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RE: LABOUR COURT APPLICATION – SOLIDARITY// MEIBC AND OTHERS CASE NO. J2924/2016

1. We refer to the above matter and confirm that the Labour Court delivered a written judgment (which is also reported) in this matter earlier today.

2. You will recall that Solidarity lodged an application during the course of 2016 with the Labour Court for purposes of saving the MEIBC from being wound up under the Labour Relations Act, 66 of 1995 as amended (LRA), and it sought an order to the effect that the MEIBC be placed under administration and an Administrator be appointed with powers similar to those of a business rescue practitioner under the Companies Act.

3. In its analysis of the merits, the Labour Court recognized that although the LRA does not make specific provision for a bargaining council to be placed under administration, such a process is a necessary intervention and assistance to bringing back the bargaining council on track so that it can fulfill the purpose for which it was established.

4. In view of the above, the Court made an order in the following terms:

a. An Administrator is hereby appointed for the MEIBC in the person of senior CCMA Commissioner Mr. Afzul Soodebaar.

b. The term of appointment of the Administrator shall be for a period of six (6) months from date of the court order.

c. The term of appointment of the Administrator in terms of (b) above may be extended for a further period as agreed to by the MANCO in consultation with the Department of Labour; or in the absence of such agreement, by way of an order of the Labour Court made on application by any of the parties to the MEIBC, with proper notice of the application being given to all other parties to the MEIBC.

d. For the entire term of the appointment of the Administrator, including any
extension(s) thereof, the MEIBC and MANCO shall resort under the Chairmanship of the Administrator who, in collaboration with the MANCO, shall manage the MEIBC. In the event of any dispute arising between the Administrator and MANCO about a managerial or financial issue and function of or relating to the MEIBC, the decision of the Administrator shall prevail and shall bind the MEIBC.

e. The Administrator shall be remunerated out of the funds of the MEIBC on the tariff as prescribed by the Companies Act No 71 of 2008 applicable to business rescue practitioners.

f. The Administrator shall have the following powers:

i. The Administrator shall have full management control of the MEIBC in collaboration with MANCO, but in the event of a dispute, in substitution of MANCO.

ii. The Administrator may delegate any management function to a person who is part of the existing management of the MEIBC, or to such other person that the Administrator deems appropriate, after consultation with MANCO.

iii. Subject to the financial procedures of the MEIBC, as read with any changes required by the order, the Administrator shall control the funds of the MEIBC and take control of and operate or close existing bank accounts of the MEIBC.

iv. The Administrator shall develop a plan on the prospects of rehabilitating the MEIBC to solvency and functionality, which plan is to be furnished to MANCO and the Department of Labour within a period of four (4) months from the date of the court order.

v. The Administrator must ensure that MANCO considers, with a view of adopting within six (6) weeks of the date of the court order, a budget for 2017/18 period.

vi. If MANCO fails to adopt the budget under (v) above, the Administrator shall determine this budget, after considering any representations by the parties to the MEIBC.

vii. The Administrator shall be responsible for overseeing the recruitment of a new General Secretary of the MEIBC, in consultation with MANCO and a selection committee to be appointed from amongst the members of the MANCO, which shall include both employer and employee party representatives.

viii. Following consultation with MANCO, the Administrator is authorized, during his term of office, to apply to the Labour Court for an amendment, amplification or clarification of powers granted to the Administrator in terms of this order, in the event that it is necessary to do so for the purposes of the effective management of the MEIBC.

5. SEIFSA welcomes this decision by the Labour Court, which we consider as a victory towards saving the MEIBC for the proper administration of the Metals and Engineering Industries Sector.

We trust that you find the above in order.

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