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[2011] ZALAC 5
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Volkswagen (SA) Pty Ltd v Koorts and Others (PA10/09) [2011] ZALAC 5; [2011] 6 BLLR 561 (LAC); (2011) 32 ILJ 1892 (LAC) (9 March 2011)
IN THE LABOUR
APPEAL COURT OF SOUTH AFRICA
HELD AT PORT
ELIZABETH
CASE NO:
PA10/09
BEFORE: MLAMBO
JP, TLALETSI JA and LANDMAN AJA
In the matter
between:
VOLKSWAGEN SA
(PTY) LTD
…...............................................................
APPELLANT
and
MARTIN KOORTS
N.O
….............................................................
FIRST
RESPONDENT
NUMSA
….................................................................................
SECOND
RESPONDENT
D GOLIATH
…...............................................................................
THIRD
RESPONDENT
K SAME
….................................................................................
FOURTH
RESPONDENT
H MARAIS
…..................................................................................
FIFTH
RESPONDENT
L FANSE
…....................................................................................
SIXTH
RESPONDENT
M BARKES
….........................................................................
SEVENTH
RESPONDENT
S ARNOLDS
….............................................................................
EIGHT
RESPONDENT
P HAIGH
…....................................................................................
NINTH
RESPONDENT
H JORDAAN
…............................................................................
TENTH
RESPONDENT
A DOLLEY
…........................................................................
ELEVENTH
RESPONDENT
R VAN
BUCHENRODER
…....................................................
TWELFTH
RESPONDENT
G SLAMDILL
….................................................................
THIRTEENTH
RESPONDENT
M JANTJIES
…................................................................
FOURTEENTH
RESPONDENT
M TAKA
…............................................................................
FIFTEENTH
RESPONDENT
J ARENDS
….......................................................................
SIXTEENTH
RESPONDENT
D TYLER
…....................................................................
SEVENTEENTH
RESPONDENT
L HLULANI
…...................................................................
EIGHTEENTH
RESPONDENT
H CLAASEN
…..................................................................
NINETEENTH
RESPONDENT
JUDGMENT
LANDMAN AJA
:
Introduction
[1] This is an
appeal against the judgment of Bhoola AJ (as she then was) dismissing
an application to declare a submission to arbitration
void on the
grounds of a common error or supposition and declining to review and
set aside the award of the arbitrator. The appeal
is opposed by all
the respondents save for the first and ninth respondents. I shall
refer to the respondents, who were employees
of the appellant, as
“the employees”.
[2] Volkswagen SA
(Pty) Ltd, the appellant, manufactures vehicles at its plant in
Uitenhage. It employs a large staff of salaried
and hourly paid
employees. Early in 2005 Mr Rautenbach, the appellant’s head of
security, received information that some
employees were playing cards
and gambling in the lead wipers locker room (“the wiper locker
room”). As a result it
was decided to install a video camera
and to commence with video surveillance of all the employees who
entered and exited the wiper
locker room. The surveillance covered
the period Saturday 21 May to Friday 10 June 2005.
[3] The footage
was viewed and a number of employees, mostly those who spent, what
the security services considered to be an undue
period of time in the
locker room, were interviewed individually or in groups by the head
of security. The employees were not told
that the company had
conducted a video surveillance.
[4] Thereafter the
selected employees were charged with three attendance offences.
Supervisors were charged with an additional offence.
A disciplinary
enquiry was convened in September 2005. After the employees had given
their evidence the video tapes were screened
and admitted into
evidence. The chairperson of the disciplinary committee found that
the charges had been proven and dismissed
the employees.
[5] The employees,
assisted by their trade union, declared a dispute. They entered into
an arbitration agreement with the appellant
and appointed the first
respondent, Martin Koorts, as their arbitrator. The arbitrator heard
the evidence and concluded that the
dismissals were procedurally fair
but substantively unfair and awarded compensation to two employees
and ordered the retrospective
reinstatement of the other employees.
[6] The appellant
decided to challenge the award in the Labour Court. It discovered
that the award made by the arbitrator could
only be challenged on the
relatively narrow grounds contained in
section 33
of the
Arbitration
Act 42 of 1965
. Appellant’s challenge of the validity of the
arbitration award was unsuccessful. The appellant was also unable to
convince
the court
a quo
to review and set aside the award.
The appellant appeals to this court against that judgment. The main
premise of the appeal is
that the parties laboured under a common
error in concluding the submission to arbitration.
The validity of
the arbitration agreement
[7] The
arbitration agreement was settled by three sets of legal
representatives. The terms of the arbitration agreement are
particularly
relevant. Three aspects of clauses two and three of the
submission to arbitration need to be highlighted:
(a) the arbitrator
was enjoined to determine whether, based on the evidence presented
during the course of the arbitration proceedings,
there existed:
“…fair cause to make a finding of misconduct against the
employees based on the allegations raised
against them in the
disciplinary proceedings”. The arbitrator was in the event of
such misconduct being established further
enjoined to determine a
fair sanction;
(b) the arbitrator
was obligated to “conduct the proceedings as if appointed under
section 188A of the Labour Relations Act
66 of 1995 (the “Act”)”;
(c) the parties
specifically agreed that “
although the proceeding are
private in nature they will be entitled to rely upon the grounds of
review encapsulated in section 145
of the Act
and further agree,
to the extent necessary, that the arbitrator’s award is
required to be both rational and justifiable within
the meaning of
the authorities”. (My emphasis.)
[8] Mr A E
Franklin SC, with him Mr R B Wade SC, who appeared for the appellant,
submitted that in spite of the parties’ best
intentions, the
position is that courts are not legally able to give effect to the
parties’ requirement that a private arbitrator
render an award
which is “rational and justifiable”, or any other review
standard for that matter. Unless the error
thus vitiates the award a
review court is bound to measure the product of private arbitration
proceedings against the narrow grounds
of review encapsulated in the
Arbitration Act of 1965
.
[9] That this is
the legal position is borne out by
Telcordia Technologies Inc v
Telkom SA Ltd
[2006] ZASCA 112
;
2007 (3) SA 266
(SCA). Harms JA had the following
to say at 292:
“
[51]
Last, by agreeing to arbitration the parties limit interference by
courts to the ground of procedural irregularities set out
in s 33(1)
of the Act. By necessary implication they waive the right to rely on
any further ground of review, ‘common law’
or otherwise.
If they wish to extend the grounds, they may do so by agreement but
then they have to agree on an appeal panel because
they
cannot by agreement impose jurisdiction on the court
.”
(My emphasis.)
[10]
This view has been reconfirmed by the SCA in
Lufuno
Mphaphuli and Associates (Pty) Ltd v Andrews and another
[2007] ZASCA 143
;
2008 (2) SA 448
(SCA) which has received the
approval of the Constitutional Court in
Lufuno
Mphaphuli and Associates (Pty) Ltd v Andrews
and
another
2009 (4) SA 529
(CC). The
Labour Appeal Court adopted the same view in
National
Union of Mineworkers on behalf of employees v Grogan NO and another
(2010) 31
ILJ 1618 (LAC) at para 33.
[11]
Counsel for the appellant submitted that it is necessary to decide on
the validity of the arbitration agreement at the outset.
This was the
approach which the court
a quo
followed.
The court
a quo
decided
that the agreement was not vitiated by mistake.
[12]
Counsel for the respondents pointed out that, in the court
a
quo,
the appellant urged the court to
adopt the opposite approach. On that occasion appellant’s
junior counsel, Mr Wade (now Wade
SC) urged the court to review the
award and, only if the review were to fail, should the court decide
the nullity issue.
Evaluation
[13] In my view
the logical approach is that adopted by the court
a quo
. If
the arbitration agreement is null and void then the award must fall
with it. The court
a quo
found that the Labour Court was
clothed with jurisdiction to consider whether the arbitration award
before it was preceeded by a
valid arbitration agreement. See section
157(3) of the LRA read with the
Arbitration Act of 1965
.
Section
157(3)
of the LRA reads:
“
Any
reference to the court in the Arbitration Act 1965 (Act 42 of 1965),
must be interpreted as referring to the Labour Court when
an
arbitration is conducted under that Act in respect of any dispute
that may be referred to arbitration in terms of this Act.”
[14] A High Court
has the power in terms of
section 3
of the
Arbitration Act of 1965
to
set aside a submission to arbitration. This being so the Labour
Court, when it performs the functions as contemplated by
section
157(3)
of the LRA, enjoys the same jurisdiction and powers.
Section
151(2)
does not affect the operation of
section 157(3)
of the LRA.
Agreement
vitiated by common error?
[15] The court
a
quo
decided that the parties were
ad idem
in respect of
the review standard, even though this may have been based on a common
error. This error does not vitiate the consensus;
nor does the nature
of the award render the review standard material. The court
a quo
said, in this regard, at paragraph 15 of the judgment:
“
Insofar
as submissions were made by the parties on the issue of whether the
materiality of the clause was contingent on a finding
that the award
was irrational and unjustifiable, I do not consider it necessary to
deal with this given that I have concluded that
the review standard
is not a material term of the arbitration agreement. I agree with the
applicant that this court is not required
to determine rationality
and justifiability and then on this basis backtrack to determine
whether the term was material or not,
but instead I am required to
decide whether there was consensus, and if not the agreement is then
vitiated. I have already indicated
that, in my view, there clearly
was consensus between the parties in respect of the review standard,
even though this may have
been based on a common error. The error
does not vitiate the consensus, in my view, nor does the nature of
the award render the
review standard material.”
[16] Counsel for
the appellant submitted that the court
a quo
was plainly wrong
to conclude that the common error was not material. He submitted that
its finding runs counter to the evidence
which was either common
cause or not seriously disputed and further that, had the court
accepted the materiality of the error,
it is inevitable that the
application would have succeeded. That being so, the appeal should
succeed on this circumscribed issue
so it was submitted.
[17] This
submission was made on the following basis:
(a) The
appellant’s ability to have recourse to the grounds of review
that would have been available to it (had the matter
run its ordinary
course in the CCMA) represented “an absolute precondition to
the submission of the dismissal dispute to
the first respondent.”
(b) It is plain
that the parties’ consensus reflected in the arbitration
agreement had two main elements. First, the three
parties to the
arbitration proceedings plainly intended to afford themselves the
right to invoke
section 145
of the LRA. Secondly, the parties also
intended prescribing the precise review standard against which they
wished the Labour Court
to assess the arbitrator’s award in the
event that either of them were dissatisfied with the award.
(c) Although there
may previously have been some uncertainty regarding the question
whether or not parties to private arbitration
proceedings could, in a
binding fashion, expand upon a review court’s jurisdiction, the
law has now become settled.
(d) If the
parties’ mistake is sufficiently fundamental the contract will
be
void ab initio
for initial impossibility. The general rule
is that a contract is a nullity if at the time it was made it was
factually or legally
impossible of performance. See
Peters,
Flamman and Co v Kokstad Municipality
1919 AD 427.The
impossibility must be absolute as opposed to probable.
(e) A common
mistake not giving rise to initial impossibility will justify
rescission by either party if it relates to a matter
which was vital
to the transaction, in the sense that if either of them had been
aware of the true position, the transaction would
not have gone
ahead. A common mistake on a matter which is not material will of
course have no effect on the validity of the contract.
(f) The disputed
clause was considered material or “
vital to the transaction”
because:
(i) had the
appellant been aware of the legal impediment under consideration, it
would not have entered into the arbitration agreement
in its current
form and would either have allowed the matter to be addressed under
the LRA, or insisted on material adjustments
to the arbitration
agreement;
(ii) the mere fact
that the clause was inserted and that it features prominently and can
hardly be regarded as an ancillary provision
is proof positive that
the respondents’ themselves considered the clause material.
(g) The matter is
identical to the decision of the Labour Court in
Lear Sewing (Pty)
Ltd v Tokiso Dispute Settlement (Pty) Ltd and others
(unreported
judgment of the Labour Court; P 131/07) where a submission to
arbitration was set aside.
[18] On the other
hand the respondents contended that:
(a) No mistake,
whether material or otherwise, was made.
(b) To the extent
that there had been a common mistake between the parties, the
respondents dispute the appellant’s contention
regarding the
materiality of that alleged mistake.
(c) The judgment
in
Lear
does not support the appellant’s case at all. In
Lear
the dispute between the parties was that the applicant,
in that matter, claimed that the parties had agreed on extended
review
grounds whilst the respondents in that case claimed that they
had in fact, by necessary implication, agreed on the narrow review
grounds contained in the Arbitration Act of 1965.
(d) The court
a
quo
was entirely correct when it concluded that the common
mistake between the parties was not a material one.
Evaluation
[19] A submission
to arbitration is a contract. A party cannot resile from the contract
without the consent of the other party.
See
Turkstra and another v
Massyn
1958 (1) SA 623
(T) at 625. But if the agreement is void
it is unenforceable and any award made in terms of a void submission
to arbitration will
be invalid.
[20] The appellant
alleged that the submission to arbitration is void on account of a
common mistake. The second to eighth and tenth
to nineteenth
respondents defend the validity of the submission to arbitration and
that of the award.
[21] The appellant
relies,
inter alia
, upon the decision in
Lear
. This
decision concerned parties who wished to submit to pre-dismissal
arbitration in terms of section 188A of the LRA which would
ensure
that the award could be reviewed on the broad grounds in section 144.
They however laboured under a common error that Tokiso
was an
accredited organisation and that an award of an arbitrator acting
under the auspices of Tokiso could be reviewed on broad
grounds.
Tokiso was not accredited by the CCMA and the result is that the
narrow grounds of
section 33
of the
Arbitration Act of 1965
applied.
The Labour Court set aside the submission to arbitration.
[22] The Labour
Court in
Lear
did not refer to the approach adopted in
Wilson
Bayly Homes (Pty) Ltd v Maeyane and others
1995 (4) SA 340
(T)
nor
Van Reenen Steel (Pty) Ltd v Smith NO and another
2002 (4)
SA 264
(SCA). It was content to find that there had been a common
error of fact. It did not consider the further step mentioned in
these
two decisions.
[23] In
Blaas v
Athanassiou
1991 (1) SA 723
(W) Hartzenberg J, who was seized
with a similar matter (both parties had thought that an award could
be appealed), said at 725A-D:
“
It is
accepted that the respondent would not have entered into the
agreement if he had known that he could not appeal to the Appeal
Court against the arbitrator’s award. Even if it is accepted
that that
error
juris
can
in these circumstances vitiate the contract, which I definitely do
not say is the case, then in any event it has to be decided
if the
respondent’s
error
was
j
ustus
or not. (See
George
v Fairmead (Pty)
Ltd
1958 (2) SA 465
(A) at 471C-E.) There is no suggestion of any fraud
or other improper conduct on the side of the applicant, which led the
respondent
to his mistaken belief. He has only himself to blame for
it. In the circumstances I cannot accept that his
error
was j
ustus.
In
my judgment, further, the right in the agreement as to an appeal, as
opposed to an automatic right of review, was merely incidental
to the
main agreement, i.e. to submit to arbitration. In my view the
respondent is bound by the agreement. This point accordingly
fails.”
[24]
Blaas v
Athanassiou
was followed by Mpati J (as he then was) in
Patcor
Quarries CC v Issoroff and others
1998 (4) SA 1069
(SE).
[25] However, the
error need not be a justus or reasonable one where there is a common
error as regards a supposition, as is the
case here. See
Humphreys
v Laser Transport Holdings Ltd
1994 (4) SA 388
(C). I accept
that, for purposes of common mistake, there is no difference between
a mistake of law and a mistake of fact. See
R H Christie
The Law
of Contract
4
th
edition 382 and
Bulawayo
Municipality v Dundee Butchery Ltd
1944 SR 120 at 125. In
Van
Reenen Steel (Pty) Ltd v Smith NO and another
(
supra
) at
270 Harms JA (as he then was) cited the following passage from Van
der Merwe et al
Contract: General Principles
19 with approval:
“
[12]
Van
der Merwe et al
sum
it all up:
‘
A
common mistake is said to be present where both parties to an
agreement labour under the same incorrect perception of a fact
external to the minds of the parties. Such a mistake, of course, does
not lead to
dissensus:
the
parties are in complete agreement, although their
consensus
is
based on an incorrect assumption or supposition. This kind of mistake
can be related to the concept of a common underlying supposition
(“veronderstelling”) on which the parties base their
contract so that a mistake in their common motive will render
the
contract without further effect.’
[13] It follows from this that
the quoted statement in
Wilson Bayly Homes
conforms to
authority and principle...”
[26] The dictum by
Nugent J (as he then was) in
Wilson Bayly Homes (Pty) Ltd v
Maeyane and others
(
supra
) at 343I clearly explains the
basis for voiding some agreements featuring common errors or the
existence of an assumption and not
others. Nugent J said at 344I to
J:
“
As I
understand the decisions in those cases, a common mistake relating to
the existence of a particular state of affairs will not
render the
contract void unless it can be said that the parties expressly or
tacitly agreed that the validity of the contract was
conditional upon
the existence of that state of affairs.”
[27] This is what
prompted Harms JA in to say in
Van Reenen
at 270D:
“
The
correctness of the conclusion can be tested in other ways. If the
question were to be asked whether the appellants would not
have
concluded the agreement had they known of the true facts, the answer
is probably in the affirmative.”
[28] Clearly the
parties laboured under a common error. But would the appellant not
have concluded the submission to arbitration
had it known of the true
legal position? What would the parties have said to the officious
bystander if told that they could not
instruct the Labour Court to
review their matter on broader grounds than those in
section 33
of
the
Arbitration Act? They
probably would have said: “We have a
limited choice. Either we go to the CCMA and have no say as to which
commissioner will
be allocated to arbitrate our matter but we can
review the award on wide grounds; or we can continue with
arbitration, choose our
arbitrator but accept the narrow grounds of
review”. The probabilities are that the parties would rather
wish to choose their
arbitrator and the benefits of private
arbitration. The parties would also probably say: “Although we
cannot prescribe to
the Labour Court how it should review an award,
we can validly charge the arbitrator with the injunction to hear the
matter as
would a CCMA commissioner. If the arbitrator fails to do so
his award can be reviewed on the basis of misconduct”. They may
also have said: “We could arrange for an appeal to a panel and
charge that panel with powers similar to those relating to
the wide
grounds of review. But if we do so the decision of that panel could
be reviewed on the narrow grounds”. See
Hos+med
Medical Aid Scheme v Thebe Ya Bophelo Healthcare and others
[
[2007] ZASCA 163
;
2008]
2 ALL SA 132
(SCA).
“
So
we stand by our submission”.
[29] I therefore
conclude that the submission to arbitration is valid. That part of
clause 3, which purports to impose an obligation
on the court, is
severable from the remainder of the contract. It can be deleted
without depriving the parties of their bargain.
It must therefore be
deleted. I turn to consider the application to review the award of
the first respondent.
The review on
narrow grounds
[30] The award of
the arbitrator may be reviewed on the grounds in
section 33
of the
Arbitration Act of 1965
which are set out below:
“
Setting
aside of award:
(1) Where-
(a) any member of an
arbitration tribunal has misconducted himself in relation to his
duties as arbitrator or umpire; or
(b) an arbitration tribunal has
committed any gross irregularity in the conduct of the arbitration
proceedings or has exceeded its
power; or
(c) an award has been
improperly obtained,
the court may, on the
application of any party to the reference after due notice to the
other party or parties, make an order setting
the award aside.
(2) …
(3) …
(4) If the award is set aside
the dispute shall, at the request of either party, be submitted to a
new arbitration tribunal constituted
in the manner directed by the
court.”
The charges
[31] During the
disciplinary hearing and during the arbitration the employees faced
the following charges:
“
It is
alleged that you committed serious misconduct, in breach of the trust
necessary to sustain the employment relationship in
that:
You dishonestly and
deliberately abandoned your workstation during normal working hours,
and without having any prior authority
to do so for
periods/approximating to the time specified below.
You dishonestly took money in
the form of remuneration for the period during which you were not
working, to which you knew you
were not entitled.
You dishonestly and
deliberately attempted to mislead the Company by providing false
information when you were requested to explain
your conduct.
In respect of
group leaders:
4. You undermined the authority
entrusted to you in your position as a Group Leader by participating
in and/or condoning conduct
in breach of the standards which you are
required to uphold.”
Appellant’s
submissions
[32] Counsel for
the appellant submitted that:
(a) the
arbitrator’s award is an aberration,
inter alia,
on
account of the fact that he never at any stage sought to actually
assess the versions of the individual respondents with a view
to
determining (on the probabilities) whether those accounts were
credible and, importantly, whether or not the individual respondents
actually believed that they could do what they did. He therefore
ignored his terms of reference;
(b) the arbitrator
could only discharge his function (under his agreed terms of
reference) by analysing the individual respondents’
evidence,
and thereafter properly assessing the appellant’s submissions
in relation to both the veracity of their account,
and the central
enquiry whether or not they had acted dishonestly by engaging in
their own private affairs whilst being paid by
the appellant;
(c) what is plain
is that the arbitrator premised his assessment of the evidence on the
adoption of the fixed principle that the
individual respondents were
unaware that what they were doing was wrong;
(d) there was no
credible evidence supportive of the conclusion that the individual
respondents were not aware of the concept of
“
stealing
company time.”
This was in any event not the case presented
by them. The essence of their defence, and it was far from
consistent, was to the effect
that they were entitled to do what they
did in circumstances where there was no work for them to perform;
(e) at the most
elementary level the arbitrator inexplicably failed to appreciate
that the central factual enquiry, being whether
or not the individual
respondents had been dishonest, could not be resolved with reference
to general principles and abstract observation;
(f) the arbitrator
acted unjustifiably and irrationally (and “unreasonably”)
in concluding that the question whether
or not there was in fact work
to perform was a central enquiry, and that the individual
respondents’ evidence to the effect
that they had no work to
perform was probable;
(g) this general
conclusion was at odds with the individual respondents’ own
evidence and, moreover, the clear import of the
probabilities
something the arbitrator never turned to assess;
(h) entirely
irrelevant was the arbitrator’s conclusion to the effect that
there was no sustainable evidence to support the
finding that the
individual respondents had compromised either quality or quantity.
Not only was this not the thrust of the appellant’s
case, it is
a fact or consideration of absolutely no relevance in relation to the
fundamental enquiry regarding the individual
respondents’ state
of mind;
(i) equally
irrational and unjustifiable was the arbitrator’s attempt to
suggest that there could be no dishonesty in the
absence of concrete
proof that, at time of the respective absences, the individual
respondents did not in fact have work to perform;
(j) equally devoid
of rationality and reason was the arbitrator’s finding that
because (according to him) certain of the individual
respondents had
not acted dishonestly, those of the individual respondents who
performed the function of group leaders could not
be guilty of either
participating in and/or condoning a breach of the appellant’s
standards;
(k) the arbitrator
plainly failed to appreciate that charge four was not in itself
dependent upon a factual conclusion to the effect
that either the
group leader or his subordinates were themselves dishonest;
(l) the fact is
that in exercising his power an arbitrator is enjoined to comply with
the provisions of the arbitration agreement.
He is also primarily
obliged to observe the rules of natural justice, implying,
inter
alia
, that he must act fairly; and
(m) the
arbitrator’s award cannot stand because in his method of
approach and reasoning the arbitrator’s adoption of
a number of
fixed and abstract “principles” led to him consciously
electing not to address fundamental aspects of the
evidence
supportive of the appellant’s overall version, thereby
depriving the appellant of its right to a fair hearing.
Evaluation
[33] This matter
has been made more difficult by the intrusion of an excess of
emotion. First the employees have been taxed with:
deliberately
abandoning their work, “stealing company time”, and
dishonestly taking remuneration. Secondly the charges,
which I have
set out above, are not found in the disciplinary code although it was
conceded that the code is a guide and that additional
offences may be
formulated. Thirdly I must point out that there appears to be a
splitting of charges. The employees are charged
with making false
explanations to Rautenbach about their absence from their workstation
and activities in the locker room although
there appears to be no
explicit provision in the code for this offence. This charge or the
evidence relating to this charge is
in turn, according to the
appellant, to be used to demonstrate that the employees were
dishonest in the sense that they stole company
time to spend on their
own private interests while being paid for this time.
[34] Another
aspect which is raised in counsel’s heads is that the pursuit
of private matters during working hours is prohibited.
This, it is
said, may be inferred from the prohibition on gambling on company
premises during working hours. Although the employees
believed
gambling was prohibited it seems that the appellant did not share
this view at the hearing. In any event this was not
the charge the
employees faced. It was their non-attendance or, as it was framed,
dishonest state of mind and their non-attendance
which was the cause
of the complaint.
The award
[35]
A
close reading of the award shows that the arbitrator
approached the matter asking whether the charges brought against the
employees
were permissible and legitimate. In the second instance,
which is in effect in the alternative, he said that the evidence did
not
establish dishonesty on the part of the employees.
The main
approach to charges one and two
[36] The
arbitrator started from the premise that
the
evidence presented during the arbitration proceedings established
that the employees left their workplaces or stations during
a period
when there was no work to be done. This was either when there was a
break in production for one or other reason or where
an employee had
such a degree of expertise that he “could work his way up the
production line”, so that he would complete
his work
competently in less time than allowed.
[37] The appellant
has attacked this finding but there is no evidence that the absences
of the employees from their work place did
not coincide with down
time. The appellant led no evidence from the supervisors that this
was the case. The appellant also submits
that the arbitrator
misdirected himself by taking into account irrelevant evidence namely
that production did not suffer when the
employees were absent from
work. But this does not take sufficient cognisance of the fact that
this evidence supported the employees’
case that there was no
work to be done; hence no harm. In addition a manager called by the
appellant said that it would have been
impossible for an employee to
have been absent from his work for long periods when the production
line was running.
[38] After having
established that the absences related to down time, the arbitrator
examined the charges which the employees faced
to determine whether
they were legitimate charges.
[39] The
arbitrator was charged to conduct the arbitration as a CCMA
Commissioner would (this was directed by terms of the submission
to
arbitration). Paragraph 7 of the Code of Good Practice: Dismissal
(8
th
schedule to the LRA), which CCMA commissioners
routinely apply, provides:
“
Guidelines
in cases of dismissal for misconduct. –
Any person who is determining
whether a dismissal for misconduct is unfair should consider –
(a) whether or not the
employee
contravened a rule or standard regulating conduct in, or of relevance
to, the workplace; and
(b) if a rule or standard was
contravened, whether or not –
(i) the rule was a valid or
reasonable rule or standard;
(ii) the
employee
was
aware, or could reasonably be expected to have been aware, of the
rule or standard;
(iii) the rule or standard has
been consistently applied by the employer; and
(iv)
dismissal
was an
appropriate sanction for the contravention of the rule or standard.”
[40] The
arbitrator noted
the following species of
misconduct, which are gathered under the general heading
“Transgressions Relating to Attendance”.
“
Being
absent from work without authority (A.W.O.L.).”
“
Being
late at one’s place of work without a legitimate reason (this
includes tea and lunch breaks).”
“
Leaving
workplace before official stopping time (this includes tea and lunch
breaks).”
“
Being
absent from workplace without permission from duly authorised
Supervisor.”
[41] These
offences indicate the rules relating to attendance at work regardless
of whether there is work to do or not. But in the
context and against
the backdrop of the evidence the arbitrator confined himself to
non-attendance at the workplace or station
while there was no work to
be done.
[42] The
arbitrator appreciated that the code was a guideline and that the
employer was entitled to amplify it. But only where it
was fair and
only where the employees would have an appropriate inkling that the
conduct in question could reasonably be regarded
as misconduct in
their workplace.
[43] The
arbitrator concluded in essence that it was impermissible to create
charges based on their non adherence to the rules relating
to
attendance (being absent from their workstations without permission)
coupled with a mental element of dishonesty. He provided
examples as
to why this was not so but he was careful to provide examples where
non-attendance and dishonesty could be legitimately
coupled.
[44] An important
charge, which the employees faced, was that which the appellant
expressed metaphorically, namely that they were
guilty of “stealing
company time”. The first observation, of course, is that time
cannot be appropriated; merely wasted.
Secondly when there was no
work to do employees were paid for being available for work. The
notion of dishonesty imports an intention
to cheat or defraud
another. The employees did not represent or misrepresent to the
employer that they are entitled to remuneration
for down time. The
employer paid them as it is obliged to do. If an employee left his or
her workstation, when there was no work
to do, and kept himself
available for the resumption of work when work becomes available, it
cannot be said that the employee defrauds
the employer when he is
remunerated.
[45] What if the
employer is correct that the employees went to the locker room to
play cards or even gamble, during down time and
without permission to
absent themselves from their workplaces, would the employees be
defrauding their employer? They would be
paid in any event when there
is down time. They have not caused the down time. They may be
punished if they left their work stations
during down time without
permission but they would be entitled to their wages. They had not,
on the facts, engaged on a frolic
of their own which would have
entitled their employer to have regarded them as being absent from
its service.
The alternative
approach to charges one and two
[46] Secondly the
arbitrator examined the evidence (presumably on the assumption that
the charges were good ones) to see if there
was dishonesty on the
part of the employees and found that the employees were not
dishonest. This he did in a cursory fashion as
he had already decided
the matter on the basis that the charges were impermissible. He was
entitled to deal with the evidence in
this way and to make the
decision he did. It cannot be said that he misconducted himself in
anyway.
Charge three
[47] If an
employee leaves his workplace when there is no work, and lies about
what he went to do in a locker room during this time,
he may be
contravening an employer’s rule. This is the substance of the
third charge. The arbitrator did not investigate
whether the code
provided for this or, if the code did not contain such a rule,
whether the rule was a legitimate one; whether
the rule was breached;
was the breach a breach of trust; how serious was the breach and what
would be a suitable sanction? The
arbitrator opined that “the
Applicants were clearly not confronted with the allegation that they
‘were stealing Company
time’ when they were interviewed
by Claasen and Rautenbach...” This was not substance of the
charge. The charge was
that they provided a false explanation of
their presence in the locker room. The arbitrator clearly failed to
apply his mind to
the charge and the evidence and to investigate this
aspect. He committed misconduct in the sense which it is used in
review proceedings.
[48] The court
a
quo
did not specifically consider this aspect. It should have.
The failure of the arbitrator to have applied his mind in this
respect
constitutes misconduct.
Charge four
[49] The appellant
charged group leaders with undermining the authority entrusted to
them as a Group Leader by participating in
and/or condoning conduct
in breach of the standards which they are required to uphold. The
appellant complains that the arbitrator
did not appreciate that this
charge was unrelated to the charges relating to non attendance and
dishonesty. The arbitrator did
not see it this way. The whole thrust
of the charges was based on this alleged conduct. The arbitrator
cannot be faulted. Even
at this stage it is not specified what other
conduct the group leaders participated in or what other conduct they
condoned in breach
of the appellant’s standards.
[50] One of the
employees found guilty on charge four was not even a group leader.
Conclusion
Should portion
of the award be remitted?
[51] The
arbitrator has erred as regards charge three. Nevertheless there is
nothing to show that the whole award should be reviewed
and set
aside. The award is separable as far as the four charges are
concerned. Charge three can be separated and it, alone, can
be
remitted to the arbitrator. But should it be remitted?
[52] The question
whether an award should be remitted involves the exercise of a
discretion. See
Melmin v Egelman
1940 WLD 151
at 155. The
exercise of the discretion will depend upon the facts and
circumstances of the particular case. See
Harlin Properties Ltd v
Rush and Tomkins (SA) Ltd
1963 (1) SA 187
(N). A factor which
would weigh in favour of a remittal of the award is the fact that
there is nothing to show that the arbitrator
will not be able to deal
with the issue impartially and competently.
[53] But on the
other hand the principal issue was whether the dismissal of the
employees was fair. In my view, even if the arbitrator
were to find
that the employees lied about their whereabouts whilst they were in
the locker room, this is not sufficiently serious
to warrant a
dismissal on this ground alone. Strictly speaking this would be for
the arbitrator to decide. But this is a labour
dispute and such
disputes must be decided as expeditiously as possible. This dispute
has remained unresolved for far too long.
It would work a grievous
injustice to set aside this portion of the award and remit it to the
arbitrator particularly as it would
not be possible to reinstate the
employees pending the outcome of the remittal. The parties have not
sought a remittal of the award
in the event that this court finds it
to be defective. That is not bar to this court remitting the award
mero motu
. See
Kannenberg v Gird
1966 (4) SA 173
(C).
But it is a factor which must be taken into account in the exercise
of the discretion conferred on this court.
[54] In the result
I do not consider that the award, in so far as it concerns charge 3,
should be remitted to the arbitrator.
Costs
[55] The
respondent was successful. In my view costs should follow the result.
Appellant is to pay the respondents’ costs.
[56] In the
result:
The appeal is
dismissed with costs.
A A LANDMAN
ACTING JUDGE OF
APPEAL
I agree
D MLAMBO
JUDGE PRESIDENT
I agree
P TLALESTSI
JUDGE OF APPEAL
COUNSEL FOR
APPELLANTS: Mr A E Franklin SC, who with Mr R B Wade SC, Instructed
by Chris Baker and Associates
COUNSEL FOR 2
nd
to 8
th
AND 10
th
to 19
th
RESPONDENTS: Minnaar Niehaus of Minnaar Niehaus
Attorneys
Date of Judgment:
9 March 2011