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[2020] ZALAC 25
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Communication Workers Union and Others v Mobile Telephone Networks (Pty) Ltd and Another (JA 107/16) [2020] ZALAC 25; (2020) 41 ILJ 2072 (LAC) ; [2020] 11 BLLR 1096 (LAC) (18 May 2020)
IN THE LABOUR APPEAL
COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case no: JA 107/16
In the matter between:
COMMUNICATION WORKERS
UNION
First Appellant
LULAMA
MKALIPI
Second Appellant
SIBUSISO
BANDA
Third Appellant
FIKELEPHI
MTHEMBU
Fourth Appellant
NCEBA
LONI
Fifth Appellant
JOHN
SEEMELA
Sixth Appellant
FANYANA
MKWANAZI
Seventh Appellant
XOLELWA
MBAKAZI
Eight Appellant
SIFISO
NOMBIKA
Ninth Appellant
ENOCH
PHAALA
Tenth Appellant
and
MOBILE TELEPHONE
NETWORKS (PTY) LTD
First Respondent
COMMISSION FOR
CONCILIATION, MEDIATION
AND
ARBITRATION
Second Respondent
COMMISSIONER JOSEPH
TSHABADI NO
Third Respondent
Heard:
05 November 2019
Delivered:
18 May 2020
Summary: Jurisdiction
– Ruling that party submits proof of payment before matter set
down is an administrative action –
failure to comply with the
ruling deprives CCMA of jurisdiction.
Coram: Waglay JP,
Sutherland JA and Kathree-Setiloane AJA
________________________________________________________________________
JUDGMENT
KATHREE-SETILOANE
AJA
[1]
The
first to the tenth appellants (“the appellants”) appeal
against paragraph
50.2
[1]
of the order of the Labour Court (Bester AJ) reviewing and setting
aside the arbitration award of Commissioner Joseph Tsabadi
(“Commissioner Tsabadi”) made under the auspices of the
Commission for Conciliation, Mediation and Arbitration (“CCMA”).
Reinstatement
of the Appeal
[2]
The
appeal lapsed as a result of the appellants’ failure to file
the appeal record within the prescribed time limits. The
appellants
make application for reinstatement of the appeal. The Court is
satisfied that the delay in filing the record was due
to the wrong
case number that was allocated to the appeal record by the
transcription company. The first respondent has suffered
no prejudice
as a result of the delay and does not oppose the application for
reinstatement of the appeal. The appeal is, therefore,
reinstated.
Background
[3]
In
September 2010, the second to tenth appellants (“the second to
tenth appellants) were dismissed by the first respondent,
Mobile
Telephone Networks (Pty) Ltd (“MTN”) for misconduct
relating to their purported failure to disclose their membership
of
the first appellant, Communication Worker’s Union (“Union”),
to MTN.
[4]
In
mid-2009, MTN embarked upon a retrenchment process which would have
resulted in the retrenchment of approximately four hundred
of its
employees. Pursuant to an urgent application brought by the Union,
MTN and the Union entered into an agreement in terms
of which MTN
undertook to consult with the Union in relation to any retrenchments
that were likely to affect its members.
[5]
The
retrenchment process was to conclude by the end of March 2010. When
this did not happen, MTN created a “special dispensation
fund”
for the payment of salaries and benefits to members of the Union who
had not opted to take voluntary retrenchment packages.
Since this
fund was for Union members only, it was imperative that MTN
established who the affected Union members were. MTN, therefore,
requested the second to tenth appellants to verify their membership
of the Union on numerous occasions. As a result of their failure
to
do so, MTN continued to pay them after the cut-off date by means of
the “special dispensation”. They were consequently
charged with gross dishonesty, misrepresentation and fraud. Following
on a disciplinary hearing, they were found guilty of all
the charges
and dismissed on 14 September 2010.
[6]
The
second to tenth appellants referred an unfair dismissal dispute to
the CCMA. Conciliation failed and the dispute was referred
to
arbitration. After a series of postponements, and a ruling by
Commissioner Braam Van Wyk that the Union lacked the necessary
locus
standi
to act as the employees’ representative, the dispute came
before Commissioner Lawrence Nowosenetz ("Commissioner
Nowosenetz”)
for determination. He advised the second to tenth
appellants that the Union’s lack of
locus
standi
could be cured, at that stage of the proceedings, by them
“legitimately” joining the Union for purposes of it
representing
them in the arbitration proceedings. The employees
accepted Commissioner Nowosenetz’s advice and the proceedings
were postponed
to 7 April 2011 (to run for two days on 7 and 8 April)
to enable the second to tenth appellants to remedy their lack of
membership
of the Union.
[7]
At
the resumption of the arbitration proceedings on 7 April 2011,
Commissioner Nowosenetz ruled that the Union, acting on behalf
of the
second to tenth appellants, be allowed legal representation during
the arbitration proceedings. At that point, the Union
applied for a
postponement in order to enable it to appoint an attorney. After
noting that only one of the nine appellants had
attended the
proceedings on that day, and that the matter had been set down for
two consecutive days, Commissioner Nowosenetz postponed
the matter
sine
die
awarding
wasted costs (for 7-8 April 2011) to be jointly and severally paid by
the Union and the employees. He directed that the
costs be paid
before the matter could be set down for hearing. Paragraph 6 of
Commissioner Nowosenetz’s ruling reads:
‘
The
case is postponed
sine
die
and may only be rescheduled for hearing upon proof of payment by the
applicants.’ (“the cost’s ruling”).
[2]
[8]
The
appellants instituted review proceedings against the costs’
ruling. Curiously, they enrolled the dispute for hearing
on 14
October 2011 in the CCMA. This was before finalisation of the review
application, and before payment of the wasted costs
as stipulated in
the costs’ ruling. The dispute came before Commissioner Tsabadi
for determination.
[9]
On
1 October 2012, Commissioner Tsabadi found the second to tenth
appellants’ dismissals to be procedurally fair but
substantively
unfair. The second and fourth appellants were awarded
12 months’ compensation, and the third and fifth to tenth
appellants
were reinstated with back pay (limited to 12 months).
[3]
[10]
On
22 October 2012, MTN instituted review proceedings in the Labour
Court. One of the review grounds raised by MTN was that Commissioner
Tsabadi committed an act of gross misconduct by ignoring the costs’
ruling of Commissioner Nowosenetz that the matter could
only be
enrolled upon proof of payment of the wasted costs having been
furnished by the appellants.
[11]
MTN
contended in the review application that Commissioner Tsabadi erred
in stating that no preliminary issues were raised before
him, when on
the first day of the hearing MTN’s legal representative argued
that the matter had been enrolled for hearing
in direct breach of the
costs’ ruling, and that Commissioner Tsabadi undertook to
address the issue in the award. However,
Commissioner Tsabadi failed
to do so and, instead, stated in his award that no preliminary issues
were raised by the parties. MTN,
accordingly, contends that in
arriving at this conclusion, Commissioner Tsabadi committed a gross
irregularity as he was not entitled
to disregard the costs’
ruling.
In
the Labour Court
[12]
The
Labour Court concluded in relation to this ground of review that
Commissioner Tsabadi’s conduct was not irregular nor
unreasonable as he did not exceed his powers as provided for in s
138
[4]
of the Labour Relations
Act (“the LRA”).
[5]
The Labour Court reasoned as follows in arriving at this conclusion:
‘
Although
the Commissioner [Tsabadi] did not deal with this issue in his award,
he dealt with it during the proceedings. He did,
upon request for a
ruling in writing, refuse to postpone the arbitration for purposes of
issuing a written ruling and instead stated
that the ruling will be
availed as part of the award. I am, however, of the view that the
Commissioner’s failure to then
deal with the ruling in the
award, does not, per se, render the award reviewable.
An arbitrator is tasked
to conduct arbitration proceedings in a manner that the commissioner
deems appropriate in order to determine
a dispute quickly and fairly
(section 138 of the LRA). It would have been inappropriate for the
Commissioner in the circumstances
to have postponed the arbitration
and accordingly not to have determined the substantial merits of the
case pending the outcome
of a review application relating to a cost
order.’
[13]
MTN’s cross-appeals this finding of
the Labour Court.
[14]
At the hearing, this Court requested the
parties to address it on this issue first, because it concerned the
question of the CCMA’s
jurisdiction to determine the dispute.
Thus, the preliminary question for determination is whether, in view
of the appellants’
failure to comply with the costs’
ruling, the CCMA (Commissioner Tsabadi) had jurisdiction to continue
with the arbitration
proceedings on 1 October 2012.
[15]
The thrust of the submission advanced on
behalf of the appellants is this: there is a distinction between (i)
the substantive part
of a ruling, and (ii) a procedural directive
contained within a ruling. The former is final and can only be
overturned on rescission
or review. The latter can be revisited in
the absence of a formal review or rescission application. The costs’
ruling is
a procedural directive alternatively, an interlocutory step
in the arbitration proceedings which can be rescinded or varied by a
Commissioner of the CCMA.
[16]
Accordingly, the appellants argue that the
costs’ ruling is either a procedural
directive or a simple interlocutory ruling which had no bearing on
the main issues between
the parties to the arbitration. Nor did it
anticipate any of the relief sought. It merely directed that the
matter should not be
set down for hearing before the Union and the
employees paid the wasted costs occasioned by the postponement.
Hence
, it was
permissible for Commissioner Tsabadi to proceed with the arbitration
hearing despite the failure of the Union and the employees
to provide
him with proof that the costs order had been complied with as
stipulated in the costs’ ruling. /
[17]
I
consider the appellants’ contentions to be completely
unfounded. What they fail to recognise is that an award or ruling
of
a Commissioner of the CCMA is an administrative decision. It is
important, in this regard, to remain mindful that the CCMA is
not a
branch of the judiciary and it does not exercise judicial power. It
is a creature of statute. The exercise of its powers
of arbitration
is of an administrative nature.
[6]
Consequently, its awards or rulings constitute administrative action.
[18]
Our
courts have repeatedly held that administrative decisions remain
binding until set aside by a court order.
[7]
They, therefore, have legal consequences until set aside.
[19]
Commissioner
Nowesenetz’s costs’ ruling is an administrative decision.
It remains binding until set aside by a court
of law. Arbitration
awards and rulings may, however, be varied and rescinded in the
limited circumstances provided for in section
144 of the LRA which
provides:
‘
Any
commissioner who has issued an arbitration award or ruling or any
other commissioner appointed by the
director
for that purpose, may on that commissioner’s own accord or, on
the application of any affected party, vary or rescind an
arbitration
award or ruling –
(a)
erroneously sought or erroneously made in
the absence of any party affected by that award;
(b)
in which there is an ambiguity, or an
obvious error or omission, but only to the extent of that ambiguity,
error or omission; or
(c)
granted as a result of a mistake common to
the parties to the proceedings.
(d)
made in the absence of any party, on good
cause shown.’
[20]
There was no application before
Commissioner Tsabadi to vary or rescind the costs’ ruling of
Commissioner Nowosenetz on the
limited grounds set out in section 144
of the LRA. Nor did he seek to do so on his own accord. Accordingly,
Commissioner Tsabadi
was bound by the costs ruling of Commissioner
Nowosenetz and could not simply ignore it, and proceed with the
arbitration proceedings
in breach of that ruling.
[21]
The costs ruling had an important legal
consequence. In the absence of compliance by the Union and employees
with the cost’s
ruling, the CCMA had no jurisdiction to
determine the dispute. As a result, Commissioner Tsabadi committed a
gross irregularity
by proceeding to determine the dispute between the
parties.
[22]
It follows that the Labour Court erred in
failing to set aside the arbitration award of Commissioner Tsabadi on
the basis that the
CCMA had no jurisdiction to determine the dispute
in the absence of proof from the appellants that they had complied
with the costs’
ruling of Commissioner Nowosenetz.
[23]
For these reasons, the appeal falls to be
dismissed and the cross-appeal upheld.
Costs
[24]
I consider it fair and just that each party
pays its own costs in both the appeal and cross-appeal.
Order
[25]
In the result, I make the following order:
1.
The appeal is dismissed.
2.
The cross-appeal is upheld.
3.
The order of the Labour Court is set aside
and replaced with the following order:
‘“
1.
The CCMA has no jurisdiction to arbitrate the dispute in the absence
of compliance by the
first to tenth respondents with the ruling of
Commissioner Lawrence Nowosenetz dated 7 April 2011.
2.
The arbitration award is set aside on review.
3.
There is no order as to
costs.’
____________________
F
Kathree-Setiloane AJA
Waglay
JP and Sutherland JA concur.
APPEARANCES:
FOR THE
APPELLANTS:
Mr M Sibanda
Instructed by Eversheds
Sutherlan (SA) Inc
FOR THE FIRST
RESPONDENT: Mr AM Mthembu
Instructed
by Mashiane Moodley & Monama Inc
[1]
Paragraph
50.2 of the order of the Labour Court reads:
‘The
award is reviewed and set aside in as far as
reinstatement or compensation was granted to the employees and the
matter is remitted
to the Second Respondent [CCMA] for set down
before the Third Respondent [Commissioner Tsabadi] or, if he is
unavailable, another
Commissioner to determine an appropriate remedy
in respect of all the employees after hearing relevant evidence
hereto including
evidence in respect of the possible retrenchment of
the employees or their transfer to alternative positions on
different terms
and conditions, if not for their dismissal for
misconduct.’
[2]
The
term “applicants” refers to the Union and the employees.
[3]
The
third and fifth to tenth appellants were directed to report for duty
on 1 November 2012.
[4]
Section
138(1) of the LRA provides: ‘The commissioner may conduct the
arbitration in a manner that the commissioner considers
appropriate
in order to determine the dispute fairly and quickly, but must deal
with the substantial merits of the dispute with
the minimum of legal
formalities.’
[5]
66
of 1995.
[6]
Sidumo
and Another v Rustenberg Platinum Mines (Pty) Ltd and Others
[
2
007]
12 BLLR 1097
(CC) paras 84, 84, 85 and 87.
[7]
Oudekraal
Estates (Pty) Ltd v City of Cape Town and Others
(2004)
6 SA 222
para 26.