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[2005] ZALAC 2
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National Union of Metal Workers of South Africa (NUMSA) and Others v Jajbhay NO and Another (JA33/03) [2005] ZALAC 2 (23 March 2005)

IN THE LABOUR
APPEAL COURT OF SOUTH AFRICA
(
HELD AT JOHANNESBURG)
CASE NO: JA33/03
In
the matter between :
NATIONAL UNION OF METAL WORKERS OF
SOUTH AFRICA (NUMSA)
First
Appellant
(1
st
applicant
a quo)
MADODA MDUNYELWA AND 19
OTHERS
Second &
Further Appellants
(2
nd
to 20
th
Applicants
a quo)
AND
MAHOMED JAJBHAY NO
First
Respondent
(1
st
Respondent
a quo)
SABAT BATTERY COMPANY
(PTY) LTD
Second
Respondent (2
nd
Respondent
a quo)
NICHOLSON JA, PILLAY AJA, NKABINDE AJA
JUDGMENT
NKABINDE AJA:
Introduction
[1] The appellants appeal against the judgment of the
Labour Court in which their application, brought in terms of section
33 (1)
of the Arbitration Act No. 42 of 1965 (“the Act”), to
review and set aside the award issued by the first respondent (“the
arbitrator”) before whom the matter was referred by agreement, was
dismissed with costs.
[2] The dispute which culminated in this appeal concerns
the substantive and procedural fairness of the dismissal in June 2001
of
the second and further appellants (“the dismissed employees”)
by the second respondent (“the employer”) subsequent to a
disciplinary
enquiry on a charge of them having participated in a
retardation of production during the period 24 May to 18 June 2001.
The arbitrator
confirmed the dismissal. Leave to appeal has been
granted by this Court.
Facts not in dispute
[3] The employer conducts a business as a manufacturer
and distributor of batteries. The manufacturing process is performed
in different
departments in the employer’s factory. The dismissed
employees worked in two of these departments: seven of them worked in
the
Cast on Strap (COS) Department. Of these six worked on machine 4
(“the COS4”) and one on machine 1 (“the COS1”). The dismissed
employees worked on two different shifts classified as team one and
team two. They used machines as part of the manufacturing process.

Twelve of the dismissed employees worked on the finishing line which
is at the end of the manufacturing process. There appeared
to be two
other employees who also worked in the finishing department. Two
shifts operated in the finishing department. On each shift
there are
six employees and a supervisor. One of the six employees operates the
machine and the others are essentially packers. The
employees in this
department receive batteries from the charge room (also referred to
as the formation department) where batteries
are filled with acid and
placed into charging trays. Their target per hour was the production
of 250 (two hundred and fifty) batteries.
The batteries are tested in
a machine and those batteries which pass the test are then furnished
with stickers, clips, vent plugs,
et cetera
,
before being stored. The whole process is initiated by lead ingots
being received and culminates when batteries are tested by the
bitrode tester using a high rate short duration discharge. When the
finishing process is completed the batteries are levelled, coded
and
passed into the warehouse.
[4] During late 1999 and early 2000 the formation
department underwent an upgrading process for reasons the details of
which are not
relevant for the purpose of this judgment. The plant in
that department was replaced with a modern device. This upgrading
process
was completed during the middle of May 2001. The job content,
as a result of the upgrading, changed from one of manual handling of
batteries to that of handling batteries by cranes and moving the
trays in and out of the stacks. Consequently jobs in the formation
department had to be re-graded. The employer, in consultation with
the first appellant, the National Union of Metal Workers of South
Africa, (“NUMSA”), and non-union members agreed that the persons
in the formation department, after such upgrading, required
skill to
move a half ton tray full of batteries on an overhead crane and
locate it to the stacks. The positions of such employees
were
re-evaluated and eventually upgraded from grade 1 on the Patterson
Scale to Grade 2, putting them in the same level as the
COS
operators.
The employer’s case
[5] The case of the employer is based on the evidence of
three of its employees, namely :Messrs Steyn, Van Staden and Heath.
It was
explained, on behalf of the employer, that the said upgrading
triggered dissatisfaction among workers in the COS supervised by
Steyn
and the finishing department supervised by Van Staden. Their
demand, according to Heath, was based on the perception that the
charge
room or formation department was seen as the lowest level job.
Heath testified that they felt that they had to be moved up to a
level
3 to maintain the distinction between them and those whose
positions were re-graded. The dissatisfaction, according to him,
resulted
in a twenty minutes work stoppage in the COS department.
Production level dropped. When enquiring from the operators of the
reason
for the decline he was told that there were no problems.
[6] Steyn testified
that he kept a close watch on the performance of the operators and
packers. Both Steyn and Heath noted a trend
of retardation in
production from 24 May to 18 June 2001. There was, according to their
testimonies, a big difference in the performance
of teams one and two
that were operating the COS 4. Steyn realised that team two was
retarding the production process. The operators
and packers were,
according to Heath, counselled. Steyn was secretly informed by one of
the operators, Mr Baloyi, that the packers
were holding back the
production because of their dissatisfaction with the job grading.
Baloyi apparently tried to push the groups
to increase production but
was told not to do so. He was subsequently assaulted. According to
Steyn and Heath targets had been set
out and communicated to the
workers in the COS department (through notice boards) and the
finishing department (on a personal basis).
Such targets were
invariably not met. Steyn testified further that he observed the
behaviour of the dismissed employees during the
period under
consideration.
[7] Steyn also observed that Mr Mokoena, an operator on
COS1, was busy retarding the process in the production. He kept a log
book
in which he recorded the hours during which the machines were
operational, the down time and reasons therefore and other
information
which could assist in evaluating the level of production
of a particular machine. The information in the log book revealed
that the
production level in the COS teams was not the same. Mention
should be made of the fact that one Zwane in the COS2 was not
dismissed.
The reason, according to Steyn, was that the targets in
the COS2 depended on the size of the battery. He explained the
reasons for
the down time of each particular machine and testified
that there were replacements when shortages were experienced. He was
cross
examined at length about the activities that took place around
the machines on a day to day basis during the period in question.

He fairly conceded that the targets set out were not met on many
occasions but was steadfast that, even so, there was a marked
downtrend
in production level during the period under consideration.
[8] The crux of Van Staden’s evidence is that on 24
May 2001 the workers, who were singing and dancing, worked slower
than usual.
He observed that certain employees were obstructive in
their work in that double plastic bags were being pulled over the
batteries
in order to retard the progress in production. He raised
his concerns regarding the drop in production level with the
individuals
concerned. According to him the factory manager, Mr de
Bruyn, also spoke to the workers about the drop in the level of
production.
The employees’ response was that they were doing their
job. Van Staden observed a back-log in the formation department. The
employer,
as a result of the retardation, had to employ extra casual
workers between 29 May and 6 June 2001 to finish the work in order to
finalise the production. He testified further that a backlog of
approximately 3 000 batteries for the week-end was brought up to
speed over two days by the casual workers. Under cross examination he
testified, among other things, that he spoke to the employees
individually and requested them to reach the targets of 250 per
hour. According to him the employees were simply not willing to
reach
the targets. He testified that the production, during the period
under consideration, was below the target of 3 200 per day.
[9] Much of Heath’s testimony is common cause and is
confirmed by Steyn. He confirmed the 20 minutes work stoppage on 24
May 2001. After this incident, according to
Heath, there was a decline in the volume of boxes of the batteries
produced. In addition
the target of 80 batteries per hour in the COS4
was not reached. Graphs, which form part of the documentary evidence,
were prepared
to illustrate the employer’s concerns with the levels
of production then achieved. In the graphs an indication is given by
the
use of spikes when one of the following occurred: mould changes
or when moulds were removed for cleaning and drilling, or when the
machine broke down or when there was a shortage of components. The
graphs also show daily production trends between teams one and
two.
According to Heath the production level of both teams ran level until
24 May. Thereafter, although the teams operated the same
machine,
albeit at different times, team one continued to run at a level of
500 batteries per shift while team two’s production
dropped to 450.
He testified further that in the COS the lead parts were switched
off making them cold overnight thus delaying production.
Heath
further testified that problems were also encountered in the
finishing line where the targets were set for 250 per hour. He
confirmed that the employees were dancing, singing and working
slowly. He referred also to the two shifts in the finishing
department
where production, according to the calculations of
batteries supplied per hour, had dropped significantly. Heath
testified further
that after raising the employer’s concerns with
NUMSA, the latter, through Mangele, requested information of the
overall COS
production which was then furnished at the follow-up
meeting on 15 June. NUMSA then undertook to discuss the matter with
the workforce
which they did on the same day during the shift change.
He, thereafter, noted a marked improvement in the volume of batteries
passing
through the finishing line though such improvement only
lasted for a short time.
[10] Under cross examination Heath testified, among
other things, that what the employees were doing was not ‘loafing
per se
’ but was
industrial action in the form of a deliberate retardation of
production. The graphs revealed that the one shift was producing
less
than the other shift in the COS. He could not say with certainty who
turned the moulds on and off in the COS. He conceded that
there was a
decline in all the four machines in the COS and that not all
employees in that department were charged. The reason, according
to
him, being that they ‘attempted to isolate everybody that we could
prove were involved’. He testified that they had difficulty
in
obtaining proof of the involvement of the others. The reason,
according to him, for being able to detect with ease problems in
the
COS4 was because such machine produced a particular size of battery
making it easy to measure volumes, while other COS machines
produced
different sizes resulting in difficulties in terms of measuring
volumes. With regard to the finishing department, he testified
that
the production level declined because of the employees’ obstructive
behaviour, which included work stoppages, dancing and
singing. He
testified that he saw them from his position in his office opposite
the department. He testified further that the employees
were not
charged for underproduction on 20-23 May 2001 because during that
period the machinery in the charge room was being commissioned.
The appellants’ case
[11] The appellants’ case in the arbitration, as
testified to by the Organiser for NUMSA, Mangele, was a total denial
of any work
stoppage. According to him the employees were surprised
by the allegations of the stoppage. The reduction in production was,
according
to what the employees had told him, attributable to the
delays on the part of management in supplying the employees with
material.
[12] One of the dismissed employees from COS4, Mr Mdoda,
denied that he or his co-workers were involved in a retardation
process.
He also denied having any knowledge about the re-grading
that had taken place in the formation department. He testified,
however,
that during certain periods when he commenced work in the
morning he would find that the burners had not been turned on.
According
to him the shortage of packers, plates and cases, from time
to time, resulted in him not meeting the targets. He testified
further
that he was absent from work on certain days. He and his
co-workers were informed about the targets thus confirming the
version of
the employer in this regard.
[13] Mr Mkhize, one of the employees and a shop steward,
represented the employees at the disciplinary hearing. He denied the
allegations
that there was retardation of production. He testified
that he would have known if any retardation took place because he was
a shop
steward. The problem, according to him, was with the packers
as well as the fact that the operator’s work in the finishing
department
was excessive because they had to deal with the acid
spills which resulted in the targets not being met. He testified that
there
was never a problem with employees sitting down and singing. He
testified initially that he was not aware of the grading process
but
changed, under cross exanimation, and testified that ‘the whole
grading itself was being discussed.’
The findings by the arbitrator
[14] The arbitrator, having considered the evidence
presented, confirmed the dismissal of the employees and found their
dismissal
to have been substantively fair but that the employer did
not follow a fair procedure in dismissing them. He ordered the
employer
to compensate each of the dismissed employees in the amount
equal to the remuneration they would each have received between 29
June
2001 and August 2001. This is the award which was the subject
matter of the review application in the court
a
quo.
The issues on appeal
[15] The contention, on appeal, is basically that the
court
a quo
erred –
(a) in confirming the finding of the arbitrator and not
finding that the dismissal of the employees was both procedurally and
substantively
unfair and finding that there was a causal link
between the retardation of work and the individual employees;
(b) in
not giving more weight to the parity principle and the application
thereof: the contention being that the employer acted inconsistently
and selectively in dismissing the individual employees in that while
it relied on the information on the graphs in dismissing the
individual employees on COS4 (Team 2) it should have used the same
information and also taken disciplinary action of whatsoever nature
against the other employees in the COS department; and
(c) in
not holding that the arbitrator failed to perform his duties
properly.
Powers on review
[16] Section 33 (1) of the Act sets out the following
four grounds of review:
misconduct by the arbitrator in relation to his duties
as arbitrator;
where the arbitrator has committed a gross irregularity
in the conduct of the arbitration proceedings;
where the arbitrator has exceeded his powers; and
where the award has been improperly obtained.
[17] The principles that govern reviews are delineated
by Van Dijkhorst AJA in
Stocks Civil
Engineering (Pty) Ltd v Rip NO & Another
(2002)
23 ILJ 358 (LAC) at paragraphs 33-60. They may be summarised as
follows:
A court must determine whether an arbitrator acted
honestly, duly considered all the evidence before him and had due
regard to
the applicable legal principles. If he does this, but
reaches the wrong conclusion, the court on review will not
interfere. But
if he does not function as an arbitrator, he reneges
on the agreement under which he was appointed. His award will then
be tainted
and reviewable. The arbitrator must be fully cognizant
with the extent of the 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
is not. 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.
Gross irregularities can be patent - and occur during
the course of the trial, such as the refusal to allow
cross-examination
or latent – that occur in the mind of the
judicial officer. These are only ascertainable from the reasons
given by him. In
neither case need there be intentional
arbitrariness or any conscious denial of justice. The crucial
question is whether the
irregularities 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 enquiry
or of the court’s duties in connection therewith,
then the losing party has not had a fair trial.
An irregularity in the proceedings does not mean an
incorrect judgment; it refers not to the result but to the methods
of a trial,
such as, for example, some high-handed or mistaken
action which has prevented the aggrieved party from having his case
fully
and fairly determined.
[18] It is not necessary to deal with grounds (iii) and
(iv), above, as these were not relied upon on review or on appeal.
The determination of the first issue
[19] Counsel for the appellants correctly submitted that
there was no progressive reduction in production as there was no
pattern
of decline. I am, however, of the view that the proper
interpretation of the graphs reveals a clever and deliberate
manipulation
in the level of production. The drop in the level of
production between 20 and 23 May was, according to Heath, due to
commissioning
in the charge room. On 24 May the work stoppage lasted
for 20 minutes. Van Staden testified that between 29 May and 6 June
2001 casual
employees were employed to finish the backlog of
approximately 3 000 batteries in order to finalise production. His
testimony in
this regard was unchallenged. As seen in the reading of
the graphs it is beyond question that the level of production during
the
last mentioned period improved significantly. Heath testified
that he noted a marked improvement in the level of production in the
finishing line albeit for a short time around the 15
th
of June 2001 after the employer’s concerns were communicated to the
workforce. After that and until the 18
th
of June 2001 Heath noted a trend in the level of production by the
dismissed employees. His evidence in this regard was also
unchallenged.
The sporadic drops and increases in the levels of
production must be seen,
inter alia,
in the light of those factors. The suggestion by the appellants that
the decline in production is solely attributable to the management’s
non supply of material and shortage of packers is, in the context of
the evidence in its totality, highly improbable. Much of the
evidence
of Steyn and Heath, as well as the documentary evidence, reveal
machine breakdowns and mould problems on certain occasions.
Such
incidents, however, contributed little to the decline in production.
This view is fortified by the fact that on the unchallenged
information supplied there is a major drop in production, for
instance on 28 May 2001, even when there appears to have been no
supply
or shortage problems as alleged. That explains the back-log
which was completed by the casual employees.
[20] The evidence tendered on behalf of the employer
does, in my view, lend support to the conclusion that the identified
employees,
in all probability, deliberately retarded production.
Steyn, who was the production supervisor during the relevant period,
testified
about the methods used by the employer to monitor the
productivity of the COS department. He kept log books in which hours
the machines
were operational and reasons,
inter
alia
, for breakdown, were recorded. His
evidence on this aspect was not challenged. It must, therefore, be
accepted. The appellants’
case was that the decline in production
was caused by machine breakdowns and non supply of material. This is
not entirely correct.
Steyn conceded that there were breakdowns but
explained that there were replacements when shortages were
experienced. After the initial
work stoppage for 20 minutes he noted
a decline in production. He specifically requested the employees to
increase production. He
then kept a close watch on them and observed
that they were retarding production for the period between 24 May
until 18 June 2001.
He also observed that Mokoena, an operator in
the COS1, was busy retarding production. His testimony was also
unchallenged on these
aspects. Steyn’s evidence is corroborated by
Heath and Van Staden regarding retardation and decline in production.
[21] Van Staden also testified that as a result of the
retardation there was a back-log of approximately 3000 batteries.
This was
remedied by the engagement of casual labourers between 29
May to 6 June. There is no evidence to gainsay this. The dismissed
employees
were, according to his testimony, involved in the trend of
retarding production. A scrutiny of the information in the graphs
relating
to the volume of production between 29 to 6 June 2001, when
casuals were engaged, reveals a marked improvement in production of
team
two. Immediately thereafter a major decline from the 7
th
of the same month is observed. Such unchallenged information, clearly
shows a marked difference in the level of production by team
two as
compared to the level of production by team one. It reveals also a
trend in the decline of production by team two. That cannot
be said
in respect of the performance by employees in team one. Moreover
there is no evidence on behalf of the appellants that the
employer’s
records, including the graphs, were not accurate. As correctly stated
by the arbitrator it is not suggested that any
one of the dismissed
employees distanced or dissociated himself or herself from the
actions complained of by the employer. In fact
Mdoda confirmed the
employer’s case that on certain occasions he found that burners
were switched off. Baloyi, who tried to discourage
his co-workers
from retarding production was in fact victimised by them. The
arbitrator found, correctly in my view, that such conduct
must be
considered in a serious light. Accordingly, I cannot find fault with
the arbitrator’s finding that the factual causal
link between the
drop in the production figures and the individual employees was
established. I am satisfied that the evidence as
a whole justifies
the conclusion of the court below.
The determination of the second issue
[22] The next question that falls for consideration is
whether the employer selectively dismissed the COS employees. It is
contended,
on behalf of the appellants, that the employer, while
relying on the information of the graphs in dismissing the
individual employees,
should have done the same and dismissed the
team one packers as well in the COS department.
[23] The principle underlying ‘parity principle’ has
been applied in a number of court cases in which it has been held
that ‘unjustified
selective dismissal constitute an unfair labour
practice. In
National Union of Metalworkers &
Others v Henred Fruehauf Trailers (Pty) Ltd (1994) 15 ILJ 1257 (A)
Nicholas AJA remarked as follows regarding the principle :
“Equity requires that the courts should have regard to the
so-called ‘parity principle’. This has been described as a basic
tenet of fairness which requires that like cases should be treated
alike (see Brassey ‘The dismissal of strikers’ (1990) 11 ILJ
213
at 229-30). So it has been held by the English Court of Appeal that
the word ‘equity’ as used in a United Kingdom statute
dealing
with the fairness of dismissal ‘comprehends the concept that the
employees who behave in much the same way should have
meted out to
them much the same punishment’(Post Office v Fennel
(1981) IRLR 221
at 223).”
[24] The issue of selective disciplinary action was also
considered in
Riekert & Coleman SA
(Pty)Ltd v Chemical Industrial Union & Others
(1991) 12 ILJ 806 (LAC) where the court
remarked, at 813F, as follows :
“There is obviously no general rule to the effect that selective
industrial action is
per se
unfair. It depends upon the
circumstances.”
In considering whether or not the employer’s conduct
was fair in that case the Court considered :-
whether there was any ulterior motive in disciplining
some of the employees and not the others;
the fact that it is not unreasonable to take
disciplinary action
only against those individuals who can be identified;
that one should be careful to come to a conclusion that
a whole workforce or part of a workforce participated in disruptive
activities;
the fact that during the trial which took place before
the Industrial Court, the individual respondents and the shop
stewards throughout
persisted in a denial that there was any
disruptive activity; and
the fact that those individual respondents who did
testify in the industrial Court were unable to identify any
co-employees who
were involved in similar actions.
[25] In
Cape Town City Council v
Masiko & Others
(2000) 21 ILJ 1957 (LAC)
this Court found that there were no material
distinguishing features to justify deviation from the parity of
treatment. Needless to
say, that case is distinquishable from the
instant case in that there are material distinguishing features in
the latter case which
include the following :
the fact that the dismissed employees who testified
during arbitration throughout persisted in a denial that they were
involved
in the retardation of production. Mkhize, who also
testified on their behalf, stated that he would have known of the
retardation,
if any, as he was a shop steward. He gave conflicting
versions with regard to whether re-grading was discussed or not. It
is not
surprising that his evidence was rejected. The NUMSA
official, Mangele, also denied the allegations of retardation in
production.
He however did not refute Heath’s testimony that the
employer’s concerns were raised with the NUMSA which then
undertook to
discuss the matter with the workforce. If all were
well, as suggested on behalf of the dismissed employees, there was
no reason,
firstly, for the employer to raise the matter with
NUMSA. Secondly, there would have been no point in NUMSA discussing
the matter
with the workforce. Thirdly, there would have been no
reason for the sudden increase in production after such a discussion
with
the workforce. It is remarkable also that the appellants denied
that the dismissed employees were involved in the retardation.

Although Heath could not identify the culprit who turned the moulds
off, Mdoda, one of the dismissed employees in the COS4, confirmed
this evidence. Mkhize confirmed the evidence tendered on behalf of
the employer with regard to the obstructive behaviour of the
employees in the finishing line;
the fact that none of them mentioned names of any
employees they alleged were also involved and should have been
treated the same.
Even on the postulate that they mentioned the
names, the dismissed employees’ case was throughout that they
never participate
in the retardation of production ;
the fact that there is no evidence that the employer,
in taking action against them and ultimately dismissing them and not
others
in the COS, acted in bad faith and/or with ulterior motive;
the evidence of Heath as to why other employees in the
COS were not disciplined even though a decline in the whole COS was
noted
was unchallenged. He clearly explained how difficult it was to
prove the involvement of other employees in the COS especially those
who produced different types of batteries. The employer simply did
not have sufficient proof of their involvement in the retardation
of production. On the evidence tendered it would, in my view, have
been unjustifiable for the employer to have taken disciplinary
action against the whole workforce in the COS department; and
the
fact that the employer did not rely solely on the information on
the graphs which showed a decline in the COS department when
it
preferred charges against the dismissed COS employees. Apart from
the information in the graphs which confirmed the trend in
the
reduction of production, the evidence of Steyn, Van Staden and Heath
also implicated the dismissed employees.
[26] There is therefore no merit in the submission that
all employees in the COS department should have been dismissed.
The
determination of the third issue
[27] The last contention raised relates to whether the
arbitrator performed his duties as required in terms of the law.
Reference
has been made above to the grounds of review of an
arbitrator who acts in terms of section 33 (1) of the Act. It
suffices to state
that the arbitrator, in his award, carefully and
properly analysed the evidence of the participation of the employees
in the retardation
exercise and analysed the evidence regarding the
participation of each and every one of the employees in the affected
groups. There
is therefore no merit in that contention. I do not
believe that the arbitrator committed any misconduct as envisaged in
the Stocks
Civil Engineering case,
supra,
or that he committed a gross irregularity.
Conclusion
[28] In the premises there is no evidence or grounds
which would justify this Court’s interference with the decision of
the court
a quo.
Accordingly,
the appeal is dismissed with costs.
_________________
NKABINDE AJA
I
agree
________________
NICHOLSON JA
I
agree
____________
PILLAY AJA
Date of
hearing: 9 November 2004
Date of
judgment : 23 March 2005
Appearances
:
For the
appellants : Adv. H van der Riet SC instructed byRuth Edmonds
Attorneys
For the
first respondent: Adv M Van As instructed by Ken McDade Attorneys