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Constitutional Court ruling

4 March 2014, Posted in NUMSA Bulletin

The Constitutional Court on Wednesday held that a union does not enjoy special protection from damages claims by members that it represents.

The Food and Allied Workers’ Union (Fawu) applied for leave to appeal a lower court judgment that awarded two Fawu members damages. The damages claim arose when Fawu failed to represent the employees in an unfair dismissal dispute.

The two employees, represented by advocate C Nel, succeeded in the damages claim against the union, which was upheld by the Supreme Court of Appeal (SCA). The SCA upheld the lower court’s view that the two members were unfairly dismissed by their employer in 2002.

Fawu, represented at the Constitutional Court by Maurice Pillemer SC and advocate R Pillemer, argued that it could invoke its constitution, together with its constitutional right to determine its own administration, to get special protection from a damages claim.

In a unanimous judgment authored by Justice Edwin Cameron on Wednesday, the court dismissed Fawu’s application for leave to appeal notwithstanding the fact that a constitutional issue was raised by the union.

Said Cameron: “It [Fawu] invokes section 23(4) (a) of the Bill of Rights. But, as will emerge now, its argument is barely tenable. It has no prospects of success.”

The union’s argument had “constitutional colouring, but no constitutional substance”.

No prospects of success

The court also held that the union’s appeal had no prospects of success. Fawu’s appeal was dismissed with costs.

“The [union’s first argument] seeks to confine the ambit of the obligations it undertook to the employees when it took on their case by implying a term into their agreement that it could withdraw when it no longer served its own interests to represent them.

“The second attempt to evade the consequences of its admitted failure to lodge the employees claims properly … by asserting that this was not a breach of its agreement with the employees. Neither premise survives inspection,” said Cameron.

In 2002, two workers, Mandla Ndlela (who has died, his life partner pursued the case on his behalf) and Michael Mkhize, were fired from Nestlé after working for the company for 20 years.

Fawu promised to represent them in their unfair dismissal claims, and a Fawu official represented the employees at a hearing at the Commission for Conciliation, Mediation and Arbitration (CCMA) in June that year.

“But that is about all it [Fawu] did. Its constructive involvement in their cause ended there,” said Cameron.

The CCMA certified that the dispute had not been resolved. The employees could then refer the matter to the Labour Court, but this had to be done within 90 days. Fawu promised to refer the matter, but it did not and the 90-day window lapsed.

The union could have applied to the court, climbing a “stone-strewn hill”, for the Labour Court to condone the application. The union did not do this, either.

“All its officials did, for nearly a year, was to assure the employees that their matter was being attended to,” said Cameron.

‘Virtually nothing done’

In May 2003, the employees sought help from the law clinic at the University of Durban-Westville. They then discovered that the union “had done virtually nothing to prosecute their claims”.

Fawu then assigned their case to a different union official, who also failed to lodge a condonation application. Instead, in January 2004 the official tried to take the matter back to the CCMA.

“Unsurprisingly, the CCMA rejected this attempt,” Cameron said.

In June that year, the employees hired attorneys who threatened a damages claim against Fawu if the union did not file a condonation application within two weeks. The union did not respond.

Seven years later, Mkhize and Ndlela sued the union for damages and won their case in the high court.

The high court rejected the union’s argument that it would be contrary to public policy to hold a union liable for not prosecuting its members’ claims because of the financial implications for the union.

The high court also found that, had the employees’ matter been referred to Labour Court, their dismissal would have been found to be “procedurally and substantively unfair”. The employees were awarded damages amounting to a year’s salary each and commissions.

On appeal, the majority of the SCA held that the union had promised to assist the employees under a contract of mandate, which obliged them to represent their members. The SCA said the question of whether the union’s constitution obliged it to represent its members was a “red herring”.

Dispute

The SCA said the union was obliged to take the necessary steps to have its members’ dispute with Nestlé resolved in accordance with the Labour Relations Act.

It upheld that the employees’ dismissal was unfair and upheld the compensation awarded.

In the Constitutional Court, Fawu argued that it had special protection from damages claims under the Constitution and the Labour Relations Act.

It argued that a provision in its own constitution, which said the aims of the union included providing “legal assistance to members where it deems it in the interests of the union to do so” should be read together with its constitutional right to determine its own administration.

Because the Labour Relations Act allows for it to act in its own interests as well as in the interests of its members, and that these interests are sometimes conflicted, Fawu argued it could use its own discretion to withdraw from its mandate to represent its members.

Because it does not charge members for its legal services and because its officials are generally not qualified as lawyers, it must act on behalf of the union as a whole and not just on behalf of individuals, Fawu argued.

The Constitutional Court found that the right of a union to determine its own administration was rooted in response to legislated racial oppression, which criminalised the rights of the majority of South Africans to organise through unions.

Organisational autonomy

These laws also prevented unions from having organisational autonomy.

This now-protected right to organisational autonomy in pursuit of its members’ rights was “an integral part of the constitutional vision that sought to replace that repressive history”, the court said.

“This right does not, however, specify how the freedom it confers may be exercised. Nor, in itself, does it suggest immunity from damages claims.”

In addition, Fawu argued that section 200 of the Labour Relations Act conferred on the union the power to act in its own interests, even when doing so may prejudice individual members.

Cameron said: “But the provision cannot bear the weight the union seeks to put on it. It is a capacity-conferring provision, not an exemption clause.”

Even if a union could withdraw from representing its members, it must do so in good faith and properly notify its members, the court said.

“The union did not do this. Rather, it seems to have cut the employees loose to protect itself from the unpalatable consequences of its failure to represent them properly,” the court said.

Even the fact that the employees could apply to the Labour Court for condonation on their own “does not rescue the union from its predicament”. This was because the union’s failure to refer the case to the Labour Court had weakened the employees’ case.

“That they could still try to obtain the indulgence [of the Labour Court] is no answer to their complaint about what they lost. And their agreement required precisely that the union avoid this loss.”

By Sarah Evans