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[2013] ZAFSHC 46
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Minister of Safety and Security v Dispute Resolution Panel and Others (5727/2009) [2013] ZAFSHC 46 (22 March 2013)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No.: 5727/2009
In the matter between:
THE MINISTER OF
SAFETY AND SECURITY
............................
Applicant
and
THE DISPUTE
RESOLUTION PANEL
............................
First Respondent
S M O SEOBE N.O.
....................................................
Second
Respondent
M M RAMPOU
................................................................
Third
Respondent
_______________________________________________________
CORAM:
KRUGER, J
et
LEKALE, J
_______________________________________________________
HEARD ON:
11 MARCH 2013
_______________________________________________________
JUDGMENT BY:
LEKALE, J
_______________________________________________________
DELIVERED ON:
22 MARCH 2013
_______________________________________________________
INTRODUCTION AND
BACKGROUND
[1] On 27 February 2009
the third respondent, a police trainee with the applicant, was
subjected to a disciplinary hearing on allegations
of fraud and was,
thereupon, found guilty of misconduct and issued with a final written
warning as a sanction.
[2] The divisional
commissioner responsible for training with the applicant, thereafter,
overturned the said sanction and notified
the third respondent that
her agreement (the contract) had been terminated with effect from 12
March 2009 because she was found
guilty of serious misconduct.
[3] The third respondent
felt aggrieved by this turn of events and referred a dispute
concerning the termination of her appointment
contract to the first
respondent in terms of the contract.
[4] On 29 June 2009 the
third respondent was found guilty of fraud by the criminal court at
Welkom on the same facts.
[5] The second respondent
was, eventually, appointed by the first respondent as the arbitrator
to resolve the dispute in terms of
the provisions of the Arbitration
Act 42 of 1965 (the AA).
[6] The arbitration was
conducted on 27 July 2009 and on 9 September 2009 the arbitrator
issued an award,
inter alia
, declaring the termination of the
contract unfair and directing the applicant to reinstate the third
respondent as a trainee without
any loss of benefits and on terms and
conditions no less favourable to her than those that prevailed as at
the date of termination
of her contract.
[7] The applicant feels
hard done by the award and now approaches us in terms of Rule 53 of
the Uniform Rules of Court for an order,
inter alia
, reviewing
and setting aside the said award in terms of section 33 of the AA.
[8] At the commencement
of the proceedings the third respondent effectively consented to
condonation of the late filing of the application
and condonation was
granted accordingly to the extent that it was necessary.
[9] There was, further,
no indication on the papers that service was, in fact, effected on
the arbitrator. The third respondent,
however, desired finality in
the matter and consented to the matter proceeding notwithstanding
that fact. There is, as such, no
appearance for the first and second
respondents.
ISSUES BEFORE AND
POWERS OF THE ARBITRATOR
[10] It is clear from the
arbitration agreement entered into by and between the parties that
the arbitrator was enjoined to determine
whether or not there was
fair cause to make a finding of misconduct against the third
respondent as the trainee and, if so, whether
or not the sanction
imposed was fair.
[11] The arbitrator was
empowered by the arbitration agreement to make an award which he
deemed reasonable and appropriate in the
circumstances.
ARBITATION AWARD
[12] The arbitrator found
that the fact that the third respondent inserted the initials and
surnames of her two relatives in the
application forms in spaces
where the said relatives were supposed to sign did not make her
guilty of fraud because she would not
have been guilty of fraud if
she had “signed and inscribed ‘pp’”.
[13] The arbitrator,
further, concluded that the prescripts of fairness require that the
dismissal be declared unfair and the sanction
was, thus, also unfair.
APPLICANT’S
CONTENTIONS
[14] At the commencement
of her verbal submissions on behalf of the applicant, Ms Snyman,
correctly abandoned all contentions to
the effect that the arbitrator
exceeded his powers by considering and determining whether or not
there existed a fair reason for
finding the third respondent guilty
of misconduct.
[15] The applicant’s
attack against the award is, therefore, limited to some four grounds
it first being contended that it
was common cause before the
arbitrator that the third respondent was found guilty of misconduct
and convicted by the criminal court
on the charge of fraud in that
she signed application forms, for admission to the training programme
with the applicant, for two
relatives fraudulently. That the
arbitrator, therefore, committed gross misconduct in ignoring the
verdict of a criminal court
by finding that the third respondent was,
on the facts, not guilty of fraud.
[16] It is, further, the
applicant’s case that the arbitrator exceeded his powers in
reinstating the third respondent.
[17] It is, furthermore,
contended for the applicant that the arbitrator misdirected himself
and committed misconduct in failing
to appreciate that the applicant,
through the divisional commissioner responsible for training, was
entitled and obliged to terminate
the third respondent’s
contract in the circumstances and in terms of clause 7.1 of the
contract between the parties.
[18] The arbitrator,
further, exceeded his powers, according to the applicant, when he
found that the applicant was guilty of following
an unfair procedure
by excluding union representatives from disciplinary hearings.
[19] It is the
applicant’s view that the arbitrator erred and committed gross
misconduct in relation to his duties in regarding
the third
respondent as an employee and, thus, applying the provisions of the
Labour Relations Act 66 of 1995 (LRA) when the actual
relationship
between the parties was purely contractual as opposed to an
employment relationship.
THIRD RESPONDENT’S
CONTENTIONS
[20] Mr Basson, for the
third respondent, supports the award and maintains that trainees in
the position of his client are employees
as evidenced by the
provisions of clause 1 of the contract read with regulation 35(1)(b)
of the South African Police Service Employment
Regulations of 1999.
Section 37
of the
South African Police Service Act 68 of 1995
also
regards trainees as members appointed in the South African Police
Service.
[21] The arbitration was
conducted in terms of the AA and the test of rationality,
justifiability or reasonableness applicable to
arbitrations conducted
in terms of the LRA are, therefore, not applicable in Mr Basson’s
view. The only grounds for review
in terms of the AA are gross
misconduct, gross irregularity and excess of powers.
[22] The onus was on the
applicant, at the arbitration hearing, to prove that there existed a
fair reason to terminate the contract
and, as such, evidence of fraud
had to be produced. No such evidence was before the arbitrator
according to the third respondent.
[23] The arbitrator had
the authority to award the third respondent reinstatement in terms of
the contract.
[24] The applicant had no
power to change the sanction of final written warning because the
procedure agreed upon between the parties
only makes provision for an
appeal by a trainee and not by the applicant.
[25] The applicant should
have afforded the third respondent a hearing before it took any
independent decision to terminate the
contract. It was not entitled
to rely on the findings of the disciplinary procedure which had its
own conclusion in the form of
a final written warning. The presiding
chairperson of such an enquiry had the power to,
inter alia
,
terminate the contract but decided, in the circumstances of the third
respondent, that a final written warning was the most appropriate
sanction among a range of possible sanctions available to him.
APPLICABLE TEST AND
LAW
[26] As correctly
submitted by Mr Basson, the only grounds of review available to
parties to a private arbitration conducted in
terms of the AA are
those set out in
section 33
of the AA. As the Supreme Court of Appeal
found in
Telcordia Technologies Inc v Telkom SA Ltd
[2006] ZASCA 112
;
2007 (3) SA 266
(SCA) at par
[50]
:
“
[50] By
agreeing to arbitration parties to a dispute necessarily agree that
the fairness of the hearing will be determined by the
provisions of
the Act and nothing else. Typically, they agree to waive the
right of appeal, which in context means that
they waive the
right to have the merits of their dispute re-litigated or
reconsidered. They may, obviously, agree otherwise
by
appointing an arbitral appeal panel, something that did not happen in
this case.
[51] Last, by agreeing to
arbitration the parties limit interference by courts to the ground of
procedural irregularities set out
in section 33(1) of the Act. By
necessary implication they waive the right to rely on any further
ground of review, ‘common
law’ or otherwise…”
[27]
The reasonableness standard of review applicable to administrative
actions and compulsory or statutory labour arbitrations
in terms of
section 145 of the LRA is, as such, not applicable to private
arbitrations as correctly pointed out for the third respondent.
This
test, as extended to such labour arbitrations by the Constitutional
Court in
Sidumo and Another v
Rustenburg Platinum Mines Ltd and Others
2008 (2) SA 24
(CC) is, thus, limited to review of compulsory
arbitrations in terms of LRA where the question is whether or not the
decision reached
by,
inter alia,
a
commissioner of the Commission for Conciliation, Mediation and
Arbitration (CCMA) was one that a reasonable decision-maker could
not
reach. (See further
UASA v Impala
Platinum Ltd and Others
[2010]
31 ILJ 1702 (LC).)
REVIEW
[28] The parties are in
agreement that the arbitration took place in terms of the AA and that
the award is final and binding.
[29]
The applicant feels aggrieved by the outcome of the arbitration
proceedings and seeks to have the award set aside on,
inter
alia
, the ground that the arbitrator
treated the third respondent as an employee and, as such, accorded
her more rights than she actually
had. In my view the status of the
third respondent as at the date of termination of the contract is of
no consequence in the instant
matter. Such status does not determine
the applicable review standard because the arbitration procedure
agreed upon by the parties
is one in terms of the AA. The fact that
there existed an employment relationship between the parties at the
relevant time would
have entitled the third respondent to refer the
dispute to compulsory arbitration in terms of the LRA but for the
arbitration agreement
between the parties. It is, thus, not
necessary, in my judgment, to determine the relationship between the
parties as at the date
of termination of the contract.
[30] The applicant,
further, assails the award on the ground that the arbitrator strayed
beyond his jurisdiction when he directed
the applicant to reinstate
the third respondent. We are, however, satisfied, as correctly
submitted by Mr Basson, that the arbitrator
was well within the
boundaries of his powers in this regard because he was empowered by
the arbitration agreement to make an award
which he deemed reasonable
and appropriate in the circumstances.
[31]
We are, furthermore, not persuaded that a finding by the arbitrator
that the third respondent was not guilty of fraud amounts
to
reviewable misconduct or an irregularity in terms of section 33 of
the AA. Only a court exercising review powers in terms of,
inter
alia
, section 145 of the LRA could
possibly have come to the conclusion contended for by the applicant.
We may not share the arbitrator’s
view in this regard but our
task, in the present matter, is generally to consider the method
employed by the arbitrator to arrive
at his award and not to question
the reasonableness and/or appropriateness and/or correctness of the
award. (See
Telcordia Technologies Inc v Telkom SA Ltd
,
supra
, at 298C.)
[32] We are, further, not
convinced that in questioning the correctness of the verdict of the
criminal court or in ignoring it the
arbitrator committed a gross
irregularity. In this regard, the question is whether or not the act
or omission complained of prevented
a fair arbitration. In our view
the arbitrator did consider the verdict of the criminal court and
consciously rejected or ignored
it, or downplayed its importance
after applying his mind to it. As Mr Basson correctly points out, the
arbitrator was not bound
by the opinion of the criminal court in the
circumstances of the instant matter because the termination of the
contract was not
based on the verdict in question but was, in fact,
based on the outcome of the disciplinary enquiry. (See generally
Goldfields Investment Ltd v City Council of Johannesburg
1938 TPD 551
at 560 – 561.)
[33] Lastly we are not
satisfied that the arbitrator, in fact, made a finding that the
disciplinary hearing was procedurally unfair
in that union
representatives were excluded from such proceedings. A proper reading
of the award indicates that the relevant submission
was made for or
by the third respondent at the arbitration process and was not a
finding by the arbitrator. (See p 34 of the indexed
review papers
under the heading “
The Applicant’s Submissions
”
and p 7 of the indexed bundle of the review record which contains the
third respondent’s Heads of Argument at the
arbitration
hearing.) It is not apparent
ex facie
the impugned award that
the arbitrator made any findings on the issue. In the award findings
(paras 1 – 7 at the end of the
award) nothing is said about the
conviction of fraud.
[34] The award is not
reviewable on any of the grounds recognised by section 33 of the AA.
The principal reason why this application
should be dismissed is that
the divisional commissioner amended the sanction imposed by the
presiding officer at the disciplinary
enquiry to the more serious
sanction of dismissal without affording the third respondent a
hearing. The action of the divisional
commissioner to dismiss the
third respondent was unreasonable and procedurally unfair and that
sanction was correctly set aside
by the second respondent, the
arbitrator.
ORDER
[35] The application is
dismissed with costs.
______________
L. J. LEKALE, J
I concur.
____________
KRUGER, J
On behalf of applicant:
Adv F.M.M. Snyman
Instructed by:
c/o State Attorney
BLOEMFONTEIN
On behalf of third
respondent: Adv J.L. Basson
Instructed by:
Grosskopf Attorneys
Pretoria
c/o McIntyre Van der Post
BLOEMFONTEIN
/spieterse