A reminder to Labour Court litigants – costs will follow the suit, sometimes…
It is trite that the principle that the costs follow the suit does not apply in labour litigation, save for exceptional circumstances. This was emphasised by the Constitutional Court (“CC”) in two recent decisions. In National Union of Mineworkers and others v Samancor Limited (Eastern Chrome Mines) and others, the CC held that it is crucial not to discourage litigants from approaching the Labour Court and Labour Appeal Court by mulcting unsuccessful litigants in costs and that where costs are awarded, reasons must be provided.
In Union for Police Security & Corrections Organisation v SA Custodial Management (Pty) Ltd & others, the CC noted that there had been a concerning pattern of it being required to overturn Labour and Labour Appeal Court decisions applying the general rule that costs follow the result, notwithstanding that the rule must only be applied in exceptional circumstances in these courts. According to the CC, the general rule does not apply in labour matters because: … when costs orders are too readily made against those who seek to vindicate their constitutionally-entrenched labour rights in the specialist institutions created by the LRA, employers and employees alike may be left with no option but to resort to industrial action to remedy disputes that the LRA places beyond the purview of protected industrial action. That would cultivate unlawfulness and be inimical to the foundational value of the rule of law underpinning our democratic order
However, the CC reiterated that the rule does not preclude courts from exercising its discretion to award costs where it deems it appropriate, provided that this discretion is exercised judicially. A court departing from the rule must give reasons for its decision. It must apply its mind to the dictates of the fairness standard in section 162, and the constitutional and statutory imperatives that underpin it.
These decisions were referred to in the recent Labour Court judgement in Bapotrans (Pty) Ltd v Association of Mineworkers and Construction Union (AMCU) and Others, where Mangena AJ ordered AMCU to pay Bapotrans’ costs arising from an urgent interdict brought by Bapotrans, as a result of what the Court deemed irresponsible behaviour and a lack of leadership on the Union’s part.
In May 2020, AMCU lodged a grievance with Bapotrans’ management, alleging that certain members of management had used vulgar language and insulted employees. AMCU called upon Bapotrans to investigate the allegations, take disciplinary action and dismiss guilty employees. In response, Bapotrans appointed an independent chairperson to conduct an enquiry into the grievance. Notwithstanding that AMCU had lodged the grievance, it failed to participate in the enquiry. The Chairperson recommended that Mr Els be subjected to a formal enquiry but excluded Messrs Joubert and Kotze from his recommendation. They were found not to have been part of the events that led to the grievance.
Prior to the Chairperson’s ruling being issued, AMCU and the Company had exchanged correspondence in an attempt to resolve the grievance expeditiously. During these communications, AMCU called on the Company to find that the employment of Els, Kotze and Joubert was incompatible with the Company’s values and to institute a compatibility enquiry chaired by an independent chairperson. The Company obliged and invited AMCU to provide the details of the alleged incompatibility and to propose three suitable chairpersons to chair the enquiry. AMCU took the position that the Company had all the relevant details relating to the incompatibility and refused to suggest any chairpersons.
The Company convened the compatibility enquiry, and the Chairperson recommended that Els be charged and placed on a precautionary suspension pending the finalisation of the disciplinary process, accepted and implemented by the Company. The Company addressed a letter to the Union, requesting it to respect the outcome and to ask its members to allow Joubert and Kotze to return to work, as they had been cleared of any wrongdoing.
In accordance with the Chairperson’s findings, Els’ disciplinary hearing was convened. However, AMCU members disrupted the proceedings to the extent that it had to be postponed. Prior to the second sitting of the disciplinary hearing, AMCU and its members addressed correspondence to the Company, indicating that Els should be permitted to return to work. The Company accordingly uplifted Els’ suspension and required him to report for duty, however, upon Els’ return, AMCU reneged on its position and submitted a list of demands to the Company. Els’ second disciplinary hearing was convened and the Chairperson issued a finding that Els was not guilty of the alleged misconduct and he was accordingly permitted to return to work. Upon his return, he was prevented from performing his duties by AMCU and its members, who rejected the Chairperson’s finding. Bapotrans approached the Labour Court for an urgent interdict, which the Court granted, ordering that costs be determined at a later stage. This was the issue for determination before Mangena AJ.
Mangena AJ outlined the key principles relating to cost orders in the Labour Court.
He stated that the awarding of costs in the Labour Court is governed by section 162 of the Labour Relations Act 66, 1995(“the LRA, which provides that, when making costs orders, the Court may have regard to the requirements of the law and fairness, and furthermore, may take into account, inter alia, the conduct of the parties.
Furthermore, generally, in labour disputes, the costs will not follow the results, except in exceptional circumstances where sufficient reasons are advanced to demonstrate that the requirements of the law and fairness were taken into account.
This is not an act of generosity towards litigants, but rather, a constitutional imperative that individuals have access to labour dispute resolution institutions, so as to ensure that unlawful industrial action is avoided.
Application of the principles
In reaching its conclusion, the Court found that AMCU, as the majority union at Bapotrans, enjoyed significant collective bargaining power.
Despite the Company’s efforts to secure the Union’s co-operation in the resolution of its grievance, AMCU had failed to act responsibly and show leadership when circumstances demanded that it do so and were steadfast in its disregard for due process and went to an extent of disrupting the process which was a product of its struggle. Ultimately, the Court was of the view that AMCU had abused its majority by frustrating a legitimate process.
Mangena AJ opined that the rule that, in labour disputes, the costs should not follow the suit, could not mean that unions should be entitled to threaten a company’s stability and operations in circumstances where the Company is co-operative and attempts to accommodate the U’Union’s requests. In this case, AMCU and its members were disruptive, whereas the employer attempted in good faith to resolve the dispute. In the circumstances, it was disingenuous and tantamount to blackmail for AMCU to argue that it should not be ordered to pay the Company’s costs on the basis of their ongoing relationship when AMCU had abused and failed to show due regard for that relationship. Accordingly, an adverse costs order was warranted, and, in fact, required, to vindicate the rule of law.
The judgement is an important reminder to litigants that the rule against costs being awarded is not a free pass to behave disruptively or to obstruct legitimate attempts at dispute resolution. It is noteworthy that the Court recognised that the relationship between the parties, which AMCU sought to rely on as justification for not awarding costs to the Company, is one that requires mutual respect and cannot simply be cited opportunistically when it suits a party.