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[2010] ZASCA 102
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Rawlins v Dr DC Kemp t/a Centralmed (483/09) [2010] ZASCA 102; [2011] 1 All SA 281 (SCA) ; (2010) 31 ILJ 2325 (SCA) ; [2011] 1 BLLR 9 (SCA) (7 September 2010)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 483/09
In the matter between:
DR B M RAWLINS Appellant
and
DR D C KEMP t/a
CENTRALMED Respondent
Neutral citation:
Rawlins
v Kemp
(483/09)
[2010] ZASCA 102
(7 SEPTEMBER 2010)
Coram:
NAVSA, NUGENT,
SNYDERS and MHLANTLA JJA and BERTELSMANN AJA
Heard:
26 AUGUST 2010
Delivered: 7 SEPTEMBER 2010
Summary:
Labour Relations
Act of 1995
– unfair dismissal – refusal to order payment
of compensation.
_____________________________________________________________________
ORDER
_____________________________________________________________________
On appeal from:
Labour
Appeal Court (Zondo, JP and Willis and Waglay JJA sitting in the
court below):
The appeal is dismissed.
_____________________________________________________________________
JUDGMENT
_____________________________________________________________________
NUGENT JA (NAVSA, SNYDERS and
MHLANTLA JJA and BERTELSMANN AJA concurring)
[1] There are troubling aspects
of this case that go beyond the particular issues that it raises. The
case arises from the dismissal
of Dr Rawlins (the appellant) from the
employment of Dr Kemp (the respondent). Soon after the dismissal
occurred Dr Kemp accepted
that it was unfair. What remained in
dispute was only what remedy Dr Rawlins should have. Indeed, the
dispute was even narrower
than that, because Dr Kemp offered to
reinstate Dr Rawlins on numerous occasions but on each occasion the
offer was refused. Dr
Rawlins said in evidence that she refused the
offers because the relationship of trust had broken down. The dispute
in the litigation
that followed was confined to whether she should be
awarded compensation and, if so, what amount that should be.
[2] Even before the litigation
commenced Dr Rawlins found alternative employment at a higher salary
than she had been paid by Dr
Kemp and it was conceded by her counsel
that the financial loss she sustained in consequence of the dismissal
did not exceed R40 000.
1
In a long line of cases courts have held that compensation for unfair
dismissal is limited to financial loss (even then it need
not
compensate for that loss in full).
2
[3] It is now more than twelve
years since Dr Rawlins was dismissed and the case has passed through
the hands of nine judges. It
was decided by the Labour Court –
albeit incorrectly – more than seven and a half years after the
event. The order
of the Labour Court was corrected by the Labour
Appeal Court eleven years after the event. It is now before us one
and a half years
later. Yet the claim is of the kind that the
mechanisms of the
Labour Relations Act 66 of 1995
are designed to
bring to expeditious finality.
[4] Briefly, the claim arose as
follows. Dr Kemp is a medical practitioner in private practice in
Bloemfontein. In 1997 he purchased
a second practice – what he
called a ‘satellite’ practice. With effect from 1
February 1997 he employed Dr Rawlins
to run the satellite practice at
a net salary of R10 000 per month. The satellite practice was
financially separated from
his own practice, it was conducted from
separate premises, and Dr Rawlins was left to exercise her medical
skills without interference.
[5] In about June 1997 Dr Rawlins
informed Dr Kemp that she was pregnant. They agreed that she would
take maternity leave for two
months with effect from 1 February 1998.
She would be paid for two weeks of her maternity leave and the
balance would be taken
as unpaid leave. Shortly before her leave
commenced Dr Kemp suggested to Dr Rawlins that she should take the
opportunity to look
for alternative employment in view of the
financial difficulty of the practice. According to Dr Kemp he hoped
to find a more junior
doctor who would be willing to run the
satellite practice at a lower salary.
[6] Dr Rawlins took the
suggestion to mean that she was being dismissed. She informed her
husband who immediately telephoned Dr
Kemp and demanded a letter
advising Dr Rawlins that she had been dismissed. There was some
acrimony between the parties at that
time but the detail is not
important. Suffice it to say that although Dr Kemp maintained that he
had not intended to dismiss Dr
Rawlins he nonetheless, unaccountably,
furnished Dr Rawlins with a letter informing her that she was
dismissed with effect from
the end of February 1998 on account of the
financial difficulties of the practice.
[7] Alleging that she had been
dismissed on account of her pregnancy, Dr Rawlins referred the matter
to the Commission for Conciliation,
Mediation and Arbitration through
the offices of her union, claiming compensation from Dr Kemp. Had she
indeed been dismissed on
account of her pregnancy the dismissal would
have been ‘automatically unfair’ under
s 187(1)(e)
of the
Labour Relations Act. The
statutory maximum that may be
awarded to an employee for an ‘automatically unfair’
dismissal is the equivalent of 24
months’ remuneration.
3
Where a dismissal is otherwise unfair the statutory maximum is the
equivalent of 12 months’ remuneration.
4
[8] Counsel for Dr Kemp told us
frankly that we can accept that Dr Kemp behaved poorly towards Dr
Rawlins at the time that he dismissed
her and no doubt she was
entitled to feel aggrieved. But within a month, on 12 March 1998, Dr
Kemp acted sensibly when, on the
advice of his attorney, he offered
to reinstate Dr Rawlins, alternatively, to pay her one month’s
salary in lieu of notice,
severance pay of one week’s salary
for each completed year of service, and unspecified compensation for
the period 1 February
1998 to 12 March 1998. It was accepted by
counsel for Dr Rawlins that the offer of reinstatement was made
genuinely and in good
faith. At first there was no response to the
offer but it was repeated in the course of attempts at conciliation
on 17 March 1998
and was summarily rejected.
[9] Conciliation failed to
resolve the dispute and Dr Rawlins commenced proceedings in the
Labour Court on 22 September 1998 in
which she claimed a declaration
that her dismissal had been ‘automatically unfair’ or,
alternatively, a declaration
that her dismissal had been otherwise
unfair. She claimed in each case the maximum amount of compensation
that the statute allows.
[10] By then Dr Rawlins had found
and taken up alternative employment (with effect from 1 September
1998) at a higher salary than
she had been paid by Dr Kemp (precisely
what her new salary was does not appear from the evidence). Her
financial loss had thus
been fixed by then at no more than four
months’ remuneration – amounting to R40 000 –
though in truth it
might even have been less. Before the matter came
to trial Dr Kemp again offered to reinstate Dr Rawlins. Nonetheless,
Dr Rawlins
persisted in her claims.
[11] The Labour Court (Gush AJ)
found that Dr Rawlins had not been dismissed on account of her
pregnancy (a finding that she did
not challenge in the subsequent
appeal) but that her dismissal was nonetheless unfair (a finding that
was not challenged by Dr
Kemp). The learned judge went on to hold
that her refusal of the offer of reinstatement had been reasonable
and he awarded compensation
of R120 000 (twelve months’
remuneration), observing that ‘the manner in which [Dr Kemp]
went about dismissing
[Dr Rawlins] and his timing is deserving of
censure’. The basis upon which he made the award was a clear
misdirection. I
have already referred to the long line of cases that
have held that a court’s remedial powers are compensatory and
not punitive
and her loss amounted to no more than four months’
remuneration.
[12] An appeal to the Labour
Appeal Court
5
was confined to the questions whether Dr Rawlins should have been
awarded compensation at all and, if so, whether the amount awarded
was excessive.
[13] In separate judgments the
majority (Zondo JP and Waglay JA) enquired into the nature of the
discretion that is exercised by
a court when it considers questions
of compensation and the grounds upon which a court might interfere on
appeal. We need not consider
that question because counsel for the
appellant accepted that the Labour Appeal Court was at large to
substitute its discretion
for that of the Labour Court. His argument
was confined to the correctness of its conclusion.
[14] The majority found that Dr
Rawlins should not have been awarded compensation, while Willis JA
was of the view that she should
have been awarded compensation, but
no more than six months’ remuneration. The principal reason for
the decision of the majority
was that Dr Rawlins had unreasonably
refused the offer of reinstatement. Zondo JP expressed that as
follows:
‘
[Dr Kemp] may
have treated [Dr Rawlins] the respondent unfairly when he dismissed
her in the manner in which he did but he had “a
right to seek
to right the wrong” that he had committed by offering to put
the respondent back in the position in which she
would have been had
she never been dismissed. It is what I call an employer's “right
to right a wrong”. And, if the
offer was genuine and
reasonable, as it has been conceded on behalf of [Dr Rawlins] it was,
I cannot see why [Dr Kemp] must be
ordered to pay her compensation
which would not have arisen if the respondent had accepted the offer
of reinstatement. In my view
it is very important to affirm the
employer’s “right to right a wrong” that he or she
has made in these kinds
of circumstances. 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.’
6
[15] The difference between the
Labour Court and the Labour Appeal Court was thus within a decidedly
narrow compass – the
Labour Court felt that the rejection of
the offer of reinstatement was reasonable and the Labour Appeal Court
felt that it was
not. In each case the court concerned was called
upon to make a value judgment on the same facts. And we are asked by
the parties
to do no more than to say whether we agree with the value
judgment of the one court or the other.
[16] It is questionable whether
an appeal of that kind should be before us at all in view of the
decision in
National
Union of Metalworkers of SA v Fry’s Metals (Pty) Ltd
7
– though I hasten to add that the petition to this court might
have cast the matter in a different light. In that case the
test for
special leave to be granted was expressed as follows:
‘
No doubt
every appeal is of great importance to one or both parties, but this
Court must be satisfied, notwithstanding that there
has already been
an appeal to a specialist tribunal, and that the public interest
demands that labour disputes be resolved speedily,
that the matter is
objectively of such importance to the parties or the public that
special leave should be granted. We emphasise
that the fact that
applicants have already enjoyed a full appeal before the LAC will
normally weigh heavily against the grant of
leave. And the demands of
expedition in the labour field will add further weight to that.’
8
[17] Now that the appeal is
before us I mention that decision only to indicate that the principle
upon which it is founded is that
this court will not lightly
interfere with the decisions of the specialist tribunal that has been
established to hear appeals in
labour disputes. That is consistent
with the observation by the Constitutional Court in
Dudley
v City of Cape Town
9
that:
‘
[t]he LAC is
a specialised appellate Court that functions in the area of labour
law. Both the LAC and the Labour Court were established
to administer
labour legislation. They are charged with the responsibility for
overseeing the ongoing interpretation and application
of labour laws
and the development of labour jurisprudence.’
[18] That applies particularly
where the decision of the Labour Appeal Court is the product of a
value judgment that is arrived
at in its continuing development of
its own jurisprudence. Whatever view we might have taken on the
matter it seems to me that
we would be remiss if we were not to defer
to that court’s value judgment in a matter of this kind. In any
event I agree
with the conclusion of the majority. No doubt Dr
Rawlins genuinely felt that there had been a breach of trust. But
these are two
professional people who might be expected to resolve
any acrimony that might earlier have existed. No objective grounds
were advanced
why any perceived breach of trust between them was not
capable of being restored. Dr Rawlins chose not even to explore that
possibility
but rejected it out of hand. That is not how labour
relations should be conducted and I agree that the rejection of the
repeated
offers of reinstatement was unreasonable and she has only
herself to blame for her financial loss.
[19] In heads of argument counsel
for Dr Kemp asked for the costs of the appeal but generously did not
press that claim in argument.
I might only add that I think he cannot
be faulted for having adopted that course.
[20] The appeal is dismissed.
_________________
R W NUGENT
JUDGE OF APPEAL
APPEARANCES:
For
appellant: P R Cronjé
Instructed
by:
Phatshoane
Henney Inc, Bloemfontein
For
respondent: S Snyman
Instructed
by:
Snyman
Attorneys, Johannesburg
Honey
Attorneys, Bloemfontein
1
Four months’ remuneration.
2
See the long line of cases under the Labour Relations Act 28 of 1956
of
Camdons Realty (Pty) Ltd v Hart
(1993) 14 ILJ 1008 (LAC)
1018F-1019D;
Alert Employment Personnel (Pty) Ltd v Leech
(1993) 14 ILJ 655 (LAC) 661E-G;
Ferodo (Pty) Ltd v De Ruiter
(1993) 14 ILJ 974 (LAC) 981C-H;
Amalgamated Beverages Industries
(Pty) Ltd v Jonker
(1993) 14 ILJ 1232 (LAC) 1256B-1257E;
SA
Quilt Manufacturers (Pty) Ltd v Radebe
(1994) 15 ILJ 115 (LAC)
126C-127B;
Robecor v Durant
(1995) 16 ILJ 1519 (LAC)
1521I-1522H;
Chevron Engineering (Pty) Ltd v Nkambule
2004
(3) SA 495
(SCA) para 31. That principle has since been endorsed by
the Labour Appeal Court in relation to the
Labour Relations Act of
1995
:
Le Monde Luggage CC t/a Pakwells Petje v Dunn NO
(2007)
28 ILJ 2238 (LAC) para 30.
3
Section 194(3).
4
">
4
Section 194(1).
5
Reported as
Kemp t/a Centralmed v Rawlins
(2009) 30 ILJ 2677
(LAC).
6
Para 26.
7
2005 (5) SA 433
(SCA).
8
Para 43.
9
2005 (5) SA 429
(CC) para 9.