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[2011] ZASCA 74
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National Union of Mineworkers and Another v Samancor Ltd (Tubatse Ferrochrome) and Others (625/10) [2011] ZASCA 74; [2011] 11 BLLR 1041 (SCA); (2011) 32 ILJ 1618 (SCA) (25 May 2011)
THE SUPREME COURT
OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 625/10
No precedential significance
In the matter between:
NATIONAL UNION OF MINEWORKERS
.........................
First Appellant
MARIFI JOHANNES MALOMA
......................................
Second
Appellant
and
SAMANCOR LIMITED
(TUBATSE FERROCHROME)
..........................................
First Respondent
METAL AND ENGINEERING
INDUSTRIES
BARGAINING COUNCIL (“MEIBC”)
.........................
Second
Respondent
JAN STEMMETT NO
........................................................
Third
Respondent
Neutral citation:
National
Union of Mineworkers v Samancor Ltd
(625/10)
[2011] ZASCA 74
(25
MAY 2011)
Coram:
NUGENT, PONNAN,
CACHALIA and TSHIQI JJA and MEER AJA
Heard:
6 MAY 2011
Delivered: 25 MAY 2011
Summary: Labour law –
arbitrator – review – standard for interference on
review.
___________________________________________________________
ORDER
___________________________________________________________
On appeal from: Labour Appeal
Court (Davis and Jappie JJA and Revelas AJA sitting as court of
appeal).
The appeal is upheld with costs.
The order of the Labour Appeal Court is set aside and substituted
with the following order:
‘
The
appeal is dismissed with costs’.
___________________________________________________________
JUDGMENT
___________________________________________________________
NUGENT JA (PONNAN, CACHALIA and
TSHIQI JJA and MEER AJA concurring)
[1] The second appellant (Mr
Maloma) was employed by the first respondent (Samancor) as a furnace
operator in August 1996. On 20
March 2006 he was arrested on
suspicion of robbery. Fourteen days later the charge was withdrawn
and Mr Maloma was released and
he returned to work. On 20 May 2006 he
was again arrested on the same charge. On this occasion he was
detained for about 140 days
until he was released on bail. Meanwhile,
on 30 May 2006, ten days after his second arrest, Samancor terminated
his employment.
A letter telling him of his dismissal was sent to the
police station where Mr Maloma was being detained but he did not
receive
it. For obvious reasons there was no hearing before the
termination but a ‘post dismissal’ hearing was held after
his
release. Following that hearing Samancor decided not to reverse
the earlier termination.
[2] Mr Maloma disputed the
fairness of his dismissal and the dispute was referred to arbitration
under the auspices of the bargaining
council. The arbitrator was Mr
Stemmett (the third respondent). Mr Stemmett found that the
termination was both substantively and
procedurally unfair and issued
an award ordering his reinstatement. Adopting the view that Samancor
should not be penalized for
the period that Mr Maloma was detained he
ordered that he should be reinstated with effect from 2 November 2006
(the date of the
post dismissal hearing).
[3] Samancor applied to the
Labour Court to review and set aside the award. The grounds alleged
in the founding affidavit were that
the arbitrator committed a gross
irregularity, exceeded his powers, misconducted himself, and that the
award was irrational and
not justified by the evidence. I need to say
immediately that the word ‘misconduct’ was used in a
technical sense by
Samancor and there is no suggestion that Mr
Stemmett acted in any way to his discredit.
[4] The application was dismissed
by the Labour Court (Francis J). An appeal to the Labour Appeal Court
(Davis and Jappie JJA and
Revelas AJA) succeeded. The order of the
Labour Court was set aside and substituted with orders declaring the
dismissal to have
been substantively fair, but procedurally unfair
for which Mr Maloma was awarded compensation equivalent to six
months’ remuneration.
Mr Maloma, assisted by his union (the
first appellant), now appeals with the special leave of this court.
[5]
It is trite that an appeal does not lie against the award of an
arbitrator. Even if the reviewing court believes the award to
be
wrong, there are limited grounds upon which it is entitled to
interfere. Section 145 of the Labour Relations Act 66 of 1995
permits
the Labour Court to set aside an award for one or other defect stated
in s 145(2) – none of which are now applicable.
But it was
recognised in
Sidumo
v Rustenburg Platinum Mines Ltd,
1
adopting
what was held in
Carephone
(Pty) Ltd v Marcus NO
,
2
that
an award may also be set aside if it is one that ‘a reasonable
decision-maker could not reach’,
3
and
it was on that basis that Samancor sought to have the award set
aside. Thus the question that was before the Labour Court –
and
subsequently before the Labour Appeal Court – was whether the
award in this case was so defective as to fall within that
category.
[6] After considering the facts,
and the reasons give by Mr Stemmett for his award, the Labour Court
answered that question as follows
(referring to Mr Stemmett as ‘the
commissioner’):
‘
The
Commissioner’s award is well reasoned. He dealt with all the
issues that arose in the matter. It can therefore not be
said that
the commissioner committed any reviewable irregularity. His decision
is one that a reasonable decision maker would have
made. His award is
lawful, reasonable and procedurally fair. He had decided the issue on
the basis of his own sense of fairness.
It is reasonable and meets
the constitutional requirement that an administrative action must be
reasonable’.
[7] It is apparent from the
reasons given by the Labour Appeal Court that it did not appreciate
the limited nature of the question
that had been before the Labour
Court – and hence the limited question that was before it on
appeal. Nowhere in its reasons
is there any express finding that the
award was one that no reasonable decision-maker could make nor does
it appear by implication.
The most that can be said is that it found
that the arbitrator erroneously categorised the dismissal – a
matter to which
I will return – but error is not by itself a
proper basis for reconsidering an award. Having found that there was
an error
the Labour Appeal Court said that ‘manifestly, the
question as to whether a dismissal in the circumstances of the
present
dispute, is substantively fair depends upon the facts of the
case’ and proceeded to consider the facts, reaching the
following
conclusion:
‘
In
the circumstances of this case and for the reasons so set out, [Mr
Stemmett] should have considered that the decision to terminate
[Mr
Maloma’s] employment was fair and manifestly fair’.
That approach to the matter would
have been appropriate if the arbitrator’s award had been under
appeal but not where it was
being subjected to review. (The court
went on to find that the termination had been procedurally unfair but
I need not deal with
that aspect of the case.)
[8] Before us it was submitted
for Samancor that the order of the Labour Appeal Court was
nonetheless correct because the award
was indeed one that could not
reasonably have been made and I turn to that submission.
[9] One of the grounds that was
advanced in support of that submission was the error made by the
arbitrator in categorizing the
reason for the dismissal. On that
issue some background is necessary. Under s 185 of the Act every
employee has the right not to
be unfairly dismissed. Section 188(1)
of the Act provides that a dismissal that is not automatically unfair
(that is, one that
does not fall within the categories listed in s
187) is unfair if the employer fails to prove
‘
(a)
that the reason for the dismissal is a fair reason –
related to the
employee’s conduct or capacity; or
based on the
employer’s operational requirements; and
that the dismissal
was effected in accordance with a fair procedure’.
[10] There was debate before Mr
Stemmett as to the correct categorization of the dismissal. It
appears from the reasons given for
the award that Samancor argued
that it had dismissed Mr Maloma for ‘incapacity’, which
Mr Stemmett described as a ‘no
fault dismissal based on the
principle of impossibility of performance.’ He concluded,
however, that in truth Mr Maloma had
been dismissed for absenteeism
and that ‘absenteeism is a disciplinary offence and cannot be
treated as an operational incapacity’.
The Labour Court was of
the same view and said that since Mr Maloma was not ‘the author
of his own misfortune’ he had
a ‘valid reason for his
absence’ and thus had to be reinstated with loss of income’.
The Labour Appeal Court,
on the other hand, said that ‘incapacity’
might include imprisonment, which seems to me to be correct. But I do
not
see that the difference of opinion on the correct categorisation
of the dismissal plays any material role in this case.
[11]
It was submitted before us by its counsel that Samancor had not
purported to dismiss Mr Maloma for fault on his part (that
is, for
the disciplinary offence of absenteeism). He was dismissed because he
was no longer capable of performing his employment
duties (that is,
for incapacity). Reminding us of the ordinary consequences for a
contract of the inability of one party to perform,
counsel submitted
that the inability of Mr Maloma to present himself for work in itself
entitled Samancor to bring the employment
to an end, which is what it
had purported to do.
4
[12] The submission is not
altogether correct. 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 exercise
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
to 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 10 days of absence’.
He added that
he had not been persuaded that the employment
relationship had become intolerable. In those circumstances I cannot
see that the
error that he made was material to the outcome. 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.
[13] Counsel for Samancor
advanced further grounds for his submission that no reasonable
arbitrator could have made the award but
I do not think it is
necessary to recite them. In substance they are all facets of the
rhetorical question that counsel posed:
what else is an employer to
do when he or she is not to know when the employee will be capable of
resuming his or her duties, or
even whether they will be resumed at
all? I do not under-estimate the dilemma of an employer in that
situation but there can be
no universal answer – as in all
cases of unfair dismissal the question whether he or she acted fairly
will depend on the
particular facts. In this case Mr Stemmett
concluded that Samancor had not demonstrated why no temporary
arrangement could have
been made. Nor, I might add, did it
demonstrate why Mr Maloma – who had worked for Samancor for
almost ten years –
could not have been accommodated once he was
able to return to work. Whether I would have reached the same
conclusion as that reached
by Mr Stemmett is not germane and I
express no view on the matter. It is sufficient to say that on the
material before him I have
no doubt that his decision was not so
unreasonable that it could not have been reached by a reasonable
decision-maker. In those
circumstances there were no grounds for the
order of the Labour Court to be set aside.
[14]
But that is not the end of the matter. The basis for the decision of
this court in
National
Union of Metalworkers of SA v Fry’s Metals (Pty) Ltd
5
was
that it will not interfere with a decision of the Labour Appeal Court
only because it considers it to be wrong: what is required
in
addition are special circumstances that take it out of the ordinary.
It is because of that approach that this court takes to
appeals from
the Labour Appeal Court that leave to appeal will not be granted in
cases that do not fall within that category. As
it was expressed in
that case:
‘
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.’
6
That
is consistent with the observation by the Constitutional Court in
Dudley
v City of Cape Town
7
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.’
[15]
The fact that leave to appeal has been granted upon application to
the President of this court is not decisive of whether a
case meets
the criteria laid down in
Fry’s
Metals
.
That question is one that is ultimately to be answered by the court
itself upon consideration of an appeal (Cf
Rawlins
v Kemp
8
).
Applications to review the awards of arbitrators are unfortunately
not uncommon and generally raise no issues that bring them
within
those criteria. But counsel for the appellant submitted that this
case is indeed out of the ordinary. He submitted that
while this
court might generally not entertain an appeal where the Labour Appeal
Court has exercised its judgment on the merits
of the case that is
not what occurred in this case. In this case, he submitted, the
Labour Appeal Court overturned the lower court
without considering at
all the question that had been placed before it, effectively denying
the appellant his entitlement to answer
the appeal. I think there is
merit in that submission. It seems to me that there has indeed been a
failure that is so fundamental
as to take the case out of the
ordinary and that intervention is warranted. This court entertained
an appeal in comparable circumstances
in
Shoprite
Checkers (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration
9
and
there is no reason to differentiate in this case. Had the Labour
Appeal Court not misconceived its function it ought to have
dismissed
the appeal and consequently this appeal should succeed. I see no
reason why the appellants should not receive their costs
both in this
court and in the court below.
[16] The appeal is upheld with
costs. The order of the Labour Appeal Court is set aside and
substituted with the following order:
‘
The
appeal is dismissed with costs’.
__________________
R W NUGENT
JUDGE OF APPEAL
APPEARANCES:
For
appellant: N H Maenetje
Instructed
by:
E
S Makinta Attorneys, Johannesburg;
N
W Phalatsi & Partners, Bloemfontein.
For
first respondent: A E Franklin SC
T
Ngcukaitobi
Instructed
by:
Bowman
Gilfillan, Johannesburg;
Matsepes
Inc, Bloemfontein.
For
second respondent: Abides the decision of the Court
For
third respondent: Abides the decision of the Court
1
Sidumo
v Rustenburg Platinum Mines Ltd
2008 (2) SA 24
(CC).
2
Carephone
(Pty) Ltd v Marcus NO
1999 (3) SA 304
(LAC).
3
Para
110.
4
RH
Christie
The Law of Contract in South Africa
5 ed p 474.
5
National
Union of Metalworkers of SA v Fry’s Metals
2005 (5) SA 433
(SCA).
6
Para
43.
7
Dudley
v City of Cape Town
2005 (5) SA 429
(CC) para 9.
8
Rawlins
v Kemp
[2011] 1 All SA 281
(SCA) paras 19-20.
9
Shoprite
Checkers (Pty) Ltd v Commission For Conciliation, Mediation and
Arbitration
2009 (3) SA 494
(SCA).