24/11/2020
GROUNDBREAKING JUDGMENT
PEASA v CCMA (J1619/19) (LC) (7 October 2020)
Introduction:
*This case is about representation at CCMA processes, specifically the representation of an employer by an official of an employer’s organization.
* creative subterfuge by labour consultants
*Rule 25
Factual Background:
PEASA is an employer’s organization. There is a 2 month waiting period for representation services from PEASA, in order to ensure that employers do not join simply to obtain CCMA/BC representation.
LabourNet is an Industrial Relations and Labour Law Service Provider, which is not in the business of representing their members in CCMA or BC proceedings.
LabourNet is a member of PEASA, in its own right as an employer of about 183 employees.
There is an arrangement in terms of PEASA’s constitution in terms of which PEASA could appoint “Dispute Advisors” as PEASA officials, to represent PEASA members in CCMA/BC processes.
The “Dispute Advisors” are appointed from nominated employees of PEASA’s members. The “Dispute Advisors” were not themselves members of PEASA; their employer (in this case LabourNet) was.
LabourNet nominated about 46 “Dispute Advisors” who were appointed by PEASA as their officials in terms of their constitution.
The “Dispute Advisors” were not employed by PEASA, and not paid for their representation services by either PEASA, or their employer LabourNet. Neither PEASA nor LabourNet were paid by the employer who was represented by the “Dispute Advisor” in his purported capacity as an official of PEASA. PEASA and LabourNet do not share fees. There is no financial nexus between them.
Background to the case
This scheme caught the eye of some commissioners who mero motu considered and ruled upon whether the “Dispute Advisors” were entitled to appear before them. There were 4 cases in the CCMA and BCs where the commissioners ruled that the “Dispute Advisors (being employees of LabourNet purporting to appear in their capacity as officials of PEASA) could not appear before them (but for different reasons).
PEASA sought to review the 4 rulings.
PEASA then brought a case against the CCMA for clarity on the question of representation by their “Dispute Advisors,” as appointed officials of PEASA.
The case came before the Labour Court as a stated case – and the parties agreed that the court would rule on the question of the right of representation, and then, in the light of that order, consider and decide the 4 pending review applications.
It was common cause that a commissioner cannot determine the bona fides of an employer’s organization and/or whether it’s constitution complies with the LRA because this is the function of the Registrar of Labour. So this was not an issue.
The court identified many issues which required determination in the light of the parties arguments – including whether commissioners could raise the issue of representation mero motu and whether rule 25 (5) could be relied upon to exclude officials of PEASA from appearing in the CCMA or BC.
Rule 25(5) provides that a commissioner can exclude a representative who is appearing on the basis that they are a co-member of the employer’s organization with the employer being represented, on certain grounds such as whether the representative joined the employer’s organization solely in order to gain rights of appearance.
The competing arguments of the parties are set out in the judgement – so I am not going to set them out here. I will jump to the Labour Court’s reasoning and finding.
Labour Court
The Labour Court said that the starting point was rule 25 (1) (a) (ii) read with rule 25 (1) (b) which provides for the right of representation by an office bearer or official, as defined in the LRA, to appear in CCMA/BC processes.
Section 213 of the LRA define an office bearer as a person who holds office in an employer’s organization. An official is a person employed as the secretary, assistant secretary, organizer of the employer’s organization, or in any other capacity prescribed by the Minister. The Minister has not prescribed any other capacity.
It was common cause between the parties that the “Dispute Advisors” appointed by PEASA did not hold office in PEASA and neither were they employed as he secretary, assistant secretary or organizer.
Therefore, held the court, PEASA’s “Dispute Advisers” did not qualify for the right of representation. PEASA could not appoint “officials” outside of the definition in section 213, LRA.
The court held further that commissioners do have the power to enquire into and determine right of representation mero motu.
As regards the application of rule 25 (5), the court held that it had no relevance in the case before it since the clear wording of the subsection limited its application to representatives claiming a right to appear by virtue of being a member of the same employer’s organization as the employer (not as an office bearer or official of the employer’s organization).
The Labour Court then proceeded to deal with the pending review cases. It held that the commissioners had all arrived at the correct outcome, which was to exclude the “Dispute Advisers,” but for the wrong reasons. None of the commissioners had referred to the definition of an official of an employer’s organization. One excluded the “Dispute Advisor” because he was not a bona fide office bearer of PEASA. In fact he had not been elected to an office of PEASA at all; and bona fides was irrelevant once it was provide that the representative fell within the statutory definition of office holder or official of the employer’s organization. The other commissioners relied on rule 25 (5) to exclude the “Dispute Advisor” but section 25(5) was irrelevant because the representative was acting in his capacity as an official, not a co-member PEASA with the employer.
Ultimately, the Labour Court declared that in the absence of any election to office or employment as the secretary, assistant secretary or organizer of PEASA, their “Dispute Advisors” had no right to appear in the CCMA in terms of the CCMA rule 25.
