Article 71/2022

Demarcation disputes in terms of s62 of the LRA

Demarcation disputes between various bargaining councils are a sui generis species of dispute.  It is a broad investigative process rather than the usual adversarial contest at arbitration.  Policy decisions of policymakers play an important role in this regard. 

What are the main principles to be extracted from the approach recently followed by the labour appeal court in National Union of Metalworkers of SA v CCMA and Others (200) 31 SALLR 148 (LAC); (2020) 41 ILJ 1629 (LAC)?

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The main principles can be summarised as follows:

  • the nature of the demarcation exercise was addressed by this court, in SA Municipal Workers Union v Syntell (Pty) Ltd and Others (2014) 35 ILJ 3059 (LAC), as follows:

‘[21] In the main, arbitrations under the LRA are those which address disputes of right and are adjudicative proceedings proper. In s62, the word ‘arbitration’ is not used to describe the process. Indeed, if a ‘demarcation’ issue arises in any ordinary adjudicative proceedings, those proceedings must be stayed until the demarcation issue is decided in the distinct process provided for in s62.

[22] The s62 process, as is evident from its provisions, contemplates more than a conventional adversarial contest between interested parties. It presupposes a broader investigative role. In such a context, whether or not an onus in any sense exists is not obvious.

[23] These considerations which are imbedded in the provisions of the section underscore its sui generis character. The s62 process was commented on by Francis J in Coin Security (Pty) Ltd v CCMA & others (2005) 26 ILJ 849 (LC) at paras 43 and 63:

‘[43] The function of a CCMA commissioner in a demarcation dispute is a classic case of the legislature entrusting a functionary with the power to determine what facts are about the making of a decision and the power to determine whether or not they exist. It is fundamental to the effective operation of the Act that the commissioner must be a repository of such power. …

[63] The demarcation process is one entrusted to a specialist tribunal in terms of the provisions of the Act. The demarcation decision is one involving facts, law and policy considerations. In demarcation decisions, there will, more often than not, be no one absolutely correct judgment. Particularly in decisions of this sort, and given the provisions of the Act, there must of necessity be a wide range of approaches and outcomes that would be in accordance with the behests of the Act. Due deference should therefore be given to the role and functions and resultant decisions of the CCMA in achieving the objects of the Act. This approach will not only be consistent with these principles, but also consistent with the need for the Act to be administered effectively.’

  • more recently, Van Niekerk J affirmed this perspective in National Bargaining Council for the Road Freight Industry v Marcus NO and Others (2011) 32 ILJ 678 (LC) at para 22:

‘It should also be recalled that Coin Security is also authority for the point that a demarcation involves considerations of fact, law and social policy and that in these circumstances, due deference ought to be given to a commissioner making a demarcation award (at para 63 of the judgment). As I understand the judgment, in demarcation judgments there will be, more often than not, no single correct judgment, and that a wide range of approaches and outcomes is inevitable. A reviewing court should be attuned to this reality, and recognize it by interfering only in those cases where the boundary of reasonableness is crossed. Further, Coin Security recognizes that a demarcation is provisional – s62(9) of the LRA requires a commissioner to consult with NEDLAC before making an award. As the court in Coin Security observed, the case for judicial deference is all the more compelling in these circumstances. In short, far from encouraging an expansive approach to a demarcation, the Coin Security judgment requires this court to recognize the specific expertise of commissioners who undertake this task and to defer to that expertise.’

  • due regard should also be had to the following issues:
  • the scale of operations of the various enterprises
  • an overlap between the scope definitions of the various bargaining councils
  • the bargaining history under the jurisdiction of the different bargaining councils
  • achieving the ‘best fit’ for the enterprises at the time of the enquiry
  • the end product produced by the relevant enterprises
  • the value chain concept?

With reference to Potgieter v Samancor Chrome Ltd t/a Tubatse Ferrochrome (2022) 33 SALLR 190 (LC) and Van Rensburg and Others v Department of Justice and Correctional Services and Others (2022) 33 SALLR 280 (LC); (2022) 43 ILJ 2110 (LC).

In what instances does the jurisdiction of the supreme court of appeal trump the jurisdiction of the labour appeal court?

Where an employer prematurely terminates a fixed-term contract and the employee challenges such termination as being unlawful and claims damages and not specific performance, the labour court has up to now ordered damages even though same is an unliquidated claim for damages.