Brief Summary

Labour Law — Dismissal — Substantive fairness — Employee dismissed for alleged insubordination and failure to follow instructions — Employee challenged dismissal at CCMA, which found dismissal substantively unfair — Appellant sought review of CCMA award in Labour Court, which upheld the award — Appeal against Labour Court decision — Employee, a security guard, followed instructions to escort an individual with an arrest warrant but did not prevent him from leaving premises — CCMA found no lawful instruction to detain the individual, and no misconduct established — Labour Court confirmed reasonableness of CCMA's findings — Appeal dismissed, reinstatement upheld.

Comprehensive Summary

Summary of Judgment

1. Introduction

The matter concerned an appeal to the Labour Appeal Court against a judgment and order of the Labour Court dismissing an application to review and set aside an arbitration award issued under the auspices of the Commission for Conciliation, Mediation and Arbitration (CCMA).

The appellant was Bidvest Protea Coin (Pty) Ltd (the employer). The first respondent was SATAWU (a trade union), the second respondent was Mr Molahlehi Isaac Phakathi (the employee), the third respondent was the commissioner who issued the award (cited as Mr Gerhard Jansen van Vuuren N.O.), and the fourth respondent was the CCMA.

The procedural history was that the employee, having been dismissed, referred an unfair dismissal dispute to the CCMA challenging substantive fairness. The commissioner found the dismissal substantively unfair and ordered retrospective reinstatement. The employer then launched a review application in the Labour Court, which was dismissed. The employer thereafter appealed to the Labour Appeal Court with leave of that Court.

The dispute arose from an incident at the employer’s client’s premises (Carnival City Casino) in which a person against whom a warrant of arrest had been issued left the premises before the police arrived. The employer alleged that the employee failed to comply with a lawful and reasonable instruction to keep the individual in an interview room, and that his conduct amounted to misconduct, insubordination, and reputational harm.

2. Material Facts

The material facts were largely common cause. The employee had been employed by the employer since 16 October 2003 and, at the time of dismissal, was a duty manager stationed at the Carnival City Casino premises of Sun International (the employer’s client). He had more than 13 years’ service and a clean disciplinary record at the time of dismissal.

On 20 November 2016, Mr Cornelius Johannes Kriek, against whom a warrant of arrest had been issued on 23 May 2016, was identified at the casino. The employee, having been instructed to do so, escorted Mr Kriek to an interview room. The client’s surveillance shift manager, Mr Brian Kgobe, arrived and explained to Mr Kriek that a warrant of arrest existed at the instance of SARS in relation to alleged fraud involving more than R32 million, and that Mr Kriek was to remain in the interview room until the police arrived.

After waiting, Mr Kriek spoke to his attorney and decided to leave. The employee followed Mr Kriek to the car park but did not call for backup to prevent his departure. Mr Kriek left the premises and the police arrived shortly thereafter.

Following the incident, Mr Kgobe compiled a report and it was circulated by email. The client’s surveillance manager queried why Mr Kriek was allowed to leave. Disciplinary action followed, and on 22 December 2016 the employee was dismissed on charges framed as refusing to carry out a lawful and reasonable instruction to keep Mr Kriek in the interview room and allowing him to leave; bringing the employer’s name into disrepute; and insubordination in failing to adhere to Mr Kgobe’s instruction to prevent Mr Kriek from leaving the premises.

Certain aspects of the incident were contested at arbitration, principally the nature and legal character of what the employee had been required to do (including whether he had the power to arrest or detain Mr Kriek), and whether the employee’s conduct in not calling for backup constituted misconduct or insubordination. It was also relevant that, once Mr Kriek indicated he intended to leave (acting on legal advice), the employee contacted Mr Kgobe, and it was material to the Labour Appeal Court’s assessment that Mr Kgobe did not, at that point, instruct the employee to arrest Mr Kriek or to call for backup to prevent him leaving.

3. Legal Issues

The central questions before the Labour Appeal Court were whether the Labour Court erred in dismissing the employer’s review application and, in that context, whether the commissioner’s award was reviewable under the applicable statutory test.

The issues required determination of the application of legal standards to facts, rather than the resolution of primary factual disputes. In particular, the Court had to determine whether any alleged procedural defect in the conduct of the arbitration proceedings constituted a reviewable irregularity, and whether the commissioner’s outcome was one that a reasonable arbitrator could reach on the material before the commissioner.

A further legal issue concerned whether, on the evidence, the employer had proved the alleged misconduct (including insubordination and reputational harm) arising from the employee’s failure to prevent Mr Kriek from leaving, given the instruction relied upon by the employer and the legal position that Mr Kriek had not been arrested by the police at the time he left.

4. Court’s Reasoning

The Labour Appeal Court approached the matter by first addressing the employer’s complaint that the commissioner had intervened improperly in the arbitration and had conducted the proceedings in a manner said to be unfair. Referring to the Constitutional Court’s articulation of the commissioner’s duty to “reach for the real dispute”, the Court noted that section 138(1) of the Labour Relations Act permits a commissioner to conduct arbitration in a manner considered appropriate to determine the dispute fairly and quickly, dealing with the substantial merits with minimum legal formalities. On that basis, the Court accepted that an inquisitorial approach is not barred and may be employed to reach the merits of the dispute.

Applying that approach to the record, the Labour Appeal Court concluded that the commissioner’s conduct, while robust, was neither inappropriate nor unfair. The Court found that both parties were given a fair hearing and were not curtailed in presenting their cases. It rejected the contention that the commissioner created a version for the employee or predetermined the merits before the employer completed its evidence, and it found no support in the record for the claim that the commissioner intimidated or prevented the employer’s witnesses from testifying about relevant facts. The Court characterised the commissioner’s engagement as directed at clarifying the real nature of the dispute, including the source and content of the instruction and whether it was breached, and observed that similarly robust questioning was directed at both sides.

The Court also addressed the employer’s submission that it elected not to call Mr Kgobe as a witness due to the commissioner’s purported hostility. It found that this contention was not borne out by the record and that there was no bar to calling Mr Kgobe. The Court held that the employer’s decision not to call him was made of its own accord and appeared connected to the fact that the employee did not dispute the material facts to which Mr Kgobe might have testified.

On the substantive question of misconduct, the Labour Appeal Court accepted that, as a security officer safeguarding the client’s interests and assets, the client was entitled to provide reasonable and lawful instructions to the employee. The Court identified the employer’s case as resting not on an instruction to arrest Mr Kriek but on an instruction that Mr Kriek was to be kept in the interview room until the police arrived. It considered that this contemplated that the police, not the employee, would arrest Mr Kriek upon arrival.

The Court reasoned that the employer’s case failed to appreciate that, not having been arrested at that time, Mr Kriek was legally entitled to leave the premises. On the Court’s analysis, the employee therefore did not commit misconduct by failing to prevent Mr Kriek’s departure, and the argument that the employee should have called for backup to prevent him from leaving similarly failed because it rested on the premise that Mr Kriek could lawfully be prevented from leaving in the circumstances presented. It was material to the Court’s reasoning that, when the employee contacted Mr Kgobe as Mr Kriek was threatening to leave, Mr Kgobe did not instruct the employee to arrest Mr Kriek or call for backup to prevent his departure.

The Court then addressed the review standard, relying on the authority which holds that an arbitration award may be reviewed if a defect falls within section 145(2)(a) of the Labour Relations Act, including where the arbitrator misconceived the nature of the inquiry or arrived at an unreasonable result, with unreasonableness being measured by whether the outcome is one a reasonable arbitrator could reach on all the material before the arbitrator. In applying that standard, the Labour Appeal Court held that the commissioner’s ultimate result—namely that the employee did not commit misconduct—fell within the ambit of reasonableness, even if the Court reached that conclusion on reasoning different to the commissioner’s.

On the charges of insubordination and bringing the employer’s name into disrepute, the Court held that the employer failed to prove that the employee was insubordinate or that the employer’s reputation had been harmed as alleged. Since misconduct was not established, the Court held that the commissioner could not be faulted for granting the primary remedy of reinstatement which the employee sought, and regarded it as “patently appropriate” in the circumstances.

Although the Labour Court had dismissed the review for reasons that differed from those adopted by the Labour Appeal Court, the Labour Appeal Court concluded that the Labour Court nonetheless did not err in dismissing the review application as being without merit.

5. Outcome and Relief

The Labour Appeal Court dismissed the appeal and upheld the Labour Court’s order dismissing the review application, with the result that the arbitration award ordering retrospective reinstatement remained in place.

The Court ordered that the appeal be dismissed with costs, finding no reason in law or fairness to depart from a costs order, having regard to the merits of the appeal and the fact that the employee was no longer represented by a trade union on appeal.

Cases Cited

CUSA v Tao Ying Metal Industries and Others [2008] ZACC 15; 2009 (2) SA 204 (CC).

Herholdt v Nedbank Ltd (Congress of South African Trade Unions as Amicus Curiae) (2013) 34 ILJ 2795 (SCA).

Legislation Cited

Labour Relations Act 66 of 1995 (as amended), including section 138(1) and section 145(2)(a).

Rules of Court Cited

No specific rules of court were cited in the judgment.

Held

The Labour Appeal Court held that the commissioner’s robust and inquisitorial conduct of the arbitration proceedings did not render the proceedings unfair or the award reviewable. It held further that the employer had not proved that the employee committed the alleged misconduct, including insubordination or reputational harm, arising from the departure of Mr Kriek before the police arrived, particularly because Mr Kriek had not been arrested and was legally entitled to leave, and the instruction relied upon did not involve an instruction to arrest.

The Court held that the commissioner’s conclusion that the dismissal was substantively unfair was a result that fell within the bounds of reasonableness on the material before the commissioner, and that the award of retrospective reinstatement was appropriate. The appeal against the Labour Court’s dismissal of the review was therefore dismissed with costs.

LEGAL PRINCIPLES

A commissioner conducting CCMA arbitration proceedings is required to “reach for the real dispute” between the parties, and may adopt an inquisitorial approach where appropriate in order to determine the dispute fairly and quickly, consistent with section 138(1) of the Labour Relations Act.

An arbitration award is reviewable under section 145(2)(a) of the Labour Relations Act only if the arbitrator misconceived the nature of the inquiry or arrived at an unreasonable result, with unreasonableness assessed by whether the outcome is one that a reasonable arbitrator could not reach on all the material before the arbitrator. Material factual errors or disputes about the weight and relevance of evidence are not, without more, sufficient to set aside an award unless they render the outcome unreasonable.

Where an employer alleges misconduct for failure to comply with an instruction, the employer must prove the misconduct alleged on the facts and in light of the nature of the instruction relied upon. In assessing alleged insubordination and related misconduct, the enquiry remains focused on whether the employee breached the instruction as formulated and whether the conduct was shown, on the evidence, to constitute misconduct warranting dismissal.

Reinstatement, as the primary remedy sought by an employee where dismissal is found substantively unfair and no sustainable basis is established to deny such remedy, may be ordered, and will not be interfered with on review absent a basis showing the award falls outside the band of reasonableness.

Bidvest Protea Coin (PTY) Ltd v SATAWU and Others (JA105/2021) [2022] ZALAC 122; [2023] 3 BLLR 195 (LAC); (2023) 44 ILJ 997 (LAC) (29 November 2022)