About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Labour Appeal Court
SAFLII
>>
Databases
>>
South Africa: Labour Appeal Court
>>
2016
>>
[2016] ZALAC 25
|
|
Xstrata South Africa (Pty) Ltd (Lydenburg Alloy Works) v Num Obo Masha and Others (JA 4/15) [2016] ZALAC 25; (2016) 37 ILJ 2313 (LAC); [2017] 4 BLLR 384 (LAC) (14 June 2016)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA,
JOHANNESBURG
Case no: JA 4/15
DATE: 14 JUNE 2016
Reportable/Not Reportable
In
the matter between:
XSTRATA
SOUTH AFRICA (PTY) LTD
(LYDENBURG
ALLOY
WORKS)
..........................................................................................
Appellant
And
NUM
OBO MASHA,
R
................................................................................................
First
Respondent
PIERRE
DE VILLIERS,
N.O
..................................................................................
Second
Respondent
METAL
AND ENGINEERING INDUSTRIES
BARGAINING
COUNCIL
........................................................................................
Third
Respondent
Heard:
12 May 2016
Delivered:
14 June 2016
Summary: Review of arbitration award –-
reinstatement primary remedy for unfair dismissal unless reasonably
impractical or
employment relationship irretrievably destroyed –
reinstatement not appropriate relief when it is not practically
feasible
- arbitrator misconstrued the nature of the enquiry he was
obliged to undertake to determine the practicability of
reinstatement.
Employer leading no evidence as to the
impracticability of reinstatement - arbitrator committing reviewable
irregularity by taking
irrelevant considerations into account –
Labour Court’s judgment upheld – Appeal dismissed with
costs. Coram:
Davis, Musi JJA
et
Murphy AJA
JUDGMENT
MURPHY
AJA
[1] The appellant (“Xstrata”) appeals against the
judgment of the Labour Court (Shai AJ) in which it upheld the
application
of the first respondent (“NUM”) for review of
the award of the second respondent (“the arbitrator”)
granting
the employee (“Masha”) compensation for unfair
dismissal. The Labour Court set aside the award and substituted it
with
an order reinstating Masha with retrospective effect.
[2]
Xstrata operates a ferrochrome smelting plant at Lydenburg,
Mpumalanga. Masha commenced employment with Xstrata as a human
resources assistant on 1 February 2010. In this position, she was
required to complete route and induction forms for contractors
before
they could be granted access or admission cards (clock cards)
allowing them access to the premises, and to ensure that the
contractors were referred to departmental supervisors or the safety
department for job specific induction. She initially performed
her
duties and functions under the supervision of two other employees,
referred to in the record as Otto and Petro. She assisted
them with
the administration of contractors. After some mentoring, she was
given responsibility for capturing all contractors on
the company’s
systems, namely SAP and ADC, and the issuing of clock-cards. Otto
trained and mentored her in performing the
aforesaid functions. The
mentoring that Masha received from Otto was inadequate in that it was
based upon an established incorrect
practice. After Otto left Xstrata
at Lydenburg, the company introduced a new route form to be used for
the capturing of all contractors
on the company’s system and
the issuing of clock-cards. It is common cause that Masha did not
receive any training on how
to complete the new route form properly.
[3] On
24 January 2011, a contract employee of Enviro Experts, Mr Letsoalo,
was killed on site in an accident. Masha had issued
Letsoalo with a
clock card on 7 January 2011. The clock card was not issued by Masha
in accordance with the procedure for the new
route form. It was
completed and issued in the manner in which she was mentored
previously by her supervisors Otto and Petro, in
accordance with what
she believed and understood to be standard practice. After
investigation, it was discovered that Letsoalo
had not been handed
over to the safety department to ensure that he followed the correct
procedure in terms of his job specific
induction. Had the route form
been completed properly and procedure followed, Letsoalo would have
benefited from the site specific
induction. Xstrata considered the
failure to be gross negligence by Masha and charged her accordingly.
A disciplinary hearing was
held pursuant to which Masha was found
guilty of gross negligence and dismissed on 3 February 2011.
Aggrieved by the outcome, NUM
referred a dispute on behalf of Masha
to the third respondent (‘the Bargaining Council’
)
,
contending that the dismissal was substantively unfair. Conciliation
failed and the matter proceeded to arbitration. Xstrata’s
second witness in the arbitration proceedings, Mr Bosch, confirmed
that Otto had been found to have incorrectly completed the route
forms but, unlike Masha, had not been disciplined for the
transgression.
[4] The
arbitrator found that Masha had not been properly trained in respect
of the new route forms and consequently that she was
not guilty of
the charge of gross negligence. He then expressed the view that Masha
was guilty of poor work performance, a charge
never levelled against
her, and in respect of which she had not had an opportunity to lead
evidence about attempts to train her,
if any, to improve.
Nonetheless, the arbitrator concluded that dismissal was not the
appropriate sanction, in the absence of counselling
or warnings, and
hence that the dismissal of Masha was substantively unfair. Despite
Masha having sought reinstatement, the arbitrator
refused to
reinstate her and awarded her compensation equivalent to three
months’ remuneration.
[5] In reaching his decision not to award reinstatement, the
arbitrator had regard to section 193 of the Labour Relations Acts
(LRA) which provides that where an arbitrator finds that a dismissal
is unfair he/she may order reinstatement, re-employment or
compensation. Section 193(2) of the LRA makes reinstatement the
primary remedy unless one of four exceptions is applicable. Section
193(2) reads:
‘
The
Labour Court or the arbitrator must require the employer to
re-instate or re-employ the employee unless-
(a)
the
employee does not wish to be re-instated 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 re-instate or
re-employ the employee; or
(d)
the
dismissal is unfair only because the employer did not follow a fair
procedure.”
[6] The
employee in this case sought reinstatement and the procedural
fairness of the dismissal was never placed in dispute before
the
arbitrator. Consequently, having found that the dismissal was
substantively unfair, the arbitrator had authority to refuse
reinstatement only if the evidence established that the circumstances
surrounding the dismissal were such as to render continued
employment
intolerable (section 193(2)(b)), or reinstatement was not reasonably
practicable (section 193(2)(c)). The arbitrator’s
finding was
as follows:
‘
The
applicant stated that if I were to find in her favour she wished to
be reinstated. Reinstatement is not practical in the matter
at hand.
The applicant had short service. The dismissal was over a year ago.
The applicant showed little initiative in the period
she was
employed. In the circumstances I am only awarding compensation.
Taking into account the applicant’s short length
of service I
am awarding her three months compensation.’
The
arbitrator’s finding that reinstatement was “not
practical” was probably intended to mean that “it was
not
reasonably practicable”. The factors he took into account in
reaching that conclusion were three: (1) the employee’s
short
service; (2) the fact that the dismissal took place a year before the
award was made; and (3) that she showed little initiative
in the
period she was employed. There was no evidence, and nor was it
submitted by the employer at the arbitration, that the continuation
of an employment relationship would be intolerable.
[7] In
the court
a quo,
and in the submissions on appeal before this
Court, much was made of the employee’s alleged poor
performance. However, there
was no cross-review of the finding of the
arbitrator that the dismissal was substantively unfair. In the
premises, the only issue
was whether the decision of the arbitrator
not to order reinstatement was reviewable. The reasoning of the court
a quo
went beyond the issue for determination, but it
nonetheless held that the three factors relied upon by the arbitrator
were insufficient
to conclude that it was “impractical”
to reinstate the employee. Although nothing was said about the
employee’s
short service, or the period between the dismissal
and the award, the learned judge clearly regarded the alleged lack of
initiative
during employment as insufficient foundation for
concluding that reinstatement was impracticable, especially in light
of the fact
that the employee, a relatively new and junior employee,
had been incorrectly trained on the old route form and had received
no
training at all in relation to the new form. The court decided
that the arbitrator’s decision was accordingly not reasonable
and appeared also to accept that the arbitrator had misconstrued the
true nature of the enquiry. It therefore set aside the award
and
replaced it with an order of retrospective reinstatement.
[8]
In
Mediterranean Textile Mills (Pty) Ltd
v SACTWU and Others,
[1]
this Court confirmed that reinstatement is the
primary remedy under the LRA and involves placing an employee back in
employment
as if the dismissal had never occurred. If the exceptions
to the remedy of reinstatement do not apply, the Labour Court and
arbitrators
only have a discretion with regard to the extent to which
reinstatement should be made retrospective. An employer wishing to
avoid
reinstatement must satisfy the arbitrator that one of the
exceptions to reinstatement applies, in this case to show that it
would
not be practicable. The employer should lead evidence
concerning relief in anticipation of a finding that a dismissal might
be
ruled unfair
.
[2]
Xstrata did not raise or present any evidence in
respect of any of the factors relied upon by the arbitrator or in
opposition to
an order for reinstatement. The issue of the
impracticability of reinstatement was not mentioned in the
arbitration proceedings
and no evidence was tendered to support such.
Xstrata submitted before us that the arbitrator nevertheless
considered the totality
of the evidence and correctly found that
reinstatement would not be practical. It argued that having found the
employee was guilty
of poor performance and in the light of a
concession made by the employee that she needed continuing direct
supervision, as she
did not feel competent to work alone, it was, in
its view, entirely reasonable for the arbitrator to find it was not
“practical”
to reinstate the employee.
[9]
There are a number of obstacles in the way of accepting that
submission. While an arbitrator is bound to determine the true
nature
of the dispute between the parties, it was unreasonable for the
arbitrator to raise the issue of poor work performance and
make an
adverse determination in this regard for the first time in the award.
This was not the case Masha had to meet. At no stage
prior to or even
during the arbitration was Masha called upon to deal with her alleged
incapacity. The approach and principles
applicable to a dismissal
based on poor work performance differ in material respects from those
applicable to a dismissal based
on misconduct. Misconduct and poor
work performance are distinct concepts requiring different remedial
procedures with different
sanctions. Consequently, the relevant
evidence and arguments to be presented in each case are different.
When an employee is dismissed
for poor work performance, the
arbitrator must examine whether the employee was trained to perform
the functions that he or she
was tasked to do; whether such training
was adequate; and whether the employee may benefit from further
training or counselling.
The common cause evidence before the
commissioner was that the initial mentoring that Masha received in
relation to the completion
of the route forms was incorrect; and she
did not receive any training or counselling with regard to the
completion of the new
route forms. It is therefore not surprising
that Masha testified that she did not feel competent to do her job
alone. Having determined
that the dismissal was substantively unfair
on the grounds that the alleged misconduct had not been proved, it
was problematic
for the arbitrator to then seize upon an untested
allegation of poor performance as the essential reason for refusing
reinstatement.
[10]
Moreover, Masha’s short service is irrelevant and does not
relate to whether or not it was practicable to reinstate her.
Were
that a relevant consideration, contrary to the purpose and intention
of statute it would potentially deny the remedy of reinstatement
to
all unfairly dismissed employees with short service. Similarly, it is
not rational to use the lapse of time between Masha’s
dismissal
and the arbitration to deny her the primary remedy of reinstatement.
If that was a relevant factor, an employer could
avoid reinstatement
by merely delaying the completion of the arbitration.
[11]
The arbitrator’s reliance on these two irrelevant
considerations is symptomatic of the irrationality and
unreasonableness
of his decision in relation to the applicable
remedy. It signifies that he misconstrued the nature of the enquiry
he was obliged
to undertake to determine the practicability of
reinstatement. He did not conduct the enquiry properly by asking the
questions
he ought rightly to have asked to decide if reinstatement
was feasible. The object of section 193(2)(c) of the LRA is to
exceptionally
permit the employer relief when it is not practically
feasible to reinstate; for instance, where the employee’s job
no longer
exists, or the employer is facing liquidation, relocation
or the like. The term “not reasonably practicable” in
section
193(2)(c) does not equate with “practical”, as
the arbitrator assumed. It refers to the concept of feasibility.
Something
is not feasible if it is beyond possibility. The employer
must show that the possibilities of its situation make reinstatement
inappropriate. Reinstatement must be shown not to be reasonably
possible in the sense that it may be potentially futile. An
employee’s
length of service, the delay in the arbitration and
alleged untested shortcomings in capacity are not normally relevant
to the
question of practicability. The taking of such irrelevant
considerations into account amounted to an irregularity of the part
of
the arbitrator. Moreover, the arbitrator ignored the relevant
consideration that remedial training to assist the employee attain
the desired standard had not been attempted.
[12]
In
Herholdt v Nedbank Ltd,
[3]
the Supreme Court of Appeal held that a review of
an award is permissible in terms of section 145 of the LRA if the
defect in the
proceedings falls within one of the grounds in section
145(2)(a) of the LRA, including the ground of “gross
irregularity”
in section 145(2)(a)(ii). For a defect in the
conduct of the proceedings to amount to such a gross irregularity,
the arbitrator
must have misconceived the nature of the enquiry
or
arrived at an unreasonable result. In
this case, the arbitrator failed to grasp the meaning of the term
“not reasonably practicable”,
took irrelevant
considerations into account and ignored relevant factors. His
interpretation constituted a material error of law
resulting in a
misconception of the enquiry which prevented a fair and proper
determination of the issue of reasonable practicability.
These
irregularities had a distorting effect on the outcome of the
arbitration with the result that it was not one that a reasonable
arbitrator could have reached. There was no reasonable basis for
denying the employee reinstatement. The court
a
quo
was accordingly correct to set
aside the award. The appeal falls to be dismissed. There is no reason
why costs should not follow
the result.
[13] The appeal is accordingly dismissed with
costs.
JR
Murphy AJA
I
agree
Davis
JA
I
agree
Musi
JA
APPEARANCES:
FOR THE APPELLANT: Mr Masher of Edward Nathan Sonnenberg
FOR THE RESPONDENT: Adv LM Malan
Instructed
by Finger Phukubje Attorneys
[1]
[2012] 2 BLLR 142
(LAC) at para 28.
[2]
Edcon Ltd v Pillemer NO and Others
[2010] 1 BLLR 1
(SCA) at para 23.
[3]
2013 (6) SA 224
(SCA) at para 25.