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[2016] ZALAC 103
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African Explosives Limited v Panelist M S Raffee N.O and Others (JA 88/2014) [2016] ZALAC 103 (4 March 2016)
IN THE LABOUR APPEAL COURT OF SOUTH
AFRICA, JOHANNESBURG
Not Reportable
Case number: JA 88/2014
In the matter between:
AFRICAN
EXPOSIVES limited
Appellant
and
PANELIST
M S RAFFEE N.O.
First
respondent
NATIONAL
BARGAINING COUNCIL FOR THE
CHEMICAL
INDUSTRY
Second
respondent
CEPPWAWU
Third
respondent
L
LUZIPHO & 9 OTHERS
Fourth
respondents
Heard: 26 November 2015
Delivered: 04 March 2016
Summary: Appellant entitled by
terms of collective agreement to change shift system but required to
consult regarding implementation
of the change. No agreement reached
regarding implementation. Employees attended at work under old shift
system with intention
of disrupting workforce. Unprotected strike
action ensued. The respondents dismissed after disciplinary hearing.
Arbitrator found
dismissals substantively unfair in that no agreement
to implement new shift system reached and employees disciplined
selectively;
and procedurally unfair given conduct of
chairperson and refusal to allow fellow employee to represent
employees at hearing.
Thereafter Labour Court dismissed appellant’s
review application. On appeal held that: award reviewable in that it
fell outside
the ambit of reasonableness required given that no
agreement to implement shift change was required and consultation had
occurred.
Attack against consistent application of discipline without
merit. Appeal against substantive fairness upheld. Three months’
compensation awarded for procedural unfairness with no order as to
costs.
Coram: Waglay JP, CJ Musi JA
et
Savage AJA
Judgment
SAVAGE AJA:
Introduction
[1]
This
is an appeal, with the leave of this Court, against the judgment of
the Labour Court (Lallie J) in terms of which the appellant’s
application to review and set aside the arbitration award of the
first respondent (the arbitrator) was dismissed with costs.
[2]
The
fourth and further respondents (the respondents) were employed by the
appellant, African Explosives, at its U307 explosives
plant. The
appellant decided to introduce a continuous shift system in order
that employees work an average of 42 hours per week
to limit fatigue
caused by excessive overtime. The second respondent, CEPPWAWU (the
union), and its members were among those who
opposed the change and
insisted that prior to implementing the new shift system, the issue
must be negotiated at plant level. The
appellant relied on schedule 3
to the Constitution of the Bargaining Council which provides that
shift allowances fall within the
negotiating scope of the sectoral
chamber and that these had been determined. In addition, in terms of
schedule 4 of the Constitution
only the practicalities of workplace
restructuring, such as implementing a revised shift system, fell to
be negotiated at company
or plant level.
[3]
In
June 2009, the appellant referred a dispute to the bargaining council
seeking an interpretation of the applicable collective
agreements in order to clarify the way forward. On 24 October 2009,
bargaining council panellist, Ms L Dreyer, determined that:
“
The
company is not obliged to renegotiate a shift allowance and increase
in working hours every time that the company wants to move
people
from one shift to another. The company is correct in its
interpretation of the various collective agreements to say that
shift
allowances and hours of work are negotiated at a centralised level
and therefore that there is no reason to reengage with
trade unions
on this point at plant level, save to agree the time of the change,
the work roster and the pattern of the continuous
shift.”
[4]
No
application was made by the union or its members to have the 2009
arbitration award set aside on review. On 29 October 2009,
the
appellant communicated the outcome of the arbitration award to
employees and sought to consult regarding the roster and pattern
of
implementation of the continuous shift system from 30 November 2009.
Following meetings held with employees on 11 and 19 November
2009, it
was apparent that no agreement would be reached regarding the
practicalities of implementing the new shift system given
the union’s
stance that the new shift could not be implemented in the absence of
agreement.
[5]
On 23
November 2009, team leaders presented an initial shift roster and
pattern to employees. Briefings on the new system were held
with
employees. The shift roster was placed on the notice board, with
notice of the final roster given on 26 November 2009. All
employees
were notified that the continuous shift system would commence on 30
November 2009. They were also informed of the date
and time of their
new shifts. The union persisted with its opposition to the
implementation of the new shift system.
[6]
On 30
November 2009, most of the 250 employees at the appellant’s
U307 plant reported for work under the new shift system.
The fourth
and further respondents attended at work on the old shifts allocated
to them. The ensuing disturbance led to all work
at the plant being
disrupted. Employees refused to return to their posts, gathered
outside the appellant’s premises and embarked
on unprotected
strike action. An ultimatum issued by the appellant’s
management calling on employees to return to work was
ignored,
causing the appellant to obtain a Labour Court order on 3 December
2009
inter
alia
interdicting the strike action and ordering the employees to return
to work.
[7]
Thereafter
the fourth and further respondents were given notice to attend a
disciplinary enquiry at which they were called upon
to answer two
disciplinary complaints:
“
1.
Admission to property and work areas” in that you arrived at
work on the morning of the 30
th
November 2009 on the incorrectly designated shift with the purpose of
disrupting the workforce.
2. “Admission to property and
work areas” in that you intimidated and influenced employees to
leave their place of work
as the result of the U307 continuous shift
dispute.”
[8]
At
the ensuing disciplinary enquiry, there was no dispute that the
fourth and further respondents had arrived at work on 30 November
2009 on their incorrect shifts and that the ensuing disruption led to
employees embarking on unprotected strike action. The employees
were
found to have misconducted themselves in the manner alleged by the
appellant and to have caused “considerable harm”
to the
company through their actions. In December 2009, the appellant
dismissed the fourth and further respondents from their employment.
[9]
Aggrieved
by their dismissals, the employees referred an unfair dismissal
dispute to the bargaining council for determination.
Arbitration award
[10]
At
arbitration the respondents attacked the substantive and procedural
fairness of the dismissals. Issue was taken with the fact
that no
agreement had been reached between the parties concerning the
implementation of the continuous shift system in the manner
required
by the 2009 award. In addition, the respondents contended that the
appellant had not applied workplace discipline consistently
in that
previous shift changes had been agreed with employees; at the
appellant’s ISAP plant a similar incident had occurred
yet
employees were not dismissed; and many U307 plant employees who were
involved in the incident on 30 November 2009 were not
disciplined or
dismissed by the appellant.
[11]
The
appellant disputed that the dismissals of the fourth and further
respondents had been unfair. It contended that the disruption
at its
ISAP plant in August 2009 was distinguishable from the events of 30
November 2009 in that as at August the 2009 arbitration
award, which
clarified the legal position, had not been received.
[12]
Disciplinary
hearings were held against 36 employees who attended at work on their
incorrect shifts. Two arbitration hearings involving
other employees
of the same plant were held prior to the respondents’
arbitration. At the respondents’ arbitration
hearing Mr Yusuf
Makra, the appellant’s detonator products section manager,
detailed the history of consultations, notifications
and briefings
regarding the shift change. He stated that notice was given of the
change on 29 October 2009, with consultations
held thereafter on 9
and 11 November 2009. On 23 November 2009 notice of the new shifts
was given and on 25 November 2009 employees
were briefed by
management, with discussions continuing thereafter on 27 November
2009. On 30 November 2009 the respondents attended
at work at the
time of their old shifts and when certain of the respondents entered
the plant, they caused work to be disrupted
as a result of which all
employees left their posts. Management attempts to resolve the issue
were unsuccessful. The respondents
refused to leave the premises.
With work disrupted and employees no longer at their posts
unprotected strike action ensued.
[13]
The
respondents did not dispute in evidence that they were aware that the
new shifts were to be implemented from 30 November 2009;
that they
attended work on the wrong shifts; and refused to work the new shifts
given that no agreement was in place that the new
shifts could be
implemented.
[14]
On 21
June 2010, the arbitrator found that the dismissals of the
respondents had been substantively and procedurally unfair. The
respondents were retrospectively reinstated into their employment
with the appellant with back pay. In finding substantive unfairness,
the arbitrator relied on paragraph 4.3 of the 2008/9 wage agreement
which had been entered into with the union and which provided
that:
‘
4.3
All employees whom the employer anticipates will be required to
perform any of the types of shift work during any pay month,
shall,
before commencement of such month, be designated as such by the
employer. All such employees shall, in addition to the salaries
payable be paid a pensionable shift allowance as reflected below:
4.3.1
Continuous Shift Work covering 24 hours a day, 7 days a week (12% of
basic salary)
4.3.2
Three – Shift Work: 40 Hours a week – Monday to
Friday/Saturday (11% of basic salary)
4.3.3
Two-Shift Work: 40 Hours 5 day (10% of basic salary)
4.3.4
Two-Shift Work: 40 Hours 5 day week, finishing after 24h00 (11% of
basic salary).’
[15]
The
arbitrator stated that
“
(i)n
deciding whether or not the Applicants were designated employees”
there
was
“…
no
reason for the Applicants to be served a letter on the 4
th
December 2009 when such a letter could have been served on the
Applicants before the 30
th
November 2009
”
.
The arbitrator found that there was no agreement concerning the
time of the change, the work roster and the pattern of the
continuous
shift and that this had caused the appellant, who had anticipated
“trouble on the 30
th
November 2009 because there was no agreement”, to bring in
alternative labour on the day. In addition, the arbitrator relied
on
Mr Makra’s evidence that “
there
could be a reason why
”
other
employees were not disciplined yet he could not recall what these
were. This led the arbitrator to conclude that
“
(t)he
quantity of evidence indicating the number of employees who were
involved that were not disciplined makes attack (sic) on
consistency
therefore to succeed”.
[16]
The
dismissals were found procedurally unfair on the basis that the
chairperson refused to allow Mr Lordwick Luzipho, the fourth
respondent, to represent at least six of his fellow employees at the
disciplinary hearing in that he was “
also
involved
”
and
would be biased. In addition, procedural unfairness arose in that the
chairperson was found to have had prior knowledge of the
matter when
he stated before the commencement of the enquiry that “
management
is wasting their time, they should all be dismissed
”
.
Labour Court review
[17]
The
appellant sought the review and setting aside of the arbitration
award by the Labour Court. The Labour Court accepted that the
fourth
and further respondents had reported for duty on 30 November 2009 “
in
defiance of the new shift system…causing disruption as
employees scheduled for those shifts had also reported for duty
”
.
Yet, the Court stated that Mr Makra on the day had not known if he
had seen the respondents and that no obligation rested on the
employees to refute such evidence. The Court accepted that the
arbitrator had appropriately dealt with the decision on the part
of
the employees not to testify and found the dismissals unfair on the
basis that employers are required to treat employees who
commit
similar misconduct in a similar manner. No reviewable irregularity
was found to have been committed in the manner in which
the
arbitrator had approached the consistent application of discipline.
Furthermore, the decision reached on procedural fairness
was found to
be one that a reasonable decision-maker could reach on the material
before him. On 9 January 2014, the appellant’s
review
application was therefore dismissed with costs.
Grounds of appeal
[18]
The
appellant’s application for leave to appeal against the
judgment of the Labour Court was refused with leave to appeal
subsequently granted on petition to this Court. Although the
appellant raised 11 grounds of appeal in its notice of appeal, the
essence of this appeal is whether the Labour Court erred in
concluding that no reviewable irregularity was committed by the
arbitrator
and whether the arbitrator’s determination was one
which on the material before him a reasonable decision-maker could
have
reached.
Evaluation
[19]
This
Court has emphasised that the decision in
Sidumo
does not mean
“…
that
the grounds of review in section 145 of the Act are obliterated
[but]... that they are suffused by reasonableness.”
[1]
The Supreme Court
of Appeal in
Herholdt
v Nedbank
Ltd
(
Congress
of South African Trade Unions as Amicus Curiae
)
[2]
made it clear that a review of an arbitration award is permissible if
the defect in the proceedings falls within one of the grounds
in
section 145(2)(a) of the LRA:
‘
For
a defect in the conduct of the proceedings to have amounted to a
gross irregularity as contemplated by Section 145(2)(a)(ii),
the
arbitrator must have misconceived the nature of the enquiry or
arrived at an unreasonable result. A result will only be unreasonable
if it is one that a reasonable arbitrator could not reach on all the
material that was before the arbitrator. 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
.’
[3]
[20]
This
Court in
Gold
Fields Mining SA (Pty) Ltd (Kloof Gold Mine) v CCMA and Others (Gold
Fields
)
[4]
stated that:
‘
Sidumo
does
not postulate a test that requires a simple evaluation of the
evidence presented to the arbitrator and based on that evaluation,
a
determination of the reasonableness of the decision arrived at by the
arbitrator. The court in
Sidumo
was at pains to state that arbitration awards made under the Labour
Relations Act (LRA) continue to be determined in terms of section
145
of the LRA but that the constitutional standard of reasonableness is
“suffused” in the application of section 145
of the LRA.
This implies that an application for review sought on the grounds of
misconduct, gross irregularity in the conduct
of the arbitration
proceedings, and/or excess of powers will not lead automatically to a
setting aside of the award if any of the
above grounds are found to
be present. In other words, in a case such as the present, where a
gross irregularity in the proceedings
is alleged, the enquiry is not
confined to whether the arbitrator misconceived the nature of the
proceedings, but extends to whether
the result was unreasonable, or
put another way, whether the decision that the arbitrator arrived at
is one that falls in a band
of decisions to which a reasonable
decision-maker could come on the available material.’
[5]
[21]
A
determination as to the substantive fairness of a dismissal for
misconduct requires a decision-maker to have regard to item 7
of the
Code of Good Practice and to consider whether the employee was aware
of the workplace rule allegedly breached or can reasonably
be
expected to have been aware of the rule; whether the rule has been
consistently applied; whether the rule had been breached;
and whether
dismissal is an appropriate sanction to be imposed for breach of the
rule.
Sidumo
made
it pertinently clear that:
‘
In
terms of the LRA, a commissioner has to determine whether a dismissal
is fair or not. A commissioner is not given the power to
consider
afresh what he or she would do, but simply to decide whether what the
employer did was fair. In arriving at a decision
a commissioner is
not required to defer to the decision of the employer. What is
required is that he or she must consider all relevant
circumstances.
’
[6]
[22]
The
arbitrator accepted that the 2009 arbitration award had determined
that the appellant was entitled to change its shift system.
From the
evidence it was apparent that the appellant had engaged with the
unions and employees repeatedly after receipt of the
2009 award and
prior to the implementation of the new shift system regarding the
practicalities of implementing the new system.
There was no dispute
that the union and its members opposed the shift system change, that
this opposition was reiterated to the
appellant on a number of
occasions prior to 30 November 2009 and that, given such opposition,
the practicalities of implementing
the new system would not, and
consequently were not, agreed.
[23]
In
Apollo
Tyres South Africa (Pty) Ltd v National Union of Metal Workers of
South Africa (NUMSA) and Others,
[7]
it was made clear that
“…
unless
specifically entrenched contractually, the right to regulate shift
patterns is the prerogative of the employer
.”
[8]
The appellant’s entitlement to amend the shift system had been
determined and recorded in collective agreements entered into
between
the parties. The 2009 arbitration award confirmed as much in finding
that in terms of the collective agreements there was
no reason to
“reengage” with unions at plant level regarding a change
to the shift system, with the appellant only
required to re-engage
“…
to
agree the time of the change, the work roster and the pattern of the
continuous shift”
.
With the 2009 award not having been set aside on review, it followed
that the appellant was entitled to change the shift system
provided
it had consulted with the union or employees regarding the practical
implementation of the new system.
[24]
This
process of consultation envisaged that the appellant in a
constructive manner addressed the issue with employees and their
trade unions. It did not require that in the absence of an agreement
reached on the time of the change, the work roster and the
pattern of
the new shifts, the new shift system could not be implemented by the
appellant. For, were this to be the case, it would
render the
appellant’s right to change the system in accordance with the
applicable collective agreements meaningless.
[25]
The
respondents had repeatedly indicated their opposition to the new
system and had refused to agree to any aspect of its implementation.
There was no dispute that the appellant had sought agreement, that it
had engaged with employees and their unions on the issue
over the
course of a month following the receipt of the 2009 award. With the
entitlement to change the shift system having been
the subject of
collective agreement, faced with the respondents’ refusal to
agree to the manner of implementation of the
new system, the
appellant was entitled to implement the new system even when no
agreement had been reached with the union regarding
the time of the
change, the roster or shift pattern.
[26]
It
follows for these reasons that the conclusion reached by the
arbitrator that the appellant had implemented the continuous shift
system in the absence of agreement having been reached with employees
is one that on the material before him did not fall within
the ambit
of reasonableness required. The arbitrator failed to have regard to
the fact that the appellant was entitled by collective
agreement to
change the shift system and that it had consulted in the manner
required with the trade unions and employees concerning
the practical
implementation of the new shift system.
[27]
The
absence of an agreement as to the practical implementation of the new
shift system did not entitle the respondents to report
for duty under
the old shift system or refuse to work according to their new shifts
allocated. Furthermore, when the roster had
been published on notice
boards and notice given to individual employees of the new shifts
they were required to work, the conclusion
reached by the arbitrator
that the fourth and further respondents had not been “designated”
in the manner contemplated
in clause 4.3 of the 2008/9 wage agreement
was not a finding that was sustainable on the evidence before the
arbitrator. Notice
of the new shifts had clearly been provided to
employees. From the conduct of the respondents it was apparent that,
regardless
of the manner or date of such notice, they refused to work
new shifts and sought to prevent other employees from working their
new shifts allocated.
[28]
The
claim made by the fourth respondent, Mr Lordwick Luzipho, that the
reason for the attendance at work on the day was in order
that the
respondents be present at meetings was not a version put to the
appellant’s witnesses in cross-examination. On the
evidence
before the arbitrator, the respondents, who included shop stewards,
arrived at work and entered the appellant’s
premises intent on
causing employees who had reported for duty under the new shift
system to leave their posts. The evidence indicated
that this
intention was realised when work was disrupted, with employees
leaving their posts and engaging in unprotected strike
action which
was only halted when a Court order was obtained on 3 December 2009 by
the appellant. While certain employees returned
to their posts in
response to the appellant’s ultimatum that they do so, it was
not disputed that the respondents failed
to do so.
[29]
Turning
to the issue of consistency, the arbitrator found that discipline had
been applied inconsistently by the appellant in that
there were other
employees who had engaged in misconduct similar to that of the fourth
and further respondents but who were not
disciplined by the
appellant. On the material before the arbitrator it was apparent that
the appellant took disciplinary action
against those employees who it
could determine had arrived at work on the incorrectly designated
shift under the old shift system
with the purpose of disrupting the
workforce.
[30]
I
tem
7 (b) (iii) of the Code of Good Practice: Dismissal
establishes as a
guideline for testing the fairness of a dismissal for misconduct
whether “
the
rule or standard has been consistently applied by the employer
”
.
Disciplinary
consistency is the hallmark of progressive labour relations.
[9]
While discipline should be neither capricious nor selective,
[10]
this applies within reasonable bounds and subject to the proper and
diligent exercise of discretion in each individual case with
fairness
remaining a value judgment.
[11]
In
SACCAWU
& Others v Irvin & Johnson
[12]
this Court
reiterated that it
“
is
really the perception of bias inherent in selective discipline which
makes it unfair
”
,
observing that the flexibility which is inherent in the exercise of a
discretion will inevitably create the potential for some
inconsistency:
“
Where,
however, one is faced with a large number of offending employees, the
best that one can hope for is reasonable consistency.
Some
inconsistency is the price to be paid for flexibility, which requires
the exercise of a discretion in each individual case
”
.
[13]
[31]
The
appellant was neither capricious nor selective in taking disciplinary
action against the employees that it determined had committed
the
misconduct alleged. In finding differently, the arbitrator arrived at
a decision which on the material before him was not one
which fell
within the ambit of reasonableness required. For these reasons, it
follows that in finding that the dismissals of the
respondents were
substantively unfair, the arbitrator arrived at a decision which was
not one that a reasonable decision-maker
could have reached on the
material before him.
[32]
With
regards to the procedural fairness of the dismissals of the
respondents, the evidence before the arbitrator was that the
chairperson
of the hearing had prematurely and prior to the
conclusion of the disciplinary hearing expressed a view as to the
course that the
matter should take and had, in addition, denied the
employees the right to representation by a fellow employee, namely
the fourth
respondent. Neither aspect was disputed at arbitration. It
follows that the finding of procedural unfairness arrived at by the
arbitrator was reasonable. Given the procedural defects which arose
at the disciplinary hearing, the view I take of the matter is
that an
amount of three months’ wages as compensation, which from the
record it is apparent amounts to a total of R18900,00
per respondent,
for procedural unfairness is appropriate.
[33]
Having
regard to considerations of law and fairness, I can find no reason to
justify a costs order being granted against the respondents.
Order
[34]
In
the result, the following order is made:
1.
The
appeal is upheld with no order as to costs.
2.
The
order of the Court
a
quo
is set aside and replaced with the following order:
‘
(1)
The arbitration award issued by the second respondent is reviewed
and set aside; and replaced with the order that the dismissals
of the
fourth to further respondents were substantively fair but
procedurally unfair.
(2) The applicant is to pay the sum of
R18 900.00, being equivalent to three (3) months’ wages, to
each of the fourth and
further respondents within fourteen (14) days
of this order.
(3) There is no order as to costs.’
Savage AJA
Waglay JP and CJ Musi JA concur in the
judgment of Savage AJA.
APPEARANCES:
FOR APPELLANT:
Mr B Masuku
Instructed by Mervyn Taback Inc.
FOR THIRD, FOURTH AND
FURTHER RESPONDENTS:
Mr Z M Navsa
Instructed
by Cheadle Thompson & Haysom Inc.
[1]
See
inter
alia
Fidelity
Cash Management Service v CCMA and Others
[2008] 3 BLLR 197
(LAC) at para 101.
[2]
2013
(6) SA 224
(SCA);
[2013] 11 BLLR 1074
(SCA); (2013) 34 ILJ 2795
(SCA).
[3]
At
para 25.
[4]
(2014)
35 ILJ 943 (LAC) with reference to
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others
2008
(2) SA 24
(CC) (
Sidumo
).
[5]
At
para 14. With reference to s145(2)(i), (ii) and (iii) of the LRA.
[6]
At
para 79.
[7]
[2012]
6 BLLR 544 (LC).
[8]
At
para 28.
[9]
Gcwensha
v CCMA and Others
[2006]
3 BLLR 234
(LAC)
at para 36. See too
confirming
the decision of
Irvin
& Johnson
(1999)
20 ILJ 2302 (LAC) at para 29.
[10]
Chemical
Energy Paper Printing Wood & Allied Workers Union and Others v
Metrofile (Pty) Limited
(2004)
25 ILJ 231 (LAC)
at paras 36-37;
National
Union Metalworkers of SA v Haggie Rand Ltd
(1991)
12 ILJ 1022 (LAC) 1029G-H.
[11]
National
Union of Metalworkers of SA and Others v Henred Fruehauf Trailers
(Pty) Ltd
(1994)
15 ILJ 1257 (A) at 1264A-D;
SACCAWU
and Others v Irvin & Johnson (Pty) Ltd
(1999) 20 ILJ 2302 (LAC) at para 29;
Cape
Town Council v Masitho and Others
(2000) 21 ILJ 1957 (LAC) at para 14.
[12]
[1999]
8 BLLR 741
(LAC) at 751B.
[13]
At
751.