Summary of Judgment

1. Introduction

The matter concerned an appeal in the Labour Appeal Court against a judgment of the Labour Court (per Whitcher AJ) which had dismissed an application to review and set aside a CCMA arbitration award. The arbitration award had been issued by a commissioner of the CCMA (Lester N.O.), who found in favour of the third respondent, Boniface Doe.

The appellant, Thanda Royal Zulu Football Club, had been unsuccessful before the CCMA, where Doe alleged that he had been employed as a football coach on a fixed-term contract and had been unfairly dismissed. The commissioner upheld Doe’s claim and awarded compensation equivalent to the remuneration Doe would have earned for the balance of the fixed term.

Procedurally, the dispute progressed from an alleged dismissal, to a CCMA arbitration award in Doe’s favour, to a review application in the Labour Court (dismissed), and finally to the present appeal in the Labour Appeal Court. The appellant’s case, both on review and appeal, rested primarily on (i) a jurisdictional objection to CCMA proceedings (based on an alleged private dispute-resolution regime in the National Soccer League structures), and (ii) a challenge to Doe’s status as an employee (as opposed to an independent contractor), together with a dispute about the duration of the contractual relationship.

The general subject-matter was therefore a labour dispute concerning employee status, CCMA jurisdiction, unfair dismissal on a fixed-term contract, and the reasonableness of an arbitration award on review.

2. Material Facts

Doe’s evidence (accepted in the absence of rebuttal) was that he was employed by the appellant as a football coach on an oral fixed-term contract concluded with a representative of the club, said to be Ngubane, commencing on 30 August 2009. He testified that the agreed remuneration was R20,000 per month, and that the term was 12 months.

On 13 November 2009, Doe was invited to sign a document described as a “voluntary release”. He refused to sign it, and his relationship with the club was terminated nonetheless. Thereafter, on 26 November 2009, Doe’s attorney wrote recording what was described as an unlawful termination and demanding specific performance. That demand was not met, and Doe referred an unfair dismissal dispute to the CCMA.

Certain facts were placed before the commissioner through documents rather than oral testimony from the club’s witnesses. A letter dated 3 November 2009 from the appellant to the South African Reserve Bank (SARB) confirmed a “one year” employment contract at R20,000 per month from 30 August 2009 until 30 June 2010 (a period of approximately ten months). Doe stated that the June 2010 end-date was an error. The author of the letter, Ngubane, was not called to testify, and no explanation was given for the failure to call him. The Labour Appeal Court treated the letter as corroborative of employment, while also noting that the alleged “error” about duration was not rebutted by evidence from the person best placed to do so.

In addition, the appellant produced purported invoices said to have been submitted by Doe, which were presented as indicative of an independent contractor relationship. Doe denied knowledge of the invoices, and the documents appeared, on their face, to have been prepared by Ngubane rather than by Doe. Again, Ngubane was not called to explain the provenance and significance of the invoices or to reconcile them with the SARB letter.

The appellant’s jurisdictional contention was that Doe’s contract (or the regulatory environment governing football clubs and coaches) required disputes to be resolved through the Dispute Resolution Chamber (DRC) of the National Soccer League (NSL) rather than the CCMA. However, Doe denied that the oral agreement included such a stipulation, and the appellant did not adduce evidence proving that a term of that kind formed part of the contract, whether expressly, tacitly, or by custom.

3. Legal Issues

The appeal required determination of the following central questions.

The first was whether Doe had proved that he was an employee of the appellant (rather than an independent contractor), because employee status was foundational to CCMA jurisdiction and to the unfair dismissal claim. This entailed a factual enquiry, and in particular an evaluation of whether Doe’s version stood unrebutted in the face of the documentary material produced by the appellant.

The second was whether, assuming Doe was an employee, the CCMA lacked jurisdiction because the dispute was allegedly governed by a private dispute-resolution mechanism under the NSL (the DRC), said to exclude CCMA jurisdiction. This raised an issue of the application of legal principles to facts, including the evidentiary requirements to establish an agreement (or tacit term) that disputes would be resolved privately, and whether such a case had been made on the evidence before the commissioner.

The third was whether Doe had been unfairly dismissed, and if so, whether the commissioner’s award of compensation—calculated as remuneration for the balance of the fixed term—was reviewable on the basis that it was not one a reasonable arbitrator could reach. This involved the legal standard for review under the Sidumo/Heroldt reasonableness test, applied to the material that served before the commissioner.

4. Court’s Reasoning

The Labour Appeal Court’s reasoning emphasised that the appellant’s case failed largely because it did not adduce evidence necessary to support factual contentions central to its defences. The Court addressed the issues sequentially: employee status, jurisdiction, unfair dismissal, and compensation/review reasonableness.

On employee status, the Court noted that Doe gave direct evidence that he was employed on an oral fixed-term contract at an agreed monthly salary. The appellant led no oral evidence to contradict Doe’s account. The Court treated the SARB letter as corroborating the existence of an employment relationship and the agreed remuneration, and considered the unresolved discrepancy about end-date (June 2010 rather than a 12-month term) in light of the appellant’s failure to call Ngubane. The Court held that, absent rebuttal from the author of the letter or other evidence contradicting Doe, Doe’s version remained the only version properly established before the commissioner, including on the 12-month term.

The purported invoices were considered by the Court to be, at most, suggestive of an independent contractor relationship, but the Court accepted that Doe denied knowledge of them and that they appeared to have been prepared by Ngubane. In the Court’s evaluation, the invoices could not displace Doe’s evidence in the absence of explanatory testimony from the person responsible for preparing them and in the absence of a coherent evidential case reconciling these documents with the SARB letter. The Court therefore held that Doe had discharged the onus resting on him to show that he was an employee.

On CCMA jurisdiction and the alleged displacement of jurisdiction by the NSL’s DRC, the Court held that once Doe had established employee status, the CCMA’s jurisdiction was established on the evidence. If the appellant wished to contend that jurisdiction was “trumped” by a private dispute-resolution forum, the appellant bore an evidentiary burden (and, as framed by the Court, an onus) to prove the basis for that contention. The Court found that the appellant did not prove that Doe agreed—expressly or tacitly—to a term requiring dispute resolution through the NSL’s DRC.

The Court considered two principal attempts by the appellant to support the DRC contention. The first was reliance on a different CCMA award involving a footballer (Dylan Kerr), where the parties in that matter had agreed that a written contract existed containing a DRC clause. The Labour Appeal Court held that this material did not establish that Doe’s oral agreement incorporated a similar clause, and further held that no evidence had been adduced to show an industry custom binding Doe to such a stipulation.

The second attempt was the appellant’s effort, raised for the first time in the review proceedings, to introduce the NSL Constitution and to argue for an “implied” (treated by the Court as intended to mean tacit) term. The Court accepted criticism that the partial reliance on NSL rule 18 was deficient and, importantly, held that in any event it was of no assistance if it was not put before the arbitrator as part of an evidentiary case. The Court also addressed the indicia relied upon in argument on appeal (registration requirements, an NSL handbook allegedly given to “everyone”, and a passage in Doe’s evidence). The Court regarded these as insufficient to establish a contractual submission to the DRC and noted that without evidence establishing the contractual mechanism by which the NSL could compel such submission, the “hints” could not bear the weight of the appellant’s jurisdictional case. Accordingly, the Court concluded that no competing jurisdiction was established that could have required the commissioner to defer to the DRC.

On unfair dismissal, the Court observed that Doe’s evidence stood alone and that there was no rebuttal of the attorney’s letter recording termination and demanding specific performance. The Court held that, on that evidentiary footing, the commissioner could not reasonably have reached a conclusion other than that Doe was summarily dismissed without a valid reason, particularly as no reason was given at the time of termination or at the arbitration hearing.

On the relief, the Court recorded that Doe waived reinstatement. The commissioner awarded compensation equivalent to the balance of the fixed term (about nine months, totalling R180,000). The Court accepted the commissioner’s reasoning that awarding less would, in effect, license breaches of fixed-term contracts, and noted the commissioner’s view that this amount aligned with common-law liability for the contractual remainder. The appellant’s contention that a lesser sum should have been awarded was not supported by cogent grounds demonstrating unreasonableness.

Finally, on the review standard, the Court held that the commissioner’s reasons demonstrated compliance with the reasonableness test associated with Sidumo, as reaffirmed in Heroldt v Nedbank, namely that a result is unreasonable only if it is one a reasonable arbitrator could not reach on all the material before the arbitrator. The Court also endorsed the Labour Court’s approach to costs, emphasising the burden placed on an individual litigant required to defend repeated challenges to an award.

5. Outcome and Relief

The Labour Appeal Court dismissed the appeal. It upheld the Labour Court’s dismissal of the review application and confirmed the CCMA award in effect.

The Court ordered the appellant to pay costs, including the costs of the review and of the appeal, as stated in the order.

Cases Cited

Sidumo and Another v Rustenburg Platinum Mines Ltd and Others [2007] ZACC 22; 2008 (2) SA 24 (CC); [2007] 12 BLLR 1097 (CC).

Heroldt v Nedbank Ltd [2013] 11 BLLR 1514 (SCA).

Legislation Cited

No specific legislative provisions were expressly cited in the text of the judgment provided, although the matter concerned unfair dismissal and CCMA arbitration within the statutory labour-law framework.

Rules of Court Cited

No rules of court were expressly cited in the text of the judgment provided. The judgment referred to NSL rule 18 in the context of an alleged private dispute-resolution mechanism, but this was not a rule of court.

Held

The Court held that Doe’s evidence established that he was an employee of the appellant on an oral fixed-term contract, and that the appellant failed to adduce evidence to rebut that version or to substantiate the contrary contentions suggested by documents such as invoices.

The Court further held that the appellant did not prove that the CCMA’s jurisdiction was excluded by the NSL’s private dispute-resolution forum (the DRC), because the appellant failed to establish that Doe agreed to any contractual term (whether express, tacit, or by custom) compelling referral to the DRC.

On the merits, the Court held that in the absence of any evidence from the appellant offering a valid reason for termination, the commissioner could reasonably conclude that Doe was unfairly dismissed, and could reasonably award compensation equal to the balance of the fixed-term remuneration. The commissioner’s award was held to meet the Sidumo/Heroldt reasonableness standard, and the appeal was dismissed with costs, including the costs of the review and the appeal.

LEGAL PRINCIPLES

The judgment applied the principle that material factual contentions must be supported by evidence, and that a party who bears an evidentiary burden (or onus) cannot succeed through assertion, insinuation, or reliance on vague indicia in circumstances where the opposing party’s direct evidence stands unrebutted.

In relation to CCMA jurisdiction, the judgment applied the principle that where jurisdiction is established on the evidence (here, through proof of employee status), a party alleging that jurisdiction is excluded by a private dispute-resolution agreement must prove the contractual foundation for that exclusion. The Court treated attempts to rely on other matters (such as a separate award involving different parties, or incomplete references to regulatory rules) as insufficient without evidence linking those rules to the particular contract in issue.

The judgment applied the review principle that an arbitration award is reviewable only if it is one that a reasonable arbitrator could not reach on all the material before the arbitrator, as articulated in Sidumo and Another v Rustenburg Platinum Mines Ltd and Others and reaffirmed in Heroldt v Nedbank Ltd. On the facts before the commissioner—particularly where the employer led no evidence to rebut dismissal allegations or to justify termination—the findings and the compensation award were held to fall within the bounds of reasonableness.

Finally, the judgment reflected an evaluative stance that awarding compensation equivalent to the balance of a fixed-term contract may be reasonable where dismissal is found to be unfair and no persuasive basis is advanced for a lesser amount, particularly where the award is consistent with the contractual consequences of premature termination as understood by the commissioner on the evidence before him.