About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Labour Appeal Court
SAFLII
>>
Databases
>>
South Africa: Labour Appeal Court
>>
2017
>>
[2017] ZALAC 72
|
|
Billion Group (Pty) Ltd v Mosheshe and Others (JA64/2016) [2017] ZALAC 72; (2018) 39 ILJ 368 (LAC); [2018] 3 BLLR 223 (LAC) (21 November 2017)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case no: JA 64/2016
In the matter between:
BILLION
GROUP (PTY) LTD
Appellant
and
MOTHUSI
MOSHESHE
First Respondent
COMMISSION FOR CONCILIATION
MEDIATION
AND
ARBITRATION
Second Respondent
MOTLATSI PHALA
N.O.
Third Respondent
Heard:
21 September 2017
Delivered:
21 November 2017
Summary:
Employee employed on a six-month fixed term contract. Dismissal for
poor work performance found
by CCMA to be procedurally and
substantively unfair, with employee awarded four months’
compensation. On review the Labour
Court found the dismissal
substantively fair but procedurally unfair and ordered the employer
to pay the employee two and a half
months’ compensation, being
the remainder of the fixed term contract, with interest from the date
on which judgment was reserved.
Leave to appeal granted against the
quantum of compensation and interest orders only. On appeal held that
Labour Court did not
err, save for that interest should properly have
been ordered from the earlier date on which the arbitration award
issued. Compensation
order upheld. Appeal dismissed with costs.
Coram:
Waglay JP, Sutherland JA and Savage AJA
JUDGMENT
SAVAGE AJA
Introduction
[1]
This
is an appeal against only the quantum and costs orders of a judgment
of the Labour Court (Olivier AJ), with the leave of that
Court, in
terms of which the appellant, the Billion Group (Pty) Ltd, was
ordered to pay to the first respondent, Mr Mothusi Mosheshe
(the
employee), two and a half months’ compensation for procedural
unfairness in his dismissal and interest from the date
on which
judgment was reserved by the Labour Court. The employee seeks to
cross-appeal against the finding that his dismissal was
substantively
fair.
[2]
On
26 July 2010, t
he
appellant, which
conducts
business as the owner and manager of a number of retail properties,
employed the employee as
its
Group Financial Manager on a six-month fixed term contract to expire
on 31 January 2011. On 4 November 2010, the appellant notified
the
employee to attend a poor work performance investigation on 9
November 2010. At the hearing, although the appellant was represented
by its attorney, Dr G Ebersohn, the employee was refused legal
representation and informed that he could be assisted by his sister.
Since his sister was unavailable, the hearing proceeded with the
employee unrepresented. After the chairperson expressed concern
that
since the employee faced a complaint of gross negligence, it was
unclear whether the hearing concerned allegations of misconduct
or
poor work performance, the matter was postponed for the appellant to
clarify the issue and allow the employee sufficient time
to prepare
for the matter.
[3]
Shortly
thereafter, on 12 November 2010,
the
employee received a new notice to attend a “
Final
Poor Work Performance Investigation
”
on 14 November 2010 at which he was notified that issues related to
his alleged failure to complete and submit VAT assessment
returns
timeously; his incorrect completion of a VAT assessment; his failure
to complete certain PAYE, SDL and UIF returns, prepare
proper
management accounts for the Group and load payments onto the computer
system; and his negligence in failing to correctly
adjust employees'
salaries for one month were to be considered. The notice concluded by
stating that, as a result of the allegations
raised, the employee was
responsible for “…
irreparably
damaging and destroying the trust relationship between you and your
employer
.’
[4]
The
second hearing, at the instance of the appellant, proceeded before a
new chairperson. The appellant was again represented by
Dr Ebersohn
and although the employee sought to be represented by his attorney,
Mr Zwane, who was present at the hearing, inexplicably
the
chairperson refused that application. As Mr Zwane left the hearing,
Dr Ebersohn was recorded on record to remark sarcastically
“
tata
bye bye
”
and the hearing proceeded with the employee unrepresented. The
employee was found to have committed the misconduct alleged
and he
was dismissed from his employment with the appellant.
[5]
Aggrieved
with his dismissal, the employee referred a dispute to the Commission
for Conciliation Mediation and Arbitration (CCMA).
The commissioner
found
the
dismissal both procedurally and substantively unfair. The hearing was
found to have been fatally flawed as it concerned complaints
of
misconduct and not poor work performance, the appellant’s legal
representative had inappropriately directed proceedings,
with the
employee unrepresented, and the outcome was found to have been a
foregone conclusion. Since the employee did not seek
reinstatement or
re-employment but only the two and a half months remaining on his
fixed term contract, the commissioner awarded
compensation for both
procedural and substantive unfairness in the dismissal. In doing so,
the employee was awarded four months’
compensation in the
amount of R216 666,68.
Judgment of the Labour Court
[6]
The
appellant sought the review of the arbitration award by the Labour
Court on the basis that it was unreasonable insofar as the
commissioner had failed to find on the evidence that the dismissal
was substantively and procedurally fair and had awarded the
employee
more compensation than was permitted in law or had been sought by the
employee.
[7]
On
review, the Labour Court found the commissioner’s finding of
substantive unfairness to have been unreasonable and set it
aside on
the basis that it had been arrived at without regard to the evidence.
However, the Court found that
there
was no basis on which to interfere with the finding of procedural
unfairness. This was so in that the refusal of legal representation
had placed the employee at a “
distinct
disadvantage
”
at the hearing, which was “
prejudicial
and unfair
”
in
that it set the employee up against the appellant’s experienced
attorney. The Court was also critical of the conduct of
the
chairperson of the hearing who had failed to censure Dr Ebersohn for
his “
cynical,
if not sarcastic manner during the hearing
”.
[8]
Turning
to the issue of relief, since t
he
employee had only sought to be paid out for the remainder of his
fixed term contract, the Court found, with reference to
Tshongweni
v Ekurhuleni Metropolitan Municipality,
[1]
that the
commissioner was not permitted to award
more
compensation than what the employee would have earned.
The
dismissal was consequently found to be substantively fair but
procedurally unfair, with the appellant ordered to pay the respondent
two
and a half months’ compensation
,
calculated at the rate of R54 166.67 per month, plus interest at the
prescribed rate from the date on which judgment was reserved.
There
was no order as to costs.
Submissions on appeal
[9]
The appellant was
granted leave to appeal against the judgment of the Labour Court
limited only to the decision to the quantum of
compensation awarded
for procedural unfairness and the order that interest accrue on such
amount from the date on which judgment
was reserved. Leave to appeal
against the finding of procedural unfairness, this Court was informed
from the bar, was refused by
the Constitutional Court.
The
employee seeks to cross-appeal against the finding that his dismissal
was substantively fair and against the reduction in the
amount of
compensation awarded to him.
[10]
It
was submitted for the appellant that the Labour Court erred in the
exercise of its discretion to grant compensation to the employee
when
regard should have been had to the fact that he was employed on a
fixed term contract, that he was found guilty of five complaints
and
suffered no real prejudice as a result of his lack of representation.
Furthermore, it was contended that the Court had erred
in ordering
that interest be paid from a date prior to the date of the judgment.
[11]
The
appellant also took issue with the respondent’s entitlement,
without having obtained leave, to pursue a cross-appeal in
the
matter. This was so despite rule 5(4) of this Court’s Rules
which states that “(a)
ny
respondent who wishes to cross-appeal must deliver a notice of
cross-appeal
”
on the basis of s166(1) of the Labour Relations Act 66 of 1995 (the
LRA) which provides that –
‘
(a)
ny
party to any proceeding before the Labour Court may apply to the
Labour Court for leave to appeal to the Labour Appeal Court
against
any final judgment or final order of the Labour Court’
.
[12]
It
was submitted for the employee that the Labour Court’s decision
to award compensation to him in respect of procedural unfairness
was
reasonable and that on the facts the exercise of a discretion not to
award compensation would have been unwarranted. As to
interest, it
was argued with reference to s143(2) of the LRA that interest may be
ordered from the date on which the award was
made. With reference to
Mkonto
v Ford NO and Others
[2]
and
Department
of Correctional Services and Another v POPCRU and Others,
[3]
it
was stated that leave to appeal was not required in order to
cross-appeal to this Court. The material before the commissioner
did
not support the findings of misconduct made against the employee.
Furthermore, given the finding of procedural unfairness,
the employee
seeks that the Labour Court’s limited compensation order be set
aside and substituted with an order that four
months’
compensation be paid to him given that the Court is not limited to
award compensation for the period outstanding
on the fixed term
contract.
Evaluation
[13]
The
Labour Court or an arbitrator appointed in terms of the LRA may,
in terms of s193(1) of the LRA, where a dismissal
is found to be
unfair, order reinstatement, re-employment or the payment of
compensation to the employee. Reinstatement “
must
”
be awarded in terms of s193(2) where a dismissal is found unfair
unless what have been termed the “
non-reinstatable
conditions
”
set out in s193(2) are present. Of these “non-reinstatable”
conditions include in terms of s193(2)(d) that “
the
dismissal is unfair only because the employer did not follow a fair
procedure
”.
[14]
In
the award of compensation for procedural unfairness in terms of
s194(1):
‘
(1)
The compensation…must be just
and equitable in all the circumstances, but may not be more
than the
equivalent of 12 months’ remuneration calculated at the
employee’s rate of remuneration on the date of dismissal.’
[15]
The
power to award a remedy under s193 is one to be exercised
judicially,
[4]
having regard to underlying considerations of fairness to both
parties.
[5]
This
provision does not
introduce
an
onus
but requires the
Court
or arbitrator to take into account any relevant factors which apply
to the determination
.
[6]
It follows that on
review the Labour Court was required to consider whether the
commissioner in the exercise of his discretion in
terms of s
193(1)(c) to award compensation to the employee took into account
such relevant factors and circumstances. Having
found the dismissal
of the employee procedurally unfair, the commissioner exercised a
wide discretion under s193(1)(c) to award
compensation to the
employee. In its review of that decision, the Labour Court had regard
to the nature of the procedural unfairness
committed and the impact
of that unfairness in the resultant prejudice caused to the employee.
This was clearly the basis on which
the Court
a
quo
found that the commissioner’s decision to award compensation
could not be faulted. The fact that as much is not stated in
express
terms in the judgment
a
quo
matters not when the Court detailed in critical terms the nature of
the unfairness committed and its consequences for the employee.
[16]
Turning
to the quantum of the compensation ordered, the Labour Court properly
had regard to the fact that while the employee had
only sought that
he be paid out until the end of his fixed term contract, the
commissioner awarded compensation of four months.
While it is so that
compensation for procedural unfairness amounts to a
solatium
for the unfairness committed, the Court cannot be faulted for finding
that it was neither just nor equitable to grant relief both
beyond
the period sought by the employee and in excess of the period which
remained on his fixed term contract. Having found as
much, neither
the employee’s entitlement to cross-appeal without leave nor
the merits of such cross-appeal require consideration
in this appeal.
[17]
As
to the interest ordered by the Labour Court,
s143(2)
provides that a money order contained in an arbitration award “
earns
interest from the date of the award…unless the award provides
otherwise.
”
Section 2(1)
of the
Prescribed Rate of Interest Act 55 of 1975
states:
‘
(1)
Every judgment debt which, but for the provisions of this subsection,
would not bear any
interest after the date of the judgment or order
by virtue of which it is due, shall bear interest from the day on
which such judgment
debt is payable, unless that judgment or order
provides otherwise.’
[18]
S2A(5)
provides
that:
‘
(5)
Notwithstanding the provisions of this Act but subject to any other
law or an agreement
between the parties, a court of law, or an
arbitrator or an arbitration tribunal may make such order as appears
just in respect
of the payment of interest on an unliquidated debt,
the rate at which interest shall accrue and the date from which
interest shall
run.’
[19]
While
there was no bar on the Labour Court ordering interest to be paid
from the date on which judgment was reserved, I see no reason
in this
appeal as to why the terms of s143(2) should not be applied and
interest ordered to be paid from date of the arbitration
award in
this matter. In conclusion, it must be noted that the conduct of the
appellant’s attorney, Dr Ebersohn, at the disciplinary
hearings
held, which was correctly criticised by the Labour Court in its
judgment, was unacceptable and unprofessional.
[20]
There
is no reason in law or fairness as to why the appellant should
not be ordered to pay the costs of this appeal.
Order
[21]
In
the result, the following order is made:
1.
The
appeal is dismissed with costs, subject to the substitution of the
order of the Labour Court as follows:
‘
1.
The
dismissal
of the First Respondent was procedurally unfair
;
2.
The Applicant is ordered to pay the First Respondent an amount equal
to two and
a half months' compensation, calculated at the rate of R54
166.67 per month, within ten (10) days of this order with interest
calculated
on such amount at the prescribed rate from the date of the
arbitration award to date of final payment;
3.
No order as to costs is made
.’
___________________
Savage
AJA
Waglay
JP and Sutherland JA concur in the judgment of Savage AJA.
APPEARANCES:
FOR THE APPELLANT:
Dr G Ebersohn
Instructed by
Tracy
Sischy Attorneys
FOR THE RESPONDENT:
Mr R Grundlingh
Instructed by Tracy Sichy Attorneys
[1]
(2012)
ILJ
2847
(LAC) at para 40.
[2]
(2000)
21 ILJ 1312 (LAC) at para 8.
[3]
(2011)
32 ILJ 2629 (LAC) at para 21. See too
De
Beer v Minister of Safety and Security and Another
(2013)
34 ILJ 3083 (LAC) at para 22.
[4]
Equity
Aviation Services (Pty) Ltd v CCMA & Others
[2010]
JOL 26192
(CC) at para 48.
[5]
Billiton
Aluminium SA t/a Hillside Aluminium v Khanyile
[2010]
BLLR 465
(CC); Equity Aviation [2008] 12 BLLR 1129 (CC).
[6]
DHL
Supply Chain (Pty) Ltd v De Beer NO and Others
;
[2014] 9 BLLR 860 (LAC); (2014) 35 ILJ 2379 (LAC) at para 21;
Equity
Aviation
Services
Ltd v Commission for Conciliation Mediation and Arbitration and
Others
[2008]
29 ILJ 2507;
[2008]
ZACC 16
;
[2008]
12 BLLR 1129
(CC)
at paras 36
and
48.