Brief Summary

Labour Law — Unfair dismissal — Procedural and substantive fairness — Appeal against arbitration award reinstating employee — Employee dismissed without evidence of misconduct or absence without permission — Arbitrator's decision found to be reasonable — Reinstatement impractical due to lack of available non-clinical position — Compensation awarded instead of reinstatement. Dr. Hermanus Broens, a principal medical officer, was dismissed by the Department of Health, Western Cape, after being in a state of bureaucratic limbo regarding his employment status due to a medical condition. The arbitrator found that there was no evidence justifying his dismissal, leading to an award for reinstatement. The Labour Appeal Court held that reinstatement was not practicable and awarded compensation instead, as no suitable position existed for Dr. Broens.

Comprehensive Summary

Summary of Judgment

1. Introduction

This matter was an appeal in the Labour Appeal Court against a judgment of the Labour Court (Steenkamp J). The Labour Court had upheld (on review) an arbitration award made under the auspices of the Public Health and Welfare Sectoral Bargaining Council, in which the arbitrator (Ramabulana N.O.) found that the dismissal of Dr Bernades Hermanus Broens was procedurally and substantively unfair and ordered his retrospective reinstatement, albeit into a non-clinical equivalent post.

The appellants were the Director-General: Office of the Premier of the Western Cape and the Head: Health Department of Health Western Cape. The first respondent was the South African Medical Association, acting on behalf of Dr Broens. The second respondent was the bargaining council, and the third respondent was the arbitrator in his official capacity.

The dispute concerned whether Dr Broens’ employment had been lawfully terminated and, if not, what remedy was appropriate. In particular, the employer sought to justify termination by reliance on a statutory “deeming discharge” provision applicable to prolonged unauthorised absence from duty, while the employee contended that he had not wilfully absented himself and that the employer had failed to deal appropriately with his medically documented inability to perform clinical duties.

2. Material Facts

Dr Broens was employed as a principal medical officer at the Bellville Community Health Centre. In June 2002, he was diagnosed with anxiety and depression with a social phobia. A psychiatrist recommended that he be redeployed in a non-clinical capacity.

On 13 January 2003, Dr Broens was informed that he would be redeployed to perform vetting functions, but this redeployment decision was later reversed by the appellants. In April 2003, he met with the Chief Medical Officer, Dr Perez, who informed him that a placement could not be found and advised that medical boarding proceedings would be initiated on the basis that Dr Broens was medically unfit.

On 12 November 2003, Dr Broens objected to being medically boarded. He was referred to a state psychiatrist, who again recommended placement in a non-clinical position. It was common cause that after 12 November 2003, Dr Broens did not return to work. The judgment recorded his description of being in “bureaucratic limbo”, in that there were no further communications from the Department for a period.

On 14 June 2004, the Department sent a letter headed “termination of contract of employment” stating that Dr Broens’ contract was terminated with immediate effect. On 7 July 2004, a further letter was sent stating that because Dr Broens had been absent without permission for more than one calendar month since 13 October 2003, his services were deemed terminated due to misconduct in terms of section 17(5)(a)(i) of the Public Service Act 1994, with effect from 13 October 2003.

At arbitration, the employer called one witness, Dr Martell (Chief Medical Officer). The arbitrator found that the employer failed to provide evidence of wrongdoing by Dr Broens that would justify dismissal procedures, and that the witness had no knowledge of the employee’s absence or the basis on which dismissal was necessary, having acted on instructions.

On review, the Labour Court similarly found that no evidence was produced showing that Dr Broens had been absent without permission, and that the evidence rather suggested that the Department had not yet decided what to do about his situation (whether to redeploy him or proceed with medical boarding), while Dr Broens remained under the impression that a suitable placement was still being sought.

In the Labour Appeal Court, the evidential picture remained that Dr Martell could not explain the basis for the dismissal letter, while Dr Broens maintained that his employment had not been terminated prior to the dismissal letters and that continued salary payment contributed to his understanding that he remained employed. The psychiatric report referenced in the judgment supported that he could function adequately in a non-clinical capacity and described a stalemate over his return to work.

3. Legal Issues

The central legal questions were whether the arbitrator’s finding—confirming that Dr Broens had been dismissed and that the dismissal was procedurally and substantively unfair—was reasonable on the review standard applied by the Labour Court and considered on appeal.

A further question concerned the employer’s reliance on section 17(5)(a)(i) of the Public Service Act 1994 (a statutory deeming provision) as a basis for termination, and whether that reliance was sustainable on the evidential record and procedural footing on which the arbitration had proceeded.

Finally, assuming unfair dismissal was correctly found, the court had to determine the appropriate remedy, specifically whether reinstatement or re-employment into a non-clinical equivalent position was competent and practicable on the evidence, or whether the proper remedy was compensation under the Labour Relations Act 68 of 1995.

The dispute primarily concerned the application of legal standards to the facts, including an evaluative assessment of the reasonableness of the arbitral outcome and the practicability of reinstatement or re-employment.

4. Court’s Reasoning

The Labour Appeal Court held that, on the evidence, there was no basis to conclude that the arbitrator’s decision was one that a reasonable arbitrator could not reach. The court emphasised the limited and uninformative nature of the employer’s evidence at arbitration. Dr Martell, the employer’s only witness, testified that he had been instructed to draft the relevant correspondence and could not explain the foundation for dismissal. His testimony went no further than indicating that discussions had reached a point where the Department believed it could not accommodate Dr Broens in a non-clinical role and that continuing employment would have had to be in a clinical capacity.

By contrast, the employee’s evidence was that he understood he remained employed, reinforced by the Department’s conduct, including continued payment of salary. The psychiatric report (as referenced) supported the proposition that he was capable of performing non-clinical work and described a stalemate as to how and where he would return. On this evidential material, the court found no clear proof that Dr Broens had been dismissed before the June/July 2004 letters, nor that he had wilfully absented himself from duty in a manner consistent with misconduct.

In dealing with the employer’s reliance on the statutory deeming discharge provision in section 17(5)(a)(i) of the Public Service Act, the court identified multiple difficulties. The arbitration had proceeded on a consensual basis before the bargaining council, and the determination required was framed as whether there had been a dismissal as contemplated by section 186 of the Labour Relations Act 68 of 1995. Further, the first termination letter of 14 June 2004 did not invoke the Public Service Act provision, and the employer’s conduct (including salary payment) was inconsistent with an assertion that it had treated the employee as absent without permission for more than one calendar month. The later reliance on section 17(5)(a)(i) in the 7 July 2004 letter also ran counter to the earlier termination communication. On this record, the court held that the evidence before the arbitrator was insufficient to sustain the employer’s case on the deeming provision, and it was unnecessary to engage further with argument about that provision.

On remedy, the court accepted the Labour Court’s view that reinstatement into the same clinical position was not reasonably practicable, particularly given the psychiatric evidence indicating that Dr Broens could not function in a clinical environment. However, the Labour Appeal Court held that the arbitrator’s remedial order was defective because there was no evidence that a designated, equivalent non-clinical post existed into which Dr Broens could be placed. The court reasoned that, absent evidence of such a post, it was inappropriate to make an order effectively placing an employee into a different post that might not exist and could not simply be created by an award.

Given that reinstatement or re-employment could not be required in the circumstances because it was not reasonably practicable, the court held that the matter fell within section 193(2)(c) of the Labour Relations Act 68 of 1995. The only reasonably available remedy on the facts was therefore compensation, and the court held that the appropriate award was the maximum compensation permitted by section 194(1), namely 12 months’ remuneration calculated at the employee’s rate of remuneration on the date of dismissal.

5. Outcome and Relief

The appeal was upheld in part. The Labour Appeal Court confirmed the finding that Dr Broens’ dismissal was procedurally and substantively unfair, but it set aside the reinstatement / re-employment component and substituted an order of compensation.

The substituted order required the appellants to pay Dr Broens compensation equal to 12 months’ remuneration, calculated at his rate of remuneration on the date of dismissal. The appellants were also ordered to pay the first respondent’s costs in the Labour Court proceedings.

As to the appeal itself, the court made no order as to costs, reasoning that although the first respondent had been substantially successful in the court a quo, the appellants had achieved some success on appeal.

Cases Cited

No prior cases were expressly cited in the judgment.

Legislation Cited

Public Service Act 1994 (PROC 103 of 1994), section 17(5)(a)(i).

Labour Relations Act 68 of 1995, sections 186, 193(2)(c), and 194(1).

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The Labour Appeal Court held that the arbitrator’s conclusion that Dr Broens had been dismissed and that the dismissal was procedurally and substantively unfair was reasonable on the evidence and therefore stood.

The court further held that the employer’s attempt to justify termination through the section 17(5)(a)(i) deeming discharge mechanism could not succeed on the evidential record and the way the dispute had been framed and conducted.

On remedy, the court held that reinstatement or re-employment was not reasonably practicable because Dr Broens could not return to clinical work and there was no evidential basis for placement into an existing equivalent non-clinical post. The appropriate relief was therefore maximum compensation of 12 months’ remuneration.

LEGAL PRINCIPLES

The review or appellate assessment of an arbitral outcome proceeds on a standard that asks whether the decision is one that a reasonable arbitrator could reach on the evidence, and where the employer fails to adduce evidence substantiating wrongdoing, a finding of unfair dismissal may remain unassailable on that standard.

A statutory deeming discharge for unauthorised absence cannot be sustained where the employer’s own conduct and evidential presentation do not support the factual premise of unauthorised absence, and where the employer’s reliance on the deeming provision is inconsistent with earlier termination communications and the basis on which the dispute was prosecuted.

Where reinstatement or re-employment is not reasonably practicable within the meaning of section 193(2)(c) of the Labour Relations Act 68 of 1995, compensation is the appropriate remedy, and the court may award the maximum compensation permitted by section 194(1) where justified on the facts.

Director-General: Office of the Premier of the Western Cape and Another v South African Medical Association obo Broen and Others (CA 5/2011) [2013] ZALAC 9 (26 April 2013)