Head of the Department of Education v Mofokeng and Others (JA14/2014) [2014] ZALAC 50; [2015] 1 BLLR 50 (LAC); (2015) 36 ILJ 2802 (LAC) (1 October 2014)

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[2014] ZALAC 50
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Head of the Department of Education v Mofokeng and Others (JA14/2014) [2014] ZALAC 50; [2015] 1 BLLR 50 (LAC); (2015) 36 ILJ 2802 (LAC) (1 October 2014)

REPUBLIC OF SOUTH
AFRICA
IN THE LABOUR APPEAL
COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Reportable
Case
no: JA 14/2014
In the matter between:
HEAD OF THE DEPARTMENT
OF EDUCATION

Appellant
and
JONAS MOHALE
MOFOKENG

First Respondent
THE EDUCATION LABOUR
RELATIONS COUNCIL

Second Respondent
COMMISSIONER
K.C. MOODLEY N.O.
Third
Respondent
Heard:
08 September 2014
Delivered:
01 October 2014
Summary: Unfair labour
practice related to promotion. Review of arbitration award –
employer merging two schools and upgrading
the merged school-
employee former principal recommended for position of principal by
school governing body- employer advertising
position- employee
unsuccessful during interview -- commissioner finding that employee
non-promotion unfair- evidence showing that
employer had discretion
to advertise the position- recommendation not binding on the
employer- review test restated- commissioner
failing to apply his
mind to the evidence- appeal upheld- Labour Court decision set aside-
arbitration award reviewed and set aside
Coram: Musi JA, Murphy
and Kathree-Setiloane AJJA
JUDGMENT
MURPHY AJA
[1]
The first respondent has been employed as an educator by the
appellant since 1981. In August 2004, he referred a dispute to
the
Education Labour Relations Council (“ELRC”) alleging an
unfair labour practice on the part of the appellant in
relation to
his non-appointment to the post of principal at the school at which
he was employed, after it had been upgraded.
[2]
Section 191 of the Labour Relations Act
[1]
(“the LRA”) provides
inter
alia
that if there is a dispute about an unfair labour practice, the
employee may refer the dispute to a bargaining council having
jurisdiction for conciliation and arbitration. The alleged unfair
labour practice in this case is one contemplated by section 186(2)(a)

of the LRA which defines an unfair labour practice to include “any
unfair act or omission that arises between an employer
and an
employee involving… unfair conduct by the employer relating to
the promotion, demotion…of an employee”.
[3]
In the Dispute Referral Form E1, by which he referred the dispute to
the ELRC, the first respondent described the dispute in
the following
terms:
‘
Mr
JM Mofokeng was a Post Level 3 principal at Credo Primary School. The
school was upgraded to PL4. According to the EEA 76 of
1998 Chapter B
25(6) of the PAM, the School Governing Body could recommend the
appointment of the incumbent. The district refused
to do so without
giving reasons.’
In
the section of the form dealing with relief, the first respondent
requested that he be appointed principal at Credo Primary School

(“Credo”) as recommended by the School Governing Body
(“the SGB”).
[4]
On 5 March 2010, almost 10 years after the dispute arose, and six
years after it had been referred to the ELRC, the third respondent

(“the arbitrator”) handed down an award declaring the
decision by the appellant not to promote the first respondent
to
post-level 4 to be an unfair labour practice and ordering it to
promote the first respondent to the post of principal at post
level 4
(grade 11) at Credo from 15 July 2003 and to adjust the first
respondent’s remuneration retrospectively in accordance
with
the order of promotion.
[2]
The
appellant brought a review application before the Labour Court which
was dismissed by Cele J on 30 April 2013. The appellant
appeals to
this Court with the leave of the court
a
quo
.
[5]
The record in this appeal is below the acceptable standard. The
transcript of the proceedings before the ELRC is of such a poor

quality as to be almost unreadable. The court
a quo
ought to
have directed that the record be reconstructed. It did not do so. The
transcript furthermore does not include the expected
annotations
referencing exhibits and documentary evidence. This Court could
justifiably have struck the appeal from the roll. However,
the first
respondent informed the court that he preferred the appeal to proceed
on the record notwithstanding its imperfections.
The facts are in the
main common cause and it is possible to rely extensively upon the
documentary evidence. The appellant’s
conduct is nonetheless
unacceptable, a consideration of some consequence to the question of
costs.
[6]
The first respondent began working for the appellant in January 1981
as a teacher. On 1 March 1994, he was promoted to the position
of
principal at Credo. In 2000, the department began giving
consideration to merging or amalgamating Credo with another school
in
the area, Somerpos Primary School (“Somerpos”). There is
a dispute between the parties about whether the process
of
unification was a merger as contemplated by section 12A of the South
African Schools Act
[3]
(“SASA”),
or whether it was something less than or different to that. The
process was referred to at different times
as an amalgamation,
absorption, a merger and platooning.
[7]
Despite the on-going debate within the governing bodies of both
schools about whether to merge, amalgamate, absorb or platoon,
the
facts on the ground are not contentious. Somerpos closed down and
ceased to exist. The pupils and the teachers of Somerpos
moved to
Credo and for all intents and purposes the two schools became one
under the name Credo Primary School.
[8]
The first respondent submitted that as there was non-compliance with
section 12A of SASA, the amalgamation was not a merger
but something
else. Section 12A confers the power to merge two or more schools upon
the approval of the provincial MEC for Education.
He or she is
required before the merging of the schools to give written notice to
the schools and to publish a notice giving the
reasons for the
proposed merger in local newspapers and to invite interested parties
to make representations, which he or she is
then obliged to consider.
None of this appears to have happened in this case. The governing
bodies of the merging schools are obliged
in terms of the section to
meet and to constitute a single interim governing body to deal with
the budgeting and practical issues
of the merger. Although the two
SGBs did meet, it does not seem that they were constituted as an
interim governing body. However,
the dispute about whether there was
a merger or not is in fact a red herring. For reasons that will
become apparent, the characterisation
of the consolidation of the two
schools is in the final analysis inconsequential to the determination
of whether the appellant’s
conduct amounted to an unfair labour
practice. Nothing turns on the categorisation of what happened. But,
for what it is worth,
the contemporaneous correspondence indicates
that the appellant probably intended to effect a merger. If that was
indeed the case,
then the process was an illegal or un-procedural
merger for want of compliance with the provisions of section 12A. The
illegality
of the merger though had no material bearing on the
decision taken by the appellant in relation to the first respondent.
[9]
In any event neither the legality of the merger nor the decision of
the MEC is on review before us. The real issue relates to
the
consequences the merger (illegal or otherwise) had for the first
respondent’s position as principal.
[10]
The minutes of a meeting between the two governing bodies held on 8
October 2000 record the following recommendation:
‘
The decision
taken is that the two schools will amalgamate to form one school
which will be known as Credo Public School and its
principal be the
hosting principal, Mr Mofokeng JM who will be deputised by Mr Msibi
JP, principal of outgoing Somerpos.’
[11]
On 18 October 2000, Mr HM Mthombeni, a district manager of the
department, who was driving the merger process on its behalf,

prepared an internal memorandum recording that the department had put
three options to the SGBs of the two schools at a joint meeting
of
the two SGBs which took place on the same day. The SGBs expressed a
preference for platooning. The department preferred a merger
and
accordingly Mr Mthombeni made that recommendation. The minutes record
that the “merging” of the two schools would
take place on
27 November 2000, that from that date, Somerpos would no longer exist
and that preparation for the 2001 academic
year would be done jointly
from then onwards.
[12]
On 16 January 2001, Mr Mthombeni addressed a letter to Mr Msibi, the
former principal of Somerpos, which read as follows:
‘
1.
Due
to the amalgamation of Somerpos and Credo, you have been absorbed
into the establishment of Credo as from 16 January 2001.
2.
Since the school will be upgraded to post level 4, the Principal post
will be
advertised.
3.
For now, as agreed at our meeting on 8 October 2000, you will be
utilized as
a Deputy Principal.
4.
Your nature of appointment, income and conditions of service remain
unchanged.’
Two
aspects of this letter should be noted. First, the utilisation of Mr
Msibi as deputy principal was perceived as temporary -
“for
now”. Second, the department expressed its intention to upgrade
the school to post level 4 (which was justified
on the basis of the
increase in the number of pupils and staff after the merger) and
that, following the upgrade, the post of principal
would be
advertised.
[13]
Three days later, in a letter dated 19 January 2001, Mr Mthombeni
informed the first respondent as follows:
‘
Please be
informed hereby that all educators of Somerpos have been absorbed in
your school establishment. Mr Msibi will be utilised
as a Deputy
Principal and you will remain the principal of Credo.’
The
letter did not apprise the first respondent of the intention to
upgrade the school and the plan to advertise the post of principal.

Nor did it specify how long he would “remain” the
principal.
[14]
Despite the ostensible merger of the two schools, the two SGB’s
continued to exist and continued to press for a platooning
of the
schools rather than a merger. On 26 October 2001, almost 11 months
after the effective merger, the chairperson of the Credo
SGB wrote to
the district director of the department informing him that the SGB
had made a recommendation that the first respondent,
who had
demonstrated good leadership, be promoted to PL4 because the number
of learners at the school had increased to 1259.
[15]
On 3 December 2001, the Acting Head of the department addressed a
memorandum to the first respondent which stated:
‘
Approval has
been granted by the Acting Head: Education on 2001-11-25 for the
merger of Credo and Somerpos public primary schools
subject to the
following conditions:
·
The
merged school retains the name Credo Public Primary School with EMIS
no 43611174.
·
Somerpos
School be officially closed retrospectively on 2000.12.31.
·
The
implementation of the merger be officially recognized to have taken
place on 2001-01-01.’
Subsequent
minutes of the two SGBs and correspondence indicate that during 2002
there was on-going discussion among the interested
parties about
whether the merger should be undone and substituted with a process of
platooning. That ultimately did not transpire.
[16]
It is common cause that at some point between October 2002 and
February 2003, the school was upgraded or re-graded to PL4 on
account
of the increase in learner numbers. The exact date on which this came
to pass and the process whereby it occurred, if any,
are uncertain.
The parties though are in agreement that such did happen as is
reflected in an undated letter addressed by Mr Mthombeni
to the
chairperson of the Credo SGB, which, having regard to the timelines
mentioned in the letter, was clearly written in early
2003. It reads:
‘
1.
On
8 October 2000 a meeting was held between the two SGBs of Credo and
Ex-Somerpos Primary Schools. The following resolutions were
taken by
the meeting:
- To amalgamate the two Schools.
- The hosting principal to act as
principal of the resultant School and the principal of ex-Somerpos to
deputize.
2.
The amalgamation of these two Schools resulted into an increase of
the number
of learners, which upgraded the School to PL4.
3.
As indicated in the letters to Mr JP Msibi dated 17 January 2001 and
8 February
2001, the School will be upgraded to PL4 and the
principal’s post will be advertised for which he will be
welcome to apply.
4.
Your letter dated 26 October 2001 regarding request for the promotion
to higher
post level 4 refers
4.1
Due to decisions taken it was not possible to approve this request
due to number 1 and 3
above.
5.
Please take note that short-listing and interviews will continue as
agreed at
a meeting held with the SGB on Wednesday, 5 February 2003.’
[17]
In January 2003, Mr Msibi, the former principal of Somerpos, who
acted as deputy principal at Credo, accepted an appointment
as
principal at another school. The first respondent applied and was
interviewed for the post of principal at the upgraded Credo,
but in
the end was not appointed to the position. He learnt in July 2003
that Mr Chuta, the former deputy principal at Somerpos,
was appointed
as principal. Although the position of the first respondent as
supernumerary was not formally resolved after the
appointment of the
new principal, he confirmed during his testimony at the arbitration
hearing that he had declined offers of the
position of principal at
post level PL3 at other schools and opted to stay at Credo where he
was utilised to perform the functions
of a deputy principal. He
retained his post level as well as the salary which he earned in that
post.
[18]
Clause 4.8 of the pre-arbitration minute required the arbitrator to
decide whether the first respondent was: i) unfairly refused

promotion to a higher post on upgrading of the school; ii) unfairly
demoted from the position of principal; iii) unfairly lost

remuneration and benefits; and iv) has unfairly had his status and
benefits degraded. The first respondent’s claim that he
was
victim to an unfair labour practice rested on three legs: firstly, he
construed the letter of 19 January 2001 as appointing
him permanently
to the position of principal at Credo; secondly, he believed that he
was qualified to be promoted to PL4 as he
had previously been at that
level for a short period; and thirdly he believed that the department
was bound by the recommendation
of the SGB that he should be promoted
to PL4 and assume the position of principal. If these submissions are
sustained, the appellant’s
conduct relating to his
non-promotion or demotion might be construed as unfair.
[19]
The ultimate resolution of the dispute depends on the interpretation
and application of two instruments: Chapter B of the Personnel

Administration Measures (“PAM”) and ELRC Resolution 3 of
2001 - Re-grading of Institutions. The former instrument owes
its
provenance to the
Employment of Educators Act of 1998
, while the
latter is a collective agreement concluded in the ELRC. The parties
agree that the provisions of both are applicable
and govern a
situation such as the present.
[20] Resolution 3 records
the purpose of the agreement as follows:
‘
The purpose
of this agreement is to determine measures according to which
education institutions are re-graded and what the position
of such a
re-graded institution is.’
[21]
The agreement adopted a number of proposed provisions to be inserted
into PAM to provide for the re-grading of institutions
and the
filling of principals’ posts. Paragraph 2.7 of Chapter A of PAM
was amended to provide that an institution will be
upgraded to a
higher grading level if in terms of two consecutive annual statistics
surveys, the learner enrolment of the institution
exceeds the minimum
enrolment requirement of such higher grading level by at least 50
full-time equivalent learners. The head of
department may re-grade
the institution where sufficient evidence exists that the new
enrolment level will be maintained for a
reasonable period.
[22]
Paragraph 2.5 of Chapter B of PAM was amended by Resolution 3 to read
as follows:
‘
2.5
Position of principals in cases where an institution is upgraded or
downgraded
(a)
When an institution is re-graded, the post of the principal is
regarded as a new and
therefore vacant post that must, subject to
these measures, be filled in terms of paragraph 3 without undue
delay.
(b)
If the permanent incumbent of a principal post that had been upgraded
qualifies to
be promoted to the new level and the governing body or
council recommends in writing that the person may be appointed to the
higher
post, such appointment may be made without having to advertise
the post. If the governing body or council does not make such a
recommendation, the post must be advertised in which case the
incumbent will be entitled to apply for the upgraded post and s/he

shall be short-listed.
(c)
If such a principal’s application for appointment to the
upgraded post is unsuccessful,
he or she will be regarded as in
excess as a result of operational requirements and must be dealt with
in terms of paragraph 2.4.’
[23]
The effect of this provision is that where an institution is
re-graded, the post of principal is regarded as a new vacant post

which normally must be filled by advertising the post in terms of
paragraph 3 of Chapter B of PAM. This latter provision sets out
the
procedures for advertising, sifting, short listing, interviewing and
appointment. Paragraph 2.5(b) of Chapter B of PAM permits
a departure
from the general requirements of advertising and engagement in a
competitive appointment process. It provides that
where, as in the
present case, the permanent incumbent of a principal post that has
been upgraded, qualifies to be promoted to
the new level and the SGB
or the ELRC recommends that the person be appointed to the higher
post, the appointment may be made without
having to advertise the
post. Absent a recommendation from the SGB or the ELRC, the post must
be advertised and the incumbent has
a right to be automatically
short-listed.
[24]
When the incumbent principal is compelled to engage in a competitive
interview process for an advertised post and is unsuccessful,
he or
she, in terms of paragraph 2.5(c) of Chapter B of PAM, will be
“regarded as in excess as a result of operational requirements

and must be dealt with in terms of paragraph 2.4”.
[25]
The relevant part of Paragraph 2.4 of Chapter B of PAM reads:
‘
2.4
Transfer of serving Educators in terms of operational requirements
(a)
Operational requirements for educational institutions are based on,
but not limited
to the following:
(i)
change in pupil enrolment
(ii)
curriculum changes within a specified educational institution
(iii)
change to the grading of the specific educational institution
(iv)
financial restraints
(b)
These measures do not deal with the transfer of level one serving
educators declared
in excess in term of operational requirements
linked to rationalisation to effect equity in staff provisioning.
This aspect is
covered by Resolution No.6 of the Education Labour
Relations Council (ELRC), dealing with the procedures for
rationalisation and
redeployment of educators in the provisioning of
educator posts.
(c)
In cases referred to in paragraph (a) above the following procedure
shall
apply.
(i)
All vacancies that arise at educational institutions must be offered
to serving
educators displaced as a result of operational
requirements of that specific provincial education department as a
first step.
(ii)
All vacancies must be advertised and filled in terms of paragraph 3
(The advertising
and Filling of Educator Posts). Provided that:
·
every
attempt is made to accommodate serving educators, displaced as a
result of operational requirements, in suitable vacant posts
at
educational institutions or offices; and
·
a
provincial education department may publish a closed vacancy list. In
such an event, the procedures contained in the resolution
dealing
with the rationalisation and deployment of educators in the
provisioning of educator posts shall apply.
(iii)
When a governing body exercises its functions in terms of
section
20(1)(i)
of the
South African Schools Act 1996
and chapter 3 of the
Employment of Educators Act, they
must accommodate the obligations of
the employer towards serving educators. The governing body must also
take in account the requirements
for appointment as determined by the
Minister of Education and/or the requirements of the post as
determined by the Head of the
Provincial Education Department.
(iv)
All applicants who are serving educators displaced as a result of
operational requirements
and who are suitable candidates for a vacant
post in an educational institution or office must be shortlisted.’
[26]
The first respondent at arbitration, as reflected in the referral to
arbitration and in his evidence at the hearing, relied
on the
recommendation of the SGB made on 8 October 2000, the letter
addressed to him by Mr Mthombeni on 19 January 2001 and the
letter of
the chairperson of the SGB of 26 October 2001, to contend that as the
incumbent he had a preferential right to promotion
to the post. His
contention is premised upon an incorrect interpretation of paragraph
2.5(b) of Chapter B of PAM. Even assuming
that the first respondent
was qualified to be promoted to the upgraded principal’s post
for which he was short-listed and
unsuccessfully interviewed (which
the appellant denies), the appellant still had a discretion to
advertise the post. The department
is not normally obliged to accept
the recommendation of the SGB. Paragraph 2.5(b) confers a choice on
the department to either
appoint a qualified incumbent principal or
to advertise the post. It is evident from the letter to Mr Msibi in
January 2001 and
the undated letter of early 2003 to the SGB by Mr
Mthombeni that the department always intended to advertise the post
of principal
after the merger and subsequent re-grading of the
school. It obviously preferred to appoint the best candidate for the
upgraded
school.
[27]
Moreover, the recommendation of the SGB of Credo pre-dated the
re-grading of the school by some months and there is no evidence
that
a fresh recommendation was made by the joint SGBs after the school
was upgraded. Paragraph 2.5(b) requires that a recommendation
for the
appointment of the incumbent be made in relation to a principal post
“that has been upgraded”. Consequently,
absent a valid
recommendation the department was in fact obliged to advertise the
post.
[28]
The arbitrator’s finding that the appellant’s
non-promotion or demotion of the first respondent constituted an

unfair labour practice was similarly based upon his understanding of
the implications of the letter of 19 January 2001 and the

recommendation of the SGB. His reasoning is encapsulated in the
following paragraph of his award:
‘
The
applicant was informed in writing as per letter on 19 January 2001
that he would remain as the principal of Credo. The first
respondent
(appellant) sought to disown the letter by stating that the author
had no mandate to have written it …. The first
respondent has
for all intents and purposes accepted the recommendation of the
governing body, confirmed the appointment of the
applicant as
principal post level 4. It then sought to undo the acceptance and
confirmation by having the post advertised.’
The
arbitrator went on and asserted the principle of estoppel. He said:
‘
The
respondent is thus estopped from denying that the Applicant should
have been promoted to post level 4. The applicant is not
sure as to
whether he is the principal or not. Strangely the first respondent’s
witnesses have no clue as to what the applicant
has been doing since
2003. The applicant himself does not know what his position in the
school is …. The first respondent’s
conduct in promoting
and demoting him is unfair. The contested post is now vacant and
Msibi has been transferred. I see no reason
why the applicant should
not be appointed.’
[29]
The arbitrator’s reasoning is open to question principally
because he failed to apply his mind to and ignored the relevant

consideration that the appellant was entitled to regard the principal
post at Credo as new and vacant, in terms of paragraph 2.5(a)
of
Chapter B of PAM, when the school was re-graded.
[4]
As just discussed, the letter of 19 January 2001 was written and the
two SGB recommendations were made before the re-grading of
the school
and the upgrading of the post. The letter provides no basis for an
entitlement for the first respondent to remain in
the post after the
school was re-graded. The letter cannot override Chapter B of PAM. It
also makes no misrepresentation of any
kind justifying an estoppel.
Moreover, the letter did not promote the first respondent to PL4. He
was and remains employed at PL3.
The arbitrator accordingly
misconceived the true issue before him by not appreciating or
ignoring the relevant consideration that
the re-grading resulted in
the creation of a new and vacant post at a level higher than the one
occupied by the first respondent.
He thus did not apply his mind to
the question for decision namely whether the non-promotion of the
first respondent to the
newly
vacant
post of principal was an unfair labour practice. This failure
resulted in his not grasping the fact that the collective agreement

permitted or obliged the appellant to resort to a competitive
interview process, which it did, to fairly and legally appoint Mr

Chuta. With that, the appellant fell into the category of employee
regarded in terms of paragraph 2.5(c) of Chapter B of PAM “as

in excess as a result of operational requirements”. The
evidence confirms that the first respondent was thereafter treated

fairly in accordance with paragraph 2.4 of Chapter B of PAM. He was
offered reasonable alternative placements which he declined,
and was
permitted to remain as
de
facto
deputy
principal at Credo at the same level and the same terms and
conditions of employment. The fairness of the interview process

selecting Mr Chuta is not in contention.
[30]
The failure by an arbitrator to apply his or her mind to issues which
are material to the determination of a case will usually
be an
irregularity. However, the Supreme Court of Appeal (“the SCA”)
in
Herholdt
v Nedbank Ltd
[5]
and this court in
Goldfields
Mining South Africa (Pty) Ltd (Kloof Gold Mine) v CCMA and others
[6]
have held that before such an irregularity will result in the setting
aside of the award, it must in addition reveal a misconception
of the
true enquiry or result in an unreasonable outcome.
[7]
[31]
The determination of whether a decision is unreasonable in its result
is an exercise inherently dependant on variable considerations
and
circumstantial factors. A finding of unreasonableness usually implies
that some other ground is present, either latently or
comprising
manifest unlawfulness. Accordingly, the process of judicial review on
grounds of unreasonableness often entails examination
of
inter-related questions of rationality, lawfulness and
proportionality, pertaining to the purpose, basis, reasoning or
effect
of the decision, corresponding to the scrutiny envisioned in
the distinctive review grounds developed casuistically at common law,

now codified and mostly specified in section 6 of the Promotion of
Administrative Justice Act
[8]
(“PAJA”); such as failing to apply the mind, taking into
account irrelevant considerations, ignoring relevant considerations,

acting for an ulterior purpose, in bad faith, arbitrarily or
capriciously etc. The court must nonetheless still consider whether,

apart from the flawed reasons of or any irregularity by the
arbitrator, the result could be reasonably reached in light of the

issues and the evidence.
[9]
Moreover, judges of the Labour Court should keep in mind that it is
not only the reasonableness of the outcome which is subject
to
scrutiny. As the SCA held in
Herholdt
,
the arbitrator must not misconceive the inquiry or undertake the
inquiry in a misconceived manner. There must be a fair trial
of the
issues.
[10]
[32]
However, sight may not be lost of the intention of the legislature to
restrict the scope of review when it enacted section
145 of the LRA,
confining review to “defects” as defined in section
145(2) being misconduct, gross irregularity, exceeding
powers and
improperly obtaining the award. Review is not permissible on the same
grounds that apply under PAJA. Mere errors of
fact or law may not be
enough to vitiate the award. Something more is required. To repeat:
flaws in the reasoning of the arbitrator,
evidenced in the failure to
apply the mind, reliance on irrelevant considerations or the ignoring
of material factors etc. must
be assessed with the purpose of
establishing whether the arbitrator has undertaken the wrong enquiry,
undertaken the enquiry in
the wrong manner or arrived at an
unreasonable result.
[11]
Lapses in lawfulness, latent or patent irregularities and instances
of dialectical unreasonableness should be of such an order

(singularly or cumulatively) as to result in a misconceived inquiry
or a decision which no reasonable decision-maker could reach
on all
the material that was before him or her.
[33]
Irregularities or errors in relation to the facts or issues,
therefore, may or may not produce an unreasonable outcome or provide

a compelling indication that the arbitrator misconceived the
inquiry.
[12]
In the final
analysis, it will depend on the materiality of the error or
irregularity and its relation to the result. Whether the
irregularity
or error is material must be assessed and determined with reference
to the distorting effect it may or may not have
had upon the
arbitrator’s conception of the inquiry, the delimitation of the
issues to be determined and the ultimate outcome.
If but for an error
or irregularity a different outcome would have resulted, it will
ex
hypothesi
be material to the determination of the dispute. A material error of
this order would point to at least a
prima
facie
unreasonable result. The reviewing judge must then have regard to the
general nature of the decision in issue; the range of relevant

factors informing the decision; the nature of the competing interests
impacted upon by the decision; and then ask whether a reasonable

equilibrium has been struck in accordance with the objects of the
LRA.
[13]
Provided the right
question was asked and answered by the arbitrator, a wrong answer
will not necessarily be unreasonable. By the
same token, an
irregularity or error material to the determination of the dispute
may constitute a misconception of the nature
of the enquiry so as to
lead to no fair trial of the issues, with the result that the award
may be set aside on that ground alone.
The arbitrator however must be
shown to have diverted from the correct path in the conduct of the
arbitration and as a result failed
to address the question raised for
determination.
[14]
[34]
In the present case, the arbitrator erred in his failure to
understand the provisions of paragraph 2.5 of Chapter B of PAM,
in
particular the fact that the post of principal became vacant once
(and only once) the school was upgraded to PL4, and that the

arrangement was a legitimate product of collective bargaining
consistent with the purposes of the LRA. He furthermore misunderstood

that the appellant was not obliged to accept the recommendation of
the SGB, which was in any event made prior to the upgrading.
His
failure to properly apply his mind to these issues which were
material to the determination of the dispute, and then to apply
the
provisions of the applicable collective agreement
[15]
to them, led him to misconceive the nature of the inquiry and failing
to address the question raised for determination in the
arbitration;
[16]
namely
whether the non-promotion of the first respondent at the end of a
competitive appointment process was permitted, justified
and fair in
accordance with the applicable collective agreement. His point of
departure was an incorrect assumption that the first
respondent had a
preferential right to promotion without the necessity of a
competitive appointment process. The failure of the
arbitrator to
properly apply his mind to these issues and additionally to the
material facts that on becoming supernumerary the
first respondent
had been offered legitimate alternatives and had not been financially
prejudiced, reflected not only his failure
to address the question
raised for determination, but that he made a decision which no
reasonable decision-maker could have made
in that he wholly
misconstrued the policy introduced by the collective agreement. There
was in view of that no fair trial of the
issues and the outcome was
unreasonable. The award must consequently be set aside.
[35]
The Labour Court accepted most of the reasoning of the arbitrator and
incorrectly concluded that the first respondent’s

qualifications and the recommendation of the SGB meant that there was
no need to advertise the post. For the reasons stated that
conclusion
is not correct and the learned judge erred accordingly.
[36]
In the result, the appeal must be upheld. The appellant did not
prosecute the appeal in an appropriate manner by not filing
a record
compliant with the provisions of the rules. For that reason it is
just not to make any order as to costs.
[37] The following orders
are issued:
i)
The appeal is upheld
ii)
The order of the Labour Court is set aside and substituted with the

following order:
‘
The award of
the Third Respondent in Case No 394-07/08FS dated 5 March 2010 made
under the auspices of the second respondent is
hereby reviewed and
set aside.’
____________________
JR
Murphy
I
agree
___________________
Musi
JA
I
agree
___________________
Kathree-Setiloane
AJA
APPEARANCES:
FOR
THE APPELLANT:

Adv P Mokoena SC and Adv Y van Aartsen
Instructed by The State
Attorney
FOR THE FIRST
RESPONDENT:
Adv W B Bank and Adv E Masombuka
Instructed
by Koulountis INC
[1]
Act 66 of 1995.
[2]
There is no
explanation on record explaining why it took the ELRC so long to
process the dispute.
[3]
Act 84 of 1996.
[4]
The first
respondent has not challenged the reasonableness of the provisions
of the collective agreement or PAM, nor has he alleged
that they are
in any way discriminatory or unconstitutional.
[5]
2013 (6) SA 224
(SCA).
[6]
[2014] 1 BLLR 20
(LAC).
[7]
In
CUSA
v Tao Ying Metal Industries and others
[2009] 1 BLLR 1
(CC) at paras 76 and 134 the Constitutional Court
held that it is now axiomatic that a commissioner of the CCMA (or an
arbitrator
of a bargaining council) is required to apply his or her
mind to the issues before him or her and that failure to do so may
result
in the ensuing award being reviewed and set aside. The
irregularity must however result in an unreasonable outcome or
misconception
of the true enquiry resulting in no fair trial of the
issues. See also
Sidumo
and Another v Rustenburg Platinum Mines Ltd
2008
(2) SA 24 (CC).
[8]
Act 3 of 2000.
[9]
Herholdt v
Nedbank Ltd
2013 (6) SA 224
(SCA) at para 12.
[10]
CUSA v Tao Ying
Metal Industries and Others
[2009] 1 BLLR 1
(CC) at para 76.
[11]
Herholdt v
Nedbank Ltd
2013 (6) SA 224
(SCA) at para 21-25.
[12]
Perhaps somewhat
at variance with the Constitutional Court in
Tao
Ying
,
the SCA in
Herholdt
(
para
25) was of the opinion that material errors of fact, as well as the
weight and relevance to be attached to particular facts,
are not in
and of themselves sufficient for an award to be set aside, but are
only of any consequence if their effect is to render
the outcome
unreasonable. In
Tao
Ying,
the Constitutional Court seemed to take the view that a factual or
legal error would be reviewable if it was material to the

determination of the dispute submitted to arbitration.
[13]
Bato Star
Fishing (Pty) Ltd v Minister of Environmental Affairs
[2004] ZACC 15
;
2004 (4) SA 490
(CC) at paras 49-54.
[14]
Telcordia
Technologies Inc v Telkom SA Ltd
[2006] ZASCA 112
;
2007 (3) SA 266
(SCA) para 52-78, 85-88.
[15]
Resolution 3 as
incorporated into paragraph 2.5 of Chapter B of PAM.
[16]
Herholdt
at para 19; and
Telcordia
Technologies Inc v Telkom SA Ltd
[2006] ZASCA 112
;
2007 (3) SA 266
(SCA) para 52-78, 85-88.