Automated Summary
Key Facts
Two employees, Mr. Mandla Ndlela and Mr. Michael Mkhize, were dismissed by Nestlé South Africa in May 2002. They entrusted their unfair dismissal claims to the Food and Allied Workers Union, which referred the dispute for conciliation in June 2002 but failed to lodge the claims in the Labour Court within the 90-day statutory deadline. The union's inaction caused the claims to lapse, and subsequent attempts to revive them were unsuccessful. The employees later sued the union for damages, and the KwaZulu-Natal High Court and Supreme Court of Appeal ruled in their favor. The union sought leave to appeal, arguing constitutional immunity under section 23(4)(a) of the Constitution and clause 5.11 of its constitution, but the Constitutional Court dismissed the application, finding no merit in the union's arguments.
Transaction Type
The dispute centers on a service agreement between the Food and Allied Workers Union and its members, where the Union undertook to represent employees in their unfair dismissal claims but failed to perform its obligations under the contract of mandate.
Issues
- The central issue is whether the Food and Allied Workers Union's constitutional right to determine its own administration (Section 23(4)(a) of the South African Constitution) can shield it from liability for breaching its contractual obligations to members. The Union argued that its constitution (Clause 5.11) allowed it to withdraw legal assistance when it deemed it no longer in its interest, even if this prejudiced members. The court rejected this, emphasizing that organisational autonomy does not imply immunity from damages for contractual breaches, particularly when the Union's failure to act within statutory deadlines (e.g., 90-day referral period to the Labour Court) directly harmed members. The judgment clarifies that while unions have autonomy, they remain liable for negligence or failure to fulfill agreed mandates.
- The court examined whether the Union's inaction—failing to refer the employees' unfair dismissal claims to the Labour Court within the 90-day statutory period and not applying for condonation—constituted a breach of its contract of mandate. The Union contended that its mandate only required eventual referral, not adherence to the deadline, and that employees could independently seek condonation. The court rejected this, holding that the mandate explicitly required timely action to preserve members' rights. The Union's withdrawal, based on an external legal opinion, was deemed a repudiation of the mandate, entitling employees to damages for the Union's negligence. The judgment underscores that contractual obligations under a mandate must be performed diligently, with timely execution critical to preventing prejudice.
Holdings
- The court determined that the union's failure to refer the employees' claims to the Labour Court within the 90-day deadline and its subsequent withdrawal without applying for condonation constituted a breach of the contract of mandate. The union's constitutional arguments were deemed without merit, as the right to self-determination does not override contractual obligations. The employees' weaker legal position post-deadline (requiring condonation) was a direct consequence of the union's negligence.
- The application for leave to appeal is dismissed with costs. The Constitutional Court found that the trade union's constitutional right to determine its own administration does not exempt it from liability for breaching its duty to members by failing to prosecute their unfair dismissal claims. The union's argument for immunity under section 23(4)(a) of the Constitution and clause 5.11 of its constitution was rejected, as the agreement to provide legal assistance implied an obligation to act in good faith and meet statutory deadlines. The employees are entitled to compensation for the union's breach of mandate.
Remedies
- The application for leave to appeal is dismissed with costs.
- Each of the employees was awarded R107,232 in damages, calculated as 12 months' salary and commissions, for the union's failure to properly prosecute their unfair dismissal claims.
Monetary Damages
107232.00
Legal Principles
The court held the trade union liable for breaching the contract of mandate by failing to act in good faith when withdrawing from representing employees. The union's constitutional right to determine its administration did not exempt it from the obligation to perform its contractual duties with honesty and diligence, particularly when its inaction prejudiced the employees' legal claims.
Precedent Name
- Relgate v Union Manufacturing Co (Ramsbottom) Ltd
- Ngcobo and Another v Food & Allied Workers Union
- Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration
- Maphango and Others v Aengus Lifestyle Properties (Pty) Ltd
- Wilkins N.O. v Voges
- Food & Allied Workers Union v Ngcobo N.O. and Another
Key Disputed Contract Clauses
Clause 5.11 of the Food and Allied Workers Union's constitution states that one of the union's aims is to provide legal assistance to members and officials where it deems it in the interest of the Union to do so. The Union argued this clause, in conjunction with its constitutional right to self-determination, allowed it to withdraw from representing members without liability if it no longer served its interest. The court rejected this, clarifying that while the clause grants the union discretion to provide legal assistance, it does not authorize withdrawal from existing mandates without fulfilling contractual obligations. The union's failure to refer claims within the statutory deadline and subsequent withdrawal constituted a breach of contract, incurring liability.
Cited Statute
- Constitution of the Republic of South Africa
- Labour Relations Act 66 of 1995
Judge Name
- Madlanga J
- Skweyiya J
- Jafta J
- Froneman J
- Cameron J
- Van der Westhuizen J
- Mhlantla AJ
- Moseneke DCJ
- Nkabinde J
- Zondo J
Passage Text
- [34] So clause 5.11 does not shield the Union. And even if we understand the provision as defining the Union's authority, at most it authorises the Union to give an undertaking to represent its members when it deems it in its interest to do so. It says nothing about the Union's entitlement to withdraw from that undertaking, once given. It does not imply a term into an agreement to provide legal assistance entitling the Union to withdraw with impunity. The clause gives the Union the freedom to contract to provide legal assistance, not the freedom not to perform its contracts.
- [38] Much more probably the party, when asked, would say, 'No, of course not, the claim must obviously be lodged in time, and failing to do so would violate our agreement.'
- [40] The Union's contention that the business of the mandate could still be performed also rests on a misappreciation of how its remissness impaired the employees' rights. It is true that the employees could themselves have applied for condonation. In fact, they could still do so now. Though it is by no means clear that condonation would be granted, I assume in favour of the Union, along the lines of the dissenting judgment in the Supreme Court of Appeal, that it would. This does not rescue the Union from its predicament.
Damages / Relief Type
Compensatory Damages awarded: R107,232 each to employees for breach of contract by the union