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[2024] ZALCJHB 198
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CMC Global Outsourcing (Pty) Ltd and Another v Van Niekerk and Others (JR408/22) [2024] ZALCJHB 198 (8 May 2024)
FLYNOTES:
LABOUR – Temporary employment services –
Client
deemed sole employer
–
Principles
relating to existence of dismissal considered – Employment
relationship – Section 198A(3)(b) of LRA
considered –
Client of TES deemed to be sole employer – No further
employment relationship with TES – Cannot
rely on initial
contract concluded between TES and employee – No dual
employment relationship exists – Review
upheld in part and
dismissed in part – Labour Relations Act 66 of 1995, s
198A(3)(b).
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case No: JR 408 / 22
In
the matter between:
CMC
GLOBAL OUTSOURCING (PTY) LTD First
Applicant
RTT
GROUP (PTY) LTD
Second Applicant
and
EUGENE
VAN NIEKERK
First Respondent
NOMUSA
MBHELE
N.O.
Second Respondent
COMMISSION
FOR CONCILIATION, MEDIATION
AND
ARBITRATION Third
Respondent
Heard
:
25 October 2023
Delivered
:
8
May 2024
T
his
judgment was handed down electronically by circulation to the parties
and legal representatives by email. The date and time
for hand-down
is deemed to be 8 May 2024
Summary:
Review
–
matter concerns issue as to whether dismissal
exists – constitutes issue of jurisdiction – principles
considered –
test for review – s 145 of LRA 1995 –
reasonable outcome test does not apply – review considered on
the basis
of a
de novo
determination of whether
award is right or wrong
Nature
of dispute – principles considered – dispute one of
dismissal for operational requirements – CCMA has jurisdiction
– jurisdictional point dismissed
Employment
relationship – s 198A(3)(b) of LRA considered – client of
TES deemed to be sole employer – no further
employment
relationship with TES – cannot rely on initial contract
concluded between TES and employee – no dual employment
relationship exists
Dismissal
– principles relating to existence of dismissal considered –
no evidence of dismissal of employee by client
– no conduct by
client bringing about termination of employment – dismissal not
proven – finding of arbitrator
that employee dismissed by
client in error and reviewable – relief afforded against client
incompetent and set aside
Employment
contract – employee concluding new employment contract with TES
– nothing in s 198A(3)(b) prohibiting such
contract –
finding by arbitrator that such contract invalid erroneous –
employee entitled to take up employment with
TES again even after
application of s 198A(3)(b)
Dismissal
– employee dismissed by TES after taking up employment with TES
– such dismissal for operational requirements
– dismissal
both substantively and procedurally unfair – finding of
arbitrator of unfair dismissal unassailable on
review – award
of arbitrator in this respect upheld
Dismissal
– relief for unfair dismissal – compensation sought –
employee entitled to compensation award for unfair
dismissal against
TES – principles considered – compensation awarded by
arbitrator excessive and irregular –
compensation award
substituted
Review
of award – finding by arbitrator against client of TES wrong –
review application granted in his respect –
finding of unfair
dismissal against TES justified and compensation awarded –
award substituted with determination that employee
unfairly dismissed
by TES and that TES pay employee compensation
Judgment
SNYMAN,
AJ
Introduction
[1]
In
this case, the applicants have brought an application in terms of
section 145 as read with section 158(1)(g) of the Labour Relations
Act (LRA),
[1]
to review and set
aside an arbitration award handed down by the second respondent, in
her capacity as an arbitrator of the Commission
for Conciliation,
Mediation and Arbitration (CCMA), being the third respondent.
[2]
The dispute at hand concerns an unfair dismissal dispute pursued by
the first respondent to the CCMA, which dispute was pursued
against
both the first and the second applicants. It is this unfair dismissal
dispute that ultimately ended up before the second
respondent for
arbitration.
[3]
In an arbitration award dated 13 February 2022, the second respondent
made a number of pertinent findings. Firstly, the second
respondent
held that the first respondent’s current contract of employment
with the first applicant was null and void and
that the second
applicant was his employer. Secondly, the second respondent held that
the first respondent’s employer was
the second applicant and
that he had been dismissed by the second applicant for operational
requirements. And finally, the second
respondent concluded that the
first respondent’s dismissal was both substantively and
procedurally unfair, and she ordered
that the second applicant pay
compensation to the first respondent in the sum of R150 000.00,
being an amount equivalent to
10(ten) months’ salary.
[4]
The arbitration award was received by the applicants on 13 February
2022. On 1 March 2022, the applicants’ review application
was
filed, in which the applicants sought to review and set aside the
arbitration award of the second respondent. The review application
has therefore been filed within the time limit as contemplated
section 145(1) of the LRA and is properly before Court.
[5]
I will now proceed to decide the applicants’ review application
by first setting out the relevant background facts. For ease
of
reference, I will refer to the first applicant as ‘
CMC
’
and the second applicant as ‘
RTT
’, and these two
parties jointly as ‘
the applicants
’.
The
relevant background
[6]
CMC conducts business as a temporary employment service (TES). RTT is
a freight, transport and logistics business, and is a client
of CMC,
with CMC providing employees to RTT from time to time. CMC has a
number of other clients as well, to whom it also provides
employees
as a TES.
[7]
The first respondent was employed by CMC on 15 February 2021 in terms
of a written contract of employment. The first respondent
was then
placed by CMC with RTT, dedicated to the ‘
OnDemand Sixty60
’
operations of RTT. He rendered services initially as a compliance
officer in these operations, and later as a quality officer,
earning
a remuneration of R15 000.00 per month. This function was in
essence a controlling function relating to independent
contractor
motorcycle driver utilized by RTT in these operations.
[8]
The 15 February 2021 contract of employment between CMC and the first
respondent specifically records that CMC is in the business
of a TES
service to clients, and that the first respondent will be placed at a
client of CMC accordingly, which in this case is
as set out above.
Clause 2.3 of this contract of employment stipulates that after three
consecutive months, the first respondent
would be deemed to be
employed by the client (RTT) for the purposes of the LRA. However,
clause 2.3 goes further and records: ‘…
This does not
mean that the company will cease to be your employer after these 3
(three) months nor does it mean that there will
be a transfer of
employment to the client after these 3(three) months …
’.
Clause 2.4 records that in terms of the commercial agreement between
CMC and RTT, CMC would remain responsible for all
industrial
relations functions relating to the first respondent. The first
respondent’s remuneration is paid by CMC.
[9]
There were further specific conditions of employment pertaining to
the first respondent stipulated in annexure “A”
to the 15
February 2021 contract of employment. In clause 3 of this annexure,
it is recorded as follows:
‘
The
employee agrees and understands that he will initially be deployed as
compliance officer at On Demand Sixty 60, however also
agrees and
understands that he may be transferred and redeployed at other CMC
clients / sites at the sole discretion of CMC (Pty)
Ltd subject to
varying employment terms and conditions due to changing operational
requirements.’
[10]
The first respondent remained placed on the OnDemand Sixty60
operations until August 2021, when it appeared that operational
circumstances
at RTT changed, in that the OnDemand Sixty60 operations
diminished to the extent that a controlling function was no longer
required.
As a result, Gerrit Duvenhage (Duvenhage) from CMC went to
the site at RTT to remove the first respondent off site for
deployment
elsewhere. CMC sought to apply clause 3 of annexure “A”
to the contract of employment contract of 15 February 2021,
in this
regard, and thereby transfer the first respondent back to CMC, with
effect from 1 September 2021. This move was perpetrated
by CMC of its
own accord, and Duvenhage at the time conveyed no reasons to the
first respondent for this transfer, as he believed
CMC was entitled
to do so in terms of the contract of employment. But when the first
respondent left the RTT site with Duvenhage,
the first respondent did
refer to a number of difficulties he had with the people he worked
with at RTT.
[11]
Pursuant to the aforesaid transfer, the first respondent then
actually started working for CMC as a nightshift manager at the CMC
head office in Bedford Avenue. A new contract of employment was
entered into between the first respondent and CMC, or better stated,
one of its subsidiaries called CMC Labonte Prop (Pty) Ltd, also on 1
September 2021, for this purpose.
[12]
In terms of this 1 September 2021 contract of employment, which also
contains an annexure “A”, and was signed by the
first
respondent, the first respondent is appointed as a night shift
manager at the same salary of R15 000.00 per month. This
contract of employment contained similar provisions to the 15
February 2021 contract of employment where it comes to placement
with
a client beyond three months. Therefore, the first respondent was
once again employed by CMC with effect from 1 September
2021.
[13]
According to Duvenhage, the appointment of the first respondent as
night shift manager was pending an alternative placement for
the
first respondent at another client of CMC, which client had a
delivery service similar to that the first respondent was placed
in
at OnDemand Sixty60. However, this placement fell through, and
according to CMC, that left it without an actual income earning
placement immediately available for the first respondent.
[14]
It is then that the CMC instituted operational requirements
consultation proceedings in terms of section 189 of the LRA in
respect
of the first respondent. It issued the first respondent with
a notice as contemplated by section 189(3) of the LRA on 8 September
2021. In terms of this notice, it was stated that the first
respondent had been redeployed from OnDemand Sixty60 to head office
due to operational issues, however those same issues have again
arisen. This refers to the aforesaid envisaged posting having fallen
through. It was stated that it was contemplated that the first
respondent’s employment may be terminated due to operational
requirements. It was indicated that the first respondent would be
consulted on alternatives to dismissal, however if termination
of
employment was on the cards, it was envisaged that this would happen
on 8 October 2021.
[15]
According to Duvenhage, and in the consultation on 8 September 2021
when the first respondent was presented with the section 189(3)
notice, the first respondent informed him that CMC should continue to
process his termination of employment and that the issuing
of his
exit documents, his UI19 and provident fund withdrawal be expedited.
In a letter dated 9 September 2021, Duvenhage confirmed
this
discussion, and indicated that the first respondent would be
contacted to collect this documentation. It was also indicated
in
this letter that the first respondent would be placed on a priority
list should a future vacancy arise.
[16]
There was another letter by CMC to the first respondent on 13
September 2021, calling on the first respondent to attend a meeting
on 15 September 2021 to discuss the termination of his assignment and
forthcoming re-deployment. The first respondent did not attend
this
meeting. On 16 September 2021, CMC sent another letter to the first
respondent, calling on him to attend a consultation on
20 September
2021. The first respondent did not attend this consultation as well.
I was however common cause that the first respondent
was dismissed on
8 September 2021.
[17]
What next happened is that on 27 September 2021, the first respondent
referred two separate unfair dismissal disputes against both
RTT and
CMC to the CCMA for conciliation. These disputes were allocated case
numbers GAEK 7867 – 21 and GAEK 7868 –
21 respectively.
Both cases were unsuccessfully conciliated on 20 October 2021 and
certificates of failure to settle issued. The
parties then agreed for
both disputes to be consolidated, and in a consolidation ruling dated
20 October 2021, the two disputes
were consolidated under case number
GAEK 7867 – 21. The first respondent then referred this
consolidated dispute to arbitration
on 22 October 2021.
[18]
The dispute came before the second respondent for arbitration on 25
January 2022. The applicants were represented by Duvenhage,
and the
first respondent by an attorney. Following completion of the
arbitration proceedings, and in an award dated 13 February
2021, the
second respondent found that the first respondent had been dismissed
by RTT, and that such dismissal was substantively
and procedurally
unfair. The second respondent made a compensation award against RTT
in a sum of R150 000.00 being an amount
equivalent to 10(ten)
months’ salary. No finding was made against CMC. The applicants
were clearly not satisfied with this
outcome, which led to the
current review application now before me.
Test
for review
[19]
Where
it comes to the review application by the applicants, the test for
review to be applied is trite. In
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others,
[2]
the
Court held that ‘
the
reasonableness standard should now suffuse s 145 of the LRA
’
,
and that the threshold test for the reasonableness of an award was:
‘…
Is
the decision reached by the commissioner one that a reasonable
decision-maker could not reach?...’
[3]
.
This
means that the award in question is tested against all the facts
before the arbitrator to ascertain if it meets the requirement
of
reasonableness.
[4]
In conducting
this test it is always necessary and important for the Court to
enquire into and consider the merits of the matter
and the entire
evidence on record in deciding what is reasonable.
[5]
In
Herholdt
v Nedbank Ltd and Another
[6]
the Court said:
‘
A
result will only be unreasonable if it is one that a reasonable
arbitrator could not reach on all the material that was before
the
arbitrator. Material errors of fact, as well as the weight and
relevance to be attached to the particular facts, are not in
and of
themselves sufficient for an award to be set aside, but are only of
consequence if their effect is to render the outcome
unreasonable. …’
[20]
Based
on the aforesaid, the first enquiry is to establish if there a
failure or error on the part of the arbitrator. Second, and
where
there is such a failure or error, it must be shown that the outcome
arrived at by the arbitrator was unreasonable as a result.
It would
only be if the consideration of the evidence and issues before the
arbitrator shows that the outcome arrived at by the
arbitrator cannot
be sustained on any grounds, and the irregularity, failure or error
concerned is the only basis to sustain the
outcome the arbitrator
arrived at, that the review application would succeed.
[7]
As said in
Anglo
Platinum (Pty) Ltd (Bafokeng Rasemone Mine) v De Beer and Others
[8]
:
‘…
the reviewing court must
consider the totality of evidence with a view to determining whether
the result is capable of justification.
Unless the evidence viewed as
a whole causes the result to be unreasonable, errors of fact and the
like are of no consequence and
do not serve as a basis for a review
…’
[21]
The
above being said as constituting the general test for review, what is
at stake in this case is also an instance where the applicants
contend that the first respondent committed material errors of law.
If an error of law is committed by an arbitrator, and that
error of
law is material, it would render the award arrived at to be
unreasonable, and thus subject to being reviewed and set aside.
[9]
In fact, an award based on a material error of law can be
legitimately challenged not only on the basis of it being
unreasonable,
but also on the basis that the award would be
incorrect.
[10]
The simple
point is that a reasonable arbitrator will not commit a material
error of law. The Court in
Herbert
v Head of Education: Western Cape Education Department and Others
[11]
articulated the following apposite summary:
‘
In
MacDonald’s
Transport
it
was found that the LRA did not contemplate that a CCMA or bargaining
council arbitrator, both statutory roles, would have the
last word on
the proper interpretation of an instrument as this would mean that a
patently wrong interpretation would be left intact,
which ‘would
be absurd’. The wrong interpretation of an instrument by
an arbitrator could therefore constitute
a reviewable irregularity as
envisaged by s 145 of the LRA, in the sense that a reasonable
arbitrator does not get a legal point
wrong. The court concluded that
either ‘the reasonableness test is appropriate to both value
judgments and legal interpretations.
If not, “correctness”
as a distinct test is necessary to address such matters’. This
view was echoed in
NUMSA
, in
which it was stated that an incorrect interpretation of the law by a
commissioner constitutes a material error of law
which ‘will
result in both an incorrect and unreasonable award’, which ‘can
either be attacked on the basis of
its correctness or for being
unreasonable’.’
[12]
And,
as succinctly put in
Ekurhuleni
Metropolitan Municipality v Mabusela NO and Others
[13]
:
‘…
It is now established
that the applicable test on review of a CCMA or bargaining council
arbitrator’s interpretation of a
legal instrument is
correctness and not reasonableness. A reasonable arbitrator is
not supposed to get a legal point wrong
…’
[22]
The
application of the review test
in
casu
however
has one final nuance. It also concerns the issue as to whether RTT in
fact dismissed the first respondent. Whether or not
a dismissal
exists is an issue of jurisdiction. In
Fidelity
Cash Management Service v Commission for Conciliation, Mediation and
Arbitration and Others
[14]
the Court considered the review test postulated in
Sidumo
supra
,
and said:
‘…
Nothing said in Sidumo
means that the CCMA’s arbitration award can no longer be
reviewed on the grounds, for example, that
the CCMA had no
jurisdiction in a matter or any of the other grounds specified in
section 145 of the Act.
If
the CCMA had no jurisdiction in a matter, the question of the
reasonableness of its decision would not arise
…’ (emphasis added)
[23]
The
aforesaid means that where the issue to be considered on review is
about the jurisdiction of the CCMA, it is not about a reasonable
outcome. What happens is that the Labour Court is entitled to, if not
obliged, to determine the issue of jurisdiction of its own
accord. In
doing so, the Labour Court determines the issue
de
novo
in
order to decide whether the determination by the arbitrator is right
or wrong.
[15]
In
SA
Rugby Players Association and Others v SA Rugby (Pty) Ltd and
Others,
[16]
the Court articulated the enquiry as follows:
‘
The
CCMA is a creature of statute and is not a court of law. As a general
rule, it cannot decide its own jurisdiction. It can only
make a
ruling for convenience. Whether it has jurisdiction or not in a
particular matter is a matter to be decided by the Labour
Court …’
The
aforesaid approach has been consistently applied in instances where
the existence of a dismissal was at stake.
[17]
[24]
Accordingly, and in this instance, I shall proceed to decide this
matter based on the different applicable facets of the review
test,
as summarized above.
Analysis
[25]
First
things first. The applicants argued in this Court that the true
nature of the dispute was a dismissal dispute relating to
the first
respondent having been dismissed for making a protected disclosure,
which the CCMA would have no jurisdiction to arbitrate,
as it would
constitute an automatic unfair dismissal which can only be
adjudicated in the Labour Court.
[18]
This contention was raised despite the dispute referred by the first
respondent to the CCMA being an alleged unfair dismissal based
on
operational requirements, which would be an arbitrable dispute, as
the first respondent was the only one affected.
[19]
The dispute was also conciliated and then referred to arbitration on
such basis. In the opening address by the applicants, it was
stated
that the first respondent had been dismissed for operational
requirements. Being legally represented, the first respondent
through
his attorney also made it clear that the dispute concerned a
dismissal for operational requirements. All this seems obvious
as to
what the dispute was all about. But what bedevilled matters is when
the first respondent came to testify in the arbitration,
which I will
turn to next.
[26]
In giving his testimony, the first respondent made much of the fact
that he believed he was removed off site at RTT because he
had made a
protected disclose concerning maleficence committed by managers at
RTT. He in fact gave a detailed exposition as to
why he believed he
had been singled out for untoward treatment because of this. As will
be addressed more fully later in this judgement,
as this testimony
has other implications as well, Duvenhage on behalf of the applicants
immediately took issue with the impact
this evidence and contention
would have on the jurisdiction of the CCMA to arbitrate the matter.
[27]
Ordinarily,
jurisdiction is determined on the basis of the case as pleaded.
[20]
However, and in arbitration proceedings before the CCMA, there are
really no pleadings to speak of. It is therefore true that despite
what may be contained in the referral documents, or the certificate
of failure to settle, the true nature of a dispute may only
emerge
once all the evidence in a particular case has been presented.
[21]
In
September
and Others v CMI Business Enterprise CC
[22]
it
was said that: ‘
In
my view, the commissioner is not bound by a party’s
categorisation of the nature of the dispute. Rule 15 clearly intended
the commissioner to have the right and power to investigate and
identify the true nature of the dispute.
’
Having
so said, the Court then concluded:
[23]
‘
The
general rule is that the referral form and certificate of outcome
constitute prima facie evidence of the nature of
the
dispute conciliated. However, if it is alleged that the nature
of the dispute is in fact different from that reflected
on such
documents, the parties may adduce evidence as to the nature
of the dispute.’
[28]
It is
based on the above principles that the applicants seized on the first
respondent’s testimony referred to above, as basis
to challenge
jurisdiction. I am unpersuaded that there is any merit in this
challenge. First and foremost, the referral documents
cannot be
ignored and clearly identify the dispute as relating to operational
requirements. Secondly, when this issue was raised
in the course of
the arbitration itself, the first respondent, through his attorney,
made it clear that he was not relying on a
dismissal based on having
made a protected disclosure. It was re-affirmed that all the first
respondent was relying on was a dismissal
for operational
requirements. On that basis, Duvenhage for the applicants was
satisfied to proceed with the arbitration. Thirdly,
and in the
absence of pleadings, the opening addresses by the parties in an
arbitration bind the parties in a manner similar to
a pre-trial
agreement.
[24]
Considering
what was said in the opening addresses, the parties effectively bound
themselves to a dispute concerning an unfair
dismissal for
operational requirements having to be decided. And finally, the first
respondent never came out and said his dismissal
was automatically
unfair. In
Buscor
(Pty)
Ltd v Ntimbana NO and Others
[25]
the Court held as follows, which in my view is quite apposite
in
casu
:
‘
This
contention is unsustainable as the individual employees did not
testify, in the arbitration hearing, that their dismissal was
automatically unfair as contemplated in s 187 of the LRA. To the
extent that Buscor was of the view that the nature of
the
dispute was different to that reflected on the referral documents, it
was required to lead evidence, at the arbitration hearing,
on the
real nature of the dispute. Needless to say, it took no such steps.
What
ultimately emerged from the testimony of Buscor’s own
witnesses at the arbitration hearing, is that the individual
employees were dismissed for giving false evidence in the unfair
labour practice arbitration before Commissioner Dibden. As alluded
to
above, this was common cause between the parties. Thus for Buscor to
contend, as it did for the first time in the
review application, that
the real dispute was not an unfair dismissal, but rather an
automatically unfair dismissal, as contemplated
in s 187 of the LRA,
was disingenuous.’
[29]
In the end, it is my view that the jurisdictional objection raised by
the applicants as to the nature of the dispute is opportunistic.
It
is clear that what the parties intended the CCMA to arbitrate was an
unfair dismissal dispute for operational requirements.
The fact that
the first respondent may have held a personal view that his protected
disclosure may have something to do with what
happened, matters not.
The jurisdictional objection is thus dismissed.
[30]
Turning
then to the merits of this case and as a point of departure in
deciding the same, there is no dispute that CMC conducts
business as
a TES and employs and then places employees at its various clients,
which includes RTT. It is also undisputed that
the first respondent
was placed at RTT in such context, and was earning an amount less
than the earnings threshold as prescribed
under section 6(3) of the
Basic Conditions of Employment Act (BCEA).
[26]
It follows that this is an instance where section 198A of the LRA
would find application.
[31]
In
terms of section 198(2) of the LRA,
[27]
when CMC first employed the first respondent to place him at RTT, CMC
was deemed to be the employer of the first respondent, no
matter what
the parties may have contracted. But nonetheless, CMC concluded a
written contract of employment with the first respondent,
in the form
of the 21 February 2021 contract of employment referred to earlier in
this judgment. This employment contract contained
all the ordinary
terms one would associate with an employment contract between
employer and employee. At this point, RTT stood
outside the
employment relationship between the first respondent and CMC, and all
that existed was a contractual relationship between
CMC and RTT in
the form of CMC providing the first respondent as a resource /
service to RTT.
[32]
However,
and because section 198A found application, things changed after the
expiry of three months from the date when the first
respondent was
placed by CMC at RTT, because then he was no longer considered to be
a temporary employee.
[28]
The
basis for this change can be found in section 198A(3) of the LRA,
which reads:
‘
For
the purposes of
this
Act
,
an
employee
-
(a)
performing
a temporary service as contemplated in subsection (1) for the client
is the
employee
of the temporary employment services
in terms of section 198 (2); or
(b)
not
performing such temporary service for the client is-
(i) deemed
to be the
employee
of that client and the client is
deemed to be the employer; and
(ii) subject
to the provisions of section 198B, employed on an indefinite basis by
the client.’
[33]
But what does this change then mean? According to CMC, it means that
RTT was in essence now added as an employer to the relationship
between the parties. This appears clearly from clause 2.3 of the 15
February 2021 contract of employment which actually stipulates
that
after three consecutive months, the first respondent would be deemed
to be employed by RTT, however this does not mean that
CMC would
cease to also be his employer. According to CMC, RTT would be the
employer of the first respondent where it comes to
the actual work to
be provided and all aspects related thereto, whilst CMC would be his
employer where it comes to paying him and
in respect of all
industrial relations and human resources issues. This contention was
also advanced in this Court as one of the
grounds of review, on the
basis that the second respondent is alleged to have erred in applying
section 198A(3)(b) by failing to
appreciate that such section did not
prevent CMC from still remaining as an employer of the first
respondent, even if RTT was deemed
to be the employer. In short, the
case of CMC was that RTT was deemed to the employer in terms of
section 198A(3)(a) ‘
for the purposes of the LRA
’,
and CMC would remain as his employer for everything else.
[34]
The
difficulty with this case of CMC is that it has been disposed of in
the judgment of
Assign
Services
(Pty)
Ltd v National Union of Metalworkers of South Africa and Others
[29]
.
In that case, the TES sought to suggest the exact same kind of
relationship following the application of the deeming provision
in
section 198A(3)(b) making the client the employer. The so-called dual
employment relationship was specifically propagated. The
Court
decisively dealt with this contention as follows:
[30]
‘
A
plain reading of s 198A(3)
(b)
clearly
distinguishes between employees employed by the TES for
temporary work and those deemed to be employed by the
TES's client
where the work is not temporary. Interpreting this section to mean
that the client becomes 'one of the employers'
strains the language
used
.
If
the legislature intended the client to become a joint or co-employer
together with the TES, it could easily have provided
for the
client to 'also' be the employer.’
The
Court concluded:
[31]
‘
Regard
being had to the language employed in s 198A(3)
(b)
read
with ss 198 and 198A, the following is discernible …
(c)
Section 198A(3)
(a)
provides that, when vulnerable
employees are performing a temporary service as defined, they
are deemed to be employees
of the TES as contemplated in s 198(2).
(d)
Section 198A(3)
(b)
(i) provides that when vulnerable
employees are not performing a temporary service as defined, they are
deemed to be the employees
of the client.
(e)
The deeming provisions in s 198(2) and s 198A(3)
(b)
(i)
cannot operate at the same time.
(f)
When marginal employees are not performing a temporary service as
defined, then s 198A(3)
(b)
(ii) replaces s 198(2) as the
operative deeming clause for the purposes of determining the
identity of the employer …’
[35]
It is
therefore undeniable that the proposition advanced by CMC that it
somehow remains a co-employer of the first respondent after
expiry of
the three months’ period contemplated by section 198A(3)(b) is
entirely without substance. Once this deeming provision
is triggered,
the first respondent only has one employer, and that employer would
be RTT. But significantly, RTT does not become
the employer as a
result of a transfer of employment from CMC or as a result a new
employment contract coming into existence between
RTT and the first
respondent. What actually happens is an automatic change of employer
identity.
In
casu
,
and as soon as the three months’ deadline is reached, and the
first respondent tis still placed at RTT, he is automatically
deemed
to be an employee of RTT, going forward, on the same terms and
conditions as RTT’s other similar employees.
[32]
[36]
So
where does all of this leave CMC, RTT, the first respondent, and the
various contracts already concluded between them? This situation
is
known as the triangular relationship between the TES, the client, and
the employee. This triangular relationship is not expunged
as a
result of the application of section 198A(3)(b). However, this
continuing triangular relationship does not contemplate an
employment
relationship, as the employment relationship would forthwith only
exist between the client and the employee. The triangular
relationship is, properly considered, a commercial one. This was
recognised in
Assign
supra
,
where the Court held:
[33]
‘
In
evaluating these arguments, it is necessary first to consider the
'triangular' nature of the TES/client/placed employee
relationship. The
triangular relationship exists to split the
functions of the employer between the TES and the client for a fee.
However, the functions
for which the TES is responsible seldom relate
to the actual work of the employee. Its primary responsibilities
are to pay
and manage the human-resources component of employment,
while the day-to-day management, work allocations and
performance
assessment in most circumstances are conducted by the
client only. The client is also responsible for the employees'
working conditions
because employees are placed on the client's
premises. Importantly, the client also has the power to discontinue
the employee's
services. In a sense the TES is merely the third
party that delivers the employee to the client. The employee does
not contribute
to the business of the TES, except as a
commodity. And, on a practical level, the contract between a TES and
a placed worker seldom
constitutes an employment contract …’
[37]
Applying
the above
in
casu
,
it is clear that as from 16 May 2021, the identity of the employer of
first respondent changed, from CMC to RTT, and going forward,
RTT was
his sole employer. However, the first respondent’s relationship
with CMC did not end. For as long as the underlying
commercial
agreement between CMC and RTT continued to exist, CMC would continue
to pay the first respondent and manage human resources
and industrial
relations issues pertaining to him. It is comparable to an outsourced
management service between CMC and RTT, which
enables CMC to deal
with the first respondent within the parameters allowed by the
commercial relationship between CMC and RTT.
For example, CMC may
conduct the disciplining of the first respondent, but it would do so
at the behest and in the name of RTT
as employer, applying RTT’s
rules, and what it does would then be attributed to RTT. As held in
Assign
supra
:
[34]
‘…
Section 198(2) gives rise
to a statutory employment contract between the TES and the placed
worker, which is altered in the event
that s 198A(3)
(b)
is
triggered. This is not a transfer to a new employment
relationship but rather a change in the statutory attribution
of
responsibility as employer within the same triangular employment
relationship. The triangular relationship then continues for
as long
as the commercial contract between the TES and the client remains in
force and requires the TES to remunerate the workers
…’
[38]
The
judgment in
Assign
supra
was
applied by the Court in
Victor
and Others v Chep SA (Pty) Ltd and Others
[35]
as follows:
‘
Section
198A(3)
(b)
of
the LRA enacts another important deeming provision. It provides that
an employee not performing a temporary service for
a client is deemed
to be an indefinitely employed employee of that client and the client
is deemed to be the employer. Accordingly,
while a TES is normally
regarded as the employer of the workforce it procures and provides to
perform work for the client, s 198A(3)
(b)
has
introduced a different arrangement for employees falling below the
specified earning threshold who work for more than
three months. Such
employees are deemed to be the client’s employees. The
contractual relationship between the client and
the placed employee
does not come into existence through a negotiated agreement or
through the normal recruitment processes used
by the client.
Employees paid less than the threshold amount, and who work for a TES
for more than three months, automatically
become employed by the
client …’
[39]
The second respondent was alive to the implications of the judgment
in
Assign
. She correctly held that RTT was the sole employer
of the first respondent. She further correctly decided that that the
provision
in annexure “A” of the 15 February 2021
contract of employment to the effect that the first respondent may be
transferred
and redeployed at other CMC clients / sites at the sole
discretion of CMC, would no longer be valid and binding, for the
simple
reason that CMC was not his employer, and such a provision
could only apply for as long as the first respondent remained
employed
by CMC. One can hardly say that CMC was entitled to rely
upon a contractual provision in an employment contract to instruct
the
first respondent to transfer to one of its other sites or other
clients, where it was no longer the first respondent’s
employer.
Therefore, these findings of the second respondent are
unassailable on review, and CMC cannot rely on this contract as basis
to
transfer the first respondent back to it from RTT.
[40]
However,
the further findings of the second respondent do not fare as well. In
my view, the second respondent takes the implications
of the judgment
in
Assign
and
the provisions of section 198A(3)(b) too far. Section 198A(3)(b) is
designed to protect vulnerable employees from businesses
that seek to
avoid their obligations as employers under the LRA.
[36]
This avoidance tactic was found in the stratagem of using the vehicle
of a TES, which was never really intended for such purpose,
as
follows. Individual persons, who would ordinarily have been employees
in the normal course, are secured through the TES for
the business,
and these persons would work for the business just like an employee
would have done. However, and when the time comes,
for example, to
reduce staff numbers, or dismiss or incapacitate staff members, the
business would simply give notice to the TES
to remove the staff
concerned, and these unfortunate individuals would then face the
prospect of being dismissed without any compliance
with the LRA, and
simply on the basis that the TES would not have a job for them if
they are not placed at the client. So, and
what section 198A(3)(b)
does is to make sure that the client of the TES carries all the
obligations of an employer under the LRA
as soon as it applies, and
thus eliminate the above state of affairs.
[41]
So
then, the first question that must be answered is whether RTT, being
the employer of the first respondent, actually dismissed
the first
respondent. This is because,
in
casu
,
there was no evidence that RTT ever gave the first respondent any
kind of notice or communication that he was dismissed or removed
from
site. Section 186(1)(a) of the LRA
inter
alia
defines
dismissal as: ’
Dismissal
means
that …. an employer has terminated employment with or without
notice’
.
This has been interpreted to mean that the employer engages in an act
which brings the contract of employment to an end.
[37]
In
Ouwehand
v Hout Bay Fishing Industries
[38]
the Court described this as: ‘…
some
overt act by the employer that is the proximate cause of the
termination of employment. …
’
,
whilst in
Chemical
Energy Paper Printing Wood and Allied Workers Union v Astrapak
Manufacturing Holdings (Pty) Ltd t/a East Rand Plastics
[39]
the Court said that: ‘…
the
respondent has taken some initiative to terminate the contract, and
that the respondent's action has caused the termination
…
’
.
It does not matter what kind of label was attached to the act of
termination.
[40]
In
Uthukela
District Municipality v Khoza and Others
[41]
,
Court held as follows in this regard:
[42]
‘…
In short, where the
conduct of an employer brings about the termination of the contract
of employment, whatever the motivation for
this conduct may be, it
has to be considered to be a dismissal of the employee as
contemplated by the LRA. The simple question
that must be asked is
whether, was it not for the conduct of the employer, the employment
contract would have endured. If the answer
is yes, then there has to
be a dismissal. It is important to cast the dismissal net as wide as
possible, because it is an imperative
in terms of the LRA and
Constitution that terminations of employment, as far as possible, be
tested against the fundamental principle
of fairness …’
[42]
It is
of course true that the dismissal of an employee can be brought about
by conduct on the part of the employer. Determining
whether this is
the case would be done by way of an objective assessment of all the
factual circumstances, in order to ascertain
whether the conduct of
the employer is such as to establish a termination of employment.
[43]
As said in
Heath
v A & N Paneelkloppers
:
[44]
‘
W
here
the employer conducts itself in such a fashion that has the cause of
bringing the employment relationship to an end, it
must equally
be considered to be a dismissal. Of course, such kind of behaviour
may be readily apparent …’
[43]
On the facts of this case, there is no indication that RTT sought to
avoid any obligations it may have as an employer, vis-à-vis
the first respondent. There was no written or verbal notice from RTT
to CMC that required that the first respondent be removed
from the
OnDemand Sixty60 deployment, or away from or out of RTT. For all
intents and purposes, RTT never sought to deal with the
first
respondent in any manner designed to bring about the termination of
his employment.
[44]
Duvenhage testified that the first respondent was never dismissed by
RTT and conceded that the first respondent as dismissed by
CMC on 8
September 2021 for operational requirements. According to Duvenhage,
the first respondent was not escorted off site at
RTT by anyone, and
he stated that he came to collect the first respondent and left with
him. In cross examination of Duvenhage,
it was put to him that the
first respondent was taken off site at RTT because of alleged
misconduct and / or a protected disclosure
made by the first
respondent. Duvenhage disputed this, and answered as follows:
‘…
the uptake of the service
of Sixty60 declined. So quite a number of drivers, of independent
contractors were no longer utilised.
So obviously on the management
structure, or the Supervisory level there had to be an adjustment.
He, Mr Van Niekerk, was the last
one in okay. So there was a
possibility and we could have retrenched him from RTT but we decided
not to. Because we said well maybe
he has got potential and we can
utilise him in this other possibility that has developed …’
No
alternative version was put to Duvenhage under cross examination,
other than the allegation of the protected disclosure.
[45]
[45]
In presenting his testimony, the first respondent gave detailed
evidence about what he considered unacceptable conduct of certain
managers at RTT, and that he made a protected disclosure about
fraudulent conduct on the part of such managers. He suggested that
this was the cause why RTT wanted him to be removed. The first
respondent also led testimony on how he was escorted off site at
RTT,
which was not put to Duvenhage under cross-examination to answer. In
fact, Duvenhage’s evidence on how and why he fetched
the first
respondent and came to leave the site was never disputed under cross
examination.
[46]
In essence, and according to the first respondent, his dismissal by
RTT was evidenced by the fact that he was escorted off site
at RTT.
Whilst it is true that he was removed from the site, it is unclear
why the first respondent believed he was so removed.
As touched on
above, the first respondent in his testimony made it clear that he
was removed off site at RTT because of his protected
disclosure.
However, and if his removal from site constituted the act of
dismissal of the first respondent, then the reason for
that dismissed
would be him having made a protected disclosure. As touched on above,
this prompted Duvenhage to complain that the
CCMA would not have
jurisdiction to consider such a dismissal dispute. It must be
emphasized that in response, the first respondent’s
attorney
made it clear that the first respondent’s case was that he was
unfairly dismissed for operational requirements and
that he did not
rely on having made a protected disclosure. That being so, there was
unfortunately no evidence presented by the
first respondent that RTT
wanted him removed from site for this latter reason. In fact, the
only evidence of the dismissal of the
first respondent for
operational requirements was the one by CMC on 8 September 2021. An
apposite illustration of the aforesaid
is evident from the following
exchange between Duvenhage and the first respondent during cross
examination:
‘
MR
DUVENHAGE
:
… Sir did you receive any letter of dismissal from RTT?
APPLICANT
:
No.
MR
DUVENHAGE
: Did you receive any notice that you were to be called
to a meeting to discuss your dismissal?
APPLICANT
:
No.
MR
DUVENHAGE
: So the only dismissal letter that you received was
from CMC, is that correct?
APPLICANT
:
Yes. On the second contract you gave me.’
[47]
In my view, the first respondent did not prove that he had been
dismissed by RTT. The second respondent however found that the
‘
act
of moving
’ the first respondent to CMC from RTT constituted
a dismissal. But this mere eventuality cannot be said to constitute
such
a dismissal. There can be many reasons for it, and these reasons
must be ventilated. The second respondent needed to determine who
perpetrated the act of removal, or at least, at whose behest it was
perpetrated and why. As is clear from the aforesaid summary,
there
was no evidence or indication that RTT was involved in anything
relating to the removal of the first respondent off site
and then his
deployment at the CMC head office. The second respondent does not
even pertinently conclude that RTT dismissed the
first respondent.
Accordingly, I am unconvinced that on the facts, it had ever been
shown that RTT dismissed the first respondent,
and as such, any
finding against it would be incompetent, and thus reviewable.
[48]
I believe that what the evidence showed is that when CMC contemplated
the redundancy of the position of the first respondent with
RTT due
to the decline in the take up of the OnDemand Sixty60 service, it
took the initiative, and based on its view that it could
rely on
clause 3 of annexure “A” to the 15 February 2021 contract
of employment, effectively went and took the first
respondent off
site at RTT. The evidence also shows that CMC acted on the assumption
that it was still in a permanent employment
relationship with the
first respondent and could simply place him where it required. This
view is of course erroneous, but it does
not change that what
happened was not perpetrated by RTT. As an employee of RTT at this
time, it would have been open to the first
respondent to refuse being
removed from site at OnDemand Sixty60 when approached by CMC, for the
simple reason that he was an employee
of RTT and not of CMC. If he
did that, and he was then forcibly, for the want of a better
description, removed off site by CMC
at the behest of or with the
support of RTT, then one would have no hesitation in concluding that
he was dismissed by RTT. But
that is simply not what happened.
[49]
In my view, what the evidence showed is that both CMC and the first
respondent at all times laboured under the apprehension that
the
first respondent was always still a permanent employee of CMC and
that he would fulfil various supervisory positions when needed.
That
he is why he never protested when he was removed from the OnDemand
Sixty60 posting. He understood he would be given a new
posting when
removed from OnDemand Sixty60. In that context, and on 1 September
2021, he signed a new contract of employment as
a nightshift manager
at the same salary, posted at the CMC head office, which once again
confirmed his status as permanent employee
of CMC. This placement was
a temporary measure until he could be placed at a specific post at a
client. Had the events that then
transpired at CMC in September 2021
giving rise to the dismissal of the first respondent not happened, I
am quite sure there would
have been no claim of unfair dismissal by
the first respondent against RTT. I am convinced that the reliance on
section 198A(3)(b)
was an
ex post facto
stratagem, thought of
by the first respondent’s attorneys, in seeking to challenge
his dismissal after the fact.
[50]
The point is that even with the first respondent being a permanent
employee of RTT as at the end of August 2021, there was nothing
in
law preventing him from leaving that employment and once again taking
up employment with CMC.
Assign supra
does not stand in the way
of such an eventuality. The reason is because such a decision is in
the hands of the first respondent,
and cannot be forced upon him by
CMC. If he does not agree, then he remains employed by RTT, and any
attempt to take him away from
RTT could be seen as a dismissal by
RTT. But if he agrees to take up employment at CMC, then the identity
of his employer is substituted
by agreement, and of his own volition.
The latter event is what happened
in casu
. It is important to
appreciate that I am not saying, at all, that employees can contract
out of the application of section 198A(3)(b).
That obviously is not
allowed, as it would undermine the very protection that section seeks
to bestow. What I am saying is that
an employee that is by law deemed
to be an employee of the client, given a choice, can still agree to
revert back to employment
with the TES. It is surely similar to an
employee deciding to take up a job at a previous employer.
[51]
It is in the above context that the second respondent materially
erred. According to the second respondent, the application of
section
198A(3)(b) rendered the contract of employment concluded with the
first respondent on 1 September 2021 to be null and void.
However,
this finding would be wrong. There is nothing in section 198A(3)(b)
rendering any contract involving an employee, the
TES and even the
client null and void. Section 198A(3)(b) determines the identity of
the employer. It does so by application of
law. It does not remove or
inhibit the contracting capacity of the employee. When the contract
of employment of 1 September 2021
was concluded, the identity of the
employer of the first respondent had long since changed to RTT. The
application of section 198A(3)(b)
had come, applied, and had gone. If
the first respondent then decided to take up a job with his former
employer, CMC, and signed
a contract of employment with it, so be it.
In any event, the validity of the contract signed on 1 September 2021
was never placed
in issue by the first respondent, nor was it ever
suggested to the witnesses for CMC that this contract was null and
void.
[52]
Therefore, what happened in this case on 1 September 2021, happened
by agreement. That agreement did not involve RTT. It was an
agreement
between the first respondent and CMC, in terms of which the first
respondent left RTT to take up employment with CMC.
In fact, I
believe that the first respondent was not averse to leaving RTT,
considering all the problems he had there, emerging
from his own
evidence. He would thus get a fresh start on another assignment at
CMC. There is no evidence to indicate that this
agreement was not
voluntarily concluded, or that the first respondent was somehow
forced or coerced into concluding the same. As
stated, the validity
of the agreement was not even attacked at arbitration, and the first
respondent himself actually sought to
rely on it when presenting his
case.
[53]
For all the aforesaid reasons, I conclude that as of 1 September
2021, the first respondent was no longer employed by RTT, but
was
employed by CMC. It is true that the 1 September 2021 agreement
refers to the employer as CMC Lebonte Prop, however Duvenhage
made it
clear in evidence that the first respondent was employed by CMC
itself. It appeared that the reference to CMC Lebonte Prop
was
tantamount to a ‘client’ reference, as this was the head
office of CMC where the first respondent was stationed
as a
nightshift manager. Importantly, Duvenhage confirmed that the very
idea behind this initial posting was that it would just
be temporary,
as the first respondent was to be deployed elsewhere in CMC at a
client, and that he was considered a permanent employee
of CMC.
[54]
For all the reasons as set out above, I must conclude that any award
made against RTT in this case would not be competent, would
be
irregular and made in error, and falls to be reviewed and set aside.
However, and that being so, it still leaves CMC as the
employer of
the first respondent, and considering that it was common cause that
the first respondent was dismissed by CMC on 8
September 2021 due to
operational requirements, it then fell on CMC to prove that such
dismissal was fair.
[55]
For
all the reasons to follow, I do not believe that the dismissal of the
first respondent by CMC was fair. The question whether
a dismissal
for operational requirements is substantively fair is decided, as set
out in
Chemical
Workers Industrial Union and Others v Latex Surgical Products (Pty)
Ltd
[46]
,
as follows:
‘
Whether
or not there was a fair reason for the dismissal of the individual
appellants relates to a general question and a specific
question. The
general question is whether or not there was a fair reason for the
dismissal of any employees. The specific one is
whether there was a
fair reason for the dismissal of the specific employees who were
dismissed, which in this case, happened to
be the individual
appellants. The question of a fair reason to dismiss the specific
employees who were dismissed goes to the question
of the basis upon
which they were selected for dismissal whereas the other question
relates to whether or not there was a reason
to dismiss any employees
in the first place …’
In
fact, and for the reasons to follow, I consider that the first
respondent was poorly treated by CMC where it came to his dismissal.
[56]
As already discussed to a large extent above, the first respondent
could have remained employed at RTT, as he was by law deemed
to be
its permanent employee. But he decided to move back to CMC on the
understanding of permanent employment there and a suitable
placement
elsewhere. Having been brought back into CMC on such basis and for
such reason, only for CMC to retrench him eight days
later, cannot be
fair treatment. As the first respondent correctly testified:
‘…
you cannot tell me that
you transferred me to assist me based on the fact that you basically
retrenched me within eight days of
working for you. It is like me
signing a Contract of Employment and then after I start the company
decides “oh we cannot
afford you – okay bye-bye”’(sic)
[57]
As to the rationale for the dismissal of the first respondent for
operational requirements, I am unconvinced that CMC proved any
justifiable reason for this. Duvenhage simply referred to a suitable
posting at another client falling through, but he never explained
why
the first respondent could not have remained on as nightshift manager
at head office until another suitable posting was found.
Considering
that the first respondent was brought back into the fold for the very
reason of getting him another posting, it is
simply an untenable
proposition to say, after one week, that there is nothing else and he
must face retrenchment. There was also
no evidence as to what efforts
CMC had embarked upon to see if there was any posting available for
the first respondent anywhere
else in the business. CMC jumped the
gun, to a material extent, and this materially compromised any chance
of substantive fairness.
[58]
Also, in the context of substantive fairness, there is no evidence
that CMC properly consulted on or even explored the issue of
alternatives. It is clear to me that in the meeting of 8 September
2021 when the first respondent was handed the notice in terms
of
section 189(3), he was told there were no alternatives, because from
the outset he was told he would only be placed if something
comes up
in future. The issue of selecting the first respondent for
retrenchment faces similar difficulties. Duvenhage curtly refers
to
LIFO, but there is no indication that any selection criteria was ever
applied. There was no exposition by CMC as to what the
postings were
that were in existence at CMC, which the first respondent could
possibly fill but were currently filled by other
employees, and why
one of those employees that were posted in any one of those postings
could not have been selected for retrenchment
with the first
respondent being retained. In short, the first respondent was
earmarked for retrenchment before any consultation
even started.
[59]
Because
the first respondent was effectively presented with a
fait
accompli
,
any consultation with him would then simply pay lip service to the
prescribed process under section 189 of the LRA, and would
have
little meaning.
[47]
Certainly,
there was no information shared with the first respondent about his
possible retrenchment, and why it was necessary.
CMC was not open to
any persuasion where it came to the retrenchment of the first
respondent.
[48]
For these
reasons, the attempts by CMC to invite the first respondent to
further consultations on 15 and 20 September 2021 would
simply have
no effect when it comes to deciding whether the process in this case
could be considered to be fair. In any event,
the letter of 9
September 2021 made it clear to the first respondent that he must
come and collect his termination documents. None
of what happened
in
casu
can
by any semblance of the imagination be seen to constitute a fair
process. The following
dictum
in
Havemann
v Secequip (Pty) Ltd
[49]
is apposite:
‘
A
key purpose behind consultation is the protection of employment, with
security of employment being a core constitutional value
protected
through the LRA. In
Supergroup
Trading (Pty) Ltd v Janse van Rensburg
this
Court criticised the consultation undertaken by an employer as a
“charade” and “purposeless insofar
as it deprived
the Respondent of a chance to save his post or avoid his being
selected for retrenchment. His representations on
that score were to
be fruitless because restructuring was a
fait
accompli
.”
It was emphasised that –
‘…
the purpose
of consultation is to try and save a job or position. If this cannot
be done the next aim is to avoid dismissal
by placing the person,
whose post has become redundant, elsewhere. And if avoidance is not
possible consultation concerns the extent
to which the consequences
of the retrenchment can be mitigated.’’
[60]
Overall considered, the dismissal of the first respondent by CMC for
operational requirements was both substantively and procedurally
unfair. The second respondent, in her award, not only reasonably
appreciated this, but her findings in this regard were correct.
She
found that Duvenhage was unable to support in evidence that the
dismissal was for operational requirements. She also found
that the
first respondent was not properly consulted. These findings are
unassailable on review.
[61]
Because CMC unfairly dismissed the first respondent for operational
requirements, the first respondent would obviously be entitled
to
consequential relief against CMC. The first respondent did not seek
reinstatement, but instead sought compensation as contemplated
by
section 194 of the LRA. According to the second respondent, the
10(ten) months’ salary in compensation she awarded was
just and
equitable. The second respondent however did not elaborate on why she
so found.
[62]
When
considering the amount of compensation that should be awarded
in
casu
,
it must be taken into account that the dismissal of the first
respondent was both substantively and procedurally unfair. It
must also be considered that an award of compensation in the case of
a finding of procedural unfairness includes a
solatium
due to
the infringement of the employee’s right to procedural
fairness.
[50]
In
ARB
Electrical Wholesalers (Pty) Ltd v Hibbert
[51]
the Court considered the objective of compensatory relief under the
LRA, and said:
‘…
it is a
payment for the impairment of the employee's dignity. This monetary
relief is referred to as a solatium and it constitutes
a solace to
provide satisfaction to an employee whose constitutionally protected
right to fair labour practice has been violated.
The solatium must be
seen as a monetary offering or pacifier to satisfy the hurt feeling
of the employee while at the same time
penalising the employer. It is
not however a token amount hence the need for it to be 'just and
equitable' and to this end salary
is used as one of the tools to
determine what is 'just and equitable' …’
[63]
Compensation
must be just and equitable. In section 194(1), it is provided that
compensation must be ‘
just
and equitable in all the circumstances’
.
[52]
As said in
Kemp
t/a Centralmed v Rawlins
[53]
:
‘…
The
court has to consider all the relevant circumstances and make such
order as it deems fair to both parties in the light of everything
…
’
.
In order to decide what is just and equitable and fair in all
circumstances, so as to arrive at an appropriate award of
compensation,
the second respondent as arbitrator had to exercise a
judicial discretion. The normal basis upon which this discretion is
to be
exercised is enunciated in
Le
Monde Luggage CC t/a Pakwells Petje v Dunn NO and Others
[54]
,
as
thus:
‘
The
compensation which must be made to the wronged party is a payment to
offset the financial loss which has resulted from a wrongful
act. The
primary enquiry for a court is to determine the extent of that loss,
taking into account the nature of the unfair dismissal
and hence the
scope of the wrongful act on the part of the employer. This court has
been careful to ensure that the purpose of
the compensation is to
make good the employee's loss and not to punish the employer.’
Further,
‘
considering
everything
’
as
referred to in
Rawlins
supra
must
mean a consideration also of the scope and extent of the loss
suffered by the employee, the nature and extent of the deviation
from
what would normally be considered to be fair, whether there may exist
any justification for the conduct of any of the parties,
any
mala
fides
on
the part of the employer, and the impact of the sum awarded on the
employer or its business.
[55]
[64]
In this instance, and as said, the dismissal was substantively
unfair, in that CMC simply could not prove a fair reason for the
dismissal of the first respondent. Further, there was in essence a
complete failure of process and compliance with section 189
of the
LRA. But I also consider that the first respondent had very short
service, being some seven months. I do not believe CMC
was
mala
fide
, and simply overhastily reacted to what it saw as an
operational difficulty, instead of giving the situation time to
properly unfold.
I must confess that the manner in which the first
respondent led his evidence in the arbitration left much to be
desired, and was
on occasion quite unacceptable. The first respondent
also presented no evidence as to his current employment status or
loss he
may have suffered.
[65]
All this considered, I believe a compensation award of 6 (six)
months’ salary in favour of the first respondent would have
been appropriate. The first respondent’s salary at the time of
his dismissal amounted to R15 000.00 per month, and thus
the
first respondent would be entitled to compensation of R90 000.00.
In awarding the first respondent compensation in the
sum of
R150 000.00, being an amount equivalent to 10(ten) months’
salary, I do not believe the first respondent exercised
a judicial
discretion. The amount is excessive and unduly punitive to CMC, and
considering that the first respondent had very short
service and
there was no evidence concerning his current employment status or
loss suffered.
Conclusion
[66]
For all the reasons as set out above, the second respondent’s
arbitration award against RTT cannot stand. There was simply
insufficient evidence to show that RTT had dismissed the first
respondent. The second respondent should have dismissed the unfair
dismissal claim against RTT for want of jurisdiction, because
dismissal had not been proven. It follows that the arbitration award
against RTT was in error, and falls to be reviewed and set aside.
[67]
I am satisfied that on the evidence, it was clear that at the time of
termination of employment of the first respondent, he was
employed by
CMC and that CMC had dismissed him for operational requirements on 8
September 2021. That dismissal was substantively
and procedurally
unfair, and the second respondent’s finding to this effect was
rational and reasonable based on the evidence
before her, and must be
upheld on review. The only proviso is that this finding applies
against CMC, and not RTT.
[68]
Finally, I do not consider the second respondent to have exercised a
judicial discretion where it comes to the quantum of the compensation
award she had made. That award is to be reviewed and set aside, and
be substituted with an award that just and equitable in all
circumstances, which in my view is an amount equivalent to 6(six)
months’ salary, giving a sum of R90 000.00.
Costs
[69]
This
then only leaves the issue of costs. In terms of section 162(1) of
the LRA, I have a wide discretion where it comes to the
issue of
costs. The applicants were partially successful, however the finding
that the first respondent was unfairly dismissed
was still sustained.
This was certainly an arguable case which had some novelty attached
to it. I do not think any of the parties
acted unreasonably in
seeking to pursue this matter to finality, and in any event, it is an
issue that called for final determination
by this Court. I also
consider the
dictum
of the
Constitutional Court with regard to costs in employment disputes as
expressed in
Zungu
v Premier of the Province of Kwa-Zulu Natal and Others
[56]
.
The same Court recently re-affirmed the principle set in
Zungu
supra
and
stated that ‘
when
making an adverse costs order in a labour matter, a presiding officer
is required to consider the principle of fairness and
have due regard
to the conduct of the parties.
’
[57]
In my view, there certainly exists no reason in this case to depart
from the principle set out above. Therefore, I consider it
to be in
the interest of fairness that no costs order should be made.
[70]
In the premises, I make the following order:
Order
1.
The applicants’ review application is upheld in part and
dismissed in part.
2.
The arbitration award of the second respondent, arbitrator Nomusa
Mbhele, dated 13 February 2022, and issued under case number
GAEK
7867 – 21, is reviewed and set aside.
3.
The arbitration award is substituted with the following
determinations:
3.1
The first respondent was not dismissed by the second applicant and
consequently the third respondent has no jurisdiction to entertain
the dispute as against the second respondent.
3.2
The first respondent was dismissed by the first applicant, CMC Global
Outsourcing Projects (Pty) Ltd, which dismissal was both
substantively and procedurally unfair.
3.3
The first applicant is directed to pay compensation to the first
respondent in an amount equivalent to 6(six) months’ salary,
amounting to R90 000.00 (ninety thousand Rand).
3.4
The amount as contemplated by paragraph 3.3 of this order shall be
paid within 14(fourteen) days of date of this order, failing
which
the amount shall accrue interest at the legally prescribed rate from
due date to date of actual payment.
4.
There is no order as to costs.
S
Snyman
Acting
Judge of the Labour Court of South Africa
Appearances:
For
the Applicants:
Advocate G Van Der Westhuizen
Instructed
by:
Du Pre Le Roux Attorneys
For
the First Respondent: Advocate C Britz
Instructed
by:
Sassenberg Attorneys
[1]
Act 66 of 1995 (as amended).
[2]
(2007)
28 ILJ 2405 (CC).
[3]
Id
at para 110. See also
CUSA
v Tao Ying Metal Industries and Others
(2008)
29 ILJ 2461 (CC) at para 134;
Fidelity
Cash Management Service v Commission for Conciliation, Mediation and
Arbitration and Others
(2008)
29
ILJ
964
(LAC) at para 96.
[4]
See
Duncanmec
(Pty) Ltd v Gaylard NO and Others
(2018)
39 ILJ 2633 (CC) at para 43.
[5]
Id at para 41.
[6]
(2013)
34
ILJ
2795
(SCA)
at
para 25. See also
Gold
Fields Mining South Africa (Pty) Ltd (Kloof Gold Mine) v Commission
for Conciliation, Mediation and Arbitration and Others
(2014)
35 ILJ 943 (LAC) at para 14;
Monare
v SA Tourism and Others
(2016)
37 ILJ 394 (LAC) at para 59;
Quest
Flexible Staffing Solutions (Pty) Ltd (A Division of Adcorp
Fulfilment Services (Pty) Ltd) v Legobate
(2015)
36 ILJ 968 (LAC) at paras 15 – 17;
National
Union of Mineworkers and Another v Commission for Conciliation,
Mediation and Arbitration and Others
(2015)
36 ILJ 2038 (LAC) at para 16.
[7]
See
Campbell
Scientific Africa (Pty) Ltd v Simmers and Others
(2016)
37 ILJ 116 (LAC) at para 32.
[8]
(2015) 36 ILJ 1453 (LAC) at para 12.
[9]
See
Head
of Department of Education v Mofokeng and Others
(2015)
36
ILJ
2802
(LAC) at paras 32 – 33;
Democratic
Nursing Organisation of SA on behalf of Du Toit and Another v
Western Cape Department of Health and Others
(2016)
37
ILJ
1819
(LAC) at paras 21 – 22;
Civil
and Power Generation Projects (Pty) Ltd v Commission for
Conciliation, Mediation and Arbitration and Others
(2019)
40 ILJ 2055 (LC) at para 33.
[10]
In
National
Union of Metalworkers of SA v Assign Services and Others
(2017)
38
ILJ
1978
(LAC) at para 32, it was held: ‘…
An
incorrect interpretation of the law by a commissioner is, logically,
a material error of law which will result in both an incorrect
and
unreasonable award. Such an award can either be attacked on the
basis of its correctness or for being unreasonable …
’
.
This
judgment of the LAC was upheld by the Constitutional Court in
Assign
Services (Pty) Ltd v National Union of Metalworkers of SA and Others
(Casual Workers Advice Office as Amicus Curiae)
(2018)
39
ILJ
1911
(CC).
[11]
(2022)
43 ILJ 1618 (LAC) at para 24.
[12]
The Court was referring to
MacDonald’s
Transport Upington (Pty) Ltd v Association of Mineworkers and
Construction Union and Others
(2016)
37
ILJ
2593
(LAC) at para 29, and
Assign
Services
(
supra
).
[13]
(2023)
44 ILJ 137 (LAC)
at
para 27.
[14]
(2008) 29 ILJ 964 (LAC) at para 101.
[15]
See
Trio
Glass t/a The Glass Group v Molapo NO and Others
(2013)
34
ILJ
2662
(LC) at para 22.
[16]
(2008)
29
ILJ
2218
(LAC)
at para 40.
[17]
See:
De
Milander v Member of the Executive Council for the Department of
Finance: Eastern Cape and Others
(2013)
34 ILJ 1427 (LAC) at para 24;
Asara
Wine Estate and Hotel (Pty) Ltd v Van Rooyen and Others
(2012)
33
ILJ
363
(LC) at para 23;
Hickman
v Tsatsimpe NO and Others
(2012)
33
ILJ
1179
(LC) at para 10;
Protect
a Partner (Pty) Ltd v Machaba-Abiodun and Others
(2013)
34
ILJ
392
(LC) at paras 5–6;
Gubevu
Security Group (Pty) Ltd v Ruggiero NO and Others
(2012)
33
ILJ
1171
(LC) at para 14;
Workforce
Group (Pty) Ltd v CCMA and Others
(2012)
33
ILJ
738
(LC)
at para 2;
Stars
Away International Airlines (Pty) Ltd t/a Stars Away Aviation v Thee
NO and Others
(2013)
34
ILJ
1272
(LC) at para 21.
[18]
See section 187(1)(h) as read with section 191(5)(b)(i) of the LRA.
[19]
See section 191(12)(a) of the LRA.
[20]
See
Gcaba
v
Minister for Safety and Security and Others
(2010)
31
ILJ
296
(CC)
at
para 75;
Mbatha
v University of Zululand
(2014)
35
ILJ
349
(CC) at para 157;
Ekurhuleni
Metropolitan Municipality v SA Municipal Workers Union on behalf of
Members
(2015)
36
ILJ
624
(LAC) at para 21;
Moodley
v Department of National Treasury and Others
(2017)
38
ILJ
1098
(LAC) at para 37.
[21]
In
Commercial
Workers Union of SA v Tao Ying Metal Industries and Others
(2008)
29
ILJ
2461
(CC) at para 65, the Court held: ‘
In
deciding what the real dispute between the parties is, a
commissioner is not necessarily bound by what the legal
representatives
say the dispute is. The labels that parties attach
to a dispute cannot change its underlying nature. A
commissioner is required
to take all the facts into consideration
including the description of the nature of the dispute, the outcome
requested by the
union and the
evidence
presented
during the arbitration. What must be borne in mind is that there is
no provision for pleadings in the arbitration process
which helps to
define disputes in civil litigation. … The dispute between
the parties may only emerge once all the
evidence
is
in
’
.
Similarly, in
Hotbake
Systems (Pty) Ltd t/a the Rich Corporation of SA v Commission for
Conciliation, Mediation and Arbitration and Others
(2019)
40 ILJ 1516 (LAC) at para 21, it was held: ‘
The
determination of the true nature of the dispute is a factual enquiry
which may at times only emerge during the proceedings.
…
’
.
See also
Health
and Other Services Personnel Trade Union of SA on behalf of Tshambi
v Department of Health, Kwazulu-Natal
(2016)
37 ILJ 1839 (LAC) at para 16;
National
Union of Metalworkers of SA on behalf of Sinuko v Powertech
Transformers (DPM) and Others
(2014)
35 ILJ 954 (LAC) at para 17.
[22]
(2018)
39
ILJ
987
(CC) at para 43.
[23]
Id at para 52.
[24]
See
Fidelity
Cash Management Service
(
supra
)
at para 24;
ZA
One (Pty) Ltd t/a Naartjie Clothing v Goldman No and Others
2013)
34 ILJ 2347 (LC) at paras 61 – 62;
Tiger
Brands Field Services (Pty) Ltd v Commission for Conciliation
Mediation and Arbitration and Others
[2013]
ZALCJHB 216 (13 August 2013) at para 71.
[25]
(2023)
44 ILJ 125 (LAC) at paras 28 – 29.
[26]
Act 75 of 1997 (as amended).
[27]
Section 198(2) reads: ‘
For
the purposes of this Act, a person whose services have been
procured for or provided to a client by a temporary employment
service is the employee of that temporary employment
service, and the temporary employment service is that person's
employer
.’.
[28]
Of relevance
in
casu
,
section 198A(1)(a) reads: ‘
In
this section, a 'temporary service' means work for a
client by an employee - (a) for a period not exceeding
three
months …
’
.
[29]
(2018)
39 ILJ 1911 (CC).
[30]
Id at para 54.
[31]
Id at para 83. See also para 84 of the judgment, where the Court
said: ‘
As
stated above, the language used by the legislature in s
198A(3)(b) of the LRA is plain. And, when interpreted in
context,
it supports the sole-employer interpretation
.’.
[32]
See section 198A(5) which reads: ‘
An employee deemed
to be an employee of the client in terms of subsection
(3) (b) must be treated
on the whole not less favourably
than an employee of the client performing the same or
similar work, unless there is
a justifiable reason for different
treatment.
’
.
[33]
Id at para 73.
[34]
Id at para 75.
[35]
(2020)
41 ILJ 2802 (LAC) at para 6.
[36]
See
Assign
(
supra
)
at paras 65 – 70.
[37]
National
Union of Leather Workers v Barnard NO and Anothe
r
(2001) 22 ILJ 2290 (LAC) at para 23
[38]
(2004) 25
ILJ
731
(LC) at para 14 – 15. See also
National
Union of Metalworkers of SA and Others v SA Five Engineering (Pty)
Ltd and Others
(2007)
28
ILJ
1290
(LC) at para 41;
Ismail
v B & B t/a Harvey World Travel Northcliff
(2014)
35
ILJ
696
(LC) at para 27.
[39]
(2012) 33
ILJ
2386
(LC) at para 13. See also
Heath
v A & N Paneelkloppers
(2015)
36 ILJ 1301 (LC) at paras 31 and 33.
[40]
Marneweck
v SEESA Ltd
(2009)
30
ILJ
2745
(LC) at para 31.
[41]
[2015] ZALCD 19 (20 March 2015) at para 18.
[42]
Id at para 65.
[43]
See
Leshabane
v Minister of Human Settlements and Others
(2024)
45 ILJ 833 (LC) at para 27;
Trio
Glass
(
supra
)
at para 36;
Ismail
v B & B t/a Harvey World Travel Northcliff
(2014)
35
ILJ
696
(LC) at paras 27 – 28.
[44]
(2015)
36 ILJ 1301 (LC) at para 31. See also
Marneweck
(
supra
)
at para 32, where it was held: ‘…
as
a matter of principle, an employment contract can be regarded as
terminated based on the objective construction of the employer's
conduct which unequivocally repudiates the contract ,,,
’
.
[45]
In
ABSA
Brokers (Pty) Ltd v Moshoana NO and Others
(2005)
26
ILJ
1652
(LAC) at para 39, the Court said: ‘…
A
failure to cross-examine may, in general, imply an acceptance of the
witness’ testimony…
’
.
And in
Trio
Glass t/a The Glass Group v Molapo NO and Others
(2013)
34
ILJ
2662
(LC) at para 41, the Court held: ‘…
The
effect of the failure to put such an important issue to the
third respondent under cross-examination must mean that this
evidence must be disregarded….
’
.
[46]
(2006) 27 ILJ 292 (LAC) at para 55.
[47]
See
Van
Rooyen and Others v Blue Financial Services (SA) (Pty) Ltd
(2010)
31 ILJ 2735 (LC) at para 19 as to what is actually required.
[48]
Association
of Mineworkers and Construction Union and Others v Tanker Services
(Pty) Ltd
(2018)
39 ILJ 2265 (LC) at para 22.
[49]
(JA91/2014)
[2016] ZALAC 53
(22 November 2016) at para 32. See also
Kotze
v Rebel Discount Liquor Group (Pty) Ltd
(2000)
21 ILJ 129 (LAC) at para 36.
[50]
Johnson
& Johnson (Pty) Ltd v Chemical Workers Industrial Union
(1999)
20 ILJ 89 (LAC) at para 41.
[51]
(2015) 36 ILJ 2989 (LAC) at para 23.
[52]
Fouldien
and Others v House of Trucks (Pty) Ltd
(2002)
23
ILJ
2259
(LC) at para 11;
Bandat
v De Kock and Another
(2015)
36 ILJ 979 (LC) at para 14.
[53]
(2009) 30
ILJ
2677
(LAC) at para 27. The SCA in
Rawlins
v Kemp t/a Centralmed
(2010)
31
ILJ
2325
(SCA) upheld the findings of the LAC.
[54]
(2007)
28
ILJ
2238
(LAC)
at
para 30. See also
Mohlakoana
v CCMA and Another
(2010)
31
ILJ
2688
(LC)
;
SA
Post Office Ltd v Jansen Van Vuuren NO and Others
(2008)
29
ILJ
2793
(LC).
[55]
See
Rawlins
(
supra
)
at para 20;
Ferodo
(Pty) Ltd v De Ruiter
(1993)
14
ILJ
974
(LAC)
.
[56]
(2018) 39 ILJ 523 (CC) at para 25.
[57]
Long
v South African Breweries (Pty) Ltd and Others
(2019)
40 ILJ 965 (CC)
at
para 30.