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[2016] ZALAC 31
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Pack n Stack v Khawula N.O and Others (DA05/15) [2016] ZALAC 31; (2016) 37 ILJ 2807 (LAC) (28 June 2016)
INTHE
LABOUR APPEAL COURT OF SOUTH AFRICA, DURBAN
Reportable
Case No: DA05/15
In the matter between:-
PACK N
STACK
Appellant
(Applicant in the Court
a
quo)
and
COMMISSIONER KHAWULA,
N.O
First Respondent
(First Respondent in the
Court
a quo
)
THE COMMISSION FOR
CONCILIATION,
MEDIATION
AND ARBITRATION
Second
Respondent
(Second
Respondent in the Court
a quo
)
PATRICK SIMPHIWE
MDLETSHE &
ANOTHER
Third Respondents
(Third
Respondent in the Court
a quo
)
Heard:
25 February 2016
Delivered
:
28
June 2016
Summary: Review of a
rescission ruling - employer and its witnesses attending arbitration
proceedings – commissioner finding
that the person representing
employer not having
locus
standi
to do so –
commissioner proceeding with arbitration in employer’s absence
– employer applying for rescission
of award –
commissioner dismissing rescission application. Commissioner ought to
have found explanation for the default
bona
fides
–
that presence of employer’s witnesses indicative that the
defence was not abandoned – employer having intention
to defend
the matter but not for the incompetence of its representative.
Employer not in wilful default. Appeal upheld –
rescission
ruling set aside and arbitration award rescinded.
Coram:
Ndlovu, CJ Musi
et
Sutherland JJJA
JUDGMENT
CJ MUSI JA
[1] This is an appeal
against the judgment of the Labour Court (Naidoo AJ) wherein it
refused to set aside a rescission ruling made
by the first respondent
(the commissioner).
[2] The facts of this
matter are not seriously in dispute. The appellant places
merchandisers at the sites of its clients on a contract
basis. The
third respondents were employed by the appellant but placed at one of
the appellant’s clients, Simba in Port Shepstone.
As part of
the terms of their employment contracts, the third respondents were
obliged not to transgress the client’s workplace
rules and to
adhere to its instructions.
[3] Simba alleged that
third respondents refused to adhere to a lawful instruction which was
issued on 20 September 2010. They were
charged with insubordination
and bringing the company’s name into disrepute. The appellant
utilised the services of Labournet
– a labour consulting
company - to appoint an independent chairperson. Ms Roopram was
appointed and Mr Vasan Govender, a
manager at Simba was the initiator
of the disciplinary proceedings. Both third respondents were found
guilty and dismissed.
[4] The third respondents
referred an unfair dismissal dispute to the second respondent, the
Commission for Conciliation, Mediation
and Arbitration (CCMA).
Conciliation failed and the matter was referred for arbitration. The
matter was properly set down for hearing
on 19 January 2011.
[5] The appellant’s
Human Resources Manager Ms Reddy, who was responsible for this
matter, experienced complications with
her pregnancy and had to
undergo an emergency procedure and was still on maternity leave on 19
January 2011. Due to the holiday
season, the appellant realised at a
late stage that Reddy would not be able to attend to the matter on 19
January 2011.
[6] The appellant
arranged that all the witnesses, including Govender and Roopram,
attend the hearing on 19 January 2011 and that
Govender should
testify during the arbitration but also represent the appellant if
the need arose. All the witnesses duly attended
the hearing.
[7] During the
proceedings, it came to the commissioner’s attention that
Govender was not employed by the appellant. The commissioner
correctly ruled that Govender had no right to represent the
appellant. There being no-one competent to appear on behalf of the
appellant, the commissioner ruled that the proceedings should
continue in its absence. He thereafter heard the testimonies of the
third respondents and found that their respective dismissals were
unfair and ordered the appellant to reinstate them and pay them
back
pay retrospectively from the date of their dismissal.
[8] The appellant
approached the CCMA with an application for the rescission of the
above award. In amplification of its application,
it filed an
affidavit by Ms Busi Nyathikazi, its regional human resources
assistant. Ms Nyathikazi stated that the appellant’s
HR
functions are managed from its Durban office. The disciplinary
inquiries were therefore initiated by Govender but the appellant
utilised labournet because of the distance between Durban and Port
Shepstone. She stated that the appellant has an excellent and
reasonable explanation that would illustrate that it was not in
wilful default and that the appellant took all reasonable steps
to
defend the matter. She set out the facts on which the dismissals were
based in order to show its prospects of success and
inter alia
pointed out that the third respondents’ version during the
default proceedings differed from the appellant’s version.
She
said that if the appellant’s version is correct then it must
succeed.
[9] The commissioner,
after dealing with the fact that the appellant was properly notified
about the date of the hearing, concluded
as follows:
‘
8.
In order to succeed with the application for the rescission, the
Respondent must furnish
reasons why she did not attend the hearing
(good cause must be shown). The reasons submitted by Nyathikazi in
her affidavit are
unacceptable an unreasonable. One of the reasons is
that the HR Manager who was responsible for this case was
hospitalised on 07
December 2010 and thereafter was on maternity
leave. I am of the view that the Respondent had enough time to
replace the
HR Manager Alice Reddy, or apply for postponement as the
hearing was scheduled for 19 January 2011. I also reject the
submission
that the Respondent’s witnesses were refused the
right to testify. The Respondent was not present at
arbitration.
Roopram is an HR Consultant. She is
reasonably expected to understand the labour laws. If she was
going to be a witness
as stated in Nyathikazi affidavit, she should
not have asked to remain in the arbitration room as an observer.
In the light
of the aforementioned reasons, make the following
ruling:
9.
The application is not granted and the award dated 31 January 2011 is
not rescinded.”
[10]
The appellant took the refusal of its rescission application on
review to the Labour Court. The Labour Court found that:
10.1
There were no precise details of what was done by whom in respect of
the contingency plan;
10.2
There was no explanation why Nyathikazi could not attend to the
matter;
10.3
No evidence was put up to support the contention that witnesses
(other than Roopram) were present;
10.4
There
is no explanation why an application for postponement was not made
before 19 January 2011;
10.5
The explanation that the appellant is a lay person is neither
bona
fide
nor reasonable because on the day of the hearing, the
“applicant” (sic) was accompanied by a labour consultant
who
was
au fait
with the rules regulating representation;
10.6
There was no evidence as to who paginated the bundles that the
appellant prepared. This according to the
court
a quo
, is an
indication that someone with knowledge about preparing for
arbitration proceedings was involved in the preparations prior
to the
hearing;
10.7
The fact that the commissioner did not specifically deal with an
analysis of the applicant’s defence
and provide reasons in that
regard, does not necessarily mean that he did not consider it at all.
[11]
Although the application for rescission was dealt with before the
amendment of
section 144
of the
Labour Relations Act 66 of 1995
, the
requirement of good cause was already part of our labour law when
dealing with rescission applications.
[1]
In
Shoprite
Checkers (Pty) Ltd v Commissioner for Conciliation Mediation and
Arbitration and Others,
[2]
it was said that:
‘
[35]
The test for good cause in an application for rescission normally
involves the consideration of at
least two factors. Firstly,
the explanation for the default and secondly whether the applicant
has a
prima
facie
defence. In
Northern
Province Local Government Association v CCMA and Others
[2001] 5 BLLR 539
(LC) at 545, paragraph [16], it was stated:
“
An
applicant for the rescission of a default judgment must show good
cause and prove that he at no time denounced his defence, and
that he
has a serious intention of proceeding with the case. In order
to show good cause an applicant must give a reasonable
explanation
for his default, his explanation must be made
bona
fide
and he must show that he has a
bona
fide
defence to the plaintiff’s claims.”’
[3]
[12]
In
MM
Steel Construction CC v Steel Engineering & Allied Workers Union
of SA and Others
,
[4]
it
was said that:
‘
Those
two essential elements ought nevertheless not to be assessed
mechanistically and in isolation. Whilst the absence of one of
them
would usually be fatal, where they are present they are to be weighed
together with relevant factors in determining whether
it should be
fair and just to grant the
indulgence.’
[5]
[13]
In
Harris
v ABSA Bank Ltd t/a Volkskas,
[6]
Moseneke J set out the principles that ought to guide a court in the
determination whether a party was in wilful default. He said
the
following:
‘
Before
an applicant in a rescission of judgment application can be said to
be in “wilful default” he or she must bear
knowledge of
the action brought against him or her and of the steps required to
avoid the default. Such an applicant must deliberately,
being free to
do so, fail or omit to take the step which avoid the default and must
appreciate the legal consequences of his or
her actions.’
[7]
[14]
The one overriding fact in
this
matter is that
the
appellant might have been negligent in requesting an incompetent
person to represent it but that is a far cry from
mala
fide
or wilful default. It is clear that the appellant had every intention
to defend the matter.
[15]
The court
a
quo’
s
reasons for dismissing the review are individually and cumulatively
unconvincing. There was no need to state chapter and verse
how the
contingency plan was conceived where and by whom. The fact of the
matter is that
Govender
was at the CCMA on 19 January 2011 to represent the appellant if the
need arose. When the need arose he was found wanting.
[16] There was no need
for Nyathikazi to drive all the way from Durban to Port Shepstone
because the contingency plan was in place
and all those who attended
the hearing
bona fide,
though erroneously, believed that
Govender was competent to represent the appellant. The allegation
that all the witnesses were
present on 19 January 2011 was never
disputed. The appellant mentioned all the witnesses that were present
by name. There was,
from the appellant’s perspective,
therefore, no need to apply for a postponement.
[17] The court
a quo
found that the labour consultant was an expert with knowledge of the
rules regulating representation in the CCMA when there is
not a
scintilla of evidence to substantiate that finding. The mere fact
that Roopram accompanied Govender under the wrong impression
that he
would represent the appellant is indicative of the fact that she did
not know the rules regulating representation in the
CCMA or she was
indifferent because she was there as a witness to testify about the
manner in which she conducted the disciplinary
inquiry and not as a
legal advisor.
[18] The issue of the
pagination of the documents is neither here nor there. Govender is
the Disciplinary Committee Manager of Simba.
There is no evidence
that he did not know how to paginate and index documents. The
appellant’s case was that but for Govender’s
incompetence
to represent it, it was fully ready to proceed with the matter.
[19]
In
Maepa
v CCMA and Another,
[8]
it was said that:
‘
[8]
… Although a commissioner is required to give brief reasons
for his or her award
in a dismissal dispute, he or she can be
expected to include in his or her brief reasons those matters or
factors which he or she
took into account which are of great
significance to or which are critical to one or other of the issues
he or she is called upon
to decide. While it is reasonable to
expect a commissioner to leave out of his reasons for the award
matters or factors that
are of marginal significance or relevance to
the issues at hand, his or her omission in his or her reasons of a
matter of great
significance or relevance to one or more of such
issues can give rise to an inference that he or she did not take such
matter or
factor into account.’
[9]
[20] It is clear that the
commissioner only dealt with the reason for the default. He did not
deal with the defence of the appellant
which is an integral part of
the inquiry in determining whether good cause was shown. It is good
and well to say that because something
was not mentioned does not
mean that it was not considered. Although this is true it must
however be clear from the totality of
the facts of the case. That
inference cannot and should not be made when it is not borne out by
the facts or where an important
and vital issue was clearly not
mentioned in the commissioner’s reasons. The most important
tool to determine whether a commissioner’s
decision is one
which a reasonable decision maker could make is the reasons for the
decision. Although the reasons must be brief
they must deal with the
important issues; that shows that he/she understood what he/she was
supposed to consider. In this matter,
the omission is too glaring. In
my view, the court
a quo’s
reasoning is flawed.
[21] My view relating to
the court
a quo’s
judgment largely also applies to the
reasoning of the commissioner. What the commissioner failed to
understand was that the appellant
had put a contingency plan in place
when it realised that Ms Reddy would not be able to attend the
hearing. All the witnesses attended
the offices of the CCMA Port
Shepstone,
bona fide
but wrongly thinking that Govender would
be able to represent the appellant. The appellant indeed had enough
time to replace Reddy
and it utilised the time for that purpose.
Unfortunately it chose the wrong person to do so. That is the nub of
this matter.
[22] The commissioner saw
the wood for the trees. A reasonable decision–maker would
applied his mind carefully to the explanation
for the default. After
considering and weighing all the facts he/she would have come to the
conclusion that the mere presence of
Roopram, Govender and the other
witnesses was indicative of the fact that the defence was not
abandoned. The explanation
has
bona fides
written all
over it – otherwise why would they have attended on 19 January
2011 if the explanation was not
bona fide.
[23] Although the
exercise of the commissioner’s discretion against the appellant
during the default proceedings was not taken
on review, a word or two
about the manner in which that matter was handled need to be said.
[24] When the
commissioner realised that Govender did not have the right to
represent the appellant the most prudent thing that
he could have
done was to ask Govender why he and not a proper representative of
the appellant attended the proceedings. After
hearing such
explanation, he should have asked the third respondents what their
views were and after considering all the circumstances
he would then
have been in a position to exercise his discretion properly with the
necessary reasons why he chose a particular
path.
[25]
Section 138
(5)(b)(ii) of the Act reads as follows:
‘
If a party
to the dispute fails to appear in person or to be represented at the
arbitration proceedings, and that party had not
referred the dispute
to the commission, the commissioner may adjourn the arbitration
proceedings to a later date.
[10]
“
[26] The commissioner did
not give any reasons why he decided to proceed with the matter
instead of exercising his discretion in
favour of the appellant.
[27] In my view, the
order of the court
a quo
ought to be set aside.
[28] I accordingly make
the following order
(a)
The
appeal is upheld with no order as to costs.
(b)
The
order of the cost
a
quo
is set aside and replaced with the following:
‘
(1)
The rescission ruling issued by the first respondent, commissioner
Khawula, under case number
KNPS672 – 10 dated 25 April 2011 is
set aside and replaced with the following:
(2)
The rescission application is granted.’
_____________
C J
Musi JA
Ndlovu and Sutherland JJA
agreed with CJ Musi JA
APPEARANCES:
FOR THE APPELLANT:
Mr R Orton
Instructed by Snyman
Attorneys
HOUGHTON
FOR
THE THIRD RESPONDENTS: No
appearance
[1]
In terms of
section 144
(d) which was added by
section 21
of Act 6 of 2014 a
ruling may be rescinded or varied if it was made in the absence of
any party, on good cause shown.
[2]
(2007) 28 ILJ 2246
(LAC).
[3]
At paras 35 and
36.
[4]
(1994) 15 ILJ 1310
(LAC).
[5]
At 1311J –
1312A.
[6]
2006 (4) SA 527
(T).
[7]
At para 8.
[8]
(2008) 29 ILJ 2189
(LAC)
[9]
At para 8.
[10]
See also rule 30
of the CCMA rules. Government Gazette No 38572 dated 17 March 2015.