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[2024] ZALCJHB 73
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Aquarian Lifestyle Trading (Pty) Ltd ta Vespa SA v Commission for Conciliaton Meditation and Abritration (JR 329/21) [2024] ZALCJHB 73 (20 February 2024)
IN THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
Not
Reportable
case No:
JR
329/21
AQUARIAN LIFESTYLE
TRADING (PTY) LTD
T/A
VESPA SOUTH AFRICA
Applicant
and
COMMISSION FOR
CONCILIATION, MEDIATION
AND
ARBITRATION
First
Respondent
COMMISSIONER AUBREY
SITHOLE
Second Respondent
NADINE
MARNEWICK
Third
Respondent
Heard
:
14 August 2023
Delivered
:
20 February 2024
JUDGMENT
MAHOMED, AJ
Introduction
[1]
Not
insulated from the rest of the world, the
Minister
of Health
at the time
Zweli
Mkhize
on 5 March 2020 confirmed the spread of the Corona virus to South
Africa. Ten days later
President
Ramaphosa
,
declared a National
State
of Disaster
and announced measures such as immediate
travel
restrictions
and the closure of schools from 18 March. For most school-going
children this, I am sure, was met with immediate jubilation. On
17
March, the National Coronavirus Command Council was established,
"to
lead the nation's plan to contain the spread and mitigate the
negative impact of the coronavirus"
.
[1]
[2]
By
23
March, a National
Lockdown
was announced, starting on 27 March. F
or
those fortunate to be in employment (as a large segment of our
population is unemployed) and as this case demonstrates management
charged with running businesses this was to be the beginning of much
uncertainty.
[3]
There
was uncertainty on the impact the closure would have on the future of
businesses and for employees what was the position related
to their
continued employment
.
[4]
Whilst
some of us would recall the difficulties brought about by the State
of Emergency imposed by the Apartheid regime in the mid-1980's,
this
was different in legal form in that the pandemic was declared a State
of Disaster. Unlike the State of Emergency which was
designed to hold
the oppressed majority under tighter control to achieve its nefarious
objections to quell rising resistance across
the country at the time,
the State of Disaster impacted every single person in the country in
one way or another. I dare say, that
the effects thereof linger today
as is evident by this case which is a snapshot of the effects of the
lockdown on these parties.
[5]
This
dispute relates to whether the resignation of the
Third
Respondent, Ms Nadine Marnewick (Marnewick)
during
the pandemic constituted a constructive dismissal for the purpose of
section 186 of the Labour Relations Act
[2]
(LRA). This is obviously a fact specific analysis which analysis was
conducted by
Commissioner
Sithole
.
It his decision which is the subject of this review application.
[6]
The
Applicant (Company/Vespa)
imports and distributes spare parts
for the well-known luxury Italian scooter brand – Vespa.
[7]
Vespa
was found by the Commissioner, to have constructively dismissed
Marnewick in an arbitration award dated 8 February 2021. The
Commissioner awarded Marnewick:
7.1
Outstanding
salary in the amount of R56 635.51; and
7.2
Ten
month's compensation in the amount of R175 000.00.
[8]
The
Company seeks to review and set aside the award. The grounds of
review are
that the Commissioner committed a gross
irregularity and/or misconduct and/or exceeded powers invested in him
in terms of the LRA
as he
inter alia
:
‘
i.
Failed
to apply his mind properly to the material facts and evidence that
were placed before him;
ii. Failed
to understand or to appreciate the true nature of the issue and
dispute;
iii. Issued
a ruling which reflects no rational, objective basis justifying the
connection made by
him between the evidence that was properly made
available to him;
iv. Dealt
with the evidence that was placed before him in a selective manner
which unduly favoured
the employee;
v. Conducted
the proceedings in a manner which reduces the sense of impartiality
on his part;
vi. Arrived
at an unreasonable result;
vii. Reached
a conclusion that a reasonable Commissioner would not have in light
of the material facts
that were before him;
viii. Analyzed
the facts in a selective manner; and
ix. Took
extraneous circumstances into consideration.’
[9]
It
is well established that the review test on the first question –
whether the resignation amounted to a constructive
dismissal –
is correctness, not reasonableness.
[3]
Reasonableness is the applicable test in the second stage of the
enquiry – when assessing the reasonableness of the finding
of
the Commissioner against his finding that the dismissal was
fair/unfair.
[4]
[10]
I
set out the material background facts in brief:
Background facts
[11]
Marnewick
commenced employment on 9 May 2016 as a Junior Bookkeeper and
resigned with immediate effect on 26 August 2020. Her primary
responsibilities related to invoicing.
[12]
Following
President Ramaphosa's announcement on 23 March of a Lockdown (what
was to become known as Alert Level 5), the Company
on 25 March 2020
resolved to temporarily lay off a number of its staff including
Marnewick.
[13]
Pursuant
to this, on 25 March 2020 an agreement was concluded between the
Company and Marnewick which provided that:
‘
The
Company and the employee agree that the employment of the employee
with the Company will temporarily lay-off for a period of
21 days
beginning on the 26
th
day of March 2020 due to the President declaring the nation in a
total state of Lockdown due to the COVID-19 pandemic. Therefore,
the
employee will only be required to return to work on the 17
th
day of April 2020.’
[14]
So,
the layoff at least, until 17 April 2020 was consensual.
[15]
Vespa's
warehouse, however, remained open during the Lockdown as it was
considered an essential service and the Company commenced
trading
again during Lockdown Alert Level 3, which was around June 2020.
[16]
During
the lay-off period, Marnewick worked for two hours. It was confirmed
by the Company in evidence that Marnewick's manager
had taken over
her duties while she was laid off.
[17]
Marnewick
complained that she did not receive her full monthly salary over the
lay-off (which is the point of a lay-off). She received
R7 815.14
being the equivalent of accrued paid leave days on 30 April 2020. She
also received the UIF TERS benefit payment (which
was paid by UIF on
application by an employer affected by the Lockdown) in April 2020
and May 2020 in the amounts of R7 668.15
and R6 791.79 respectively.
Her monthly remuneration was R17 500.
[18]
The
Company had no intention of reimbursing laid-off employees the
balance of their salaries. This was admitted at arbitration.
[19]
Lockdown
Level 5 was extended to 30 April. On the same date, a second
agreement was entered into extending the lay-off period from
30 April
2020 until the upliftment of the lockdown.
[20]
After
the conclusion of the second agreement, the Company requested
Marnewick to return her laptop as she had access to the Company's
bank account. It was the version of Vespa that there was no work
available for Marnewick. The laptop was obviously a tool of trade.
[21]
Around
May 2020, while Marnewick was still laid off, Vespa received a
container of bikes. Marnewick decided to attend the workplace
with
her brother, to assist with the offloading of the bikes. Marnewick's
testimony was that she did not intend to demand payment
for such
assistance. Upon her arrival, she was met with a few technicians and
workshop managers who were assisting with offloading
the delivery.
Marnewick and her brother were requested to leave the premises
because she was at the time laid off. Other employees
present were
not requested to vacate the premises. It is the Company's version
that they were entitled to request Marnewick to
leave as offloading
was not part of her duties (much did not turn on this aspect at
arbitration). Why Marnewick took it upon herself
to have her brother
(who was also not an employee) attend the workplace at the time is
bewildering as he had no right to be on
the premises. This issue was
also not canvassed in evidence - so, be that as it may.
[22]
On
14 July 2020, Marnewick lodged a grievance. I refer to some of the
salient portions below:
‘
6.1.
I
was pressurized to sign the temporary lay off agreement, under the
impression that I would not receive UIF/TERS assistance without
signing same…
…
6.3. The
Company is no longer in lockdown, and the industry is unrestricted in
terms of trade and operations.
Due to this the lockdown is
subsequently over for the Company, and further, the indefinite nature
of the lay-off has rendered this
lay-off to be unreasonable under the
circumstances, and amounts to an abuse of the circumstances and
Regulations which are currently
in place.
…
6.6. I
am aware that my position is currently being fulfilled by another
employee, and despite no meaningful
consultation, consent and/or
section 189 proceedings being present, there is still work to be done
in my position, which I am able
to do remotely. I am capable and
willing to continue working remotely, however, the Company has
confiscated my laptop, and has
refused me access to my laptop, and
further refused to allow me to work despite being willing and able to
work remotely and allowed
another employee to take over my position.
I consider the refusal to allow me to fulfill (sic) my position
whilst another employee
tends to my duties to be an unlawful
demotion…
…
11. The
Company has made various statements that it is not in a financial
position to pay its employees,
however, no information has been
provided in respect of the actual financial position of the Company,
and further, as stated above,
no section 189 proceedings have been
instituted…
12. In
light of the above, and in attempt to utilize the internal structures
available to me, I request
the following to be addressed and attended
to immediately:
12.1.
Payment
of the balance of my salary for May 2020 in the amount of R10 708.21
subject to lawful tax deductions on or before the 20
th
of July 2020;
12.2. Payment
of my full salary amount for June 2020 in the amount of R17 500.00
subject to lawful
tax deductions, on or before the 20
th
of
July 2020;
12.3. That
I be allowed to return to work immediately, and work remotely, if
necessary;
12.4. Payment
of my full salary amount for July 2020 in the amount of R17 500.00
subject to lawful
tax deductions, on or before the 31
st
of
July 2020.’
[23]
A
grievance hearing was held on 23 July 2020.
[24]
On
15 July 2020, the Company advised staff who were laid off that there
was uncertainty about whether UIF TERS benefits would be
extended and
that payments would most likely end in June 2020. The letter provided
further that the relevant employees would remain
laid off until
"matters have been clarified by our
Government”.
[25]
On
24 July 2020, the Company provided Marnewick with a "Grievance
Solution Proposal" whereby Marnewick was required to
provide the
following information to the Company:
‘
A.
We
have evaluated the possibility of staff rotations… We request
that if staff rotation would occur, who would you be rotating
with at
the office.
B. Regarding
the employee(s) that you would propose rotating with, what are the
skills that you possess
that the other employee does not in order for
you to carry out that function within the workplace?’
[26]
Marnewick,
through her attorneys Kern Armstong & Associates, addressed a
letter to the Company on 29 July 2020 in reply. In
essence, the
letter set out the following proposals:
26.1 That
Marnewick worked three and a half days a week, and that she was
willing to work remotely;
26.2 Marnewick
receive 70% of her salary, with UIF TERS supplementing the balance so
long as the benefit
exists;
26.3 That
the above arrangement be implemented for two months, after which
Marnewick would return to
her ordinary working hours and salary; and
26.4 That
Marnewick was open to being retrenched should the Company remain
under financial strain.
[27]
The
Company chose not to reply to the proposal made by Marnewick at the
time. Its rationale was that the proposal was unreasonable
and
demanding. This may well be so, but Marnewick was owed a response
from the Company setting out its position to her proposal.
[28]
At
the hearing of the review application it was confirmed by Counsel for
the Company that there was indeed no response from the
Company at the
time to either Marnewick or her attorneys. Put differently, Marnewick
was left guessing and in limbo.
[29]
With
no reply forthcoming from the Company, Marnewick tendered her
resignation on 26 August 2020 and made the demand for amounts
alleged
to be outstanding in respect of salary for May – August 2020
and annual leave days accrued from 1 May – 26
August 2020.
[30]
At
the hearing of the review application I enquired whether the
conclusion of the lay-off agreement was indued by a misrepresentation
by the Company in respect of the receipt of the TERS benefit. Counsel
for the Company accepted that it was.
[31]
What
is apparent from the facts is that Marnewick was not consulted by the
Company during the tumultuous period in which it, like
all other
employers, found themselves. It acted for instance on a frolic
without consultation/engagement with Marnewick, acted
egregiously in
misrepresenting the basis of qualification of the TERS benefit to
induce a lay-off agreement, failed to respond
to a counter-proposal
made by Marnewick in the grievance process, had another employee take
on her responsibilities and in effect
kept Marnewick at a distance at
a time when it should have engaged her to keep her appraised of its
financial position and its
impact on staff which ostensibly justified
its difficult position. This would have been a reasonable approach
taken by the Company.
Yet this is not how management conducted the
business at the time.
[32]
Marnewick
must be found to have made a reasonable effort to preserve the
employment relationship
[5]
on
these facts which is an important consideration in a claim of
constructive dismissal, the Commissioner found that she discharged
such obligation.
[33]
The
evidence demonstrates that she engaged the Company and at the
critical juncture post the grievance, where she made her concerns
plain to management, she was simply stonewalled by the Company. Had
there been a response from the Company post the grievance,
a
resignation may well have been premature.
CCMA arbitration
[34]
On
28 August 2020, Marnewick referred a claim of an alleged constructive
dismissal dispute to the CCMA together with a claim for
outstanding
salary. The arbitration was convened on 18 January 2021.
[35]
Marnewick
was represented by an attorney, whilst the Company was represented by
its Managing Direct Mr Andrew John Reid (Reid).
[36]
Marnewick
presented a bundle comprising of,
inter
alia
, various correspondence exchanged,
the temporary layoff agreements and documents which confirmed various
payments made by the Company,
payslips of the relevant periods and
Ul19 Forms. Vespa’s documentary evidence consisted of,
inter
alia
, correspondence, agreements and
staff rules. Strangely, no evidence of Vespa's alleged financial
strain over the period in question
was discovered. So, there was no
evidence of the alleged underlying financial difficulty presented
before the Commissioner.
This was also not lost to the
Commissioner who identified that such evidence was lacking on the
part of the Company.
Analysis
[37]
The
Commissioner found on the evidence that there was a constructive
dismissal.
[6]
[38]
It
is common cause that Marnewick resigned. The being the first factor
in a claim of constructive dismissal. The second factor is
that the
reason for the termination must be that the continued employment has
become intolerable for the employee with the test
for intolerability
being an objective one.
[7]
As
indicated above objectiveness is fact specific and requires a correct
analysis by the Commissioner. The circumstances must be
demonstrated
to be “
insufferable
and too great to bear
”
[8]
and be such that no reasonable employee could be expected to put up
with them. The employee must show something more than bad treatment,
or a “
difficult,
unpleasant or stressful working environment”
[9]
and the employee must show that there was no reasonable
alternative.
[10]
The
Commissioner found that the evidence demonstrated such facts.
Thirdly, the intolerability must have been of the employers making.
On this requirement it cannot be gainsaid - the circumstances which
gave rise to the lockdown were not the making of the employer.
This
is incontrovertible on these facts. This is also a question of
causation. Reid put it thus in his evidence: "
We
did not choose Covid, we did not choose layoffs, it happened”.
Reid is only partly correct in that whilst the Company was not
responsible for the pandemic, its response thereto was entirely
within its control and so was how it chose to deal with its
employees.
[39]
The
manner upon which it dealt with the pandemic in its workplace and
vis-à-vis
Marnewick is the causation door into which the Commissioner was to
step and in respect of which he found the conduct of the Company
to
constitute a constructive dismissal.
[40]
More
could have been done by the Company to maintain the working
relationship which would on a conspectus easily have been achieved
by
inter alia
,
proper consultation pre and post the grievance hearing, being
transparent, not misrepresenting the TERS entitlement. The lodgment
of the grievance was a clear sign of discontent on the part of
Marnewick and the letter addressed by her attorney demanded a reply
from the Company. Yet, the Company chose not to do so and this on a
conspectus of all the evidence placed Marnewick in a position
which
rendered her continued employment intolerable.
[41]
It
is also apparent from the record that the facts put up of the alleged
intolerable situation were not sufficiently disputed by
Reid to show
that these were not objectively speaking facts which made employment
intolerable.
[42]
Having
found a constructive dismissal, it was for the Company to prove that
the dismissal was fair.
[11]
It
failed to do so as is apparent from the record.
[43]
Accordingly,
on the facts before the Commissioner, I cannot find that his finding
was either incorrect on the jurisdictional question
or unreasonable
on the fairness of the dismissal as it were.
[44]
Turning
to compensation, I am alive to the fact that
this
decision of the Commissioner is not an exercise of a narrow
discretion such that this court is precluded from interfering with
it.
[12]
However, the decision
as to the amount of compensation awarded requires that this court
ascertain whether a limited ground for
interference exists before it
can vary the quantum.
[13]
But
to do so, there must be a pleaded ground of review which will attract
the attention of this court where the award appears on
the high end
of the compensation scale. The review application is, however,
lacking in this regard meaning that there is no specific
attack on
the discretion of the commissioner in the award of compensation. For
such reason, I cannot find a basis to interfere
with the quantum of
compensation awarded despite some debate on such point at the hearing
of this application. My hands are tied
as a court of review which
does not sit on appeal against an award of the Commissioner.
[45]
Furthermore,
there is no specific challenge to the award made in respect of the
outstanding salary under the Basic Conditions of
Employment Act
[14]
(BCEA). By this I mean that the application for review is framed
under the LRA. With no review premised upon the BCEA there is
no
legitimate review mounted to the portion of the award, which deals
with salary and for such reason such aspect of the award
must
accordingly stand.
[15]
[46]
In
the circumstances, the following order is made:
Order
1.
The
review application is dismissed.
2.
There
is no order for costs.
I. I. Mahomed
Acting Judge of the
Labour Court of South Africa
Appearances
For the
Applicant:
Advocate Samantha
Jackson
Instructed
by:
Vermulen Attorneys
For the Third
Respondent: Advocate Sinako Lindazwe
Instructed
by:
Kern Armstrong & Associate
[1]
Statement by the Presidency on 18 March 2020.
[2]
Act
66 of 1995, as amended.
[3]
Conti
Print CC v Commission for Conciliation, Mediation and Arbitration
and Others
[2015] ZALAC 25
; (2015) 36 ILJ 2245 (LAC) at para 16.
[4]
If the Court is satisfied that the employee was dismissed, it must
apply the usual
Sidumo
reasonableness
test on review of the decision as to fairness. This test focuses on
the outcome: is the arbitrator’s decision
capable of
reasonable justification on all the material that was before the
arbitrator (including for reasons not considered)
-
Fidelity
Cash Management Service v Commission for Conciliation, Mediation and
Arbitration and Others
[2007] ZALAC 12
;
[2008] 3 BLLR 197
(LAC) at para 103;
National
Union of Mineworkers and another v Rustenburg Platinum Mine
(Mogalakwena Section) and others
[2015] 1 BLLR 77 (LAC); [2014] ZALAC 62 (LAC).
[5]
Albany
Bakeries Ltd v Van Wyk & others
(2005) 26 ILJ 2142 (LAC); [2011] JOL 27545 (LAC).
[6]
The
requirements for the establishment of a constructive dismissal were
confirmed in
Solid
Doors (Pty) Ltd v Theron NO and Others
[2004]
ZALAC 14
; (2004) 25 ILJ 2337 (LAC) at para 28. In this case, the
court held as follows:
"It
should be clear from the above that there are three requirements for
constructive dismissal to be established. The first
is that the
employee must have terminated the contract of employment. The second
is that the reason for termination of the contract
must be that
continued employment has become intolerable for the employee. The
third is that it must have been the employee's
employer who had made
continued employment intolerable. All these three requirements must
be present for it to be said that a
constructive dismissal has been
established. If one of them is absent, constructive dismissal is not
established. Thus, there
is no constructive dismissal if an employee
terminates the contract of employment without the two other
requirements present”
.
[7]
National
Health Laboratory Service v Yona and Others
[2015]
ZALAC 33
;
(2015)
36 ILJ 2259 (LAC);
Bakker
v Commission for Conciliation, Mediation and Arbitration and Others
[2018]
ZALCJHB 13; (2018) 39 ILJ 1568 (LC) at 15-16.
[8]
Solidarity
obo Van Tonder v Armaments Corporation of South Africa (SOC) Limited
and Others
[2019] ZALAC 55
;
[2019] 8 BLLR 782
(LAC).
[9]
Gold
One Ltd v Madalani and Others
[2020] ZALCJHB 180; (2020) 41 ILJ 2832 (LC) at para 46;
HC
Heat Exchangers (Pty) Ltd v Araujo and Others
[2019]
ZALCJHB 275
[2007] ZALC 72
; ;
[2020] 3 BLLR 280
(LC) at para 50.2
;
Jordaan v Commission for Conciliation, Mediation and Arbitration and
Others
[2010]
ZALAC 10
; (2010) 31 ILJ 2331 (LAC)
.
[10]
Asara
Wine Estate & Hotel (Pty) Ltd v Van Rooyen and Others
[2011] ZALCCT 21; (2012) 33 ILJ 363 (LC) at paras 33-34.
[11]
Bakker
v Commission for Conciliation, Mediation and Arbitration and Others
[2018]
ZALCJHB 13;
[2018] 6 BLLR 597
(LC) at para 10
.
"Once, it has been proven that a constructive dismissal has
occurred, the onus shifts to the employer to prove that it
did not
act unfairly. A two-stage approach is thus envisaged. The central
question is then whether the conduct of the employer
that prompted
the employee to resign was fair or unfair. A court will consider the
circumstances with a view to establishing
whether the employer’s
conduct was justified”.
[12]
Kemp
t/a Centralmed v Rawlins
[2009]
ZALAC 8
;
(2009)
30 ILJ 2677 (LAC).
[13]
McGregor
v Public Health and Social Development Sectoral Bargaining Council
and Others
(2021) 42 ILJ 1643 (CC).
[14]
Act 75 of 1997.
[15]
This is a basic premise of a long line of jurisprudence and what
Professor Cora Hoexter refers to as the routes/pathways to securing
administrative justice through judicial review.