IMATU obo J Nathan v Polokwane Local Municipality

IMATU acted on behalf of its member, Jeremy Nathan, a Superintendent in the Swimming Pool Section of the Municipality. Nathan lodged a grievance on 19 September 2016 regarding the grading of his position, claiming he was at post level 10 while other superintendents at the Municipality were graded at post level 6, which he claimed was unfair and discriminatory on the basis of equality. The grievance proceeded through the Municipality's Grievance Procedure contained in the Main Collective Agreement 2015-2020 concluded in SALGA. On 24 January 2017, the acting municipal manager, Mr Lubbe, recorded on the grievance form that he agreed the practice was not fair and that Nathan should be placed on post level 6 with immediate effect. This was signed by both Lubbe and the IMATU shop steward. Despite the agreement, the Municipality failed to implement it. On 24 May 2017, the municipal manager, Mr Makobe, issued a letter purporting to "rescind" Mr Lubbe's decision, arguing it was ill-informed and violated sections 51 and 66 of the Local Government Municipal Systems Act. IMATU then brought an application to make the settlement agreement an order of court in terms of section 158(1)(c) of the LRA. The Municipality filed its answering affidavit late and sought condonation.

• Whether the Municipality's late filing of the answering affidavit should be condoned
• Whether the agreement recorded on 24 January 2017 constituted a valid settlement agreement for purposes of sections 158(1)(c) and 158(1A) of the LRA
• Whether the agreement complied with common law requirements for a valid contract
• Whether the agreement settled a dispute that a party had the right to refer to arbitration or the Labour Court
• Whether the grievance procedure could be used to resolve an unfair labour practice or discrimination dispute
• What the legal effect was of Mr Makobe's letter purporting to rescind Mr Lubbe's decision

1. The respondent's late delivery of the answering affidavit is condoned. 2. The settlement agreement concluded on 24 January 2017 is made an order of this Court. 3. There is no order as to costs.

For a settlement agreement to be made an order of court under section 158(1)(c) and 158(1A) of the LRA, it must comply with: (1) common law requirements for a valid contract (offer and acceptance, parties ad idem on terms, animus contrahendi); and (2) statutory requirements in section 158(1A) (agreement in writing, settling a dispute, concerning a dispute that a party has the right to refer to arbitration or the Labour Court, excluding organizational rights and essential/maintenance services disputes). A repudiation of a contract does not dissolve the contract; it grants the innocent party the option to either accept the breach and sue for damages, or hold the repudiator to the contract and require specific performance. If the innocent party rejects the repudiation, the contract and obligations remain intact. Grievance procedures in collective agreements may be used to resolve disputes concerning unfair labour practices or discrimination, provided the parties reach consensus through the procedure. A dispute concerning equal treatment/unequal pay based on a comparison to similar positions constitutes a dispute of right (unfair discrimination under section 6(4) of the Employment Equity Act) that may be referred to arbitration or the Labour Court, and settlements of such disputes may be made orders of court under section 158(1)(c) and (1A) of the LRA.

The Court expressed strong displeasure with the Municipality's flagrant disregard for the prescribed time periods without adequate explanation, noting that such conduct severely impacts on the expeditious resolution of disputes. The Court noted it would only grant condonation because of the unique circumstances of the case. The Court observed that the language used in the original formulation of the dispute was inelegant but suggested an unfair discrimination complaint rather than simply an unfair labour practice. The Court noted that the questions whether the positions were in fact the same, similar or of equal value, and whether Nathan was treated differently on a prohibited or arbitrary ground, may not have been properly considered, but Mr Lubbe nevertheless agreed to resolve the dispute. The Court observed that had Nathan simply complained about his post grading level without comparison to other similar positions, the dispute might have concerned a matter of mutual interest rather than a right, and would fall outside the scope of section 158(1A).

This case is significant in South African labour law for several reasons: (1) It clarifies the requirements for making a settlement agreement an order of court under section 158(1)(c) read with section 158(1A) of the LRA, confirming that the agreement must comply with both common law requirements for a valid contract and the statutory requirements (written, settling a dispute that could be referred to arbitration/Labour Court, excluding organizational rights and essential/maintenance services disputes). (2) It establishes that grievance procedures in collective agreements may be used to resolve disputes that could otherwise be categorized as unfair labour practices or unfair discrimination disputes, provided the parties reach consensus. (3) It demonstrates the distinction between rescission/cancellation of a contract and repudiation, and the remedies available to the innocent party. (4) It illustrates the Court's approach to condonation applications involving flagrant disregard of court rules, balancing the need for discipline with the interests of justice. (5) It clarifies that section 158(1A) does not require that a dispute must have been referred to a council/CCMA or Labour Court, only that it must be a dispute that could be so referred.