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[2015] ZALAC 13
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Builders Warehouse (Pty) Ltd v Commission for Conciliation, Mediation And Arbitration and Others (PA 1/14) [2015] ZALAC 13 (5 May 2015)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA,
PORT
ELIZABETH
Case no: PA 1/14
DATE: 05 MAY 2015
Not reportable
In the matter
between:
BUILDERS
WAREHOUSE (PTY)
LTD
.................................................................................
Appellant
COMMISSION
FOR CONCILIATION,
MEDIATION
AND
ARBITRATION
...........................................................................
First
respondent
JULIA
CAMERON
NO
.............................................................................................
Second
respondent
JOHANNA
PETRONELLA
BENADE
......................................................................
Third
respondent
Heard:24 February
2015
Delivered:05 May
2015
Summary: Review
of jurisdictional ruling – employee and employer agreeing on
demotion as alternative to dismissal due to employee’s
incapacity for ill health – employee referring unfair dismissal
dispute to the CCMA – commissioner ruling that CCMA
lacking
jurisdiction because of the existence of the agreement –
Existence of the agreement for demotion not preventing the
employee
from referring an unfair labour practice dispute. Labour Court
correct in setting aside the jurisdictional ruling and
referring
matter to the CCMA. Appeal dismissed.
CORAM: Waglay JP,
Ndlovu
et
Landman JJA
JUDGMENT
LANDMAN
JA
Introduction
[1] The appellant,
Builders Warehouse (Pty) Ltd, appeals against the whole of the
judgment of the Labour Court (Lagrange J) delivered
on 22.August
2013, which, at the instance of Ms Johanna Petronella Benade, the
third respondent, reviewed and set aside a ruling
on jurisdiction
made by the second respondent, a commissioner of the Commission for
Conciliation, Mediation and Arbitration (the
CCMA) and remitted the
matter to the CCMA for arbitration to be held afresh. The appellant
appeals with the leave of the court
a quo
.
Background
[2] The third
respondent was employed by the appellant in its Pretoria store as
from September 2004. She requested a transfer to
a store in Port
Elizabeth for medical reasons. Her request was granted and she was
transferred there in January 2009.
[3]
The third respondent worked at the Port Elizabeth store as an
Administrative Manager. In the course of the years 2009 to 2011,
she
was often absent from work owing to ill health. A number of meetings
were held during 2010 and 2011 with her regarding her
absenteeism.
One of such meetings took place on 24 May 2010. A further meeting
took place on 4 August 2010. At this meeting, the
third respondent
and the appellant signed an agreement in terms of which she undertook
to make every endeavour to minimize her
absenteeism due to illness.
The third respondent acknowledged the seriousness with which the
appellant viewed her absenteeism and
understood that future
absenteeism would necessitate the continuation of the counselling
process due to incapacity and that this
could constitute a
substantive ground for the termination of her employment.
[4] On 22 December
2010, the Branch Manager of the Port Elizabeth store, complained that
it was difficult to run the operation because
the third respondent
could not be relied upon to attend work when the business needed her
the most.
[5] The third
respondent’s absenteeism during critical periods was again
discussed with her on 30 June 2011. On 9 September
2011, the third
respondent was admitted to hospital and placed on medication. She was
obliged to continue with medication after
her discharge. She informed
the appellant that this medication had side-effects which made her
sleepy and impaired her concentration
levels. She indicated that the
side-effects were expected to be of a temporary duration.
[6] On 11 October
2011, the third respondent left the store because she was feeling
sleepy. She left through the front entrance
and not the staff
entrance of the store. In doing so, she failed to clock out. She also
failed to declare that she was off-site.
As a result, the appellant
instituted disciplinary action against her. The third respondent said
that the side-effects caused by
the medication were the cause of her
incapacity. She was issued with a final written warning.
[7] The position did
not improve. The third respondent was then suspended pending an
investigation into her capacity to undertake
the functions of an
Administrative Manager owing to her health and performance. An
incapacity hearing, chaired by an external chairperson,
was convened
on 11 January 2012. The chairperson ruled that owing to the third
respondent’s excessive absenteeism during
2009 to 2011 and her
response to previous counselling sessions (where she had made a
commitment to improve but was subsequently
absent from work for a
longer period), dismissal was the appropriate sanction. However, as
an alternative to dismissal, the chairperson
offered her a demotion
to the position of the receiving supervisor.
[8] The offer to
accept or decline the demotion was kept open until 23 March 2012.
After some communication, the third respondent
accepted the demotion
on 28 March 2012 by means of an email.
[9] Subsequently,
the third respondent complained to the CCMA that the appellant had
committed an unfair labour practice by demoting
her. An attempt to
conciliate the dispute failed and the matter was set down for
arbitration on 24 May 2012.
The
commissioner’s ruling
[10] The
commissioner explained in her ruling that, in light of the complexity
of the issues, she had heard evidence on the merits
and then she made
her ruling as regards jurisdiction. The commissioner found that the
third respondent had agreed to accept demotion
as an alternative to
dismissal and reasoned that because of this the CCMA did not have
jurisdiction to arbitrate the dispute. The
commissioner added that if
the CCMA had had jurisdiction, she would have found that the
appellant had not committed an unfair labour
practice.
[11] The third
respondent was dissatisfied with the ruling. She launched an
application in the Labour Court to review and set aside
the ruling.
The appellant opposed the application. However, the Labour Court
granted the relief sought.
The judgment of
the court a quo
[12] The issue
before the commissioner, which the Labour Court correctly identified,
was whether, in the face of an agreement between
the parties that the
third respondent accepted demotion to a lower position, she was
nevertheless entitled to refer an unfair labour
practice dispute
concerning her demotion to the CCMA.
[13] The court
a
quo
approached the matter this way:
‘
[10]
[T]his matter concerns a referral of an alleged unfair labour
practice relating to the applicant’s demotion in terms
of s
186(2)(a) of the LRA, which states:
‘
Unfair
labour practice means any unfair act or omission that arises between
an employer and an employee involving –
‘
unfair
conduct
by the employer
relating
to
the promotion,
demotion
,
probation (excluding disputes about dismissals for a reason relating
to probation) or training of an employee or relating to the
provision
of benefits.’
(emphasis added.)
[11] There is no
dispute that a demotion took place. Rather, there is a dispute over
whether the demotion was fair. The determination
of whether a
demotion took place, unlike the determination of dismissal, does not
require an arbitrator to determine if there was
consent or not. It is
true that will be an issue which will be relevant, and may well be
decisive, in determining the fairness
of the demotion, but is not a
jurisdictional prerequisite for entertaining the unfair labour
practice claim. Moreover, what may
fall within the ambit of the
definition of the unfair labour practice is described in broad terms,
as ‘unfair conduct …
by the employer…
relating
to
… demotion’ (emphasis added). Conceivably, this
could encompass something more than the act of demotion itself, and
dismissing the claim based on a finding that consent occurred might
indirectly curb the ambit of the claim.
[12] For these
reasons, I am satisfied that the arbitrator misdirected herself in
deciding the matter on a jurisdictional basis.
Having said that, her
obiter comments on how she would have dealt with the matter, if she
had found she did have jurisdiction,
are not without merit in my
view, and the applicant might wish to consider these when proceeding
further with her claim. Nonetheless,
I accept that there might be
some matters that were not canvassed by the arbitrator as a result of
her jurisdictional ruling, such
as the degree of the demotion, which
the arbitrator might still have considered if she had ruled
otherwise. For the sake of clarity,
I wish to emphasize that I make
no finding on the merits of the applicant’s unfair labour
practice claim despite my comments
above.’
Evaluation
[14] Employers and
employees are encouraged to settle their differences by agreement.
When they have done so, a binding contract
comes into existence.
Contracts are binding unless there is a valid reason to have them set
aside. The commissioner correctly appreciated
that she did not have
any power to set aside the contract (which is what the third
respondent wanted). But the commissioner erred
in concluding that the
agreement between the parties meant that the CCMA did not have
jurisdiction to hear the dispute. The court
a quo
is correct
that a dispute about an alleged unfair labour practice extends to
“unfair conduct relating to demotion”.
The fact that the
parties have agreed that the aggrieved employee accepts demotion is
not a complete defence because the ambit
of this unfair labour
practice is wider than this. The implementation of an agreement to
accept demotion, may constitute an unfair
labour practice.
15]
Mr Masuku, who appeared on behalf of the appellant, referred us to
Phaka
and Others v Bracks and Others
.
[1]
This judgment does not assist the appellant. Rather it goes the other
way. In this case, the Labour Court was faced with a situation
where
the applicants alleged that they were employees. The respondent
contended that they were independent contractors. The Labour
Court
took into account the written contract that each of the applicants
concluded with the third respondent that constituted a
contract of an
independent service. But the Court remarked that it was required to
consider whether, notwithstanding the express
provisions of the
contract, the applicants were nevertheless employees by virtue of the
presumption included in
section 200A
of the
Labour Relations Act 66
of 1995
. The Labour Appeal Court approved of this approach.
[16]
Mr Masuku also referred us to the judgment in
Benicon
Earthworks & Mining Services (Pty) Ltd v Jacobs NO and Others
.
[2]
This decision was approved of in
South
African Rugby Players Association (SAPRA) and Others v SA Rugby (Pty)
Limited and Others; SA Rugby Pty Limited v South African
Rugby
Players Union and Another
[3]
and applied to rulings by the CCMA on jurisdiction. The result is
that the jurisdiction of the CCMA is not dependent upon any finding
or view by a commissioner as regards jurisdiction but upon the
objective presence of the necessary jurisdictional facts. But this
does not assist the appellant because as the court
a
quo
correctly found, the commissioner was wrong as regards the
jurisdictional issue.
[17]
In the appeal before us, the commissioner was obliged to have regard
to the statutory formulation of the concept of an unfair
labour
practice. The agreement between the appellant and the third
respondent was part of the material relevant to a finding on
jurisdiction but it was not decisive as regards the jurisdictional
question. It may well be decisive when the merits of the complaint
are adjudicated.
Should the court
a quo
have decided the merits?
[18]
Mr Masuku also submitted that the Labour Court erred by remitting the
matter to the CCMA because it could and should have decided
the
issue. This submission overlooks the fact that because the
commissioner found that the CCMA did not have jurisdiction to
arbitrate
the dispute; no decision was made on the merits.
[19]
I should mention that although the third respondent applied to the
Labour Court to review the ruling, she did not seek an order
setting
the agreement between the appellant and herself aside or declaring it
invalid. The Labour Court could have decided whether
the agreement
was entered into under duress. See
Ulster
v Standard Bank of South Africa Limited and Another
.
[4]
But in the absence of a legal challenge to the agreement, the
agreement stands.
[20]
The court
a quo’s
decision to review the ruling was
correct as was its decision to remit the award for arbitration by
another commissioner of the
CCMA.
[21]
It follows that the appeal must be dismissed. Mr Masuku very properly
did not press for the costs of appeal.
Order
[22] In the result,
I would make the following order:
1.
The appeal is dismissed.
Landman JA
I
agree
Waglay JP
I agree
Ndlovu
JA
APPEARANCES:
FOR
THE APPELLANT: Mr Bongani Masuku
Instructed
by Mervyn Tabacks Attorneys.
FOR
THE THIRD RESPONDENT: No Appearances
[1]
(JA 3/2014)
[2014] ZALAC 73
(18 December 2014).
[2]
(1994) 15 ILJ 801 (LAC) at 804C–D.
[3]
[2008] 9 BLLR 845 (LAC).
[4]
[2014] JOL 31895
(LC).