BINDING EFFECT OF PRECEDENTS

CASE LAW FOR COMMISSIONERS

First Edition

November 2012

INDEX 01 RELEVANCE OF LRA AND LABOUR CASE LAW

Giving meaning to the right to fair labour practices 0101 NEHAWU v University of Cape Town & others (2003) ILJ 95 (CC)

Sidumo and another v Rustenburg Platinum Mines Ltd & others (2007) 28 ILJ 2405 (CC); [2007] 12 BLLR 1097 (CC)

0103 National Union of Metalworkers of South Africa v Vetsak Co-Operative Ltd and others 1996 (4) SA 577 (A); 1996 17 ILJ 455 (A)

Binding effect of precedents

0104 Gcaba v Minister of Safety & Security & others (2010) 31 ILJ 296 (CC); [2009] 12 BLLR 680 (CC)

0105 Robin Consolidated Industries Ltd v Commissioner for Inland Revenue 1997 (3) SA 654 (SCA)

0106 Le Roux v CCMA & others [2000] 6 BLLR 680 (LC) Daniels v Campbell NO & others 2004 (5) SA 331 (CC)

0111 Maarten & others v Rubin NO & others [2001] 2 BLLR 162 (LC) at 168F

Determining fairness - the Sidumo case 0112 Sidumo and another v Rustenburg Platinum Mines Ltd & others (2007) 28 ILJ 2405 (CC);

[2007] 12 BLLR 1097 (CC) 02 COMMENCEMENT AND TERMINATION OF EMPLOYMENT

Existence of employment relationship after contract but before work commences 0201 Wyeth SA (Pty) Ltd v Manqele & others (2005) 26 ILJ 749 (LAC) 0202 Bayat v Durban Institute of Technology (2006) 27 ILJ 188 (CCMA) Offers to resign and resignations 0203 Esack & another v Commission on Gender Equality (2000) 21 ILJ 467 (W) 0204 Shanaaz Achmat v Umgeni Local Council (formerly Howick Local Council), unreported

award dated 24 July 2006 in Case No KN 7727-02: Lottering & others v Stellenbosch Municipality (2010) 31 ILJ 2923 (LC)

2006 African National Congress v Municipal Manager, George Local Municipality & others [2010] 3 BLLR 221 (SCA)

Retirement

0207 Kirsten and Southern Cross Manufacturing CO Ltd t/a Southern Cross Industries (2006) 27 ILJ 2471 (CCMA

0209 Rubin Sportswear v SACTWU & others (2004) 15 ILJ 1671 (LAC) 03 JURISDICTION

General 0301 Gcaba v Minister of Safety & Security & others (2010) 31 ILJ 296 (CC); [2009] 12 BLLR

680 (CC) par 74 0302 SA Maritime Safety Authority v McKenzie [2010] 5 BLLR 488 (SCA) 0303 Makhanya v University of Zululand (218/08) [2009] ZASCA 69 (29 May 2009) 0306 BHT Water Treatment v CCMA & others [2002] 2 BLLR 173 (LC)

Territorial jurisdiction 0307 Astral Operations Ltd v Parry (2008) 29 ILJ 2668 (LAC)

Jurisdiction limited to certain parties – not independent contractors 0309 SABC v McKenzie [1999] 1 BLLR 1 (LAC) at 4 -7

Jurisdiction limited to certain parties – genuine clients of temporary employment services excluded

0312 State Information Technology Agency (SITA) (Pty) Ltd v CCMA & others (2008) 29 ILJ 607 (LAC) Unfair labour practice jurisdiction limited to employees

0314 Sithole v Nogwaza NO & others (1999) 20 ILJ 2710 (LC); [1999] 12 BLLR 1348 (LC) 0315 Velinov v University of Kwazulu-Natal & others (2006) 27 ILJ 177 (LC) 0316 MEC for Tourism, Environmental & Economic Affairs, Free State v Nondumo & others

[2005] 10 BLLR 974 (LC)

Jurisdiction limited to certain parties – illegal workers not excluded 0318 ‘Kylie’ v CCMA and others (2010) 31 ILJ 1600 (LAC) 0319 Johnson & Johnson (Pty) Ltd v CWIU (1999) 20 ILJ 89 (LAC) at para 41

Jurisdictional limitations - Nature of dispute 0322 De Beers Consolidated Mines Ltd v CCMA & others [2000] 5 BLLR 578 (LC) 0323 NEWU v CCMA & others [2004] 2 BLLR 165 (LC) United National Public Servants Association of SA v Digomo NO & others [2005] 12 BLLR

1169 (SCA) Ntlabezo & others v MEC for Education, Eastern Cape and others [2002] 3 BLLR 274 (Tk) Mzimni & another v Municipality of Umtata [1998] 7 BLLR 780 (Tk)

Unfair labour practices perpetrated against an employer 0324 NEWU v CCMA & others (supra)

Short time 0325 SACTWU obo Ndlangisa & others v Prowood Clothing [2005] 9 BALR 936 (NBCCMI)

Upgrading of salary scales

0326 Ntlabezo & Others v MEC for Education, Eastern Cape & Others [2002] 3 BLLR 274 (Tk)

Equal pay for equal work 0328 Louw v Golden Arrow Bus Services (Pty) Ltd [2000] 3 BLLR 311 (LC) 0330 Heysen v Armsrong Hydraulics (Pty) Ltd [2000] 12 BLLR 1444 (LC)

Victimisation 0331 Nawa and another v Department of Trade and Industry [1998] 7 BLLR 701 (LC)

Interpretation of settlement agreements 0332 Drummer and Polaris Capital (2009) 30 ILJ 2179 (CCMA)

Spilhaus & Co (WP) Ltd v CCMA & others [1997] 8 BLLR 1116 (LC) First National Bank Ltd (Wesbank Division) v Mooi NO & others (2009) 30 ILJ 336 (LC)

0333 Sivraj v Caspian Freight CC (Case Nos: KZNRFBC 2390 and KZNRFBC 9092)

Settlement agreements – interpretation when arbitrating other disputes 0334 Mohale v Net 1 Applied t/a Cash Paymaster Services Northern (Pty) Limited (unreported

Case No J1981/2010) Ruling whether settlement agreement induced by fear 0337 Rambado and EZ Shuttle (Pty) Ltd (2012) 33 ILJ 1016 (CCMA) 0338 Arend & another v Astra Furnishers (Pty) Ltd 1974 (1) SA 298 (C)

Makiwane v International Healthcare Distributors (2003) 24 ILJ 2150 (LC)

Interpretation and application of collective agreements 0339 NEHAWU / Department of Health Northern Cape Provincial Administration [2005] 10

BALR 1056 (PSCBC) NEHAWU / Department of Social Services and Population Development [2005] 11 BALR

1140 (PSCBC) 0340 Public Servants Association /Provincial Administration Western Cape [2001] 5 BALR 497

(CCMA) 0341 Minister of Safety and Security v SSSBC & others [2010] 6 BLLR 705 (LAC)

When arbitration has to be requested and what is the time limit 0342 Ceramic Industries Ltd v CCMA & another [2005] 12 BLLR 1235 (LC) 0343 Indoor Amusements (Pty) Ltd v CCMA & others (2004) 25 ILJ 2205 (LC)

Effect of certificates of outcome

0344 Fidelity Guards Holdings (Pty) Ltd v Epstein and others [2000] 12 BLLR 1389 (LAC); (2000) 21 ILJ 2382 (LAC)

0345 Velinov v University of Kwazulu-Natal & others (2006) 27 ILJ 177 (LC) EOH Abantu (Pty) Ltd v CCMA & others (2008) 29 (ILJ) 2588 (LC) (A.C. Basson J)

Avgold - Target Division v CCMA & others (2010) ILJ 924 (LC); [2010] 2 BLLR 149 (LC) 0349 Bombardier Transportation (Pty) Ltd v Lungile Mtiya NO & others [2010] 8 BLLR 840 (LC)

Whether employment relationship should be proved at conciliation 0351 EOH Abantu (Pty) Ltd v CCMA & others (2010) 31 ILJ 937 (LC); [2010] 2 BLLR 172 (LC)

(Cele J) Dempster v Kahn NO & Others (1998) 19 ILJ 1475 (IC)

0352 Bombardier Transportation (Pty) Ltd v Lungile Mtiya NO & others [2010] 8 BLLR 840 (LC)

Effect of a premature referral of a dismissal dispute 0353 Avgold - Target Division v CCMA & others (2010) ILJ 924 (LC); [2010] 2 BLLR 149 (LC)

Powers of the arbitrator 0354 Shoredits Construction (Pty) Ltd v Pienaar NO and others 1995 (16) ILJ 390 at 393 0355 Reunert Industries (Pty) Limited t/a Reutech Defence Industries v Naicker and others

[1997] 12 BLLR 1632 (LC) 0356 Tao Ying Metal Industry (Pty) Ltd v Pooe NO and others (2007) 28 ILJ 1949 (SCA) 0357 Equity Aviation Services Pty (Ltd) v CCMA & others (2008) 29 ILJ 2507 (CC) Republican Press v CEPPWAWU (2007) 28 ILJ 2503 (SCA); [2007] 11 BLLR 1001 (SCA)

Bargaining Council cases – section 147 discretion 0360 Pankana CC t/a R & W Transport Components v Dreyer NO & others (2012) 33 ILJ 692

(LC)

Belated allegation that union activities was reason for dismissal 0365 Evan Gordon Enterprises (Pty) Ltd v Phetla NO & others (2012) 33 ILJ 229 (LC) 0665

04 REPRESENTATION Legal representation in cases of dismissal for misconduct or incapacity 0401 Afrox Ltd v Laka & others [1999] 5 BLLR 467 (LC)

Commuter Handling Services (Pty) Ltd v Mokoena & others [2002] 9 BLLR 843 (LC) Vaal Toyota (Nigel) v MIBCO and others [2002] 10 BLLR 936 (LAC)

0402 Strydom v CCMA and others [2004] 10 BLLR 1032 (LC)

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Fellow member of employers’ organisation 0404 AHI Employers’ Organisation obo Members v CCMA; AHI Employers’ Organisation obo

Members & Others v CCMA & Others (Case Nos.J656/2011 and JR2518/2010 05 CONCILIATION

Non binding nature of categorisation of dispute 0501 National Union of Metal Workers of SA & others v Driveline Technologies (Pty) Ltd (2000)

21 ILJ 142 (LAC) 0502 Ingo Strautmann v Silver Meadows Trading 99 (Pty) Ltd t/a Mugg and Bean Suncoast

(unreported, D412/07) 0503 Goldfields Mining S A (Pty) Ltd (Kloof Gold Mine) v CCMA and other [2010] 2 BLLR 149

(LC) Dismissal of matter at conciliation – whether competent

0504 Premier Gauteng & another v Ramabulana N.O & others (2008) 29 ILJ 1099 (LAC)

Telephonic conciliations permissible

0505 GIWUSA on behalf of Heyneke v Klein Karoo Kooperasie Bpk (2005) 26 ILJ 1083 (LC) 0506 Kasipersad v CCMA & others [2003] 2 BLLR 187 (LC)

06 CON-ARB 0601 Pioneer Foods (Pty) Ltd v CCMA & others (unreported Labour Court judgment in Case

No C265/10)

07 ARBITRATION

Duties of commissioner 0701 Sondolo IT (Pty) Ltd v Howes & others [2009] 5 BLLR 499 (LC) 0702 Cash Paymaster Services (Pty) Ltd v Paul Shabangu NO & others (Unreported Case

D324/03 heard on 15 March 2005) 0703 Klaasen v CCMA & others [2005] 10 BLLR 964 (LC) Scholtz v Maseko NO & others [2000] 9 BLLR 1111 (LC) 0704 Heroldt v Nedbank Ltd [2012] 9 BLLR 857 (LAC) Rulings on merits not binding on succeeding commissioner 0705 Sondolo IT (Pty) Ltd v Howes & others [2009] 5 BLLR 499 (LC) Absolution from the instance 0706 Minister of Safety and Security v Madisha and others (Unreported Case No JR161-07) Postponements 0707 National Police Service Union and others v Minister of Safety and Security and

Others 2000(4) SA 1110 (CC) Moshela v CCMA & others (unreported; Labour Court Case No JR1524/06)

Contempt of the commission 0708 Bargaining Council for the Clothing Manufacturing Industry & another v Prinsloo

[2007] 9 BLLR 825 (LC)

Interpreter 0710 Mabitsela v Department of Local Government & Housing & others [2012] 8 BLLR

790 (IC)

Costs 0711 Van den Berg v SA Police Service (2005) 26 ILJ 1723 (LC)

Withdrawals 0714 Ncaphayi v CCMA & others (2011) 32 ILJ 402 (LC) 0715 Kgobokoe v CCMA & others (2012) 33 ILJ 235 (LC

08 EVIDENCE

Parol evidence 0801 Denel (Pty) Ltd v Gerber [2005] 9 BLLR 849 (LAC) 0802 Fidelity Cash Management Services v Commission for Conciliation, Mediation and

Arbitration and others [2008] 3 BLLR 197 (LAC)

Hearsay 0803 The Sisonke Partnership t/a International Healthcare Distributors v National Bargaining

Council for Chemical Industry & others Case No: JR2766/07 Evaluating evidence

0804 SFW Group Ltd & another v Martell et Cie & others 2003 (1) SA 11 (SCA) Enviroserv Waste Management (Pty) Ltd v Mosime N.O. & others (Case No: JR 644/07) Sasol Mining (Pty) Ltd v Ngqeleni NO & others (2011) 32 ILJ 723 (LC)

0805 Masilela v Leonard Dingler (Pty) Ltd (2004) 25 ILJ 544 (LC)

Polygraph tests 0806 Sedibeng Local Municipality v SALGBC & others (Unreported Labour Court Case No JR

1559-09 dated 31 May 2012 0807 Truworths Ltd v Commission for Conciliation, Mediation and Arbitration (2009) 30 ILJ 677

(LC) 0808 National Union of Mineworkers & Others v Coin Security Group (Pty) Ltd t/a Protea Coin

Group (2011) 32 ILJ 137 (LC) Food & Allied Workers Union on behalf of Kapesi & others v Premier Foods Ltd t/a Blue Ribbon Salt River (2010) 31 ILJ 1654 (LC)

0809 SA Transport & Allied Workers Union & Others v Khulani Fidelity Security Services (Pty) Ltd (2011) 32 ILJ 130 (LAC)

09 RESCISSION

Rescission of certified awards 0901 Gois t/a Shakespeare’s Pub v Van Zyl & others (2003) 24 ILJ 2302 (LC); [2003] 11 BLLR

1176 (LC)

Grounds for rescission 0902 Shoprite Checkers (Pty) Limited v CCMA and others (2007) 28 ILJ 2246 (LAC); [2007]10

BLLR 917 (LAC) 0904 Northern Province Local Government Association v CCMA and Others [2001] 5 BLLR

539 (LC) at 545 0905 MM Steel Construction CC v Steel Engineering and Allied Workers Union of SA and

Others (1994) 1 5 ILJ 1310 (LAC) 0906 Lumka and Associates v Maqubela (2004) 25 ILJ 2326 (LAC) 0907 Northern Training Trust v Maake & others (2006) 27 ILJ 828 (LC) 0909 Tshivhase Royal Council & another v Tshivhase & another 1992 (4) SA 852 (A) 0910 Theron NO v United Democratic Front and others 1984 (2) SA 532 (CPD)

Tshivhase Royal Council & another v Tshivhase & another (supra)

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Service by fax 0911 Northern Province Local Government Association v CCMA & Others [2001] 5 BLLR 539

(LC) 0912 Edgars Consolidated Stores (Pty) Ltd v Kalanda & others [2007] 7 BLLR 632 (LC) 0913 Inzuzu I.T. Consulting (Pty) Limited v CCMA & others (Unreported Case No: P 487/2009)

10 CONDONATION

1002 Melane v Santam Insurance Co Ltd 1962 (4) SA 531 (A) at 532B-E

SA Broadcasting Corporation v Commission for Conciliation, Mediation & Arbitration & others (2003) 24 ILJ 999 (LC)

1003 Moila v Shai NO & Others (2007) 28 ILJ 1028 (LAC) 1004 Meintjies v H D Combrinck (Edms) Bpk 1961 (1) SA 262 (A) at 263H-264A

Saloojee & another NNO v Minister of Community Development 1965 (2) SA 135 (A) Reinecke v IGI Ltd 1974 (2) SA 84 (A) Arnott v Kunene Solutions & Services (Pty) Ltd (2002) 23 ILJ 1367 (LC); and Chemical Energy Paper Printing Wood & Allied Workers Union & others v Metal Box t/a MB Glass (2005) 26 ILJ 92 (LC)

11 UNFAIR DISMISSAL – GENERAL

So-called fixed term contracts subject to the discretion of a client 1101 NUMSA obo Daki v Colven Associates [2006] BALR 877 (MEIBC) 1103 Jonas / Quest Staffing Solutions [2003] BALR 811 CCMA

Denel (Pty) Ltd v Gerber [2005] 9 BLLR 849 (LAC) 1105 SACCAWU & others v Primserv ABC Recruitment (Pty) Ltd [2007] BLLR 78 (LC) 1106 NUMSA obo Mahlangu & others/ Abancedisi Labour Services CC & another [2006] 1

BALR 29 (MEIBC), Smith/ Staffing Logistics [2005] 10 BALR 1078 (MEIBC)

NUMSA obo Daki v Colven Associates [2006] BALR 877 (MEIBC) Dismissal demanded by client of labour broker 1107 Nape v INTCS Corporate Solutions (Pty) Ltd (2010) ILJ 2120 (LC)

Constructive dismissal – what needs to be proved - relevance of repudiation 1108 Pretoria Society for the Care of the Retarded v Loots (1997) 18 ILJ 981 (LAC) 1109 Old Mutual Group Schemes v Dreyer & another (1999) 20 ILJ 2030 (LAC)

Albany Bakeries Ltd v Van Wyk & Others (2005) 26 ILJ 2142 (LAC) 1110 Sergio Carlos v IBM South Africa (Pty) Ltd (2006) (LAC), unreported

Constructive dismissal not necessarily unfair

1112 Amalgamated Beverage Industries (Pty) Ltd v Jonker (1993) 14 ILJ 1232 (LAC) Moser Industries (Pty) Ltd v Venn [1997] 11 BLLR 1402 (LAC) Progressive discipline – may dismiss in appropriate circumstances even if no final written warning- approach to be adopted in regard to consistency

1113 S A Commercial and Allied Workers Union & others v Irvin & Johnson (1999) 20 ILJ 2302

(LAC) Gcwensha v CCMA & others (2006) 27 ILJ 927 (LAC)

Factors relevant to whether or not to award compensation 1114 Kemp t/a Centralmed v Rawlins (2009) 30 ILJ 2677 (LAC); [2009] 11 BLLR 1027 (LAC)

Reasons to be given for amount of compensation 1116 Mohlakoana v The Commissioner, CCMA & others (Case No JR284/09)

Relevance of patrimonial loss 1117 Lakomski v TTS Tool Technic Systems (Pty) Ltd (2007) 28 ILJ 2775 (LC)

Nape v INTCS Corporate Solutions (Pty) Ltd (2010) ILJ 2120 (LC)

Compensation for procedural unfairness 1118 Johnson & Johnson (Pty) Ltd v Chemical Workers Industrial Union (1999) 20 ILJ 89

(LAC) Dismissal to compel acceptance of a demand 1120 NUMSA & others v Fry’s Metals (Pty) Ltd (2005) 26 ILJ 689 (SCA) 1121 Solidarity obo Wehncke v Surf4Cars (Pty) Ltd (2011) 32 ILJ 3037 (IC)

12 DISMISSAL FOR MISCONDUCT - PROCEDURAL FAIRNESS 1202 Avril Elizabeth Home for the Mentally Handicapped v CCMA and others (2006) 27 ILJ 1644

(LC); [2006] 9 BLLR 833 (LC)

Taking disciplinary action against a shop steward POPCRU obo Masemola & others v Minister of Correctional Services (2010) 31 ILJ 412 (LC) BIAWU & another v Mutual and Federal Insurance Co Ltd [2002] 7 BLLR 609 (LC)

Legal representation at disciplinary enquiries

1206 MEC: Department of Finance, Economic Affairs & Tourism, Northern Province v Mahumani [2005] 2 BLLR 173 (SCA) Hamata & another v Chairperson Peninsula Technikon Internal Disciplinary Committee & others 2002 (5) SA 449 (SCA) Dabner v South African Railways & Harbours 1920 AD 583

1208 Schoon v MEC: Department of Finance, Economic Affairs & Tourism, Northern Province & another [2003] 9 BLLR 963 (T)

1210 Majola v MEC, Department of Public Works, Northern Province & others [2004] 1 BLLR54 (LC)

1211 Van Eyk v Minister of Correctional Services & others [2005] 6 BLLR 638 (EC) 13 DISMISSAL FOR MISCONDUCT - SUBSTANTIVE FAIRNESS Reason for dismissal 1301 Fidelity Cash Management Services v Commission for Conciliation, Mediation and

Arbitration and others [2008] 3 BLLR 197 (LAC)

Second enquiry / changing decision of chairperson of disciplinary enquiry 1302 BMW (SA) (Pty) Ltd v Van der Walt (2000) 21 ILJ 113 (LAC). 1303 Branford v Metrorail Services (Durban) & others (2003) 24 ILJ 2269 (LAC): [2004] 3

BLLR 199 (LAC) 1305 Greater Letaba Local Municipality v Mankgabe NO & others [2008] 3 BLLR 229 (LC)

SACCAWU & others v Irvin & Johnson Ltd (1999) 20 ILJ 2302 (LAC); [1999] 8 BLLR 741 (LAC) Cape Town City Council v Masitho &others (2000) 21 ILJ 1957 (LAC)

1306 JAMAFO on behalf of Nero v Pick ’n Pay (2007) 28 ILJ 688 (CCMA) 1308 Solidarity/MWU on behalf of Van Staden v Highveld Steel & Vanadium & another (2005)

26 ILJ 2045 (LC)

14 DISMISSAL FOR POOR WORK PERFORMANCE 1401 Pernod Ricard SA (Pty) Ltd v CCMA & others (2011) 32 ILJ 119 (LC) 1402 Gostelow v Datakor Holdings (Pty) Ltd t/a Corporate Copilith (1993) 14 ILJ 171 (IC) 1403 New Forest Farming CC v Cachalia & others [2003] 10 BLLR 1 (LC)

Somyo v Ross Poultry Breeders (Pty) Ltd [1997] 7 BLLR 862 (LAC) 15 DISMISSAL FOR OPERATIONAL REQUIREMENTS

Consultation at what stage

1501 National Education Health & Allied Workers Union & others v University of Pretoria (2006) 27 ILJ 117 (LAC):

Who to consult

1502 Sikhosana & others v Sasol Synthetics Fuels [1999] JOL 5648 (LC) Maluleke & others v Johnson Tiles (Pty) Ltd [2008] 11 BLLR 1065 (LC)

1503 Mahlinza & others v Zulu Nyala Game Ranch (Pty) Ltd [2004] JOL 12459 (LC)

Leading evidence regarding procedural fairness in cases where section 189A applies

1506 Watts v Fidelity Corporate Services (Pty) Ltd [2007] 6 BLLR 579 (LC) NUMSA & others v SA Five Engineering & others [2005] 1 BLLR 53 (LC) Banks & another Coca-Cola SA [2007] 10 BLLR 929 (LC)

Single retrenchments

1511 Bracks N.O. & another v Rand Water & another (2010) 31 ILJ 897 (LAC); [2010] 8 BLLR 795 (LAC) Scheme Data Services (Pty) Ltd v Myhill N.O. & others (2009) 30 ILJ 399 (LC) Winnie Ngidi and Fidelity Supercare Services Group (Pty) Ltd (2009) 30 ILJ 1185 (CCMA)

1513 Sans Souci Girls High School v McGahey N.O. and others (Case No JR 2261/07)

First in first out selection criterion unfair 1514 Screenex Wire Weaving Manufacturing (Pty) Ltd v Jafter Ngema & others JA 49/07 (LAC)

handed down on the 2nd

of September 2009. Effect of agreements with unions representing affected employees 1516 Muthulingum v Nampak Flexible KZN (unreported award in Case No KNPM 471-04 dated

28 December 2009) 1518 CWIU and others v Latex Surgical Products (Pty) Ltd [2006] 2 BLLR 142 (LAC)

16 FIXED TERM CONTRACTS

Premature termination 1601 Buthelezi v Municipal Demarcation Board (2004) 25 ILJ 2317 (LAC) 1602 Fedlife Assurance Ltd v Wolfaardt 2002 (1) SA 49 (SCA); (2001) 22 ILJ 2407 (SCA) 1603 Meyers v Abrahamson 1992(3) SA 121 (C) 1604 Nkopane & other v Independent Electoral Commission (2007) 28 ILJ 670 (LC)

17 SECTION 197 TRANSFERS Applicability of section 197

1701 Douglas & others v Gauteng MEC for Health [2008] 5 BLLR 401 (LC)

When is a business transferred as a going concern 1702 NEHAWU v University of Cape Town & others (2003) 24 ILJ 95 (CC).

SAMWU & others v Rand Airport Management Company (Pty) Ltd & others (2005) 26 ILJ 67 (LAC)

Transfer – relevant factors

1703 Ponties Panel Beaters Partnership v NUMSA & others [2009] 2 BLLR 99 (LAC)

When is transfer the reason for dismissal 1708 Van der Velde v Business Design Software (Pty) Ltd & another (1) (2006) 27 ILJ 1738

(LC)

Which employer to cite 1711 Anglo Office Supplies (Pty) Ltd v Lotz (2008) 29 ILJ 953 (LAC) 1712 NEHAWU v University of Cape Town & others (2003) 24 ILJ 95 (CC) Second generation transfers 1713 Aviation Union of SA & another v SA Airways (Pty) Ltd & others (2011) 32 ILJ 2861 (CC) 18 PROMOTION

Meaning

1801 Mashegoane & Another v University of the North [1998] 1 BLLR 73 (LC) Jele v Premier of the Province of Kwazulu-Natal & others (2003) ILJ 1392 (LC)

1802 Lamana v SA Police Service [2002] 8 BALR 802 at 808 to 809 De Villiers v SA Police Service [2002] 8 BALR 795 (BC) at 798-799

Relevant considerations in deciding fairness 1803 Aries v CCMA & others (2006) 27 ILJ 2324 (LC)

De Nysschen v General Public Service Sectoral Bargaining Council & others (2207) 28 ILJ 375 (LC)

1805 Public Servants Association v National Commissioner of the SA Police Service (2006) 27 ILJ 27 2241 (CC)

Whether a contractual right to promotion must be established

1806 Department of Justice v CCMA & others [2004] 4 BLLR 297 (LAC) 1808 Hospersa and another v Northern Cape Provincial Administration (2000) 21 ILJ 1066

(LAC) 1809 Protekon (Pty) Ltd v CCMA & others (2005) 7 BLLR 703 (LC)

When should other candidates be joined 1810 Gordon v Department of Health: KwaZulu-Natal 2008 (29) ILJ 2535 (SCA)

Polygraph results as selection criterion 1812 Sedibeng Local Municipality v SALGBC & others (Unreported Labour Court Case No JR

1559-09 dated 31 May 2012 Protected promotion 1813 Sedibeng Local Municipality v SALGBC & others (supra)

Minister of Safety and Security v SSSBC & Others (Unreported Labour Court Case No P186/08)

19 DEMOTION Meaning 1901 Solidarity obo Kern v Mudau & others [2007] 6 BLLR 566 (LC)

20 TRAINING 2001 MITUSA & others v Transnet Ltd & others [2002] BLLR 1023 (LAC)

21 BENEFITS

2101 Protekon (Pty) Ltd v CCMA & others [2005] 7 BLLR 703 (LC)

IMATU obo Verster v Umhlatuzi Municipality & others [2011] 9 BLLR 783 (LC) Department of Justice v CCMA and others [2004] 4 BLLR 297 (LAC) South African Post Office Ltd v CCMA & others (unreported judgment in Case No C293/2011 dated 18 June 2012)

22 UNFAIR SUSPENSION

Pending a disciplinary enquiry

2201 Koka v Director General: Provincial Administration North West Government [1997] 7 BLLR 874 (LC) Sappi Forests (Pty) Ltd v CCMA & others [2009] 3 BLLR 254 (LC)

2203 POPCRU obo Masemola & others v Minister of Correctional Services (2010) 31 ILJ 412 (LC)

2204 Mogothle v Premier of the Northwest Province & another (2009) ILJ 605 (LC)

POPCRU obo Masemola & others v Minister of Correctional Services (supra) 23 OCCUPATIONAL DETRIMENT AND RELEVANT CONSIDERATIONS IN

DETERMINING COMPENSATION 2302 The Minister for Justice and Constitutional Development & another v Tshishonga [2009] 9

BLLR 862 (LAC) Mogale v Seima 2008 (5) SA 637 (SCA)

24 MISCONDUCT – SPECIFIC OFFENCES

Absence without leave –imprisoned employee

2401 NUM & another v CCMA & others [2009] 7 BLLR 669 (LC) 2402 Trident Steel (Pty) Ltd v CCMA & others [2005] 10 BLLR 1028 (LC) 2404 National Union of Mineworkers v Samancor Chrome Ltd ( Tubatse Ferrochrome) (2011)

32 ILJ 1618 (SCA) 2406 Samancor Tubatse Ferrochrome v MEIBC & others (2010) 31 ILJ 1838 (LAC)

Abscondment or desertion

2412 SABC v CCMA & Others [2002] 8 BLLR 693 (LAC) 2414 SABC v CCMA & others [2001] 4 BLLR 449 (LC)

SACWU v Dyasi [2001] 7 BLLR 731 (LAC) at 735 Lebowa Platinum Mines [2002] 5 BLLR 429 (LC) at 432

Under the influence of alcohol

2420 Tanker Services (Pty) Ltd v Magudulela [1997] 12 BLLR 1552 (LAC)

Derogatory and racist remarks 2422 Crown Chickens (Pty) Ltd t/a Rocklands Poultry v Kapp and others (2002) 23 ILJ 863

(LAC) JAMAFO on behalf of Nero v Pick ’n Pay (2007) 28 ILJ 688 (CCMA)

2424 Solidarity/MWU on behalf of Van Staden v Highveld Steel & Vanadium & another (2005)

26 ILJ 2045 (LC)

Unauthorised eating in supermarket

2426 Shoprite Checkers (Pty) Ltd v CCMA & others [2008] 12 BLLR 1211 (LAC) 2427 Shoprite Checkers (Pty) Ltd v CCMA & others [2008] 9 BLLR 838 (LAC) 2430 Miyambo v CCMA & others (2010) 31 ILJ 2031 (LAC)

Sleeping while working impermissible hours and dishonestly receiving payment for such hours

2431 Boardman Brothers (Natal) (Pty) Ltd v CWIU [1998] 7 BLLR 655 (A)

Derivative misconduct

2432 Foschini Group v Maidi & others (2010) 31 ILJ 1787 (LAC) 2433 Federal Council of Retail & Allied Workers and Snip Trading (2001) 22 ILJ 1945 (ARB);

[2007] 7 BALR 669 (P); SACCAWU v Pep Stores (1998) 19 ILJ 939 (CCMA) Chauke & others v Lee Service Centre CC t/a Leesam Motors (1998) 19 ILJ 1441(LAC)

Failure to attend disciplinary enquiry

2443 Fidelity Cash Management Services v Commission for Conciliation, Mediation and Arbitration and others [2008] 3 BLLR 197 (LAC

Failure to undergo polygraph test

2444 Fidelity Cash Management Services v Commission for Conciliation, Mediation and Arbitration and others (supra) Insubordination

2445 Wasteman Group v South African Municipal Workers’ Union [2012] 8 BLLR 778 (LAC)

25 SEVERANCE PAY

Arranging alternative work 2501 Irvin & Johnson Limited v CCMA & others (2006) 27 ILJ 935 (LAC)

Severance pay more than statutory minimum 2502 Telkom (Pty) Ltd v CCMA & others [2004] 8 BLLR 844 (LC) Retrenchment at alleged normal retirement age 2503 Kirsten and Southern Cross Manufacturing CO Ltd t/a Southern Cross Industries (2006)

27 ILJ 2471 (CCMA) 26 TAX DEDUCTIONS FROM AMOUNTS DUE IN TERMS OF SETTLEMENT

AGREEMENTS AND AWARDS

2601 Eckhard v Filpro Industrial Filters (Pty) Ltd (1999)20 ILJ 2043 (LC)…

Motor Industry Staff Association & Another v Club Motors, a Division of Barlow Motor Investments (Pty) Ltd (2003) 24 ILJ 421 (LC)

2605 Penny v 600 SA Holdings (Pty) Ltd (2003) 24 ILJ 967 (LC) 27 STATUTORY MONEYS How to refer 2701 Douglas & others v Gauteng MEC for Health [2008] 5 BLLR 401 (LC 2713 Sectoral determinations and the calculation of remuneration, arrear salaries and

outstanding amounts owing in terms of the BCEA

Calculating severance pay, leave pay and notice pay 2720 Zietsman & others v Transnet Ltd (2008) 29 ILJ 779 (LC)

Calculation of annual remuneration for purposes of establishing whether employees fall outside the threshold referred to in a ministerial determination envisaged by section 6 (3) of the BCEA

2721 Mondi Packaging (Pty) Ltd v Department of Labour & Others (2008) 29 ILJ 371 (LC)

Leave pay - when payable and limit 2722 Jooste v Kohler Packaging Ltd (2004) 25 ILJ 121 (LC) Leave pay – agreement to pay leave pay on a monthly basis and not at the time

when leave is taken 2724 Minny & another v Smart Plan CC (2010) 31 ILJ 675 (LC)

Notice pay when not payable

2725 SABC v CCMA & Others [2002] 8 BLLR 693 (LAC)

28 ORGANISATIONAL RIGHTS

Jurisdictional requirements

2801 SA Commercial Catering and Allied Workers Union v Speciality Stores Ltd (1998) 19 ILJ 557 (LAC); [1998] 4 BLLR 352 (LAC)

2807 Health & Hygiene Services v Seedat NO & others [1999] 11 BLLR 1153 (LC)

What constitutes a workplace

2811 Specialty Stores v SACCAWU & another [1997] 8 BLLR 1099 (LC)

Relevant considerations when settling

2816 THOR v Blue Waters Hotel, unreported Case No KNDB 649-12

Edgars Consolidated Stores Ltd v FEDCRAW [2004] 7 BLLR 649 (LAC) 29 ENFORCEMENT OF AWARDS / ORDERS

2901 Motor Industry Staff Association & Another v Club Motors, a Division of Barlow Motor

Investments (Pty) Ltd (2003) 24 ILJ 421 (LC) Penny v 600 SA Holdings (Pty) Ltd (2003) 24 ILJ 967 (LC)

2902 Chillibush Communications (Pty) Ltd v Gericke and others (2010) 31 ILJ 1350 (LC) 2903 MIBCO v Osborne & others [2003] 6 BLLR 573 (LC) 2904 Molaetsa v Meyer & another (2007) 28 ILJ 2000 (LC) at para 10

2906 Robor (Pty) Ltd (Tube Division) v Joubert & others (2009) 30 ILJ 2779 (LC)

May not attach right title and interest in a dispute 2907 Mthiyane & another v Banaris Investment CC t/a Essenwood Spar [2006] 12 BLLR 1177

(LC)

Set off 2908 Rank Sharp South Africa (Pty) Ltd v Kleinman (Unreported Labour Court Case No

C123/2012 dated 24 May 2012) AAA Brick Co (Pty) Ltd v Coetzee 1996 All SA 23 (B); 1996 (3) SA 578 (B); Penny v 600 SA Holdings (Pty) Ltd [2003] JOL 1422 (LC)

30 SECTION 188A ARBITRATIONS

May not be unilaterally withdrawn in favour of internal disciplinary enquiries 3001 SATAWU & Others v MSC Depots (Pty) Ltd & Others (LC Case No 449/2011)

31 REVIEW TEST 3301 Sidumo and another v Rustenburg Platinum Mines Ltd & others (2007) 28 ILJ 2405 (CC);

[2007] 12 BLLR 1097 (CC) 3303 Heroldt v Nedbank Ltd [2012] 9 BLLR 857 (LAC)

01 RELEVANCE OF LRA AND LABOUR CASE LAW

Giving meaning to the right to fair labour practices 0101 One of the primary objects of the LRA is to give effect to and regulate the

fundamental rights conferred by section 23 of the Constitution including the right to fair labour practices enshrined in section 23 (1).

The concept of unfair labour practice must be given content by the legislature and thereafter left to gather meaning, in the first instance, from the decisions of the specialist tribunals including the LAC and the Labour Court.

NEHAWU v University of Cape Town & others (2003) ILJ 95 (CC) See also Sidumo and another v Rustenburg Platinum Mines Ltd & others (2007) 28 ILJ 2405 (CC); [2007] 12 BLLR 1097 (CC)

0102 “The focus of s 23 (1) is, broadly speaking, the relationship between the

worker and the employer and the continuation of that relationship on terms that are fair to both. In giving content to that right it is important to bear in mind the tension between the interests of the workers and the interests of the employers which is inherent in labour relations. Care must therefore be taken to accommodate, where possible, these interests so as to arrive at the balance required by the concept of fair labour practices. It is in this context that the LRA must be construed”.

NEHAWU v University of Cape Town & others (supra) at para 40 0103 “Fairness comprehends that regard must be had not only to the position

and interests of the worker, but also those of the employer, in order to make a balanced and equitable assessment. In judging fairness, a court applies a moral or value judgment to established facts and circumstances… And in doing so it must have due and proper regard to the objectives sought to be achieved by the Act. In my view it would be undesirable to lay down, or attempt to lay down, any universally applicable test for deciding what is fair.”

National Union of Metalworkers of South Africa v Vetsak Co-

Operative Ltd and others 1996 (4) SA 577 (A); 1996 17 ILJ 455 (A)

Binding effect of precedents 0104 CCMA commissioners are bound to follow the judgments of the Labour

Court, the Labour Appeal Court, the Supreme Court of Appeal and the Constitutional Court irrespective of their views as to the correctness of such judgments. Subject to certain exceptions commissioners are also bound to follow awards and rulings of their colleagues. Such judgments, awards and rulings are to be followed because it is in the interests of

legal certainty;

equality before the law; and

the satisfaction of legitimate expectations.

Gcaba v Minister of Safety & Security & others (2010) 31 ILJ 296 (CC); [2009] 12 BLLR 680 (CC)

0105 It is particularly important to observe a previous decision when it has been acted on for a number of years in such a manner that rights have grown up under it.

Robin Consolidated Industries Ltd v Commissioner for Inland Revenue 1997 (3) SA 654 (SCA)

0106 If divergent views were expressed in judgments of a Court and there is no

binding decision of a higher Court, then commissioners may properly select that view which they regard to be more in accordance with the proper interpretation of the LRA.

Le Roux v CCMA & others [2000] 6 BLLR 680 (LC) at 687-668 0107 On a debatable point of law where the Labour Court has expressed its

views with diffidence there may be room in some cases for a commissioner, after a careful consideration of the problem in accordance with proper legal principles, to arrive at a different conclusion.

Le Roux v CCMA & others (supra)

0108 Where a Court whose decisions are binding made remarks in passing which remarks had no bearing on the outcome of the case i.e. was not the reason for the decision, commissioners are not bound to follow such views although it should be regarded as persuasive. They should only deviate from such views if satisfied that it is wrong and in such event reasons for deviating should be given.

0109 Only in exceptional cases may a previous award be deviated from i.e. only

if the commissioner is satisfied that the previous award was wrong; or

where the point was not argued; or

where the issue is in some legitimate manner distinguishable.

Gcaba v Minister of Safety & Security & others (supra) at par 59 See also Daniels v Campbell NO & others 2004 (5) SA 331 (CC)

0110 If there is no binding authority on an issue commissioners must interpret

the LRA themselves. 0111 A failure to follow binding judgments is a reviewable irregularity.

Le Roux v CCMA & others [2000] 6 BLLR 680 (LC) at 687-668 See also Maarten & others v Rubin NO & others [2001] 2 BLLR 162 (LC) at 168F

Determining fairness - the Sidumo case

0112 In the Sidumo case the Constitutional Court recognized and found that in

arbitrable cases it is the commissioner’s sense of fairness that must prevail. The determination and the assessment of fairness are not limited to what occurred at the internal disciplinary inquiry and deference to an employer’s decision is not required.

Sidumo and another v Rustenburg Platinum Mines Ltd & others (2007) 28 ILJ 2405 (CC); [2007] 12 BLLR 1097 (CC).

0113 The Constitutional Court went further and qualified its findings as follows:

Although the commissioner must pass a value judgment it was not the intention of the law-maker to leave the determination of fairness to the unconstrained value judgment of a commissioner. See par 180 to 183.

Commissioners should not approach the matter on the basis of what decision they would have made had they been the employer. See par 67.

A commissioner is not given the power to consider afresh what he or she would do. See par 79.

A commissioner’s task is not to ask what the appropriate sanction is but whether the employer’s decision to dismiss was fair. See para 79.

What is required is that the commissioner must consider all relevant circumstances. See para 79

0114 Amongst the factors relevant to the determination of fairness are:

The general vulnerability of employees to unfair decision making; (par 72)

The importance of security of employment; (par 72)

The importance of the rule that was breached;

The reasons for establishing the rule including its reasonableness; (par 78 and 181)

The harm caused by the employee’s conduct; (par 78)

The impact that it had on the trust relationship;

The effect of setting a precedent;

The reason why the employer imposed the sanction of dismissal; (par 78)

The basis of the employee’s challenge to the dismissal; ( par 78)

Whether additional training and instruction may result in the employee not repeating the misconduct; (par 78)

The effect of dismissal on the employee; (par 78)

The employee’s long service record; (par 78)

The generally applicable industrial norms of which commissioners will have knowledge through the institutional knowledge of the CCMA, (par 183).

0115 The generally applicable industrial norms appear inter alia from the

pronouncements of the Constitutional Court, the Supreme Court of Appeal, the Labour Appeal Court and the Labour Court as well as awards of other commissioners. It also appears from the Codes of Good Practice such as the Code of Good Practice: Dismissal as well as the CCMA Arbitration Guidelines and the LRA requires of commissioners to take into account such codes of good practice and guidelines if it is relevant to a matter under consideration.

See s 138(6) of the LRA.

02 COMMENCEMENT AND TERMINATION OF EMPLOYMENT

Existence of employment relationship after contract but before work commences

0201 After considering conflicting decisions of the Labour Court the Labour

Appeal Court came to the ultimate conclusion “that the definition of employee in s 213 of the LRA can be read to include a person or persons who has or have concluded a contract or contracts of employment the commencement of which is or are deferred to a future date or dates.”

Wyeth SA (Pty) Ltd v Manqele & others (2005) 26 ILJ 749 (LAC)

0202 If an offer of employment is conditional upon the happening of a future

uncertain event, such as a favourable probity check, no employment relationship comes into being if the condition is not fulfilled. The same applies if the coming into operation of an employment contract is suspended until the happening of an uncertain future event and the suspensive condition is not fulfilled.

Bayat v Durban Institute of Technology (2006) 27 ILJ 188 (CCMA)

Offers to resign and resignations 0203 An offer to resign may be withdrawn prior to termination of employment. If

an offer to resign is unconditional employment terminates on acceptance of the offer. If such offer is conditional on its acceptance being communicated to the employee employment only terminates upon such communication.

Esack & another v Commission on Gender Equality (2000) 21 ILJ 467 (W)

0204 Unlike an offer to resign, an actual resignation need not be accepted for

the employment relationship to come to an end as the contract of employment, alternatively, the BCEA provides for this.

Shanaaz Achmat v Umgeni Local Council (formerly Howick Local Council), unreported award dated 24 July 2006 in Case No KN 7727-02: Lottering & others v Stellenbosch Municipality (2010) 31 ILJ 2923 (LC)

0205 The common law rules relating to termination on notice by an employee

were summarized as follows n the Lottering case:

Notice of termination must be unequivocal…

Once communicated, a notice of termination cannot be withdrawn unless agreed…

Termination on notice is a unilateral act – its does not require acceptance by the employer…

Subject to waiver of the notice period and the possible summary termination of the contract by the employer during the period of the notice, the contract does not terminate on the date notice is given but when the notice period expires…

If the employee having given notice does not work the notice, the employer is not obliged to pay the employee on the principle of no work no pay.

If notice is given late (or short), that notice is in breach of the contract entitling the employer either to hold the employee to what is left of the contract or to cancel it summarily and sue for damages…

If notice is given late (or short) and the employer elects to hold the employee to the contract, the contract terminates when the full period of the notice expires. In other words if a month’s notice is required on or before the first day of the month, notice given on the second day of the month will mean that the contract ends at the end of the next month if the employer elects to hold the employee to the contract…

2006 A resignation must be communicated to the employer in order to take

effect. If a written resignation is required the resignation only takes effect once the written resignation was read by the employer.

African National Congress v Municipal Manager, George Local Municipality & others [2010] 3 BLLR 221 (SCA)

Retirement

0207 Where there is an agreed retirement age employment terminates on the

retirement date due to effluxion of time in terms of the agreement and there is no dismissal.

Kirsten and Southern Cross Manufacturing CO Ltd t/a Southern Cross Industries (2006) 27 ILJ 2471 (CCMA) at 2475F

0208 In terms of section 187 (1) (f) of the LRA, a dismissal is automatically

unfair if the reason for the dismissal is that the employer unfairly discriminated against an employee, directly or indirectly on an arbitrary

ground, including but not limited to age. Section 187 (2) (b) creates an exception and provides that a dismissal based on age is fair if the employee had reached the normal or agreed retirement age for persons employed in that capacity.

0209 Where there is no agreed retirement age and an employer cannot prove

what the normal retirement age is in the particular workplace or job category, termination of employment simply on the basis of age would be automatically unfair. To prove what the normal retirement age is the employer must prove that it is the norm for employees in that workplace or for employees in that particular category to retire at a particular age i.e. that employees have been retiring at that age over a long period of time.

Rubin Sportswear v SACTWU & others (2004) 15 ILJ 1671 (LAC)

03 JURISDICTION

General 0301 “Jurisdiction”, may be defined as the “power or competence of a Court to

hear and determine an issue between parties.”

Gcaba v Minister of Safety & Security & others (2010) 31 ILJ 296 (CC); [2009] 12 BLLR 680 (CC) par 74

0302 In a Court jurisdiction is determined on the basis of pleadings and not on

the substantive merits of the case. In the event of the Court’s jurisdiction being challenged at the outset (in limine), the applicant’s pleadings are the determining factor. They contain the legal basis of the claim under which the applicant has chosen to invoke the court’s competence. While the pleadings must be interpreted to establish what the legal basis of the applicant’s claim is, it is not for the Court to say that the facts asserted by the applicant would also sustain another claim cognizable only in another court. If, however the pleadings, properly interpreted, establish that the applicant is asserting a claim under the LRA, i.e. one that is to be determined exclusively by the Labour Court, the High Court would lack jurisdiction.

Gcaba v Minister of Safety & Security & others (supra) at par 75

See also SA Maritime Safety Authority v McKenzie [2010] 5 BLLR 488 (SCA)

0303 The CCMA does not have jurisdiction to arbitrate pure contractual claims

i.e. in dismissal cases it must be alleged that the dismissal was unfair and that would then be the issue that the arbitrator is required to decide. An applicant cannot simply rely on the fact that a dismissal was unlawful and then claim specific performance or damages. The nature of the claim is to be determined from what is alleged. “…the claim that is before a court is a matter of fact. When a claimant says that the claim arises from an infringement of the common law right to enforce a contract, then that is the claim, as a fact, and a court must deal with the claim accordingly. When a claimant says that the claim is to enforce a right that is created by the LRA, then that is the claim that the court has before it, as a fact.”

Makhanya v University of Zululand (218/08) [2009] ZASCA 69 (29 May 2009)

0304 The approach adopted by the Courts in cases where there is an in limine

objection against jurisdiction would be equally relevant when there are jurisdictional objections against the CCMA jurisdiction at the commencement of conciliation or arbitration processes and is support for

rulings to the effect that such objections should at that stage be decided on what is alleged by the applicant. Once a referring party has indicated that he relies on an LRA right and has made allegations which if proven would entitle him/her to relief at arbitration the CCMA has jurisdiction to arbitrate the dispute. If the referring party fails to prove the allegations it simply means he/she has failed to prove that he/she is entitled to relief.

0305 The CCMA does not have the power to dismiss a matter on the merits if it

does not have jurisdiction. If the CCMA does not have jurisdiction the matter should be dismissed for want of jurisdiction.

See Makhanya v University of Zululand (supra) at par 23 0306 Conciliation, or mediation as it is sometimes called, has no mechanism to

resolve disputes otherwise than through agreement. No adjudication takes place at the conciliation. A commissioner at conciliation has no power to make a final and binding award (Dempster v Kahn NO & Others (1998) 19 ILJ 1475 (LC))….A dispute is defined as including an alleged dispute… So the commissioner had to be satisfied that there existed a dispute or an alleged dispute about the fairness of a dismissal. The referral form will in most circumstances be more than sufficient to establish the relevant jurisdictional facts… all that is required is a dispute about the fairness of an alleged dismissal….”

BHT Water Treatment v CCMA & others [2002] 2 BLLR 173 (LC)

Territorial jurisdiction 0307 “In a case where there was no bargaining council and the Commission for

Conciliation, Mediation & Arbitration would have to be involved if the Act applied, the position would be that in terms of s115 of the Act the CCMA has jurisdiction in the whole republic and, obviously, has no jurisdiction outside the Republic. It seems to me that in a case involving the CCMA the Court could also ask whether the employer’s undertaking in which the employees work is carried on inside or outside the Republic. If it was carried on inside the CCMA would then have jurisdiction and, where it was carried on outside, the CCMA would not have jurisdiction.”

Astral Operations Ltd v Parry (2008) 29 ILJ 2668 (LAC)

Jurisdiction limited to certain parties – not independent contractors 0308 Generally the jurisdiction of the CCMA is limited to employer and

employee parties and, in some instances, their representatives. The CCMA does not have jurisdiction if the relationship is one between an

independent contractor and his or her client. There is a Code of Good Practice dealing with the issue.

Code of Good Practice: Who is an Employee 0309 The Code was to a great extent influenced by the McKenzie case and the

McKenzie case explains the underlying principles. It was indicated in the said case that the dominant impression test has, despite criticism, been consistently followed by the High Court, the Industrial Court, the Labour Court and the Labour Appeal Court and that the underlying principles are

The object of the contract of service is the rendering of personal services by the employee to the employer. The services are the object of the contract.

The object of the contract of work is the performance of a certain

specified work or the production of a certain specified result.

According to a contract of service the employee will typically be at the beck and call of the employer to render his personal services at the behest of the employer.

The independent contractor, by way of contrast, is not obliged to

perform the work himself or to produce the result himself, unless other-wise agreed upon. He may avail himself of the labour of others as as-sistants or employees to perform the work or to assist him in the performance of the work.

Services to be rendered in terms of a contract of service are at the disposal of the employer who may in his own discretion subject, of course, to questions of repudiation decide whether or not he wants to have them rendered.

The independent contractor is bound to perform a certain specified work or produce a certain specified result within a time fixed by the contract of work or within a reasonable time where no time has been specified.

The employee is subordinate to the will of the employer. He is obliged to obey the lawful commands, orders or instructions of the employer who has the right of supervising and controlling him by prescribing to him what work he has to do as well as the manner in which it has to be done.

The independent contractor, however, is notionally on a footing of equality with the employer. He is bound to produce in terms of his

contract of work, not by the orders of the employer. He is not under the supervision or control of the employer. Nor is he under any obligation to obey any orders of the employer in regard to the manner in which the work is to be performed. The independent contractor is his own master.

A contract of service is terminated by the death of the employee whereas the death of the parties to a contract of work does not neces-sarily terminate it.

A contract of service terminates on expiration of the period of service

entered into while a contract of work terminates on completion of the specified work or on production of the specified result. See Smit v Workmen's Compensation Commissioner at 61 A-H.

SABC v McKenzie [1999] 1 BLLR 1 (LAC) at 4 -7

0310 “The legal relationship between the parties must be gathered primarily

from a construction of the contract which they concluded (Smit v Work-men's Compensation Commissioner at 64B; Liberty Life Association of Africa Ltd v Niselow at 683D-E), "although the parties' own perception of their relationship and the manner in which the contract is carried out in practice may, in areas not covered by the strict terms of the contract, assist in determining relationship" (Borcherds v CW Pearce & J Sheward t/a Lubrite Distributors at 1277H-1). In seeking to discover the true rela-tionship between the parties, the court must have regard to the realities of the relationship and not regard itself as bound by what they have chosen to call it (Goldberg v Durban City Council 1970 (3) SA 325 (N) at 33IB-C). As Brassey "The Nature of Employment" at 921 points out, the label is of no assistance if it was chosen to disguise the real relationship between the parties, "but when they are bone fide it surely sheds light on what they intended".

SABC v McKenzie (supra) at par 10 0311 Ordinarily a referring party will have to prove on a balance of probabilities

an employment relationship existed before relief will be granted. Section 200A of the LRA creates a presumption that applies in the cases of persons earning less than a prescribed threshold. If the referring party proves one or more of the factors mentioned in section 200A the onus shifts to the respondent who will then have to prove that no employment relationship existed. In cases involving persons earning more than the threshold, the presumption does not come into operation and the onus never shifts.

Jurisdiction limited to certain parties – genuine clients of temporary employment services excluded

0312 In terms of section 198 (2) read with section 198 (4) of the LRA a person

whose services have been procured for or provided to a client by a temporary employment service is the employee of that temporary employer service and the client is not liable for unfair dismissals and unfair labour practice effected by the temporary employment services. In appropriate circumstances a finding may however be made that the client and not the temporary employment service was the employer. In such cases a reality test has to be adopted and the criteria to be considered are

An employer’s right to supervision and control;

Whether the employee forms an integral part of the organisation with the employer;

The extent to which the employee was economically dependent upon the employer.

State Information Technology Agency (SITA) (Pty) Ltd v CCMA & others (2008) 29 ILJ 607 (LAC)

0313 In a case where the employee is part of the organization of the so-called client, where the so-called client and not the so-called temporary employment service exercises control over the employee, where the employee is economically dependent on the so-called client and where the co-called temporary employment service is merely used as instrument to avoid legal problems that would arise in the case of an employment relationship between the employee and the so-called client, it may be appropriate to find that the so-called client was the employer.

State Information Technology Agency (SITA) (Pty) Ltd v CCMA & others (supra)

Unfair labour practice jurisdiction limited to employees

0314 An employee whose employment was terminated does not enjoy the

protection of the unfair labour practice provisions of the LRA after termination of employment.

Sithole v Nogwaza NO & others (1999) 20 ILJ 2710 (LC); [1999] 12

BLLR 1348 (LC)

0315 An employee whose employment has been terminated either by resignation or otherwise, but who continues to work out his or her notice period, still enjoy the protection of the provisions of the LRA and particularly the unfair labour practice provisions contained in chapter VIII during the notice period.

Velinov v University of Kwazulu-Natal & others (2006) 27 ILJ 177 (LC)

0316 In the Sithole case it was found that the remedies prescribed for unfair

labour practices are only available in respect of disputes arising between employers and employees and that there must be an existing employment relationship at the time that the dispute is referred to the CCMA and that the only exception was a dispute relating to a failure or refusal to reinstate or re-employ a former employee in terms of an agreement. In a subsequent case involving a dispute concerning the fairness of a suspension and where the employment relationship had ended prior to the referral, it was found that there was no merit in an argument that the CCMA lacked jurisdiction inter alia because the alleged unfair labour practice occurred while the applicant was still an employee.

MEC for Tourism, Environmental & Economic Affairs, Free State v Nondumo & others [2005] 10 BLLR 974 (LC)

0317 If the applicant was not an employee at the time of the alleged unfair

labour practice the CCMA would not have jurisdiction to arbitrate except if the dispute relates to a failure or refusal to reinstate or re-employ a former employee. The CCMA would have jurisdiction if there was an employment relationship at the time that the unfair labour practice was committed. However if the case does not involve a failure or refusal to reinstate or re-employ a former employee and there is no longer an employment relationship at the time that an unfair labour practice dispute is arbitrated, reinstatement or re-employment would not be an appropriate remedy.

MEC for Tourism, Environmental & Economic Affairs, Free State v

Nondumo & others (supra)

Jurisdiction limited to certain parties – illegal workers not excluded 0318 While the remedial issues must be tailored to meet the specific context of

this case, the objects and provisions of the Act, the illegality of the work performed, there is nothing which indicates that no form of protection in terms of section 193 of the LRA should be available to a sex worker who was unfairly treated within the context of the provisions of the LRA. “As sex workers cannot be stripped of the right to be treated with dignity by their clients, it must follow that, in their other relationship namely with their employers, the same protection should hold. Once it is recognised that

they must be treated with dignity not only by their customers but by their employers, section 23 of the Constitution, which, at its core, protects the dignity of those in an employment relationship, should also be of application.”

‘Kylie’ v CCMA and others (2010) 31 ILJ 1600 (LAC) 0319 In cases involving the unfair dismissals of sex workers, it would be against

public policy to reinstate such ‘employees’ in their employ even if they could show that their dismissals were unfair. For similar reasons it may well be that compensation for a substantively unfair dismissal would be inappropriate where the nature of the services provided was illegal. But, public policy does not constitute an absolute prohibition to, at least, some protection provided under the LRA, a protection which can reduce their vulnerability, exploitation and the erosion of their dignity. Monetary compensation for a procedurally unfair dismissal has been treated as a solatium for the loss by an employee of her right to a fair procedure. This kind of compensation is therefore independent of the loss of illegal employment in this case and would therefore appear to be applicable in an appropriate case where the services rendered by the employee are classified as illegal.

‘Kylie’ v CCMA and others (supra) Johnson & Johnson (Pty) Ltd v CWIU (1999) 20 ILJ 89 (LAC) at para 41 0320 “Although sex workers would, as employees, be entitled to form and join

trade unions, they would not be entitled to participate in any activities, including collective bargaining, that amounted to the furthering of the commission of crime.”

‘Kylie’ v CCMA and others (supra)

Jurisdictional limitations - Nature of dispute 0321 The CCMA has jurisdiction to conciliate

disputes about matters of mutual interest referred to it in terms of section 134 of the LRA; and

any other dispute referred to it in terms of the LRA 0322 The term “matters of mutual interest” is not defined in the Act. It must

therefore be interpreted literally to mean any issue concerning employment. It has been given a wide interpretation. The term would include disputes of right as well as of interest.

De Beers Consolidated Mines Ltd v CCMA & others [2000] 5 BLLR 578 (LC)

0323 The LRA is not intended to regulate exhaustively the entire concept of a

fair labour practice as contemplated in the Constitution. Unfair labour practices not covered by the LRA definition may not be arbitrated by the CCMA or a bargaining council and can only be adjudicated by the Labour Court or the High Court as provided for in section 157 (2).

See NEWU v CCMA & others [2004] 2 BLLR 165 (LC) United National Public Servants Association of SA v Digomo NO

& others [2005] 12 BLLR 1169 (SCA) Ntlabezo & others v MEC for Education, Eastern Cape and

others [2002] 3 BLLR 274 (Tk) Mzimni & another v Municipality of Umtata [1998] 7 BLLR 780 (Tk)

Unfair labour practices perpetrated against an employer 0324 Disputes about unfair labour practices perpetrated against an employer,

such as a failure to give notice, are not to be dealt with by the CCMA but may be adjudicated by the High Court or the Labour Court.

NEWU v CCMA & others (supra)

Short time 0325 “It is clear that a dispute relating to short time does not fall into the definition

of an unfair labour practice as understood by section 186. The reference to “suspension” in section 186 (2) (b) above is clearly a reference to suspension as a sanction for misconduct. None of the other sub-clauses of section 186 can accommodate a dispute relating to short time…

…in the absence of a collective agreement which permits the

implementation of short time in periods of slack trade, or in the absence of an individual agreement with each employee, an employer… may not unilaterally place an employee on short time. An employee who is placed unilaterally on short time then has a claim for wages for the period that he or she was placed on short time. This claim should be lodged as a remuneration issue with the Bargaining Council. Where no Bargaining Council exists this claim should be lodged with the Department of Labour, as a breach of the obligation to pay wages contained in section 32 of the Basic Conditions of Employment Act 75 of 1997….

… this is not an unfair labour practice dispute as understood by section 186 (2) of the Act. However outside of the ambit of the LRA, our law guarantees the right to fair labour practice. Chapter 2 of the Constitution guarantees employees the right to fair labour practices, and the forum, which has the

power to deal with a dispute of this nature, is the Labour Court. Section 157 (2) of the LRA provides as follows:

‘The Labour Court has concurrent jurisdiction with the High Court in respect of only alleged threatened violation of any fundamental right entrenched in Chapter 2 of the Constitution of the Republic of South Africa and arising from –

(a) employment and from labour relations’

… the employees, through their union, could refer a dispute to the Labour Court in terms of section 157 (2) of the Labour Relations Act….

SACTWU obo Ndlangisa & others v Prowood Clothing [2005] 9 BALR 936 (NBCCMI)

Upgrading of salary scales

0326 A dispute about the upgrading of salary scales is not a dispute about

promotion which can be arbitrated. It may be a dispute about an infringement of the constitutional right to fair labour practices which may be adjudicated by the High Court or the Labour Court in terms of section 157 (2) of the LRA

Ntlabezo & Others v MEC for Education, Eastern Cape & Others [2002] 3 BLLR 274 (Tk)

Equal pay for equal work

0327 The CCMA does not have jurisdiction to arbitrate disputes about wage

disparity; whether it arises from alleged unfair discrimination or whether any other grounds for unfairness are relied upon. In terms of the EEA the CCMA must however conciliate disputes relating to discrimination. It is only when the parties so agree that the CCMA may arbitrate such disputes

0328 Fairness requires that persons doing equal work should receive equal pay.

The principle “equal work should receive equal pay” in its true form may be extended to an analogous situation namely that work of equal value should receive equal pay. These premises have not been enshrined as principles of law in the unfair labour practice definition. They are principles of justice, equity and logic which may be taken into account in considering whether an unfair labour practice has been committed, e.g. the payment of unequal pay for equal work or work of equal value in the context of unfair discrimination. In other words it is not an unfair labour practice to pay different wages for equal work or for work of equal value. It is, however, an

unfair labour practice if the reason or motive, being the cause for so doing, is direct or indirect discrimination on arbitrary grounds or the listed grounds, e.g. race or ethnic origin. Louw v Golden Arrow Bus Services (Pty) Ltd [2000] 3 BLLR 311 (LC)

0329 In the Golden Arrow case it was found that pay differentials are in practice

subject to a number of factors; implying that it does not necessarily follow that unequal pay for equal work is unfair. The factors include

the performance, experience, skills and potential of the various incumbents;

market factors such as supply and demand;

the employer’s judgment as to the position’s relative importance and value to the organization; and

the influence of collective bargaining, minimum pay levels and bargaining council and industry agreements.

0330 A disparity in wages/ salaries is in any event not unfair if it was brought about through collective bargaining and the affected employee had opted to be part of the bargaining unit.

Heysen v Armsrong Hydraulics (Pty) Ltd [2000] 12 BLLR 1444 (LC)

Victimisation

0331 …section 23 of the Constitution read together with section 157 (2) (a) of the LRA, would permit this Court in suitable circumstances, to interdict the victimization of an employee.

Nawa and another v Department of Trade and Industry [1998] 7 BLLR

701 (LC)

Interpretation of settlement agreements 0332 The CCMA does not have jurisdiction to arbitrate an alleged dispute that

was settled. If it is in dispute whether a dispute is still unresolved the applicant will have to prove as part of his/her case that it has not been settled and the arbitrator will have to consider and interpret the terms of any alleged settlement agreement that the employer may rely on.

Drummer and Polaris Capital (2009) 30 ILJ 2179 (CCMA) See Spilhaus & Co (WP) Ltd v CCMA & others [1997] 8 BLLR 1116 (LC) See however First National Bank Ltd (Wesbank Division) v Mooi NO & others (2009) 30 ILJ 336 (LC)

0333 It is so that the heading of section 24 i.e. “Disputes about collective

agreements” gives the impression that section 24(8) refers to collective agreements that are also settlement agreements. However in terms of the definition of “this Act” in section 213 a reference to the Act does not include the headings. It follows that in interpreting the Act the heading should not be considered….

As worded until 2002 section 158 (1) (c) allowed “a settlement agreement

other than a collective agreement” to be made an order of the Labour Court. The purpose of the exclusion of collective agreements was to prevent collective agreements entered into in settlement of interest disputes being enforced as orders of the Labour Court (as opposed to being dealt with in terms of section 24).

The unintended effect of the original section 158 (1) (c) was to exclude agreements entered into by a trade union to settle rights disputes from being enforced in the same manner as settlement agreements concluded by individuals. The 2002 amendments introducing section 24(8), 142A, amending section 158 (1)(c) and introducing section 158 (1A) addressed this problem and allowed all agreements entered into in settlement of rights disputes to be enforced through the same route; irrespective whether they are collective agreements or not.

That this was the purpose of section 24(8) appears from the fact that there

would have been no need for section 24(8) if it only related to collective agreements as disputes about the interpretation and application of collective agreements could already be arbitrated in terms of section 24 as it was before the amendments.

Section 142A provides as follows:

“(1) The Commission may, by agreement between the parties or on application by a party, make any settlement agreement in respect of any dispute that has been referred to the CCMA, an arbitration award.

(2) For the purposes of subsection (1), a settlement agreement is a

written agreement in settlement of a dispute that a party has the right to refer to arbitration or to the Labour Court, excluding a dispute that a party is entitled to refer to arbitration in terms of either section 74(2) or 75(7).”

Section 158 (1) (c) provides that the Labour Court may

“make any arbitration award or any settlement agreement an order of the Court”.

What is a settlement agreement for the purposes of section 158 (1) (c) appears from section 158(1A):

“For the purposes of subsection (1)(c) a settlement agreement is a written

agreement in settlement of a dispute that a party has the right to refer to arbitration or to the Labour Court, excluding a dispute that a party is only entitled to refer to arbitration in terms of section 22 (4), 74(4) or 75 (7).”

It follows that the jurisdictional requirements for arbitrating a dispute in terms of section 24(8) are:

The alleged settlement agreement must be in writing;

The agreement must be in settlement of a dispute;

A party to the agreement must have the right to refer the dispute to the CCMA or to the bargaining council (depending whether or not the LRA requires that a bargaining council deal with the matter) for arbitration or to the Labour Court for adjudication;

The dispute must be about the interpretation and application of the agreement; and

The dispute must not relate to essential services or maintenance services.

The reason for the view that section 24 (8) does not require that the dispute

must have been referred to the CCMA or, where applicable, the bargaining council, or the Labour Court, is that, unlike section 142A, section 158 (1) (c) read with 158 (1A) does not contain such limitation. In terms of section 24 (8) read with section 24 (5) a dispute about the interpretation and application of a settlement agreement envisaged by section 158 (1) (c) may be arbitrated.

In Molaba & others v Emfuleni Local Municipality [2009] JOL 23477 (LC) it was implied by way of an obiter dictum that a narrower interpretation of section 158(1) (c) is preferable i.e. that its application should be limited to instances where a party has validly referred a dispute to the Labour Court. The effect of section 158 (1A) was however not considered in that case and the express wording of that section can… not be ignored. Sivraj v Caspian Freight CC (Case Nos: KZNRFBC 2390 and KZNRFBC 9092)

Settlement agreements – interpretation when arbitrating other disputes

0334 The interpretation of the settlement agreement was incidental to and part

of the issues to be decided by the commissioner in arbitrating the alleged unfair dismissal. In the circumstances, he had both the power and duty to interpret the agreement as part of the arbitration process which he was seized of. Commissioners do that all the time, particularly in the form of interpretation of employment contracts in the course of deciding unfair dismissal disputes. It would be absurd if, on every occasion that a CCMA commissioner was required to interpret an employment contract or other agreement in the course of the arbitration of a valid unfair dismissal dispute, the matter had to be stayed pending an interpretation by the Labour Court.

I am also supported in my view that the commissioner had the requisite

jurisdiction, by section 24(8) of the LRA. If a commissioner of the CCMA has the express power to determine disputes pertaining specifically to the interpretation or application of a settlement agreement, it is difficult to conceive how he or she would not have jurisdiction to interpret or apply a settlement agreement where that duty arises as an incident of the adjudication of an unfair dismissal dispute properly referred to him or her.

Mohale v Net 1 Applied t/a Cash Paymaster Services Northern (Pty) Limited (unreported Case No J1981/2010)

0335 In Mohale the Labour Court distinguished the circumstances of that case

from the circumstances in First National Bank Limited (Wesbank Division) v Mooi NO & Others (2009) 30 ILJ 336 (LC). It found that what the Court was conveying in FNB v Mooi was that a commissioner of the CCMA would not have a distinct jurisdiction to receive and arbitrate a dispute aimed at the setting aside of a settlement agreement. “This does not mean to say that a commissioner would not be able to interpret a settlement agreement in the course of adjudicating an unfair dismissal dispute which was validly referred to him or her.”

0336 The Mohale judgment is support for the awards in Drummer and Polaris

Capital (2009) 30 ILJ 2179 (CCMA) and Sivraj v Caspian Freight CC (Case Nos: KZNRFBC 2390 and KZNRFBC 9092)

Ruling whether settlement agreement induced by fear 0337 In Rambado and EZ Shuttle (Pty) Ltd (2012) 33 ILJ 1016 (CCMA) a

CCMA commissioner found that the CCMA could rule on the validity of

settlement agreements in a case where it was alleged that the settlement agreement was entered into under duress:

“Graig Bosch in his article ‘Contract as Barrier to “Dismissal”: The Plight of the Labour Broker’s Employee.’ (2008) 29 ILJ 813 at 829…says:

‘Employers might claim that the employee has signed an agreement to the effect that the employment relationship has come to an end or that the employee accepts a sum of money “in full and final settlement” of all claims arising out of the employment relationship and can therefore not claim anything from the CCMA. It is surely within the commissioner’s jurisdiction to determine whether those agreements are valid.’

I share Graig Bosch’s views in this regard. The dictates of justice and fairness require a pragmatic approach.”

0338 The commissioner inter alia quoted two cases that assist when making a

ruling whether a settlement agreement was induced by fear. The quotes appear hereunder.

Arend & another v Astra Furnishers (Pty) Ltd 1974 (1) SA 298 (C) at 305/6:

“…it is clear that a contract may be vitiated by duress (metus), the reason d’etre of the rule apparently being that intimidation or improper pressure renders the consent of the party subject to duress no consent…Duress may take the form of inflicting physical violence upon the person of a contracting party or of inducing fear by means of threats. Where a person seeks to set aside a contract, or resist the enforcement of a contract on the ground of duress based on fear, the following elements must be established: (i) The fear must be a reasonable one. (ii) It must be caused by the threat of some considerable evil to the person

concerned or his family. (iii) It must be a threat of an imminent or inevitable evil. (iv) The threat or intimidation must be unlawful or contra bonos mores. (v) The moral pressure used must have caused damage.

Makiwane v International Healthcare Distributors (2003) 24 ILJ 2150 (LC):

Our law is trite that where a party accepts the benefits under any settlement agreement in full and final of the benefits owing to him by his former employer arising from the termination of his employment relationship with such employer, and has abided by such acceptance

of those benefits, he has placed himself beyond the jurisdiction of this court.

Similarly, in the present case I am of the view that when the applicant signed the agreement, thereby signifying his acceptance of its terms and later accepted the benefits paid to him in terms thereof, the dispute between him and the respondent was finally settled. From that point onwards there was no live dispute between the parties…There being no live dispute for this court to determine, it follows that this court has no jurisdiction to deal with this matter.”

Interpretation and application of collective agreements

0339 “A dispute over the interpretation of a collective agreement exists when

the parties disagree over the meaning of a particular provision; a dispute over the application of a collective agreement arises when the parties disagree over whether the agreement applies to a particular set of facts or circumstances.”

Grogan Workplace Law (8th Edition) at page 375

NEHAWU / Department of Health Northern Cape Provincial Administration [2005] 10 BALR 1056 (PSCBC)

See also NEHAWU / Department of Social Services and Population Development [2005] 11 BALR 1140 (PSCBC)

0340 The term “application of a collective agreement” refers to the applicability

of a collective agreement i.e. “whether the agreement applies to a particular set of facts or circumstances.” It also refers to the manner in which the agreement is to be applied.

Wallis Employment and Labour Law Vol 3 Juta

Public Servants Association /Provincial Administration Western Cape [2001] 5 BALR 497 (CCMA)

0341 In deciding whether to arbitrate disputes relating to non-compliance with

collective agreements it would be necessary to consider the purpose and nature of the collective agreement. The purpose of the collective agreement may be to agree on or to vary the terms and conditions of employment. In the event of an alleged breach, the real dispute would be about the breach of the terms and conditions of employment, a matter in respect of which the Labour Court would have concurrent jurisdiction with the High Court in terms of section 77 (3) of the BCEA. In deciding whether there was a breach of the terms and conditions of employment the Labour Court or the High Court as the case may be would be entitled to interpret

the collective agreement in order to make a finding what the terms and conditions of employment are.

See Minister of Safety and Security v SSSBC & others [2010] 6 BLLR 705 (LAC)

When arbitration has to be requested and what is the time limit

0342 “the result of the provisions relating to con-arb is that if one party objects

to taking part in con-arb the CCMA is precluded from invoking section 191(5A). The CCMA may not rely on rule 17 which provides for the conducting of the con-arb process. The effect of this is that the procedure which was in place prior to 1 August 2002 must be used. This means that after conciliation, the commissioner must issue a certificate of non-resolution, should this be the case, and thereafter the employee must request the CCMA to conduct an arbitration by completing form 7.13 and serving it on the employer. . . if a party objects to con-arb the whole process is then switched to the old regime”.

Ceramic Industries Ltd v CCMA & another [2005] 12 BLLR 1235 (LC) 0343 Section 135(5) (a) … is peremptory and establishes that, barring any

agreement to the contrary, the commissioner must issue the certificate of outcome at the end of the 30 day period following the referral to the CCMA. In the absence of an agreement between the parties to extend the time-limit, the commissioner has no power to conduct a conciliation process outside the 30-day period. Such is in keeping with the primary objects of the LRA and the policy aimed at ensuring swift and effective dispute resolution, coupled with the need for finality in labour disputes.

…Section 191(5)(a) of the LRA provides that if a commissioner has

certified that the dispute remains unresolved or if 30 days have expired since the commission received the referral and the dispute remains unresolved, the commission must arbitrate the dispute. In other words the LRA permits an employee …to refer the dispute to arbitration under two circumstances; firstly, where the CCMA has issued a certificate of outcome to the effect that the dispute remains unresolved, or where the 30 days have expired since the CCMA received the referral and the dispute remains unresolved. In De Vries v Lionel Murray Schwormstedt & Louw (2001) 22 ILJ 1150 (LC); [2001] 8 BLLR 902 907 par 21, it was held:

“This is so because the phrase in s 191 (5) of the Labour Relations Act

commencing with the words “or if 30 days have expired…” means that the employee wishing to pursue its alleged unfair dismissal dispute does not have to be in possession of a certificate of non-resolution of the dispute from the commission. Had the possession of a certificate been a sine qua non for an employee to proceed to the next stage

there would have been no need to include the phrase referred to above”

…In short, where no certificate of outcome is issued at the end of the

period the referring party is nevertheless required to refer the dispute to arbitration within 90 days at the end of the aforesaid 30-day period.”

Indoor Amusements (Pty) Ltd v CCMA & others (2004) 25 ILJ 2205 (LC)

Effect of certificates of outcome

0344 …the language employed by the legislature in sec 191 is such that, where

a dispute about the fairness of a dismissal has been referred to the CCMA or a council for conciliation, and, the council or commissioner has issued a certificate in terms of sec 191(5) stating that such dispute remains unresolved or where a period of 30 days has lapsed since the council or the CCMA received the referral for conciliation and the dispute remains unresolved, the council or the CCMA, as the case may be, has jurisdiction to arbitrate the dispute. That the dispute may have been referred to the CCMA or council for conciliation outside the statutory period of 30 days and no application for condonation was made or one was made but no decision on it was made does not affect the jurisdiction to arbitrate as long as the certificate of outcome has not been set aside. It is the setting aside of the certificate of outcome that would render the CCMA or the council to be without the jurisdiction to arbitrate.

Fidelity Guards Holdings (Pty) Ltd v Epstein and others [2000] 12 BLLR 1389 (LAC); (2000) 21 ILJ 2382 (LAC)

0345 …it is now settled law that the commission acquires jurisdiction to arbitrate a dispute after a certificate of non-resolution has been issued (see Fidelity Guards Holdings (Pty) Ltd v Epstein NO & others (2000) 21 ILJ 2382 (LAC) ; [2000] 12 BLLR 1389 (LAC)). The court found in this case that even if the dispute is referred late, the commission retains jurisdiction, provided a certificate of 'non-resolution' has been issued. It went on to find that the only way in which a defective certificate can be challenged is by way of review.

I do not agree that the Fidelity Guards Holdings case is distinguishable because of the amendment or that the amendment read with rule 22 introduces a new jurisdictional prerequisite. I consider that the principle remains the same and that as long as the certificate of outcome has not been set aside, the commission retains jurisdiction. It is the setting aside of the certificate of outcome that would render the commission without




jurisdiction to arbitrate (see para 12 of the Fidelity Guards Holdings decision at 1393H-1394A).

Velinov v University of Kwazulu - Natal & others (2006) 27 ILJ 177 (LC) (Van Niekerk AJ)

See also EOH Abantu (Pty) Ltd v CCMA & others (2008) 29 ILJ 2588 (LC) (A.C. Basson J)

0346 The view expressed by Van Niekerk J in Bombardier Transportation (Pty)

Ltd v Lungile Mtiya NO & others [2010] 8 BLLR 840 (LC) that a certificate of outcome has nothing to do with jurisdiction is not only in conflict with the LAC judgment in Fidelity Guards Holdings (Pty) Ltd v Epstein and others but also in conflict with his own decision in the Velinov case.

0347 "If the administrative act of certification is invalid, even then it must be challenged timeously because, if not, public policy as expressed in the maxim omnia praesumuntur rite esse acta, requires that after a reasonable time has passed for it to be challenged, it should be given all the effects in law of a valid decision. (C L O'Reilly v Mackman [1983] 2AC 237, 238 and Harnmaker v Minister of Interior 1965(1) SA 372(C) at 381)"

Fidelity Guards Holdings (Pty) Ltd v Epstein and others (Court a quo quoted with approval)

0348 …the arbitrating commissioner will not have the power to decide

(reconsider) a jurisdictional point afresh in circumstances where the conciliating commissioner has already decided on jurisdiction at the conciliation phase and issued a certificate of non-resolution.

EOH Abantu (Pty) Ltd v CCMA & others (2008) 29 ILJ 2588 (LC) (A.C.

Basson J) See also Avgold - Target Division v CCMA & others (2010) ILJ 924 (LC); [2010] 2 BLLR 149 (LC)

0349 If a jurisdictional challenge is heard and upheld prior to the

commencement of conciliation proceedings, the commissioner’s ruling puts an end to the dispute. It is not necessary in these circumstances for the commissioner to issue a certificate of outcome (since the dispute was never capable of being resolved by the CCMA) and the ruling binds the CCMA and all parties to the dispute. This jurisdictional ruling stands unless and until it is reviewed and set aside by this Court.

Bombardier Transportation (Pty) Ltd v Lungile Mtiya NO & others

[2010] 8 BLLR 840 (LC)

Condonation to be considered at conciliation 0350 If there was a late referral the CCMA does not have jurisdiction to

conciliate the matter in the absence of an application for and a commissioner would exceeded his/her powers and act beyond the scope of his/her authority by proceeding with the conciliation and issuing the certificate of outcome if a late referral has not been condoned.

Whether employment relationship should be proved at conciliation 0351 …the provisions in rule 14 that the commissioner must require the

referring party to prove that the commissioner has jurisdiction to conciliate means no more than the commissioner should determine whether or not the referral alleges that the respondent in those proceedings is an employer, who has dismissed an employee referring the dispute or on whose behalf it is referred…

In the case where such an allegation is properly made, but the respondent counters the allegation by alleging that the “employee” was never employed at the material times or was an “independent contractor”, the conciliating commissioner must find that there exists between the parties, a dispute of facts which must be resolved through the leading of evidence. He or she then must issue a certificate of outcome to the effect that the dispute could not be resolved through conciliation.”

EOH Abantu (Pty) Ltd v CCMA & others (2010) 31 ILJ 937 (LC); [2010] 2 BLLR 172 (LC) (Cele J)

See also Dempster v Kahn NO & Others (1998) 19 ILJ 1475 (IC) in which it was found that a conciliator does not have the power to determine an issue whether or not an employment relationship existed and that it was an issue that should be decided at arbitration.

0352 …many “jurisdictional issues” raised by parties in conciliation proceedings are not jurisdictional questions in the true sense. For example, whether a person is an independent contractor or an ‘employee’ as defined in s 213 of the LRA is more properly a question that falls within the power of the CCMA to determine in the course of the arbitration proceedings (i.e. the adjudication stage of the matter) in relation to a dispute before it. It is not a question that must necessarily be determined prior to conciliation taking place, nor is it a jurisdictional question contemplated by Rule 14 of the CCMA’s rules. A challenge to the CCMA’s jurisdiction on the basis that there was no dismissal falls into the same category. The only true jurisdictional questions that are likely to arise at the conciliation phase are whether the referring party referred the dispute within the time limit prescribed by s 191(1) (b), whether the parties fall within the registered

scope of a bargaining council that has jurisdiction over the parties to the dispute to the exclusion of the CCMA, and perhaps whether the dispute concerns an employment-related matter at all. The distinction to be drawn is one between facts that the legislature has decided must necessarily exist for a tribunal to have the power to act (and without which the tribunal has no such power) and facts that the legislature has decided must be shown to exist by a party to proceedings before the tribunal, the existence of which may be determined by the tribunal in the course of exercising its statutory powers. The power given to the CCMA to determine the fairness of a dismissal includes the power to determine whether or not an applicant was an employee, and whether she was dismissed. These questions ordinarily fall to be determined in the course of the CCMA’s adjudication functions. It follows that a conciliating commissioner is under no obligation to determine them at the conciliation phase.”

Bombardier Transportation (Pty) Ltd v Lungile Mtiya NO & others [2010] 8 BLLR 840 (LC)

Effect of a premature referral of a dismissal dispute

0353 An employee whose contract of employment has been terminated by

notice may in terms of s 191 (2A) refer a dispute to the CCMA once the employee has received the notice. If it is common cause that the dispute was referred prior to that the CCMA will not have jurisdiction to conciliate or to arbitrate. If the issue was not decided at conciliation it must be decided at arbitration

Avgold - Target Division v CCMA & others (2010) ILJ 924 (LC); [2010] 2 BLLR 149 (LC)

Powers of the arbitrator

0354 A party is entitled to restrict the ambit or scope of arbitration and statutory

proceedings.

See Shoredits Construction (Pty) Ltd v Pienaar NO and others 1995 (16) ILJ 390 at 393

0355 Parties are entitled to limit the issues to be decided by the arbitrator e.g.

by agreeing in the context of a dismissal dispute that procedural fairness is not an issue to be decided. An arbitrator exceeds his or her powers if he or she decides issue falling outside the agreed terms of reference and commits a gross irregularity by not hearing the parties before doing so.

Reunert Industries (Pty) Limited t/a Reutech Defence Industries v Naicker and others [1997] 12 BLLR 1632 (LC) at 1367-1368

0356 “The task of an arbitrator is a demanding one. It is made more demanding

by the absence of formality that characterises the resolution of labour disputes. It is important that an arbitrator, notwithstanding the absence of formality, ensures at the outset that the ambit of the dispute has been properly circumscribed, even if the dispute has many facets, for that defines the authority that the arbitrator has to make an award. The authority of an arbitrator is confined to resolving the dispute that has been submitted for resolution and an award that falls outside that authority will be invalid. As pointed out by Mustill and Boyd in the context of commercial arbitration (but the principle is equally applicable to labour arbitrations): ‘If [an arbitrator] awards on issues which have not been left to him for decision, he commits misconduct and may also be acting in excess of jurisdiction.’…

An award may also not be founded on matters that occur to the arbitrator but that the parties have had no opportunity to address.” Tao Ying Metal Industry (Pty) Ltd v Pooe NO and others (2007) 28 ILJ 1949 (SCA) at 1954

0357 Where a finding was made that a dismissal was substantively unfair reinstatement may be awarded with unlimited retrospective effect save that it may not be effective from a date earlier than the date of dismissal.

Equity Aviation Services Pty (Ltd) v CCMA & others (2008) 29 ILJ 2507

(CC) Republican Press v CEPPWAWU (2007) 28 ILJ 2503 (SCA); [2007] 11

BLLR 1001 (SCA) 0358 “While the Act requires an order for reinstatement or re-employment

generally to be made, a court or an arbitrator may decline to make such an order where it is ‘not reasonably practicable’ for the employer to take the worker back into employment. Whether that will be so will naturally depend on the particular circumstances, but in many cases the impracticability of resuming the relationship of employment will increase with the passage of time.”

Republican Press v CEPPWAWU (supra)

Bargaining Council cases – section 147 discretion 0359 Should it become apparent after a referral that the parties to a dispute fall

within the registered scope of a bargaining council and that one of the

parties to the dispute is not a party to the bargaining council, the CCMA may in terms of section 147 (3) (a)

refer the dispute to the council for resolution; or

appoint, or confirm the appointment of a commissioner, to resolve the dispute in terms of the LRA.

0360 In Pankana CC t/a R & W Transport Components v Dreyer NO &

others (2012) 33 ILJ 692 (LC) it was found that the CCMA must exercise the discretion referred in section 147 (3) (a) before assuming jurisdiction to arbitrate a bargaining council case:

The rationale for s 147 is to avoid delays that might otherwise be caused by jurisdictional disputes. However for the section to serve its purpose, the jurisdictional dispute needs to be raised…

As a consequence of the issue of jurisdiction having not been raised at arbitration…, the CCMA could not exercise the discretion conferred upon it in terms of s 147 (3) (a)…

Jurisdiction is a matter of fact, either the CCMA has jurisdiction or the CCMA lacks jurisdiction…

The raising of the jurisdictional point at the review stage, in the absence of proof of a deliberate attempt to pull out a “trump card”, does not deprive the applicant of the right to raise the issue…the CCMA did not exercise its assumption of jurisdiction in terms of s 147 (3) (a) of the LRA. Accordingly objectively speaking the facts did not give the CCMA jurisdiction to entertain the dispute.”

0361 The Pankana case illustrates that the question of jurisdiction must be

considered even if it is not raised by one of the parties. 0362 Section 147 (3) (a) only clothes the CCMA with jurisdiction if the discretion

envisaged by the section was exercised. It need not be done expressly and may be inferred from the fact that the CCMA appointed a commissioner despite knowledge that a bargaining council has jurisdiction. See Magic Company v CCMA & others (2005) 26 ILJ 271 (LC); [2005] 4 BLLR 349 (LC). However to avoid situations like the one that occurred in the Pankana case it is suggested that a written record be kept that a discretion was exercised and, if it was exercised in favour of dispute resolution by the CCMA, that it should be recorded in any award that is issued.

0363 The exercise of the discretion envisaged by section 147 (3) (a) is dealt with in detail in the Practice and Procedure Manual at paragraph 2.11. Section 147 (3) (a) also does not apply if a dispute is referred to the CCMA with full knowledge that a bargaining council has jurisdiction i.e. it only applies if it became apparent after a referral that a bargaining council has jurisdiction. In such event the matter must be dismissed for want of jurisdiction. In cases where the referral was as a result of a bona fides error the matter must not be dismissed for lack of jurisdiction as the CCMA must in such circumstances either resolve the dispute or refer it to the relevant bargaining council.

0364 It is also to be noted that the CCMA may not assume jurisdiction in terms

of section 147(3) (a) if both parties to the dispute are parties (including members of parties) to a bargaining council.

Belated allegation that union activities was reason for dismissal

0365 In Evan Gordon Enterprises (Pty) Ltd v Phetla NO & others (2012) 33

ILJ 229 (LC) the labour Court reviewed an arbitration in which the employee party fist alleged that he was unfairly dismissed for misconduct. At a late stage of the arbitration the employee party alleged that he was dismissed for participating in union activities. The arbitrator found that that was the case that the dismissal was unfair. On review it was found that the arbitrator did not have jurisdiction:

“the only plausible interpretation of the arbitrator’s conclusion is that he

took the view that, whatever the merits of the charge of misconduct, the employer had not been actuated by those merits to charge and dismiss the employee, but had done so because of the employee’s union activities. Moreover… the arbitrator did not base his ultimate conclusion on whether or not the charge against the employee had been proved, but whether or not the dismissal was motivated by an improper objective on the employer’s part. Consequently I can only infer that the arbitrator effectively decided the matter on a basis that it was an automatically unfair dismissal in terms of s 187 read with s 5(2)(c)(i) of the LRA, which prohibits the dismissal of employees on account of their union membership. When the issue of union membership came to the fore late in the hearing as the supposed reason for the dismissal, the arbitrator should have enquired whether the employee was now seeking to rely on that reason as the reason for his dismissal and to advise him that he had no jurisdiction to determine the fairness of the dismissal on that basis unless both parties consented to the council jurisdiction in terms of s 141(1) of the LRA.

0366 As stated in Gcaba v Minister of Safety & Security & other (2010) 31 ILJ

296 (CC); [2009] 12 BLLR 680 (CC) and other cases, jurisdiction is decided on pleadings and not on the substantive merits of the case –

“They contain the legal basis of the claim under which the applicant has chosen to invoke the court’s competence. While the pleadings … must be interpreted to establish what the legal basis of the applicant’s claim is, it is not for the court to say that the facts asserted by the applicant would also sustain another claim cognizable only in another court.”

0367 In CCMA proceedings there are no pleadings and jurisdiction must be

determined on what is alleged. The CCMA can only arbitrate a dispute if it is one that the LRA requires to be arbitrated by the CCMA. Therefore it must at some point be alleged by the employee party that the dispute is such a dispute.

0368 If the employee party alleges that he was dismissed for misconduct and

that that was an unfair reason for dismissing him that is the case to be arbitrated. During the arbitration hearing it would not be open to such employee party to pursue a case and for an arbitrator to make a finding that the reason for the dismissal was automatically unfair as that was not the legal basis of the referral or request under which the applicant had chosen to invoke the CCMA’s competence.

0369 If the employee party alleges during the course of the arbitration hearing

that he was dismissed for a reason that rendered the dismissal automatically unfair the arbitrator must enquire “whether the employee was now seeking to rely on that reason as the reason for his dismissal and to advise him that he had no jurisdiction to determine the fairness of the dismissal on that basis.” If the employee party indicates that he is seeking to rely only on such reason then argument should be invited on whether the CCMA has jurisdiction to arbitrate such dispute and a ruling be made whether the CCMA has jurisdiction to continue to arbitrate such dispute.

0370 A distinction should be drawn between cases referred to in the preceding

paragraph and cases where alternative allegations are made e.g. that the employee party was dismissed for misconduct, alternatively, for participation in union activities. In such cases the arbitration should continue in respect of the issue falling within the jurisdiction of the CCMA e.g. whether it was fair to dismiss the employee for misconduct. Issues in respect of which the CCMA does not have jurisdiction e.g. the fairness of a dismissal for participating in union activities, should not be arbitrated and the employee party should be left to pursue it separately in an appropriate forum e.g. the Labour Court.

04 REPRESENTATION Legal representation in cases of dismissal for misconduct or

incapacity 0401 In deciding whether to allow legal representation in dismissal cases where

the reason for dismissal relates to conduct or capacity the central issue is whether it would be unreasonable to expect a party to deal with the dispute without legal representation and the factors mentioned in the rules should be considered in coming to a conclusion on the said central issue.

Afrox Ltd v Laka & others [1999] 5 BLLR 467 (LC) at 471-2 Commuter Handling Services (Pty) Ltd v Mokoena & others [2002] 9 BLLR 843 (LC) at 848 Vaal Toyota (Nigel ) v MIBCO and others [2002] 10 BLLR 936 (LAC) at 943

0402 “…the fact that a negative incriminating outcome would have devastating

consequences for the applicant’s future career is indeed an important consideration and is one which would incline many a commissioner to conclude that that legal representation and a more adversarial approach might be better suited to the determination of the dispute. It does not follow that all commissioners ought to be impelled to that conclusion. In the circumstances of a given case it is open to a commissioner to opt for a more investigative approach by excluding legal representation in order to give effect to the public interest of expeditiously resolving employment disputes.

While past experience is replete with instances demonstrating the

advantages brought to a case by lawyers, there are many commentators who see legal representation as frequently undermining of endeavours to resolve disputes expeditiously…What is more the mischief aimed at by section 140 (1) is clearly stated in the explanatory memorandum to the legislation in the following terms:

‘Legal representation is not permitted during arbitration concerned with dismissals for misconduct except with the consent of the parties. Lawyers make the process legalistic and expensive. They are also often responsible for delaying the proceedings due to their unavailability and the approach they adopt’

Strydom v CCMA and others [2004] 10 BLLR 1032 (LC) 0403 The right to legal representation is acquired once a commissioner has

concluded that it would be unreasonable to expect a party to deal with the dispute without legal representation. Once a commissioner has reached

such conclusion he/she has no discretion and the party concerned becomes entitled to legal representation during the arbitration.

Afrox Ltd v Laka & others supra;

Commuter Handling Services (Pty) Ltd v Mokoena & others supra; Vaal Toyota (Nigel) v MIBCO and others supra

Fellow member of employers’ organisation

0404 The rules provide that an employer party may be represented by a

“member” of that party’s employers’ organisation. The rules do not preclude a juristic person who is a member of an employers’ organisation from representing a fellow member of that employer’s organisation in CCMA proceedings. Such juristic person may appoint one of its directors or employees to represent such fellow member on its behalf as that is the only way that it can represent such fellow member. A fellow member may represent a member even if he/she is paid a fee for doing so.

AHI Employers’ Organisation obo Members v CCMA; AHI Employers’ Organisation obo Members & Others v CCMA & Others (Case Nos.J656/2011 and JR2518/2010

0405 The AHI judgment further made it clear that commissioners are not

expected or required to always verify the credentials of representatives including representatives of employer’s organizations. In terms of rule 25 (2) commissioners are however obliged to determine an issue about representation in two instances; viz

if the other party to the dispute objects to the representation; and

if the commissioner suspects that the representative does not qualify in terms of rule 25.

0406 If the commissioner does not suspect that the representative does not

qualify to represent the party concerned and there is no objection to such representation, the process may proceed without enquiry into the basis on which the representative qualifies.

05 CONCILIATION

Non binding nature of categorisation of dispute 0501 While it would be better and preferable if a party which referred a

dismissal dispute to conciliation stated whether the dismissal was a dismissal for operational requirement or a dismissal for misconduct or for incapacity, the fact that that is not made clear in the referral to conciliation would not make the referral defective in terms of the Act.

Parties are not bound by the conciliating commissioner’s categorization of the dispute on the certificate of outcome. A conciliating commissioner is bound not to change the nature of the real dispute between the parties. If he did, the party that seeks to take the matter further would not be bound by a wrong description of the dispute but would have a right to take further the true dispute that was referred to conciliation and to give a correct description of the dispute. What the parties are bound by is the correct description of the real dispute that was referred to conciliation.” National Union of Metal Workers of SA & others v Driveline Technologies (Pty) Ltd (2000) 21 ILJ 142 (LAC)

0502 “...when a commissioner completes Form 7.12 and categorises the dispute

referred to the CCMA by ticking one of the boxes provided, the commissioner does not make a jurisdictional ruling. Nor does the ticking of any of the boxes marked “CCMA arbitration”, Labour Court”, “None” or “Strike/Lock Out” amount to a ruling on which of those courses of action must be pursued by a referring party. Consistent with the principle established in the Drive Line case, it is not for commissioners, by means of certificates of outcome or otherwise, to dictate to litigants either how they should frame the disputes that they might wish to pursue or which forum they are obliged to approach to have those disputes determined. Litigants stand or fall by the claims that they bring to arbitration.”.

Ingo Strautmann v Silver Meadows Trading 99 (Pty) Ltd t/a Mugg and Bean Suncoast (unreported, D412/07)

0503 “The wording of s 191(5) also contemplates that it is not for the conciliating commissioner to interrogate the nature of the dispute as it appears on the referral form or make any ruling as to the forum to which an unresolved dispute may ultimately be referred. An employee is entitled to refer a dispute to this court or require that the dispute be arbitrated on the basis of the reason for dismissal alleged by the employee. It is the referring party’s categorisation of the dispute (and nothing more) that triggers either the arbitration or the adjudication of the dispute… the principle to be applied is

that jurisdiction is conferred upon the CCMA, on a provisional basis, by the referring party’s categorisation of the reason for the dismissal.

“…the Act should be interpreted to permit or require a commissioner to

make a jurisdictional ruling based on the reason for the dismissal that the referring party asserts. It is the referring party’s right to frame an unfair dismissal claim in any way that he or she deems fit, and it is not for the commissioner (or the employer) to decide for that party how the claim should be formulated and in which forum the relief should be pursued.”

Goldfields Mining S A (Pty) Ltd (Kloof Gold Mine) v CCMA and others [2010] 2 BLLR 149 (LC)

Dismissal of matter at conciliation – whether competent

0504 “the Act does not anywhere confer on the CCMA or a bargaining council power to dismiss an employee’s referral of a dismissal dispute simply because he failed to attend the conciliation meeting…

… in terms of sec 191(4) of the Act a party to a dispute who refers a dispute to the CCMA or a bargaining council for conciliation has a right, once a period of 30 days from the date when the CCMA or a bargaining council received the referral has lapsed, to have his dismissal dispute arbitrated if he so requests or has a right to refer it to the Labour Court for adjudication, without such party having done anything after referring the dispute for conciliation. The CCMA Rules cannot take that right away.”

Premier Gauteng & another v Ramabulana N.O & others (2008) 29 ILJ 1099 (LAC)

Telephonic conciliations permissible

0505 “It is frequent practice in the CCMA to conduct telephonic conciliations and this practice does not contravene any provision of the Act. The Act simply requires that the commissioner appointed by the CCMA must attempt to resolve the dispute through conciliation (s 135(1)). The Act does not prescribe that a meeting between the parties be convened for that purpose. In fact s 135(3) goes on to provide that the commissioner must determine the process for the purposes of attempting to resolve the dispute.”

GIWUSA on behalf of Heyneke v Klein Karoo Kooperasie Bpk (2005) 26 ILJ 1083 (LC)

0506 When doing reality testing a conciliating commissioner should “have presented fully and dispassionately all the consequences of proceeding with and withdrawing the dispute.”

“Even if a commissioner is invited by a party to give advice, such an invitation should be resisted. A commissioner has to be even-handed in dealing with the parties. If she gives advice to the one party, she would have to do likewise for the other party. That would create conflicts of interest for a commissioner. A commissioner who puts herself in such a situation would have great difficulty in acting with honesty, integrity and impartiality. Ethically, it is therefore untenable.

Giving advice is also counter-productive to the objectives of conciliation. A party who is advised that she has a good case is unlikely to settle. One who is advised that he has a bad case is likely to capitulate, as happened in this case.”

Kasipersad v CCMA & others [2003] 2 BLLR 187 (LC)

06 CON-ARB

0601 In terms of sub-rule 8 read with rule 30 a commissioner may dismiss a matter if an applicant party fails to appear at the arbitration stage of a con-arb (save in cases where there was an objection.) If the respondent fails to appear the commissioner may continue with the proceedings in the absence of the respondent or may adjourn the proceedings to a later date.

“…Rule 17 must be interpreted in the light of s191(5A) of the Act. The purpose of the rule is to guide the application of that section. And the section is clear: The Commissioner must commence the arbitration immediately after certifying that the dispute remains unresolved. …In fact, it seems clear to me that the Commissioner has no discretion to adjourn the proceedings immediately after having issued a certificate. He must commence the arbitration immediately after certifying that the dispute remains unresolved…

The correct interpretation, having regard to the plain language of section 191(5A)(c) and the apparent scope and purpose of rule 17 in that context, seems to me to be the following:

If no party has objected to con-arb, the Commissioner must conduct the conciliation on the scheduled date, even if a party fails to appear or be represented.

In those circumstances, there can obviously be no conciliation in the real sense. The Commissioner will then inevitably issue a certificate that the dispute remains unresolved.

The Commissioner must then commence the arbitration. There is no peremptory provision that he or she must conclude it.

Having commenced the arbitration, the Commissioner retains a discretion to adjourn it to a later date. This could be for a variety of reasons – for example, to enable a witness to attend the proceedings; or to provide the party who did not attend or who was not represented to attend or to obtain representation.

After having commenced the arbitration, the Commissioner may have to entertain an application for a postponement of the proceedings in terms of CCMA rule 23 and rule 31 by the party who was not present at the conciliation stage.”

Pioneer Foods (Pty) Ltd v CCMA & others (unreported Labour Court judgment in Case No C265/10)

07 ARBITRATION

Duties of commissioner

0701 Section 138(1) of the LRA thus places two distinct but related obligations on the commissioner. The first is to determine the manner in which the arbitration will be conducted. This discretion will be exercised bearing in mind the legislative instruction to determine the dispute fairly and quickly. Secondly, the commissioner must deal with the substantial merits of the dispute. In dealing with the matter, the commissioner may rule on the evidence which may be presented to the arbitration and may also make rulings which may restrict the range of issues on which the parties are required to give evidence. The commissioner may therefore narrow down the issues and in doing so the commissioner may decide what evidence it wants to hear. In exercising this discretion, the commissioner will consider the facts and circumstances of the particular case and also the nature of the dispute that was referred to arbitration. This principle was confirmed by the Labour Court in Moloi & another v Euijen v CCMA & another (1997) 18 ILJ 1372 (LC):1

“In terms of section 138(1) of the Act, a commissioner, such as the first respondent, is empowered to conduct an arbitration in a manner that he considers appropriate in order to determine the dispute fairly and quickly. This power, in my view, includes the power to decide what evidence will be allowed or disallowed.”

When requested to make a ruling upon the admissibility of evidence or, as in the present case, rule whether the employer may prove an additional charge, the commissioner is entitled and, in fact, obliged when called to do so, to make a ruling in respect of the scope of the evidence which may be introduced. This discretion can be made on a prima facie view of relevance. Sondolo IT (Pty) Ltd v Howes & others [2009] 5 BLLR 499 (LC)

0702 “Where neither party is legally represented in arbitration proceedings… the

duty upon the commissioner to assist the parties to adduce evidence is an onerous one. Where it becomes evident to the commissioner that one of the parties has failed to lead witnesses or adduce relevant evidence necessary to discharge its onus, it is incumbent upon him or her to inform that party of the implications of not having done so.”

…Even if it only struck the commissioner during the writing of the award that the evidence was lacking, I believe he remained duty bound to reconvene the hearing in order to caution the applicant. Moreover given the powers conferred by section 138 (1) of the LRA to conduct the arbitration in a manner he considered appropriate, including inquisitorially, he might have properly exercised his discretion under section 142 (1) of

the LRA to subpoena persons in the employ of the applicant to give the information needed and to produce the relevant documentary evidence. It was not enough to draw the adverse inference from the failure to present the evidence without cautioning…” Cash Paymaster Services (Pty) Ltd v Paul Shabangu NO & others (Unreported Case D324/03 heard on 15 March 2005)

0703 “An employee’s failure to testify will always strengthen the case for the employer. Nevertheless, it is clearly not an invariable rule that an adverse inference be drawn or that the uncontradicted version should stand. In the final analysis the decision must depend upon the circumstances of the litigation. … a commissioner would be justified in drawing an adverse inference or accepting an uncontradicted version only if he has cautioned the unrepresented litigant that his failure to testify might lead to that result…

… one might expect a commissioner to take charge by instructing a party

to put a version (of which he is aware) under oath or risk the consequence of an adverse inference or his acceptance of the uncontradicted testimony. The failure to give that warning, in the light of a commissioner’s inquisitorial function and duties…constitutes a reviewable irregularity…

A commissioner is “under a duty to inform the applicant of the rules of

evidence and his intention to rely upon them to accept an uncontradicted version or to draw an adverse inference…

…There is no duty on the commissioner to insist upon the applicant

testifying, nor may he compel such testimony.”

Klaasen v CCMA & others [2005] 10 BLLR 964 (LC) See also Scholtz v Maseko NO & others [2000] 9 BLLR 1111 (LC) at

1119-1120 0704 During arbitration the duties of a commissioner include the following and a

failure to perform such duties would constitute a reviewable irregularity if it had potential to prejudice the aggrieved party or if it is possible that the result might have been different had it not been for such irregularity:

Should not prevent any party from having its case fully and fairly determined;

Should not prevent a fair trial of the issues, even if perfectly well intentioned and bona fide, though mistaken;

Apply his or her mind to all the issues in the case;

Proper consideration of all the relevant and material facts;

Should take all material evidence into account;

Should not have regard to evidence that is irrelevant;

In dismissal cases, should determine the material facts and then apply the provisions of the LRA to those facts in answering the question whether the dismissal was for a fair reason; and

Should provide proper reasons to show that no irregularity has taken place within the mind of the commissioner.

Heroldt v Nedbank Ltd [2012] 9 BLLR 857 (LAC Rulings on merits not binding on succeeding commissioner 0705 It is inconceivable (apart from the fact that it is also contrary with practice

in the High Court in both civil and criminal matters) that rulings in respect of the substantive merits of the dispute would bind a succeeding commissioner in circumstances where the earlier commissioner is unable to proceed with the arbitration.

Sondolo IT (Pty) Ltd v Howes & others [2009] 5 BLLR 499 (LC)

Absolution from the instance 0706 An order of absolution from the instance has the effect that the party

against whom such order is made still has the opportunity to have the matter adjudicated afresh. Having regard to the contents of the LRA in general, and more specifically the process of compulsory arbitration for disputes of dismissal, following unsuccessful conciliation, …it was never the intention of the Legislature to allow an arbitration to lead to an order of absolution from the instance. The overbearing intention of the Legislature with the arbitration process under the auspices of the CCMA and Bargaining Councils was to bring a dispute to finality as soon as possible with as little legal formalities as possible.

Minister of Safety and Security v Madisha and others (Unreported Case No JR161-07)

Postponements

0707 “The postponement of a matter set down for hearing on a particular date cannot be claimed as of right. An applicant for a postponement seeks an

indulgence from the Court. Such postponement will not be granted unless this Court is satisfied that it is in the interest of justice to do so. In this respect the applicant must show that there is good cause for the postponement. In order to satisfy the Court that good cause does exist, it will be necessary to furnish a full and satisfactory explanation of the circumstances that give rise to the application. Whether a postponement will be granted is therefore in the discretion of the Court and cannot be secured by mere agreement between the parties. In exercising that discretion, this a Court will take into account a number of factors, including (but not limited to): whether the application has been timeously made, whether the explanation given by the applicant for postponement is full and satisfactory, whether there is prejudice to any of the parties and whether the application is opposed.”

National Police Service Union and others v Minister of Safety and Security and Others 2000(4) SA 1110 (CC) at 1112F-H See also Moshela v CCMA & others (unreported; Labour Court Case No JR1524/06)

Contempt of the commission 0708 “Likewise, if a person in the commission or in a bargaining council

conducts himself in a manner which, if done in relation to a court of law would have been contempt of court, he must be treated very much in the same manner as if he was held in contempt of court. I can see no reason why commissioners… must not enjoy the same level of respect from parties appearing before them.”

Bargaining Council for the Clothing Manufacturing Industry & another v Prinsloo [2007] 9 BLLR 825 (LC)

0709 According to the Prinsloo case the procedure includes the following:

The person whose conduct is being considered should be allowed to make representations and to be represented and this includes legal representation.

The commissioner’s discretion to determine whether conduct amounts to contempt must be exercised with “caution and restraint.” Commissioners are expected to deal with matters where strong feelings and impassionate senses of grievance or persecution may arise. They are expected to deal with these and behaviour consequent thereupon robustly, with patience and a measure of stoicism.

After carefully considering the representations of the person concerned the commissioner must make a written finding whether or not the person concerned committed contempt of the commission and should give written reasons for the finding.

The finding should not include any sanction as the sanction is to be determined by the Labour Court.

In terms of section 142 (9) (b) of the LRA a commissioner may refer the finding together with the record of the proceedings to the Labour Court for its decision which may include:

- the confirmation of the finding, - variation of the finding;

- making any order that is deemed to be appropriate, such as, the imposition of a sanction and the suspension of the right of a person, other than a legal representative, to represent a party in the CCMA and the Labour Court; or

- the setting aside of the finding.

The referral must be done by way of notice of application and the notice of application must inter alia indicate the relief sought and must notify the respondent of its rights and obligations if it intends to oppose the relief sought. The notice of application must be supported by a founding affidavit and the record of proceedings and the commissioner’s finding must be attached.

If the respondent wishes to oppose the relief sought it must file a notice of opposition and an answering affidavit setting out fully its defence.

The Registrar of the Labour Court must set the matter down for hearing and must subpoena the respondent to appear before the Labour Court on the date of the hearing.

The Labour Court may also subpoena any other person to appear before the Labour Court to be questioned about the contemptuous behaviour of the respondent.

The commissioner must attend the hearing to answer any questions that the Labour Court may possibly want to put to such commissioner but should be represented by a representative appointed by the CCMA.

At the hearing the Court will make a ruling whether to decide the matter on the papers or whether oral evidence should be heard.

The Labour Court will consider all the facts and circumstances of each case to determine whether the respondent was willfully in contempt of the commission. If the finding of contempt is confirmed, all relevant facts and circumstances prevailing at the time and relevant to the determination of an appropriate order will be considered.

The sanction that may be imposed includes suspension from appearing in any labour dispute resolution forum (in the case of a person other than a legal practitioner), a fine, or in extreme cases, imprisonment. In the case of legal practitioners the Court may refer the matter to the Law Society or the Society of Advocates (as the case may be) to consider whether further action should be taken against the practitioner concerned.

Interpreter

0710 “In terms of the principle of access to courts and other independent

dispute resolution bodies as set out in section 34 of the Constitution, there is a positive obligation on those conducting proceedings to inform litigants of their rights and entitlement to interpretation when proceedings are conducted in a language other than their own and when they would not be in a position to understand the proceedings when conducted in any other language. The duty is less onerous when a litigant is represented by someone else during the proceedings. In that instance, the arbitrator can reasonably assume (unless the representative raises the issue of the need for an interpreter) that same is not necessary. However, the duty remains intact where the request for interpretation is made even where the litigant is represented.”

Mabitsela v Department of Local Government & Housing & others [2012] 8 BLLR 790 (IC)

Costs

0711 In general the Labour Court may make an order for the payment of costs, according to the requirements of law and fairness and can amongst other things take into account the conduct of the parties in proceeding with or defending the matter (s 162 (2) (b) (i)). Moreover in National Union of Mine Workers v East Rand Gold and Uranium ltd 1992 (1) SA 700 (A); (1991) 12 ILJ 1221 (A) the then Appellate Division held that although the general rule that costs should follow the result is a relevant consideration, it may yield where considerations of fairness require it. Proper regard should be had to all the facts and circumstances of a particular matter. Furthermore, the special nature of dispute resolution in the employment context should always be kept in mind. In particular, the making of costs orders may well discourage parties, and particularly individual employees, from

approaching the court and accordingly the court should hesitate before making such an order where a genuine dispute exists and the approach to the court was not unreasonable.

See Van den Berg v SA Police Service (2005) 26 ILJ 1723 (LC)

0712 …in an evident spirit of compromise the applicant has settled for less, but

still an arrangement granting key aspects of the relief he originally sought, pending the resolution of the grievance and dispute by means of arbitration. Far from being unreasonable, the applicant’s conduct is commendable and ought not to be punished with a costs award.

Van den Berg v SA Police Service (supra)

Withdrawals 0713 Unlike Courts of Law the CCMA must resolve the disputes referred to it, if

not through conciliation, then through arbitration. For this reason CCMA arbitrations may not be adjourned sine die and absolution from the instance is not a competent order that an arbitrator can make. For the same reason it is not open to applicants to withdraw disputes with the intention of later applying to for such disputes to be reinstated on the roll. There are time limits within which a referral may be made and time limits within which a conciliation meeting must be held. If disputes are not resolved through conciliation it must expeditiously be resolved though arbitration.

0714 In Ncaphayi v CCMA & others (2011) 32 ILJ 402 (LC) it was found that

the withdrawal of a dispute referral is not the act of a functionary that is subject to that Court’s review powers. It was further found that the withdrawal of a dispute by a party is akin to absolution from the instance which does not prevent that party from reinstituting proceedings on the same cause of action. It is however important to note that the Labour Court qualified this by stating -

“Obviously, if the withdrawal under consideration is part and parcel of a final settlement of the dispute, the situation would be quite different.”

0715 The Ncaphayi case was followed in Kgobokoe v CCMA & others (2012)

33 ILJ 235 (LC), a case in which it was found that if a referral is withdrawn due to a misunderstanding the case should be reinstated on the roll is such an application is brought.

0716 The two cases illustrate the importance of following the procedures

referred to in paragraph 12.2 of the Practice and Procedure Manual.

0717 The purpose of the procedures is to ensure that applicants are not pressurised or unduly influenced to withdraw disputes and also to ensure that the withdrawal would bring the dispute finally to an end i.e. that it is part of a settlement of the dispute.

0718 Where both parties are present it is best practice to record in a signed

settlement agreement that the dispute is by agreement finally resolved on a basis that the matter be withdrawn by the applicant and that the applicant had filed a such notice of withdrawal.

0719 If the withdrawal of the matter does not resolve the dispute e.g. where the

dispute will be pursued in a different forum with jurisdiction the commissioner dealing with the matter must ensure that that is specifically recorded in the notice of withdrawal.

08 EVIDENCE 0801 The rule which is generally referred to as the parol evidence rule is to the

effect that “when a contract has been reduced to writing, the writing is, in general regarded as the exclusive memorial of the transaction and in a suit between parties no evidence to prove its terms may be given save the document or secondary evidence of its contents, nor may such document be contradicted, altered, added to or varied by parol evidence.”

On the above authorities it seems to me that the parol evidence rule does

not preclude the leading of oral evidence where the purpose of leading such oral evidence is to show what the true relationship was between the parties to the dispute or where the evidence tends to show or may tend to show what the true relationship was between the parties or where it may tend to show that the relationship between the parties falls or fell within the ambit of the definition of the word “employee” in section 213 of the Act.

Where a court or other tribunal is called upon to decide whether a person

is another person’s employee, or not, it is enjoined to determine the true and real position. Accordingly it ought not to decide such a matter exclusively on the basis of what the parties have chosen to say in their agreement for it might be convenient for both parties to leave out of the agreement some important and material matter or not to reflect the true position.

If a court or other tribunal were to be precluded from looking at matters

outside of the parties’ agreement, there would be a serious danger that it could be precluded from determining the true position or the true relationship between the parties and end up making a finding that the parties wish it to make as to the position when in fact the true position is different. This cannot be allowed in a case where it is the duty of the court or tribunal to determine that which is objectively the position. Indeed were a court or tribunal faced with such a decision to decide in accordance only with the contents of the agreement between them, then, in a case such as this, where the decision whether a person was or was not another one’s employee goes to heart of the jurisdiction of the court , the parties would in effect be able by their agreement to confer jurisdiction on a court or tribunal which it otherwise does not have or to take away from a court or tribunal jurisdiction that it otherwise has over them. That would be completely untenable and simply be not allowed because whether or not a court or other tribunal has jurisdiction in a particular matter is generally speaking, a matter that must be determined objectively and not be based on the say so of any party or, indeed, of all parties to a dispute.

It is furthermore clear from the authorities not only in this country but also

in England and elsewhere that the law is that whether or not a person is or

was an employee of another is a question that must be decided on the basis of realities – on the basis of substance and not form or labels – at least not form and labels alone. In this regard it is important to bear in mind that an agreement between any two persons may represent form and not substance or may not reflect the realities of the relationship.

Denel (Pty) Ltd v Gerber [2005] 9 BLLR 849 (LAC)

0802 If it is recorded in the contract of employment that it constitutes the entire agreement between the parties and if it records the duties and obligations of the employee, evidence led to show that the employee party also had other duties would be inadmissible.

Fidelity Cash Management Services v Commission for Conciliation, Mediation and Arbitration and others [2008] 3 BLLR 197 (LAC)

Hearsay

0803 In deciding whether or not it is in the interest of justice to allow hearsay evidence the factors referred to in section 3(1) of the Law of Evidence Amendment Act 45 of 1988 (LEAA) has to be considered i.e. (i) the nature of the proceedings, (ii) the nature of the evidence, (iii) the purpose for which the evidence is tendered, (iv) the probative value of the evidence, (v) the reason why the evidence is not given by the person upon whose

credibility the probative value of such evidence depends, (vi) any prejudice to a party which the admission of such evidence might

entail, and (vii) any other factor which should in the opinion of the court be taken into

account, It is not irregular for an arbitrator to rely on hearsay evidence if the

purpose for which such hearsay evidence was tendered was to confirm other evidence.

The Sisonke Partnership t/a International Healthcare Distributors v National Bargaining Council for Chemical Industry & others Case No: JR2766/07 Evaluating evidence

0804 “The technique generally employed by courts in resolving factual disputes

of this nature may conveniently be summarised as follows. To come to a conclusion on the disputed issues a court must make findings on (a) the credibility of the various factual witnesses; (b) their reliability; and (c) the probabilities. As to (a), the court’s finding on the credibility of a particular

witness will depend on its impression about the veracity of the witness. That in turn will depend on a variety of subsidiary factors, not necessarily in order of importance, such as (i) the witness’ candour and demeanour in the witness-box, (ii) his bias, latent and blatant, (iii) internal contradictions in his evidence, (iv) external contradictions with what was pleaded or put on his behalf, (v) the probability or improbability of particular aspects of his version, (vi) the calibre and cogency of his performance compared to that of other witnesses testifying about the same incident or events. As to (b), a witness’ reliability will depend, apart from the other factors mentioned under (a) (ii), (iv) and (v) above, on (i) the opportunities she had to experience or observe the event in question and (ii) the quality, integrity and independence of his recall thereof. As to (c), this necessitates an analysis and evaluation of the probability or improbability of each party’s version on each of the disputed issues. In the light of the assessment of (a), (b) and (c) the court will then, as a final step, determine whether the party burdened with the onus of proof has succeeded in discharging it. The hard case, which will doubtless be a rare one, occurs when a court’s credibility findings compel it in one direction and its evaluation of the general probabilities in another. The more convincing the former, the less convincing will be the latter. But when all factors are equipoised probabilities prevail.

SFW Group Ltd & another v Martell et Cie & others 2003 (1) SA 11 (SCA), (at paragraph 5 of the judgment) See also Enviroserv Waste Management (Pty) Ltd v Mosime N.O. & others (Case No: JR 644/07) See also Sasol Mining (Pty) Ltd v Ngqeleni NO & others (2011) 32 ILJ 723 (LC)

0805 “The credibility of the witnesses and the probability and improbability of

what they say should not be regarded as separate enquiries to be considered piecemeal. They are part of a single investigation into the acceptability or otherwise of the respondent's version, an investigation where questions of demeanour and impressions are measured against the contents of a witness' evidence, where the importance of any discrepancies or contradictions is assessed and where a particular story is tested against facts that cannot be disputed and against the inherent probabilities, so that at the end of the day one can say with conviction that one version is more probable and should be accepted, and that therefore the other version is false and may be rejected with safety. In this regard see Mabona & another v Minister of Law & Order & Others 1988 (2) SA 654 (SE). "

Masilela v Leonard Dingler (Pty) Ltd (2004) 25 ILJ 544 (LC)

See also Enviroserv Waste Management (Pty) Ltd v Mosime N.O. & others (supra)

Polygraph tests

0806 The cases dealing with the value to be placed on polygraph test results were summarised in Sedibeng Local Municipality v SALGBC & others (Unreported Labour Court Case No JR 1559-09 dated 31 May 2012.

0807 In Truworths Ltd v Commission for Conciliation, Mediation and

Arbitration (2009) 30 ILJ 677 (LC) the value of polygraph testing in disciplinary matters was summarised as follows:

“…a polygraph test on its own cannot be used to determine the guilt of an employee (see also John Grogan Workplace Law (9 ed) at 160). However, a polygraph certainly may be taken into account where other supporting evidence is available provided also that there is clear evidence on the qualifications of the polygraphist and provided that it is clear from the evidence that the test was done according to acceptable and recognizable standards. At the very least, the result of a properly conducted polygraph is evidence in corroboration of the employer's evidence and may be taken into account as a factor in assessing the credibility of a witness and in assessing the probabilities. The mere fact that an employee, however, refuses to undergo a polygraph is not in itself sufficient to substantiate an employee's guilt.”

0808 In two other Labour Court judgments judges accepted expert evidence to the effect that polygraph tests are not reliable indicators of deceit. In those cases it was found that polygraph test results do not constitute fair and objective criteria for selecting employees to be affected by termination of employment for operational reasons.

See National Union of Mineworkers & Others v Coin Security Group (Pty) Ltd t/a Protea Coin Group (2011) 32 ILJ 137 (LC); and

Food & Allied Workers Union on behalf of Kapesi & others v Premier Foods Ltd t/a Blue Ribbon Salt River (2010) 31 ILJ 1654 (LC)

1809 Polygraph results may however be used if a collective agreement authorise the transfer of an employee failing a polygraph test out of a position of trust i.e. if it is an agreed criterion.

See SA Transport & Allied Workers Union & Others v Khulani Fidelity Security Services (Pty) Ltd (2011) 32 ILJ 130 (LAC) at 134J-136C



09 RESCISSION

Rescission of certified awards 0901 An award that was certified as such by the director and which may be

enforced as if it is an order of the Labour Court may be rescinded if grounds for rescission exist and it is not necessary that the act of certification first be set aside by the Labour Court.

Gois t/a Shakespeare’s Pub v Van Zyl & others (2003) 24 ILJ 2302 (LC); [2003] 11 BLLR 1176 (LC)

Grounds for rescission

0902 Section 144 of the LRA is to be interpreted so as to include “good cause”

as a ground for rescission.

Shoprite Checkers (Pty) Limited v CCMA and others (2007) 28 ILJ 2246 (LAC); [2007]10 BLLR 917 (LAC)

0903 The test for good cause in an application for rescission normally involves

the consideration of at least two factors. Firstly, the explanation for the default and secondly whether the applicant has a prima facie defence.

Shoprite Checkers (Pty) Limited v CCMA and others (supra)

0904 “An application for the rescission of a default judgment must show good

cause and prove that he at no time denounced his defence, and that he has a serious intention of proceeding with the case. In order to show good cause an applicant must give a reasonable explanation for his default, his explanation must be made bona fide and he must show that he has a bone fide defence to the plaintiff’s claims.”

Northern Province Local Government Association v CCMA and Others [2001] 5 BLLR 539 (LC) at 545 at para 16

0905 “These two essential elements ought nevertheless not to be assessed

mechanistically and in isolation. While the absence of one of them would usually be fatal, where they are present they are to be weighed together with relevant factors in determining whether it should be fair and just to grant the indulgence.”

MM Steel Construction CC v Steel Engineering and Allied Workers Union of SA and Others (1994) 15 ILJ 1310 (LAC)

0906 …where rescission is sought on the basis that an order was erroneously

granted, the applicant is not required over and above that, to show good cause. Proof of the fact that the order was erroneously granted suffices for having rescission, provided that such order was granted in the absence of the applicant.

Lumka and Associates v Maqubela (2004) 25 ILJ 2326 (LAC)

0907 “The enquiry in an application for the rescission of an arbitration award is

consequently bipartite. The first leg is one concerned with whether or not the notice of set down was sent (for instance by fax or registered post). Should evidence show that the notice was sent, a probability is created that the notice sent was received. The second leg to the enquiry is one which concerns itself with the reasons proffered by the applicant who failed to attend arbitration proceedings. Such applicant needs to prove that he or she was not willful in defaulting, that he or she has reasonable prospects of being successful with his or her case, should the award be set aside. However the applicant needs not necessarily deal fully with the merits of the case.

Northern Training Trust v Maake & others (2006) 27 ILJ 828 (LC) 0908 The LAC in the Shoprite Checkers case confirmed that section 144 should

be interpreted as including “good cause.” This means that good cause may also be a ground on which rescission may be granted. It does not mean that in all cases good cause needs to be shown before rescission may be granted.

Firstly, there should be an enquiry whether the notice of set down was

given to the affected party. If the finding is that the notice of set down was not sent to the affected party (e.g. that it was sent to the wrong address or fax number and not received by the affected party) it would follow that the commissioner issuing the default award on the assumption that notice of the set down was given, erred in doing so and granted the default award erroneously. In such circumstances rescission should be granted irrespective whether the affected party has a bona fide case or prospects of success. Not giving proper notice would constitute an irregularity in the proceedings and would remain an irregularity irrespective of the merits of the case of an affected party.

Secondly, in the event of a finding that proper notice of the set down was

given, it must further be considered whether the affected party has shown good cause for the default award or ruling to be rescinded. A finding that

the default was not willful or due to gross negligence, that the rescission application is bona fide and that the affected party has a bona fide case would imply that the award was erroneously granted. The circumstances must be such that had the commissioner who granted the default award, known of it, a ruling would not have been made that the arbitration should proceed in the absence of the affected party and the matter would have been adjourned to enable the absent party to participate in the proceedings.

0909 Like the courts, the CCMA has a discretion whether or not to grant an

application for rescission under section 144 (a). Tshivhase Royal Council & another v Tshivhase & another 1992 (4)

SA 852 (A) at 863A; Transport & General Workers Union & others v Kempton City Syndicate & another (supra) at 108D

0910 The CCMA will normally exercise the discretion in favour of a party

applying for rescission if that party was through no fault of his/her own, not afforded an opportunity to oppose the order granted against him/her, and when, on ascertaining that the order has been granted in his/her absence, he/she takes expeditious steps to have the position rectified.

Theron NO v United Democratic Front and others 1984 (2) SA 532 (CPD) at 536G;

Tshivhase Royal Council & another v Tshivhase & another (supra) at 862J

Service by fax

0911 “It seems to me that a Commissioner in considering whether or not a

notification of an arbitration hearing has indeed been received by a respondent, it is necessary to consider all the facts bearing on that question. Axiomatically, in deciding whether or not fax transmission was received, proof that the fax was indeed sent creates a probability in favour of receipt, but it does not logically constitute conclusive evidence of such receipt. A party who claims that it did not receive a telefaxed notification must be put in a position where it can consider the grounds upon which it is contended that a notice was furnished to it, and thereupon give an explanation as to whether or not it was received, could have been received, and any other germane circumstance, which has a bearing on the explanation tendered that the party was ignorant that the matter had been set down. Naturally Commissioners must be on their guard against abuse of the process by parties who, having been properly notified, but having neglected to participate in the proceedings, subsequently wail once an adverse arbitration award is served on them. However the prudent

need to guard against those circumstances should not disturb a fair minded enquiry into whether or not the notice did not come to the attention of the party.”

Northern Province Local Government Association v CCMA & Others [2001] 5 BLLR 539 (LC)

0912 “Commissioners ought to, by now, appreciate the inherent danger of

accepting facsimile transmission slips as conclusive proof that notification of legal proceedings has taken place.” A fax transmission slip or proof of registered posting is at best prima facie proof that a notice of set down was sent. In the absence of other proof that it was received commissioners should accept the mere say so of an applicant for rescission that he/she/it did not receive the notice of set down.

Edgars Consolidated Stores (Pty) Ltd v Kalanda & others [2007] 7

BLLR 632 (LC)

0913 it is an irregularity not to serve a notice of set down of a rescission application at a chosen service address and a gross irregularity to dismiss rescission application in cases where the set down was not served at a chosen service address and the applicant party failed to attend. In such circumstances the commissioner may be ordered to pay the costs of a review.

Inzuzu I.T. Consulting (Pty) Limited v CCMA & others (Unreported Case No: P 487/2009)

10 CONDONATION 1001 A referring party loses the right to be heard if a dispute is referred late

unless the late referral is condoned. In such cases the referring party must satisfy a commissioner that condonation should be granted after a consideration of the factors listed in rule 9 of the CCMA Rules. The commissioner considering whether to grant condonation has a discretion which should be exercised after weighing up:

the degree of lateness (in other words, how many days after the required time period was the dispute referred);

the reasons for the lateness (the explanation must be reasonable or satisfactory);

the referring party’s prospects of succeeding with the referral and obtaining the relief sought against the other party;

any prejudice that a party may suffer should condonation be granted or not be granted; and

any other relevant facts (such as the importance of the case, the interest of the respondent in finality or the attitude of the respondent towards the application).

1002 Ordinarily these factors are interrelated and not individually decisive, save that if there are no prospects of success, there would be no point in granting condonation. The weight to be given to any one of the factors may vary from case to case. What is needed is an objective conspectus of all the facts. Thus a slight delay and a good explanation may help to compensate for prospects which are not strong. Or the importance of the issue and strong prospects of success may tend to compensate for a long delay.

See Melane v Santam Insurance Co Ltd 1962 (4) SA 531 (A) at 532B-E; and SA Broadcasting Corporation v Commission for Conciliation,

Mediation & Arbitration & others (2003) 24 ILJ 999 (LC) 1003 Where in an application for condonation, the delay is excessive and no

explanation has been given for that delay or an “explanation” has been given but such explanation amounts to no explanation at all, I do not think it is necessary to consider the prospects of success.

Moila v Shai NO & Others (2007) 28 ILJ 1028 (LAC) 1004 Commissioners should be hesitant not to grant condonation in cases

where the delay was the fault of a representative. There are however limits beyond which a commissioner should not condone non-compliance with the time frames even if it was due to the fault of the representative. For example, where there has been a long delay commissioners should

consider what steps were taken by the party applying for condonation to ascertain whether all the procedural steps were timeously taken by the representative and, if not, to ensure that it was done.

See Meintjies v H D Combrinck (Edms) Bpk 1961 (1) SA 262 (A) at 263H-264A; Saloojee & another NNO v Minister of Community Development 1965 (2) SA 135 (A) at 140H-141A; Reinecke v IGI Ltd 1974 (2) SA 84 (A) at 92F-H. Arnott v Kunene Solutions & Services (Pty) Ltd (2002) 23 ILJ 1367 (LC); and Chemical Energy Paper Printing Wood & Allied Workers Union & others v Metal Box t/a MB Glass (2005) 26 ILJ 92 (LC)

11 UNFAIR DISMISSAL – GENERAL

So-called fixed term contracts subject to the discretion of a client 1101 The constitutional right to fair labour practices includes a right not to be

dismissed without a fair reason and without fair process. Various sections of the LRA give content to the said constitutional right. The whole purpose of the legislation would be undermined if labour brokers and their clients were allowed to evade the provisions by entering into contracts, the provisions of which enable them to dismiss employees without a fair reason and without following any procedure.

NUMSA obo Daki v Colven Associates [2006] BALR 877 (MEIBC) 1102 In many instances the contract between the labour broker and its clients

provide that the labour broker will supply the client with labour for as long as the client requires such labour. The labour broker uses its contract with the client as justification for entering into contracts with its employees in terms of which they will be employed for as long as the client requires their services. Whether such arrangement is a deliberate evasion of the LRA, depends, so it is suggested, on what the purpose was for entering into the arrangement.

1103 It may be proved that the purpose of the wording of the contracts was to

facilitate an argument that the contracts were of limited duration and it terminated automatically when the client no longer required the employee i.e. that no dismissal occurred. It may further be proved that in reality the purpose of the arrangement was simply to evade the provisions of the LRA and to enable termination of employment without following a fair procedure and without having a fair reason. What was said in the Denel case (para 20) equally applies to such situation i.e. such evasion of the law is impermissible and must not be sanctioned. In plain language the CCMA should not give effect to the form of the contract if the realities show that it was a scheme entered into to enable the labour broker and its client to terminate employment without fair reason and without following a fair procedure.

Jonas / Quest Staffing Solutions [2003] BALR 811 CCMA

Denel (Pty) Ltd v Gerber [2005] 9 BLLR 849 (LAC) 1104 The purpose of a fixed term employment contract is to agree at the outset

when the employment relationship would terminate. The employer might only have a need to employ the employee for a specific period of time or for a limited project and the parties agree at the outset that the employment relationship would terminate at the end of the period or the project, in other words at the end of a determinable time period. For

example, a labour broker might only have a contract to supply labour to a client for a fixed period of time or a fixed project and then employ employees for that purpose. In such event employment terminates in terms of the agreement and no dismissal occurs.

1105 Some contracts are not really fixed term contracts in the true sense but

have as it purpose to regulate terms and conditions of employment during certain periods of time, for example, seasonal contracts. The agreement might be to employ the employee during the harvesting season of each year or during a specified busy period when more labour is required. Such contracts do not automatically terminate and the employer may be obliged to engage the employee during each “season.” Not to do so will constitute a dismissal which will be unfair if the employer does not have a fair reason and if a fair procedure is not followed.

SACCAWU & others v Primserv ABC Recruitment (Pty) Ltd [2007] BLLR 78 (LC)

1106 Where a labour broker supplies labour to a client and the client

unreasonably indicates that it no longer wants the employee on its premises it is arguable that fairness requires of the labour broker to investigate the matter and take steps to avoid dismissal. The circumstances may be such that an attempt should be made to persuade the client to change its attitude. Alternatives to dismissal such as placing the employee at another client should be explored. If the employee is not obliged to accept such change in terms of the contract the employee must be consulted to establish whether he/she would consent to such change or whether such employee can suggest other viable alternatives. If no alternatives are discovered during a consultation process the broker would be obliged to follow a proper retrenchment process including a consideration of selection criteria and applying fair selection criteria. If reasonable alternatives were offered to the employee such employee may forfeit the right to severance pay. If the employee committed misconduct it is obviously open to the labour broker to follow the disciplinary route and to consider termination of employment for disciplinary reasons.

NUMSA obo Mahlangu & others/ Abancedisi Labour Services CC & another [2006] 1 BALR 29 (MEIBC), Smith/ Staffing Logistics [2005] 10 BALR 1078 (MEIBC)

NUMSA obo Daki v Colven Associates [2006] BALR 877 (MEIBC) Dismissal demanded by client of labour broker 1107 “The Constitution provides that everyone and not just employees have a

right to fair labour practices. Consequently, even though a person may not be regarded by law as an employee of the client but of the labour broker,

the client still has a legal duty to do nothing to undermine an employee’s right to fair labour practices unless the limitation is justified by national legislation.

There is nothing in the text of s 198 of the Act that indicates …that a

labour broker and a client may limit the right of an employee not to be unfairly dismissed.

It must be recalled that this right exists primarily to guarantee security of

employment… If labour brokers and clients are given the licence to contract for standards that are less than the fundamentals guaranteed, the right to security of employment of employees involved in this tripartite relationship will be severely undermined.

In applying the right not to be unfairly dismissed, a court is not bound by contractual arrangements created by parties through an agreement when the agreement conflicts with the fundamental rights of workers.

…any clause in a contract between a labour broker and a client which

allows a client to undermine the right not to be unfairly dismissed, would… be against public policy.

It is axiomatic that an employer should not be allowed to invoke such a

clause to justify a dismissal for operational requirements. An illegal demand can never found the basis to justify a dismissal based

on operational requirements … By the same token s 189 of the Act cannot be used to disguise the true reason for dismissal.

…The labour broker is entitled to approach a court of law to compel the

client not to insist upon the removal of an employee where no fair grounds exist for that employee to be removed. The labour broker is also entitled to resist an attempt by the client to enforce a contractual provision which is against public policy.

…if a court were to reinstate an employee into the employ of the labour

broker, the labour broker may enforce such an order against the client to give effect to the employee’s rights to fair labour practices.

The failure to recognise such a right of recourse will render the primary

remedy for a dismissed worker, namely reinstatement, altogether illusory. In order to fulfill the Act’s stated objective to promote social justice it is necessary to recognise a right of recourse.

…on the facts of this case, I find that the client’s insistence that the

applicant be removed was unlawful and a breach of the applicant’s right to

fair labour practices. The applicant did not commit an offence for which dismissal was justified. The client had no right to insist upon the application of its own internal policies concerning offensive e-mails because if it wanted that to apply it should have employed the employee… The client had no right to impose its employment policies on the labour broker, where the application of those policies conflicted with the right not to be unfairly dismissed.

Furthermore, insofar as the contract between the respondent and the

client allowed the client arbitrarily to require the removal of the employee from its premises, such provision was unlawful and against public policy as it took no account of the right of the employee not to be unfairly dismissed.

The respondent labour broker could have… resisted the client’s attempts

to invoke clauses in the contract with the client which undermined the applicant’s rights. It was unfair of it not to do so before invoking its right to terminate the contract of employment for operational requirements and also because the demand of the client was unlawful and unfair.

Nape v INTCS Corporate Solutions (Pty) Ltd (2010) ILJ 2120 (LC)

Constructive dismissal – what needs to be proved - relevance of repudiation

1108 The enquiry is whether the employer without reasonable and proper

cause, conducted itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. It is not necessary to show that the employer intended any repudiation of the contract; the court’s function is to look at the employer’s conduct as a whole and determine whether it is such that its effect, judged reasonably and sensibly, is such that the employee cannot be expected to put up with it. The conduct of the parties has to be looked at as a whole and its cumulative impact assessed.

Pretoria Society for the Care of the Retarded v Loots (1997) 18 ILJ 981 (LAC):

1109 …The decision of an employee to leave because of the intolerable work

situation has to be a last resort. In Old Mutual Group Schemes v Dreyer & another (1999) 20 ILJ 2030 (LAC) Conradie JA held at paras [16] – [17], that:

Billikheid sal normalweg ook vereis dat ‘n werknemer wat met sy werkgewer se opdragte and procedures ontevrede is, aan die werkgewer ‘n geleentheid bied om sake waaroor daar onmin bestaan reg te stel…

Ek vind steun vir hierdie standpunt in die volgende passasie uit die saak van Pretoria Society for the Care of the Retarded v Loots (1997) 18 ILJ 981 (LAC): “When an employee resigns or terminates the contract as a result

of constructive dismissal such employee is in fact indicating that the employee cannot fulfill what is the employee’s most important function, namely to work. The employee is in effect saying that he or she would have carried on working indefinitely had the unbearable situation not been created. She does so on the basis that she does not believe that the employer will ever reform or abandon the pattern of creating an unbearable work environment. If she is wrong in this assumption and the employer proves that her fears were unfounded then she has not been constructively dismissed and her conduct proves that she has in fact resigned.”

Conradie JA referred to the Loots case where mention was also made of a belief of the employee that the employer would never reform or abandon the pattern of creating an unbearable work situation. How will an employee ever prove that if he has not adopted other suitable remedies available to him? It is, firstly also desirable that any solution short of resignation be attempted as it preserves the working relationship, which is clearly what both parties presumably desire. Secondly, from the very concept of intolerability one must conclude that it does not exist if there is a practical or legal solution to the alleged oppressive conduct. Finally, it might well smack of opportunism for an employee to leave when he alleges that life is intolerable but there is a perfectly legitimate Albany Bakeries Ltd v Van Wyk & Others (2005) 26 ILJ 2142 (LAC)

1110 The LAC in effect found that an aggrieved employee must follow the

employer’s grievance procedure. Even if the employee is dissatisfied with the manner in which his grievance was dealt with in terms of a grievance procedure and if the matter involves an unfair labour practice such an employee should make use of the machinery of the LRA e.g. where the grievance relates to alleged unfair demotion the matter must be referred to conciliation and arbitration. A failure to do so would render it virtually impossible for an employee to prove in a constructive dismissal dispute that an assumption that the employer would never reform, was correct.

Albany Bakeries Ltd v Van Wyk & Others (supra) 1111 The requirements for constructive dismissal are

The employee must have terminated the employment relationship. (If it was the employer who terminated the relationship, if it was terminated by mutual consent or if it was not terminated at all then the dispute is not about a constructive dismissal).

The reason for the employee terminating the employment relationship must have been because the employee subjectively believed that a continued employment relationship had become intolerable.

Judged objectively, the employer must have conducted itself in a manner calculated or likely to destroy or seriously damage the employment relationship without reasonable or just cause for doing so.

The effect of the employer’s conduct judged reasonably and sensibly, must be such that the employee cannot reasonably be expected to put up with it.

Terminating the employment relationship must have been a measure of last resort for the employee and no reasonable alternatives, such as, following an internal grievance procedure and, if that that did not remedy the situation, making use of dispute resolution mechanisms contained in the LRA, must have been open to the employee.

The employer must have taken no or inadequate steps to address the employee’s grievance once it came to its attention, justifying a conclusion that the employer will never reform or never abandon the pattern of creating an unbearable work environment.

In exceptional cases and where the employer’s conduct was so serious that it caused an irretrievable break down in the employment relationship, an employee is not required to follow internal grievance procedures or statutory dispute resolution mechanisms but then the employee needs to prove that following the internal grievance procedure or pursuing statutory dispute resolution mechanisms would not have changed the situation to such an extent that the employee could reasonably have been expected to continue with the employment relationship.

See Albany Bakeries Ltd v Van Wyk & Others (supra) and the cases referred to in that judgment. See also Sergio Carlos v IBM South Africa (Pty) Ltd (2006) (LAC), unreported.

Constructive dismissal not necessarily unfair

1112 “In short, unlike an actual dismissal, constructive dismissal consists in the termination of the employment contract by reason of the employee’s rather than the employer’s own act. However such act of the employee is precipitated by earlier conduct on the part of the employer, which conduct may or may not be justified. Thus like an actual dismissal, a constructive dismissal may or may not be unlawful (in the sense of constituting a breach of the employment contract) and may or may not be unfair. It is not, as is sometimes mistakenly thought, either inherently unlawful or unfair.”

Amalgamated Beverage Industries (Pty) Ltd v Jonker (1993) 14 ILJ 1232 (LAC) See also Moser Industries (Pty) Ltd v Venn [1997] 11 BLLR 1402 (LAC) at 1407 Progressive discipline – may dismiss in appropriate circumstances even if no final written warning- approach to be adopted in regard to consistency

1113 “Even in the absence of a valid final written warning an employer is

entitled to dismiss an employee in appropriate circumstances…The employee has a deplorable employment record and there is a litany of transgressions to which I have alluded. An employer is always entitled to take into account the cumulative effect of these acts of negligence, inefficiency, and/or misconduct. To hold otherwise would be to open an employer to the duty to continue employing a worker who regularly committing a series of transgressions at suitable intervals, falling outside the periods of applicability of final written warnings. An employee’s duties include the careful execution of his work. An employee who continuously and repeatedly breaches such a duty is not carrying out his obligations in terms of the contract of employment and can be dismissed in appropriate circumstances.”

“In SA Commercial and Allied Workers Union & others v Irvin & Johnson

(1999) 20 ILJ 2302 (LAC) this court set out the principles of consistent employment discipline…the ‘parity principle’ merely requires that every employee must be measured by the same standards. When comparing employees care should be taken to ensure that the gravity of the misconduct is evaluated and the disciplinary record of the two employees compared. No extraneous matters should be regarded and a comparison has to be made between all the relevant features that normally considered when one employee is disciplined.” Gcwensha v CCMA & others (2006) 27 ILJ 927 (LAC)

Factors relevant to whether or not to award compensation 1114 The following factors should be taken into account in deciding whether or

not to award compensation

the nature of the reason for dismissal; where the reason for the dismissal is one that renders the dismissal automatically unfair such as race, colour, union membership, that reason would count more in favour of compensation being awarded than would be the case with a reason for dismissal that does not render the dismissal automatically unfair; accordingly, it would be more difficult to interfere with the decision to award compensation in such case than otherwise would be the case;

whether the unfairness of the dismissal is on substantive or procedural grounds or both substantive and procedural grounds; obviously it counts more in favour of awarding compensation as against not awarding compensation at all that the dismissal is both substantively and procedurally unfair than is the case if it is only substantively unfair, or, even lesser, if it is only procedurally unfair;

in so far as the dismissal is procedurally unfair, the nature and extent of the deviation from the procedural requirements; the minor the employer’s deviation from what was procedurally required, the greater the chances are that the court or arbitrator may justifiably refuse to award compensation; obviously, the more serious the employer’s deviation from what was procedurally required, the stronger the case is for the awarding of compensation;

in so far as the reason for dismissal is misconduct, whether or not the employee was guilty or innocent of the misconduct; if he was guilty, whether such misconduct was in the circumstances of the case not sufficient to constitute a fair reason for the dismissal;

the consequences to the parties if compensation is awarded and the consequences to the parties if compensation is not awarded;

the need for the courts, generally speaking, to provide a remedy where a wrong has been committed against a party to litigation but also the need to acknowledge that there are cases where no remedy should be provided despite a wrong having been committed even though these should not be frequent.

in so far as the employee may have done something wrong which gave rise to his dismissal but which has been found not to have been

sufficient to warrant dismissal, the impact of such conduct of the employee upon the employer or its operations or business.

any conduct by either party that promotes or undermines any of the objects of the Act, for example, effective resolution of disputes.

Kemp t/a Centralmed v Rawlins (2009) 30 ILJ 2677 (LAC); [2009] 11 BLLR 1027 (LAC)

1115 ‘If an employer unfairly dismisses an employee and he wishes to reverse

that decision, he must be able to do so, and if the employee fails to accept that offer for no valid reason, the employer has a strong case in support of an order denying the employee compensation.’

Kemp t/a Centralmed v Rawlins (supra)

Reasons to be given for amount of compensation

1116 An arbitrator has a discretion and a degree of latitude on what to award in the way of compensation, but an arbitrator ought to provide brief reasons for the relief granted. In the absence of reasons there would be no evidence that the commissioner exercised a proper judicial discretion. A failure to provide reasons for the relief, would also amount to misconduct in the performance of his duties as an arbitrator under section 145(2)(a) of the LRA.

Mohlakoana v The Commissioner, CCMA & others (Case No JR284/09)

Relevance of patrimonial loss

1117 The fact that an employee suffered no financial harm is not a bar to the

granting of compensation. In other words the test is not whether the employee suffered patrimonial loss but whether it would be just and equitable to grant compensation in the circumstances of the case. “Patrimonial loss is a factor to be considered though it is not absolute.”

Lakomski v TTS Tool Technic Systems (Pty) Ltd (2007) 28 ILJ 2775 (LC), See also Nape v INTCS Corporate Solutions (Pty) Ltd (2010) ILJ 2120 (LC)

Compensation for procedural unfairness

1118 Particular considerations arise where a dismissal is found to be only procedurally unfair. In such cases compensation takes the form of a solatium for the loss of the right to a fair pre-dismissal procedure. It is punitive to the employer to the extent that the employer who has breached the right must pay a penalty for doing so

See Johnson & Johnson (Pty) Ltd v Chemical Workers Industrial Union (1999) 20 ILJ 89 (LAC)

Dismissal to compel acceptance of a demand 1119 Section 187 (1) (c) reads as follows: “A dismissal is automatically unfair if the employer, in dismissing the

employee, acts contrary to section 5 or if the reason for the dismissal is - …

(c) to compel the employee to accept a demand in respect of any matter of mutual interest between the employer and employee.”

1120 In NUMSA & others v Fry’s Metals (Pty) Ltd (2005) 26 ILJ 689 (SCA)

the SCA approved of the LAC interpretation of section 187 (1) (c) –

“ The LACs solution to the conundrum of statutory concepts was to assign a distinctive meaning to dismissal in s 187 (1)(c), and then to restrict this category of unfair dismissals to those effected for the purpose of inducing employees to change their minds regarding the employer’s demand. On this approach, only conditional dismissals can fall under s 187 (1)(c)… Dismissals intended to be and operating as final – not, in other words, reversible on acceptance of the demand – can thus never have as their reason ‘to compel the employee to accept’ that demand.”

1121 The Fry’s Metals case was followed in Solidarity obo Wehncke v

Surf4Cars (Pty) Ltd (2011) 32 ILJ 3037 (IC). 1122 According to these judgments the kind of dismissal envisaged by s 187

(1)(c) occurs when the employer notifies the employee as follows:

“You are dismissed because you refuse to agree to a change to the terms and conditions of employment. You will remain dismissed for as long as you refuse to agree. Once you agree to the demand you will be reinstated.”

In other words the circumstances surrounding the dismissal must be similar to (if not the same as) a lock-out a situation. The dismissal is conditional because it is subject to a condition that it will only remain effective for as long as the employee refuses to agree to the demand. The purpose of the dismissal is to compel the employee to accept the demand.

1123 It is not the kind of dismissal envisaged by s 187 (1) (c) if the employer

notifies the employee as follows: “I have given you sufficient opportunity to agree to my demand that the

terms and conditions of you employment be changed. You failed to agree to the demand and for that reason you are now dismissed. It is too late to agree to my demand now. Even if you agree now you will remain dismissed.”

In these circumstances the purpose of the dismissal is not to compel the

employee to accept the demand. 1124 In the Surf4Cars case the Court found that the decision to dismiss the

applicant was a final decision because he would not agree to the contract The Court further found that the applicant was not dismissed in order to compel him to submit to the employer’s will on the contentious term.

12 DISMISSAL FOR MISCONDUCT - PROCEDURAL FAIRNESS 1201 A distinction must be drawn between cases where workplace discipline is

regulated by a collective agreement or by a contract of employment or by employment practices and policies on the one hand and cases where it is not regulated in this way, on the other hand. This is recognised in the Code of Good Practice: Dismissal (“the Code”) in that provides that it was not intended as a substitute for disciplinary codes and procedures that are the subject of collective agreements. The minimum standard of procedural fairness appears from the Code of Good Practice: Dismissal.

1202 “There is clearly no place for formal disciplinary procedures that incorporate

all of the accoutrements of a criminal trial, including the leading of witnesses, technical and complex ‘charge sheets’, requests for particulars, the application of the rules of evidence, legal arguments, and the like … When the Code refers to an opportunity that must be given by the employer to the employee to state a case in response to any allegations made against that employee, which need not be a formal enquiry, it means no more than that there should be dialogue and an opportunity for reflection before any decision is taken to dismiss. In the absence of exceptional circumstances, the substantive content of this process as defined by Item 4 of the Code requires the conducting of an investigation, notification to the employee of any allegations that may flow from that investigation, and an opportunity, within a reasonable time, to prepare a response to the employer’s allegations with the assistance of a trade union representative or fellow employee. The employer should then communicate the decision taken, and preferably communicate this in writing. If the decision is to dismiss the employee, the employee should be given the reason for dismissal and reminded of his or her rights to refer any disputed dismissal to the CCMA, a bargaining council with jurisdiction, or any procedure established in terms of a collective agreement (see Item 4 (1) and (3)).

Avril Elizabeth Home for the Mentally Handicapped v CCMA and

others (2006) 27 ILJ 1644 (LC); [2006] 9 BLLR 833 (LC)

Taking disciplinary action against a shop steward

1203 If an employer intends to take disciplinary action against an employee who is a trade union representative or an employee who is an office-bearer or official of a trade union, the Code requires the employer to inform and consult with the union before doing so. Because the dismissal of such employees may be perceived as victimisation, the object of the consultation is to attempt to satisfy the union that the disciplinary action is not motivated by a desire to victimise and, if there is no agreed procedure, that a procedure will be adopted that will be perceived by employees and the trade union as fair and objective.

1204 The norm applies to trade union representatives of recognised trade

unions. The LRA defines a trade union representative as a member of a trade union elected to represent employees. A shop steward appointed by an unrecognised trade union and not elected to represent employees does not constitute a trade union representative. Accordingly it is not a departure from the norm not to inform and consult in circumstances where disciplinary action is taken against a shop steward appointed by an unrecognised trade union.

1205 Departures from this requirement may constitute procedural unfairness.

Such departures may however be justified if the trade union and the trade union representative were not prejudiced by the failure to inform and consult the trade union and if the employer had good reason for not doing so. Even if there is no justification the arbitrator must consider the extent of the prejudice suffered by the employee in deciding whether to grant compensation and, if so, the amount thereof.

Clauses 14.3.28 to 14.3.30 of the Arbitration Guidelines POPCRU obo Masemola & others v Minister of Correctional Services (2010) 31 ILJ 412 (LC) BIAWU & another v Mutual and Federal Insurance Co Ltd [2002] 7 BLLR 609 (LC)

Legal representation at disciplinary enquiries

1206 In terms of the common law a person does not have an absolute right to

be legally represented before tribunals other than courts of law. In the absence of an agreed right an application is required for legal representation to be allowed at a disciplinary enquiry.

MEC: Department of Finance, Economic Affairs & Tourism, Northern Province v Mahumani [2005] 2 BLLR 173 (SCA) Hamata & another v Chairperson Peninsula Technikon Internal Disciplinary Committee & others 2002 (5) SA 449 (SCA) at par [5] Dabner v South African Railways & Harbours 1920 AD 583 at 598

1207 The common law requires disciplinary proceedings to be fair and if “in

order to achieve such fairness in a particular case legal representation may be necessary, a disciplinary body must be taken to have been intended to have the power to allow it in the exercise of its discretion, unless of course, it has plainly and unambiguously been deprived of such discretion.”

Hamata at paragraph [23] Mahumani at page 176

1208 It does not matter whether or not the disciplinary proceedings can be

characterised as administrative action or whether or not an organ of State is involved.

Hamata at paragraph [23] Schoon v MEC: Department of Finance, Economic Affairs & Tourism, Northern Province & another [2003] 9 BLLR 963 (T) at 969A.

1209 Any rule purporting to compel … an organ to refuse legal representation

no matter what the circumstances might be and even if they are such that a refusal might very well impair the fairness of the administrative proceeding, cannot pass muster in law…..there is plainly a need for …flexibility… That flexibility is…now a constitutional imperative.

Hamata at paragraphs [12] and [13] Schoon at pg 970

1210 “Employers have a general duty to ensure that employees have a fair

hearing prior to disciplinary action being taken against them. Whether legal representation is indispensable to ensuring a procedurally fair hearing is a discretion conferred upon the chairperson of a disciplinary enquiry. The chairperson must exercise such discretion judiciously having regard to all the circumstances of the particular case.”

Majola v MEC, Department of Public Works, Northern Province & others [2004] 1 BLLR 54 (LC) at paragraph [1]

1211 In certain cases where a disciplinary code and procedure contained in a

collective agreement excluded legal representation, or where there was a practice not to allow legal representation, the courts held that the disciplinary enquiry chairperson nevertheless retained a discretion whether or not to allow legal representation.

Majola at paragraph [2]

Van Eyk v Minister of Correctional Services & others [2005] 6 BLLR 638 (EC) Mahumani at pages 176 to 177

1212 If a collective agreement prohibits or restricts the right to legal

representation, legal representation may nevertheless be allowed provided just cause exists not to apply the terms of the collective agreement. Generally adjudicators should be slow to disregard or deviate from a collective agreement. “It follows that the discretion exercised by a chairperson of a disciplinary enquiry in which the right to legal

representation is regulated by collective agreement would be more restricted than a situation where there is no collective agreement.”

Majola at paragraphs [2] to [4]

1213 The factors that a chairperson of a disciplinary enquiry should be taking

into account in exercising the discretion include the following:

the nature of the charges brought;

the degree of the factual or legal complexity attendant upon considering the charges;

the potential seriousness of the consequences of an adverse finding;

the availability of suitably qualified lawyers amongst council staff;

the nature of the prejudice to the employer in permitting legal representation;

whether there is a legally trained initiator; and

any other factor relevant to the fairness of restricting the alleged transgressor to the kind of representation mentioned in the notice to attend the disciplinary enquiry.

Hamata at paragraph 21 Schoon at paragraph 25 Mahumani at paragraph 14

13 DISMISSAL FOR MISCONDUCT Reason for dismissal 1301 It is an elementary principle of not only our labour law in this country but

also of labour law in many other countries that the fairness or otherwise of the dismissal of an employee must be determined on the basis of the reasons for dismissal which the employer gave at the time of the dismissal. The exception to this general rule is where at the time of the dismissal the employer gave a particular reason as the reason for dismissal in order to hide the true reason such as union membership. In such a case the court or tribunal dealing with the matter can decide the fairness or validity of the dismissal not on the basis of the reason that the employer gave for the dismissal but on the basis of the true reason for dismissal.

Fidelity Cash Management Services v Commission for Conciliation, Mediation and Arbitration and others [2008] 3 BLLR 197 (LAC)

Second enquiry / changing decision of chairperson of disciplinary enquiry

1302 Whether or not a second disciplinary enquiry may be opened against an employee would… depend upon whether it is, in all the circumstances fair to do so. I agree with the dicta in Amalgamated Engineering Union of SA & Others v Carlton Paper of SA (Pty) Ltd (1998) 9 ILJ 588 (IC) at 596A–D that it is unnecessary to ask oneself whether the principles of autrefois acquit or res judicata ought to be imported into labour law. They are public policy rules. The advantage of finality in criminal and civil proceedings is thought to outweigh the harm, which may in individual cases be caused by the application of the rule. In labour law fairness and fairness alone is the yardstick. See also Botha v Gengold [1996] BLLR 441 (IC); Maliwa v Free State Consolidated Gold Mines (Operations) Ltd (1989) 10 ILJ 934 (IC). I should make two cautionary remarks. It may be that the second disciplinary enquiry is ultra vires the employer’s disciplinary code (Strydom v Usko Ltd [1997] 3 BLLR 343 (CCMA) at 350F–G). That might be a stumbling block. Secondly, it would probably not be considered to be fair to hold more than one disciplinary enquiry save in rather exceptional circumstances”.

BMW (SA) (Pty) Ltd v Van der Walt (2000) 21 ILJ 113 (LAC)

1303 “…It is incorrect to contend that the test espoused in Van der Walt is that a

second disciplinary enquiry would only be permissible in exceptional circumstances. The true legal position as pronounced in Van der Walt is that a second enquiry would be justified if it would be fair to institute it.”

Branford v Metrorail Services (Durban) & others (2003) 24 ILJ 2269 (LAC): [2004] 3 BLLR 199 (LAC):

1304 Considerations that should be taken into account when ascertaining the fairness of holding a second enquiry include:

whether chairperson conducted the first hearing in good faith;

whether the chairperson had the power to make a final decision, or only make a recommendation;

whether the first inquiry was conducted in accordance with the employer's disciplinary code;

whether the employer acted in good faith when it decided to hold the second inquiry;

whether the second inquiry was provided for in the disciplinary code;

whether the second inquiry itself conformed with the principles of natural justice or, much the same;

whether factors were taken into account in the second inquiry which the employee did not have an opportunity to answer;

whether and in what circumstances new and relevant information came to light after the first hearing;

the time between the first hearing and the second;

the gravity of the employee's offence;

the extent to which the penalty imposed by the first chairperson was out of kilter with the sanction prescribed by the disciplinary code and those actually imposed in practice for the particular offence (i.e. whether the leniency of the penalty induced a 'sense of shock');

whether, in cases where the employee was found not guilty by the first presiding officer, the finding was supported by the evidence.

Whether the seriousness of the charges and the consequences thereof in the workplace was properly addressed during the first enquiry;

whether an irregularity was committed during the first hearing and, if so, the nature of it;

whether the second enquiry was instituted soon after the employer became aware of the outcome of the first enquiry. In this regard fairness requires that disciplinary action should be taken within a reasonable time of the employer becoming aware of misconduct and that the disciplinary action should reach finality within a reasonable time. A long delay may indicate that the employer had at first accepted the outcome of the first hearing in which event it would probably not be fair to hold a rehearing; and

If it was through the alleged offender’s actions that the evidence was not available during the first hearing that would weigh in favour of a finding that a rehearing was fair.

1305 Whether an employer may change the decision of the chairperson of a disciplinary enquiry is determined by the substantive fairness of the decision to change it. A wrong decision by the chair of a disciplinary enquiry can be nullified on review if it was found to have been induced by improper motives. A wrong decision whereby a comparatively lenient sanction was imposed on one employee, even if completely unpolluted by any suggestion of improper motives, may be changed because it remains inherently unfair towards other employees on whom comparatively harsher sanctions were invariably imposed in respect of similar misconduct in the past. An employer may fairly overrule a sanction imposed by a chairperson of a disciplinary enquiry if such sanction is inconsistent with sanctions imposed in the past for similar misconduct.

Greater Letaba Local Municipality v Mankgabe NO & others [2008] 3 BLLR 229 (LC) See also SACCAWU & others v Irvin & Johnson Ltd (1999) 20 ILJ 2302 (LAC); [1999] 8 BLLR 741 (LAC) Cape Town City Council v Masitho &others (2000) 21 ILJ 1957 (LAC)

1306 An employer is not necessarily bound by the recommendations of a

chairperson of a disciplinary enquiry. An employer would however be bound by the findings of the chairperson if the employer had appointed the chairperson to act as its agent i.e. where the chairperson was mandated to make a decision on behalf of the employer. It would therefore be of importance to consider the terms of reference of the chairperson of the disciplinary enquiry i.e. whether he/she could make a decision on behalf of the employer or whether he/she could only make a recommendation.

JAMAFO on behalf of Nero v Pick ’n Pay (2007) 28 ILJ 688 (CCMA) 1307 Depending on the employer’s disciplinary procedure it may be arguable

that it is procedurally unfair should an employer overrule the sanction imposed by the chairperson of the disciplinary enquiry without first giving the employee an opportunity to be heard on the issue.

Greater Letaba Local Municipality v Mankgabe NO & others [2008] 3 BLLR 229 (LC)

1308 In Solidarity/MWU on behalf of Van Staden v Highveld Steel & Vanadium & another (2005) 26 ILJ 2045 (LC) it was found that it was fair in the circumstances of that case for a rehearing of a disciplinary enquiry to be held. The disciplinary tribunal had found that the employee had probably used racially abusive language but nevertheless found the employee not guilty. After a shop steward complained the employer wanted to hold a rehearing. Its disciplinary code made provision for a rehearing in certain circumstances. The employee approached the Labour

Court for an order interdicting the employer from holding such a rehearing. The Labour court refused to grant the interdict because the disciplinary tribunal had committed an obvious irregularity and because of the gravity of the charges and the consequences of the matter, was not properly addressed.

14 DISMISSAL FOR POOR WORK PERFORMANCE 1401 The commissioner correctly set out the law relating to poor work

performance, i.e. that the employer is entitled to set standards for performance and hold employees accountable failing which they face disciplinary action including dismissal. He then identified the requirements of procedural fairness as set out in item 9 of the Code of Good Practice: Dismissal (the code) which requires consideration of whether the employer conducted a factual investigation into the alleged failure to meet performance standards; whether the employee was aware or could reasonably have been expected to be aware; whether the employee was given a fair opportunity to meet the standards and lastly whether dismissal was an appropriate sanction. He further enjoined the employer to have regard, inter alia, to the prevailing circumstances, including the business cycle, market/area characteristics, lack of support structures, lack of product, the prevailing economic climate and so on. He reinforced that the mere non-attainment of performance targets was insufficient to prove poor work performance, and that the employer was required, during performance counselling meetings or disciplinary hearings, to determine the cause of the non-attainment of performance standards. Where these are attributable to external factors or reasons beyond the employee’s control, a dismissal or any other form of disciplinary action would be unfair…

Pernod Ricard SA (Pty) Ltd v CCMA & others (2011) 32 ILJ 119 (LC)

1402 The provisions of the Code of Good Practice: Dismissal relating to poor

work performance was in part a codification of the findings in an Industrial Court case i.e. Gostelow v Datakor Holdings (Pty) Ltd t/a Corporate Copilith (1993) 14 ILJ 171 (IC) some of which were restated in Pernod Ricard SA (Pty) Ltd v CCMA & others (2011) 32 ILJ 119 (LC). The Gostelow judgment gives an indication of what the Code envisages:

“An employer is obliged to make an assessment (appraisal) when the reason for dismissal is substandard performance due to lack of skill in the broader sense. A value judgment regarding unacceptable performance must be objective and reasonable to be valid. It would, where there is no assessment, be neither. The assessment would be incomplete if no attempt is made to establish the reason for the employee’s shortcomings, and, save where the incompetence is irremediable, an attempt was made to assist the employee to overcome his shortcomings by advice and guidance.”

“The employer would…discuss his criticisms with the employee, warn him of the consequences of there being no improvement and give a reasonable opportunity to improve. Such an appraisal would or at least

should show whether the employee’s performance can be improved by advice, guidance and additional training. It may also highlight weaknesses in the support management has provided. The employer must after all create the conditions which enable the employee to carry out his duties satisfactorily.”

“An employer should before dismissing an employee for incapacity, consider a transfer to suitable alternative employment… This duty to seek alternative employment or to put the employee back in his old job if it is still available is particularly important where an employee has been transferred (or promoted).”

“It is now trite law that an employee is entitled to be heard and to deal with the allegations against him before he is dismissed for incapability.”

1403 It is to be noted however that there are at last are at least two exceptions

where the normal requirement to appraise, warn and allow an opportunity to improve may not apply. This appears from New Forest Farming CC v Cachalia & others [2003] 10 BLLR 1 (LC) in which the Labour Court followed the judgment in Somyo v Ross Poultry Breeders (Pty) Ltd [1997] 7 BLLR 862 (LAC):

“The Somyo decision makes it clear that the first category where these

requirements might not be applicable is where the employee involved is a manager or senior employee whose knowledge and experience qualify him to judge for himself whether he is meeting the standards set by the employer. The second and distinct category is that of employees whose jobs require of them a degree of professional skill of an extremely high nature and where the potential consequences of the smallest departure from that high standard would be catastrophic.”

1404 There is a distinction between poor work performance resulting from

incapability and poor work performance constituting misconduct. In the case of incapability the employee is not capable of achieving the required performance standard hence the need for the procedure prescribed by the Gostelow case and the Code of Good Practice: Dismissal for poor work performance constitutes misconduct if it for example involves a negligent or intentional failure to perform duties or to follow the employer’s policies and procedures or instructions. The dividing line between the two is more often than not blurred e.g. an employee may fail to follow instructions on how to improve performance given during the course of counselling and giving advice relating to incapability and the failure to follow such instructions may then constitute misconduct. In deciding whether a fair procedure was followed, commissioners should therefore not take an overly technical armchair view if the employer instituted disciplinary action in circumstances where the procedure for incapability would have been

more appropriate. It is more relevant to consider whether the employer addressed all the issues that fairness required to be addressed.

15 DISMISSAL FOR OPERATIONAL REQUIREMENTS

Consultation at what stage

1501 The requirements for a fair consultation were dealt with in National Education Health & Allied Workers Union & others v University of Pretoria (2006) 27 ILJ 117 (LAC):

Section 189 of the Act does envisage that the employer may come to the first consultation table with a proposal that can be said to be not only his preferred proposal but, indeed, one that he strongly views as the solution to the problem. The obligation placed upon the employer to consult only arises in terms of s 189(1) of the Act when a situation has been reached where he 'contemplates dismissing one or more employees' for operational requirements. In other words, before he reaches such stage, he is under no obligation to consult and is within his rights to try and deal with the problem on his own with such assistance and advice as he may in his discretion feel he needs which need not be that of the consulting parties envisaged in s 189(1). This is because the employer is entitled to deal with the problems of his business without consulting the parties envisaged in s 189(1) as long as he is not contemplating the dismissal of any employees for operational requirements. It would be natural for him to form a view or even a strong view about one or other possible solution to the problem out of all those that he might have applied his mind to while trying to solve the problem before contemplating the dismissal. Section 189(1) (b), (c), 3 (c) and (g) refer to 'employees likely to be affected'. The frequent reference in those provisions to 'employees likely to be affected' is an indication that it is permissible for the employer to have already grappled with the problem to the extent that he has in mind 'employees likely to be affected by the proposed dismissal'.

Section 189(3) requires the employer to disclose the reason for the proposed dismissals, the alternatives that he considered before proposing the dismissals and the reasons for rejecting each one of those alternatives, the number of employees likely to be affected and the categories in which they are employed, the time when or the period during which the dismissals are likely to take effect. The content of what s 189(3) requires the employer to disclose suggests quite clearly that the employer is allowed to initiate the consultation process after he has done a lot of work to try and resolve the problem on his own. He is permitted to have done so much work that –

(a) he is in a position to propose dismissal because in his view there are no other acceptable alternatives that can address the problem satisfactorily without dismissals;

(b) he has reasons for proposing dismissals as opposed to other alternatives;

(c) before proposing the dismissal, he has considered other alternatives and has rejected them;

(d) he has reasons for rejecting other alternatives and is ready to articulate them.

Section 189 contemplates that, when the employer initiates the s 189 consultation process, he contemplates the dismissal of one or more of his employees for operational requirements; that is why already in paras (b), (c) and (d) of s 189(1) there are references to 'proposed dismissals'. So what s 189(1) contemplates is that the employer is already proposing a dismissal or dismissals when he initiates the s 189 consultation process.

The fact that s 189(3) (b) contemplates that, when the employer initiates the consultation process in terms of s 189(1) of the Act, he has already considered alternatives to dismissals which he has rejected for certain reasons and requires him to disclose the reasons why he rejected such alternatives does not mean that such alternatives cannot be revisited in the consultation process. Of course, they can be because the other consulting party or parties may view them as potentially viable solutions. Obviously, the employer may have strong views on such alternatives because he will have had an opportunity to consider them already and will have already rejected them before. For the employer to pretend as if he has no views on such alternatives would be dishonest because he will already have formed some or other view on them. However, what will be required is that the employer should consider honestly and properly whatever the other consulting party may have to say on such alternatives and change its mind or view on them if the other consulting party comes up with sufficiently persuasive arguments for the employer to change. Before considering such alternatives, the employer may have found it necessary to launch some or other research or investigation into the viability of such alternatives and may, therefore, seem to have strong views on them because it has considered them properly and thoroughly.

Where an employer has had an opportunity before the s 189 consultation process to consider certain possible alternatives or suggestions or ideas and has rejected it or them prior to such consultation process and one or other consulting party raises such

proposal or idea or suggestion during the s 189 consultation process, the employer needs to be alive to the fact that the other consulting party has not had or may not have had a similar opportunity to consider such alternative, idea, suggestion or proposal. The employer must not be unduly impatient with the other party but must listen carefully and consider the arguments or suggestions properly and, where necessary, give the other party more time also to look into the matter in the same way that he has already done.

In the light of the above I conclude that there is nothing wrong with an employer coming to the consultation table with a predisposition towards a particular method of solving the problem which has given rise to the contemplation of dismissal of employees for operational requirements. What is critical is that the employer should nevertheless be open to change its mind if persuasive argument is presented to it that that method is wrong or is not the best or that there is or may be another one that can address the problem either equally well or even in a better way. He should engage in a joint problem-solving exercise with the other consulting party or parties.

Who to consult

1502 Section 189 (1) prescribes who should be consulted when an employer

contemplates dismissing one or more of its employees for reasons based on its operational requirements and quite deliberately renounces dual consultation in favour of the single level of consultation i.e. that the section should be interpreted as set out hereunder.

If there is a collective agreement that is binding on the employees likely to be affected, that requires consultation with a specific person or union, the employer must consult that person or union.

Only if there is no such collective agreement the employer must consult a workplace forum as well as any registered union whose members are likely to be affected.

If there is no such collective agreement and no workplace forum the employer must consult any registered union whose members are likely to be affected.

If there is no such trade union the employer must consult the employees likely to be affected or their representative nominated for this purpose.

Sikhosana & others v Sasol Synthetics Fuels [1999] JOL 5648 (LC) See also Maluleke & others v Johnson Tiles (Pty) Ltd [2008] 11 BLLR 1065 (LC)

1503 It is only where there is no collective agreement in existence which

regulates consultations in respect of a retrenchment, that the employer is under an obligation to consult with another registered union or individual employees.

Mahlinza & others v Zulu Nyala Game Ranch (Pty) Ltd [2004] JOL 12459 (LC) See also Maluleke & others v Johnson Tiles (Pty) Ltd (supra)

1504 … when an employer… consults, in terms of agreed procedures with the

recognised union… in terms of a collective agreement which requires the respondent to consult with it over retrenchment, the employer… has no obligation in law to consult with any other union nor with any individual employee.

Maluleke & others v Johnson Tiles (Pty) Ltd (supra)

1505 Although it was not specifically mentioned in the Johnson Tiles judgment,

it is suggested that there are at least two requirements before a consultation with a minority union, whose members may be affected, would not be required.

The collective agreement must require the employer to consult with a specific person or union in respect of all employees likely to be affected i.e. it must relieve the employer of the obligation of consulting the minority union. A collective agreement requiring of an employer to consult a majority union in respect of the possible retrenchment of its members only, will not relieve the employer of consulting a minority union in respect of the possible retrenchment of some of its members.

The collective agreement must be binding on employees who are not members of the union party to the agreement. In terms of section 23 (1) (d), such employees would only be bound by the collective agreement if - the employees are identified in the agreement; - the agreement expressly binds the employees; and - the trade union party to the agreement has as its members the

majority of the employees employed by the employer in the workplace.

Leading evidence regarding procedural fairness in cases where section 189A applies

1506 In appropriate circumstances the Labour Court will refer motion

proceedings brought in terms of section 189A for oral evidence to be heard jointly with a trial regarding the substantive fairness of a dismissal for operational requirements Watts v Fidelity Corporate Services (Pty) Ltd [2007] 6 BLLR 579 (LC) NUMSA & others v SA Five Engineering & others [2005] 1 BLLR 53 (LC) Banks & another Coca-Cola SA [2007] 10 BLLR 929 (LC)

1507 When individuals are retrenched, particularly senior employees, the distinction between the procedural and substantive aspects of a retrenchment is less clear, than would be the case in a collective dismissal of employees who are represented by a trade union. This is so because more often than not, senior employees have more specific knowledge of the advent of the restructuring and the reason for it. Any retrenchment discussion in respect thereof is often conducted on a more personal level. The nature of, and solution to redundancy, in the case of an individual employee is often more complex than a mass retrenchment. Individuals are unable to exercise the strike option provided for in section 189A. The latter section is also applicable to employers who employ over a certain number of employees. These factors in themselves render the nature of the procedure too difficult to monitor, because it is often tied up with substantive issues. Watts v Fidelity Corporate Services (Pty) Ltd (supra)

1508 Quite plainly, the drafters of section 189A had mass retrenchments in

mind when introducing it into the act. Even though the consequences of a mass retrenchment might be more serious and often more severe, the retrenchment process which precedes it, is in most cases more simple than the retrenchment of individuals, because of the trade union involvement. Consultations have a more structured character. The personal interaction with retrenchees is greatly diminished by union representation. The participants at the consultation table are more in number and do not have a direct personal interest in the outcome. The main reason behind a collective retrenchment is usually to cut the wage bill. That is an issue which is more likely to remain separate from the consultative process, when measuring fairness. The reasons for the redundancy of an individual are mostly more complex and the outcome of the consultative process depends very much on the nature of the discussions.

Watts v Fidelity Corporate Services (Pty) Ltd (supra)

1509 …, the authors of section 189A could not have intended to non-suit

individual employees from raising procedural fairness in trial proceedings, even if he or she had referred the aspect in terms of section 189A of the Act. It would often be impractical to do so. There is no reason why the two aspects could not be heard simultaneously, particularly since the individual may not invoke strike action.”

Single retrenchments

1510 Section 191 (12) of the LRA reads as follows:

“If an employee is dismissed by reason of the employer’s operational requirements following a consultation procedure in terms of section 189 that applied to that employee only, the employee may elect to refer the dispute either to the Labour Court or to arbitration.”

1511 Such employee may exercise such election irrespective whether or not the

procedural fairness of the retrenchment is placed in issue. Bracks N.O. & another v Rand Water & another (2010) 31 ILJ 897 (LAC); [2010] 8 BLLR 795 (LAC) See also Scheme Data Services (Pty) Ltd v Myhill N.O. & others (2009) 30 ILJ 399 (LC) Winnie Ngidi and Fidelity Supercare Services Group (Pty) Ltd (2009) 30 ILJ 1185 (CCMA)

1512 The words “in terms of” in the phrase “following a consultation procedure

in terms of section 189 that applied to that employee only” do not necessarily mean that there should be full compliance with the provisions of section 189. It can equally mean “as required by”. On a purposive interpretation of the phrase, the focus of the legislature was not to restrict the arbitration option in any other way but to require that “the consultation process” must have applied to the “single employee” only. If the preceding consultation process applied to a number of employees, a single employee would not have an arbitration option. That this was the intention of the legislator was recognised in Telesure Investment Holdings (Pty) Ltd v CCMA & Others (2008) 29 ILJ 2026 (LC) at 2029 in which it was found that the jurisdictional investigation that a commissioner is required to conduct “was whether other employees were dismissed arising from the consultation during the same period.”

Winnie Ngidi and Fidelity Supercare Services Group (Pty) Ltd (supra)

1513 If the employer had followed a flawed consultation procedure or even if no

consultation procedure was followed the CCMA’s jurisdiction to arbitrate is

not affected. Applying the test referred to in the Telesure Investment Holdings case, when no consultation procedure was followed and only one employee was dismissed for operational requirements; the dismissed employee can elect to refer a dispute to the CCMA. Such a conclusion was reached in Rowmoor Investment (Pty) Ltd v Wilson & others (2008) 29 ILJ 2275 (LC) albeit for different reasons.”

Winnie Ngidi and Fidelity Supercare Services Group (Pty) Ltd (2009) 30 ILJ 1185 (CCMA) (supra)

See also Sans Souci Girls High School v McGahey N.O. and others (Case No JR 2261/07).

See however CCMA Practice Note 3 of 2010 in which it was indicated that the CCMA has jurisdiction to arbitrate cases involving the dismissal of a single employee for operational reasons and that the CCMA will have such jurisdiction irrespective of whether one or more employees were consulted in the s 189(3) process preceding the dismissal.

First in first out selection criterion unfair

1514 It seems to me that it cannot be said that FIFO is fair and objective as required by sec 189 (7) (b) of the LRA inter alia because it is easily open to abuse. This is because an employer who wants to get rid of a long serving employee can simply employ a new employee even if there is no clear need for another employee and, after a few months, complain that the workforce is excessive by one employee. At that stage he would initiate a consultation process and ultimately use FIFO to select the long serving employee for dismissal for operational requirements. The long serving employee would be dismissed and the new employee would be retained to perform the duties previously performed by the employee with long service who has been retrenched. That can simply not be justified.

FIFO is a very strange way to “reward” the loyalty to the employer that

long serving employees would have shown the employer over many years. In my view FIFO does not meet the requirement of sec 189 (7) (b) of the LRA that a selection criterion that is not agreed upon between the parties must be fair and objective. The result of this conclusion is that the dismissal of the individual respondents by the appellant was substantively unfair. Accordingly, the Court below was justified in reaching the conclusion that the dismissal was substantively unfair.” Screenex Wire Weaving Manufacturing (Pty) Ltd v Jafter Ngema & others JA 49/07 (LAC) handed down on the 2nd of September 2009.

Effect of agreements with unions representing affected employees 1515 Section 189A (19) of the LRA provides that the Labour Court must find

that an employee was dismissed for a fair reason if

(a) the dismissal was to give effect to a requirement based on the respondent’s economic, technological, structural or similar needs;

(b) the dismissal was operationally justifiable on rational grounds;

(c) there was a proper consideration of alternatives; and

(d) the selection criteria were fair and objective.

1516 If the LRA requires the dispute concerning the substantive fairness of a

retrenchment to be adjudicated by the Labour Court the parties may in terms of section 141(1) consent to arbitration under the auspices of the CCMA In such circumstances a commissioner arbitrating such dispute may in terms of section 141 (6) make an award that the Labour Court could have made. It follows that section 189A (19) applies in such and that a finding must be made that the dismissal was fair if the factors referred to in the preceding paragraph are proved.

Muthulingum v Nampak Flexible KZN (unreported award in Case No

KNPM 471-04 dated 28 December 2009.) 1517 Section 192 (2) deals with the question of onus in dismissal disputes and

provides that, if the existence of a dismissal is established, “the employer must prove that the dismissal is fair.” On my interpretation of section 189A (19) it provides nothing more than that the Labour Court (and in the present case also the arbitrator) would have no discretion but to find that a dismissal for operational requirements was substantively fair if the employer party proved all the factors referred to in that section. Section 192 (2) does not provide that that is the only way that an employer party may prove that a dismissal for operational requirements was fair and an employer party is not precluded from proving the fairness of such dismissal in alternative ways.

Muthulingum v Nampak Flexible KZN (supra) 1518 In certain circumstances it would, for example, not be an absolute

requirement that the employer party should prove that the selection criteria were fair and objective. Section 189 (7) provides that an employer party must select employees to be dismissed for operational requirements according to criteria that have been agreed to by the consulting parties. It

is only when no criteria have been agreed that the employer party must select the employees to be dismissed according to criteria that are fair and objective. It follows that it is open to an employer party to prove that employees were selected according to agreed selection criteria and if that is proved, the employer party is not required to prove in addition that the selection criteria were fair and objective. That this is a correct interpretation of section 189 (7) appears from CWIU and others v Latex Surgical Products (Pty) Ltd [2006] 2 BLLR 142 (LAC) at paras 84 to 87.

Muthulingum v Nampak Flexible KZN (supra) CWIU and others v Latex Surgical Products (Pty) Ltd [2006] 2 BLLR

142 (LAC) at paras 84 to 87

1519 As pointed out in the Latex Surgical Products case whether or not there was a fair reason for the dismissal of an individual employee relates to a general question as well as to a specific question. The general question is whether there was a fair reason for the dismissal of any employees. The specific question is whether there was a fair reason for the dismissal of the specific employees who were dismissed and requires a consideration of the fairness of the basis on which such employees were dismissed.

Muthulingum v Nampak Flexible KZN (supra) CWIU and others v Latex Surgical Products (Pty) Ltd (supra) 1520 If an agreement is reached with a union regarding the need to reduce the

respondent’s workforce by an agreed number of employees and the selection criteria to be used, such agreement is binding on the employees that the union represented and it is not open to them to include a dispute about the fairness of the reduction of the workforce and the selection criteria in a dispute about the fairness of their dismissals. In such a case there would in effect be no dispute about the fairness of the reduction of the workforce and the selection criteria that can be arbitrated as agreement was reached on those issues during the consultation process.

Muthulingum v Nampak Flexible KZN (supra)

16 FIXED TERM CONTRACTS

Premature termination 1601 There is no doubt that at common law a party to a fixed-term contract has

no right to terminate such contract in the absence of a repudiation or a material breach of the contract by the other party. In other words there is no right to terminate such contract even on notice unless its terms provide for such termination. The rationale for this is clear. When parties agree that their contract will endure for a certain period as opposed to a contract for an indefinite period, they bind themselves to honour and perform their respective obligations in terms of that contract and they plan, as they are entitled to do in the light of their agreement, their lives on the basis that the obligations of the contract will be performed for the duration of that contract in the absence of any material breach. Accordingly no party is entitled to seek to escape its obligation in terms of the contract on the basis that its assessment of the future had been erroneous or had overlooked certain things. Under the common law there is no right to terminate a fixed-tem contract of employment prematurely in the absence of a material breach of such contract by the other party.

…the employer is free not to enter into a fixed term contract but to

conclude a contract for an indefinite period if he thinks there is a risk that he might have to dispense with the employee’s services before the end of the term. If he chooses to enter into a fixed-term contract, he takes the risk that he might have to need to dismiss the employee mid-term but he is prepared to take that risk. If he has elected to take such a risk, he cannot be heard to complain when the risk materializes. The employee also takes a risk that during the term of the contract he would be offered a more lucrative job while he has an obligation to complete the contract term. Both parties make a choice and there is no unfairness in the exercise of that choice.

Buthelezi v Municipal Demarcation Board (2004) 25 ILJ 2317 (LAC) 1602 It is of no significance that the definition of “dismissal” in the LRA does not

specifically include a premature termination of a fixed-term contract “notwithstanding that such a termination would be manifestly unfair”. The SCA found that the common law right to enforce such a term remained intact and it was not necessary to declare a premature termination to be an unfair dismissal.

Fedlife Assurance Ltd v Wolfaardt 2002 (1) SA 49 (SCA); (2001) 22 ILJ 2407 (SCA)

See also Buthelezi v Municipal Demarcation Board (supra)

1603 When compensation is awarded for the premature termination of a fixed term contract the loss of income suffered by the employee should be considered and regard should be had to the following dictum:

‘The measure of damages accorded to such employee is both in our law and in the English Law the actual loss suffered by him represented by the sum due to him of the unexpired period of the contract less any sum he earned or could reasonably have earned during such latter period in similar employment”

Meyers v Abrahamson 1992(3) SA 121 (C) at 127E See also Buthelezi v Municipal Demarcation Board (supra)

1604 Compensation should generally no be more that the amount envisage in

the preceding paragraph. “Where the very basis of the finding of substantive unfairness is that the employment relationship was agreed to endure until the specified termination date, there can be no basis in law or in equity for any compensation that extends beyond the termination date.” compensation may also not be more that the equivalent of twelve months remuneration.

Nkopane & other v Independent Electoral Commission (2007) 28 ILJ 670 (LC) See also Buthelezi v Municipal Demarcation Board (supra)

17 SECTION 197 TRANSFERS Applicability of section 197 1701 Section 197 is triggered therefore if all three of the following conditions are

met:

A transfer from one employer to another,

The transferred entity must be the whole or part of a business (here, the test is whether there is an economic entity capable of being transferred), and

The business must be transferred as a going concern (here, the test is whether the economic entity that is transferred retained its identity after the transfer.

Douglas & others v Gauteng MEC for Health [2008] 5 BLLR 401 (LC)

When is a business transferred as a going concern

1702 “The phrase ‘going concern’ is not defined in the LRA. It must therefore be given its ordinary meaning unless the context indicates otherwise. What is transferred must be a business in operation ‘so that the business remains the same but in different hands’. Whether that has occurred is a matter of fact which must be determined objectively in the light of the circumstances of each transaction. In deciding whether a business has been transferred as a going concern, regard must be had to the substance and not the form of the transaction. A number of factors will be relevant to the question whether a transfer of a business as a going concern has occurred such as the transfer or otherwise of assets both tangible and intangible, whether or not workers are taken over by the new employer, whether customers are transferred and whether or not the same business is being carried on by the new employer. What must be stressed is that this list of factors is not exhaustive and none of them is decisive individually. They must all be considered in the overall assessment and therefore should not be considered in isolation.”

NEHAWU v University of Cape Town & others (2003) 24 ILJ 95 (CC)

See, also, SAMWU & others v Rand Airport Management Company (Pty) Ltd & others (2005) 26 ILJ 67 (LAC)

Transfer – relevant factors

1703 Factors to be taken into account in deciding whether a transfer envisaged

by section 197 has occurred are amongst others:

What happened to the goodwill of the business?

What happened to the stock-in-trade?

Did the business premises change?

Were the contracts with clients or customers taken over by the new employer?

Is the business continuing to service the same customers?

Was the workforce or part of it taken over?

What happened to the assets of the business including assets leased by the business?

Did the new employer take over responsibility for the debts of the old employer?

Has the operation of the business been interrupted and, if so, the duration thereof?

Did the same or similar activities continue after the transfer?

Ponties Panel Beaters Partnership v NUMSA & others [2009] 2 BLLR 99 (LAC)

Requirements for contracting out

1704 If a transfer agreement was concluded only between the old and the new

employer then it is not an agreement contemplated by section 197 (6). 1705 “To meet the requirements of section 197 (6), an agreement must comply

with the terms of that section in relation to both the identity of the parties as well as the process that is prescribed by which any variation to the consequences of section 197 should be sought. First, the agreement must be concluded between the old employer, the new employer (or the two employers acting jointly) on the one hand, and on the other hand, the appropriate person or consulting party identified after reference to section 189 (1). In brief that section contemplates a hierarchy of representative parties who are entitled to conclude agreements that “contract out” of section 197…”

Douglas & others v Gauteng MEC for Health (supra)

1706 Section 197 (6) is carefully formulated, no doubt with an eye to protecting the rights of employees affected by a pending transfer. It should be recalled that the primary purpose of section 197 is to balance employer and employee interests when the transfer of a business takes place, and that it contains important protections for employees affected by a transfer by ensuring continuity of employment on the same terms… Section 197 (6) introduced a flexibility measure that the parties may wish to invoke to vary all or some of the consequences of the application of section 197 to a business transaction, but the plain meaning of the section is to be respected, so that the primary purposes of the section are preserved. I am unable to read into the section…limitation to the effect that an employee who in a representative capacity participated in the negotiation of an agreement regulating the terms on which a business is to be transferred, is for that reason deprived of any right that might otherwise be available to that employee under section 197.


Effect of invalid contracting out agreement 1707 Finally, the fact that the transfer agreement does not meet the

requirements of section 197 (6) does not render the agreement voidable at the instance of the employees, nor is the agreement necessarily invalid for that reason. If an agreement that purports to be a contracting out of section 197 fails to meet the threshold set by that section, it means no more than that the terms of the agreement fails to trump the affected employee’s statutory rights to work security in the form that these are cast by section 197 (2). In other words, section 197 governs the terms of the transfer without variation, and any affected employee are entitled to rely on all of the rights conferred by that section as against both the old and the new employers.


When is transfer the reason for dismissal 1708 In deciding whether the transfer was the reason for a dismissal the test to

be applied is

Firstly, it must be established whether the dismissal would have taken place but for the transfer (factual causation).

Secondly, if the test for factual causation is satisfied, the test for legal causation must be applied i.e. it must be determined whether the transfer is the main, dominant, proximate or most likely cause of the dismissal. This is an objective enquiry.

Van der Velde v Business Design Software (Pty) Ltd & another (1)

(2006) 27 ILJ 1738 (LC) 1709 If an employee is dismissed for refusing to accede to an ultimatum to

accept significantly less favourable terms and conditions of employment in the immediate context of the transfer then the reason for dismissal is a reason related to the transfer and the dismissal is automatically unfair.


What does the onus entail

1710 The employer bears the onus to establish that the applicants’ dismissals were not effected for a reason that is not automatically unfair and were substantively and procedurally fair. In others words the employer must prove that the reason for the dismissal was not a reason related to the transfer.

Which employer to cite

1711 An employee who was dismissed prior to a transfer for a reason relating to

the transfer, must pursue any case about the fairness of the dismissal against the new employer unless otherwise agreed in writing between the old employer, the new employer and a representative of the employees envisaged by section 189 (1).

Anglo Office Supplies (Pty) Ltd v Lotz (2008) 29 ILJ 953 (LAC) 1712 In the Anglo Office Supplies case the LAC referred to NEHAWU v

University of Cape Town & others (2003) 24 ILJ 95 (CC) at 122C para 64 and remarked as follows:

“The legal position enunciated in the above authorities makes it clear that the new employer steps into the shoes of the old employer by operation of law. Unless there is an agreement with the employees or their representatives to the contrary, the new employer assumes responsibility for all the actions done by the old employer in relation to each employee. This means that if an employee is dismissed before the transfer of a business or the relevant part of the business, the new employer is liable for such dismissal even though it is the old employer who actually dismissed the employee. Indeed, all the rights that the dismissed employee had against the old employer at the time of the transfer of the business, including the right to institute or pursue legal proceedings in a dismissal dispute, become a right that he has against the new employer. Accordingly such an employee must, where he has instituted proceedings

against the old employer, pursue those proceedings against the new employer instead of the old employer. The result would be that if the dismissal is found, after the transfer of the business to have been unfair, any order of reinstatement would probably have to be made against the new employer.”

Second generation transfers 1713 In Aviation Union of SA & another v SA Airways (Pty) Ltd & others

(2011) 32 ILJ 2861 (CC) the Constitutional Court found that it is irrelevant what the generation of transfer is

… It does not matter in principle what the ‘generation’ of the outsourcing is, or even whether the transaction is concerned with contracting out at all. The true enquiry is whether there has been a transfer of a business as a going concern by the old employer to the new employer.

… in determining whether contracting out amounts to the transfer of a business as a going concern, the substance of the initial transaction, more specifically whether what is outsourced is a business as a going concern rather than the provision of an outsourced service remains significant during subsequent transfers. If the outsourcing institution from the outset did not offer the service, that service cannot be said to be part of the business of the transferor. What happens here is simple contracting out of the service, nothing more, nothing less. There is no transfer of the business as a going concern. The outsourcee is contracted to provide the service and becomes obliged to do so. And it is the outsourcee’s responsibility to make appropriate business infrastructure arrangements. These may include security staff, letting appropriate property for office or other work space and acquiring fixed assets, machinery and implements, computers, computer networks and the like. Cancellation of the contract in these circumstances entails only that the outsourcee forfeits the contractual right to provide the service. The whole infrastructure of conducting the business of providing the outsourced service would ordinarily remain the property of the outsourcee. As we shall see, that is not what happened here, either when the initial outsourcing contract was concluded between SAA and LGM, or when SAA cancelled it.

If, on the other hand, the first outsourcing exercise is really a transfer of part of a business of the outsourcer who has been carrying on the business of the provision of the service until transfer, the question whether the subsequent transfer is merely the transfer of the right to provide the outsourced service or the transfer of a business as a going

concern would arise. And that would require an analysis of the terms of the transaction that gives rise to the subsequent event.

It cannot be doubted that the word “by” must be given its ordinary meaning. We must ask these questions in the enquiry whether a transaction in issue contemplates a transfer of business by the old employer to the new employer. Does the transaction concerned create rights and obligations that require the one entity to transfer something in favour or for the benefit of another or to another? If so, does the obligation imposed within a transaction, fairly read, contemplate a transferor who has the obligation to effect a transfer or allow a transfer to happen, and a transferee who receives the transfer. If the answer to both these questions is in the affirmative, then the transaction contemplates transfer by the transferor to the transferee. Provided that the transfer is that of a business as a going concern, for the purposes of s 197, the transferee is the new employer and the transferor the old. The transaction attracts the section and the workers will enjoy its protection.

It will be necessary to examine the agreement in issue to determine whether the rights and obligations it creates provide for the transfer of a business as a going concern by a transferor, the old employer to a transferee the new employer… courts must determine, if required, whether the rights and obligation, properly interpreted, call for the transfer of a business as a going concern.

1714 The Concourt further highlighted the distinction between outsourcing a

service or transferring a right to provide a service, on the one hand, and the transfer of a business or part of a business that provide a service. It is only the latter that is hit by s 197. Transferring infrastructure necessary to provide a service is normally a telling factor indicating a transfer of a business.

18 PROMOTION

Meaning

1801 “Promote” is defined in the New Shorter Oxford Dictionary as “advance” or “raise to a higher rank or position.” Similar meanings were ascribed to promotion in Mashegoane & Another v University of the North [1998] 1 BLLR 73 (LC) at 76 and Jele v Premier of the Province of Kwazulu Natal & others (2003) ILJ 1392 (LC) at 1398.

1802 In deciding whether a dispute involves a promotion one has to compare the employee’s current job with the job or post applied for to determine whether promotion is involved. Some of the factors that should be taken into account are-

differences in remuneration levels

differences in fringe benefits

differences in status

differences in levels of responsibilities

differences in levels of authority and power

differences in the level of job security

See Mashegoane & Another v University of the North (supra) at 77 G-I; Lamana v SA Police Service [2002] 8 BALR 802 at 808 to 809; De Villiers v SA Police Service [2002] 8 BALR 795 (BC) at 798-799

Relevant considerations in deciding fairness

1803 In deciding whether the employer acted fairly in failing or refusing to

promote the employee considered it is relevant to consider the following

whether the failure or refusal to promote was caused by unacceptable, irrelevant or invidious consideration on the part of the employer or

whether the employer’s decision was arbitrary, or capricious, or unfair; or

whether the employer failed to apply its mind to the promotion of the employee; or

whether the employer’s decision not to promote was motivated by bad faith;

whether the employer’s decision not to promote it was discriminatory;

whether there were insubstantial reasons for the employer’s decision not to promote;

whether the employer’s decision not to promote was based upon a wrong principle;

whether the employer’s decision not to promote was taken in a biased manner.

Aries v CCMA & others (2006) 27 ILJ 2324 (LC) De Nysschen v General Public Service Sectoral Bargaining Council & others (2207) 28 ILJ 375 (LC)

1804 It is arguable that promotions and appointments should be assessed not according to the grossly unreasonable/male fide test, but against a test of fairness, evidenced by the criteria set out above. Industrial Law Journal of October 2007 Prof Alan Rycroft

1805 “The Constitution provides for a balanced approach. On the one hand, fair labour practices and affirmative action must be observed. On the other hand, effectiveness, efficiency, high ethical standards, and progressive human resource policies are crucial

Public Servants Association v National Commissioner of the SA Police Service (2006) 27 ILJ 27 2241 (CC)

De Nysschen v General Public Service Sectoral Bargaining Council & others (supra)

Whether a contractual right to promotion must be established.

1806 “ Counsel for the Department also submitted that a dispute such as the one in the present case was a dispute of interest and not a dispute of right and that item 2 (1) (b) contemplated disputes of right and not disputes of interest. The right he was referring to is a right ex contractu or ex lege. He submitted that an unfair labour practice is confined to disputes of right created ex contractu or ex lege. The answer to this argument is simply that item 2 of Schedule 7 is one of the statutory provisions that seek to give content to the constitutional right to fair labour practices… It creates a statutory right not to be subjected to an unfair labour practice that takes the form spelled out therein… The obligation that item 2 (1)(b) places on an employer is not to act unfairly towards an existing employee in relation to promotion, demotion, disciplinary action short of dismissal and the provision of benefits to an employee. The right… that an employee has under item 2(1) (b) is conferred on them ex lege. For that reason a dispute

concerning whether the conduct of an employer relating to promotion is an unfair labour practice is a dispute of right and not a dispute of interest.” Department of Justice v CCMA & others [2004] 4 BLLR 297 (LAC) per Zondo JP (at 314 -315):

1807 “..the view … that item 2 (1) (b) provided only for rights which arose ex

contractu or ex lege, is clearly wrong. If that were so, the provision would have been redundant since such rights would have been enforceable in the absence of item 2 (1) (b)…. Just as the LRA provides for disputes arising from unfair dismissal in respect of which there are no contractual remedies or remedies at common law, to be resolved by arbitration, so was item 2(1) (b) designed for situations where neither the contract of employment nor the common law provided the employee with a remedy… A further relevant consideration is that it is difficult to conceive of a situation where there would be a contractual or statutory right to promotion. Clearly such a situation would be most unusual and the legislature must have intended for a remedy in the event of an unfair promotion or an unfair failure to promote.”

Department of Justice v CCMA & others (supra) per Goldstein AJA (minority judgment) at 334 -335:

1808 The view criticized by Goldstein AJA was expressed in Hospersa and

another v Northern Cape Provincial Administration (2000) 21 ILJ 1066 (LAC). The relevant dictum in the Hospersa decision (at 1069-70) was that item 2 (1) (b) of Schedule 7 to the LRA (the predecessor of the present provisions) “ simply sought to bring under the residual unfair labour practice jurisdiction disputes about the benefits to which an employee is entitled ex contractu (by virtue of the contract of employment or collective agreement) or ex lege (the Public Service Act or any other Act)” and that it was never “intended to be used by an employee, who believes that he or she ought to enjoy certain benefits which the employer is not willing to give to him or her, to create an entitlement to such benefits through arbitration.” .

1809 In Protekon (Pty) Ltd v CCMA & others (2005) 7 BLLR 703 (LC) at 710

the Labour Court found that it was never the intention nor the effect of the Hospersa judgment to limit the enquiry in determining unfair labour practice disputes only to the question whether the employee was contractually entitled to the remedy sought. The Labour Court explained the dictum in Hospersa and remarked as follows at 710 B:

“The essence of the court’s reasoning was that the unfair labour practice

jurisdiction may not be used as a substitute for collective bargaining, to

create new employment rights or to further collective bargaining demands….

It does not, however, follow from this that an employee may have recourse only in circumstances in which he has a cause of action in contract law. If that were the case there would have been little purpose in introducing the specific unfair labour practices contemplated in section 186 of the LRA.”

When should other candidates be joined

1810 “All the cases I have referred to also illustrate the point that the order or judgment of the court is relevant to the question whether a party has a direct and substantial interest in the subject matter of any proceedings. It is so that in the course of its reasoning a court makes findings and expresses views which do not form part of its judgment or order. An example in point in the employment arena concerns a potential finding by a court that a successful appointee was not suitable for appointment. The ‘unsuitable’ appointee has no legal interest in the matter if the order will be directed at the employer (the author of the unsuitable appointment) to compensate the ‘suitable’ but unsuccessful applicant. Of course the successful but ‘unsuitable’ appointee will always have an interest in the order to confirm his/her suitability for the job but this is not a direct and substantial interest necessary to found a basis for him or her to be joined in the proceedings. In a situation where a number of applicants compete for a position, they provide information to the prospective employer to influence the decision in their favour. That is as far as they can take it. Once the employer selects from amongst them it is up to the employer to defend its decision if challenged. This is because the employer, as the directing and controlling mind of the enterprise which is vested with the managerial prerogative to manage it, has a legal interest in the confirmation of its decision as it faces a potential order against it. The successful appointee can only have a legal interest in the proceedings where the decision to appoint him is sought to be set aside which can lead to his removal from the post. He becomes a necessary party to the proceedings because the order cannot be carried into effect without profoundly and substantially affecting his/her interests.”

Gordon v Department of Health: KwaZulu-Natal 2008 (29) ILJ 2535 (SCA)

1811 In order to decide whether another candidate has a direct and substantial

interest in a promotion matter and whether it is necessary to join such candidate it is necessary to consider whether that candidate would be affected should the relief sought be granted. It is only necessary to join a successful candidate if relief is sought that will affect him or her e.g. if an order is sought setting aside his or her appointment. The possibility of

negative findings in the judgment regarding his or her suitability is not sufficient reason for requiring the successful candidate to be joined. It follows that it is not necessary to join other unsuccessful candidates.

Gordon v Department of Health: KwaZulu-Natal (supra)

Polygraph results as selection criterion

1812 “Even if polygraph test results may constitute relevant material in determining a person’s integrity, the question remains whether it is fair to rely exclusively on them as a touchstone of integrity in the recruitment context, where the prejudice to an applicant that might follow rejection on account of a polygraph test is not the same as that of an employee facing a dismissal. In this case, there was no other independent evidence that the two employees were previously implicated in some wrongdoing or corruption. It might be said that because the consequence of not being promoted is less serious than being dismissed, an employer is entitled to place greater reliance on polygraph testing as a one method of assessing job applicants, despite its unreliability. However, in this instance, it was the sole reason for not appointing candidates who would otherwise have succeeded, thereby making it not merely one of many factors to weigh up, but a deciding one. In such circumstances, the same concerns about its reliability as an accurate measure of deception which make courts hesitate to accord it a decisive impact in disciplinary cases, ought to raise similar concerns when eliminating candidates who would otherwise be appointed.

Consequently, I am of the view that the exclusive reliance on the polygraph test results to eliminate candidates for appointment on the basis of their deceitful character, in the absence of any other information placing a question mark over their integrity is unfair.”

Sedibeng Local Municipality v SALGBC & others (Unreported Labour Court Case No JR 1559-09 dated 31 May 2012

Protected promotion 1813 Protected promotion was confirmed on review in at least two cases.

Sedibeng Local Municipality v SALGBC & others (supra)

Minister of Safety and Security v SSSBC & Others (Unreported Labour Court Case No P186/08)

19 DEMOTION Meaning 1901 “…in law, demotion could also mean a reduction or diminution of dignity,

importance, responsibility, power or status even if salary, attendant benefits and rank are retained.”

Du Toit et al Labour Relations Law (4thed at 465): Solidarity obo Kern v Mudau & others [2007] 6 BLLR 566 (LC)

20 TRAINING 2001 If a dispute concerning an alleged unfair labour practice is referred to the

CCMA, it is not a correct approach to first determine whether the issues are strikeable. The correct approach is to determine whether the dispute is arbitrable in terms of the provisions of the Act.

MITUSA & others v Transnet Ltd & others [2002] BLLR 1023 (LAC) 2002 In MITUSA & others v Transnet & others the LAC rejected an argument

that a rights dispute over the provision of training is not arbitrable. The reasons for the decision on this point were the following:

The first respondent’s assertion that a dispute about a unilateral change to terms and conditions of employment is necessarily a dispute of interest is not correct. A clear case of a dispute about a unilateral change to terms and conditions of employment is a case where an employer changes existing terms and conditions of employment of an employee embodied in the contract of employment without the employee’s consent….This type of dispute entails that the employer takes away an employee’s existing rights or benefits. At common law such conduct by the employer would constitute a repudiation of the contract of employment. Such repudiation would give the employee an election either to accept the repudiation and claim damages or to reject the repudiation and hold the employer to the contract. In the latter case the employee may seek specific performance.

…there is no doubt that where there is a dispute of right that relates to training, it is possible to have conduct by an employer that can be described as unfair conduct or as an unfair labour practice as contemplated by item 2(1)(b). Such a dispute would be arbitrable in terms of item 3 (4) of Schedule 7…. On that basis …the court a quo’s conclusion that the CCMA had no jurisdiction to arbitrate the dispute cannot be upheld.

It is clear that section 64 (4) relates to a dispute about a unilateral change to terms and conditions of employment. It is also clear that it affirms that such a dispute can be the subject of a referral in terms of section 64(1) which is a referral that can be the subject of a strike. Accordingly, it can be accepted that a strike is competent in respect of a dispute about a unilateral change to terms and conditions of employment. However if a dispute about a unilateral change to terms and conditions of employment can properly fall within the provisions of item 2 (1) (b) of Schedule 7, it will nevertheless be arbitrable. “Strikeable” and arbitrable disputes do not necessarily divide into water tight compartments. Although in relation to dispute resolution the Act

contemplates the separation of disputes into those that are resolved through arbitration and those that are resolved through power play, there are disputes in respect of which the Act provides a choice between power play, on the one hand, and arbitration on the other, as a means for their resolution. This is the case for example, with disputes about organizational rights (see section 65(2)(a) and (b) read with section 65(1)(c) and sections 12 – 15 and sections 21 and 22).

In section 189A (7) a registered trade union is given a choice, when an employer has given a notice to terminate employee’s contracts of employment for operational requirements to either refer the dispute about such a termination to the Labour Court for adjudication or to resort to a strike…

It is therefore clear from the above that the fact that a strike is competent in respect of a dispute does not necessarily mean that it is not arbitrable in terms of the Act. What needs to be done in each case is to examine the provisions of the Act to determine whether such dispute is indeed not arbitrable. Where the court a quo seems to have gone wrong, in my view, is that it adopted the attitude that because the Act had provisions which make a strike competent in respect of a dispute about a unilateral change of terms of conditions of employment, such dispute could not be arbitrable. That, as I have shown above, does not follow under the Act.

21 BENEFITS 2101 An employee need not to establish a contractual right before a finding may

be made that an unfair labour practice relating to the provision of benefits occurred. Protekon (Pty) Ltd v CCMA & others [2005] 7 BLLR 703 (LC) IMATU obo Verster v Umhlatuzi Municipality & others [2011] 9 BLLR 783 (LC) See also Department of Justice v CCMA and others [2004] 4 BLLR 297 (LAC). See however South African Post Office Ltd v CCMA & others (unreported judgment in Case No C293/2011 dated 18 June 2012)

2102 “there are at least two instances in which employer conduct in relation to

the provision of benefits may be subjected to scrutiny by the CCMA under its unfair labour practice jurisdiction. The first is where the employer fails to comply with a contractual obligation that it has towards an employee in relation to the provision of employment benefits. The second is where the employer exercises a discretion that it enjoys under the contractual terms of the scheme conferring the benefit.”

Protekon (Pty) Ltd v CCMA & others (supra) 2103 “The fact that an employer is entitled, by the terms of a benefit scheme or

policy, to exercise a discretion as to the amount of the benefit to be provided, as to the terms upon which a benefit is to be provided, or as to whether as benefit is to be provided at all does not, in my view, take the benefit outside the ambit of the of the unfair labour practice jurisdiction provided by section 186(2)(a) of the Act. The existence of an employer’ discretion does not by itself deprive the CCMA of jurisdiction to scrutinise employer conduct in terms of the provisions of that section. On the contrary, it is clear that the provision was introduced primarily to permit scrutiny of employer conduct including the exercise of employer discretion in the context of employee benefits. Protekon (Pty) Ltd v CCMA & others (supra)

2104 Protekon (Pty) Ltd v CCMA & others (supra) opened the door for

commissioners to interpret the word “benefits” more broadly and equitably:

…This Court has, in previous decisions, determined that a benefit for this purpose must be something other than remuneration: Schoeman & another v Samsung Electronics SA (Pty) Ltd (1997) 18 ILJ 1098 (LC) at 1102; Gaylard v Telkom SA Ltd (1998) 19 ILJ 1624 (LC). In reaching

that conclusion, this Court was clearly concerned that if the notion of “benefits” is interpreted too widely, the effect of this would be to give parties the right to refer to arbitration a wide range of disputes that are in essence disputes about remuneration. The effect of this would, because of the provisions of section 65(1)(c) of the LRA, be to preclude industrial action over a range of disputes over remuneration that properly falls within the realm of collective bargaining.

While it is not necessary for me to here consider whether those decisions were correct on their facts, the statement (in Schoeman v Samsung, supra) that a benefit is “something extra, apart from remuneration” seems to me to go too far. In my view there is little doubt that remuneration in its statutory sense (as defined in the LRA) is broad enough to encompass many forms of payment to employees that may, in the ordinary use of language, properly be described as “benefits”.

There is no closed list of employment benefits that fall within what is contemplated in section 186(2) (a). But there can be little doubt that most pension, medical aid and similar schemes fall within the scope of those terms. This is so despite the fact that employer contributions to such schemes fall within the statutory definition of remuneration.

I have referred earlier to this Court’s concern that if some forms of remuneration are found to fall within the concept of “benefits” as contemplated in the unfair labour practice definition, this might unduly curtail industrial action in an area typically regarded as the proper subject of collective bargaining. In the light of the decisions of the Labour Appeal Court, to which I refer below, this concern need not persist.

Disputes over the provision of benefits may fall into two clearly identifiable categories: the first is where the issue in dispute concerns a demand by employees that certain benefits be granted (or re-instated) irrespective whether the employer’s conduct in not agreeing to grant the benefit (or in removing it) is considered to be unfair; the second is where the issue in dispute is the fairness of the employer’s conduct. No party has the right to refer disputes in the first category to arbitration, and there is consequently no barrier to industrial action at the point of impasse. The converse is true of disputes in the second category.

..the Labour Appeal Court cautioned against allowing parties to “convert” justiciable disputes into disputes in respect of which industrial action is permissible by changing the nature of the demand…. the court will look at the substance of the dispute and not the form in which it is presented, and that the characterisation of a dispute by a party is

not necessarily conclusive. What is required is an assessment, on the facts of each case, of the true nature of the dispute in order to determine whether it is a dispute that the party has the right to refer to arbitration.

More significantly, perhaps, the Labour Appeal Court has pointed out that there are a number of types of disputes in respect of which parties enjoy a genuine election whether to resort to industrial action or to seek adjudication. See Maritime Industries Trade Union of SA & others v Transnet Ltd & others (2002) 23 ILJ 2213 (LAC) at paragraphs [106] – [108].

Where disputes over benefits are concerned …there can be little objection to workers choosing to tackle the employer in the collective bargaining arena rather than trying to demonstrate unfairness in the sense contemplated in the unfair labour practice definition. The LRA does not appear to preclude them from doing so both at the same time (This is in contrast to the election to resort to either arbitration or industrial action in relation to organisational rights: section 21 read with section 65 (2) of the LRA; and the election to either resort to adjudication or industrial action now provided for in section 189A, with specific reference to section 189A (10).)

2105 There are conflicting decisions on whether an acting allowance is a

benefit. In some cases it was found not to be a benefit.

Schoeman v Samsung Electronics (Pty) Ltd (1997) 18 ILJ 1098 (LC)

Gaylard v Telkom SA Ltd (1998) 19 ILJ 1624 (LC)

Northern Cape Provincial Administration v Commissioner Hambidge NO & others (1999) 20 ILJ 1910 (LC)

Hospersa & Another v Northern Cape Provincial Administration (2000) 21 ILJ 1066 (LAC) at 1069-1070, paras [8] and [9] South African Post Office Ltd v CCMA & others (supra)

2106 Another case an acting allowance was considered to be a benefit was

supported by the LAC decision in Department of Justice v CCMA and others (supra). IMATU obo Verster v Umhlatuzi Municipality & others (supra)

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22 UNFAIR SUSPENSION

Pending a disciplinary enquiry 2201 Following a number of Labour Court cases it is the CCMA’s practice to

regard a suspension pending disciplinary enquiry as a suspension for disciplinary reasons:

Koka v Director General: Provincial Administration North West Government [1997] 7 BLLR 874 (LC) Sappi Forests (Pty) Ltd v CCMA & others [2009] 3 BLLR 254 (LC)

See also Ndlovu v Transnet Ltd t/a Portnet [1997] 7 BLLR 887 (LC)

Ngwenya v Premier of Kwazulu-Natal [2001] 8 BLLR 924 (LC) Minister of Labour v GPSSBC & others [2007] 5 BLLR 467(LC)

2202 It is normally unlawful and unfair to suspend an employee without pay pending a disciplinary enquiry. A collective agreement or legislation may authorize unpaid suspension in which event it would not be unlawful or unfair. An employee may also agree to a suspension without pay e.g. when seeking the adjournment of a disciplinary enquiry.

Sappi Forests (Pty) Ltd v CCMA & others (supra)

2203 “… although schedule 8 item 4 of the Labour Relations Act requires that

disciplinary action against a shop steward should not be initiated without informing and consulting with the union, the reference to disciplinary action should include a precautionary suspension like the current one. In my view the purpose of item 4 of the Labour Relations Act is to avoid possible victimization of shop stewards for performing union activities by the employer. That purpose will be defeated if employers are allowed to suspend shop stewards without informing and consulting union. I therefore agree with the applicant that it will also suffer irreparable harm for as long as the suspensions are in force since the affected employees will not be able to perform their union activities.

POPCRU obo Masemola & others v Minister of Correctional Services (2010) 31 ILJ 412 (LC)

2204 Fairness requires the following before suspending an employee pending

an investigation or disciplinary action:

first that the employer has a justifiable reason to believe, prima facie at least, that the employee has engaged in serious misconduct;

secondly, that there is some objectively justifiable reason to deny the employee access to the workplace based on the integrity of pending investigation into the alleged misconduct or some other relevant factor that would place the investigation or the interests of the affected parties in jeopardy; and

thirdly, that the employee is given the opportunity to state a case before the employer makes a final decision to suspend the employee.

Mogothle v Premier of the Northwest Province & another (2009) ILJ 605 (LC) POPCRU obo Masemola & others v Minister of Correctional Services (supra)

23 OCCUPATIONAL DETRIMENT AND RELEVANT CONSIDERATIONS IN DETERMINING COMPENSATION

2301 Section 3 of the PDA provides that “no employee may be subjected to any

occupational detriment by his or her employer on account, or partly on account, of having made a protected disclosure.” The following constitutes occupational detriment: “(a) being subjected to any disciplinary action; (b) being dismissed, suspended, demoted, harassed or intimidated; (c) being transferred against his or her will; (d) being refused transfer or promotion; (e) being subjected to a term or condition of employment or retirement

which is altered or kept altered to his or her disadvantage; (f) being refused a reference, or being provided with an adverse

reference, from his or her employer; (g) being denied appointment to any employment , profession or office; (h) being threatened with any actions referred to paragraphs in (a) to (g)

above; or (i) being otherwise adversely affected in respect of his or her

employment, profession or office, including employment opportunities and work security;”

2302 Once it has been established that there has been occupational detriment,

save in the case of a dismissal, section 4(2)(b) provides the remedy: “Any other occupational detriment in breach of section 3 is deemed to be an unfair labour practice as contemplated in Part B of Schedule 7 to that Act, and the dispute about such an unfair labour practice must follow the procedure set out in that Part: Provided that if the matter fails to be resolved through conciliation, it may be referred to the Labour Court for adjudication.”

The Minister for Justice and Constitutional Development & another v Tshishonga [2009] 9 BLLR 862 (LAC)

2303 As acts which fall within the scope of the definition of occupational

detriment are deemed to be an unfair labour practice, it is necessary to have recourse to section 194(4) of the LRA which is the provision governing the award of compensation. It provides that the compensation awarded to an employee in respect of an unfair labour practice must be just and equitable but cannot be more than the equivalent of 12 months remuneration.

The Minister for Justice and Constitutional Development & another v Tshishonga (supra)

2304 In summary, once it has been found that an employee has been subjected to occupational detriment on account of having made a protected disclosure, a court must determine what compensation is just and equitable in the circumstances, which amount is capped at 12 months remuneration. … the following factors could legitimately be taken into account by this court in making such an award:

embarrassment and humiliation… for first of all being removed with immediate effect from …business unit, without any reason being given and thereafter being subjected to a suspension and subsequent disciplinary hearing.

suffered further denigration by being referred to as a “dunderhead” by the then Minster of Justice on national television … belittle the respondent by saying that he is “the most timid public servant and at worst he is the sort of person who would not be able to box himself out of a wet paper bag”. The Minister went further to state that this statement could be printed.

…the Minister said that the respondent was rapped over the knuckles for poor work performance. There was absolutely no truth in this allegation.

…further suffered gross humiliation by being moved to a position which was non-existent at the time, and thereafter for long periods he was kept in that position without any work or instructions coming his way.

...suffered victimisation and harassment by being subpoenaed to an interrogation in terms of s417 and s418 of the Companies Act … the evidence in the inquiry was completely irrelevant. It was obvious that the only reason why he was subpoenaed was to embarrass him.

…had to employ an attorney and counsel to protect his rights and interests at the inquiry and he had to incur substantial costs of over R100 000.00 which the appellants failed to repay him.

..pay an attorney R77000.00 for defending him in the disciplinary inquiry where he was eventually found not guilty.

had to receive trauma counseling as a result of the way in which he was treated after the disclosures had been made to the media.

the appellants failed to produce any evidence to substantiate claims made in the pleadings against the respondent.

The question thus is what is just and equitable in circumstances where the compensation is for non-patrimonial loss. In this connection, some assistance can be gained from the jurisprudence relating to the award of a solatium in terms of the actio injuriarum. In these cases the award is, subject to one exception of a non-patrimonial nature, and is in satisfaction of the person who has suffered an attack on their dignity and reputation or an onslaught on their humanity. The exception is for the amount relating to the costs of R177000 which were incurred by respondent in having to defend himself, and which are patrimonial by nature. Factors regarded by

the court as relevant to the assessment of damages generally included the nature and seriousness of the iniuria, the circumstances in which the infringement took place, the behavior of the defendant (especially whether the motive was honorable or malicious), the extent of the plaintiff’s humiliation or distress, the abuse of a relationship between the parties, and the attitude of the defendant after the iniuria had taken place. It should be noted that this list is not exhaustive in that specific forms of infringement have their own peculiar factors to consider. See Bruwer v Joubert 1966 (3) SA 334 (A) at 338; Jansen van Vuuren v Kruger 1993 (4) SA 842 (A) at 857 – 858. In the context of the present dispute the following factors set out by Harms JA(as he then was) in Mogale v Seima 2008 (5) SA 637 (SCA) at 642 are of particular relevance:

“The main factor determining quantum in damages is the seriousness of the defamation…The second factor is the nature and extent of the publication…The third factor is the reputation…Lastly, the motives and conduct of the defendants are relevant”.

In the present case, a starting point must be that respondent be compensated for the R177 000 incurred to defend himself against the wholly unwarranted onslaught launched against him. In addition, this court must take account of the facts set out in paragraph 16 of this judgment. Sections of these facts must be given significant weight. In particular, the respondent suffered the indignity of unfortunate, intemperate attacks of an ad hominem nature made by the Minister of Justice on national television. The gravity of this grossly unfair and irresponsible conduct on the part of the minister was compounded by the role played by the respondent in seeking to promote integrity in government. Respondent further suffered the indignity of losing his employment. All of this occurred because he acted as a ’whistle blower’ in terms of the very legislation introduced by first appellant’s department, which was designed to protect such people. The Department of Justice is obligated to show the greatest respect for the PDA for, as the promoter of the legislation it should know the cardinal importance of this Act in promoting the constitutional values of accountability and transparency in the public administration of this country.

For all the reasons set out in this judgment, a significant award is justified. While the principles developed in the cases dealing with a solatium are important, the actual amount to be awarded is a discretionary act of the court ; there is no tariff to which recourse can be made.

To the extent that precedent is of assistance, in Mogale and Others v Seima 2008(5) SA 637(SCA) at para 18, it was noted that courts have not been generous in their awards of solatia. In Mogale, a newspaper, with a

readership of possibly more than 900000, carried a report that plaintiff gave his girlfriend a ‘hot klap’ for having taken notice of other men. The newspaper tendered an apology which was not accepted. The Supreme Court of Appeal reduced the award from R70000 to R12000. In this case, a far more significant sum, should be awarded as compensation for the indignity suffered, the extent of the publication of the attack on respondent (publication being on national television) and the persistent, egregious nature of the attacks upon respondent which has been triggered because he had acted in the national interest. In my view, an amount of R100 000 is thus justified, that is apart from the R177 000 in respect of costs incurred in respondent’s defence.

Although the amount to be awarded has been reduced to R277 000, the nature of this litigation and the outcome justify an award of costs in favour of the respondent.”

The Minister for Justice and Constitutional Development & another v Tshishonga (supra)

24 MISCONDUCT – SPECIFIC OFFENCES Absence without leave –imprisoned employee

2401 The contract of employment does not terminate automatically.

NUM & another v CCMA & others [2009] 7 BLLR 669 (LC) 2402 Absence due to imprisonment may constitute a supervening impossibility

to tender services. If that is the case the employer must as a matter of fairness consider alternatives to dismissal such as a temporary replacement. If that is not possible the employer must engage the employee “in consultation in terms of section 189 of the Labour Relations Act about his redundancy or about its operational requirements.”

Trident Steel (Pty) Ltd v CCMA & others [2005] 10 BLLR 1028 (LC)

2403 Arbitrators should consider the following cases

Trident Steel (Pty) Ltd v CCMA & others (2005) 26 ILJ 1519 (LC) [also reported at [2005] 10 BLLR 1028 (LC) – Ed];

Lebowa Platinum Mines Ltd v CCMA & others [2002] 5 BLLR 429 (LC) and two unreported judgments in

Samancor Limited v Metal & Engineering Industry Bargaining Council & others JR 1061/07 [reported at [2008] JOL 22273 (LC) –Ed] and

Eskom Limited v CCMA & others case number JR 2025/06 [reported at [2008] JOL 22274 (LC) – Ed] both delivered on 1 July 2008.

NUM & another v CCMA & others

2404 While ordinary principles of contract permit a contracting party to terminate the contract if the other party becomes unable to perform, that is not the end of the matter in the case of employment. The question that still remains in such cases is whether it was fair in the circumstances for the employer to make that election. In making that assessment the fact that the employee is not at fault is clearly a consideration that might and should properly be brought into account. But the fact that Mr Maloma was not at fault was not the sole reason for the arbitrator’s decision. Another consideration that he took account of - and it was clearly decisive of his decision - was that there was ‘no evidence that [Mr Maloma] was occupying such a key position in the company that necessitated his dismissal after ten days of absence.’ He added that he had not been

persuaded that the employment relationship had become intolerable... His reasoning shows that he would have reached the same conclusion however the dismissal was categorised. Least of all does it follow from his error that the award was so unreasonable that it fell to be set aside.”

National Union of Mineworkers v Samancor Chrome Ltd ( Tubatse Ferrochrome) (2011) 32 ILJ 1618 (SCA)

2405 In Samancor the SCA found that the commissioner’s award was not

reviewable because it was not so unreasonable that it could not have been reached by a reasonable decision maker. The Court however expressed no view on whether it would have reached the same conclusion. The Court found that there can be no universal answer to the question what an employer is required to do when its employee is imprisoned and it is not known when the employee would be capable of resuming his duties. It would depend on the facts of each case. The SCA found that the award was not unreasonable because the commissioner properly took into account that

The employee party was not at fault;

there was no evidence that the employee party occupied such a key position that it necessitated his dismissal after ten days of absence;

Samancor had not persuaded him that a continuation of the employment relationship had become intolerable;

Samancor did not demonstrate why a temporary arrangement could not have been made; and that it was further relevant that

Samancor had not demonstrated why an employee with such long service could not have been accommodated once he returned to work.

2406 The LAC judgment is reported as Samancor Tubatse Ferrochrome v

MEIBC & others (2010) 31 ILJ 1838 (LAC). Its finding that the matter related to incapacity was approved by the SCA. It appears from the LAC judgment and the other judgments referred to above that arbitrators should in essence decide whether the employer’s election to terminate the employment contract because the employee was unable to work, was fair. In this regard the following factors should be considered –

The reasons for the incapacity including whether the arrest was lawful; whether the employee was at fault; whether he or she caused the situation, whether the employee was in the end convicted and whether the employee’s actions leading to the arrest rendered a continuation of the employment relationship intolerable;

The extent of the incapacity i.e. whether it was permanent or temporary, and, if temporary, whether it was possible to estimate for how long it would continue; and

Whether there were alternatives to termination of employment that fairness required the employer party to implement;

2407 In deciding whether fairness required the implementation of alternatives to

dismissal the following factors should be considered:

The size and financial position of the employer party;

The importance of the position occupied by the employee party including whether it was such a key position that it could not reasonably be expected of the employer party to keep the position open and available for an indefinite period of time; whether it was commercially necessary for the employer party to make an expeditious decision about the employee party’s future and how imperative it was to ensure that a similarly skilled person could assume the responsibilities;

If fairness required of the employer party to keep the position open and available, whether it was kept open and available for a reasonable period of time;

Whether a temporary arrangement could have been made such as employing a temporary replacement including whether it was possible to find a replacement that was prepared to work on a temporary basis; and

The service of the employee including whether it was of such length that the employee party should as a matter of fairness have been accommodated once he returned to work either in the same or in an alternative position.

2408 The alternatives that the Labour Court (in the Samancor review judgment)

referred to appear from the following dictum in Trident Steel (Pty) Ltd v Commission for Conciliation, Mediation & Arbitration & others (2005) 26 ILJ 1519 (LC)

There were alternatives open to the applicant. It could have employed a temporary employee. If it had no alternative but to employ a permanent employee, it could have engaged the applicant in consultation in terms of section 189 of the Labour Relations Act about his redundancy or about its operational requirements.”

2409 The review judgment of the Labour Court in Samancor seems to suggest that it would not be necessary to consider alternatives

where the employee is the cause of his absence from work;

where the employee was the cause of his incarceration;

where the employee is to blame for his incarceration;

where the arrest is lawful and where the employee is in the end convicted; and/or

where the employee was the author of his own misfortune. 2410 The LAC found that the procedure followed by Samancor was unfair. It

accepted that it may have been impossible to hold a pre-dismissal hearing but found that Samancor did not do enough. It found that the procedure was unfair in that the post-dismissal hearing appeared to be nothing more than an ex post facto rationalization of the earlier decision and because the person who made original decision also chaired the post-dismissal hearing.

2411 The kind of procedure required in cases of incapacity due to imprisonment

is similar to the procedure required in respect of other types of incapacity referred to in item 10 of the Code of Good Practice: Dismissal i.e.

an investigation into the reason for the incapacity, the expected duration thereof and the possible alternatives to dismissal; and

giving the employee concerned an opportunity to state a case in response during such investigation and to be assisted by a shop steward or a fellow employee.

Abscondment or desertion

2412 There is a distinction between absence without leave and desertion …It is

not desertion when an employee who is absent from work intends returning to work. Desertion necessarily entails the employee’s intention no longer to return to work….

SABC v CCMA & Others [2002] 8 BLLR 693 (LAC) 2413 In the SABC case the LAC found that it was not a case of desertion but

one of being absent without leave. The employer however had a disciplinary code in terms of which a disciplinary hearing had to be held in cases where an employee is absent from work without permission. The LAC in effect found that this was a case of absence from work without permission (as opposed to abscondment or desertion) and therefore the respondent’s own disciplinary code required that a disciplinary enquiry be

held. Its findings regarding procedure only related to absence without leave:

Where an employer has an effective means of communicating with an employee who is absent from work, the employer has an obligation to give effect to the audi alteram partem rule before the employer can take the decision to dismiss such an employee for his absence from work.

…There was no reason why a disciplinary enquiry could not be convened

in terms of the respondent’s own disciplinary procedure. The … (employee’s) failure to heed the appellant’s written warning to report for work on specified dates or else run the risk of being deemed to have deserted his post, did not excuse the appellant from holding a disciplinary hearing prior to the … dismissal.

SABC v CCMA & Others [2002] 8 BLLR 693 (LAC) 2414 The reasons for finding hat a dismissal occurred was dealt with in the

judgment of the Court a quo reported as SABC v CCMA & others [2001] 4 BLLR 449 (LC). …whilst it is correct that a resignation on the part of an employee is the event which terminates the employment relationship without any response from the employer being required to “effect” the termination, the unilaterality of such termination flows from the fact that a resignation does not constitute a breach of contract. This circumstance distinguishes a resignation from a desertion. Although in some superficial respects, a desertion might be construed as a sort of tacit resignation or constructive resignation, it is not an act which is permitted by the terms of the contract. Because desertion is not permitted by the terms of the contract, it constitutes a breach. It is not part of our law that a breach of contract, however material, brings about a termination of the contract. In our law, such an act on the part of a party simply entitles the other party to acknowledge the “repudiation” and then by a juridical act of its own, usually referred to as the “acceptance” of the repudiation, to put an end to the contract by consciously electing to do so. From this perspective it is not the act of desertion which terminates the contract of employment, but the act of the employer who elects to exercise its right to terminate the contract in the face of that breach. (See Stewart Wrightson (Pty) Limited v Thorpe 1977 (2) SA 943 (SCA) at 953E)

The exposition of the law in the judgment of the Court a quo is supported by the following cases:

SACWU v Dyasi [2001] 7 BLLR 731 (LAC) at 735 Lebowa Platinum Mines [2002] 5 BLLR 429 (LC) at 432

2416 Whether an employee should be afforded a hearing in a case of desertion

was also dealt with in the judgment of the Court a quo:

“In those instances where the employee communicates an unequivocal intention not to return to work, the fact of desertion is established…. To require an employer in such circumstances to hold an enquiry, for the sake of form, would be silly, and if the provisions of Clause 4 (4) of the Code of Good Practice did not excuse the holding of a disciplinary enquiry, common sense certainly would do so. The real problem stems from circumstances of unexplained absence. Mere absence is no more conclusive evidence of desertion (which is absence plus an intention not to return), than it is evidence of willful absence without leave (which axiomatically includes an intention to return, albeit at a time of the employee’s choosing). The means by which the employer establishes the existence or absence of the intention to return is the critical point of the debate. What constitutes desertion is of course a matter of fact. In some instances an unexplained absence for a reasonable period, that is to say, reasonable in relation to the employer’s operational requirements, will establish the fact of desertion. In the instance of an employee who remains away from the work place and whose whereabouts are not known and who are out of reach of the employer, it is plainly impractical to impose upon an employer the obligation to convene a disciplinary enquiry before reaching the conclusion that the fact of desertion has occurred and in consequence of which it is entitled in response thereto to elect to terminate the contract…. Whether or not an employer should convene a disciplinary enquiry before taking a decision to dismiss, is dependent on the relevant circumstances, and the practicality of doing so. …the applicant should have furnished him with a notice to appear at a determined date and time to show cause why he should not be dismissed by reason of his persistent desertion of his post. There was nothing impractical about such a step and I am of the view that the circumstances which presented itself to the applicant were not exceptional in the sense contemplated by Clause 4 (4) of the Code of Good Practice.

2417 It therefore appears from the judgment of the Court a quo that fairness

does not require that an employee should be afforded a hearing in cases

where the fact of desertion is clear such as where the employee indicated unequivocally that he/she has no intention to return or where the period of absence is so long that the only inference to be drawn is that the employee has no intention to return, or

where it is not possible for the employer to contact the employee e.g. when the employee’s whereabouts are unknown.

In such circumstance an employer cannot reasonably be expected to comply with the guidelines relating to procedural fairness and may in terms of Clause 4.4 of the Code of Good Practice: Dismissal, dispense with pre-dismissal procedures.

2418 The purpose of affording a hearing to an employee who remains absent

without explanation is to establish whether such employee intends to return to work or whether he/she intends never to return to work. Fairness requires that a hearing be afforded in cases of “unexplained absence” or where there is no clear indication by the employee of an intention never to return. (See the Dyasi case referred to above.) Once it is established that the employee has no intention to return to work the employer may unilaterally elect to terminate the employment contract.

2419 Where an employer has assumed that an employee would not return to

work and the employee subsequently tenders his services, fairness may require that the employee be given a hearing at that stage. In the Lebowa case referred to above, the employer’s disciplinary procedure provided that the employee be afforded a hearing on his return and if services are tendered. It was not clear from the facts whether a decision to dismiss had already been taken at the time when the employee returned. He did not report to a person in authority and it was found that he had not tendered his services properly hence it was not unfair not to hold a disciplinary enquiry.

Under the influence of alcohol

2420 It must be proved that the skills required of an employee to perform his job

were impaired by the consumption of intoxicating liquor before a finding may be made that the employee was under the influence of liquor.

Tanker Services (Pty) Ltd v Magudulela [1997] 12 BLLR 1552 (LAC) 2421 It is open to an employer to rely on the evidence of a lay person who can

give evidence as to the condition of the alleged transgressor. In this regard the LAC did however caution that the perceptions of witnesses regarding the sobriety of another may vary inter alia because it is affected by what they consider to be socially and morally acceptable. For this reason the evidence of such witnesses should be approached with caution.

2422 Whilst recognizing that there may be explanations for refusing to undergo

a breathalyzer test, the LAC found that the obvious explanation for the employee’s refusal to undergo the breathalyzer test in that case was that

he wanted to avoid the risk of incriminating himself and that that was a factor that corroborated the evidence of the witness who testified about his condition.

Derogatory and racist remarks 2423 “The attitude of those who refer to, or call, Africans “kaffirs” is an attitude

that should not have any place in any workplace and should be rejected with absolute contempt by all those in our country – black and white – who are committed to the values of human dignity, equality and freedom that now forms the foundation of our society…. The courts must deal with such matters in a manner that will give expression to the legitimate feelings of outrage and revulsion that the reasonable members of society – black and white – should have when acts of racism are perpetrated.” Crown Chickens (Pty) Ltd t/a Rocklands Poultry v Kapp and others (2002) 23 ILJ 863 (LAC) See also JAMAFO on behalf of Nero v Pick ’n Pay (2007) 28 ILJ 688 (CCMA)

2424 The Labour Court in Solidarity/MWU on behalf of Van Staden v

Highveld Steel & Vanadium & another (2005) 26 ILJ 2045 (LC) found that it was fair in the circumstances of that case for a rehearing of a disciplinary enquiry to be held. This case also involved the use of racially abusive language. The disciplinary tribunal had found that the employee had probably used racially abusive language but nevertheless found the employee not guilty. After a shop steward complained the employer wanted to hold a rehearing. Its disciplinary code made provision for a rehearing in certain circumstances. The employee approached the Labour Court for an order interdicting the employer from holding such a rehearing. The Labour court refused to grant the interdict because the disciplinary tribunal had committed an obvious irregularity and because of the gravity of the charges and the consequences of the matter, was not properly addressed.

Unauthorised eating in supermarket 2425 Pilferage in supermarkets is a serious problem and employers have

reason to make rules designed to eradicate the problem. This does not however mean that every breach of such rules should be visited with the sanction of dismissal. In other words commissioners should not necessarily tolerate a zero tolerance approach. Factors such as the value of the items involved, the employee’s length of service and a clean disciplinary record may move an arbitrator to find that dismissal was an unfair sanction and such a finding would not be unreasonable.

Shoprite Checkers (Pty) Ltd v CCMA & others [2008] 12 BLLR 1211 (LAC)

2426 In another Shoprite case of the same year the LAC noted that it has been

consistently held that dishonesty by an employee irreparably destroys the relationship of trust with the employer. Dismissal is a sensible operational response to risk management in the enterprise. The case referred to in the preceding paragraph was distinguishable because unlike the employee in that case, the employee in the latter case had not concocted a mendacious defence.

Shoprite Checkers (Pty) Ltd v CCMA & others [2008] 9 BLLR 838 (LAC)

2427 Comparing the two Shoprite cases it appears that the different outcomes may be explained on the basis that

the employee in the first case had longer service ;

the employee in the first case had not gone so far as to produce manufactured evidence that manifestly was concocted in order to support his own mendacious account; and

in the latter case there was clear evidence that employees were made aware of the shrinkage problem and the rules put in place to curb it and that the employee acted in flagrant breach of these rules.

2428 It is apparent from the cases referred to in the second Shoprite Checkers case that the weight of LAC authority supports the upholding of a dismissal for dishonesty even if the value of the item involved is small. It is suggested that a dismissal for dishonesty should only be interfered with in highly exceptional circumstances.

2429 A successful business operates on the basis of trust. Dishonesty and theft

(including minor theft) to such an extent impacts on the trust relationship that dismissal normally is, or should be, a sensible operational response to risk management in the particular enterprise. In such cases dismissal is justified by the operational requirements of the enterprise. In a later LAC case it was again found that the weight of authority indicates that that is the legal position. It was further found that it is impractical to draw subtle distinctions between degrees of theft.

Miyambo v CCMA & others (2010) 31 ILJ 2031 (LAC)

2430 Mitigating factors such as long service and a clean disciplinary record are

unlikely to restore the trust relationship once dishonesty has been established especially if the employee concerned shows no remorse. Consistent denial of any wrongdoing and giving contradictory explanations

for unauthorised removal of company property militate against reinstatement. What the LAC in effect found in Miyambo was that an award in conflict with abovementioned principles is not one that a reasonable decision maker could reach.

Sleeping while working impermissible hours and dishonestly receiving payment for such hours

2431 In the special circumstances of the Boardman Brothers case a finding

was made on appeal that the sanction of dismissal was too harsh even though the employees dishonestly failed to disclose to their employer that they were sleeping during hours that they agreed to work. The fact that it was unlawful to permit the working of such hours and that the employees were sleeping because they were unable to work such hours played a significant role in the LAC and the AD concluding that dismissal was an unfair sanction.

Boardman Brothers (Natal) (Pty) Ltd v CWIU [1998] 7 BLLR 655 (A)

Derivative misconduct

2432 In Foschini Group v Maidi & others (2010) 31 ILJ 1787 (LAC) the LAC

found that the employee parties had “colluded to keep from their employer the fact that almost a third of the stock in the Mabopane store disappeared and gave unacceptable explanations for the disappearances. The relationship of trust between them has clearly broken down. In these circumstances dismissal is the only sanction.”

2433 In the Foschini judgment the following cases were referred to:

Federal Council of Retail & Allied Workers and Snip Trading (2001) 22 ILJ 1945 (ARB); [2007] 7 BALR 669 (P);

SACCAWU v Pep Stores (1998) 19 ILJ 939 (CCMA); and

Chauke & others v Lee Service Centre CC t/a Leesam Motors (1998) 19 ILJ 1441(LAC).

2434 In the Snip Trading matter Grogan as arbitrator expressed the view that

there are four grounds upon which dismissal for collective misconduct can be justified:

individual culpability;

derivative misconduct;

common purpose; and

team misconduct.

2435. It is probably more correct to say that every dismissal must be based on

individual culpability because if an employee did not have a blameworthy state of mind it would not be fair to dismiss such employee.

2436 What is meant by derivative misconduct appears from Chauke & others

v Lee Service Centre t/a Leason Motors (supra). In that case the LAC held that an employer who suffered continuously under industrial sabotage perpetrated by unidentified employees were entitled to dismiss all employees on the shop floor where the damages occurred because the circumstances were such that the most probable inference was that such employees knew who the perpetrators were and failed to come forward and identify them. The LAC postulated two lines of justification for a fair dismissal in such circumstances:

The first is where an employee is under a duty to assist the employer to bring the guilty to book.

The second is where an employee “has or may reasonably be supposed to have information concerning the guilty, his failure to come forward with the information may itself amount to misconduct.”

The relationship between employer and employee is in its essentials one of trust and confidence and conduct clearly inconsistent with that essential warrants termination of service. Failure to assist an employer in bringing the guilty to book violates this duty and may itself justify dismissal.

2437 A group of employees act with a common purpose if they conspire, collude

or are parties to a plan to commit misconduct. Under such circumstances the actions of one party in executing the common purpose is deemed to be the action of the group. An example would be where employees collude to steal from their employer whenever one of them gets the opportunity to do so and that they will later share the spoils. The concept of derivative misconduct is wide enough to include employees acting with a common purpose.

2438 In the Foschini case the LAC quoted with approval the following paragraph

from Grogan’s award in the Snip Trading case: “In the case of “team misconduct” the employer dismisses a group of

employees because responsibility for the collective conduct of the group is indivisible… In “team misconduct” employees are dismissed because, as individual components of the group, each has culpably failed to ensure that the group complies with a rule or attains a performance standard set by the employer.”

2439 The Snip Trading case was interpreted as follows in the Foschini case: “According to Professor Grogan in Snip Trading the justification for the

dismissal of each employee lies in his or her individual culpability for the failure of the group to attain the performance standard set by the employer. This justification is permissible if one accepts that an employer is entitled to introduce strict rules in order to protect its assets.”

2440 It is not clear what was meant in the Snip Trading award when it was

indicated that, because the collective conduct is indivisible, it “is unnecessary in cases of ‘team misconduct’ to prove ‘individual culpability’, ‘derivative misconduct’.. or common purpose.” The suggestion seems to be that it follows that if team misconduct is “indivisible” the team members are individually guilty (culpable). Whether that is a correct statement depends on what is meant by “indivisible.” It probably refers to circumstances where the acts or omissions of some members of the group can justifiably be attributed to all members, but it is suggested that individual culpability for the actions of other group members would still have to be proved and, if that is the case, it is unnecessary to work with a concept of “team misconduct.”

2441 It is conceivable that it may be fair for an employer to have a rule that all

employees working in a group are duty bound to ensure that other employees working in the group comply with the standards set by the employer as far as conduct and performance are concerned. If a standard is breached without the knowledge of a group member such group member should, as a matter of fairness, only be held liable if he/she was negligent i.e. if he/she failed to take reasonable steps to ensure that the other group members comply with the standard.

2442 Strict liability (i.e. to hold an employee liable even though he/she did not

have a blameworthy state of mind) has never been part of our labour law. It is suggested that the Foschini case should not be interpreted as meaning that there could be circumstances where a dismissal based on strict liability would not be unfair. The rationale for the judgment had nothing to do with strict liability. On the contrary the dismissals were upheld because the employees “colluded to keep from their employer the fact that almost a third of the stock in the Mabopane store disappeared” i.e. on the basis of common purpose and derivative misconduct.

Failure to attend disciplinary enquiry 2443 A failure to attend a disciplinary enquiry would generally not constitute

misconduct because it is held for the benefit of the employee i.e. so that he could have an opportunity to be heard. If the terms and conditions of

employment oblige the employee to attend a disciplinary enquiry, it may constitute misconduct not to do so.

…Failure to attend your disciplinary hearing is not, generally speaking, an

act of misconduct. It may be argued that it would be one in a case where it can be shown that it is part of the employee’s terms and conditions of employment that, if he is charged with misconduct, he is obliged to appear in, or attend, his disciplinary hearing. This is not such a case. The reason why, generally speaking, an employee is not obliged to attend his disciplinary hearing is that a disciplinary hearing is there to comply with the audi alteram partem rule before the employer may take a decision that may affect the employee or his rights or interests adversely. An employee can make use of that right if he so chooses but he can also decide not to exercise it. However, if he decides not to exercise that right after he has been afforded an opportunity to exercise it and a decision is subsequently taken by the employer that affects him in an adverse manner, he cannot be heard to complain that he was not afforded an opportunity to be heard.

Fidelity Cash Management Services v Commission for Conciliation, Mediation and Arbitration and others [2008] 3 BLLR 197 (LAC

Failure to undergo polygraph test

2444 Where an employee is contractually obliged to undergo a polygraph test if

it is reasonably required, the employer must show that it was reasonable to require the employee to undergo such test. To require an employee to undergo such test to show the client that it would go to great lengths to prove the innocence of its employees is not a legitimate reason for the use of a polygraph test. If a polygraph test is used to reveal dishonesty its use may be legitimate. Fidelity Cash Management Services v Commission for Conciliation, Mediation and Arbitration and others (supra) Insubordination

2445 …Not every case of insubordination triggers off “capital punishment” in a labour context that is dismissal. Therefore, it must follow that there are cases where it would not be reasonable to dismiss an employee for insubordination and that a decision to so dismiss, would then be one that a reasonable decision maker could not take in the circumstances.

…the commissioner is required to come to an independent decision as to whether the employer’s decision was fair in the circumstances, these circumstances being established by the factual matrix confronting the commissioner. In other words, the commissioner is not entitled to come to a conclusion which would read as follows:

“I do not necessarily consider what the employer did was fair. However, the employer is better placed than I and accordingly, given this particular situation, I will defer to the decision of the employer which, to my mind, does not appear to be inappropriate in these circumstances.”

That approach would not, in my view, meet the test as outlined by Navsa AJ as set out on behalf of the Constitutional Court, even if the dicta to which I have referred, are, perhaps, open to different interpretations. Reading the judgment as a whole, it appears to me to justify the conclusion that the commissioner must come to a view in his or her mind as to whether what the employer did was fair; that is not necessarily what the arbitrator would have personally decided, but whether what the employer did can be justified as being fair, in doing so, deference cannot enter into the decision making power.

In summary, if the test of Sidumo (supra) is properly applied to this case, neither of the justifications set out in the award of fourth respondent, stand up to reasonable scrutiny. A reasonable decision maker in the position of fourth respondent would have been alive to the distinction between insubordination per se and insubordination which must give rise to the ultimate sanction of dismissal. In order to come to the latter conclusion, she would have been required to have analysed the facts and found a plausible and reasonable justification for this sanction. As I have analysed both the evidence and her award, these are absent.

Wasteman Group v South African Municipal Workers’ Union [2012] 8

BLLR 778 (LAC)

2446 The difference between insubordination and gross insubordination is a question of degree. If an employee just partially defies an instruction and later completely complies with the instruction it would in appropriate circumstances be a reason for finding that the failure to follow the instruction did not constitute gross insubordination justifying dismissal.

2447 A mere failure to comply with an instruction is also less serious than a deliberate refusal to obey an instruction expressed with defiance and as a challenge to the authority of the employer especially if it is done in the presence of other employees. The latter scenario was probably what the commissioner had in mind when she made the award although she did not say it in so many words. Had she expressed herself along such lines and had she given reasons for it the review outcome might well have been different.

25 SEVERANCE PAY Arranging alternative work 2501 The fundamental question that arises in construing sec 41 (4) is this: What

is the mischief that section 41 (4) of the BCEA seeks to address or, put differently, what is the purpose of sec 41 (4)? Section 41 (4) provides that an employee forfeits his right to severance pay if he unreasonably refuses the employer’s offer of an alternative employment with that employer or another employer. It seems to me that what the drafters of the Act foresaw was that an employer could arrange an alternative employment for an employee but that the employee might reject such alternative employment for no sound reason and simply take the severance pay…. It seems that the purpose was to discourage employees from unreasonably rejecting offers of alternative employment arranged by their employer simply because they might prefer cash in their pockets in the form of severance pay. It can also be said that the BCEA sought to promote employment and to give employers an incentive to take steps to try and get alternative employment for their employees facing dismissals for operational requirements instead of leaving them on their own to look for alternative employment. In the light of this it seems to me that the purpose of severance pay in our law is not necessarily to tide the employee over while he is looking for another job. If that was the purpose, an employee who immediately walks into another and sometimes even a better paying job after his dismissal would not be entitled to severance pay because he would have no need for it.

The only way to reconcile the fact that the BCEA permits this situation and

the fact that in terms of sec 41 (4) the employee forfeits the right to severance pay if he unreasonably refuses the employer’s offer of alternative employment is that sec 41 (4) is more about rewarding the employer for offering the employee alternative employment than it is about not giving an employee severance pay if he could have another job had he not unreasonably rejected an offer of one. I say this because, if an employee who is facing dismissal for operational requirements is offered an alternative employment but not by his employer or through the efforts of his employer and he turns it down and, in so doing, acts unreasonably, he does not forfeit his right to severance pay.

…if the position were that an employee who has accepted the employer’s offer of alternative employment is still entitled to severance pay, there would be no need for section 41 (4). I say this because, if an employee does not want to take the alternative employment arranged by the employer but it would be unreasonable for him to refuse it, he would not have to reasonably reject the employer’s offer of alternative employment in order to get severance pay. All he would need to do would be to accept

the offer of alternative employment and the severance pay, work for a short time in the alternative employment and thereafter resign. In that way he would have secured himself the severance pay without rejecting the offer of alternative employment and, thus, running the risk that he might forfeit the right to severance pay if it is later found that his rejection of the alternative employment was unreasonable. Accordingly, sec 41 (4) would be completely undermined if the position was that an employee who accepts the employer’s offer of alternative employment with such employer or another employer remains entitled to severance pay.

It seems to me that the effect of sect 41(4) is that, where the employer has arranged an alternative employment for an employee who is facing a (possible) dismissal for operational requirements, either in this employ or in the employ of another employer, three scenarios are possible

- the one scenario is that the employee unreasonably refuses such

alternative employment in which case sec 41 (4) applies and the employee forfeits the right to severance pay.

- the second scenario is where the employee reasonably refuses

such alternative employment in which event he is entitled to severance pay.

- the third scenario is where the employee accepts the alternative

employment in which event he also forfeits the right to severance pay.

Irvin & Johnson Limited v CCMA & others (2006) 27 ILJ 935 (LAC)

Severance pay more than statutory minimum

2502 Section 41 (2) provides:

“An employer must pay an employee who is dismissed for reasons based on the employer’s operational requirements…severance pay equal at least one week’s remuneration for each completed year of continuous service with that employer…”

“At least” in the section means “not less than”. It could be more. Section 41 (6) provides: “If there is a dispute only about entitlement to

severance pay in terms of this section, the employee may refer the dispute in writing to” a council or the CCMA. The reference to “in terms of this section restricts… a commissioner to make a determination only in terms of the statutory minimum or an agreement, if there is one. In my view if the

rate, formula or method of calculation is agreed … a commissioner may enforce it even if it is more than a week per year of service.

Telkom (Pty) Ltd v CCMA & others [2004] 8 BLLR 844 (LC)

Retrenchment at alleged normal retirement age 2503 Where there is no agreed retirement age and employment is terminated

during a retrenchment exercise on the basis that the employees concerned reached the alleged normal retirement age, such employees would be entitled to severance pay if the employer cannot prove what the normal retirement age is.

Kirsten and Southern Cross Manufacturing CO Ltd t/a Southern Cross Industries (2006) 27 ILJ 2471 (CCMA) at 2475F.

26 TAX DEDUCTIONS FROM AMOUNTS DUE IN TERMS OF SETTLEMENT AGREEMENTS AND AWARDS.

2601 It follows that where the retrenchment figure which the employer agrees to

pay is not a figure net of tax, the employer is obliged to deduct the tax and pay same to the commissioner. Nothing recorded in the agreement can override this obligation. In such a case an employer who deducts the tax, accounts to the commissioner for the tax and pays the balance to the employee must be regarded as having complied with the terms of the settlement. See Eckhard v Filpro Industrial Filters (Pty) Ltd (1999)20 ILJ 2043 (LC)…

‘In my view, the critical question in cases such as the present one is

whether on a proper construction of the agreement the amount which the employer has undertaken to pay to the employee is an amount net of tax. If not, the ITA compels the deduction of tax. The amount that must be deducted is the amount determined by the commissioner (of SARS) in terms of para 9 (3) of the fourth schedule. In terms of that paragraph the commissioner's determination is final. If the determination is withdrawn or varied after the employer has already accounted to the commissioner for the tax, the employee will be entitled to credit or a refund pursuant to the provisions of para 28(1) of the fourth schedule.’


2602 For the purposes of the Income Tax Act 58 of 1962 remuneration

includes “any amount, including any voluntary award, received or accrued in respect of the relinquishment, termination, loss, repudiation, cancellation or variation of any office or employment'.

Paragraph 1 of the fourth schedule 2603 An employer who pays or becomes liable to pay any amount by way of

'remuneration' to an employee shall, unless the commissioner has granted authority to the contrary, deduct or withhold from that amount by way of employees' tax an amount determined in accordance with paras 9-12 of the schedule.

Paragraph 2(1) of the fourth schedule 2604 The Club Motors case clarified three issues:

Parties to a settlement agreement may agree that the settlement amount be net of tax. The effect of such agreement would be that the

employer would be obliged to pay a gross amount yielding the figure specified in the agreement net of tax.

For the amount mentioned in the settlement agreement to be net of tax, this must be specified in the agreement. If there is such specification the employee is entitled to the whole amount as stated in the agreement. If there is no such specification the employer must deduct the necessary tax from the stated amount and pay the balance to the employee.

No matter how the settlement agreement is worded employers are obliged to pay to SARS tax that is required to be deducted from the gross amount and the only way to establish what amount is to be paid is to apply for a tax directive from SARS.

2605 An employer is also obliged to deduct tax from back pay or compensation

stipulated in an award in accordance with a tax directive that must be obtained form SARS.

Penny v 600 SA Holdings (Pty) Ltd (2003) 24 ILJ 967 (LC)

27 STATUTORY MONEYS How to refer 2701 Section 191 contemplates two forms of referral. The first is the referral of

the dispute to the appropriate statutory dispute resolution agency (see section 191 (1)) and the second contemplates the referral of the dispute to this court or an arbitrator for adjudication (section 191 (5)). Which form of “referral” does section 74 (2) of the BCEA contemplate. In my view it can only be the former. The Labour Courts have consistently held that a dispute as framed in the initial referral to the CCMA or bargaining council is definitive, and that it is not competent for a party to change the nature of the dispute at the second stage of the referral to arbitration or adjudication. (See NUMSA v Driveline Technologies (Pty) Ltd & another (2000)1 BLLR 20 (LAC)). In the present instance, the referral forming the form which the applicants referred their dispute to the bargaining council makes no mention of a claim for remuneration for the month of April 2006. The claim for remuneration for the first time appears in the applicants’ statement of case filed in these proceedings. In these circumstances the applicants have not met the condition established by section 74 (2) and this court is accordingly precluded from making any order in this regard.

Douglas & others v Gauteng MEC for Health [2008] 5 BLLR 401 (LC

2702 When and how claims for payment of statutory monies can be referred

with unfair dismissal cases is determined by sections 74 (2) and (3) of the BCEA which read as follows:

“ (2) If an employee institutes proceedings for unfair dismissal, the Labour

Court or the arbitrator hearing the matter may also determine any claim for an amount that is owing to that employee in terms of this Act if (a) the claim is referred in compliance with section 191 of the

Labour Relations Act, 1995… (b) the amount had not been owing by the employer to the

employee for longer than one year prior to the dismissal; and (c) no compliance order has been made and no other legal

proceedings have been instituted to recover the amount.

(3) A dispute concerning any amount that is owing to an employee as a result of a contravention of this Act may be instituted jointly with a dispute instituted by that employee over the entitlement to severance pay in terms of section 41(6).”

2703 In paragraph 38 of the Douglas judgment Van Niekerk AJ in effect found

the following:

Section 74 of the BCEA requires that a claim for any amount due in terms of the BCEA must be reflected in the initial referral form;

a failure to do so precludes the Court (or an arbitrator) from making any order for payment of such amounts; and

it is not competent for a party to change the nature of the dispute at the second stage of the referral to arbitration or to the Court for adjudication (relying on the judgment of the Labour Appeal Court in NUMSA v Driveline Technologies (Pty) Ltd [2000] 1 BLLR 20 (LAC)).

2704 The procedure envisaged by section 191 is that a dispute must first be

referred for conciliation and that it may only be referred to arbitration or adjudication, as the case may be, if the attempt at conciliation has failed. Van Niekerk AJ found that this procedure must also be followed in respect of claims for statutory monies and that it must be done simultaneously with the procedure followed in respect of an unfair dismissal dispute. The effect of this judgment is that a dismissed employee cannot for the first time in his request for arbitration or at arbitration raise non-payment of statutory monies as an issue to be decided. An arbitrator does not have jurisdiction to decide such claims unless the issue was referred to conciliation together with the referral of an unfair dismissal dispute (or a severance pay dispute).

2705 In the Driveline Technology case a finding was made that an employee

can after conciliation amend his/her claim and allege a different reason for dismissal. However what can employee cannot do, so it was found, is to change the nature of the dispute. It follows that employees also cannot add further different disputes after conciliation. A claim for statutory monies is a different dispute in the sense that it is not part of the dismissal dispute and cannot be added later if it was not referred with the dismissal dispute. This illustrates how important it is to advise dismissed employees to include possible claims for statutory monies in their Forms 7.11.

2706 It should be noted that “an amount owing” in section 74 includes any

amount that is due to the employee because of underpayment of wages, particularly where the employer had paid the employee on a rate lower than the rate prescribed by a sectoral determination. If that is evident, an arbitrator hearing the matter may order payment of the difference between what was paid and what should have been paid in terms of the relevant sectoral determination, if of course the requirement contemplated in section 74 (2) (a) has been met and the claim is not subject to the prescription period and the restriction contemplated in section 74 (b) and (c), respectively.

2707 Van Niekerk AJ did not say whether an amendment of the initial referral to

include a claim for any amount that was owed in terms of the BCEA, at a

later stage, would be proper. Currently there is no provision in the LRA or the Rules, which expressly allows such an amendment. The objection to such a process may of course be that it is a new claim which has not been conciliated. It is suggested that amendments may be effected up to the conciliation stage

2708 Commissioners dealing with dismissal disputes and disputes over the

entitlement to severance pay are encouraged to enquire from the employee at conciliation, and even at arbitration stage, whether any amount is owing to the employee in terms of the BCEA and if so, try to get the employer’s consent to an amendment of the referral to include such a claim with the main dispute. If the employer is not willing to agree, the employee should be advised to approach the Department of Labour for assistance to recover the amount.

2709 It is important to note that paragraph (b) of subsection (2) has a

prescription period of one year in the sense that claims for statutory monies that have been outstanding for longer than a year may not be dealt with in terms of the section. It simply means that a claim for payment of such amount cannot be instituted together with a claim for unfair dismissal (or severance pay) if that amount is due for more than one year. It also has the effect that any order made, may not include any amount that has been owing for longer that one year.

2710 If an employee has earlier complained to a labour inspector or if a labour

inspector has secured an undertaking from an employer, a compliance order may be issued in respect of amounts that became owing up to twelve months prior to that. It may in such instances be more beneficial for the employee to wait for the Department of Labour to issue a compliance order and to enforce such compliance order.

2711 Arbitrators should be mindful of the restriction contained in paragraph (c)

of subsection (2) and should not entertain any claim if a compliance order has been issued or legal action has been instituted for payment of the same amount. Arbitrators should therefore determine whether a compliance order has been issued or whether any legal action has been instituted before they entertain the claim.

2712 Arbitrators should elicit sufficient information to determine (and quantify)

the amount payable. If the information is not sufficient to determine (and quantify) the amount, the arbitrator should not make any order in respect of that amount because such an order would not be enforceable by way of execution. It will also prevent the Department of Labour to issue a compliance order.

Sectoral determinations and the calculation of remuneration, arrear salaries and outstanding amounts owing in terms of the BCEA

2713 In cases where an arbitrator decides to award compensation or to

reinstate an employee with retrospective effect, or where the arbitrator has to determine an amount in terms of section 74 of the BCEA that is owing to that employee in terms of the BCEA, including underpayment of wages, it is necessary to quantify the amount payable to the employee in the award. Generally, the calculation of the amount payable is done with reference to the information regarding the employee’s remuneration that is before the commissioner, but in cases where the employee is employed in a sector where a sectoral determination, made by the Minister in terms of the BCEA, is applicable, the calculation should be done with reference to the rate prescribed by relevant determination.

Calculating severance pay, leave pay and notice pay

2714 The following payments are included in an employee's remuneration for

the purposes of calculating pay for annual leave in terms of section 21, payment instead of notice in terms of section 38 and severance pay in terms of section 41:

(a) housing or accommodation allowance or subsidy or housing or

accommodation received as a benefit in kind; (b) car allowance of provision of a car, except to the extent that the car

is provided to enable the employee to work; (c) any cash payments made to an employee, except those listed as

exclusions in terms of this schedule; (d) any other payment in kind received by an employee, except those

listed as exclusions in terms of this schedule; (e) employer's contributions to medical aid, pension, provident fund or

similar schemes; (f) employer's contributions to funeral or death benefit schemes. Item 1 of Schedule to Section 35 (5) Notice published in Government Notice

number GN 691 of 23 May 2003 published in GG 24889 of 23 May 2003 2715. The following items do not form part of remuneration for the purpose of

these calculations: (a) Any cash payment or payment in kind provided to enable the

employee to work (for example, an equipment, tool or similar allowance or the provision of transport or the payment of a transport allowance to enable the employee to travel to and from work);

(b) a relocation allowance;

(c) gratuities (for example, tips received from customers) and gifts from the employer;

(d) share incentive schemes; (e) discretionary payments not related to an employee's hours of work

or performance (for example, a discretionary profit-sharing scheme);

(f) an entertainment allowance; (g) an education or schooling allowance. Item 2 of Schedule to Section 35 (5) notice. 2716 The value of payments in kind must be determined as follows:

(a) A value agreed to in either a contract of employment or collective agreement, provided that the agreed value may not be less than the cost to the employer of providing the payment in kind; or

(b) the cost to the employer of providing the payment in kind.

Item 3 of Schedule to Section 35 (5) notice. 2717 An employee is not entitled to a payment or the cash value of a payment

in kind as part of remuneration if- (a) the employee received the payment or enjoyed, or was entitled to

enjoy, the payment in kind during the relevant period; or (b) in the case of a contribution to a fund or scheme that forms part of

remuneration, the employer paid the contribution in respect of the relevant period.

Item 4 of Schedule to Section 35 (5) notice.

2718 If a payment fluctuates, it must be calculated over a period of 13 weeks or,

if the employee has been in employment for a shorter period, that period.

Item 6 of Schedule to Section 35 (5) notice. 2719 This Schedule only applies to the minimum payments that an employer is

required to make in terms of the Basic Conditions of Employment Act, 1997.

Item 8 of Schedule to Section 35 (5) notice.

2720 The Schedule does not apply when calculating severance pay that is more than the minimum prescribed by section 41.

Zietsman & others v Transnet Ltd (2008) 29 ILJ 779 (LC)

Calculation of annual remuneration for purposes of establishing whether employees fall outside the threshold referred to in a ministerial determination envisaged by section 6 (3) of the BCEA

2721 Uncertainty would result should overtime be included in the calculation of annual remuneration for the purpose of establishing whether the threshold had been reached. At any given time employers would be uncertain whether they comply with the BCEA. Given the fact that overtime is an ad hoc event largely determined by the employer, employees would never be able to tell whether they fall within the threshold at any given time. For these reason overtime payments should not be taken into account in the calculation of the earning threshold.

Mondi Packaging (Pty) Ltd v Department of Labour & Others (2008) 29 ILJ 371 (LC)

Leave pay - when payable and limit

2722 The BCEA constitutes social legislation designed to establish minimum

terms and conditions of employment for employees. The parties are forbidden to contract out of its main provisions. It is a basic provision under the BCEA 1997…that an employer grant an employee the stipulated minimum period of annual leave on full remuneration in respect of each annual leave cycle. … the BCEA 1997 requires an employer upon termination of employee’s employment contract to pay to him any leave which accrued to him before the date of termination of employment, together with a pro rata amount for the leave cycle current at the time of termination. In my view s 40 …contemplate payment only in respect of leave accrued in the cycle immediately preceding that during which the termination takes place (apart of course from the pro rata entitlement for the then current leave cycle). The very purpose of the BCEA is to ensure that an employee takes annual leave. An employer may not refuse him that entitlement. The BCEA contemplates that leave will be taken so that the problem of accumulation does not arise. To permit payment upon termination for statutory leave accumulated from previous leave cycles would be to allow both the employer and the employee to circumvent the Act and …s 20 (2)… would serve no purpose...

…Section 40 (b) relates to the immediately preceding leave cycle in relation to which an entitlement to 21 days’ leave would have accrued… to

permit the accumulation of leave accrued in past years would thwart the object of the Act and therefore fly in the face of s 20 (2)…

Jooste v Kohler Packaging Ltd (2004) 25 ILJ 121 (LC)

2723 In the Kohler Packaging case it was argued on behalf of the employees

that there is no reason why an employer should be enriched by a transgression of the Act by receiving the benefit of the work done by the employee. The Court acknowledged that there was merit in such an argument but nevertheless found that an employee must insist on the rights and benefits to which he is entitled under the Act. But what about employees who at the end of each leave cycle complained to a labour inspector about not having been granted leave or who do not know their precise leave entitlement? It is suggested that there is no logical reason why they should lose their leave pay entitlement.

Leave pay – agreement to pay leave pay on a monthly basis and not

at the time when leave is taken 2724 In Minny & another v Smart Plan CC (2010) 31 ILJ 675 (LC) the court

found that in the case of employees earning more than the section 6 (3) threshold receiving leave pay in advance did not constitute a breach of the BCEA:

…Section 70 (b) provides that if the employee making the claim is a senior managerial employee, or the employee concerned earns remuneration in excess of the prescribed threshold, then the labour inspector may not issue a compliance order.

How then must employees subject to these limitations… enforce their rights to basic conditions of employment? The BCEA is not entirely clear. When an unfair dismissal claim is referred to this court, s 74 empowers this court to determine any claim for an amount owing to an employee in terms of the BCEA provided that the claim is referred in terms of s 191 (1), that the claim had not been outstanding for longer than a year prior to the date of dismissal, and that no compliance order has been made or other proceedings instituted to recover the amount. These would appear to be the only circumstances where this court sitting as a court of first instance, may determine a claim under the BCEA. In such a case as the present, where no unfair dismissal is claimed, the only remedy available to an employee who wishes to recover an amount that the employee contends is owing under the Act, is a contractual remedy….Any claim to enforce a provision of the Act in circumstances where the employee is denied access to the enforcement measures established by Part A of chapter 10 of the Act

must therefore be brought under s 77 (3) as a claim of breach of contract.

Section 4 of the Act read with s 21, requires an employer to pay an employee leave pay equivalent to the remuneration that the employee would have received for working the period of annual leave either before the beginning of the period of annual leave period or, by agreement, on the employee’s usual pay day. In my view there is nothing in principle in this formulation that precludes an employer from paying an employee an all inclusive rate, i.e. a rate of remuneration that includes the value of leave as accrued from week to week, or month to month, as the case may be. In effect by doing so, the employer discharges its obligation to pay leave pay at a date earlier than that required by the BCEA. Payment for annual leave on these terms is likely, generally speaking, to be more favourable to the employee than the terms stipulated in the Act.

Notice pay when not payable

2725 …The law in regard to notice pay is clear. It is that an employer only has

an obligation to pay notice pay to an employee on termination of employment if the termination is not due to misconduct on the employee of a sufficiently serious nature to justify the termination.”

SABC v CCMA & Others [2002] 8 BLLR 693 (LAC) 2726 Notice pay should not be included in compensation as compensation is “in

addition to, and not a substitute for, any amount due in terms of any law, collective agreement or contract of employment.” See section 195 of the LRA.

2727 In terms of section 74 of the BCEA an arbitrator may determine a claim for

notice pay at the same time as determining a dispute relating to alleged unfair dismissal or entitlement to severance pay if the conditions set out in the section are complied with. The LAC found that it makes no sense and is irrational to find that an employee was guilty of misconduct sufficiently serious to warrant dismissal and nevertheless order the payment of notice pay. It follows that no order for notice pay should be made under such circumstances.

SABC v CCMA & Others (supra)

28 ORGANISATIONAL RIGHTS

Jurisdictional requirements 2801 The jurisdictional requirements to arbitrate disputes about organizational

rights appear from SA Commercial Catering and Allied Workers Union v Speciality Stores Ltd (1998) 19 ILJ 557 (LAC); [1998] 4 BLLR 352 (LAC)

2802 The substantive preconditions for the exercise of the commission’s functions of conciliation and arbitration in terms of s 21(6) and s 21(7) of the Act are those set out in s21(1), viz that it can exercise those functions only –

in respect of organizational rights conferred by Part A of Chapter III of the Act; and

in respect of the exercise of the rights in a “workplace” as defined by s 213 of the Act.

2803 Procedurally, the following facts must exist:

a written notice must have been sent by a registered trade union to an employer (s 21(1));

the notice must have been accompanied by a certified copy of the trade union’s certificate of registration (21(2));

the notice must contain specific particulars (s 21(2)(a)-(c));

the employer must have received the notice (s 21(3));

no collective agreement must have been concluded as to the manner in which the trade union will exercise the rights in respect of a particular workplace either because no meeting was held in terms of s 21(3), or because no agreement was reached at such a meeting);

a dispute or alleged dispute must exist (s 21(4));

the dispute must have been referred to the commission by one of the parties (s 21(4));

a copy of the referral must have been served on the other party (s 21(5));

the commission must have appointed a commissioner to resolve the dispute by conciliation (s 21(6));

In the case of arbitration, further, that the attempt at conciliation must have failed and that one of the parties requested arbitration (s 21(7)).

2804 Before the commission exercises its function of conciliation and arbitration

under the Act, the substantive and procedural preconditions set out in the previous paragraph must exist. It cannot validly exercise those functions if the preconditions do not exist.

2805 Save for the express provisions of s 21(4) and s 21(8)-(11) the Act itself does not expressly state what other disputes the commission is obliged to conciliate and arbitrate on when a matter is referred to it under s 21. The purpose of section 21(3) is to reach agreement on the manner in which a trade union should exercise the organisational rights at a workplace. Such an agreement presupposes the existence and validity of these rights at the particular workplace, as well as a compliance with the procedural requirement for the holding of the meeting. The reasons which might prevent the conclusion of a collective agreement in terms of s 21(3) may thus be one of two different kinds: agreement may be thwarted by either an objection to the existence or validity of the substantive and formal preconditions; or by objection to the subject matter of the agreement; the how, where and when of the exercise of valid organizational rights. Whatever the nature of the objection, however, the ultimate dispute relates to the failure to agree on how a trade union is to exercise its organizational rights at the workplace in terms of the Act.

2806 …It must also be kept in mind that the definition of a ‘workplace’ in s 213

of the Act is preceded by the qualification that it bears that meaning ‘unless the context [of the Act] otherwise indicates.’ As pointed out by Thompson Current Labour Law 1997 at 4, the context of determining a proper workplace in terms of the Act in a lock-out dispute may well be different from the context for determining a workplace in an organisational rights dispute. The possibility of different determinations of a workplace, in different contexts, is one contemplated and accepted in terms of the Act itself.”

2807 The effect of the findings of the LAC in the Speciality Stores case was that

the jurisdictional steps set out in section 21 are peremptory and not discretionary. In a subsequent CCMA case it was found that the section 21 notice had not contained all the details set out in section 21 (2). Following an earlier CCMA award in SACTWU v Sheraton Textiles (Pty) Ltd (1997) 18 ILJ 1412 (CCMA); [1997] 5 BLLR 662 (CCMA), the arbitrator nevertheless found that the failure to adhere to the provisions of section 21 (2) did not divest the CCMA of jurisdiction as the provisions of section 21(2) were directory. The ruling was set aside on review in Health & Hygiene Services v Seedat NO & others [1999] 11 BLLR 1153 (LC) in which the Labour Court confirmed what the effect of the LAC’s findings in the Speciality Stores case was and further found that it was binding authority. What constitutes workplace

2808 Sections 21(1) and (2) read as follows:

“(1) Any registered trade union may notify an employer in writing that it seeks to exercise one or more of the rights conferred by this Part in a workplace.

(2) The notice referred to in subsection (1) must be accompanied by a

certified copy of the trade union’s certificate of registration and must specify –

(a) the workplace in respect of which the trade union seeks to

exercise the rights; (b) the representativeness of the trade union in that workplace and

the facts relied upon to demonstrate that it is a representative trade union; and

(c) the rights that the trade union seeks to exercise and the manner

in which it seeks to exercise those rights.”

2809 The meaning of “workplace” outside of the Public Service appears from paragraph (c) of the definition of “workplace” contained in s 213: Workplace: (a) … (b) … (c) “in all other instances, means the place or places where the

employees of an employer work. If an employer carries on or conducts two or more operations that are independent of each other by reason of their size, function or organisation, the place or places where the employees work in connection with each independent operation, constitutes the workplace for that operation.”

2810 The first sentence of the definition deals with two situations. Firstly, where

there is only one place where the employees of an employer work, the workplace is that “place.” Secondly, where there is more than one place where the employees of an employer work, the “places” taken cumulatively is the workplace.

2811 In Specialty Stores v SACCAWU & another [1997] 8 BLLR 1099 (LC))

(the judgment that was taken on appeal), the Labour Court interpreted the second sentence of the definition and its interpretation was not criticized by the LAC. The Labour Court’s interpretation at 1113D was as follows:

“In the result I am of the opinion that the second part of paragraph (c) of

the definition of “workplace” in section 213 is of the nature of a proviso. As such it is not an independent clause despite it appearing in a sentence of

its own. It provides an exception to the primary part of part (c) of the definition.”

This means that if there is more than one place where employees work,

such separate places would only be regarded as separate workplaces if the employer carries on or conducts two or more operations that are independent of each other and the employees perform work in connection with such independent operations at such separate places. The Labour Court found that if the stores where the union sought to exercise the organisational rights were not independent from one another they could not be separate workplaces. (See p 1113H).

2812 The Labour Court further accepted the employer’s argument that if the

union relied on the exception to argue that the stores were separate workplaces, it should have placed itself within the exception. In the end the Labour Court found that it was for the union to show that the various stores fell within the second part of paragraph (c) of the definition and that it failed to do so.(See p 1113I).

2813 It is imperative that the workplace is correctly specified in the section 21

notice. If it is not, the union would have to re-issue another notice if it desires to pursue the granting of organisational rights. At p 1114B of the Labour Court judgment, it was put as follows:

“…The validity of a section 21(1) notice is inextricably linked to the

workplace dispute in this case because if, in the end the place specified in that notice as a workplace is not a workplace, the first respondent will ultimately have to reissue another section 21 notice and ensure what is specified in the notice as a workplace is a workplace as defined in section 213 of the Act.”

2814 In a number of CCMA arbitrations similar meanings were attached to

“workplace.” See

FAGWU obo Miya & 95 others v Capital Contracting Services (unreported);

OCGAWU v Woolworths (Pty) Ltd (1997) 7 BALR 813 (CCMA);

OCGWU & another v Total SA (Pty) Ltd (1999) 20 ILJ 2176 (CCMA);

AZAWU v Mr Price Home and Weekend Material, unreported Case No KN18154-02;

SABAWU v Mr Price, unreported Case No GAJB 20440-06;

DICHAWU obo Members v Mr Price, unreported Case No: GAJB 20440/06; and

UASA v Mr Price Group, unreported Case No 4589-10.

2815 In the AZAWU and the UASA matters it was found that distribution centres and stores were not independent because they were controlled from the same head office and because the distribution centres were part of the employer’s support services without which the stores could not operate. The finding was that stores could not operate without stock being distributed to them via the distribution centres and that the distribution centres would serve no purpose if they were not performing such distribution function.

Relevant considerations when settling

2816 THOR v Blue Waters Hotel, unreported Case No KNDB 649-12 indicates

that care should be exercised when assisting parties to draft settlement agreements and what matters should be dealt with:

Section 12 of the LRA deals with rights of access. Any office bearer or

official of representative trade union is entitled to enter the employer’s premises in order to recruit members or communicate with members, or otherwise serve their interests. A representative union is entitled to hold meetings with employees outside their working hours at the employer’s premises. These rights are however subject to any conditions as to time and place that are reasonable and necessary to safeguard life or property or to prevent the undue interruption of work.

The rights exist if the union is sufficiently representative of the employees employed in the employer’s workplace. Once it is established that the union is sufficiently representative it is only the manner in which the trade union will exercise the rights in respect of that workplace that is required to be negotiated. See section 21 (3). For this reason the LRA requires of a trade union seeking to exercise organizational rights to notify the employer of the rights that it seeks to exercise as well as the manner in which it seeks to exercise those rights. If no collective agreement is concluded the LRA requires the dispute to be resolved through conciliation and, if necessary, arbitration. Settlement agreements and arbitration awards relating to disputes about rights of access therefore normally deal with the representativeness of the trade union and, if it is sufficiently representative, with the manner in which the rights of access are to be exercised.

…The parties only agreed on the manner in which the organizational right

relating to stop order facilities would be exercised but did not enter into any agreement dealing with the manner in which the organizational right to access could be exercised. There was no indication that the settlement agreement precluded the union from seeking to exercise the right to

access at a later stage and then seeking an agreement or an award regarding the manner in which such right has to be exercised…

Settlement agreements regulating organizational rights are collective agreements. Therefore such settlement agreements entered into for an indefinite period may be terminated on reasonable written notice unless the agreement itself provides otherwise. See section 23 (4) and Edgars Consolidated Stores Ltd v FEDCRAW [2004] 7 BLLR 649 (LAC) … Therefore even if the settlement agreement in the present case regulated the union’s entitlement to organizational rights on a basis that precluded the union from exercising rights of access, it would be open to the union to terminate such settlement agreement on reasonable written notice and to attempt to negotiate a new agreement after following the procedure referred to in section 21 (1) to (3) and, if that is unsuccessful, to refer a new dispute to the CCMA.

2817 The Blue Waters Hotel case indicates the desirability to record the following in a settlement agreement

whether or not it was agreed that the union is representative (within the meaning of the various sections) of the employees in the workplace;

in cases where the union is representative, the manner in which all the organizational rights that the union is seeking to exercise, may be exercised;

If no agreement was reached regarding some organizational rights, whether it would be open to the union to pursue such rights at a later stage and, if so, under what circumstances;

whether the settlement agreement was entered into for an indefinite period or not and, if so, what notice would be required to terminate the agreement;

if the settlement agreement is entered into for a specified period or until the happening of an event such as the union ceasing to be representative whether the settlement agreement will regulate all organizational rights for the duration of that period.

2818 The parties should be advised of the advantages and disadvantages of

entering into agreements for indefinite periods of time i.e. that such agreements may be withdrawn and new disputes declared.

2819 The parties should also be advised of the advantages and disadvantages

of entering into agreements for fixed periods of time i.e. that such

agreements may, depending on the wording of the agreement, regulate organizational rights for the whole duration of the agreement and that it may not be possible to withdraw or change such agreements during such period.

2820 In cases where the parties are entering into a comprehensive agreement

covering all organizational rights it is generally best practice to record that that the agreement will remain binding for as long as the union remains representative and, should a dispute arise whether the union is still representative, that an application envisaged by section 21 (11) would be necessary.

29 ENFORCEMENT OF AWARDS/ ORDERS 2901 In applications to make an award or a settlement agreement an order of

court in terms of section 158(1)(c) of the LRA the Labour Court will consider whether the award or the settlement agreement (as the case may be ) was complied with and will refuse to make the award or settlement order an order of court if it was complied with.


Penny v 600 SA Holdings (Pty) Ltd (2003) 24 ILJ 967 (LC)

2902 In terms of s 143 the applicant in whose favour an award has been made

can apply to the CCMA to have the award made as if it is an order of the Labour Court. In making an award as if it is an order of the court, the Director of the CCMA performs an administrative action of simply confirming that the award is indeed a valid award issued by the commissioner properly appointed by the CCMA.

Chillibush Communications (Pty) Ltd v Gericke and others (2010) 31 ILJ 1350 (LC)

2903 The wording of section 143 (1) i.e. that a certified award “ may be

enforced as if it were an order of the Labour Court” means nothing more than that … upon certification by the Director of the CCMA, an award is deemed to be an order of the Labour Court, for the purposes of enforcing it. For other purposes a certified award does not have the status of a Labour Court order.

MIBCO v Osborne & others [2003] 6 BLLR 573 (LC)

2904 In the case of awards requiring the performance of an act it is sufficient for

an award to be certified. “It seems to me on a proper construction of this sub-section that it is not

necessary for a party to approach this court for an order in terms of s 158 (1) (c), prior to initiating any contempt proceedings.

Molaetsa v Meyer & another (2007) 28 ILJ 2000 (LC) at para 10 2905 “The effect of section 51 (8) read with the subsections to which it refers is

that the procedure in section 143 would be available to enforce an award of a bargaining council without the need to make the award an order of the Labour Court. Upon certification by the Director of the CCMA, an award is

deemed to be an order of the Labour Court, for the purposes of enforcing it.”

MIBCO v Osborne & others [2003] 6 BLLR 573 (LC) 2906 There is a wide range of factors which the court will take into account in

considering whether or not to stay of the execution of an arbitration award, the most important of which is whether the interests of justice support the stay of execution pending the finalization of the review application. These factors include

Whether the attack on the underlying cause of action was brought in time and whether its prospects of success are strong;

The interest of all parties in securing finality;

The cost to all parties of a delay in finality, and the cost to all parties of instituting or opposing further proceedings, whether in the Labour Court or elsewhere, to attack the underlying cause of action or to stay execution pending such attack; and

The risk of harm being done to the less powerful party to the dispute.

Chillibush Communications (Pty) Ltd v Gericke and others (2010) 31 ILJ 1350 (LC)

See Robor (Pty) Ltd (Tube Division) v Joubert & others (2009) 30 ILJ 2779 (LC)

May not attach right title and interest in a dispute 2907 A writ should not be issued to attach the right, title and interest in a dispute

and an arbitration should not be removed from the roll at the request of a party claiming to have the right, title and interest in a dispute by virtue of a writ issued in its favour. The right, title and interest in the dispute are not mercantible and for that reason the Labour Court will set aside a writ of execution or stay the execution of a writ until such time as the arbitration is finalised. The right to execute is suspended until the outcome of the arbitration.

Mthiyane & another v Banaris Investment CC t/a Essenwood Spar [2006] 12 BLLR 1177 (LC)

Set off

2908 Before an amount may be set off against an amount due in terms of a settlement agreement or an award it must be a liquidated debt.

Rank Sharp South Africa (Pty) Ltd v Kleinman (Unreported Labour Court Case No C123/2012 dated 24 May 2012)

2909 The requirements for set-off to operate can be summarised as follows:

The debts must be owing between the same parties in the same capacity.

The debts must be of the same kind.

The reciprocal debts must be due and enforceable.

Both debts must be liquidated in that they are capable of speedy and easy proof.

Rank Sharp South Africa (Pty ) Ltd v Kleinman (supra) LAWSA vol 19 (“Obligations”) para 244 and authorities there cited; AAA Brick Co (Pty) Ltd v Coetzee 1996 All SA 23 (B); 1996 (3) SA 578 (B); Penny v 600 SA Holdings (Pty) Ltd [2003] JOL 1422 (LC)

30 SECTION 188A ARBITRATIONS

May not be unilaterally withdrawn in favour of internal disciplinary enquiries

3001 It seems to me from the wording of s 188A that once an employer and an

employee consent to refer the determination of allegations of misconduct or incapacity to an arbitration hearing in terms of s 188A, and once the CCMA accedes to the request, the employer effectively agrees to bypass the application of its internal disciplinary procedures and to accelerate the disciplinary process to the stage of the arbitration hearing ordinarily applicable in a post-dismissal phase. That being so, and since the consent of the affected employee and the CCMA is necessary to achieve that result, it is not open to the employer to abandon the process on a unilateral basis.

SATAWU & Others v MSC Depots (Pty) Ltd & Others (LC Case No

449/2011) 3002 The effect of the MSC Depots judgment is that where an employer and its

employee agreed on a s188A arbitration it is not open to the employer to abandon that process and to hold an internal disciplinary enquiry relating to the same charges. The judgment does not mean that the employer may not unilaterally abandon a s188A process by withdrawing the charges once and for all.

31 REVIEW TEST

3101 In terms of the LRA, a commissioner has to determine whether a dismissal

is fair or not. A commissioner is not given the power to consider afresh what he or she would do, but simply to decide whether what the employer did was fair. In arriving at a decision a commissioner is not required to defer to the decision of the employer. What is required is that he or she must consider all relevant circumstances.

Sidumo and another v Rustenburg Platinum Mines Ltd & others (2007) 28 ILJ 2405 (CC); [2007] 12 BLLR 1097 (CC)

3102 The standard of review which applies in the Labour Courts to arbitration awards is essentially based on reasonableness. CCMA awards are not, due to the “pressures under which commissioners operate and the relatively informal manner in which proceedings are conducted, and the further fact that employees are not usually represented”, expected to be “impeccable”. However, if the decision is one that a reasonable decision maker could not arrive at, the award must be reviewed.

Sidumo and another v Rustenburg Platinum Mines Ltd & others 3103 In Heroldt v Nedbank Ltd [2012] 9 BLLR 857 (LAC) the LAC indicated by

reference to a number of cases that process related conduct on the part of a commissioner may also render an award reviewable:

In Southern Sun Hotel Interests (Pty) Ltd v CCMA and others, Van Niekerk J correctly dismissed the suggestion that it might be inferred from the Sidumo line of reasoning that in an application for review brought under section 145 of the LRA, process-related conduct by a commissioner is not relevant. Where a commissioner fails to have regard to material facts, this will constitute a gross irregularity in the conduct of the arbitration proceedings because the commissioner would have unreasonably failed to perform his or her mandate and thereby have prevented the aggrieved party from having its case fully and fairly determined. Proper consideration of all the relevant and material facts and issues is indispensable to a reasonable decision and if a decision-maker fails to take account of a relevant factor which he or she is bound to consider, the resulting decision will not be reasonable in a dialectical sense. Likewise, where a commissioner does not apply his or her mind to the issues in a case the decision will not be reasonable. Relying on these principles, Van Niekerk J concluded:

“If a commissioner fails to take material evidence into account, or has regard to evidence that is irrelevant, or the commissioner commits some other misconduct or a gross irregularity during the proceedings under review and a party is likely to be prejudiced as a consequence, the commissioner’s decision is liable to be set aside regardless of the result of the proceedings or whether on the basis of the record of the proceedings, that result is nonetheless capable of justification.”

…the weight of authority favours greater scrutiny and section 145(2) of the LRA expressly permits the review of awards on the ground of irregularity. In Sidumo, Ngcobo J stated:

“It follows therefore that where a commissioner fails to have regard to material facts, the arbitration proceedings cannot in principle be said to be fair because the commissioner fails to perform his or her mandate. In so doing . . . the commissioner’s action prevents the aggrieved party from having its case fully and fairly determined. This constitutes a gross irregularity in the conduct of the arbitration, as contemplated in section 145(2)(a)(ii) of the LRA. And the ensuing award falls to be set aside not because the result is wrong but because the commissioner has committed a gross irregularity in the conduct of the arbitration proceedings.”

This approach has been followed subsequently by this Court in Ellerine Holdings Ltd v CCMA and others; and appears to have been endorsed by the Constitutional Court in CUSA v Tao Ying Metal Industries and others where it was stated that it is now axiomatic that a commissioner is required to apply his or her mind to the issues before him. One of the duties of a commissioner is to determine the material facts and then to apply the provisions of the LRA to those facts in answering the question whether the dismissal was for a fair reason. Commissioners who do not do so do not fairly adjudicate the issues and the resulting decision and award will be unreasonable. Whether or not an arbitration award or decision or finding of a commissioner is reasonable must be determined objectively with due regard to all the evidence that was before him or her and what the issues were. There is no requirement that the commissioner must have deprived the aggrieved party of a fair trial by misconceiving the whole nature of enquiry. The threshold for interference is lower than that; it being sufficient that the commissioner has failed to apply his mind to certain of the material facts or issues before him, with such having potential for prejudice and the possibility that the result may have been different. This standard recognises that dialectical and substantive reasonableness are intrinsically inter-linked and that latent process irregularities carry the inherent risk of causing an unreasonable substantive outcome.

That said though, the distinction remains important. The basic principle laid down in Ellis v Morgan; Ellis v Dessai still applies. There the court said:

“But an irregularity in proceedings does not mean an incorrect judgment; it refers not to the result, but to the methods of a trial, such as, for example, some high-handed or mistaken action which has prevented the aggrieved party from having his case fully and fairly determined.”

In short, if the conduct of the commissioner prevents a fair trial of the issues, even if perfectly well intentioned and bona fide, though mistaken, then such conduct will amount to a gross irregularity, and that will be enough to successfully found a review under section 145 (2) of the LRA. The court by necessity must scrutinise the reasons of the commissioner not to determine whether the result is correct; or for that matter substantively reasonable, but to determine whether there is a latent irregularity, that is, an irregularity that has taken place within the mind of the commissioner, which will only be ascertainable from his or her reasons.

BINDING EFFECT OF PRECEDENTS

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