REPORTABLE (73)

Judgment No. SC 77/02

Civil Appeal No. 263/99

THOMAS MEIKLE CENTRE (PRIVATE) LIMITED v

(1) TM NATIONAL WORKERS’ COMMITTEE

(2) D MVUDUDU NO

(3) THE MINISTER OF THE PUBLIC SERVICE, LABOUR AND SOCIAL WELFARE

SUPREME COURT OF ZIMBABWE

CHEDA JA, MALABA JA & GWAUNZA AJA

HARARE, JUNE 20 & OCTOBER 21, 2002

T Biti, for the appellant

W Ncube, for the first respondent

No appearance for the second and third respondents

GWAUNZA AJA: In the High Court the appellant made an application in which it sought a review of the decision of a labour relations officer, which was to the effect that the appellant should, within fourteen days, enter into negotiations with the first respondent. The main ground for the review sought was given as:

“gross irregularities in (the) first respondent’s decision in that she erred as a matter of law in making the ruling that s 74(6) of the (Labour Relations) Act (formerly s 79(6) of the Labour Relations Act (16/85)) obliged the applicant to enter into negotiations with its employees represented by the first respondent when a Collective Bargaining Agreement had been concluded and existed”.

The court a quo dismissed the application with costs, after finding that the second respondent had not only been properly seized with the matter but had also not erred as a matter of law in making the decision in question.

The appellant now appeals against this decision.

It is not in dispute that there indeed existed a Collective Bargaining Agreement between the parties. In terms of such agreement, negotiated through the National Employment Council for the Commercial Sector of Zimbabwe (“NECCS”) of which the appellant was a member and published as Statutory Instrument 248/96, the statutory wage increase to be awarded to employees in the sector to which the first respondent’s members belonged was to be 22%. It is common cause that over and above this increase the appellant arbitrarily awarded a further 3% increase to the employees concerned. The appellant thereafter refused to accede to a demand by the first respondent for negotiations on the 3% wage increase. The first respondent then filed a complaint with the third respondent, of an unfair labour practice. The latter assigned the second respondent to deal with the matter in terms of s 93 of the Labour Relations Act [Chapter 28:01] (“the Act”). The result was the decision alluded to above.

Before considering the grounds of appeal, I should note that I agree with the finding of the court a quo that the decision of the labour relations officer was not based on an error of law. To the extent that the refusal by the appellant to enter into negotiations with the respondent over wages constituted a dispute (defined in the Act as “a dispute relating to any matter concerning employment, which is governed by this Act”), I find that the labour relations officer had the requisite authority to deal with the matter. Such authority, it is correctly contended for the respondent, is contained in s 93(1)(b) of the Act, which reads as follows:

“93 (1) A labour relations officer, upon reference to him by any person of a dispute … -

(a) …

(b) after giving both parties an opportunity to submit representations orally or in writing, may make such determination in regard to the dispute or unfair labour practice as may be just in the circumstances.”

The labour relations officer did just that. She or he heard both parties’ oral representations and made the determination in question. The determination related to a matter of employment governed by s 74(6). There was, therefore, no question of an error in law.

I will now turn to the main grounds of appeal, which are that the court a quo erred –

(i) in holding that the appellant and the first respondent were not bound by the Constitution of the TM National Workers’ Committee; and

(ii) in not holding that s 74(6) of the Act does not oblige the appellant to negotiate with the first respondent the variation of the Collective Bargaining Agreement.

It is common cause that there exists within the appellant a council called the TM National Works Council. This Council has a constitution wherein, in addition to other matters ordinarily contained in any constitution of this nature, it is provided as follows in s 4(1):

“The Council may consist of five TM employee management representatives and five TM employees elected from chairpersons of TM Branch workers committees.”

Even though it is noted on behalf of the first respondent that there are two different versions of s 3(1) of this constitution, it is not in dispute that the version placed before the court a quo reads as follows:

“(3)(b) The Council shall be competent to discuss and make recommendations on the following matters –

(i) General working conditions of employment, excluding wages and all other matters covered by the Collective Bargaining Agreement of (the) National Employment Council for Commercial Sectors of Zimbabwe. …”

The appellant contends that both it and the first respondent are bound by the provisions of this constitution. This is because, it is contended for the appellant, the Council (i) was created by both the appellant and the respondent and was therefore owned and controlled by same and (ii) was the only negotiating forum between the parties. Mr Biti contends further that, since the parties have contractually agreed that they will not enter into negotiations on wages which are covered by the Collective Bargaining Agreement, then that is the end of the matter.

The court a quo disagreed, it being its finding that neither of the parties in casu was a member of the NECCS, given its composition. The learned judge observed as follows in this respect:

“It is apparent ex facie the constitution of the TM National Workers’ Council that it is composed of five members of the TM Management employees representatives and five TM employees elected from chairpersons of TM Workers Committees. It is the Works Council made up as above that is prohibited from discussing or negotiating wages. Both the applicant and the first respondent are not members of the TM National Works Council (and) therefore cannot be bound by the provisions of a constitution of a body of which they are not members. On this basis the provisions of the constitution of the TM National Works Council are irrelevant and this ground of challenge must fail.”

I agree with this finding. There is nothing in the constitution in question to suggest that the Council is the only negotiating forum between the appellant and the respondent. Nor, I find, is it necessary that whoever creates an entity, which then assumes an identity of its own, “shall own and control it”. In any case, to own and control an entity is not to say that the entity’s constitution will, by that fact, bind the operations of those who created it. There cannot be any dispute that the appellant, the first respondent and the National Works Council are three separate and distinct entities. The latter two each have a constitution from which they derive their existence and mandate. That one may have been established at the instance, or through the agency, of the other does not, in my view, affect their autonomy. The constitution of the Works Council does not allow it to discuss or make recommendations on matters to do with employees’ wages. That does not mean that the same limitation extends to the appellant and the first respondent. I am therefore not persuaded by the argument advanced on behalf of the appellant that the application of the constitution of the TM National Works Council extends beyond the Council to cover entities that are independently constituted, as are the appellant and the first respondent.

In this respect, I find merit in Mr Ncube’s submission that the TM National Works constitution binds only the Works Council created by it and not the first respondent. I am also persuaded by the further submission that in any case the Works Council established by the constitution in question was not intended as a negotiating forum, since its power is limited to “discussing” and making recommendations on any issue that it considers. As a result, the TM Works Council constitution cannot be read to take away the power and/or right of the employer and employees to negotiate and agree on wages. Such an interpretation, it is correctly submitted for the first respondent, would be inconsistent with s 24(1) of the Act which specifically gives workers committees the right and power to negotiate terms and conditions of employment at the workplace.

If, as I have found, the parties in casu are not bound by the provisions of the TM National Works Council, it follows that they could not, and have not, “contractually agreed” that they would not enter into negotiations concerning employees’ wages.

I am accordingly satisfied that the decision of the court a quo that there was no impediment to the parties’ entering into negotiations on wages was correct.

I will now turn to the second ground of appeal, which is that the court a quo misinterpreted s 74(6) of the Act.

Section 74(6) of the Act reads as follows:

“(6) The existence of a Collective Bargaining Agreement shall not preclude an employer and his employees from agreeing to the introduction of higher rates of pay or other more favourable conditions of employment before the expiry of such Collective Bargaining Agreement, so however that the rights and interests of the employees are not thereby diminished or adversely affected.”

It is contended for the appellant that this section does not place an obligation on the employer, that is, the appellant, to enter into negotiations with the employees, and that therefore the question of an employer negotiating or not is a dispute of interest, not an enforceable dispute of right.

It is contended further that, even conceding that the learned judge a quo was correct in finding that s 74(6) allowed employers and employees to negotiate terms which are more favourable than those contained in the Collective Bargaining Agreement, this was not to be understood to be synonymous with obliging the employer to negotiate.

Mr Biti, for the appellant, contended further that s 74(6) must be read with s 74(4), which, he submits, creates a positive right for both employer and employee to renegotiate or amend a Collective Bargaining Agreement after twelve months. He adds that the non-imposition of a positive right on either party to seek to renegotiate or amend a Collective Bargaining Agreement before twelve months have elapsed, by s 74(6), is not a casus omissus but recognition that the section imposes no right or obligation as s 74(4) does.

The learned judge a quo was not persuaded by this argument. He observed as follows at p 4 of the cyclostyled judgment:

“As Professor Ncube correctly pointed out in his submission, s 74(4) is irrelevant to this matter. That subsection merely makes it clear that a Collective Bargaining Agreement can and may be renegotiated by the parties after twelve months so as to take account of changed circumstances. This subsection is about renegotiation of the Collective Bargaining Agreement by the parties who make it which is not the case in casu. The first respondent is not seeking to renegotiate the Collective Bargaining Agreement but to negotiate wages and salaries in the light of that agreement. I am not persuaded by the submission that the language used in subs (4) creates a legal obligation to negotiate while the language in subs (6) does not. I am inclined to agree with Mr Ncube’s submission that the wording in s 74(6) by necessary implication allows employers and employees to negotiate terms which are more favourable than those contained in the commercial Collective Bargaining Agreement. In my view, the agreement referred to in this subsection is the tail end or result of negotiations between the applicant and the first respondent.”

I am in full agreement with these sentiments. To the extent that s 74(4) is irrelevant to the matter at hand, it is not necessary for the Court to make a determination on whether or not the section creates an obligation for the parties to negotiate, nor whether, by comparison, s 74(6) does or does not do the same.

In relation to s 74(6), Mr Ncube, in my view correctly, submits that the first respondent neither contended, nor did the High Court find, that it creates an obligation to negotiate. I am persuaded by his submission that s 74(6) envisages a situation where employers and employees, whose wages may be or are in fact regulated by a Collective Bargaining Agreement applicable to that industry or sector, engage in further negotiations during the currency of that Collective Bargaining Agreement so as to create better terms and conditions for the employees.

In this case the employees’ wages were regulated by a Collective Bargaining Agreement which at that time had been in operation for less than twelve months. The appellant, as the employer, without consulting the employees concerned, awarded an increase of 3% over and above what was contained in the Collective Bargaining Agreement. Had the employees concerned accepted this increase, that would have been the end of the matter and s 74(6) would have been complied with. This, however, did not happen. The employees were therefore simply asking that the appellant complies with s 74(6) by engaging in negotiations with them with a view to reaching agreement on a mutually acceptable higher rate of pay. Mr Biti contends that, under s 74(6), the mere fact that parties may reach an agreement does not in fact empower either of the parties to demand re-negotiation “at every turn”. I am not persuaded this is what happened in casu. The first respondent did not demand re-negotiation “at every turn”. Its demand followed the action taken by the appellant to unilaterally award a wage increase in contravention of s 74(6), which requires that such an increase be negotiated and agreed between the parties. It is possible that they would not have made the demand had the appellant not taken that unilateral action.

The appellant, it is evident, has taken the attitude that as long as it was prepared to award its employees a higher rate of pay than that specified in the Collective Bargaining Agreement, the determination of such rate was in its sole discretion, with the employees free to either take it or leave it. That is clearly contrary to the spirit of s 74(6) and is also liable to cause labour unrest. Section 74(6) seeks to minimise the possibility of tension between the employer and the employees, by emphasising that such matters be negotiated and agreed. For one party to unilaterally decide on a rate and impose it on the other party is to make nonsense of s 74(6). The same applies to the refusal by that party, where the other party does not accept the imposition of such a rate, to negotiate.

There is no doubt that a higher rate of pay than that stipulated in a Collective Bargaining Agreement, whatever its extent, does not per se diminish or adversely affect the interests of the employees. However, if, as was the first respondent’s suspicion, the rate is not uniformly applied, the potential for an adverse effect on the interests of some of the employees cannot be discounted. To the extent that the negotiations sought by the first respondent are permissible under s 74(6) and in addition may clarify issues between the parties, thereby preventing any adverse effect on the interests of the employees, the latter, i.e. the first respondent, were perfectly within their rights to seek such negotiations.

It should be noted that the first respondent is merely seeking to negotiate a higher rate in circumstances where the appellant is not averse to giving one. They are not seeking an order to compel the appellant to award a specific higher rate. It may be that after these negotiations, the employees will agree to the 3% wage increases. I do not see that the appellant has anything to lose by entering into the negotiations requested. To the contrary, the appellant stands to benefit from the elimination of unrest within the employees that is likely to be the consequence of the negotiations.

In all the circumstances, therefore, I find that the decision of the court a quo was correct in all respects.

The appeal is accordingly dismissed with costs.

CHEDA JA: I agree.

MALABA JA: I agree.

Honey & Blanckenberg, appellant's legal practitioners

Coghlan, Welsh & Guest, first respondent's legal practitioners