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THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
In the matter between:
THE INDUSTRIAL COUNCIL FOR THE   First Appellant
BUIDING INDUSTRY (WESTERN PROVINCE)      (First Applicant in Court a quo)
THE BUILDING INDUSTRY COUNCIL,   Second Appellant
TRANSVAAL        (Second Applicant in Court a quo)
THE INDUSTRIAL COUNCIL FOR THE   Fourth Appellant
BUILDING INDUSTRY, BLOEMFONTEIN  (Fourth Applicant in Court a quo)
THE INDUSTRIAL COUNCIL FOR THE   Sixth Appellant
BUILDING INDUSTRY, EAST CAPE     (Sixth Applicant in Court a quo)
THE INDUSTRIAL COUNCIL FOR THE   Seventh Appellant
BUILDING INDUSTRY, EAST LONDON   (Seventh Applicant in Court a quo)
THE INDUSTRIAL COUNCIL FOR THE   Eighth Appellant
BUILDING INDUSTRY, KROONSTAD     (Eighth Applicant in Court a quo)
THE BUILDING INDUSTRIAL COUNCIL  Nineth Appellant
NORTH AND WEST ROLAND    (Nineth Applicant in Court a quo)
THE INDUSTRIAL COUNCIL FOR THE   Tenth Appellant
BUILDING INDUSTRY, KIMBERLEY     (Tenth Applicant in Court a quo)
and
TRANSNET INDUSTRIAL COUNCIL      Respondent
Coram: Vivier, Nienaber JJA et Melunsky AJA
Heard:   18 August 1998
Delivered: 7 September 1998

2 JUDGMENT
VIVIER JA:
The eight appellants are all industrial councils registered or deemed
to have been registered as such under the Labour Relations Act 28 of 1956
("the LRA"), each with regional jurisdiction over different geographical
areas of the building industry in South Africa. Although the LRA has now
been repealed by the Labour Relations Act 66 of 1995 it was common cause
that this case must be decided as if the latter Act had not been passed. The
respondent is an industrial council which is deemed under sec 9(9) of the
Legal Succession to the South African Transport Services Act 9 of 1989
("the Act") to have been registered as such under the LRA. According to
the respondent's registration certificate issued by the industrial registrar on
2 October 1991 it was registered in respect of -

For convenience I shall refer to "an undertaking, industry, trade or
occupation" as "an undertaking" or, where the plural is used, to
"undertakings".
Subsequent to the respondent's registration a dispute arose between
the appellants, on the one hand, and Transnet Limited ("Transnet") on the
other, concerning the appellants' jurisdiction over certain building
operations conducted by Transnet and its divisions. The dispute arose
in the following way. Transnet and its predecessors, to which I shall refer
in greater detail later, had traditionally been involved in building operations
connected with the maintenance, construction and renovation of their own

4 buildings and for their own operational purposes. Since its incorporation
during October 1989, Transnet had, in addition, engaged in building
operations on the open market for outside parties under contracts unrelated
to its own operational requirements. The appellants objected to Transnet
undertaking such building work on the open market without being bound by
the industrial agreements negotiated by the appellants for the building
industry in their respective geographical areas which had been put into force
by the Minister of Manpower under sec 48 of the LRA. The dispute led
to an application brought on 17 November 1994 in the Transvaal High
Court by the present eight appellants, together with two other industrial
councils for the building industry. The last-mentioned two applicants,
which were the third and fifth applicants respectively, were subsequently
dissolved and have played no further part in the proceedings. The
respondents were the present respondent, as first respondent, the industrial

5 registrar as second respondent and Transnet as third respondent. The
industrial registrar gave notice at the outset that he would abide the Court's
decision and he has taken no part in the litigation. Transnet withdrew its
opposition before the application was heard and has similarly taken no
further part in the proceedings. The relief sought was for an order
declaring that upon a proper construction of the present respondent's
certificate of registration, read with its constitution, the undertakings in
respect of which it was registered were limited to the activities Transnet
was engaged in immediately before 1 October 1989 and did not include
building operations carried on by Transnet and its subsidiaries for purposes
not necessitated by their own operational requirements. In the alternative
an order was sought reviewing and setting aside the industrial registrar's
decision to approve the respondent's constitution and to issue the
registration certificate.

6

Clause 3 of the respondent's constitution reads as follows :
The constitution was approved by the industrial registrar in terms of sec 9
(11) of the Act. This subsection requires the industrial registrar to satisfy

7 himself, before granting his approval of a constitution agreed upon by
Transact and the trade unions in question, that it is consistent with the LRA,
that it does not contain provisions which are contrary to the provisions of
any law and that it is not calculated to hinder the attainment of the objects
of any law. The industrial registrar having given his approval and the
South African Transport Services Conditions of Service Act 1988 ("the
Conditions of Service Act") having lapsed as provided for in sec 9(6) of the
Act, the respondent was deemed in terms of sec 9(9) to be registered under
the LRA. The registration certificate issued to the respondent in effect
embodied the definition of the respondent's constitutional scope in clause
3 of its constitution.
The appellants' contention essentially was that this definition was
inconsistent with the requirements of both sec 9(9) of the Act and the LRA
since it failed to indicate exactly which undertakings the respondent

8 represented and so failed to define the occupational limitation to its
jurisdiction.
It is convenient to deal first with the provisions of the LRA.
Registration of an industrial council under the LRA is obtained under sec
19. After receiving the constitution and the application for registration
containing the prescribed information together with such further information
as he may require, the industrial registrar causes a notice to be published in
the Gazette giving particulars of the application and inviting any person
who objects to the application to lodge his objection in the manner specified
in the notice (subsecs (1) and 2(a)). Provision is made in paragraphs (e)
and (f) of subsec (2) for written representations by the parties to the council
and by the person who lodged the objection. Subsec (3) provides as
follows :

Sec 19(3) thus empowers the industrial registrar to register an
industrial council in respect of an area and an undertaking if he is satisfied,

10 inter alia, that the employer and employee parties to the council are
sufficiently representative, within that area, of that undertaking. The
industrial registrar thereby determines the jurisdictional scope of an
industrial council. In order for the industrial registrar to be satisfied that
the parties to an industrial council are sufficiently representative it is
obviously necessary for him to identify the undertaking concerned. The
industrial registrar is also empowered to vary the area or undertaking in
order to ensure that the industrial council is sufficiently representative (sec
19(8)). In terms of subsec (9) the provisions of subsecs (1), (2), (3), (4)
and (5) of sec 19 apply mutatis mutandis in respect of any proposed
variation under subsec (8). The approval of the industrial registrar is thus
required before an industrial council may vary the undertaking in respect of
which it has been registered.
Sec 23(1) of the LRA provides that an industrial council shall, within

the undertaking, and in the area in respect of which it has been registered,
endeavour by the negotiation of agreements or otherwise to prevent disputes
from arising, and to settle disputes which have arisen or may arise between
employers or employers' organisations and employees or trade unions and
to endeavour to regulate or settle matters of mutual interest to employers or
employers' organizations and employees or trade unions.
In Photocircuit SA (Pty) Ltd v De Klerk NO and De Swardt NO and
Others 1991(2) SA 11(A) Preiss AJA said the following about sec 23(1)
at 18E-
See also Genrec Mei (Pty) Ltd v Industrial Council for the Iron, Steel,

12 Engineering, Metallurgical Industry and Others 1995(1) SA 563(A) at 569
C-E.
An industrial council fulfils its first duty by negotiating industrial
agreements in respect of the matters set out in sec 24(1) of the LRA. In
terms of sec 48 the Minister of Manpower is empowered to promulgate
industrial agreements by notice in the Gazette and to extend their operation
in whole or in part, so as to bind employers and employees falling outside
of a council's jurisdiction, even for an area additional to the area for which
the industrial council is registered. (Sec 48(l)(b) and (c) and see S v
Prefabricated Housing Corporation(Pty)Ltd and Another 1974(1) SA
535(A) at 540A.) With regard to an industrial council's function to settle
disputes between employers and employees sec 27 A(l)(a) provides that,
unless an agreement entered into by the parties to an industrial council
provides otherwise, a dispute existing in any undertaking in any area where

13 an industrial council has jurisdiction in respect of the matter in dispute may,
if the parties to the dispute are, inter alia, an employer and employees, be
referred by such party to that industrial council which shall then endeavour
to settle the dispute.
As was pointed out by Van Heerden JA in the Genrec case at 569
C-E, one finds repeated reference in the LRA to the limitation of
jurisdiction in respect of the undertaking and the area for which an industrial
council is registered. In Transvaal Manufacturers' Associates and
Another v Bespoke Tailoring Employers' Association and Other, 1953(1)
SA 47(A) Schreiner JA said the following about the necessity for the
constitution of an industrial council and its registration certificate to contain
a definition of the undertaking etc which it represents (at 56G - 57A) :

Prior to the passing of the Act the LRA did not apply to Transnet's
predecessors or their employees as they formed part of "the State" as
contemplated in sec 2(2) of the LEA. The South African Railways and
Harbours ("SAR & H") came into existence in 1910 when in terms of sec
125 of the South Africa Act 1909 all ports, harbours and railways belonging
to the several colonies at the establishment of Union were vested in the

15 Governor-General-in-Council as from the date of the establishment of the
Union of South Africa. In 1981 the SAR & H became the South African
Transport Services ("SATS") in terms of the South African Transport
Services Act 65 of 1981. Both the SAR & H and SATS conducted its
operations as a commercial enterprise of the state. Sec 8 of the
Conditions of Service Act provided for the establishment of a labour council
for SATS functioning outside the provisions of the LRA. According to
its objectives, functions and powers it would seem that the labour council
was for all intents and purposes the equivalent of an industrial council for
SATS and its employees.
The Act, which came into operation on 6 October 1989, brought
about a fundamental change in the legal framework within which SATS and
its employees functioned. Sec 2 provides for the formation and
incorporation of a public company (Transnet) with share capital of which the

16 state, at the time of incorporation, would be the only member and
shareholder. Sec 3(2) provides for the whole of the commercial enterprise
of the state as contemplated in sec 3(1) of the South African Transport
Services Act 65 of 1981 to be transferred to Transnet as a going concern. In
terms of sec 9(2) all Transnet employees are deemed to be persons in the
employ of the state for the purpose of the LRA so that the provisions of the
LRA would not apply to Transnet and its employees. Subsec (3) of sec 9,
however, provides, that the provisions of subsec (2) would lapse two years
after the operative date of the Act which means that the LRA became
applicable to Transnet and its employees after 6 October 1991. In terms
of sec 9(6) the Conditions of Service Act lapsed, with certain exceptions,
two years after the commencement of the Act.
Sec 9(8)(b) of the Act envisages an agreement between Transnet and
the trade union members of the labour council to establish an industrial

17 council in terms of the LRA and para (c) of subsec (8) provides for the
transfer of the labour council's assets, liabilities, rights and obligations to
such industrial council should it be established within a period of one year
after the date on which the Conditions of Service Act lapses.
Subsecs (9) to (17) were added to sec 9 of the Act by the Transnet
Limited Second Amendment Act 110 of 1991. Subsec (9) provides as
follows:
"(9) Should the Company and the trade unions recognized by the Company, prior to the lapsing of the South African Transport Services Conditions of Service Act, 1988, in terms of subsection (6) -
(a)      agree to form one or more industrial councils; and
(b)      agree to and sign the constitution or constitutions of such industrial council or industrial councils,

18
19 an industrial council in terms of subsec (9), vary the area and undertaking in
respect of which any other industrial council is registered accordingly. In
terms of subsec (15) the LRA applies to the respondent upon its
registration in terms of subsec (9) as if it had been registered in terms of the
LRA.
The new subsecs (9) to (17) clearly encourage and facilitate the
establishment of an industrial council by Transact and the trade unions
concerned and simplify the procedure relating thereto. The formal
procedures and requirements of sec 19 of the LRA are done away with and
no room is left for any person to object to the proposed registration of the
industrial council. Instead the deeming provision in subsec (9) applies once
the industrial registrar has approved the constitution and the Conditions of
Service Act has lapsed. Instead of the requirement of sec 19(3)(c) of the
LRA that the industrial registrar has to satisfy himself that there is not in

it
20 existence an industrial council which is registered in respect of the area and

21 more industrial councils for Transnet and its employees, and the registration
thereof immediately after such lapsing. The clear intention of the
Legislature seems to be the establishment of a separate labour regime for the
approximately 114 000 Transnet employees who are engaged throughout the
country in what the respondent's secretary has stated to be "almost every
conceivable trade or occupation". The concept of a separate labour regime
for Transnet employees can be gathered from a provision such as subsec
(16) in terms of which no agreement, award or order which, but for that
subsection, would have become binding upon Transnet and its employees
under the LRA upon the lapsing of the two-year period referred to in subsec
(6), shall bind Transnet and its employees in respect of which an industrial
council has been registered under subsec (9).
The deeming provision in subsec (9) applies in respect of the areas
and undertakings "of the company", ie Transnet, provided for in the

constitution. By stating such undertakings to be the whole of Transact's

23 of activity or pursuit rather than to the persons who engage in them. See
National Industrial Council for the Iron, Steel, Engineering and

24 Sec 9(13)(c) of the Act, which requires the industrial registrar upon the
respondent's registration to vary the area and undertakings in respect of
which any other industrial council is registered accordingly, can be complied
with by simply excluding Transnet's undertakings from such other
undertakings.
Counsel for the appellants submitted that under the respondent's
constitution its jurisdictional scope could be said to extend to any activity of
any kind which Transnet may now or in the future decide to engage in,
something which is not consistent with the LRA and which is calculated to
hinder the attainment of the objects of the LRA. It would appear that this
was the reason why the main relief sought in the Court a quo was for a
declaratory order restricting the respondent's jurisdictional scope to the
activities Transnet was engaged in at a certain date. It may be that on a
proper interpretation of its constitution the respondent's jurisdiction should

be so restricted. That, however, is not the issue before this Court and I
The appeal is dismissed with costs, including those of two counsel.
W. VIVIER JA. NIENABER JA Concurs.
THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
In the matter between
THE INDUSTRIAL COUNCIL FOR THE
BUILDING INDUSTRY (WESTERN PROVINCE)
and SEVEN OTHERS         Appellants
and
TRANSNET INDUSTRIAL COUNCIL      Respondent
CORAM:   VIVIER,NIENABER JJA et MELUNSKY AJA
DATE HEARD: 18 August 1998 DATE DELIVERED: 07 September 1998
JUDGMENT
3
MELUNSKY AJA
which he proposes, there are a few matters which I would like to emphasise.
4 before the registration of the respondent and the real issue between the parties
was what effect the extension of those activities to outside building work had
on the respondent's jurisdiction. This matter was not adequately addressed in
argument and, as I have pointed out, it is not covered by the question that the
Court a quo - and this Court - has to decide. Therefore this Court can express
no view on whether the respondent's jurisdiction includes Transnet's building
work that is unrelated to that company's own operational requirements. The
result is most unfortunate for the parties, as considerable costs, effort and time
have been expended without the resolution of the real dispute. This, however,
is due to the fact that the question posed by the parties and accepted by the
hyperlink a quo as the matter to be determined, deviated from the issues covered by
the notice of motion and the affidavits.
LS MELUNSKY AJA

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