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[2024] ZALCJHB 130
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Cape Town City Football Club v Matsi and Others (JR96/2022) [2024] ZALCJHB 130; [2024] 5 BLLR 492 (LC) (13 March 2024)
FLYNOTES:
LABOUR – Jurisdiction –
Private
arbitration
–
Contract
of football player terminated by club on grounds of operational
requirements – Arbitrator finding for player
–
Jurisdiction flows from pleadings in the arbitration –Fairness
of dismissal for operational requirements is
arbitrable under LRA
– Private arbitration award rendered reviewable by section
157(3) – Proceedings were fair
and his award considered
substantive evidence and arguments – Review application
dismissed –
Arbitration Act 42 of 1965
–
Labour
Relations Act 66 of 1995
,
s 157(3).
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not Reportable
Case No: JR96/2022
In the matter between:
CAPE
TOWN CITY FOOTBALL CLUB
Applicant
And
MPHO
MATSI
First
Respondent
SOUTH
AFRICAN FOOTBALL ASSOCIATION
Second
Respondent
NATIONAL
SOCCER LEAGUE
Third
Respondent
ADVOCATE
W R MOKHARE SC N.O.
Fourth
Respondent
Heard:
12 January 2024
Delivered:
13 March 2024
Summary:
Review application –– private arbitration -
jurisdiction in terms of
section 157(3).
JUDGMENT
VENTER, AJ
Introduction
[1] This
is a review of a private arbitration award where the Applicant calls
for the setting aside
of the arbitration award dated 7 December 2021
and reinstating the initial award of the Dispute Resolution Chamber
on 27 July 2021,
alternatively remitting the matter for a rehearing
before a new arbitrator other than the Fourth Respondent.
[2]
The
First Respondent has opposed the review on three bases: (1) the
Labour Court does not have jurisdiction to review the private
arbitration award; (2) the Labour Court does not have jurisdiction to
review the arbitration award in terms of sections 145 and
158(1)(g)
of the Labour Relations Act
[1]
(LRA); and (3) substantively, the review must fail.
[3]
Despite
belatedly doing so, the Applicant has wisely abandoned the review in
terms of sections 145 and 158(1)(g), conceding that
the review of
this award can only be considered in terms of
section 33
of the
Arbitration Act
[2
]
.
[4] The
First Respondent, in turn, has raised that the Applicant has not
pleaded to a review in terms
of
section 33
of the
Arbitration Act
and
, therefore, cannot introduce such a basis as a passing shot in
its heads of argument.
Background
[5] The
facts of this case are mainly common cause.
[6] The
Applicant, the Cape Town City Football Club, is a professional
football club competing in the
National Soccer League.
[7] The
First Respondent, Mr Matsi, was a central midfielder football player
during the dispute.
[8] The
Applicant and the First Respondent are members of the Third
Respondent, the National Soccer
League (NSL).
[9] The
Third Respondent, who trades as the Premier Soccer League (PSL), is a
member of the Second
Respondent, the South African Football
Association (SAFA).
[10] All
professional clubs and professional footballers are subject to the
PSL, the rules and regulations
of SAFA, the Confederation of African
Football (CAF), and the Federation Internationale de Football
Association (FIFA).
[11] All
contracts, statutes, regulations, directives, and decisions in South
African Football must
be fully compliant with FIFA regulations,
directives and decisions (which include the decisions of the FIFA
Dispute Resolution
Chamber), CAF decisions, including but not limited
to the FIFA Circulars.
[12] On
10 September 2018, the Applicant concluded a fixed-term contract of
employment with the First
Respondent. The effective date was 1 July
2018, and the termination date was 30 June 2022. The Employee
Handbook, Constitution
and Rules form part of the contract.
[13] The
First Respondent went on loan to Maritzburg Football Club from 1
January to 30 June 2019.
On the First Respondent’s return, he
was sent out on loan to Stellenbosch Football Club from 1 July 2019
to 30 June 2020,
which was extended to 31 August 2020 as the league
was extended due to the COVID-19 pandemic. He didn't play for the
Applicant
while he was on loan.
[14] On
or about 25 May 2020, the First Respondent received a letter titled
“
Notice of Salary Reduction / Retrenchment under
section 189
of the
Labour Relations Act 66 of 1995
”
.
[15] In
response to the letter, the First Respondent’s agent addressed
emails to the Applicant
on 28 May 2020, submitting that no
consultation process had occurred and requesting a list of documents
and financial information.
The Applicant responded on 29 May 2020 but
failed to provide financial information. On 29 May 2020, the
Applicant declined to provide
relevant information and documentation,
and the Applicant could not give a signed handbook.
[16] Consultations
occurred on 1 June 2020, 24 June 2020, and 21 July 2020.
[17] The
Applicant terminated the First Respondent’s contract on 24 July
2020, effective 31 August
2020, on the grounds of operational
requirements in terms of
section 189
of the LRA for financial
reasons.
[18] On
30 September 2020, the First Respondent referred a dispute to the
Dispute Resolution Chamber
at the National Soccer League (DRC)
regarding the league’s handbook. He claimed that:
18.1. the
contract of employment was terminated unlawfully, and claimed the
total damages for the sum
of R3 630 000.00;
18.2. the
dismissal was substantively and procedurally unfair and claimed
compensation equivalent to
twelve months’ salary for the sum of
R1 440 000; and
18.3. severance
pay and leave pay due to the First Respondent.
[19] The
Applicant opposed the matter.
[20] On
27 July 2021, the DRC handed down its decision dismissing the claim
and concluded the dismissal
was substantively and procedurally fair.
[21] On
12 August 2021, the First Respondent submitted a notice of
arbitration to SAFA to appeal the
correctness of the DRC's decision.
The appeal was opposed.
[22] The
Fourth Respondent, Mr Mokhare SC, was appointed to arbitrate the
matter. The matter sat on
4 December 2021, and the award was rendered
on 7 December 2021. The award set aside the decision of the DRC and
replaced that decision
with the following order:
‘
64.2.1. the
termination of employment contract of the appellant by the respondent
on 24 July 2020,
effective 1 August 2020 was without just cause;
62.2.2. the
termination of the employment contract of the appellant by the
respondent on 24 July 2020
effective 1 August 2020 is unlawful and in
breach of the employment contract concluded between the appellant and
the respondent;
62.2.3. the
respondent is ordered to pay to the appellant the sum of R3 630 000
(three million
six hundred and thirty thousand rands );
64.2.4. the
aforesaid amount shall bear interest at the prescribed legal rate
from the date of this
award to the date of payment.
64.2.5. the
respondent is ordered to pay the costs of the appellant incurred at
the DRC as well as
the costs of the appellant in this arbitration;
64.2.6. the
costs of the arbitrator shall be borne by the National Soccer League,
which shall recover
same through its internal processes from the
respondent.’
[23] It
is this award that the Applicant seeks to review.
Jurisdiction of
this Court
[24] The
First Respondent submitted that an unlawful termination of an
employment contract does not
fall under
section 157(3)
of the LRA,
and therefore this Court does not have jurisdiction.
[25]
Section
157(3)
of the LRA provides:
‘
Any reference to
the court in the Arbitration Act, 1965 (Act 42 0f 1965), must be
interpreted as referring to the Labour Court when
an arbitration is
conducted under that Act in respect of any dispute that may be
referred to arbitration in terms of this Act.’
[26] Section
157(3) accords jurisdiction to the Labour Court to entertain matters
brought to it in
terms of the
Arbitration Act. That
being the case,
the court, in considering matters under this Act, acts in terms of
its powers set out in section 33 of the Act.
Section 158(1)(g)
accords this Court's power to review. On that basis, it is competent
for this Court to entertain a review application
relating to a matter
brought to it in terms of the
Arbitration Act.
[27
] The
essence of the First Respondent’s submission is that the
Arbitrator found that the dismissal
was unlawful and not unfair.
Because unlawfulness falls outside the ambit of the LRA, this ousts
the jurisdiction of the CCMA and
the Labour Court. Thus, this dispute
cannot be referred to arbitration under the LRA. In other words, as
the argument goes, the
finding of an unlawful dismissal transforms
the dispute from one that might be referred to arbitration in terms
of the LRA into
one that cannot be referred to and thus takes the
dispute out of the ambit of
s 157(3).
[28]
I
do not concur with this approach. Jurisdiction does not flow from an
award's outcome; jurisdiction flows from the pleadings in
the
arbitration. In
Gcaba
v Minister for Safety and Security and Others
[3]
,
the court stated:
‘
Jurisdiction is
determined on the basis of the pleadings, as Langa CJ held in
Chirwa
,
[4]
and not the substantive merits of the case. If Mr Gcaba’s case
were heard by the High Court, he would have failed for not
being able
to make out a case for the relief he sought, namely review of an
administrative decision. In the event of the Court’s
jurisdiction being challenged at the outset (
in
limine
),
the applicant’s pleadings are the determining factor. They
contain the legal basis of the claim under which the applicant
has
chosen to invoke the court’s competence. While the pleadings –
including in motion proceedings, not only the formal
terminology of
the notice of motion, but also the contents of the supporting
affidavits – must be interpreted to establish
what the legal
basis of the applicant’s claim is, it is not for the court to
say that the facts asserted by the applicant
would also sustain
another claim, cognisable only in another court. If however the
pleadings, properly interpreted, establish that
the applicant is
asserting a Claim under the LRA, one that is to be determined
exclusively by the Labour Court, the High Court
would lack
jurisdiction. An applicant like Mr Gcaba, who is unable to plead
facts that sustain a cause of administrative action
that is
cognisable by the High Court, should thus approach the Labour Court.’
[29]
In
Manaka
and Others v Air Chefs (Pty) Ltd
[5]
,
the Labour Court, in finding that a private arbitration award may be
made an order of court, had this to say:
‘
The crisp
question, therefore, is whether it is necessary for the dispute to
remain cognizable under the Act throughout its currency
or whether it
is enough for the purposes of s 157(3) that it be a dispute that at
least at the outset is cognizable under the statute.
In my view, the
latter interpretation is the appropriate one. The section simply
states that the dispute must be one that may be
referred to
arbitration in terms of this Act. It must, therefore, be a dispute
that permissibly or legally can be referred to arbitration
in that
manner. It is such a dispute at its outset and that, in my opinion,
is sufficient to bring it within the ambit of s 157(3).’
[30] Therefore,
the jurisdiction lies in the initial referral and pleadings in the
arbitration. In
this case, the First Respondent’s referral was
to challenge the fairness and lawfulness of the operational
requirements dismissal
at the DRC and, when the DRC found the
dismissal to be fair, sought to appeal the outcome at arbitration.
The prayer of the First
Respondent at arbitration was that the
decision of the DRC be declared invalid and set aside and that it be
replaced with a decision
that the employment contract of the First
Respondent was prematurely unlawfully terminated by the respondent
and the dismissal
of the Appellant was unfair and without just cause.
[31]
The
fairness of an operational requirements dismissal is arbitrable under
the LRA, and a private arbitration award is rendered reviewable
before this Court by section 157(3). Unlawfulness, on the other hand,
is not arbitrable under the LRA. It is the Labour Court or
a civil
court that has jurisdiction to adjudicate such a matter. Section
77(3) of the Basic Conditions of Employment Act
[6]
(BCEA) gives the Labour Court wide powers to hear disputes
“
concerning
a contract of employment
”
and
concurrent jurisdiction with the civil courts on whether the
termination of that contract has been validly cancelled or
breached.
[7]
The Labour Court is
a specialist court with overarching supervision over matters falling
within labour legislation. This ensures
the preservation of coherence
in our labour jurisprudence overseen by judges with specialist
knowledge and experience. Suppose
a narrow interpretation of section
157(3) was taken that the Labour Court could not review an
arbitration award determining the
unlawfulness of the termination of
a contract when it can decide this issue on a direct referral. Such
an approach would diminish
the specialist nature of this Court and
render the court unable to review a matter that at its core is an
employment matter and
which it has jurisdiction to adjudicate. In
this case, it would also result in an incongruous consequence that an
arbitration award
would need to go on review to two different forums:
to the Labour Court and the High Court to attend to fairness and
lawfulness,
respectively. I therefore agree with the purposive
approach taken in
Eskom
v Hiemstra NO and others
[8]
:
‘
[S]ection 157(3)
deserves a purposive interpretation. Clearly, it was intended that if
arbitration is resorted to in a dispute which
the Labour Court could
adjudicate, then, if it is processed by private arbitration under the
Arbitration Act 1965
, the Labour Court would have jurisdiction over
the arbitration proceedings. See the remarks in Landman & Van
Niekerk Practice
in the Labour Courts A13-A14 (revision service 2). I
am satisfied that this Court has jurisdiction to hear the review
application.’
[32] For
these reasons, the review is correctly before this Court.
Whether the
pleadings provide for a
s33
review under the
Arbitration Act
[33
] The
Applicant has, in its oral argument, abandoned its claim under
section 145
and
section 158(1)(g)
of the LRA, as outlined in its
pleadings and heads of argument. It is perplexing that, despite the
First Respondent's specific
objection in his pleadings to the Court’s
jurisdiction regarding
sections 145
and
158
(1)(g), the Applicant
persisted with the review under these LRA sections. The Applicant did
not plead any reliance in the main or
the alternative on
section 33
of the
Arbitration Act in
its replying affidavit.
[34] The
first mention of the Applicant’s reliance on
section 33
of the
Arbitration Act appears
in paragraph 34 of the Applicant’s
heads of argument, which reads:
‘
To conclude this
section, the applicant contends that this Honourable Court retains
the jurisdiction to review the arbitrator’s
award and that the
review can proceed in terms of
section 158(1)(g)
of the LRA,
alternatively in terms of
section 33
of the
Arbitration Act. The
latter section remains available to the Club because what is before
this court is a review.’
[35] Argument
is not evidence and is merely persuasive commentary concerning
questions of fact and
law. This cannot replace pleadings which
provide the factual basis and evidence for its case. To allow this
would deprive the respondent
of the opportunity to reply and refute
or comment to the allegations contained in the statements submitted
through argument.
[36] The
First Respondent argued that the Applicant’s belated attempt to
introduce reliance on
section 33
of the
Arbitration Act should
not be
condoned.
[37] The
Applicant, in turn, argued before the Court that the notice of motion
provides that this is
a review.
[38]
In
Transnet (Ltd) v Hospersa and Another,
[9]
the Court deals with a
case where there was a mischaracterisation of the nature of the
review, concluding that it is the substance
rather than the legal
label that must prevail:
‘
I turn now to the
other preliminary issue. The applicant characterised its application
as “Notice of application for a review
section 158(1)(g)
and
145
”. Mr Jammy, for the applicant submitted, correctly, that it
was clear that what was intended by the applicant was to reflect
that
it was an application in terms of
section 33
of the
Arbitration Act.
He
submitted further that if Hospersa considered the
mis-characterisation in the applicant’s papers as fatally
defective to
the application, then a formal amendment of the heading
was necessary. In my view mis-characterisation of the nature of the
review
is not fatal. This court has to look beyond the legal label
and consider the substance of the application. To look no further
than
the heading would be unduly formalistic.’
[39] I
agree with this approach. The failure of the Applicant to rely on
section 33
in its pleadings does not detract from its intention to
review the award.
[40] The
Applicant did mischaracterise the nature of the review, but it
intended to review the award,
and the jurisdiction is embedded in
section 157(3)
of the LRA, read with
section 158(g).
The Merits of the
Review
[41] Before
this Court is whether the Arbitrator misconducted himself, exceeded
his powers or committed
a gross irregularity in finding that the
dismissal of the First Respondent was unlawful. The basis of the
Applicant’s complaint
against the award seems to span between
misconduct, exceeding his powers and a gross irregularity in
section
33.
[42]
Section
33(1)
of the
Arbitration Act provides
:
‘
33. Setting
aside of award
(1) Where—
(a) any
member of an arbitration tribunal has misconducted himself in
relation to his duties as arbitrator
or umpire; or
(b) an
arbitration tribunal has committed any gross irregularity in the
conduct of the arbitration
proceedings or has exceeded its powers; or
(c) an
award has been improperly obtained,
the court may, on the
application of any party to the reference after due notice to the
other party or parties, make an order setting
the award aside.’
[43] The
National Soccer League Handbook provides, in paragraph 24.1, that the
“
Dispute Resolution Chamber may be the subject of an appeal
or review to the SAFA Arbitration Tribunal
”. The
Arbitrator’s power is derived from the SAFA Disciplinary Code,
which provides for the Arbitration Tribunal. Mr
Joseph argued that
this provision did not apply. However, the pleadings confirm
otherwise. In the answering affidavit in paragraph
34.12, the First
Respondent submitted that “… t
he Arbitrator’s
powers are recorded in the SAFA Disciplinary Code, art 81
…”
This is not disputed in the Applicant’s reply. In its reply,
the Applicant in fact relies on the article,
submitting that the
proceedings will be heard
de novo
.
[44] The
SAFA Disciplinary Code gives the Arbitrator a broad scope of
procedural powers:
‘
9. The
arbitration shall be carried out informally and in a summary manner.
It will not be necessary
to observe strict rules of evidence or
procedure.
10. The
arbitrator shall not be confined to the record before the Appeals
Board and shall have the
right to call for any papers, records or
other evidence as s/he may deem necessary to reach his finding. The
chairpersons of previous
Disciplinary Committee or the Appeal Board
may be called to explain their decisions at the sole discretion of
the arbitrator.
11. Notwithstanding
anything contained in these Rules, the powers of the arbitrator shall
be wide and
shall be determined by the arbitrator at his sole
discretion.’
[45] The
Arbitrator, in paragraph 10 of his award, confirms the issues to be
determined as follows:
‘
10. Whilst
parties filed extensive heads of arguments with case law and
submitted an extensive record
with volumes of paper, the issue
underpinning the dispute it's a simple and narrow one. The issue is
whether the club's unilateral
termination of the contract it
concluded with the player before the expiry of the contract duration
on 30 June 2022 is lawful.
Whether or not the termination of the
contract was lawful may encompass elements of fairness. This issue is
determined with reference
to the written contract itself, read
together with the other instruments which it embodies.’
[46] The
section 33 review test is distinguished from that provided in
sections 145 and 158(1)(g) of
the LRA in that it is referred to as a
narrow test of review. In other words, the reasonableness standard
does not apply, and a
court will not interfere with a discretion
exercised by an arbitrator merely because the finding is erroneous or
unreasonable.
Courts are, therefore, slow to interfere with private
arbitration, distinguishing the considerations that apply to
mandatory arbitration
by the CCMA, bargaining council or private
agency exercising public power and protecting a constitutional right.
[47] The
Applicant accepts that the review is in terms of
section 33
of the
Arbitration Act and
, therefore, the test developed by the courts of a
reasonable decision maker for purposes of reviews in terms of
sections 145
and
158
does not apply. The Applicant’s pleadings,
framed to provide for a review in terms of
section 158(1)(g)
, read
with
section 145
, refer to the reasonable decision-maker test. The
Applicant’s heads of arguments to review on this basis fall
away with its
abandonment of a review under the LRA. The Applicant,
however, pursued in its oral argument that the evidence before the
Arbitrator
could not reasonably result in him finding that the
termination of the contract was unlawful. This misdirection and
persistence
to squeeze the reasonable decision-maker test into
section 33
renders their substantive review an own goal.
[48] The
Applicant argued that the Arbitrator misconceived the entire nature
of the enquiry and, therefore,
committed misconduct by assessing the
Applicant’s position and FIFA’s position on the
termination for just cause rather
than applying South African law and
deciding whether the dismissal was unfair as provided for by
section
189
of the LRA. As I understood it, it was also submitted in oral
argument that the Arbitrator misconstrued his powers by determining
the lawfulness of the retrenchment rather than fairness and, by doing
so, committed a latent gross irregularity and exceeded his
powers. In
other words, in adjudicating the matter as a contractual dispute
instead of an employment-related dispute, the Arbitrator
indicates
that he “mis-appreciated” the facts before him and
misunderstood the dispute to be determined.
[49] Both
these bases for review fall far short of a reason for review.
[50]
In
Stock
Civils Engineering (Pty) Ltd v RIP NO and another
[10]
,
the Court, after articulating the test for review based on misconduct
as this:
‘
In
my view the following principles emerge: A court is entitled on
review to determine whether an arbitrator in fact functioned
as
arbitrator in the way that he upon his appointment impliedly
undertook to do, namely by acting honestly, duly considering all
the
evidence before him and having due regard to the applicable legal
principles. If he does this, but reaches the wrong conclusion,
so be
it. But if he does not and shirks his task, he does not function as
an arbitrator and reneges on the agreement under which
he was
appointed. His award will then be tainted and reviewable. It is
equally implicit in the agreement under which an arbitrator
is
appointed that he is fully cognizant with the extent of a limits to
any discretion or powers he may have. If he is not and such
ignorance
impacts upon his award, he has not functioned properly and his award
will be reviewable. An error of law or fact may
be evidence of the
above in given circumstances, but may in others merely be part of the
incorrect reasoning leading to an incorrect
result. In short,
material malfunctioning is reviewable, a wrong result
per
se
not
(unless it evidences malfunctioning). If the malfunctioning is in
relation to his duties, that would be misconduct by the arbitrator
as
it would be a breach of the implied terms of his appointment.’
[51] Nothing
in the pleadings or arguments suggests that the Arbitrator engaged in
improper conduct
or acted with any malfeasance or dishonesty. There
was no material malfunctioning. The Arbitrator functioned within the
vast scope
of his duties outlined in the Handbook.
[52] I
now consider whether the Arbitrator’s consideration of just
cause resulted in misconduct.
[53] The
basis for considering just cause comes from the Cape Town City
Sporting Club (Pty) Ltd Employee
Handbook, which has been
contractually incorporated into the fixed-term contract between the
parties.
Rule 41
in this Handbook deals with professional players’
contracts and states:
‘
41.2. A
contract of employment of a player must be consistent with South
African law, the NSL Handbook,
the statutes of SAFA and FIFA, and may
not exceed a period of 5 years, inclusive of any option to renew,
from its effective date.’
[54] It
was not in dispute before the Arbitrator that these instruments in
this clause from the Handbook
are binding on the parties. The
provisions of article 14(1) of the FIFA statutes are explicit. It
states that:
‘
a contract may be
terminated by either party without consequences of any kind (either
payment of compensation or imposition of sporting
sanctions) where
there is just cause.’
[55] FIFA
also states that financial reasons do not constitute just cause.
[56] The
Arbitrator correctly frames just cause by stating that it depends on
the facts and circumstances
of each case. He evaluates the facts of
the retrenchment to conclude that the common cause facts by the
parties do not demonstrate
the existence of just cause by the
Applicant when it prematurely terminated the player’s contract.
In doing so, he considers
the requirements of
section 189
and whether
proper consideration was given to the items listed in
section 189(3)
,
therefore applying the prescripts of South African law, which he
found to be applicable, against the contractual backdrop provided
by
the contract of employment, the NSL Handbook, which expressly
provides that the procedure to be followed for operational
requirements
is set out in the LRA, and the SAFA and FIFA
regulations.
[57] The
Arbitrator found that the Applicant fell materially short of the
procedural prescripts embodied
in
section 189(3)
of the LRA. The
Arbitrator concluded that no selection criteria were discussed with
the player (and that he was selected as he
does not fit into the
plans of the coach is not a justifiable reason), they never offered
the player any alternatives to termination
of his contract, they
failed to provide any documentation in support of the Applicant’s
alleged financial reasons or to demonstrate
their financial distress
or any of the information requested by the First Respondent. The
Arbitrator concluded that if this was
the basis for the retrenchment,
the Applicant was wrong in refusing to provide the player with
financial information. The Arbitrator
stated that the Applicant
failed to place any evidence before the DRC to prove that the club
was in financial distress, and the
DRC was incorrect to rely
sweepingly on COVID-19 to assert this. It further stated that
reliance on one sponsor pulling funding
was insufficient for the
Applicant to rely on financial distress.
[58] The
Arbitrator determined that:
‘
[43] …
The club has therefore failed simply at the level of common cause
facts, and on the requirement
of section 189(2) read with
section
189(3)
to discharge its onus that it was entitled to prematurely
terminate the fixed term contract that it concluded with the player.
The club’s handbook provides in paragraph 31 that termination
of contract may be effected due to operational requirements
in terms
of
section 189
of the LRA. This being a contractual terms
(sic)
,
a failure by the club to comply with clause 31 of the club’s
handbook and its failure to adhere to the requirements of
section 189
of the LRA constitutes a material breach of the contract. The club
simply failed to discharge the onus resting on it that it complied
with
section 189
of the LRA, and that retrenchment was justifiable in
the circumstances. Accordingly, the club has failed to demonstrate
just cause.
This renders the termination of the contract unlawful.
The club’s pre-mature termination of the player’s fixed
term
contract is a breach of contract entitling the player to
contractual damages.’
[59] The
Arbitrator uses
section 189(3)
to determine whether the contractual
requirement of good cause has been met against the backdrop of the
contractual requirements
between the parties. Therefore, the
Applicant’s contention that the Arbitrator failed to apply
South African law is unsustainable.
[60] The
Arbitrator went on to find that it was common cause that FIFA
statutes provide that termination
due to financial reasons does not
constitute just cause. As this was the basis for the termination of
the contract, this renders
the termination unlawful and a breach.
[61] The
Applicant argued that it could, under the LRA, terminate the First
Respondent’s contract
for financial reasons in terms of the LRA
because the South African legal position takes precedence over the
FIFA position. The
Arbitrator took the view that the FIFA position
does not conflict with South African law and, therefore, should
apply. The contention
that the Arbitrator “mistakenly
concludes” this is also unsustainable, and even if this was the
case, does not meet
the test for review in terms of
section 33.
[62]
In
South
African Football Association v Mangope
[11]
,
it was held that:
‘
The lawfulness of
the termination of the contract therefore depends on the
justifiability of the reasons for it. Where the employer
terminates
the contract without lawful reason, the employer will have repudiated
the contract permitting the employee to sue for
specific performance
or damages.’
[63] The
Arbitrator found that the Applicant fell short of the contractually
entrenched procedure to
invoke the operational requirement dismissal
and consequently breached the contract. The Arbitrator’s
conclusions fall within
the realm of the evidence before him and with
due regard for the legal principles.
[64]
Turning
to whether any of the Applicant’s complaints constitute a gross
irregularity,
Telcordia
Technologies Inc v Telkom SA Ltd
[12]
establishes the
principles that the courts have applied consistently. The review
ground of gross irregularity is procedural and
not substantive in
that it relates to the conduct of the proceedings and not the
decision on the merits. An arbitrator’s
conduct will amount to
a gross irregularity if it prevents a fair trial. Gross
irregularities may be patent and occur during the
trial as acts of
procedural unfairness or latent and occur in the mind of the judicial
officer.
[65]
In
Goldfields
Investments Ltd v City Council of Johannesburg and another,
[13]
the court stated:
‘
These
are only ascertainable from the reasons given by him. In neither case
need there be intentional arbitrariness of conduct or
any conscious
denial of justice. The crucial question is whether the irregularity
prevented a fair trial of the issues. A wrong
conclusion on law or
fact does not necessarily lead to a conclusion that there has not
been a fair trial. But if a mistake of law
leads to a material
misconception of the nature of the inquiry or of the court’s
duties in connection therewith, then the
losing party has not had a
fair trial.’
[66] The
Applicant argued in their pleadings that the Arbitrator materially
erred on the facts, “misconstrued
the test” and
“mis-appreciated” the proceedings before him because the
proceedings were
de novo
. This would be construed as a latent
gross irregularity. Therefore, his reliance on and reference to the
DRC proceedings, as a
review, were wrong. This argument cannot be
sustained considering the Arbitrator’s wide discretion in the
Disciplinary Code,
including but not limited to, calling previous
presiding officers to explain their decisions and determining his
powers at his
“sole discretion”. It was apparent from the
arbitration award that the Arbitrator determined the matter as an
appeal
of the decision of the DRC. It was well within his sole
discretion to consider the DRC proceedings and the submissions before
the
DRC as well as any other submissions that he considered relevant
to reaching his decision.
[67]
Where
an arbitrator’s award is not in keeping with what was pleaded
and with the common cause facts, it is a gross irregularity.
[14]
The Applicant also submitted that the lawfulness of the termination
of the contract was not before the Arbitrator; only the fairness
was
to be determined in terms of the LRA, making it reviewable. The
overwhelming evidence before this Court, including in the record
of
the arbitration proceedings, reflects that not only was unlawfulness
and unfairness before the DRC to determine but also central
to what
the Arbitrator was expected to determine. The statement of claim
before the DRC claimed compensation equivalent to 12 months’
salary for substantive and procedural unfair dismissal and severance
pay, as well as a claim that the termination of his contract
was
unlawful, claiming damages in the sum of R3 630 000. The
transcript of the arbitration proceedings reveals that Mr
May, who
represented the Applicant in the arbitration proceedings, in his
opening address at the arbitration, stated the following
as the
issues to be determined:
‘…
I will
highlight what my learned colleague highlighted as well. And I do
agree that the central issue to be determined is, one,
whether there
was an unlawful termination of a fixed term contract, and,
alternatively, well, I understood it as being on the alternative,
also whether there was an unfair termination of a fixed term
contract…’
[68] The
Arbitrator also engages the parties in the arbitration to confirm his
understanding that lawfulness
and unfairness are before him.
[69] It
is, therefore, quite evident that what was before the Arbitrator was
the lawfulness and unfairness
of the termination of the First
Respondent’s contract of employment and that the First
Respondent sought remedies that addressed
these complaints.
Therefore, this submission by the Applicant is quite simply factually
incorrect.
[70] The
Arbitrator's findings not only did not misconstrue the facts before
him, but his findings
seem eminently reasonable considering the
submissions before him. Even if this was not the case, nothing points
to the Arbitrator’s
conduct constituting misconduct or a gross
irregularity, nor did he exceed his powers. The procedural way he
conducted the proceedings
was well within his mandate, which he
executed honestly. The proceedings were fair, and his award
considered the substantive evidence
and the arguments before him.
[71]
Therefore,
based on all the reasons set out above, I conclude that the
Arbitrator’s award is not reviewable.
Costs
[72] The
First Respondent sought that this Court deviate from the practice
that employment case costs
do not follow the result and issue
punitive costs against the Applicant.
[73] The
awarding of costs in the Labour Court is governed by s 162 of LRA,
which provides that, in
making orders for payment of costs, the Court
must regard the requirements of law and fairness. In deciding whether
to order payment
of costs, the court may consider, among others, the
parties' conduct in proceeding with the matter before the court and
during
the proceedings. Therefore, this Court has wide discretion
when it comes to the issue of costs.
[74]
As
held in
Booi
v Amathole District Municipality and Others
[15]
:
‘
However,
this is a labour matter and this court’s jurisprudence is
settled: the ordinary rule that costs follow the result
does not
apply in labour matters. Rather, what emerges from the provisions of
the LRA and the jurisprudence is that courts, when
awarding costs in
labour disputes, must consider what fairness demands and err on the
side of not discouraging parties from approaching
the courts for the
peaceful resolution of labour disputes. Further, if costs are to be
awarded in labour matters, there must be
reasons that justify a
court’s decision to depart from the position that a losing
party should not be mulcted in costs in
labour disputes…’
[75]
In
Vermaak
v MEC for Local Government and Traditional Affairs, North West
Province and Others,
[16]
the court outlined the
principles for awarding punitive costs:
‘…
The scale
of attorney and client is the highest scale possible that a litigant
can be ordered to pay. It is an extraordinary one
which should be
reserved for cases where there is clearly and indubitably vexatious
and reprehensible conduct on the part of a
litigant. … The
learned authors of
Erasmus
Superior Court Practice
list various circumstances in which the courts have, over the years,
awarded costs on an attorney and own client scale. One of
the
instances is where a party’s conduct has been found to be
“unconscionable, appalling and disgraceful”.’
[76] In
the present case, the matter was poorly pleaded and didn’t have
any chance of meeting
the narrow test of review as prescribed in
section 33. In my view, that can hardly be described as
“unconscionable, appalling
or disgraceful”.
[77]
Although
punitive costs are not warranted, this case justifies a departure
from the ordinary principle that costs do not follow
the result.
Firstly, despite the First Respondent persisting in its pleadings
that the review could not fall under the LRA, the
Applicant sought to
include reference to section 33 as an afterthought in its heads of
argument and only in oral argument agreed
to abandon its review under
the LRA.
[78] The
Applicant’s submission that the Arbitrator exceeded its powers
and misconstrued the
issues by considering the unlawful termination
of the contract when this was plainly before him reflects a poorly
considered attempt
at reviewing an award, if not disingenuous.
[79] The
Arbitrator’s conduct cannot possibly be described as
misconduct, nor did he do anything
that constituted something that
remotely could be a gross irregularity.
[80]
The
Applicant’s case on the merits was also, truthfully described,
hopeless.
[81] I
also consider that the First Respondent is an individual who has had
to fund this litigation.
[82]
For
these reasons, I exercise my discretion by deciding that a costs
award against the Applicant is justified, and the Applicant
should be
ordered to pay the First Respondent’s costs.
Order
1. The
jurisdictional issues raised by the First Respondent are dismissed.
2. The
review application is dismissed.
3. The
Applicant is ordered to pay the costs of the First Respondent.
T Venter
Acting Judge of the
Labour Court of South Africa
Appearances:
For the
Applicant:
Brenton Joseph SC
Instructed
by:
BDP Attorneys
For the First
Respondent: Adv C Goosen
Instructed by:
Van Gaalen Attorneys
[1]
Act 66 of 1995, as amended.
[2]
Act 42 of 1965.
[3]
[2009]
ZACC 26; 2010 (1) SA 238 (CC) at para 75.
[4]
Chirwa
v Transnet Limited and Others
[2007]
ZACC 23
;
2008 (3) BCLR 251
(CC) at paras 155 and 169, referred to in
above; also see
Makhanya
above
n 4 at paras 34 and 71.
[5]
[1998] ZALC 150
; (1999) 20 ILJ 388 (LC) at 389I – 390A.
[6]
Act 75 of 1997. Section 77(3) reads: “
The
Labour Court has concurrent jurisdiction with the Civil Courts to
hear and determine any matter concerning a contract of employment,
irrespective of whether any basic condition of employment
constitutes a term of that contract
.”
[7]
See:
SA
Municipal Workers Union on behalf of Morwe v Tswaing Local
Municipality and others [2022] ZALAC 107; (2022) 43 ILJ 2754 (LAC);
Makhanya
v University of Zululand
[2009]
ZASCA 69; 2010 (1) SA 62 (SCA) at para 18;
Rand
Water v Stoop and another
[2012]
ZALAC 32; (2013) 34 ILJ 576 (LAC) at para 33;
City
of Tshwane Metropolitan Municipality v Campanella NO and Others
(JA36/2002)
[2003] ZALAC 19 (20 November 2003) at para 11.
[8]
(1999) 20 ILJ 2362 (LC) at para 14.
[9]
[1999] ZALC 18
(12 February 1999) at para 7.
[10]
[2002] ZALAC 3
; (2002) 23 ILJ 358 (LAC) at para 52.
[11]
[2012] ZALAC 27
; (2013) 34 ILJ 311 (LAC) at para 38.
[12]
[2006] ZASCA 112; [2007] 2 All SA 243 (SCA).
[13]
1938
TPD 551,560.
[14]
See:
Steeledale
Cladding (Pty) Ltd v Parsons NO and Another
2001
(2) SA 663
(D).
[15]
[2021] ZACC 36
; (2022) 43 ILJ 91 (CC) at para 60.
[16]
(JA15/2014)
[2017] ZALAC 2
(10 January 2017) at para 13.