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[2014] ZALAC 52
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Kukard v GKD Delkor (Pty) Ltd (JA52/2013) [2014] ZALAC 52; [2015] 1 BLLR 63 (LAC); (2015) 36 ILJ 640 (LAC) (7 October 2014)
REPUBLIC
OF SOUTH AFRICA
Reportable
IN THE LABOUR APPEAL
COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Case no: JA52/2013
In
the matter between:
RUAN
KUKARD
Appellant
and
GKD
DELKOR (PTY)
LTD
Respondent
Heard:
12
September 2014
Delivered:
07 October 2014
Summary: Proof of
dismissal- parties entering into a settlement agreement to re-employ
employee on same terms and conditions prior
to employee’s
resignation- employer re-employing employee on different terms-
employee refusing new terms of employment.
Employee referring unfair
dismissal- employer contending the existence of an employment
relationship and that no dismissal took
place. Commissioner finding
dismissal procedurally unfair. Labour Court finding that no dismissal
took place and CCMA not having
jurisdiction. Arbitration award set
aside- Appeal- evidence showing existence of employment relationship
and that employer re-employing
employee on different terms contrary
to the settlement agreement. Commissioner’s decision reasonable
– Compensation
Kemp
judgment distinguished- reviewing an
order for compensation- evaluation of the facts before the
commissioner based on fairness
to both parties- evidence showing that
reinstatement impractical- commissioner’s compensation order
correct- Labour Court’s
judgment set aside- review application
dismissed with costs Coram: Musi JA, Murphy and Kathree-Setiloane
AJJA
JUDGMENT
KATHREE-SETILOANE AJA
[1]
This is an appeal, with leave of this Court, against the judgment of
the Labour Court (Vatalides AJ) in which it reviewed and
set aside an
arbitration award of the Commission for Conciliation, Mediation and
Arbitration (“the CCMA”) and substituted
it with an award
that the appellant had failed to prove a dismissal, and consequently
the CCMA lacked jurisdiction to determine
the appellant’s
unfair dismissal dispute. The Labour Court ordered the appellant to
pay the costs.
[2]
The factual matrix from which this appeal arises is largely common
cause between the parties. The appellant, Ruan Kukard (“the
appellant”),
was employed by the
respondent GKD Delkor (Pty) Ltd (“Delkor”) during May
2005 as Technical Sales Representative (Specialised
Solid Weave
Products). His contract of employment included a restraint of trade
inter alia
preventing
him from entering into any form of consultation, contract or
discussions with direct competitors of Delkor, including
those
companies specifically listed in the annexures to the contract, for a
period of 12 months from the date of resignation.
[3]
On 29 September 2008, the appellant resigned from Delkor in order to
take up a position with Larox (Pty) Ltd (“Larox”).
Gary
Whitford (“Whitford”), Delkor’s General Manager,
regarded Larox to be a competitor, and advised the appellant
that
Delkor would enforce the terms of the restraint of trade agreement
should he take up the position with Larox. The appellant
disputed
that Larox was a competitor of Delkor, and a flurry of correspondence
was exchanged between his attorneys (Van Gaalen
Attorneys) and
Delkor’s attorneys (McClaren and Associates) in relation to
this issue.
[4]
On 23 October 2008, Delkor’s attorneys wrote a letter to the
appellant’s attorneys confirming that Delkor would
take back
the appellant, and that Whitford and the appellant were meeting the
next day to formalise the arrangement. On the same
day, Delkor’s
attorneys wrote a further letter to the appellant’s attorneys
stating
inter alia
that:
‘
this
matter is capable of resolution on the following basis:
1.
Larox SA (Pty) Limited or its associates
will not employ Ruan Kukard.
2.
GKD Delkor will re-employ Kukard with
effect 1 November 2008.
3.
Larox SA (Pty) Limited will not employ any
GKD-Delkor employee who is subject to a GKD restraint.’
[5]
On 24 October 2008, the appellant’s attorneys wrote a letter to
Delkor’s attorneys stating that:
‘
GKD
Delkor will re-employ Ruan Kukard on the same conditions, with the
same benefits he was entitled to prior to resigning, with
effect 1
November 2008.’
In
a letter dated, 27 October 2008, Delkor’s attorneys confirmed
the abovementioned agreement by stating that:
‘
We
refer to your letter dated 24 October 2008.
The matter is resolved on
the basis set out in your letter. We kindly request your client to
report for duty on 1 November 2008.’
On
Friday, 24 October 2008, Whitford met with the appellant at the Dros.
Other than that the appellant had asked Whitford to provide
him with
a detailed job description, which Whitford undertook to do, the
details of this discussion are in dispute.
[6]
The appellant reported for duty at Delkor on 3 November 2008, as 1
November fell on a Saturday. Upon reporting for duty, the
appellant
was instructed to wait in the reception area whilst certain documents
were being prepared for him. The document that
was handed to the
appellant on that day was a letter of appointment indicating that he
would be appointed in the position of Proposal
Engineer from 30
November 2008 until 30 January 2009, whereas prior to his resignation
he was employed on a permanent basis as
a Technical Sales
Representative. The appellant requested use of the laptop and cell
phone which he used prior to his resignation,
but these items were
not handed to him. The appellant once again asked to be provided with
a formal “job description”,
but it was not provided to
him.
[7]
On 4 November 2008, a discussion took place between the appellant and
Whitford, Although the details of this discussion remain
in dispute
between the parties, it is common cause that Whitford raised the
issue of the appellant’s refusal to sign the
fixed term
contract for the position of Proposal Engineer with the respondent,
and instructed him to hand back the company cell
phone which was
given to him the day before. Whitford also handed the appellant a
letter, of the same date, stating that:
‘
This
letter confirms that the offer of employment issued Monday 3 November
is withdrawn in its entirety.’
The
appellant, thereafter, left Delkor’s premises. Later that day
his attorneys wrote a letter, to Delkor’s attorneys
inter
alia
stating as follows:
‘
We
confirm that our client Ruan Kukard did report for duty on 3 November
2008, 1 November 2008 was a Saturday. He was handed a Letter
of
Appointment, valid only for three months, and confirming his
appointment as Proposal Engineer. We confirm he was not employed
on
the same conditions and benefit as agreed.
Our client, Ruan Kukard
approached your Gary Whitford from your client’s offices this
morning about the issue that he is not
employed on the same
conditions and benefits as agreed. Gary informed him that there is no
agreement and that he must go home.
A letter was even handed to him
that confirms that the Letter of Appointment issued on 3 November
2008 is withdrawn in its entirety.
We confirm that your
client is in breach of the settlement agreement and further unfairly
dismissed Ruan Kukard this morning. Our
client accepts your client’s
repudiation of the settlement agreement and confirms therefore that
the settlement agreement
is null and void. We are in the process of
referring the matter to the CCMA.’
[8]
Later that day, Delkor’s attorneys replied stating that:
‘
1.
Notwithstanding the settlement your client has been hell-bent on
derailing the process of his re-integration into the company.
2. As such he has been
obtuse and obstructive and difficult to deal with.
3. There is no question
of repudiation or dismissal.
4. The correspondence and
proposed letters of appointment were put forward for discussion
purposes only.
5. You will note from the
last paragraph of the proposed agreement that if your client had any
queries, he was invited to take up
same with the writer.
6. …
7. …
8. There is accordingly
no question that your client was dismissed and both you and your
client are invited to meet with the writer
to discuss the matter.’
[9]
On 4 November 2008, the appellant referred an unfair dismissal
dispute to the CCMA. The dispute was arbitrated by the Commissioner
on 17 February 2009, and on 23 February 2009 she issued the
arbitration award (“the award”) in which she found that
the appellant was dismissed by Delkor on 4 November 2008, and that
his dismissal was substantively and procedurally unfair. The
Commissioner found that the so called extension of the settlement,
dated 11 February 2009, the repeated statements that the appellant
had in fact not been dismissed, and the offers to re-employ him,
including the one made at the arbitration were of no consequence
to
the consideration of proper compensation due to the appellant.
The Commissioner held, in this regard, that the relationship
between
the appellant and Delkor “cannot be salvaged” based on:
(a) the length of service of the appellant; (b) the
way in which the
appellant was treated; and (c) the fact that the appellant had been
unable to secure employment. The Commissioner
accordingly ordered
Delkor to pay the appellant the amount of R420 000, 00, in
compensation, equivalent to seven months’
pay, within seven
working days of the award. No order as to costs was made.
[10]
Aggrieved by the outcome of the arbitration, Delkor launched an
application for the review and setting aside of the award on
the
grounds that: (a) the CCMA lacked the requisite jurisdiction to
entertain the dispute as there was no “dismissal”
as
defined in section 186
[1]
of the
Labour Relations Act, 66 of 1995 (“the LRA”); (b) the
appellant failed to discharge the
onus
of proving the existence of an employment relationship between the
appellant and Delkor, and that it was terminated at the instance
of
Delkor; and (c) no reasonable Commissioner could have awarded the
appellant compensation equivalent to seven months’ pay.
[11]
The Labour Court found in relation to the contention that an
employment relationship did not come into existence “as
a
consequence of the parties being unable to reach consensus on the
material aspects of the employment relationship”, that
an
employment relationship did in fact come into existence between the
appellant and Delkor. On the jurisdictional question, the
Labour
Court found that the withdrawal of the offer of 3 November 2008 by
Whitford, in the letter of 4 November 2008, cannot in
and of itself
constitute a dismissal as the offer had never been accepted by the
appellant. The Labour Court was furthermore not
persuaded by the
appellant’s argument that the “only inference” that
can be drawn from Whitford’s conduct
on 4 November 2008 is that
Whitford dismissed the appellant on that day. The Labour Court found
the appellant’s contention
that he was dismissed on 4 November
2008 to be in conflict with Delkor’s letter of 4 November 2008,
which states that the
appellant had not been dismissed. The Labour
Court consequently found that because the appellant had failed to
discharge the
onus
resting on him to prove that he was
dismissed by Delkor, the CCMA lacked the jurisdiction to entertain
the appellant’s dismissal
dispute.
[12]
I now turn to question of whether the CCMA had jurisdiction to deal
with this dispute. Since the jurisdiction of the CCMA is
intrinsic to
the purported dismissal of the appellant as defined in s186 of the
LRA, this Court must first determine whether, on
an objective
assessment of the evidence, the Labour Court was correct in setting
aside the Commissioner’s finding that the
appellant was
dismissed by Delkor within the meaning of s186(1)(a) of the LRA. In
determining whether the CCMA has jurisdiction
to deal with a dispute,
the Labour Court is not limited to the
Sidumo
(reasonableness) test of review, but may determine the issue de
novo
.
[2]
[13]
Relying on
Ouwehoud
v Hout Bay Fishing Industries,
[3]
Delkor contended that the appellant has failed to prove that “an
overt act” of Delkor “comprising the proximate
cause of
the dismissal, took place”. The contention thus advanced is
that the proximate cause of termination was in fact
the appellant’s
refusal to attend work or to attend a meeting to negotiate and
finalise the terms of the job description
which he had demanded, and
to discuss and resolve any minor teething issues such as parking,
cell phone etc. Accordingly, Delkor
contended that the Labour Court
was correct in finding that the appellant was not dismissed.
[14]
Fundamental to the determination of whether the appellant was
dismissed is the question of the existence of an employment
relationship between the appellant and Delkor. As correctly found by
the Labour Court, an employment relationship between appellant
and
Delkor came into existence as a result of, the appellant’s
tender of services to Delkor, on 3 November 2008, pursuant
to the
conclusion of the settlement agreement and, being assigned work.
[15]
Significantly, in this regard, Whitford acknowledged in his
testimony, at the arbitration hearing, that he was aware that in
terms of the settlement agreement, Delkor was required to re-employ
the appellant on the same terms and conditions as prior to
his
resignation. As indicated, it is common cause between the parties
that the appellant was previously employed by Delkor for
an
indefinite period, in the capacity of Technical Sales Representative
(Specialised Weave Products). An aspect of his previous
job function
was to “visit” clients, and he was furnished with a
laptop and blackberry cell phone (Talk500) in order
to perform his
functions. This notwithstanding, Whitford failed and/or refused to
comply with the terms of the settlement agreement
by
inter alia
presenting the appellant on the morning of 3 November 2008, with a
fixed term (three month) contract in terms of which his job
profile
was stated to be that of a Proposal Engineer. In addition, despite
repeated requests to be issued with the laptop and cell
phone which
he used prior to his resignation, Delkor failed and/or refused to
provide the appellant with these items. Delkor did,
however, give the
appellant a different cell phone to use.
[16]
It is manifestly clear from the evidence led at the arbitration
hearing, that Whitford had no intention of giving effect to
the
settlement agreement by permitting the appellant to resume his duties
on the same terms and conditions, which he enjoyed prior
to his
resignation. When asked under cross-examination why a job description
was not timeously prepared for the appellant, Whitford
replied:
“because it would have been under different conditions to how
he was employed previously” Whitford’s
conduct in my view
clearly justifies the inference that he, acting on behalf of Delkor,
did not intend to comply with the terms
of the settlement agreement.
[17]
Even as early as 24 October 2008 at the meeting between the appellant
and Whitford at the Dros, to finalise the terms of the
settlement,
Whitford indicated to the appellant that things would be different
when he returned to work as the appellant would
no longer be seeing
clients, and he would be at the beck and call of Whitford, even if
that meant making coffee. The conversation
became very heated, and
the appellant considered it reasonable to request a job description
from Whitford in order to protect himself
going forward. Although
Whitford denied saying this to the appellant during their meeting at
the Dros, he testified that it became
necessary for Delkor to change
the appellant’s job title and functions, because Delkor had
undergone a restructuring after
the appellant had resigned. A survey
of the evidence led at the arbitration proceedings, however, reveals
this to be an afterthought.
Even on Whitford’s own version of
the discussion which he had with the appellant at the Dros on 24
October 2008, this issue
was starkly absent. In addition, the letter
of 27 October 2008 from Delkor’s attorneys, confirming the
settlement agreement
as recorded by the appellant’s attorneys,
in the letter of 24 October 2008, also makes no reference to “a
restructuring”.
Whitford raised this issue for the first time
in his evidence in chief at the arbitration proceedings but,
predictably, it was
not put to the appellant during
cross-examination. For these reasons, the Labour Court should have
rejected the evidence of Whitford
in relation to this issue as a
recent fabrication.
[18]
Having due regard to Whitford’s conduct on 3 November 2008 in,
presenting the appellant with a three month fixed term
contract;
changing his job profile from Technical Sales Representative to
Proposal Engineer, and refusing to provide the appellant
with the
laptop, and celI phone which he used prior to his resignation, I
consider the Commissioner’s finding that Delkor
did not intend
to comply with the settlement agreement, to be correct. Whitford’s
conduct on 4 November 2008 gives credence
to this finding. It is
common cause, in this regard, that on the morning of 4 November 2008,
the appellant arrived at work and
Whitford asked him why he had not
yet departed for Botswana. The appellant responded that he was there
to collect a cash advance
for his trip to Botswana, as he was not
given a company credit card. The discussion then turned to the draft
contract, which the
appellant had still not signed. This much appears
to be common cause. From that point on, however, the respective
versions of the
appellant and Whitford diverge. The appellant’s
version is that on the advice of his lawyers, he informed Whitford
that Delkor
was in breach of the settlement agreement, and that he
was not prepared to sign the draft agreement. Whitford responded by
informing
the appellant that he had two options: to remain
unemployed, or work for Larox (the company that hired the appellant
in September
2008) and face restraint of trade proceedings. The
appellant testified that Whitford then dismissed him by handing him
the letter
of 4 November 2008 withdrawing the offer of employment of
3 November 2008, and by instructing him to return the company cell
phone
and leave the company premises.
[19]
Whitford admitted handing the appellant the letter of 4 November
2008, withdrawing the offer of employment of 3 November 2008.
He also
admitted instructing the appellant to return the cell phone, but
denied dismissing the appellant by instructing him to
leave the
premises. He testified, in this regard, that he had instructed the
appellant to go to his attorney with the intention
of speeding up
negotiations to finalise his employment contract. Whitford’s
testimony on this crucial aspect of the dispute
is, in my view,
completely implausible and contrary to the contents of the letter of
4 November 2008 withdrawing the offer of employment
of 3 November
2008, since that letter does not suggest that the offer of employment
is withdrawn until such time that the parties
can reach a different
and further agreement.
[20]
After
handing the appellant the 4 November
2008 letter withdrawing the offer of employment of 3 November 2008,
Whitford instructed the
appellant to hand his cell phone back, and
leave the premises. Whitford’s conduct, in my view, leaves no
doubt in the mind
of a reasonable person that he was terminating
Delkor’s employment relationship with the appellant such as to
constitute
a dismissal as defined in s186(1)(a) of the LRA. Although
Whitford disputed in his testimony at the arbitration hearing, that
he
instructed the appellant to leave the company premises, he failed
to provide an explanation for why he instructed the appellant
to hand
back his cell phone if, as explained by him, the purpose of the
letter of the 4
th,
and
his discussion with the appellant was for the appellant to discuss
the terms of the offer with his lawyers and revert with a
proposal.
The absence of an explanation by Whitford on this crucial aspect
which counsel for Delkor conceded during argument, called
for
explanation, compels me to the conclusion that Whitford instructed
the appellant to return the company cell phone because he
was
terminating the employment relationship with the appellant. In the
circumstances, I consider the appellant’s version
that Whitford
instructed him to return the company cell phone and leave the
premises to be plausible. If as explained by Whitford,
the purpose of
the letter of the 4
th,
and
his discussion with the appellant, was for the appellant to discuss
the terms of the offer with his lawyer and revert with a
proposal,
then there would have been no reason, on the probabilities, to
instruct the appellant to return the company cell phone.
[21]
A central factor in assessing the credibility of the appellant’s
version as to the conduct of Whitford, on 4 November
2008, is his
testimony at the arbitration hearing that, when on the advice of his
lawyers, he informed Whitford that Delkor was
in breach of the
settlement agreement for failing to employ him on the same terms and
conditions as previously, Whitford repeatedly
told him that Delkor
did not have a contract with him and that, as a result, he would not
be paid until it does. This was prudently
not disputed by Whitford as
his testimony as to what he told the appellant on 4 November 2008 is,
remarkably, consistent with the
appellant’s version:
‘
But
now I have a situation that you do not have a contract, we have not
agreed on this thing, we are waiting for this letter from
your lawyer
and I have client who was expecting you at midday… At that
point I said because there is no agreement here so
there cannot be a
contract.’
On
Whitford’s own version, therefore, he did not consider the
appellant to be an employee, until the appellant signed a new
and
different agreement to what was agreed in terms of the settlement
agreement. The conduct of Whitford on the evidence presented
at the
arbitration hearing, and the probabilities, justify the conclusion
that Delkor had dismissed the appellant on 4 November
2008 as defined
in s186(1)(a) of the LRA.
[21]
I consider the letter of 4 November 2008, which withdrew the offer of
employment of 3 November 2008 in its entirety, to be
relevant only to
the extent that it confirmed Delkor’s intention not to comply
with the terms of the settlement agreement
to re-employ the appellant
on the same terms and conditions as prior to his resignation. It does
not in itself constitute the dismissal
of the appellant. Nor can it
form the basis of the finding by the Labour Court that because the
appellant failed to accept the
offer of the fixed term agreement, no
agreement came into being and therefore no dismissal could have taken
place. To my mind,
the emphasis placed by the Labour Court on the
withdrawal of the “offer” on 4 November 2008, by Delkor,
is entirely
misplaced, and clearly wrong.
[22]
At best for Delkor, the offer to employ the appellant on a three
month fixed term contract in the position of a Proposal Engineer,
constituted an attempt to enter into a new contract of employment.
Any attempt to have done so, however, does not detract from
the fact
that by 3 November 2008, the appellant was already re-employed on the
same terms and conditions than prior to his resignation.
Thus, the
question as to what transpired in the relation to the new and further
offer of a fixed term contract in the new position
is of little
consequence in the context of this dispute. What matters though, and
what should rightly have occupied the attention
of the Labour Court
is what transpired in relation to the re-employment of the appellant
on the same terms and conditions that
he enjoyed previously.
[23]
The Labour Court also placed much emphasis on the letter of response
from Delkor’s attorneys to the appellant’s
attorneys,
dated 4 November 2008, in which it is denied that Delkor dismissed
the appellant on that day. The contents of this letter
must be judged
against the background of all the facts and events that took place on
3 and 4 November 2008 respectively. Notwithstanding
the categorical
denial that the appellant was not dismissed, this letter came a tad
too late as Whitford had by this stage made
it abundantly clear that
the appellant was dismissed by
inter alia
presenting him with
the withdrawal letter of the 4
th
instance, instructing him
to return the company cell phone and to leave the premises. Needless
to say, the letter of 4 November
2008
is completely
irreconcilable with the conduct of Whitford on that day, and it
certainly does not sway the general probabilities
in favour of Delkor
in so far as the appellant’s dismissal is concerned. The Labour
Court accordingly erred in finding that
the appellant was not
dismissed by Delkor as defined s186(1)(a) of the LRA. In the
premises, I consider the commissioner’s
analysis of the
evidence, and her finding that the appellant was dismissed by Delkor
to be beyond reproach.
[24]
The Commissioner found the appellant’s dismissal to be both
procedurally and substantively unfair. On the
Sidumo test,
this finding is unquestionably one that a reasonable decision-maker,
on a consideration of the totality of the evidence, would
have
arrived at. Even though the appellant worked for two days only,
Delkor was still required to comply with the substantive and
procedural requirements for a dismissal. This it failed dismally to
do. The concession thus made by counsel for Delkor −
that
in the event it is found that the conduct of Whitford on 4 November
2008 constituted a dismissal as defined in s 186(1)(a)
of the LRA,
then the appellant’s dismissal must, for obvious reasons, also
be found to be both procedurally and substantively
unfair − was
wisely made.
[25]
Delkor, however, takes issue with the compensation which the
Commissioner awarded the appellant. Its attack is two-fold: first
that no compensation ought to have been awarded, and secondly that
the compensation awarded is so grossly excessive that no reasonable
arbitrator on the full conspectus of the evidence could have made
such an award. The factors which Delkor contends the Commissioner
failed to have regard to are that the appellant was only employed for
a period of two days; his dismissal was disputed and he was
immediately and repeatedly offered re-employment thereafter.
[26]
The issues for determination in relation to the challenge to the
Commissioner’s award of compensation are whether compensation
should have been awarded to the appellant, and if so whether the
award of seven months compensation was just and equitable in the
circumstances? The remedies available to an employee who is unfairly
dismissed are provided for in s193(1) read with 194 of the
LRA.
Section 193(1) confers the Labour Court or an arbitrator with a
discretion to order the employer to:(a) reinstate the employee
from
any date not earlier than the date of dismissal; (b) re-employ the
employee, either in the work in which the employee was
employed
before the dismissal or in any other reasonably suitable work on any
terms and from any date of dismissal; or (c) pay
compensation to the
employee. In terms of s193(2) of the LRA, the Labour Court or
arbitrator is required to order reinstatement
unless: (a) the
employee does not wish to be reinstated or re-employed; (b) the
circumstances surrounding the dismissal are such
that a continued
employment relationship would be intolerable; (c) it is not
reasonably practicable for the employer to reinstate
or re-employ the
employee, or (d) the dismissal is unfair only because the employer
did not follow a fair procedure.
[27]
Section 194 of the LRA in turn confers the Labour court or an
arbitrator with a wide discretion to award compensation to an
employee whose dismissal is found to be unfair, either because the
employer did not prove that the reason for the dismissal was
for a
fair reason relating to the employee’s conduct or capacity or
the employer’s operational requirements or the
employer did not
follow a fair procedure, or both. The award of compensation must,
however, be just and equitable in all the circumstances,
but may not
be more than the equivalent of 12 months’ remuneration
calculated at the employee’s rate of remuneration
on the day of
dismissal.
[28]
In
Kemp
t/a
Centralmed v Rawlings
[4]
Waglay
JA (as then he was) described the difference in the exercise of the
discretion in s193(1) and s194(1) of the LRA, respectively
as
follows:
‘
The
importance of the distinction between a discretion that is exercised
in terms of s 193(1)(c) and a discretion that is exercised
in terms
of s 194(1) is how the reviewing court will consider the matter. When
the discretion that is challenged is a discretion
such as the one
exercised in terms of s 194(1) the test that the court, called upon
to interfere with the discretion, will apply
is to evaluate whether
the decision maker acted capriciously, or upon the wrong principle,
or with bias, or whether or not the
discretion exercised was based on
substantial reasons or whether the decision maker adopted an
incorrect approach. When dealing
with a discretion however such as
provided in s 193(1)(c), the court must consider if the arbitrator or
the Labour Court properly
took into account all the factors and
circumstances in coming to its decision and that the decision arrived
at is justified. In
essence therefore, a review of a discretion
exercised in terms of s 193(1)(c) is essentially no different to an
appeal because
the reviewing court will be required to consider all
the facts and circumstances which the arbitrator or the Labour Court
had before
it and then decide based on a proper evaluation of those
facts and circumstances whether or not the decision was judicially a
correct
one.
Concurring,
Zondo JP (as he then was) held specifically in relation to the
exercise of the discretion under s193(1)(c) of the LRA,
that the
“ultimate question” that the Labour Court or arbitrator
has to answer in determining whether compensation
should or should
not be granted is which one of the two options would better meet the
requirements of fairness having regard to
all the circumstances of
the case? He said that when a court or arbitrator decides this issue,
it does not exercise a true or narrow
discretion but rather passes a
moral or value judgment on the basis of the requirements of fairness
and justice.
[5]
It is important
to recognise that the
Sidumo
(reasonableness) test does not apply to a review of a compensation
award made by a commissioner in terms of s193(1)(c) of the LRA.
This
is a mistake commonly made by counsel and judges alike. What the
reviewing court is required to do is to evaluate all the
facts and
circumstances that the arbitrator had before him or her, and then
decide based on the underlying fairness to the both
the employer and
employee whether the decision was judicially a correct one.
[29]
The remedy, which the appellant sought at the arbitration hearing in
the event that his dismissal was found to be unfair, was
that Delkor
be ordered to pay him compensation. As is apparent from his testimony
at the arbitration hearing, he elected not to
be reinstated as he
believed that due to the humiliating and degrading treatment which he
received at the hands of Whitford on
3 and 4 November 2008, in
particular, the employment relationship between himself and Delkor
had been irretrievably broken down.
Prior to the arbitration hearing,
the Commissioner was requested in terms of a pre-arbitration minute
to
inter alia
make a determination on whether if she decided
that the appellant was unfairly dismissed, what effect, if any, would
Delkor’s
requests to the appellant to discuss the matter have
on the issue of compensation. The Commissioner found as follows:
‘
On
the second issue I was asked to decide on, pertaining to whether
Delkor’s offer to reinstate the Applicant dated as late
as 11
February 2009 has any bearing on whether the Applicant is entitled to
compensation, I find this to be nothing other than
an attempt to once
more…frustrate the Applicant. I base this finding on the
following:
·
The first time the Applicant returned to
his former job, things went horribly wrong;
·
That being the situation I find it odd that
in the letter dated 11 February 2009 Delkor once more extended the
vague offer of settlement
to the Applicant. If, during the first
attempt the relationship could not be rescued due to the actions of
Mr Whitford why should
the Applicant once more expose himself to the
possible abuse and embarrassment he was exposed to during the first
two days of November
2008.’
The
Commissioner accordingly found that the “so called extension of
the settlement dated 11 February 2009 is of no consequence
when
considering proper compensation due to the Applicant.”
[30]
Relying for support on
Kemp
where this Court set aside the award of compensation, despite having
found the dismissal of the employee to be both substantively
and
procedurally unfair, primarily because the dismissed employee refused
to accept “a genuine and reasonable offer of reinstatement
made
to her by the employer”, Delkor submits that the arbitrator
erred by failing to apply his mind to the principles established
in
that case– and had she done so − she would have refused
to grant any compensation at all. I beg to differ. In
Kemp
[6]
,
this Court dealt specifically with the effect of an offer of
reinstatement on an award for compensation, and the nature of the
discretion to award compensation. The court held that no compensation
at all should be payable to the employee, despite the fact
that her
dismissal was held to have been substantively and procedurally unfair
because amongst other things “[a] genuine
and reasonable offer
of reinstatement was made to her which she did not accept”.
This begs the question – did Delkor
in the present matter make
a genuine and reasonable offer to reinstate the appellant? Delkor’s
first approach to the appellant,
as contained in the letter of 4
November 2008 states
inter
alia
that: “there is accordingly no question that your client was
dismissed and both you and your client are invited to meet with
the
writer to discuss the matter.” This invitation to discuss the
matter is, however, prefaced with the following statements:
‘
1.
Notwitstanding
the settlement your client has been hell bent on derailing the
process of his re-integration into the company.
2. As such he has been
obtuse and obstructive and difficult to deal with.
3. There is no question
of a repudiation or a dismissal.
4. …’
Then,
in response to the appellant’s referral of the alleged unfair
dismissal dispute to the CCMA, Delkor’s attorneys
wrote to the
appellant’s attorneys advising:
‘
Kindly
note that not only is your referral premature, there is no question
of your client being dismissed. We once again extend
to you the offer
set out in our letter dated 4 November 2008.’
The
last approach was made at the arbitration hearing, in a letter dated
11
February 2009, wherein the following is stated:
‘
There
is no question that you client was ever dismissed as alleged.
The offer of
re-employment as set out in previous correspondence remains, subject
to your client agreeing to conduct himself in
a reasonable manner.’
[31]
Where an employer makes an unconditional offer of reinstatement to an
unfairly dismissed employee, the employee’s unreasonable
rejection of such offer may mean that the employee is not entitled to
compensation. This is certainly not the situation that obtains
here.
To my mind, the offers of the 4
th
and 5
th
of
November 2008 were merely offers to discuss the matter, with the
intention of negotiating the terms of re-employment in circumstances
where it is abundantly clear from the evidence that there was nothing
to negotiate, as Delkor was obliged, in terms of the settlement
agreement, to re-employ the appellant on the same terms and
conditions as prior to his resignation. The offers were not, in my
view, genuine, reasonable unconditional offers to re-employ the
appellant on the same terms and conditions as prior to his
resignation.
[32]
By the same token, the “so called” offer to re-employ the
appellant as expressed in the letter of 11 February 2009
does not
constitute a genuine unconditional offer to re-employ the appellant
on the same terms and conditions as prior to his resignation.
The
letter states that the “offer of re-employment as set out in
previous correspondence remains, subject to your client
agreeing to
conduct himself in a reasonable manner.” There are three
aspects of this purported offer that are disquieting:
firstly it
refers to an offer of re-employment as set out in previous
correspondence, when the record reveals that no such offer
was ever
expressly made. Secondly to the extent that it can be viewed as an
offer to re-employ – is it an offer to re-employ
on the same
terms and conditions as prior to the appellant’s resignation −
or is it an offer to re-employ on wholly
different terms? This is not
clear. Thirdly, the offer is made subject to the appellant agreeing
to conduct himself in a reasonable
manner. I fail to appreciate how
this can be interpreted as a genuine unconditional offer of
reinstatement. Taking into consideration
the rather nebulous and
ill-defined nature of the purported offers to re-employ the
appellant, Delkor’s obstinate refusal
to re-employ the
appellant in terms of its obligations under the settlement agreement
in spite of being shown to be in breach thereof,
the undignified and
disparaging manner in which the appellant was treated by Whitford on
returning to work for Delkor after his
resignation, and that his
dismissal was both procedurally and substantively unfair, I find the
appellant’s refusal
to accept the so called offers of
re-employment not to be unreasonable. In circumstances such as those
that prevailed in this dispute,
I consider it fair and just for the
Commissioner to have exercised her discretion under s193(1)(c) of the
LRA in favour of awarding
the appellant compensation.
[33]
Having exercised her discretion under s193(1)(c) of the LRA in favour
of awarding the appellant compensation, the Commissioner
then
awarded the appellant compensation equivalent to seven months of his
salary, on the basis of his length of service with
Delkor before his
resignation, which began in 2005, his inability to secure employment,
the manner in which he was treated by Delkor,
and that the
relationship with Delkor could not be salvaged. The nature of the
payment of compensation made to an employee who
has been unfairly
dismissed is to offset the financial loss which has resulted from the
unfair dismissal. The primary enquiry for
an arbitrator or a court in
determining the quantum of compensation to be awarded to the wronged
employee is to take into account
the nature of the unfair dismissal
and the scope of the wrongful act on the part of the employer. As is
apparent from the Commissioner’s
reasons for awarding
compensation, she took these factors into account. Her reasoning is
thus not open to criticism.
[37]
As indicated earlier, the court’s power to interfere with the
quantum of compensation awarded by an arbitrator under
s194(1) of the
LRA is circumscribed and can only be interfered with on the narrow
grounds that the arbitrator exercised his or
her discretion
capriciously, or upon the wrong principle, or with bias, or without
reason or that she adopted a wrong approach.
In the absence of one of
these grounds, this Court has no power to interfere with the quantum
of compensation awarded by the Commissioner.
An appeal court will,
furthermore, not interfere merely because it would come to a
different decision.
[7]
It is,
therefore, for Delkor to persuade this Court that the quantum of
compensation awarded by the Commissioner may be impugned
on one of
the narrow grounds referred to above. This it has simply failed to
do. Accordingly, the compensation awarded by the Commissioner
must
stand. As regards costs, I see no reason, in law or fairness, why
costs should not follow the result.
[38] In the result, I
make the following order:
1.
The appeal is upheld.
2.
The order of the Labour Court in the review
application is set aside and substituted with the following order:
‘
The
application is dismissed with costs’
3.
The respondent is ordered to pay the costs
of the appeal.
__________________
F
Kathree-Setiloane AJA
Musi JA and Murphy AJA
concurring
APPEARANCES:
FOR THE APPELLANT:
Van Gaalen Attorneys
Instructed
by Van Gaalen Attorneys
FOR THE
RESPONDENT:
Adv G Fourie
Instructed
by McClaren & Associates
[1]
Section
186(1)(a) of the LRA provides:
‘‘
Dismissal’
means that−
(a)
an employer has terminated a contract of employment with or without
notice ‘.
[2]
Fidelity
Cash Management Service v Commission for Conciliation, Mediation and
Arbitration and Others
(2008)
29 ILJ 964 (LAC) para 101,
Trio
Glass t/a The Glass Group v Molapo NO and Others
(2013) 34 ILJ 2662 (LC) para 21.
[3]
(2004) 25 ILJ 731 (LC).
[4]
Kemp
t/a Centralmed v Rawlings
(2009)
30 ILJ 2677 (LAC) at para 55.
[5]
Kemp
at
para 22.
[6]
Kemp
t/a Centralmed v Rawlins
(2009)
30 ILJ 2677 (LAC).
[7]
Mphela
and Others v HaakdoornbultBoerdery CC and Others
[2008] ZACC 5
;
2008
(4) SA 488
(CC).