13 August 2010

Status of a de-registered trade union

May a trade union enjoy the benefits of a registered trade union whilst its appeal against a decision to deregister it is pending? This was the crisp point the Labour Court (the Court) was required to decide on last week in CCMA v the Registrar of Labour Relations & Others (as yet unreported). 

A registered trade union is entitled to certain rights and benefits from its status as a registered union. A registered trade union that is sufficiently representative of the workers in the workplace is entitled to certain organisational rights such as, access to the workplace, the payment of union subscriptions, appointment of shop stewards and the right to represent its members.

However, in order to retain such entitled status, there are certain obligations that the Labour Relations Act, 66 of 1995 (LRA) imposes on the union. For example, the union is obliged in terms of s98 of the LRA to keep audited books and records of account. In terms of section 99 of the LRA, a trade union must maintain a list of its members, minutes of meetings and ballot papers for a specified period. Section 100 of the LRA obliges a registered trade union to annually furnish certain information to the Registrar of Labour Relations (Registrar).If a trade union is de-registered it loses the entitlement to organisational rights and the right to represent its members.

On 2 October 2009, the United Peoples Union of South Africa (UPUSA) was de-registered as a trade union by the Registrar of Trade Unions. The de-registration occurred after the Registrar had called on UPUSA to show cause why it should not be de-registered.

The Registrar took the decision to de-register UPUSA in terms of s106 (2A) of the LRA based on the following grounds:

(i) UPUSA had ceased to function in terms of its constitution;
(ii) UPUSA had not complied with section 98, 99 and 100 of the LRA; and
(iii) UPUSA had ceased to operate as a genuine trade union.

Pursuant to UPUSA's de-registration, many employers terminated their recognition agreements with UPUSA on the grounds that it was no longer entitled to organisational rights. This led to UPUSA referring a spate of disputes to the CCMA concerning the withdrawal of organisational rights.

On 20 October 2010, UPUSA lodged its notice of appeal in terms of s111 of the LRA against the Registrar's decision. The appeal is still pending before the Court.

Both the LRA and the Labour Court Rules are silent as to the effect of an appeal lodged in terms of s111(3) of the LRA.

UPUSA maintained that it continued to enjoy the rights it had before de-registration, and will continue to represent its members in the CCMA processes until such time that its appeal against the decision of the Registrar is finalised. [We respectfully disagreed - see our article headed "Appealing the un-appealing effects of de-registration" in the Summer 2009 edition of Employment Matters. - Ed]

The CCMA accepted the position taken by UPUSA that pending the appeal it was entitled to the rights and benefits it enjoyed before cancellation of its registration. The CCMA granted UPUSA the right to represent its members, given the fact that it had appealed against the Registrar's decision.

Many employers, though, argued that UPUSA had no standing on behalf of its members and that the appeal did not suspend the effect of the Registrar's decision.

Different commissioners took divergent views on the matter. In order to obtain certainty as to UPUSA's status given the flood of litigation, the CCMA instituted an application seeking an order suspending the effect of the cancellation of the registration of UPUSA as a trade union by the Registrar, pending the outcome the appeal.

Rule 49 (11) - (14) of the High Court Rules provides that where an appeal has been noted or an application for leave to appeal against or to rescind, correct, review or vary an order of a court has been made, the operation and execution of the order in question shall be suspended, pending the decision of such appeal or application.

However, there is no corresponding provision applicable to section 166 of the LRA, which is silent on the effect of noting an appeal. Further, the Registrar's decision to de-register a trade union is not a judgment but an administrative decision.

The Registrar argued that an appeal against its decision does not automatically stay the effect of such decision, and that the Court has discretion to grant such relief upon an applicant trade union making out a case for such relief.

The CCMA argued that unless the statute provides otherwise where there is a right of appeal against an administrative decision, such a decision will be automatically suspended pending the finalisation of the appeal. The fact that the LRA is silent about the consequences of an appeal against the decision of the Registrar, does not exclude the operation of the common law rule that automatically suspends the decision of a judgment pending the outcome of an appeal.

The Court, per Molahlehi J rejected the CCMA's argument and held that the prejudice that a union may suffer as a result of de-registration, even pending appeal, should be weighed against the public interest of protecting the interest of union members, in particular that of ensuring that funds contributed are utilised for the purpose of benefiting union members. In this regard, the Registrar is the custodian to ensure compliance by trade unions with the provisions of the LRA.

The provisions of the LRA relating to the de-registration of trade unions are "protective in nature, intended to protect the vulnerable workers from abuse of their trust by unscrupulous union officials whose involvement in a union may be for no other reason but to advance their selfish business interest".

The Court held further that if the Registrar's decision to de-register the trade union was wrong, the union is not without a remedy. The remedy available to the union is to approach the court for an order suspending the decision pending appeal. The union would have to demonstrate that it will suffer prejudice if the decision is not suspended pending the appeal, and that it has prospects of success on appeal.

In conclusion, a trade union that has been de-registered, may still exist as a trade union by virtue of the constitutionally protected right to freedom of association. However, it does not automatically follow that a de-registered trade union continues to enjoy neither organisational rights, nor rights of representation, even if it has lodged an appeal against the decision of de-registration.

Employers who have a trade union(s) at their workplace which have been de-registered, may deprive such trade union(s) of the organisational rights, unless the Court has granted specific relief to such trade union(s) to the effect that its appeal suspends the effect of the Registrar's decision of de-registration.

Melanie Hart, Director, Employment

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