PREDATORY PRICING: SINGLE- FIRM DOMINANCE, EXCLUSIONARY ABUSE AND PREDATORY PRICES (PART 3)

Important pronouncements of legal principle were recently made by the Competition Appeal Court and Constitutional Court on the determination of predatory pricing under section 8 of the Competition Act 89 of 1998. These pronouncements must now be seen in the context of the subsequent commencement of the Competition Amendment Act 18 of 2018. In light of these developments, this three-part series of articles evaluate the law relating to the economic concept of predatory pricing under the Competition Act. In this context, the crucial elements of dominance and abuse are also discussed. The first in this series of three articles critically evaluated the law on the determination of single-firm dominance under section 7 of the Competition Act. The second article discussed the basic forms of abuse, the meaning of abuse, tests that have been developed to identify exclusionary conduct, the criticism of the traditional theory of predatory pricing, the main strategic economic theories of predatory pricing and non-pricing theories of predation. This article focuses on the law of predatory prices under section 8(1)(c) and 8(1)(d)(iv) of the Competition Act. Pursuant to section 1(3) of the Competition Act, when interpreting or applying the Competition Act, appropriate foreign and international law may be considered. This is complementary to section 1(2)(a), which directs that the Competition Act must be interpreted in a manner that is consistent with the Constitution and which gives effect to the purposes set out in section 2. In light hereof and where appropriate, the South African position is mainly compared with the position in the European Union and the United States.

The Judicial Control of a Cross-Border Merger approved by means of an abusive resolution

The fight for the control of the Mediaset group has given rise to several judicial decisions issued in various national jurisdictions and even by the European Court of Justice. Three orders of Spanish Courts have been of particular interest. Two of them were issued by a Commercial Court in Madrid and the third one was issued on appeal by the Provincial Appeal Court Madrid. They instructed the suspension of the shareholders meeting resolutions of the Spanish Mediaset company approving a cross-border merger. The content of this resolution was to approve the acquisition of the Spanish company by another company domiciled in the Netherlands thus changing the applicable law. The resolution approving the merger was presumed (provisionally) to be abusive and, eventually, null and void. The decisions of the Spanish Court were grounded on the fact that the articles of association of the resulting Dutch company would be detrimental to the minority in the Spanish company. This limits the freedom of establishment (Art. 49 TFEU) and is based on a multilevel scrutiny, resulting from the national laws applicable to each company that participates in the merger. Those judicial decisions handled with other issues of interest in company law, such as the conclusive effect of the registration of a cross-border merger, the legitimation of the minority to challenge shareholders resolutions, or the effects of a shareholders meeting resolution replacing a previous merger resolution that has been challenged before the courts.

Dopuszczalność orzeczenia przez sąd odwoławczy wyrokiem łącznym kary łącznej po raz pierwszy albo orzeczenia jej w zakresie innym niż orzekł sąd pierwszej instancji. Glosa do uchwały składu 7 sędziów Sądu Najwyższego z dnia 28 czerwca 2018 r. (I KZP 3/18, OSNKW 2018, nr 8, poz. 55)

<p>The commentary raises the problem of the admissibility of the issuing cumulative penalty in cumulative judgement by appeal court for the first time or issuing that penalty within the different scope of punishment, from the perspective of the power to alter decisions of a court of the first instance, the principle of two-instance court proceedings, access to court and the right of defence. By discussing the essence of the constitutional and convention provisions, the author attempts to answer the question what the scope of the appeal court’s power is to alter cumulative judgement issued in the first instance, by concluding that neither Article 176 (1) of the Polish Constitution, nor Article 6 of the European Convention on Human Rights (ECHR) and Article 2 of Protocol no. 7 to the ECHR supplementing its content, as well as Article 14 (5) of the International Covenant on Civil and Political Rights in principle stand in the way of such an approach, which should be reflected in the process of interpretation of Article 437 (2) of the Code of Criminal Procedure. However, in the author’s opinion, doubts arise, from the perspective discussed above, if the appellate court were to take into account, when imposing the cumulative penalty, a unit judgement unknown, for various reasons, to the court of first instance, to which a special part of the considerations and critical remarks is devoted.</p>

THE ROLE OF REASONABLENESS IN THE REVIEW OF LABOUR ARBITRATON AWARDS (PART 2)

This article is published in two parts. In the first part (published in the previous edition of Obiter) the general principles relating to administration review were established and the different forms of review considered. It was also established that the making of a CCMA arbitration award constitutes administrative action that is subject to the constitutional right to administrative justice; that justifiability is a constitutional requirement for just administrative action and that a failure to make a decision that is justifiable in terms of the reasons given may render an award reviewable in terms of section 145 of the LRA. This second part of the article will build on the conclusions of the first by focusing on setting out the key findings made by the CC in Sidumo v Rustenburg Platinum Mines Ltd (2007 12 BLLR 1097 (CC)) as regards the test for reviewing arbitration awards in terms of section 145 of the LRA. The purpose is to establish how reasonableness might best be understood and defined as well as to determine its implications for subsequent review proceedings. Case law that has sought to interpret and apply the principles established in Sidumo, will likewise be discussed in order to contextualise the place of reasonableness in the review of arbitration awards with a view better to understand its implications for the courts’ review function. Particular attention will be given to determining the applicability of the reasonableness standard to jurisdictional reviews. The principles laid down by the labour appeal court in Fidelity Cash Management Service v CCMA (2008 3 BLLR 197 (LAC)) will also be discussed with the objective of determining whether the court’s approach that an award is not reviewable because of flawed reasoning determining that the outcome is sustainable according to reasons identified in the record, and whether this finding is consistent with CC’s findings in Sidumo. It will also be considered whether the reasonableness standard as introduced by Sidumo will have any influence on the review of private arbitration awards in terms of section 33 of the Arbitration Act 42 of 19652 and whether parties can agree that an award would be reviewable on the same grounds and subject to the same test as a CCMA award. Finally, proposals will be made in respect of the interpretation and application of the reasonableness principle for the purpose of assisting in review proceedings to come.

BREACH OF A COLLECTIVE AGREEMENT: DOES THE LRA PROVIDE A REMEDY IN SECTION 24? Minister of Safety and Security v Safety and Security Sectoral Bargaining Council [2010] 6 BLLR 594 LAC

In a recent judgment of the Labour Appeal Court the application of section 24 of the Labour Relations Act (66 of 1995, hereinafter “the LRA”) was considered, and curtailed. In this case note the judgment of Minister of Safety and Security v Safety and Security Sectoral Bargaining Council ([2010] 6 BLLR 594 LAC, hereinafter “Minister of Safety and Security”) is evaluated. In addition, an amendment to section 24 is proposed with a view to clarifying the ambit of the dispute-resolution procedure contained in that section of the LRA.

NOT LETTING THEM WHISTLE: THE LABOUR APPEAL COURT’S APPROACH TO THE PROTECTED DISCLOSURES ACT AND PROTECTING PARLIAMENT’S EMPLOYEES

The Protected Disclosures Act 26 of 2000 was passed with the aim of protecting whistleblowers in the workplace. The decision of the Labour Appeal Court in Parliament of the Republic of South Africa v Charlton (2010 31 ILJ 2353) highlights the potential shortcomings of the Act which, if interpreted in the manner suggested by this court, could deprive many whistleblowing employees of the protection that they deserve. This article suggests that the Labour Appeal Court failed to have proper regard to the objectives of the Protected Disclosures Act, the essential principles contained in the Constitution and, more particularly the Bill of Rights as well as internationallaw. If it had, it would have been compelled to conclude that the Protected Disclosures Act can and should be interpreted as applying to disclosures concerning the misconduct of Members of Parliament by the employees of Parliament.

THE JURISDICTION OF THE LABOUR COURT IN INTERNATIONAL EMPLOYMENT CONTRACTS IN RESPECT OF WORKPLACES OUTSIDE SOUTH AFRICA

Does the Labour Court have jurisdiction to adjudicate disputes between a South African employer and a South African employee where the employee performs work for the employer in a foreign country? This is a question that should be considered, as one effect of globalisation is that South African employees are increasingly working for South African employers outside of South Africa. The difficulty is that the answer to the question is to be found in the area of private international law (conflict of laws) and that very few labour disputes involving private international law have been decided by South African courts. In 2002 in Kleynhans v Parmalat SA (Pty) Ltd (2002 9 BLLR 879 (LC)) and in 2005 in Parry v Astral Operations Ltd (supra) the Labour Court held that it did have the necessary jurisdiction to adjudicate disputes where the workplace was outside South Africa, provided that certain requirements are met. However, in Astral Operations Limited v Parry (2008 29 ILJ 2668 (LAC)) the Labour Appeal Court overturned the decision of the Labour Court. Zondo J reasoned that both the Labour Relations Act and the Basic Conditions of Employment Act do not have extra-territorial application in terms of the presumption against extra-territoriality and that, as the workplace was outside South Africa, the Labour Court, which was created by these two acts, did not have jurisdiction to adjudicate the matter. In this article I shall briefly discuss the four-stage private international law process of adjudication that should be followed in disputes where international employment contracts are involved. After that I shall discuss the judgments in Parry v Astral in the Labour Court and the decision in AstralOperations v Parry in the Labour Appeal Court as well as the effect of this decision. This will be followed by a discussion of the position regarding the jurisdiction of courts and tribunals adjudicating international employment disputes in the European Union, the United Kingdom and in Ontario, Canada. In conclusion, the judgment of the Labour Appeal Court in Astral Operations v Parry will be examined in the light of the constitutional right to fair labour practices and the necessity for employees to be protected in a globalised employment context in which multi-national enterprises operate across borders.

WHEN MEN WEAR DREADLOCKS TO WORK Department of Correctional Services v POPCRU [2012] 2 BLLR 110 (LAC)

The inclusion of constitutional rights within the ambit of the employment relationship raises new tensions between the enforcement of an employee’s right to gender equality, religious and cultural freedoms and an employer’s right to engage in free economic activity. The employer, in seeking to increase its productivity and efficiency, may insist on standards of uniformity in the manner in which employees dress to work. The employee, on the other hand, might find the insistence of these norms or uniformities in conflictwith his/her right to equality and/or religious or cultural freedoms. In this case, the courts were faced with the task of reconciling these tensions between the Department of Correctional Services and some of its employees. This note looks at the manner in which the Labour Court ([2010] 10 BLLR 1067; (2010) 31 ILJ 2433 (LC) and Labour Appeal Court dealt with the issue.

SHOULD REFUSAL TO WORK FOLLOWING BREACH OF CONTRACT BY THE EMPLOYER REALLY BE A STRIKE? National Union of Mineworkers on behalf of Employees v Commission for Conciliation Mediation and Arbitration (2011) 32 ILJ 2104 (LAC)

The employment relationship is by its very nature premised on the foundation of inherent inequality between the employer and the employee. The employer by virtue of the resources at its disposal is in a stronger position than the employee. One of the strong criticisms levelled against the common law has always been its indifference to this unequal division of power. The common law tends to deal with a contract of employment on the basis that it is an agreement entered into voluntarily and on equal footing bythe employer and the employee. Unsurprisingly, the common law regards terms that regulate the employment relationship as being freely entered into by the contracting parties. This assumption overlooks the inherent inequality that characterizes the employment relationship. It is on account of this assumption that the common law can be mostly associated with unfairness when it comes to the employment relationship. Nowhere is this assumption clearer than in cases of dismissal. In relation to dismissal all that the common law demands is that the dismissal must be lawful. This requirement is easily met if the employer merely provides the employee with a notice of the dismissal. Under the common law there is no mention of fairness as a requirement for a dismissal. In order to address the deficiencies of the common law, the legislature has enacted labour legislation like the Labour Relations Act (66 of 1995, hereinafter “the LRA”) which seeks to bring in some equilibrium in the employment relationship. It must also be said that the LRA provides partiesinvolved in the employment relationship with a framework within which employment issues must be addressed. This has resulted in a situation where in some instances there is a collision between the common law and the LRA. The critical question that emerges is whether the rights and remedies of the employees in the event of a breach of contract must be exclusively determined within the framework of the LRA. If the answer is in the affirmative then it means that the common law has lost some of its relevance in employment issues. This case note seeks to analyse the tension between the common law and the LRA in the context of employees withholding their labour on account of a breach of contract by the employer. It also seeks to analyse the implications of the approach adopted by the Labour Appeal Court in National Union of Mine Workers on behalf of Employees v Commission for Conciliation Mediation and Arbitration ((2011) 32 ILJ 2104 (LAC)).

CONSTRUCTIVE DISMISSAL: A TRICKY HORSE TO RIDE Jordaan v CCMA 2010 31 ILJ 2331 (LAC)

The concept of constructive dismissal is flexible because the circumstances that may give rise to it are “so infinitely various” (Minister of Home Affairs v Hambidge 1999 20 ILJ 2632 (LC) par 12). As such, there are no clear rules defining precisely when a constructive dismissal has taken place. The facts of each case must be established, interpreted and measured against general principles to determine whether the requirements for constructive dismissal have been met. The Labour Appeal Court (LAC), in the case of Jordaan v CCMA (2010 31 ILJ 2331 (LAC) 2335), made the point that the law has attained more certainty since Hambidge’s case. This is partially true. However, this case note shows that it remains difficult to set down hard and fast rules to determine the existence of a constructive dismissal. The Supreme Court of Appeal (SCA) has held that very strict proof of constructive dismissal is required, and it has not readily found that circumstances complained of by employees constitute such a dismissal. In the case of Old Mutual Group Schemes v Dreyer (1999 20 ILJ 2030 (LAC)) Conradie JA cautioned that constructive dismissal is not for the asking. He held that generally it will be difficult for an employee who resigns to show that he has actually been constructively dismissed, because the onus of proof on the employee in this regard is a heavy one. Jordaan’s case highlights just how hard it is to establish a viable claim of constructive dismissal. It shows that even where an employee experiences a loss of job security as a result of attempts by the employer to protect his business, and this leads to the employee’s resignation, it will not rise to the standard of constructive dismissal. The LAC saw Jordaan’s case as an attempt to “stretch the law relating to constructive dismissal” and held that this was not only inappropriate but that such an attempt “should not be contemplated” by future courts.