Civil And Power Generation Projects (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others

The applicant was a contractor on the Eskom Medupi power station project. The applicant and NUMSA were bound by a Project Labour Agreement (PLA), a collective agreement regulating employment relations on the project. The PLA provided for a project bonus payable to employees (clause 13.25). Clause 13.25.3.2 dealt with forfeiture of project bonuses where employees engaged in unprotected strike action, with specific exceptions (returning to work within cooling off period, provocation by employer). Clause 13.25.3.2.3 specifically provided that "rolling unprotected industrial action" would result in employees losing their project bonus. In October 2014, 201 NUMSA members (individual respondents) embarked upon unprotected strike action on 9 October 2014, which was part of rolling unprotected strike action. The applicant refused to pay the individual respondents their accrued project bonuses for the period 1 December 2013 to 30 November 2014, contending they forfeited the entire annual bonus. NUMSA contended only the October 2014 monthly bonus was forfeited. A dispute was referred to the CCMA for arbitration. The arbitrator (second respondent) found employees only forfeited the project bonus for October 2014. The applicant sought review of this award.

• What is the correct test for review of CCMA arbitration awards under section 145 of the LRA?
• What are the applicable principles for interpretation of collective agreements?
• On a proper interpretation of clause 13.25 of the PLA, did employees who engaged in rolling unprotected strike action forfeit their entire annual project bonus or only the monthly bonus for the month of the strike?
• Did the arbitrator commit a material error of law in interpreting the collective agreement?
• Is substitution of the award appropriate in the circumstances?

1. The applicant's review application is granted. 2. The arbitration award dated 1 November 2016 under case number LP 6903-16 is reviewed and set aside. 3. The award is substituted with the following: "The members of NUMSA that embarked upon unprotected strike action on 9 October 2014 forfeit their entire project bonus for the period from 1 December 2013 to 30 November 2014." 4. No order as to costs.

An arbitrator commits a material error of law that renders an award unreasonable and reviewable when the arbitrator misconstrues the objectives of the LRA and a collective agreement, and fails to properly apply principles of interpretation of agreements. On interpretation of collective agreements: the court must apply the modern approach considering language, context, purpose and circumstances objectively; clear and unambiguous language must be respected; subjective considerations of fairness cannot override objective interpretation; different provisions contemplating different consequences for different types of conduct must be interpreted and applied separately and not artificially merged into one category; the context includes the objectives of the LRA (discouraging unprotected strikes) and the specific purposes and prohibitions in the agreement itself. Unprotected strike action, being prohibited by the LRA and violating its core objectives of orderly collective bargaining, is not part of the constitutional right to collective bargaining and may be treated more severely in collective agreements than other forms of misconduct. Where a collective agreement provides in clear language that employees who engage in rolling unprotected industrial action forfeit their project bonus, and no exceptions apply, employees forfeit the entire project bonus for the applicable period, not merely the bonus for the month in which the strike occurred.

The court noted that even though the applicant was successful, it did not consider it appropriate to burden the third respondents with a costs order, considering the ongoing relationship between the parties and the opportunity to bring finality to the matter. The court referenced the Constitutional Court guidance in Zungu regarding costs awards in employment disputes. The court also observed that the arbitrator's reasoning appeared to be unduly influenced by subjective considerations that he found it unpalatable for employees to forfeit their entire annual bonus for one strike incident, rather than remaining objective as required. The court noted that collective agreements have broader implications beyond the immediate parties to unions, employers, employees and the industry itself. The court commented that where fundamental rights under the Constitution are regulated by statute, those rights must be determined based on the statute's content, and direct reliance on constitutional provisions is not permissible - thus employees cannot claim unprotected strikes are protected as part of constitutional collective bargaining rights when the LRA prohibits such strikes.

This case is significant for clarifying the approach to reviewing CCMA awards where the arbitrator commits an error of law in interpreting collective agreements. It confirms that material errors of law render awards unreasonable and reviewable. The case provides important guidance on the interpretation of collective agreements, emphasizing that: (1) Clear and unambiguous language must be respected; (2) Context includes the objectives of the LRA and the specific agreement; (3) Different provisions contemplating different consequences for different conduct must not be artificially merged; (4) Subjective considerations of fairness cannot override objective interpretation; (5) Unprotected strike action is viewed seriously under the LRA and may be treated more severely in collective agreements. The case reinforces that unprotected strike action is not part of the constitutional right to collective bargaining but rather violates the LRA's objectives. It demonstrates the court's willingness to substitute awards where the factual matrix is common cause and the issue is essentially one of legal interpretation.