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[2020] ZALAC 50
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South African Broadcasting Corporation SOC Ltd v Phasha (JA 36/2019) [2020] ZALAC 50; [2021] 3 BLLR 270 (LAC); (2021) 42 ILJ 816 (LAC) (27 November 2020)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case no: JA 36/2019
SOUTH AFRICAN
BROADCASTING
CORPORATION SOC
LTD
Appellant
and
NOMPUMELELO PETUNIA
PHASHA
Respondent
Heard:
28 May 2020
Delivered:
27 November 2020
Summary:
Dismissal----Parties consenting to a pre-dismissal arbitration in
terms of s 188A of the LRA----Employer summarily dismissing
employee
because of recusal applications lodged by employee----Employer
construing the recusal applications as misconduct justifying
summary
dismissal----Court finding that recusal applications inextricably
linked to the pre-dismissal proceeding in terms of s
188A----Employer
breaching contractual agreement----Employee entitled to specific
performance of reinstatement.
Coram: Phatshoane
ADJP, Davis JA and Savage AJA
JUDGMENT
DAVIS JA
Introduction
[1]
This appeal requires an answer to an
important question regarding the manner in which an employer can
terminate a contract where
it is alleged that the employer had
breached the terms thereof; in particular, whether the termination
can take place without the
convening of a formal hearing.
Simultaneously it raises a further question: whether a party charged
with gross misconduct in terms
of which the dispute is to be resolved
by way of a disciplinary hearing adjudicated materially by the
Commission for Conciliation
Mediation and Arbitration (CCMA) in terms
of s 188 A of the Labour Relations Act 66 of 1995 (LRA) can be
dismissed, prior to the
completion of that hearing, for conduct which
could be found to be inextricably linked to the dispute before the
disciplinary hearing.
[2]
Respondent was employed by appellant in
2012 in terms of a written contract of employment. At the time of her
dismissal, she was
employed as General Manager: Commercial Services.
She was charged with gross misconduct on 7 August 2018. On 13
September 2018,
the parties agreed to hold a disciplinary hearing
adjudicated by the CCMA in terms of s 188 A of LRA.
[3]
The hearing was set down before
Commissioner Phala on 1 and 2 October 2018. Prior thereto respondent
brought an application to postpone
the hearing which was granted.
Thereafter she brought an application on 22 October 2018 seeking the
recusal of Commissioner Phala.
According to the founding affidavit
deposed to by respondent, she was concerned that Commissioner Phala
had been the chairperson
of a range of internal disciplinary
proceedings involving staff of the appellant, all of which had been
conducted in the offices
of appellant’s attorneys Werkmans. She
alleged that it was not coincidental that Mr Phala, who had chaired
so many of these
disciplinary proceedings would again be appointed as
the arbitrator in her dispute with appellant. She stated that she was
suspicious
of the long-standing relationship between Mr Phala and
Werkmans Attorneys. In her view, there was a reasonable apprehension
that
she would not benefit from an impartial hearing. She contended
that the matter should proceed before a senior commissioner who had
not dealt previously with employment disputes involving appellant.
[4]
The hearing was rescheduled for 11 December
2018. The notice of set down generated by the CCMA identified Mr
Terry Moodley as the
Commissioner who was now to conduct the s 188 A
enquiry. According to the respondent, ‘it then dawned on me
that he had been
the same Commissioner who had rendered an award of
dismissal against Mr Hlaudi Motsoeneng’. She thus launched
another recusal
application, this time for the recusal of
Commissioner Moodley.
[5]
On 27 December 2018, Commissioner Moodley
issued a ruling in which he found that respondent’s perception
of bias was unreasonable
and without factual foundation. He
accordingly dismissed her application.
[6]
Prior to this decision by Commissioner
Moodley with regard to his recusal, respondent received a letter from
the appellant on 18
December 2018 requesting that she makes
representations as to why she should not be dismissed for bringing
the recusal applications.
It was alleged that she had engaged in
improper conduct which ‘has negatively affected the trust
(nucleus of the employment
relationship) between yourself and the
company’. In particular, it was alleged that respondent had
proffered malicious, false
and egregious accusations regarding the
relationship between appellant and Commissioner Phala and CCMA in her
application for his
recusal. Further, she raised scandalous false
accusations regarding the relationship between the SABC, CCMA and
Commissioner Moodley
in the application for his recusal. Further, she
had made a series of serious allegations concerning collusion between
appellant
and the CCMA and two of its Commissioners without tendering
any evidence to justify these accusations. In appellant’s view,
she had brought recusal applications on the basis of unsubstantiated
egregious and false claims.
[7]
In summary, appellant wrote, ‘you
have therefore failed to comply with the implied term of the contract
of employment which
necessitates that, as an employee, you will act
[in] good faith towards the company and serve the company honestly
and faithfully.’
Respondent’s attorney replied on 28
December 2018:
‘
Our
response to your letter should not be interpreted as acquiescing to
the law which you have embarked upon but rather to sound
the clarion
call in asserting our client’s rights in this regard
.’
[8]
Respondent’s attorney warned that
were the appellant to ‘unlawfully dismiss our client
notwithstanding the pending s
188 A inquiry, respondent would seek a
personal costs order against the appellant’. The letter then
went on to discuss the
importance of the s 188 A inquiry, in
particular, that this was the process that had to be followed with
regard to any decision
which might be adverse to respondent’s
employment. The letter proved of no avail in persuading appellant to
continue with
the s188A hearing. It purported to dismiss respondent
with effect from 31 December 2018. In the letter in which respondent
was
informed of this decision, the appellant noted: ‘Your
failure to show cause why your employment with the company should not
be terminated for the reasons articulated in our letter 18 December
2018.’ Significantly, the letter went on to say:
‘
Please
note that the termination of your employment has nothing to do with
the allegations of misconduct, which are a subject matter
of the s
188 A pre-dismissal arbitration proceeding at the CCMA. The
termination has everything to do with the subsequent breach
of trust
demonstrated in your recusal applications. Further, whilst the
company appreciates and values the vindication of your
rights, it
cannot allow your vexatious and scandalous attack on it as
demonstrated by your conduct in your recusal applications.
You
continue using word like “treacherous” in your
correspondence, which is further demonstration of the irretrievable
break-down of the employment relationship
.’
[9]
Respondent then brought an urgent
application before the Labour Court in terms of
s 77(3)
of the
Basic
Conditions of Employment Act, 75 of 1997
, in which she contended that
her summary dismissal was unlawful and constituted a breach of the
appellant’s contractual obligations
to address the allegations
of misconduct in the pre-dismissal arbitration in terms of
s 188A
of
the LRA.
The judgment of the
Labour Court
[10]
Sitting in the Labour Court, Cele J found
that the relationship between the appellant and respondent was
governed by the contract
of employment which had been concluded
between the parties together with the Disciplinary Code of the
appellant which ‘supplements
the SABC’s personnel
regulations and together with the regulations they form part of all
employees contract of employment.’
Referring to clauses 4.5 –
4.6 of the Disciplinary Code, the learned judge found that a formal
disciplinary enquiry to be
presided over by a chairperson or
disciplinary panel was required in any case which warrants its
strongest disciplinary measures
than a mere verbal warning. In short,
‘for any serious acts of misconduct allegedly perpetrated by
its employees, the SABC
has bound itself to the conduct of a
disciplinary hearing with the exception of offence of participation
in procedural collective
industrial action.’
[11]
By failing to hold an inquiry before
terminating the employment of contract the court found that the
appellant had unlawfully terminated
the contract. The respondent was
entitled to uphold the terms of the contract and to seek restitution.
Accordingly, the court found
that the summary dismissal of the
respondent constituted a breach of the appellant’s contractual
obligation to address allegations
of misconduct by way of the process
set down in s 188 A of the LRA. Consequently, the respondent’s
contract of employment
had been unlawfully terminated and she had to
be reinstated into her employment with the appellant with
retrospective effect from
31 December 2018 without any loss of
remuneration and benefits. Furthermore, an interdict was granted
restraining the appellant
from taking any disciplinary action against
the respondent, save for the inquiry in terms of s 188A of the LRA.
The court also
ordered that the respondent was entitled to a punitive
costs order in her favour.
[12]
With leave of this court, the appellant
appealed this order.
Appellant’s case
[13]
Mr Cassim, who appeared together with Ms
Tulk on behalf of the appellant, submitted that the Disciplinary Code
had not been incorporated
into the contract of employment but even if
it were, the provisions of the contract prevailed. These
provisions allowed
for summary dismissal for a material breach and
this had to be considered to be a separate process from the hearing
which had been
convened in terms of s 188A of the LRA.
[14]
In particular, Mr Cassim placed
considerable emphasis on clause 20 of the contract of employment
between the parties. Clause 20.1.1
provided that either party had a
right to terminate the contract on one month’s notice. Clause
20.1.2 empowered the appellant
‘summarily (or in such other
basis as it considers appropriate) and without the payment of
compensation to the General Manager
if the General Manager; commits
any breach of a material obligation of his employment or in terms of
20.1.2.5 the appellant lose
confidence and/or trust in the General
Manager.
In addition, Mr Cassim
referred to clause 25.2 which provides:
‘
The
Agreement read with any applicable written policies, procedures or
the like as amended, from time to time, constitutes the whole
agreement between the parties and no warranties or representations
whether express or implied have been given or made by the SABC
to the
Executive. Where a dispute arises between the provisions of the
agreement and any written policies, procedures, regulations,
terms or
the like, the provisions of this agreement shall prevail.’
[15]
Within this contractual context, Mr Cassim
placed a great deal of emphasis on a judgment of the Labour Court in
Vakalisa v South African Weather
Services and others
[2017] 7 BLLR 729
(LC). In that case, the court found that the contract of employment
did not incorporate the disciplinary policy of the company.
The words
of the contractual clause which are relevant read: ‘you are
expected to be conversant with the SAWS policies and
procedures as
amended from time to time. The policies and procedures are available
in the Human Capital Management Department.’
Rabkin-Naicker J
reasoned as follows at para 11: ‘I
n
my view, the interpretation of the clause
in
casu
advocated
by the applicant, i.e. that it incorporates by reference the
disciplinary policy, must also mean that it incorporates
by reference
all SAWS policies and procedures as amended from time to time - given
that no one policy is specifically mentioned.
Can this be the
sensible meaning to attribute to the clause given that ‘
conversant
with’
means
‘having knowledge or experience with’? I do not believe
that it is. ‘
[16]
By contrast, Clause 25.2 of the contract in
the present dispute reads thus:
‘
The
Agreement read with any applicable written policies, procedures or
the like as amended, from time to time, constitutes the whole
agreement between the parties and no warranties or representations
whether express or implied have been given or made by the SABC
to the
Executive. Where a dispute arises between the provisions of the
agreement and any written policies, procedures, regulations,
terms or
the like, the provisions of this agreement shall prevail.’
[17]
At best for the appellant’s case, it
may be argued that the final words of clause 25.2 namely that ‘the
provisions of
this agreement prevail’ over the aforementioned
policies, procedures and regulations come to the aid of the
appellant. This
would mean, as Mr Cassim urged, that the contractual
provisions trumped any additional requirements that were contained in
the
disciplinary code, notwithstanding their incorporation into the
legal relationship between the parties. For Mr Cassim, the concept
of
summary dismissal in a contract can be read to mean dismissal without
any process in terms of which the affected employee has
an
opportunity to respond.
[18]
The reading of clause 21.2 clearly dictates
a contrary conclusion. Take for example clause 20.2.8 which, on the
logic of Mr Cassim’s
argument also falls under the category of
summary dismissal. It provides for summary dismissal if the General
Manager ‘does
or admits to do anything which would justify the
SABC terminating the General Manager’s appointment summarily
.
’
The consequence of appellant’s argument is
that this vague provision would justify summary dismissal without any
form of hearing
being offered to the employee whom the employer has
decided to summarily dismiss.
[19]
To
the extent that there can be any doubt about this issue, a court must
bear in mind that in terms of s 39(2) of the Constitution
[1]
the court, when developing the common law, must promote the spirit,
purport and objects of the Bill of Rights. Were the law of
contract
with regard to employment to be in the situation that summary
dismissal can take place without any form of hearing, this
part of
the law of contract would clearly be in need of renovation for the
right to fair labour practices as enshrined in s 23
of the
Constitution would then be at war with this contractual position
where simply by action of an employer’s prerogative,
an
employee can be summarily dismissed on the basis of a vague provision
as is contained in clause 20 of the employment contract.
[20]
It is not, however, necessary to have to
apply s 39(2) of the Constitution to this interpretive process within
the context of this
case. As Lewis ADP said in
Theron
v Premier of the Western Cape Province and another
[2019] ZASCA 6
at para 19:
‘
[19]
It is as well at this stage to refer to the principles dealing with
the interpretation of contracts. It is now clear that interpretation
is a unitary exercise, which starts with the text to be interpreted,
and considers it within the contract as a whole, and in context.
As
put most pithily by Unterhalter AJ in
Betterbridge
(Pty) Ltd v Masilo & others
NNO
2015
(2) SA 396
(GNP)
para
8 (referring to the decision of this court in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[2012]
ZASCA 13
;
2012 (4) SA 593
(SCA))
: ‘the
interpretation of language, including statutory language, is a
unitary endeavour requiring the consideration of text,
context and
purpose’.’
[21]
In engaging in this unitary exercise,
parties in negotiating a contract of employment within the context of
the South African legal
dispensation including the protection
afforded to employees in terms of the Constitution, would, unless
there is a clear and express
use of language to the contrary, have?
intended that the contract would be predicated on fair as opposed to
unfair labour practices.
In turn, this would impact upon the
procedure to be adopted in the case of a summary dismissal. In short,
the protections afforded
by the appellant’s Disciplinary Code
would, objectively, have been contemplated by parties negotiating a
contract of employment
at arms length and within the current legal
dispensation. It is within this frame that the court is required to
interpret the contract
between the parties.
[22]
Mr Cassim argued in the alternative that,
were this Court to find that a summary dismissal could not take place
without recourse
to a hearing, then in the present case the
respondent had been given the requisite hearing in that, on 18
December 2018, she was
called upon to make representations as to why
she should not be dismissed. Respondent rejected the opportunity to
make such representations
on 28 December 2018 by simply denying that
the appellant was entitled to summarily terminate her contract
appellant as of right.
It was only after the consideration of the
contents of the letter of 28 December 2018 that appellant terminated
the contract for
material breach.
[23]
This submission requires evaluation in the
context of the disciplinary process which was simultaneously
proceeding in terms of s
188 A of the LRA. Section 188A(1) provides
that an employer may with the consent of the employee request the
Commission to conduct
an arbitration into allegations of the conduct
or capacity of that employee.
Discussion
[24]
The essence of s 188A is to provide for a
pre-dismissal arbitration which substitutes arbitration before an
independent arbitrator
for a disciplinary inquiry. It is a voluntary
procedure and both the employer and the employee must consent
thereto. So much is
clear from s 188 A which provides,
inter
alia
, that an employer may with the
consent of the employee request the Commission to conduct an
arbitration into allegations about
the conduct or capacity of that
employee.
[25]
In this case, s 188 A inquiry was agreed
between the parties to determine the veracity of charges which had
been levelled against
the respondent as set out in a letter of 7
August 2018. In essence, as was set out in that letter ‘you
committed acts of
serious misconduct in a form of Gross Negligence
and/or Contravention of the Supply Chain Management Policy and/or the
Legal Services
Policy and/or the Information Security Policy and/or
the Information Security Framework of Standards Information Security
Policy.’
[26]
The inquiry never got underway as a result
of the two recusal applications which were brought by the respondent.
The appellant’s
case is that the recusal applications
constituted a totally separate form of gross misconduct entitling the
appellant to ignore
the s 188A process and proceed separately to a
decision to summarily dismiss the respondent after the exchange of
correspondence
to which I have made reference.
[27]
It is, in my view, possible to conceive of
a situation where entirely separate conduct on the part of an
employee could justify
a separate process of dismissal so that it may
be divorced from a prior initiation of proceedings in terms of s
188A(1) LRA. But
in the present case, whatever the merits of the two
recusal applications, these applications were directed at the very
hearing
that was designed to adjudicate upon the charges of
misconduct brought by the appellant. To the extent that the claims in
such
applications raised further allegations of misconduct, given the
nexus between the applications and the s188A process, there was
no
bar on the appellant seeking to include the determination of that
misconduct within the ambit of the agreed s 188 A process.
[28]
This was clearly a case where the appellant
relies upon form over substance in that, clearly frustrated by the
in
limine
objections brought by respondent
and ignoring the nexus between these objections and the s 188A
process, it classified these objections
as an entirely separate form
of misconduct, unrelated to the substance of the s 188A process. It
did so in order to justify summary
dismissal and thereby circumvent
the process which had already begun in terms of s 188A of the LRA.
Were this conduct to be sanctioned
by this Court, it could undermine
the very idea behind recourse to an independent inquiry pursuant to s
188A of the LRA; more so
where the impugned conduct is inextricably
linked. In other words, since the s188A inquiry has been initiated,
it should have proceeded
to finality.
[29]
In summary, there is no justification for
an attempt to classify the recusal applications as separate from and
unrelated to the
s 188A process so as to support an argument
regarding two separate processes and by so doing circumvent the
agreed s 188A process
to summarily dismiss the employee.
[30]
It is common cause that two sets of
allegations of misconduct were presented to the pre-dismissal
arbitration in terms of s 188
A. The first set of allegations to
which reference has already been made was dated 7 August 2018. On 5
November 2018, three further
charges were laid against the respondent
dealing with breaches of good faith, trust, confidence and duties of
fidelity to which
charges were set out a series of events to justify
the three new charges which were brought against respondent in terms
of this
second letter. Given that the recusal applications were
inextricably linked to the pre-dismissal arbitration; the option was
thus
always available to the appellant to add an additional charge
relating to the allegations made in the recusal applications as had
been done on 5 November 2018. In the event that the respondent had
refused to allow this additional complaint to form part of a
pre-dismissal arbitration, a separate process might then have been
justified.
[31]
There was no suggestion on the papers that
the respondent was not prepared to proceed with the pre-dismissal
arbitration, notwithstanding
her lack of success with regard to the
second recusal application. As I have indicated, this finding should
not be construed as
to prevent an employer from proceeding with
separate disciplinary measures in circumstances where a discrete case
clearly unconnected
to the initial dispute which has given rise to
the pre-dismissal arbitration has taken place. Had these been the
facts in the present
appeal, a different conclusion might well have
been reached.
The appropriate order
[32]
It should follow that a finding to the
effect that the appellant has acted in a manner which has subverted
the pre-dismissal arbitration
to which it had consented in terms of s
188A would give rise to an order of specific performance. Since the
judgment in
National Union of Textile
Workers and others v Stag Packings (Pty) Ltd and another
1982
(4) SA 151
(T) (
Stag Packings
),
our law has affirmed that the general rule is that a party to a
contract which has been wrongfully rescinded by the other party
could
hold the other party to the contract if he or she so elected. What is
significant about the
Stag Packings
case
was that the court held that the practice of allowing only the remedy
of damages to the wrongfully dismissed employee could
not be elevated
to a rule of law to the effect that such a contract could be
unilaterally terminated and that under no circumstances
could
specific performance be granted.
[33]
A Full Bench in
Santos
Professional Football Club (Pty) Ltd v Igesund and another
(2002) 23 ILJ 2001 (C) took the point further. In that case,
the court found that it had a discretion to refuse specific
performance if it would operate ‘unreasonably hardly on the
defendant or whether the agreement giving rise to the claim was
unreasonable or where the decree would produce injustice or it would
be inequitable under all the circumstances.’ In this
case, the
court held that the employee was bound to the contract and that if
the employer so chose, the employee, in this case
a football coach
who had accepted a better offer from a rival club, was compelled to
continue to discharge his contractual obligations,
that is that an
order of specific performance against an employee was, in this case,
justified (see Tjakie Naudé: “Specific
Performance
against an Employee Santos Professional Football Club (Pty) Ltd v
Igesund”
2003 SALJ 269-281)
[34]
The argument on behalf of the appellant was
that if there was a case of wrongful dismissal, it had to be grounded
in the concept
of fairness. But under the reasoning employed in this
judgment, the ultimate finding is that by attempting to circumvent
the process
in terms of s 188A of the LRA, the appellant acted
unlawfully. The distinction between fairness and unlawfulness was
emphasised
by the Constitutional Court in
Steenkamp
and others v Edcon Ltd (National Union of Metal Workers of SA
intervening)
(2016) 37 ILJ 564 (CC)
paras 189 and 192 where the court said that:
‘
An
invalid dismissal is a nullity. In the eyes of the law an employee
whose dismissal is invalid has never been dismissed. If, in
the eyes
of the law, that employee has never been dismissed, that means that
the employee remains in his or her position in the
employ of the
employer…
It
is an employee whose dismissal is unfair that requires an order of
reinstatement. An employee whose dismissal is invalid does
not need
an order of reinstatement if an employee whose dismissal has been
declared invalid is prevented by the employer from entering
the
workplace to perform his or her duties in an appropriate case a court
may interdict the employer from preventing the employee
from
reporting for duty or from performing his or her duties.
The court may also make an order that the employer must
allow the
employee into the workplace for purpose of performing his or her
duties. However it cannot order the reinstatement of
the employees
.’
(para 192)
[35]
That must be the position in this case
given the finding to which this court has arrived; that unlawfulness
renders the initial
decision void. And that means that the respondent
is entitled to be put back into a position from which she was
unlawfully removed.
This finding, of course, has nothing to say about
the merits of the allegations that were to be determined by the s188A
process
until it was subverted by appellant’s action to dismiss
on an ostensibly separate ground. That dispute will doubtless still
await determination.
Costs
[36]
The court
a
quo
made an order of costs
de
bonis propriis
with no justification
offered for such an order. Given that such a cost order is an
extraordinary order clear justification has
to be provided before
such an order can be granted. There was nothing to suggest that this
order was justified in the present case.
The order
[37]
For the reasons set out, the following
order is made:
1.
The appeal is dismissed with costs.
2.
The order of the court
a
quo
is upheld only to this extent:
2.1
by confirming paras 1 to 7 of the order.
2.2
by setting aside paras 8 and 9 of the order
and substituting para 9 as follows:
“
The
South African Broadcasting Corporation SOC Limited, the first
respondent, is to pay the costs of the application on party and
party
scale.”
__________________
Davis JA
Phatshoane
ADJP and Savage AJA concur.
APPEARANCES:
FOR
THE APPELLANT:
Adv. Nazeer Cassim
SC with Adv. Reghana Tulk
Instructed
by Werksmans Attorneys
FOR THE
RESPONDENT: Adv
Macgregor Kufa, Adv Ngoako Moropene, Adv
Tshifaro Munyai
Instructed
by Machaba Attorneys
[1]
Constitution
of the Republic of South Africa, 1996.