Intasol Tailings (Proprietary) Limited v Commission for Conciliation, Mediation and Arbitration and Others

Intasol Tailings (Pty) Ltd operates in three business areas: depositing tailings onto tailings storage facilities, hydro-mining, and providing advisory services. The Bargaining Council for the Civil Engineering Industry contended that Intasol's activities fell within its registered scope and that the company must comply with its collective agreements. Intasol disputed this, arguing it does not fall within the definition of the civil engineering industry and alternatively that its business falls within the exclusion for the mining industry because it operates tailings storage facilities primarily to win minerals for clients through hydro-mining activities. After the bargaining council sought to enforce registration and compliance, a section 62(1) LRA demarcation dispute was referred for arbitration. The arbitrator (third respondent) ruled that Intasol's employees fell within the bargaining council's registered scope and were bound by its collective agreement. Intasol brought a review application. Evidence showed that Intasol does not design or construct tailings dams (which is done by civil engineers) but operates them by receiving, distributing and placing tailings, decanting water, and returning water to process plants. Hydro-mining, which forms the main focus of Intasol's business, involves using high-pressure water to mine existing tailings facilities, producing slurry for mineral extraction. Intasol competes with other tailings operators and mines, not civil engineering firms, employs no civil engineers, bargains with mining unions, and is regulated by the Department of Mineral Resources under mining legislation.

• Whether Intasol's activities fall within the registered scope of the Bargaining Council for the Civil Engineering Industry
• Whether Intasol's employees are bound by the bargaining council's collective agreement
• The proper interpretation of 'civil engineering industry' as defined in the bargaining council's main agreement
• Whether the reference to 'tailings dams' in the definition of civil engineering industry extends to all activities associated with tailings dams or only to design and construction
• Whether Intasol's activities constitute work of a 'civil engineering character normally associated with the civil engineering sector'
• Whether the arbitrator committed reviewable irregularities in his approach to the evidence and demarcation exercise
• The proper approach to section 62 demarcation disputes under the Labour Relations Act

1. The award issued by the third respondent on 9 November 2020 under case number HO 534-19 is reviewed and set aside. 2. The award is substituted with a finding that the business of the applicant falls outside of the registered scope of the Bargaining Council for the Civil Engineering Industry. 3. The second respondent is to pay the costs of the proceedings, including costs of the applicant's expert witness and costs of senior counsel. 4. The registrar is directed to forward a copy of the judgment to the director of the National Economic Development and Labour Council (NEDLAC).

For work to fall within a bargaining council's registered scope defined as an 'industry in which employers and employees are associated for the purposes of carrying out work of a [particular] character normally associated with [that] industry', the threshold enquiry is whether the employer is associated with employees for the purpose of carrying out activities or work normally associated with that sector. The reference to specific activities (such as 'tailings dams') in a definition must be read in context of the requirement that the work be 'of a civil engineering character normally associated with the sector'. Such references are limited to work ordinarily undertaken by the relevant profession in that context (e.g., design and construction of tailings storage facilities and engineering work related to structural integrity), not all activities that may be connected to or result from such structures. Specialized operational activities that require distinct skills, are performed by different competitors, involve different regulatory frameworks, and serve different primary purposes (such as mineral extraction rather than construction) do not fall within a sectoral scope merely because they relate to structures that may be designed by that sector. In section 62 demarcation disputes, arbitrators must: properly identify the employer's activities; interpret the defined scope; conduct a proper appraisal of all evidence; and determine the 'best fit' by grouping 'like with more or less like', which may involve considerations beyond pure definitional matching.

The court observed (without deciding, as it was unnecessary given its conclusion) that given the undisputed evidence regarding the focus of Intasol's business on hydro-mining and the nature and purpose of the hydro-mining process (being the extraction of minerals), it is likely that Intasol is engaged in mining-related activities broadly speaking. The court also noted concerns about the poor drafting of the definition in the bargaining council's main agreement, particularly the unclear relationship between the exclusions in subparagraph 2.1(f) and whether they apply to all preceding subparagraphs or only to the preamble. Van Niekerk J commented on the sui generis character of section 62 demarcation proceedings, noting they are not adversarial contests in the ordinary sense but presuppose a broader investigative role by the arbitrator. The court also observed that the concerns expressed by the mining industry (then Chamber of Mines) during the NEDLAC process related to engineering activities in open cast and open pit mines, activities in which Intasol was not involved.

This judgment provides important guidance on the approach to section 62 demarcation disputes under the LRA. It clarifies that demarcation is not merely a word-matching exercise but requires: (1) identification of the employer's actual activities; (2) interpretation of the defined scope; (3) a 'best fit' determination that may involve policy considerations; and (4) an assessment of whether the work is of a character 'normally associated with' the defined sector. The judgment emphasizes that demarcation requires proper engagement with evidence and that arbitrators cannot rely on assumptions or superficial analysis. It also establishes that specialized operational activities (even if connected to structures that may be designed by a particular profession) do not automatically fall within that profession's sectoral scope. The case has implications for the mining and civil engineering sectors, particularly regarding outsourced specialist operations. The distinction drawn between design/construction work and operational work has broader application beyond the tailings context.