Hogan Lovells Publications | Routledge Modise | 29 November 2013
Trade Unions – Liable for Negligence in Not Properly Dealing With Members Claim
The Constitutional Court found on 9 October 2013 that a trade union is liable for negligence to prosecute claims by its members.
The facts in the FAWU v Ngcobo and Mkhize decision are briefly as follows. FAWU represented two of its members, who were employed by Nestlé in an unfair dismissal claim. FAWU referred the dispute timeously to the CCMA. The conciliation was not successful. FAWU obtained a certificate of deadlock and had 90 days within which to refer the dispute to the Labour Court. As often happens, unions refer claims late. In this case, FAWU simply did not refer the dispute. When the two members obtained legal advice, their attorneys demanded that FAWU refer the dispute to the Labour Court and apply for condonation for the late filing. The union simply failed to respond to the demand. The attorneys issued summons against FAWU on behalf of their clients.
The High Court awarded damages of 12 months' remuneration to each dismissed employee. The court held that the union had an obligation to prevent prejudice to its members where it agreed to assist them. FAWU appealed the judgment. The majority of the Supreme Court of Appeal (SCA) found in favour of the two members. The SCA found that FAWU was obliged to perform its functions faithfully, honestly, and with care and diligence, in a manner no different in how an attorney is to discharge his/her duties towards a client.
The Constitutional Court dismissed the appeal by FAWU. The court found that, even if the trade union was permitted to withdraw from a matter where it agreed to represent its members, it was still obliged to take such a decision in good faith and inform the members timeously. It was obliged to act in good faith and could only withdraw if the members could fulfil the mandate previously given to the trade union.
This is a significant judgment, and for the first time, confirms the responsibility trade unions owe to their members. It is an important victory for union members who are now not without remedy when faced with negligent conduct by their unions.
The signal given by the decision is that all representatives within the labour relations arena, who provide advice, must act professionally and diligently. A similar outcome would have been reached had the tables been turned and it was an employer who sought relief for negligence in the conduct of a matter by an employers' organisation (of which the employer was a member) or an industrial relations consultancy (of which the employer was a client).
Employers' organisations and industrial relations consultancies are well advised to ensure that they have appropriate levels of indemnity insurance cover in place to limit potential negligence claims.
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