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[2006] ZALAC 11
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Carlos v IBM South Africa (Pty) Ltd and Another (A36/2004) [2006] ZALAC 11 (22 March 2006)
11
IN T
HE LABOUR APPEAL COURT OF
SOUTH AFRICA
HELD IN JOHANNESBURG
Case No: JA36/2004
In the matter between
SERGIO CARLOS
APPELLANT
and
IBM SOUTH AFRICA (PTY) LTD
1
ST
Respondent
ELIAS M HLONGWANE N.O
2
ND
RESPONDENT
________________________________________________________
JUDGMENT
________________________________________________________
NKABINDE AJA
Introduction
[1] The appellant appeals against
the judgment of the Labour Court in a review application brought in
terms of s 145 of the Labour
Relations Act 66 of 1995 (
“the
Act”)
. The first respondent (“
IBM
” or
“
the employer
”) had successfully applied to review
and set aside the award issued by the second respondent (‘the
commissioner’)
in which he found in favour of the appellant.
The dispute that culminated in the issue on appeal concerns the
question whether
IBM constructively dismissed the appellant (“
Carlos
”
or “
the appellant
”).
The facts
[2] The background facts are for
the most part common cause. Carlos was employed as a senior salesman
by the first respondent. His
salary changed from straight salary to
what was referred to as the Commission Plan. During October 2000, the
appellant’s
immediate senior at work, a Mr Hassim, raised some
concerns about the commission claimed by Carlos. He was of the view
that the
commission claimed by Carlos was not justifiable in relation
to the comparative gains made by the sales division. He then
addressed
an e-mail to Carlos expressing such concern. The e-mail
read:
“Sergio, I have a concern on the
competitive winback claims you have submitted to the SIP office. In
order for us to verify
your claims can you please complete the
following template for every customer situation where revenue is
claimed against the competitive
SSM template. The whole idea of the
competitive SSM template is to be actively involved in closing
business (new and existing)
in Competitive situations.”
[3] Subsequent to the e-mail
Carlos’ commission for November and December 2000 was withheld.
The appellant being concerned
about the fact that he was not going to
be paid a commission for that quarter, raised the matter with senior
management. Several
meetings were scheduled to address the matter.
Two of such meetings were held on 7 November 2000 and 13 December
2000. At the meeting
held on 7 November 2000 Carlos advised Hassim
that he sought legal advice regarding the latter’s e-mail. The
issue of the
commission was not resolved. At the meeting of 13
December 2000 Hassim requested Carlos to furnish all the information
on all his
claims in which payment had been made, particularly all
accounts in which he had been involved. Carlos expressed concern that
giving
such information would be prejudicial to him. Hassim explained
that the information was required, first, to verify Carlos’
claims, and, second, to identify problems attendant upon a sale plan
in order to avoid a similar problem in the future. Carlos
undertook
to furnish the information on all such accounts within two weeks from
13 December 2000. In his answering affidavit delivered
in the review
application, Carlos admits having made this undertaking.
[4] On 15 December 2000, barely
two days after the meeting and before furnishing the information he
had undertaken to furnish, Carlos,
through his attorneys, addressed a
letter to IBM tendering his resignation. He alleged in the letter
that the resignation was due
to IBM having rendered his continued
employment intolerable through its failure to pay him the commission
allegedly due to him
for the months of November and December. In
response to that letter of resignation on 10 January 2001 IBM denied
non-payment of
his basic salary and benefits for November and
December 2000. Regarding the commission claimed by Carlos, IBM stated
that the commission
was normally payable monthly in arrears in terms
of the Company Sales Incentive Plan and that the commission owed to
Carlos before
tax was R703.26 for October 2000 which amount, due to
an oversight, remained unpaid. It denied that it repudiated the
contract
of employment or terminated the contract of employment by
way of constructive dismissal. It stated further that Carlos had
resigned
voluntarily.
Arbitration.
[5] On 10 January Carlos referred
a dispute concerning constructive dismissal in terms of section
186(e) of the Act to the Commission
for Conciliation, Mediation and
Arbitration (‘CCMA’), for arbitration claiming
compensation and payment of outstanding
monies allegedly owed to him
by IBM.
[6] At arbitration a bundle of
documents, including written communication between the parties, was
handed in by agreement. The parties
agreed that the documents in the
bundle were to be what they purported to be. The commissioner found
that the reason that prompted
Carlos’ resignation was unfair
and that Carlos had established that he had been constructively
dismissed. The commissioner
ordered IBM to pay Carlos compensation in
an amount ‘equal to R480 333.00 within 14 days of receiving
this award’.
He further ordered the parties to convene a
meeting to reconcile their calculations of the commission …’.
In reaching
the conclusion the commissioner stated that-
‘The respondent’s letter referring
to ‘oversight was served on the applicant on or about 10
January 2001, it is
about 25 days after the resignation of the
applicant. No evidence was placed before me that his information was
made
available to the applicant on 15
December 2000. For this reason, I cannot see why the applicant was
precluded from seeking help
I (sic) this regard or to declare a
dispute with the respondent.
The respondent’s failure to pay was
deliberate….
I fail to find any justification in what Mr
Hassim had said and I must state such statement is in contradiction
to the 'oversight
letter' referred to earlier.
To this end, I am satisfied that the reason
that prompted the applicant to resign [was] unfair. A constructive
dismissal has been
established by the applicant.’
Review application in the
Labour Court.
[7] The employer launched a review
application in terms of s 145 of the Act for an
order, among
other things, to review and set aside the
award and to
declare that Carlos had voluntarily resigned. The grounds for review
were that the commissioner had committed gross
irregularities in the
conduct of the arbitration proceedings in that he had failed to give
proper consideration to relevant facts
and evidence placed before him
and
to properly assess the evidence, and, that he had failed
to apply the
proper test in determining
whether Carlos
had indeed been constructively dismissed.
[8] The employer's contention was
that payment of the outstanding commission was to be effected upon
Carlos furnishing the information
he had undertaken on 13 December to
furnish to the employer within two weeks of that date. Carlos
admitted that he had undertaken
to furnish the information which the
employer had requested. His contention was that he was under the
impression that payment would
be effected immediately after the
meeting held on 13 December 2000. The Labour Court set the award
aside. In setting the award
aside with costs and declaring that
Carlos had resigned voluntarily, the Court a quo remarked, inter
alia, that-
"In casu Carlos could have lodged a
grievance if he was unhappy about the instruction to supply the
required information. It
was open to him to show that the supply
thereof would be prejudicial to him as he stated in the meeting and
in what way he would
be prejudiced. There is no evidence that the
suspicions of undue claims by Hassim were not true and/or were
unfounded. Carlos admitted
in papers that he had undertaken to supply
such information within two weeks. He could not explain, however, why
he decided to
renege on this agreement. He stated that the sole
reason for the resignation was the failure to pay the commission.
In my view [IBM] was entitled to demand the
information from Carlos and he was unreasonable to expect payment
before such information
was furnished as agreed. To the knowledge of
Carlos this was the source of concern, which was subject of the
investigation. In
other words the information required was directly
linked to amounts of commission claimed. Consequently it is highly
improbable
that he would have expected immediate payment when the
information was still outstanding.
The finding by the arbitrator that the reason
that prompted the resignation was unfair does not make sense,
especially if regard
is being had to the circumstances of this case.
There was an agreement to supply the information at the meeting of
the 13
th
December 2000. Carlos advanced no reasons why he
failed to do so. The reasoning of the arbitrator demonstrates clearly
that he
did not apply his mind to the facts placed before him.
[Carlos| was paid his normal monthly salary. It was not as if the
situation
was such that he could not tolerate the employment
conditions. There was no change in the conditions as such. The
investigations
were necessary before any decision could be taken
regarding the continuation of payments. The continuation of payments.
If anything
out of that decision became intolerable it was self
induced and [Carlos] is not entitled to benefit therefrom."
With the leave of the Court a quo
Carlos now appeals to this Court.
The Appeal
[9] On appeal Carlos contended
that the furnishing by him of information to IBM which was within the
knowledge of IBM was a term
which the latter sought to impose
unilaterally upon him in an unreasonable manner. It was argued
further that the resignation by
Carlos was a measure of last resort
as he had made attempts to resolve the situation. It was further
contended on behalf of Carlos
that the employer had admitted, 25 days
after Carlos' resignation, that the commission was due to him and
that, at the meeting
held on 13 December 2000, Carlos had understood
Hassim to mean that he (Carlos) would be paid immediately after the
meeting.
[10] On appeal the appellant
attacked the judgment of the Court a quo and submitted that the award
was justifiable. The employer
contended that the award was
unjustifiable and the Court a quo was correct in reviewing and
setting it aside.
[11] Section 186(1)(e) of the Act
deals with the type of dismissal commonly
known as
"
constructive dismissal
".
It provides that it
is a dismissal if-
(e) "an employee terminated a contract of
employment with or without notice because the employer made continued
employment
intolerable for the employee."
It is clear from the provisions of
sec 186(1)(e) that for there to be a constructive dismissal,
there must be a termination of
the contract of employment;
the employee must be the one who
terminated the contract of employment;
the employee’s reason for
the termination of the contract of employment must be that continued
employment had become intolerable,
and,
the employer must be the one who
made continued employment intolerable for the employee.
The employee bears the onus to
prove all of the above requirements for constructive dismissal. The
employee must act reasonably
in resorting to terminating the contract
of employment. In other words, if the employee’s conduct in
resorting to terminating
the contract of employment when faced with
the situation which he found unacceptable was unreasonable, there can
be no constructive
dismissal. Also, if the employee could reasonably
be expected to have given the employer more time to address the
situation or
problem, then constructive dismissal has not been proved
because in such a case it cannot be said that continued employment
had
become intolerable.
[12] In determining whether the
employer's conduct made the continued employment intolerable an
arbitrator or the Court ought to-
‘look at the employer's conduct as a
whole and determine whether ... its effect, judged reasonably and
sensibly is such that
the employee cannot be expected to put up with
it.”
(see
Pretoria Society for the
Care of the Retarded v Loots
(1997) 18 ILJ (LAC) at 985C
)
The arbitrator or the Court shou
l
d
also
'
consider whether or not the
employee has taken advantage of any internal procedures available to
him
(Old Mutual Group Schemes v
Dreyer
and Another (1999) 20 ILJ 2030
(LAC) at para 16).
[13] In this matter Carlos resigned on 15 December but
had agreed, on 13 December, to provide Hassim with information that
Hassim
had requested him to provide before his claim(s) could be
decided upon or honoured. It is common cause that between 13 and 14
December
the employer did not do anything that could have prompted
Carlos to change his mind and resign even before he could supply the
information that he had agreed to supply.
[14] Whether or not continued employment was intolerable
must be determined as at the date of the resignation. That would be
on
15 December. Carlos had agreed on 13 December to give Hassim more
time to deal with his concern and had undertaken to give Hassim
the
information that the latter required. He was to give such information
within two weeks from 13 December. He resigned before
that period of
two weeks could expire. He gave no acceptable justification for doing
so before the expiry of that period. The commissioner’s
finding
completely ignored this and was, in my view, unjustifiable. In those
circumstances the Court a quo was correct in its conclusion
that no
constructive dismissal had been proved. As to costs, there is no
reason why costs should not follow the result.
[15] In the premises the appeal is dismissed with costs.
Nkabinde AJA.
I agree.
Zondo JP
I agree.
Davis AJ
Appearances:
For the appellant : Adv CC Ascar
Instructed by : McLaren and Associates
For the respondent : Adv D Loxton
Instructed by : Bowman Gilfillan
Date of judgment : 22 March 2006