truly exceptional circumstances and submitted that any deviation from the normal position that the judgment is suspended pending an application for leave to appeal, will not be justified. The Respondents’ case is that the circumstances relied on as being ‘exceptional’, is the non-payment of remuneration to the employees and that does not constitute ‘exceptional circumstances’.

 

[30]     In my view the Applicants failed to show exceptional circumstances on the facts placed before this Court, for a number of reasons.

 

[31]     Firstly, in Road Traffic Management Corporation v Tasima (Pty) Limited; Tasima (Pty) Limited v Road Traffic Management Corporation[7] (Tasima CC) the Constitutional Court held, in the context of a section 197 transfer dispute wherein an interim enforcement order was sought, that:

 

‘[131]    In any event, the non-payment of wages or salaries pending finalisation of an appeal cannot constitute exceptional circumstances for the purposes of section 18(3) without bringing almost every labour matter within the ambit of the section. It is impossible to find that Tasima’s employees’ position pending appeal must be protected, without finding that this must be the case in almost every labour dispute. Differently put, the exceptional circumstances that section 18(3) requires, ordinarily should not be located purely in the non-payment of wages or salaries pending appeal.’

 

[32]     The Constitutional Court confirmed that the exceptional circumstances required by section 18(3), should not be located purely in the non-payment of wages or salaries pending an appeal process. More will be needed to demonstrate that ‘exceptional circumstances’ exist and the reality is that the Applicants did not present any facts, other than financial suffering and distress, to support their case on the question of exceptional circumstances.

 

[33]     Secondly, as the Constitutional Court held, if the non-payment of wages or salaries pending finalisation of an appeal were to constitute exceptional circumstances for the purposes of section 18(3), it would bring almost every labour matter within the ambit of section18(3). The Applicants seek to counter this by drawing a distinction between a section 197 matter and other labour matters to make out a case that a section 197 transfer scenario constitutes ‘exceptional circumstances’. This is so inter alia because in a section 197 scenario the conduct of the employees is not in question and they should therefore not be prejudiced by the suspension of a judgment which confirms that their employment has transferred by operation of law, with no interruption in their employment.

 

[34]     In my view the conduct of an employee plays no role in determining whether exceptional circumstances exist for purposes of section 18(3). A dismissal due to retrenchment is often referred to as a ‘no fault dismissal’ and an employee who is reinstated because a retrenchment was found unfair, is in no different position than an employee whose employment transferred by operation of law, if this Court were to consider the conduct of the employee.

 

[35]     Thirdly, in Afriforum, the SCA held that the prospects of success in the appeal are a valid consideration when determining whether exceptional circumstances have been established by an applicant seeking leave to execute pending appeal.

 

[36]     The prospects of success in the appeal is a relevant factor in the consideration of the application, as was held in Minister of Social Development, Western Cape and others v Justice Alliance of South Africa and another[8] where the court said that:

 

‘It follows that the less sanguine a court seized of an application in terms of section 18(3) is about the prospects of the judgment at first instance being upheld on appeal, the less inclined it will be to grant the exceptional remedy of execution of that judgment pending the appeal. The same quite obviously applies in respect of a court dealing with an appeal against an order granted in terms of section 18(3). The position is very much akin to that which pertains when interim interdictory relief pending a judicial review is being considered.’

 

[37]     In casu there are three applications for leave to appeal, each raising their own grounds for leave to appeal. However, the one aspect that runs like a golden thread through all of the applications for leave to appeal is the fact that three different entities are effectively deemed to be the employers of 240 affected employees, either jointly or severally and the Respondents submitted that the order so granted is unusual and that leave to appeal is likely to be granted.

 

[38]     MTN submitted that it was incorrectly included in the judgment as a ‘new employer’ and that an order to that effect is incompetent. MTN has not insourced a portion of CCI’s business in which it can place the employees, nor does it have anywhere else to deploy them within its operations and it cannot, on any construction, be a new employer of the employees, even if section 197 was to have taken effect. MTN submitted that it has excellent prospects of success on appeal.

 

[39]     In its submissions in the application for leave to appeal, MTN further submitted that leave to appeal should be granted, given the importance of the matter and the important questions of law involved, relating to fragmentation, which is a novel issue, and the implications of the non-transfer of employees in labour-intensive businesses.

 

[40]     The Respondents further submitted that the judgment does not specify which of the employees are to be transferred to which of the Respondents and by not identifying the employees’ actual new employer, the order of the Court is not capable of being given effect to. It is impossible to identify which Respondent is liable to remunerate which of the employees, which is a fundamental problem in the Court’s order and which would be perpetuated by an order lifting the suspension of its operation. Therefore, they submit, the judgment is inchoate, improper and unenforceable, an obvious ground of appeal which has been taken by all three Respondents.

 

[41]     It is trite that court orders must be capable of being understood and enforced. In Eke v Parsons[9] the Constitutional Court confirmed that:

 

‘[73]    A court order must bring finality to the dispute, or part of it, to which it applies. The order must be framed in unambiguous terms and must be capable of being enforced, in the event of non-compliance. …

 

[74]    If an order is ambiguous, unenforceable, ineffective, inappropriate, or lacks the element of bringing finality to a matter or at least part of the case, it cannot be said that the court that granted it exercised its discretion properly. It is a fundamental principle of our law that a court order must be effective and enforceable, and it must be formulated in language that leaves no doubt as to what the order requires to be done.’

 

[42]     It is evident from a perusal of the judgment that it does not specify which of the employees are to be transferred to which of the Respondents. The order that a transfer of employment of over 200 employees has taken place, and that as a result, the employees are now employed by one or more of the three Respondents, is impossibly vague and impossible to enforce. The Court in its judgment did not provide any guidance as to which employees should transfer to which employer, or as to the manner in which the affected employees should be allocated to any of the Respondents.

 

[43]     The issues of transfer and payment of salaries are inextricably linked, and cannot be separated for purposes of granting enforcement of a portion of the relief, pending the outcome of the appeal.

 

[44]     In CCI’s founding papers, the prospects of success in the appeal are not dealt with meaningfully but instead, the issue is left to argument. CCI thus failed to establish exceptional circumstances at the level of prospects of success. It takes the matter no further that CCI has put up its submissions opposing leave to appeal as an annexure to its replying affidavit. CCI was required to make out a case in its founding affidavit, and it failed to do so. Be that as it may, the submissions made by CCI in respect of the Respondents’ leave to appeal, did not establish that the Respondents’ appeal is without prospects of success.

 

[45]     Prospects of success are to be considered as a factor in deciding whether or not to grant the exceptional remedy of execution of a judgment pending appeal. In my view, considering what I alluded to supra, it is highly likely that leave to appeal will be granted in due course and that the LAC will reach a different finding on appeal.

 

[46]     In casu no facts placed before this Court are sufficient to constitute exceptional circumstances.

 

Irreparable harm

 

[47]     The second leg of the enquiry is ‘irreparable harm’.

 

[48]     The Applicants must prove, on a balance of probabilities, that they would suffer irreparable harm should the order for leave to execute or enforce not be granted pending the appeal and that the Respondents, on the other hand, will not suffer irreparable harm if leave to execute is granted pending appeal.

 

[49]     The Applicants’ case is that the employees will be substantially prejudiced and suffer irreparable harm if the order is not immediately enforced because they will not receive their normal remuneration at the end of January 2023, or subsequent until the finalisation of the appeal process. The employees rely on their monthly remuneration inter alia to feed their families, service debts, pay rental, school fees and generally support themselves and their families and their income on a monthly basis is critical.

 

[50]     CCI cannot remunerate the employees where it is not receiving fees from MTN in light of the cancellation of the agreement and where the monthly wage bill of the employees comprises R1,7 million. CCI is no longer the employer of the employees and has no legal obligation to pay their remuneration. CCI explained that it operates various campaigns or projects with different customers and that employees are normally appointed and assigned to specific campaigns and projects and will remain so employed. The employees appointed to the MTN campaign were required to exclusively work on the MTN campaign and they were specifically trained and skilled in relation to the systems of MTN. with the cancellation of the agreement, CCI no longer receives any fees from MTN in relation to the campaign to which the employees have been assigned. The employees will lose their benefits and while the dispute plays out between the parties, they are not entitled to submit a claim to the Unemployment Insurance Fund. The employees are in an invidious position as CCI is no longer under an obligation to remunerate them and the Respondents refuse to accept them as employees.

 

[51]     CCI will be prejudiced if the relief sought is not granted because the employees have been automatically transferred by operation of law and CCI cannot continue to remunerate them in circumstances where it no longer receives any fees from MTN. CCI is precluded from engaging in any retrenchment process in circumstances where it does not employ the employees.

 

[52]     The Applicants submitted that if the judgment is made enforceable, the Respondents will be required to remunerate the employees, while the applications for leave to appeal or any subsequent appeal is pending. The result will not be irreparable prejudice in circumstances where iBridge and iSon have been engaged by MTN to perform the same call centre operations as formerly rendered by CCI, iBridge and iSon will receive significant service fees in terms of their commercial agreements with MTN, which would serve to cover all or a substantial portion of the costs associated with remunerating the employees in the interim and iBridge and iSon will receive the benefits of the employees’ services.

 

MTN’s case

 

[53]     MTN’s case is that at the level of the employees, the non-payment of their remuneration would not constitute irreparable harm. If CCI was to re-engage the employees and remunerate them pending the appeal process, it would not suffer irreparable harm. CCI runs a large call centre business in Umhlanga with multiple campaigns to which it can deploy the employees.

 

[54]     In support of this contention, MTN referred to a letter of 4 March 2022, in which CCI confirmed that: “[s]hould MTN reduce CCI’s volumes to such an extent that a reduction in CCI staff allocated to the MTN campaign is required, CCI confirms that it will retain all of the staff members removed from the MTN campaign and will redeploy those staff members to other campaigns within CCI. In such a case section 197 of [LRA] will not be applicable as CCI’s contractual relationship with these staff members will not be affected and CCI will continue to service its other clients with these staff members”.

 

[55]     CCI has, during the currency of its agreement with MTN, deployed large numbers of staff who were engaged on the MTN campaign to other campaigns. During the period 3 January to 21 October 2022, of the 351 CCI employees engaged on the MTN campaign, 171 of them moved campaigns, with 105 CCI employees having been moved to other campaigns during September and October 2022 alone. On its own version in the replying affidavit, CCI has already placed 66 of the affected employees with a group company.

 

[56]     MTN further submitted that given the huge rate of attrition experienced by CCI and in the call centre industry generally, and CCI’s ability to secure the moving of employees engaged in the MTN campaign to other campaigns, CCI would be able to easily accommodate the employees, particularly as CCI SA (as a whole) employs some 9 000 employees. CCI continues to actively recruit staff on the open market. As at 8 January 2023, it was actively soliciting job applicants through a prominent billboard advert in the Umhlanga area stating “NOW HIRING”. MTN submitted that the attempt, in the replying affidavit, to contend that this advert pertained to another CCI group company (the same one with which CCI placed the 66 affected employees), takes the issue no further.

 

[57]     According to MTN CCI can productively use the employees in the interim, and can derive value from them for the remuneration that it pays them, which is not the case with MTN.

 

[58]     There would be irreparable harm to MTN if the court orders that the judgment is to operate as MTN was erroneously included in the judgment as a potential new employer. Even on CCI’s version in the founding affidavit, MTN has not insourced a portion of CCI’s business in which it can place the employees, nor does it have anywhere else to deploy them within its operations.

 

[59]     What is more telling is that in the section of the founding affidavit dealing with the irreparable harm of the Respondents, reference is made to iBridge and iSon having been engaged to perform CCI’s services and no mention of MTN is made at all.

 

[60]     Considering the facts, set out in this application, CCI has not made out a case in the founding affidavit on irreparable harm vis-à-vis MTN, or even on MTN having taken transfer of CCI’s business. On the other hand, if MTN was to remunerate the employees without being able to derive any value from them because it has no work to productively deploy them to undertake, it will be out of pocket for remuneration paid to employees who will not do any work for such remuneration. If the appeal succeeds, MTN cannot realistically assert and enforce claims against multiple individuals to reclaim the funds.

 

iBridge’s case

 

[61]     The case for iBridge is that CCI does no more than allege that it “will be left to deal with the fallout in circumstances where the Employees do not receive any remuneration at the end of January 2023 notwithstanding that it is not their employer”. CCI does not allege that it cannot afford to pay the employees pending the finalisation of the appeal proceedings or that it will not be able to recover any remuneration paid to the employees from the Respondents in the event of the judgment being upheld on appeal.

 

[62]     Furthermore, on CCI’s own version it is no longer the employer of the affected employees, with effect from 1 January 2023 and is as such not required to remunerate the employees, more so where CCI alleges that it does not have work for the employees. As a result, CCI will not suffer financial prejudice pending the finalisation of the appeal proceedings.

 

[63]     CCI has therefore not shown that it will suffer irreparable harm should the judgment not be enforced pending the appeal proceedings.

 

[64]     iBridge further submitted that the employees will not suffer irreparable harm as the Respondents will have to pay the employees’ salaries with effect from 1 January 2023 should the appeal not succeed. The employees are therefore (as pointed out by the Constitutional Court in the Tasima) in no different a position than other dismissed employees who have judgments in their favour which have been taken in appeal. They will be paid in due course if the appeal does not succeed.

 

[65]     On the other hand, iBridge will suffer irreparable harm should the judgment be enforced pending the appeal proceedings as iBridge will have to employ the employees under circumstances in which it does not have work for them. iBridge will have to retrench some of its own employees who have less service than the employees, to accommodate the affected employees, which will cause a severe disruption to iBridge’s operations. CCI does not address this allegation in its replying papers, nor does it not undertake to make good to iBridge any severance packages paid by iBridge to the aforesaid employees should the appeal succeed. Since iBridge cannot in law recover these severance packages from CCI, iBridge will suffer irreparable financial harm should the judgment be enforced pending the appeal. CCI also does not undertake to reemploy or, at the very least, retrench the employees should the appeal succeed. The nett effect of the judgment being enforced pending the appeal proceedings is therefore that the employees will become the responsibility of the Respondents.

 

iSon’s case

 

[66]     iSon’s case is that inasmuch as the plight of the affected employees may be a legally relevant consideration, it does not in itself establish the exceptional circumstances required to grant any interim execution order.

 

[67]     CCI does not establish on a balance of probabilities that iSon will not suffer irreparable harm if it were to pay all or some unknown portion of the affected employees’ salary bill pending the appeal. iSon does show that it will suffer irreparable harm for the following reasons:

 

67.1   It operates in an entirely different province from CCI, as it has an established call centre in Cape Town, and is therefore unlikely to ever receive the benefit of the services of any of the affected employees, who are mainly based in Durban or Umhlanga;

 

67.2   It has already employed and trained a workforce for the anticipated increase in MTN call volumes assigned to it and will have to retrench those employees if it were to take over the services of or the obligation to pay the affected employees;

 

67.3   It has an entirely separate contract with MTN, which would be likely rendered commercially unviable if it were saddled with the salary burden of CCI’s former employees;

 

67.4   It would have no practical legal recourse against affected employees to recover such salary payments should it succeed in the appeal.

 

[68]     iSon submitted that CCI manifestly did not say in its founding affidavit that it cannot afford to pay the affected employees their salaries or retrenchment packages. This is hardly surprising, as CCI employs over 9000 employees in its South African operations alone. CCI fails to prove, on a balance of probabilities, that it would suffer irreparable harm if the relief sought is not granted immediately. CCI asserts that it has no legal obligation to continue paying the affected employees, as the Labour Court has ruled that it is no longer their employer and it is at liberty to raise this defence against any claims for payment by the affected employees. Unless and until the appeal is dismissed, this is a valid defence. The Applicant therefore cannot prove any legally relevant prejudice, let alone irreparable harm, if interim enforcement is not granted.

 

[69]     Furthermore, CCI did not establish on a balance of probabilities that iSon will not suffer irreparable harm if it were to pay all or some unknown portion of the affected employees’ salary bill pending the appeal.

 

[70]     In Tasima CC the Constitutional Court, although it did not consider the appeal in respect of section 18(3), held that:

 

‘Tasima failed on the facts and not on the law. This is because, as correctly found by the Labour Appeal Court, Tasima failed to show that it or the employees would suffer irreparable harm if the suspension of the operation and execution of the section 197 order was not reversed pending finalisation of the appeal by this Court. Tasima had not shown that it was unable to pay the employees’ salaries in the interim pending finalisation of the section 197 appeal. Tasima therefore failed to make out a proper case for the interim enforcement of the order.’

[71]     Considering the facts put forward by iBridge and iSon, I am not convinced that the Applicants have been able to show that they (iBridge and iSon) would not suffer any irreparable harm.

 

Conclusion

 

[72]     The Applicants must prove the existence of exceptional circumstances and that on a balance of probabilities they will suffer irreparable harm should the order for leave to execute or enforce not be granted pending the appeal and that the Respondents, who seek leave to appeal, will not suffer irreparable harm if leave to execute is granted pending appeal.

 

[73]     I already found that the Applicants were unable to show exceptional circumstances.

 

[74]     In casu the prejudice to the Respondents is self-evident as they would be forced to pay the salaries of the affected employees, whose employment by operation of section 197, is disputed. The judgment did not deal with the problem as to how the affected employees should be distributed between the Respondents, which problem permeates the relief sought in this application, being the payment of the affected employees’ salaries by the Respondents.

 

[75]     CCI’s case is that the employees’ contracts of employment transferred as a matter of law from it to the Respondents on 1 January 2023, pursuant to section 197, with the result that it no longer employs the employees and no longer has a legal or contractual obligation to pay their remuneration. This constitutes a valid defence for not paying the employees’ salaries and CCI is not prejudiced in that regard.

 

[76]     The employees will no doubt suffer financially if their salaries are not paid pending the appeal process, but should the LAC ultimately find that there has been a section 197 transfer to any of the Respondents, they would be retrospectively reinstated into the employ of the relevant respondent, with effect from 1 January 2023. The prejudice, although real and obvious, will be temporary and is not irreparable.

[77]     The parties have agreed that the appeal in this matter be dealt with on an expedited basis and that the Judge President be approached in that regard. If the appeal is expedited, it will alleviate any prejudice to a great extent.

 

[78]     The Applicants failed on all three substantive requirements for departing from the default position that an appeal suspends execution of the order appealed against. It follows that all the requirements under sections 18(1) and (3) of the Superior Courts Act have not been satisfied and that this application must fail.

 

Costs

 

[79]     The last issue to be decided is the issue of costs.

 

[80]     Insofar as costs are concerned, this Court has a broad discretion in terms of section 162 of LRA to make orders for costs according to the requirements of the law and fairness. Effectively all the parties before Court sough a cost order.

 

[81]     Mr Itzkin for MTN argued that MTN is entitled to the cost of two counsel, where two counsel were briefed and used. Mr van As for iBridge submitted that a cost order in favour of iBridge should be made.

 

[82]     Mr Fourie on behalf of iSon submitted that iSon is entitled to a punitive cost order against the Applicant. On 11 January 2023 iSon’s attorneys addressed a letter to CCI’s attorneys, advising them that the application was ill-founded and specific reference was made to appellate authority on the point. CCI was advised to withdraw the application, yet elected to continue, notwithstanding the authorities which indicated that there would be no prospect of success in pursuing the current application.

 

[83]     The Constitutional Court in Zungu v Premier of Kwazulu-Natal and others[10] confirmed that the rule that costs follow the result does not apply in labour matters, but that the Court should seek to strike a fair balance between unduly discouraging parties from approaching the Labour Court and have their disputes dealt with and, on the other hand allowing those parties to bring to this Court cases that should not have been brought to Court in the first place.

 

[84]     In this matter I have to strike a fair balance and in doing so I considered the fact that the Applicants approached this Court notwithstanding the authorities, which do not support the application they brought and the relief they seek. The Applicants should have considered the matter more carefully before launching this application and dragging the Respondents to Court, at great cost.

 

[85]     Accordingly, I make an order as follows:

 

Order

 

1.      The application is dismissed;

 

2.      The First Applicant (CCI) is ordered to pay the First, Second and Third Respondents’ costs on a party and party scale, which cost is to include the cost of one counsel.

 

 

Connie Prinsloo

Judge of the Labour Court of South Africa

 

 

Appearances:

 

For the Applicants:                     Advocate A E Franklin SC with

Advocate D Whittington

Instructed by:                             Cowan Harper Madikizela Attorneys

 

For the First Respondent:          Advocate R Itzkin

Instructed by:                             Edward Nathan Sonnenbergs Inc Attorneys

 

For the Second Respondent:     Advocate M van As

Instructed by:                             Webber Wentzel Attorneys

 

For the Third Respondent:        Advocate G Fourie SC

Instructed by:                            Blakes Maphanga Inc Attorneys

 

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