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[2018] ZALAC 50
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Macsteel Trading Wadeville v Francois van der Merwe N.O and Others (JA67/2016) [2018] ZALAC 50; (2019) 40 ILJ 798 (LAC) (12 December 2018)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case no: JA67/2016
In the
matter between:
MACSTEEL
TRADING WADEVILLE
Appellant
And
FRANCOIS
VAN DER MERWE N.O.
First
Respondent
METAL AND ENGINEERING
INDUSTRIES
BARGAINING
COUNCIL
Second
Respondent
NUMSA
obo LEMSON CHILOANE
Third
Respondent
Heard:
27 September 2018
Delivered:
12 December 2018
Summary:
Review of arbitration award – employer raising union undue
delay in prosecuting the review application in its answering
affidavit in the review application – Labour Court refusing to
consider the undue delay because the employer had not filed
a rule 11
application – court finding that by the time review was heard,
the application had in effect lapsed and been archived
in terms of
Practice Manual of the Labour Court- as such the Labour Court had no
jurisdiction and should have struck the matter
from the roll or give
the employer an opportunity to file a separate rule 11 application
demonstrating why the matter should be
dismissed or struck from the
roll on the basis of undue delay. Appeal upheld with costs and Labour
Court’s judgment set aside.
Coram:
Phatshoane ADJP, Sutherland JA and Kathree-Setiloane AJA
___________________________________________________________________
JUDGMENT
KATHREE-SETILOANE
AJA
[1]
The
appellant, Macsteel Trading Wadeville (“
Macsteel
”)
appeals against the judgment and order of the Labour Order (Coetzee
AJ) which reviewed and set aside the arbitration award
of the third
respondent (“
Arbitrator
”),
made under the auspices of the second respondent, the Metal and
Engineering Industries Bargaining Council (“Bargaining
Council”). The third respondent is the National Union of
Metalworkers South Africa (NUMSA) acting on behalf of Mr Lemson
Chiloane (“Mr Chiloane”) who was dismissed by Macsteel
for purportedly planning and orchestrating an unprotected work
stoppage. Only NUMSA on behalf of Mr Chiloane opposes the appeal.
[2]
Macsteel
employed Mr Chiloane as a warehouse administrator. He was also a
NUMSA shop-steward. On 11 June 2009, following a disciplinary
hearing, Mr Chiloane was dismissed after being found guilty of the
following incidents of misconduct:
(a)
Intimidation
or incitement to violence or illegal action, in that on 22 May 2009,
he facilitated and led a group of employees to
the offices of
Macsteel and, once there, made various threats.
(b)
Acting
in bad faith towards Macsteel and deliberately acting in a manner
designed to harm the company.
[3]
On
6 May 2009, Mr Chiloane faxed a letter to one “
Albert
”
of the NUMSA Group Shop-Stewards Council, announcing an intention to
“deal with the current challenges facing us,
e.g., unfair
labour practice in the group and the effects of short-term.”
The letter evinced an intention to mobilise
Macsteel’s workers
for protest action and indicated that a demonstration would happen
“very soon.” On 22
May 2009, some two weeks after
Mr Chiloane sent the fax, an unprotected work stoppage occurred at
Macsteel’s premises after
several employees demanded their pay
slips and threatened to, amongst other things, go on strike if the
payslips were incorrect.
The payslips were handed to the employees
just after 8 am on 22 September 2009.
[4]
On
discovering that “short time” deductions were made from
their pay, Mr Chiloane and several of his fellow employees
confronted
Ms G. Nelson, the Human Resources Supervisor, about the deductions.
They asked her to leave her office with them. When
she showed a
reluctance to do so, other employees surrounded her. This made her
feel unsafe.
[5]
Ms
Nelson
immediately reported the incident to Mr T. Blahnek, the managing
director. He approached Mr Chiloane and suggested that the
employees
assemble in the training centre. Upon doing so, the employees began
chanting, stopping only on instruction from Mr Chiloane.
The
employees had no permission to leave their workstations. Nor did they
have permission to go to Ms Nelson’s office.
[6]
Mr
Chiloane
admitted writing the letter of 6 May 2009 but explained that it was
merely the minutes of a NUMSA meeting which he took
down on 18 April
2009.
[7]
Following
a disciplinary hearing, Mr Chiloane was found guilty of misconduct
and dismissed from Macsteel’s employ.
In
the Arbitration
[8]
Following
his dismissal, Mr Chiloane referred a complaint to the Bargaining
Council. The parties concluded a pre-arbitration minute
in which it
was envisaged that several witnesses would be called to testify for
each of them, including an expert witness. However,
at the
commencement of the arbitration proceedings, their legal
representatives agreed that the dispute would be decided on the
record of evidence led at the disciplinary inquiry, and the argument
presented by the parties, subject to the Arbitrator’s
right to
call for further information in the case of uncertainty. In other
words, the parties agreed that no evidence would be
led at the
arbitration hearing. The Arbitrator endorsed the agreement by issuing
a directive recording it.
[9]
The
Arbitrator determined the matter on the record of evidence led at the
disciplinary inquiry. He made certain credibility findings
and
findings on the probabilities. On 4 May 2010, he issued an award in
which he found the dismissal of Mr Chiloane to have been
both
procedurally and substantively fair.
In
the Labour Court
[10]
Aggrieved
by the award, Mr Chiloane instructed NUMSA to institute review
proceedings, on his behalf, which it duly did on 22 June
2010. On 19
July 2010, NUMSA advised Macsteel’s attorneys of record that it
had uplifted the record and was in the process
of having it
transcribed. The transcription of the record was only completed in
May 2011, some 10 months after NUMSA had uplifted
it. NUMSA filed an
incomplete copy of the record 17 months later in December 2012, not
explaining its incompleteness or the delay
in filing it. In January
2013, NUMSA filed the full record. This was approximately 19 months
after the record had been transcribed.
Again, NUMSA did not explain
the delay.
[11]
In
its answering affidavit, Macsteel raised the issue of NUMSA’s
undue delay in filing the record and requested the Labour
Court to
dismiss the review application. In reply, NUMSA failed to provide any
explanation or seek condonation for the delay. It
simply denied
prosecuting the review with “a high degree of negligence.”
[12]
The
review application was heard on 24 February 2016, almost six years
after it was instituted. NUMSA did not explain the delay
in setting
the matter down for hearing.
[13]
Macsteel
sought to persuade the Labour Court to dismiss the review application
because of the dilatory manner in which NUMSA had
prosecuted it, and
its total failure to explain the delays. The Labour Court refused to
consider the issue on the basis that Macsteel
had not brought an
application in terms of rule 11 of the Labour Court Rules (“the
Rules”)
[1]
. Significantly,
in this regard, it held as follows:
‘
[47]
The issue of an undue delay has been raised by the respondent.
There is, however, no application
in this regard and it has been
argued that as far as costs are concerned, that should be taken into
account, especially as it was
foreshadowed in the answering
affidavit. I am, however, not basing a costs order on this
factor.’
The
Labour Court accordingly exercised his discretion against making a
costs order.
[14]
As
indicated, the Arbitrator did not hear
viva
voce
evidence in the arbitration but determined the dispute on the record
of evidence led at the disciplinary inquiry. On review, the
Labour
Court found this approach to amount to a reviewable irregularity
reasoning thus:
‘
[42]
Is this then an award that a reasonable commissioner could have made
or not made? The commissioner
made findings of fact on the
probabilities and on the credibility of witnesses where the facts do
not justify those conclusions.
He was in no position in the
absence of oral evidence to make credibility findings. This, in
my view, is an irregularity,
i.e., misconduct on the part of the
commissioner.
[43]
The award, therefore, is based upon an incorrect interpretation of
the facts and the exclusion
of facts because of credibility
findings.’
[15]
Notably,
the Labour Court reviewed and set aside the arbitration award, and
substituted it with an order reinstating Mr Chiloane
retrospectively
to 11 June 2009, on terms and conditions no less favourable than
those that applied to him just before his dismissal.
The Labour Court
substituted the arbitration award on an evaluation of the
probabilities based only on the record of evidence led
in the
disciplinary inquiry. In so doing, the Labour Court questioned
whether it was reasonable for the Arbitrator to decide that
the
dismissal was fair and concluded as follows:
‘
[44]
In my view, no reasonable commissioner could have concluded that the
employee was guilty of the misconduct as charged.
He simply was
executing his shop-steward functions. There was no justifiable
basis to conclude that the employee had to be
dismissed.
[45]
The award stands to be reviewed. This matter is six years old.
The record, in my
view, is sufficient to substitute the award with
the court’s finding.’
Issues
for determination
[16]
The
issues that arise for determination in the appeal are whether the
Labour Court erred in:
(a)
Failing
to consider NUMSA’s undue delay in prosecuting the review
application because Macsteel did not bring an application
in terms of
rule 11 of the Rules;
(b)
Reviewing,
setting aside and substituting the Arbitrator’s award on the
record of evidence led in the disciplinary inquiry,
rather than
remitting it to the Bargaining Council for a new hearing.
Undue
delay in prosecuting the review application
[17]
Macsteel
contends that the Labour Court erred in declining to consider the
issue of NUMSA’s delay in prosecuting the review
application
when it had specifically pleaded the issue in its answering
affidavit.
[18]
Neither
the Rules nor the Labour Relations Act 66 of 1995 (LRA/Act) makes
provision for the dismissal of a review application on
the grounds of
undue delay in prosecuting the application. However, rule 11(3)
provides that if a situation for which the Rules
do not provide
arises in proceedings or contemplated proceedings, the court may
adopt any procedure that it deems appropriate in
the circumstances.
The Labour Court declined to deal with the issue raised by Macsteel
because it did not bring a rule 11 application.
[19]
Rule
11(4) provides that in the exercise of its powers and the performance
of its functions, or any incidental matter, a reviewing
court may act
in a manner that it considers expedient in the circumstances to
achieve the objects of the Act. This provision gives
the Labour Court
a wide discretion to take any course of action to achieve the objects
of the Act.
[20]
A
primary object of the Act is to promote the effective resolution of
labour disputes, integral to which is the speedy resolution
of
disputes. As stated by the Constitutional Court in
Toyota:
[2]
‘
Any
delay in the resolution of labour disputes undermines the primary
object of the LRA. It is detrimental not only to the
workers
who may be without a source of income pending the resolution of the
dispute but ultimately, also to the employer who may
have to
reinstate workers after many years.’
[3]
[21]
Clause
11 of the Practice Manual of the Labour Court (“Practice
Manual”) which was adopted to give effect to the requirement
of
expedition, as contemplated in the LRA and the Rules, states in
relation to review applications that:
’
11.2.2
For the purposes of Rule 7A(6),
[4]
records must be filed within 60 days of the date on which the
applicant is advised by the registrar that the record has been
received.
11.2.3 If the
applicant fails to file a record within the prescribed period, the
applicant will be deemed to have withdrawn
the application, unless
the applicant has during that period requested the respondent’s
consent for an extension of time
and consent has been given. If
consent is refused, the applicant may, on notice of motion supported
by affidavit, apply to
the Judge President in chambers for an
extension of time.
…
11.2.7
A review application is by its nature an urgent application. An
applicant in a review application is therefore required
to ensure
that all the necessary papers in the application are filed within
twelve (12) months of the date of the launch of the
application
(excluding Heads of Argument) and the registrar is informed in
writing that the application is ready for allocation
for hearing.
Where this time limit is not complied with, the application will be
archived and be regarded as lapsed unless
good cause is shown why the
application should not be archived or be removed from the archive.’
[22]
The
underlying objective of the Practice Manual is the promotion of the
statutory imperative of expeditious dispute resolution.
It enforces
and gives effect to the rules of the Labour Court and the provisions
of the LRA. It is binding on the parties and the
Labour Court. The
Labour Court does, however, have a residual discretion to apply and
interpret the provisions of the Practice
Manual, depending on the
facts and circumstances of a particular case before the court.
[5]
[23]
The
Practice Manual came into effect during April 2013; midway through
the review application. It, therefore, applies to it. Clause
11.2.7
imposes an obligation on the applicant to ensure that all the
necessary papers in the application are filed within 12 months
of the
date of the launch of the application (excluding heads of argument),
and the registrar is informed in writing that the application
is
ready to be set down for hearing. Where this time limit is not
complied with, the application will be archived and be regarded
as
lapsed unless good cause is shown why the application should not be
archived or be removed from the archive. The record in the
review
application had been filed approximately 20 months after the launch
of the review application. And the review application
was set down
for hearing almost six years from its launch. This means that by the
date of set down of the review application, it
had been archived and
regarded as lapsed.
[24]
Macsteel
had raised NUMSA’s undue delay in prosecuting the review
application in its answering affidavit in the review application,
but
since that application had in effect lapsed and been archived, the
Labour Court had no jurisdiction to determine the issue
of the undue
delay raised there. In the circumstances, Macsteel would have been
required to bring a separate rule 11 application
for the review
application to be dismissed or struck from the roll on the grounds of
NUMSA’s undue delay in prosecuting it.
But a rule 11
application was not a prerequisite for the Labour Court, in this
particular instance, to consider whether, on the
grounds of undue
delay, the review application should be dismissed or struck from the
roll.
[25]
As
indicated, the review application was archived and regarded as lapsed
as a result of NUMSA’s failure to comply with the
Practice
Manual. There was also no substantive application for reinstatement
of the review application, and no condonation sought
for the undue
delay in filing the record. As contended for by Macsteel, the Labour
Court was, as a matter of law, obliged to strike
the matter from the
roll on the grounds of lack of jurisdiction alternatively, give
Macsteel an opportunity to file a separate
rule 11 application
demonstrating why the matter should be dismissed or struck from the
roll on the basis of undue delay.
[26]
Thus,
having failed to strike the matter from the roll, it was
impermissible for the Labour Court to decline to deal with the issue
of the delay because Macsteel did not bring a rule 11 application.
The correct approach was for the Labour Court to afford Macsteel
an
opportunity to bring a rule 11 application.
[6]
[27]
The
Labour Court did not adopt this approach. It instead declined to deal
with the issue of the undue delay and proceeded to determine
the
merits of the review application, which had already lapsed for
non-compliance with clause 11.2.7 of the Practice Manual. The
Labour
Court determined the “lapsed application” in the absence
of a substantive reinstatement application and an order
reinstating
the review application. Put simply; the Labour Court determined the
review application when it had no jurisdiction
to do. This
constitutes a basis for interference on appeal. The appeal must
accordingly be upheld, and the order of the Labour
Court set aside
and replaced with an order striking the matter from the roll.
Costs
[28]
The
review application fell to be struck from the roll in the Labour
Court as NUMSA did not, in compliance with Rule 11.2.7 of the
Practice Manual, file a substantive application for reinstatement of
the review application in the Labour Court. In the circumstances,
I
consider it fair and just that NUMSA pays the costs of appeal.
Order
[29]
In
the result I order that:
1.
The
appeal succeeds with costs.
2.
The
order of the Labour Court is reviewed and set aside and replaced with
the following order:
“
The
application is struck from the roll.
”
____________________
F
Kathree-Setiloane AJA
R
Sutherland JA and M Phatshoane Acting DJP concur.
APPEARANCES:
FOR
THE APPELLANT:
Ms Elisa Tolmay
Instructed
by Webber Wentzel
FOR
THE THIRD RESPONDENT:
Mr Chris Orr
Instructed
by David Cartwright Attorneys
[1]
Rule
11 of the Labour Court Rules provide:
“
(1)
The following applications must be brought on notice, supported by
affidavit:
(a)
Interlocutory
applications;
(b)
Other
applications incidental to, or pending, proceedings referred to in
these rules that are not specifically provided for in
the rules; and
(c)
Any
other application for directions that may be sought from the court.
(2) The requirement in
sub-rule (1) that the affidavit must be filed does not apply to
applications that deal only with procedural
aspects.
(3) If a situation for
which these rules do not provide arises in proceedings or
contemplated proceedings, the court may adopt
any procedure that it
deems appropriate in the circumstances.
(4) In the exercise of
its powers and in the performance of its functions, or in any
incidental matter, the court may act in a
manner that it considers
expedient in the circumstances to achieve the objects of the Act.
[2]
Toyota
SA Motors (Pty) Ltd v Commissioner for Conciliation, Mediation and
Arbitration and Others
[2016] 3 BLLR 217 (CC).
[3]
At
para 1.
[4]
Rule
7 regulates review applications. Sub-rule 7A(6) provides:
‘
The
applicant must furnish the registrar and each of the other parties
with a copy of the record or portions of the record, as
the case may
be, and a copy of the reasons filed by the person or body’
[5]
Samuels
v Old Mutual Bank
[2017] ZALAC 10
(25 January 2017) at paras 14 and 15.
[6]
This
application could have been brought simply on notice of motion at
the hearing in the Labour Court, as rule 11(3) of the Rules
provide
that t
he
requirement in sub-rule (1) that the affidavit must be filed does
not apply to applications that deal only with procedural
aspects.