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[2013] ZALAC 28
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Gold Fields Mining South Africa (Pty) Ltd (Kloof Gold Mine) v Commission for Conciliation Mediation and Arbitration and Others (JA 2/2012) [2013] ZALAC 28; [2014] 1 BLLR 20 (LAC); (2014) 35 ILJ 943 (LAC) (4 November 2013)
Reportable
REPUBLIC OF SOUTH
AFRICA
THE LABOUR APPEAL
COURT OF SOUTH AFRICA, JOHANNESBURG
Case number JA 2/2012
GOLD FIELDS MINING
SOUTH AFRICA
(PTY) LIMITED (KLOOF
GOLD MINE)
...........................................................
Appellant
and
COMMISSION FOR
CONCILIATION`
MEDIATION AND
ARBITRATION
......................................................
First
Respondent
MORAJANE C NO
.........................................................................
Second
Respondent
MOREKI E M
.....................................................................................
Third
Respondent
Delivered: 4 November
2013
Summary
:
Review of the arbitration award- arbitrator miscategorising the
dispute as that of poor work performance instead of misconduct.
Labour Court dismissing the review on a result-related basis.
Appeal- review of
arbitration awards not divided into process-related and result based
reviews. Test for review of arbitration awards
set out in
Sidumo-
gross irregularity not a self-standing ground to set aside
an arbitration award without being assessed against the
Sidumo
test.
Reviewing court should consider the alleged misconduct committed by
the arbitrator then apply the test in
Sidumo. Sidumo
test restated. Appeal upheld. Arbitration award set aside -
dismissal of third respondent substantively fair.
JUDGMENT
WAGLAY JP
[1] This is an appeal
against the judgment of the Labour Court (Fourie AJ)dismissing the
appellant’s claimthat the arbitrator
committed a
process-related irregularity by miscategorising the third
respondent’s conduct as that of poor performance instead
of
misconduct, thereby failing to apply his mind to the material facts.
The Labour Court rejected the appellant’s submissions
with no
order as to costs,holding that the error committed by the arbitrator
was immaterial to the outcome of the review. Leave
to appeal was
granted by the Labour Court.
Background facts
[2] Moreki, the third
respondent, was employed by the appellant as a senior sampler. He
held the highest qualification that exists
in mine sampling: an
Advance Mine Valuation Certificate. His functions entailed taking ore
samples from measured and plotted rock
faces in the appellant’s
underground mining operations according to the Stope and Development
Sampling Standard (sampling
standard).
[3] The duty of a sampler
such as Moreki is to take measurements underground so as to indicate
the exact location of the stope face
position from which he extracted
ore samples.In terms of the sampling standard, measurements must be
taken from at least two numbered
survey pegs and entered into a field
book which is then co-signed by a miner. The field book is then
handed to a senior dedicated
sampler who takes the measurements from
the field book and plots it onto a sampling plan.
[4] The ore sample
collected by the sampler is then sent to a laboratory for analysis in
order to determine the valuation of the
whole area.The decision to
mine a particular area depends on the result of the laboratory test.
Mining a particular area carries
significant costs. It is therefore
crucial that the measurements be carried out according to the
sampling standard. An incorrect
measurementcould result in the mine
incurring significant loss. A sampler therefore plays an extremely
important role with respect
to choosing areas to be mined, in that
decisions on the areas to mine are based on the preliminary work done
by the samplers such
as the third respondent.
[5] On 20 June 2009, the
third respondent provided measurements of an area from which he
collected ore samples and recorded the
measurements of the area from
which he extracted the ore in his field book. The field book in which
the measurements were recorded
was not co-signed by a miner; doubt
was thus cast on the measurements provided by the third respondent.
[6] On 1 July 2009, a
scheduled monthly measurements of various panels which included the
panels which the third respondent had
measured was undertaken. A
discrepancy was discovered by the surveyors Msimang and Nyawo between
their measurements and those provided
by the third respondent.
[7] Msimang and Nyawo
confronted the third respondent with the discrepancy in the
measurements. The third respondent disputed that
his measurements
were incorrect and indicated that someone must be sent underground to
re-measure the panels. On 3 July 2009, Ms
Mmapitsi, a sampler, was
sent to re-measure the panels initially measured by the third
respondent.
[8] Mmapitsi’s
report revealed that the position of the stope face reported on by
the third respondent was 11 metres further
than was actually the
case. This wrong measurement affected the valuation of the panels.The
financial loss according to the appellant
would have been R1.2
million as the panel measured by Moreki was valued at R700 000
whereas its true value was R 1.9 million.
[9] Subsequent to the
confirmation of the wrong measurements, the third respondent was
charged with serious neglect of duty based
on the incorrect report on
the stope face position and a failure to work according to the
applicable standards. He was dismissed
on 19 September 2009 after
being found guilty as charged at the disciplinary hearing.
[10] Dissatisfied with
his dismissal, the third respondent referred a dispute of unfair
dismissal to the CCMA for conciliation thereafter
for arbitration.
The arbitratorfound the third respondent guilty of poor work
performance but found the sanction of dismissal too
harsh on the
basis that the third respondent’s conduct could be
corrected
and improved
. The arbitratorordered that the third respondent be
reinstated without backpay.
Labour Court
[11] The appellant took
the matter on review to the Labour Court. The Labour Court dismissed
the review application and did so on
inter alia
the following
bases:
(i) that although the
arbitrator had miscategorised Moreki’s [third respondent]
conduct as poor performance instead of misconduct,
this was
immaterial and not unreasonable;
(ii)
thatwhile the sanction of dismissal was actually fair, the
arbitrator’s decision that it was unfair passed the test set
in
Sidumo;
1
and
(iii) that the appellant
brought predominantly a result-based review.
The appeal
[
12] The appellant
raised a number of grounds of appeal, these can be summarised as
follows:
(i) that the Labour Court
miscategorised the review as a result-based and not process-related
review, and thus arrived at an incorrect
decision;
(ii) thatsince the
fairness of the sanction was based on the miscategorisation of the
third respondent’s conduct as poor work
performance instead of
misconduct, this led to a failure to consider what sanction was
appropriate in the circumstances.
[13]
The right to review an arbitration award on process-related grounds
has been a topic of recent discussion and debate.
2
It has
beenregarded as a differentspecies of review to that postulated in
Sidumo.Sidumo
requires
the review court to ask the question: is the decision made by the
arbitrator one that a reasonable decision-maker could
not reach on
the available material?
3
This
has been interpreted by some to suggest that the
Sidumo
test
deals only withthe result or outcome of the arbitration proceedings,
and that it remains open to review an award on process-related
grounds.
[
14
]
Sidumo
does
not postulate a test that requires a simple evaluation of the
evidence presented to the arbitrator and based on that evaluation,
a
determination of the reasonableness of the decision arrived at by the
arbitrator. The court in
Sidumo
was
at pains tostate that arbitration awards made under the Labour
Relations Act
4
(LRA)
continue to be determined in terms of s145 of the LRA but that the
constitutional standard of reasonableness is “suffused”
in the application of s145 of the LRA.This implies that an
application for review sought on the grounds of misconduct,
5
gross
irregularity in the conduct of the arbitration proceedings,
6
and/or
excess of powers
7
will
not lead automatically to a setting aside of the award if any of the
above grounds are found to be present. In other words,
in a case such
as the present, where a gross irregularity in the proceedings is
alleged, the enquiry is not confined to whether
the arbitrator
misconceived the nature of the proceedings, but extends to whether
the result was unreasonable, or put another way,
whether the decision
that the arbitrator arrived at is one that falls in a band of
decisions to which a reasonable decision-maker
could come on the
available material.
[15] A
‘process-related review’suggests an extended standard of
review, one that admits the review of an award on the
grounds of a
failure by the arbitrator to take material facts into account, or by
taking into accounts facts that are irrelevant,
and the like. The
emphasis here is on process, and not result. Proponents of this view
argue that where an arbitrator has committed
a gross irregularity in
the conduct of the arbitration as contemplated by s145(2),
8
it
remains open for the award to be reviewed and set aside irrespective
of the fact that the decision arrived at by the arbitrator
survives
the
Sidumo
test.
I disagree.What is required is first to consider the gross
irregularity that the arbitrator is said to have committed and
then
to apply the reasonableness test established by
Sidumo.
The
gross irregularity is not a self-standing ground insulated from or
standing independent of the
Sidumo
test.
That being the case, it serves no purpose for the reviewing court to
consider and analyse every issue raised at the arbitration
and regard
failure by the arbitrator to consider all or some of the issues
albeit
material
as rendering the award liable to be set aside on the grounds of
process-related review.
[
16]
In short: A review court must ascertain whether the arbitrator
considered the principal issue before him/her; evaluated the
facts
presented at the hearing and came to a conclusion which was
reasonable to justify the decisions he or she arrived at.
[17]
The fact that anarbitrator committed a process-related irregularity
is not in itself a sufficient ground for interference by
the
reviewing court.
The
fact that an arbitrator commits a process-related irregularity does
not
mean that the decision reached is necessarily one that a reasonable
commissioner in the place of the arbitratorcould not reach.
[18] In a review
conducted under s145(2)(a)(c) (ii) of the LRA,the review court is not
required to take into account every factor
individually, consider how
the arbitrator treated and dealt with each of those factors and then
determine whethera failure by the
arbitratorto deal with one or some
of the factors amounts to process-related irregularity sufficient to
set aside the award. This
piecemeal approach of dealing with the
arbitrator’s award is improper as the review court must
necessarily consider the totality
of the evidence and then decide
whether the decision made by the arbitrator is one that a reasonable
decision-maker could make.
[19]
To do it differently or to evaluate every factor individually and
independently is to defeat the very requirement set out in
section
138 of the LRA which requires the arbitrator to deal with the
substantial merits of the dispute between the parties with
the
minimum of legal formalities and do so expeditiously and fairly. This
is also confirmed in the decision of
CUSA
v Tao Ying Metal Industries
.
9
[20]
Failing to consider a gross irregularity in the above context would
mean that an award is open to be set aside where an arbitrator
(i)
fails to mention a material fact in his award; or (ii) fails to deal
in his/her award in some way with an issue which has some
material
bearing on the issue in dispute; and/or (iii) commits an error in
respect of the evaluation or considerations of facts
presented at the
arbitration. The questions to ask are these: (i) In terms of his or
her duty to deal with the matter with the
minimum of legal
formalities, did the process that the arbitratoremployed give the
parties a full opportunity to have their say
in respect of the
dispute? (ii) Did the arbitrator identify the dispute he was required
to arbitrate(this may in certain cases
only become clear after both
parties have led their evidence)? (iii) Did the arbitrator understand
the nature of the dispute he
or she was required to arbitrate?(iv)
Did he or she deal with the substantial merits of the dispute? and
(v) Is the arbitrator’s
decision one that another
decision-maker could reasonably have arrived atbased on the
evidence?
10
[21]
Where the arbitrator fails to have regard to the material facts it is
likely that he or she will fail to arrive at a reasonable
decision.
Where the arbitrator fails to follow proper process he or she may
produce an unreasonable outcome (see
Minister
of Health and Another v New Clicks South Africa (Pty) Ltd and Others
2006
(2) SA 311
(CC)). But again, this is considered on the totality of
the evidence not on a fragmented, piecemeal analysis. As soon as it
is
done in a piecemeal fashion, the evaluation of the decision
arrived at by the arbitrator assumes the form of an appeal.A
fragmented
analysis rather than a broad-based evaluation of the
totality of the evidencedefeats review
as
a
process.
It follows that the argument that the
failure
to have regard to material facts
may
potentially
result
in a wrong decision has no place in review applications.Failure to
have regard to material facts musta
actually
defeat the constitutional imperative that the award must be rational
and reasonable- there is no room for conjecture and
guesswork.
[22] Based on the above,
what is clear in this matter is that the arbitrator properly allowed
each of the parties to state their
case and led their evidence but he
misconceived the nature of the enquiry, which was to determine the
fairness of a dismissal for
misconduct. He concluded that the third
respondent’s dismissal was premised on poor performance and not
misconduct.Poor work
performance and misconduct are by definition two
distinct and diverse concepts.
[23] In drawing a
distinction between poor work performance and misconduct, Professor
B. Jordaan in his article “Poor Work
Performance (Incapacity)
vs Misconduct”
11
stated the following:
‘
Incapacity
relating to poor performance is prevalent where an employee has
persistently failed to meet certain performance standards
despite the
employer offering training, guidance, assistance and evaluation. In
such a case the employee would potentially lack
the skills, knowledge
or competencies to meet the employer’s standards. In this case
the problem lies with the employee’s
‘aptitude’:
although willing to do what is required, s/he is
unable
to
because of some factor linked to the employee that s/he has little or
no control over.
A dismissal for misconduct is based on
the employees fault i.e. intentional or negligent noncompliance to
company rules or standards.
A degree of blameworthiness is therefore
ascribed to the employee. In respect of misconduct, the employer must
prove that the employee
contravened a rule, was aware of or could
reasonably be aware of the rule, that the rule was valid and there
was consistency in
the application of the rule (substantive
fairness). The employer is required to give the employee an
opportunity respond to the
allegations (procedural fairness). This
may take the form of a disciplinary hearing or an interview for
lesser transgressions.’
[24]
The
requirements to show that the
dismissal for misconduct was fair are different to what has to be
shown in the case of dismissal for
incapacity.
12
[25]
In
order to find
that an employee is guilty of poor performance and consider dismissal
as an appropriate sanction for such conduct,
the employer is required
to prove that the employee did not meet existing and known
performance standards; that the failure to
meet the expected standard
of performance is serious; and that the employee was given sufficient
training, guidance, support, time
or counselling to improve his or
her performance but could not perform in terms of the expected
standards. Furthermore the employer
should be able to demonstrate
that the failure to meet the standard of performance required is due
to the employee’s inability
to do so and not due to factors
that are outside the employee’s control.
[26]
The
facts
to be taken into account in considering the fairness of a dismissal
in a case involving misconduct are set out in item 7 of
the Code of
Good Practice as follows:
‘
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.’
[27]
Itis trite that in cases of dismissal for misconduct, the burden to
prove that the employee was guilty of misconduct rests
with the
employer and failure to discharge it renders the dismissal unfair. In
discharging its burden the employer has to show
that the employee
breached an existing rule which he or she knows about or could
reasonably be expected to have known of its existence.
[28]
In this matter, it is obviousthat the arbitratormiscategorised the
charges against the third respondent. The arbitrator stated
that “
the
problem with this charge and finding is that there is a thin line
dividing the poor work performance of the [third respondent]
and a
violation of the rule
and added that
in case the [third respondent] has
been performing poorly surely the [appellant] has a duty to follow
the correct procedure in dealing
with that
.”
Based on the perception that the third respondent was charged with
poor performance, the arbitrator concluded that the
sanction of
dismissal of the third respondent was extremely harsh and therefore
the dismissal was substantively unfair.
[29]
The third respondent was charged with gross negligence in the
performance of his duties;for falsely reporting on the position
of
the stope; and, for failing to work in accordance with the applicable
standard. This charge was found, by the arbitrator and
confirmed by
the Labour Court, not to be clear as to whether it refers to poor
performance or misconduct. However, the evidence
adduced showed that
the third respondent did not perform his duties in compliance with
the standard that he knew was required of
him. The evidence was that
he had always performed these tasks properly and correctly, that
these tasks constituted his duties
and on that day he failed to
perform his duty.The evidence was not that he did not know or was
confused as to what he was required
to do.
[30]
The evidence at the arbitration demonstrated that the third
respondent failed to perform his duties as required and had refused
to admit it. He knew what he was required to do; he was able to do
what was required but deliberately and intentionally failed
to do
what was required; and, compounded this by pretending that he had
carried out his duties properly (this he did)by fabricating
the
information he was required to provide. Also, only when pressed by
the arbitratordid he admit that he failed to take the measurements
on
the second peg as he was required to do.
13
By
admitting that no measurements was done on the second peg he
admittedthat the measurements he provided were fabricated. This
cannot be said to be a case of poor performance as the third
respondent was a qualified sampler and deliberately and intentionally
failed to follow the sampling procedure; failed to carry out his task
and fabricated the information he provided to his employer.
[31]
It therefore follows that in approaching the dismissal as one
effected for poor performance, the arbitrator committed a gross
irregularity in the conduct of the proceedings. The conclusion he
arrived at was influenced by the wrong categorisation of the
case
against the third respondent. This however is not sufficient for the
award to be reviewed and set aside. The question needs
to be asked:
had the categorisation of the case against the third respondent been
misconduct as opposed to poor work performance,is
the arbitrator’s
award nonetheless one that could be arrived at by a reasonable
decision-maker? In my view it is clearly
not. The third respondent
committed an act ofserious misconduct. He deliberately failed to
follow the sampling procedure and was
recalcitrant about his
wrongdoing. In such circumstances, his years of service and seniority
serve not only as mitigation but also
aggravation particularly in
light of the fact that his work has a serious impact on the decision
that the employer would take in
relation to which area should be
mined and the costs implications attached thereto.
[32]
The decision arrived at by the arbitrator is not one which a
reasonable decision-maker could reach. In the circumstances, the
award is liable to be reviewed, set aside and replaced with an order
that the dismissal was fair.
[33]
With regard to costs, taking into account the requirements of law and
equity, I believe this is a matter in which there should
be no order
as to costs.
[34]
In the result, I make the following order:
(i)
The appeal is upheld with no order as to costs;
(ii)
The order of the Labour Court is set aside and replaced with the
following order:
“
The
award of the second respondent is reviewed and set aside and replaced
with the following order:
‘
The
dismissal of the employee was fair.’”
____________
Waglay JP
I agree
____________
Hlophe AJA
I agree
____________
Zondi AJA
APPEARANCES:
FOR THE APPELLANT: Anton
Myburgh SC with Laura Grai-Coletti
Instructed by Webber
Wentzel Attorneys
FOR THE THIRD RESPONDENT
No appearance
1
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others
2008 (2)
SA 24
(CC).
2
The
debate came about as a result of the comments made in the judgment
of
Herholdt v NedbankLtd
[2012] 9 BLLR 857
(LAC) where the
Labour Appeal Court (differently constituted) was of the view that
there were different tests to be applied to
process-related reviews
and result-based reviews, adding that the whole idea of reviews
needed to be abandoned in favour of appeals
of the arbitration
awards. When I was interviewed by the Judicial Service Commission
for the position of the Judge President
of the Labour Court I was
asked for my view on the judgment and I indicated that I did not
share the opinions expressed in that
judgment. As the matter was on
appeal to the SCA I thought it appropriate to await the decision of
the SCA before handing down
this judgment. The judgment of the SCA
was handed down on 5 September 2013 under the following citation:
Andre Herholdt v Nedbank Ltd and Another
(701/2012[2013]
ZASCA 97 and disagrees with the comments expressed in the LAC
judgment.
3
The
test as expressed by the court appears at paragraph 110 as follows:
‘Is the decision reached by the arbitrator one that
a
reasonable decision-maker could not reach?’
4
66
of 1995.
5
S145(2)(a)(i)
of the LRA.
6
S145(2)(a)(ii)
of the LRA.
7
S145(2)(a)(iii)
of the LRA.
8
S142(2)
reads that: (2) A defect referred to in subsection (1), means -
(a) that the
commissioner -
(i) committed misconduct
in relation to the duties of the commissioner as an arbitrator;
(ii) committed a gross
irregularity in the conduct of the arbitration proceedings; or
(iii) exceeded the
commissioner’s powers; or
(b) that an award has
been improperly obtained.
9
[2008] ZACC 15
;
2009
(2) SA 204
(CC) at paragraphs 64 and 65 where the court held that:
‘…commissioners are required to “deal with the
substantial
merits of the dispute with the minimum of legal
formalities.”This requires commissioners to deal with the
substance of
a dispute between the parties. They must cut through
all the claims and counter-claims and reach for the real dispute
between
the parties. In order to perform this task effectively,
arbitrators must be allowed a significant measure of latitude in the
performance of their functions. Thus the LRA permits commissioners
to “conduct the arbitration in a manner that the commissioner
considers appropriate”. But in doing so, commissioners must be
guided by at least three considerations. The first is that
they must
resolve the real dispute between the parties. Second, they must do
so expeditiously. And, in resolving the labour dispute,
they must
act fairly to all the parties as the LRA enjoins them to do. An
arbitrator must, as the LRA requires, “deal with
the
substantial merits of the dispute”. This can only be done by
ascertaining the real dispute between the parties
.’
10
The
Sidumo
test.
11
Maserumule
Consulting, September 2009
Issue.
http://www.masconsulting.co.za/uploads/news/Poor_work_performance.pdf
.
12
Landsec
and Another v Commission for Conciliation, Mediation and Arbitration
and Others
(JR 819/07)
[2009] ZALC 12
(29 January 2009) at para
26.
13
Record
vol 4 p 330.