Greathead, Brian Courtney v South African Commercial Catering & Allied Workers Union

The respondent union and Metcash Trading Limited concluded an agency shop agreement on 2 July 1997 in terms of section 25 of the Labour Relations Act 66 of 1995. The agreement required Metcash to deduct an agreed monthly agency fee from the wages of non-union member employees and remit these fees to the union. The appellant, employed by Metcash as a retail adviser, was one of the affected employees. He strongly opposed the union and its policies and objected to the imposition of the agreement on constitutional grounds, arguing it contravened his right to freedom of association under section 18 of the Constitution and freedom of political choice under section 19(1). The appellant launched an application in the Witwatersrand Local Division against Metcash and the union seeking to declare the agreement unenforceable. The court a quo dismissed the application with costs on the ground that it was limited to an attack on the concluded agreement and not on the constitutionality of section 25 of the Act. The court a quo nonetheless granted leave to appeal.

• Whether the agency shop agreement complied with the mandatory requirements of section 25(3) of the Labour Relations Act 66 of 1995
• Whether an agency shop agreement that does not expressly provide for the matters required by section 25(3) can be regarded as substantially compliant
• Whether the agreement could be rectified to incorporate the missing statutory requirements
• Whether a factual/legal issue may be raised for the first time on appeal
• Whether the appellant waived his right to rely on non-compliance with section 25(3)

1. The appeal is upheld with no order as to the costs of appeal. 2. The order of the court a quo is set aside and replaced by the following order: (a) The agency shop agreement entered into between the first and second respondents on 2 July 1997 is declared to be unenforceable. (b) The second respondent is ordered to pay the applicant's costs, such costs to include those consequent upon the employment of two counsel.

An agency shop agreement concluded in terms of section 25 of the Labour Relations Act 66 of 1995 is binding 'only if' it expressly provides for all the matters specified in section 25(3). The required provisions must be expressly recorded in the written agreement itself and cannot be incorporated by mere reference to the statute or by implication from references to memoranda or to the Act. Where an agency shop agreement fails to comply with the mandatory requirements of section 25(3), it is formally invalid and unenforceable. Rectification is not competent as a remedy where an agreement is invalid for want of compliance with statutory formalities. An appellate court is entitled and obliged to raise a point of law relating to statutory validity mero motu where the facts are common cause and no unfairness results to the parties.

The Court noted that it was evident from the Constitutional Court's decisions in S v Mhlungu, S v Vermaas, Zantsi v Council of State, and Motsepe v Commissioner for Inland Revenue that where it is possible to decide any case without reaching a constitutional issue, that is the course which should be followed. The Court also observed that a party cannot, by abandoning a law point as to statutory validity, in effect compel the court to condone non-compliance with statutory requirements. In addressing costs, the Court noted that where an appellant succeeds on a new ground not raised in the court a quo, the appropriate order may be to make no order as to costs of appeal but to order costs in the court a quo in favor of the successful party, following the approach in Argus Printing and Publishing Co Ltd v Die Perskorporasie van Suid-Afrika Bpk.

This case establishes important principles regarding agency shop agreements under the Labour Relations Act 66 of 1995. It confirms that compliance with section 25(3) is mandatory and that the agreement is binding 'only if' it provides for all the specified requirements. The case establishes that the required provisions must be expressly recorded in the agreement itself and cannot be incorporated merely by reference to the statute or by implication. It also confirms that rectification is not available as a remedy where an agreement is formally invalid for non-compliance with statutory formalities. The case demonstrates the approach South African courts take to avoiding constitutional issues where a matter can be decided on other grounds, and illustrates the circumstances in which an appellate court may raise a point mero motu (on its own initiative) without causing unfairness to the parties.