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[2019] ZALAC 73
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Bester (Scott) In re: Small Enterprise Finance Agency SOC Ltd v Commission for Conciliation Mediation and Arbitration and Others (JA41/2018) [2019] ZALAC 73; [2020] 3 BLLR 244 (LAC); (2020) 41 ILJ 877 (LAC) (11 December 2019)
IN THE LABOUR APPEAL
COURT OF SOUTH AFRICA, JOHANNESBURG]
Reportable
Case no: JA 41/2018
In the matter between:
RONÈ BESTER
(SCOTT)
Appellant
(Third Respondent in
court
a quo
)
and
In re:
SMALL ENTERPRISE
FINANCE AGENCY SOC LTD
Applicant
THE COMMISSION FOR
CONCILIATION
MEDIATION AND
ARBITRATION
First Respondent
L NOWOSENENTZ
N.O.
Second
Respondent
RONÈ
BESTER (SCOTT)
Third Respondent
Held:
20 November 2019
Delivered:
11 December 2019
Summary: The employee
was dismissed for misconduct. The CCMA held she was both
substantively and procedurally unfairly dismissed.
She was awarded
compensation equivalent to 8 months. On review, the compensation
reduced because she had tendered her resignation
before the dismissal
which the review court wrongly held to have been voluntary.
The appeal by the
employee was solely against the alteration of the quantum of the
compensation. Held on appeal that there were
no proper grounds to
interfere with the discretion of the arbitrator.
Kemp v Rawlins
Applied. Labour Court judgment set aside and award restored.
Costs: the employee/
appellant appeared in person in the review hearing and in the appeal
and was unassisted by a Trade Union. Her
circumstances justified a
consideration of a costs order in her favour.
Costs to which she
would be entitled included her disbursements. Further, as the
employee/ appellant was an admitted legal practitioner
she would in
principle be entitled to the costs of her own expertise being applied
to the litigation. The quantification of the
quantum of costs was
best left to the taxing master.
Knoll v Van Druten
applied.
Coram:
Sutherland JA, Murphy and Kathree Setiloane AJJA
JUDGMENT
SUTHERLAND
JA
Introduction
[1]
The appellant, an advocate, who was the head of legal services of the
respondent,
was dismissed by the respondent for absenteeism and
“insolence”. In a subsequent arbitration the dismissal
was held
to have been both substantively and procedurally unfair.
Compensation of the equivalent of eight months’ salary was
awarded.
[2]
The respondent sought a review. The Labour Court upheld the award of
an unfair dismissal.
However, the Labour Court held that eight
months’ compensation was too much on the grounds that the
appellant had resigned
and was, for that reason, entitled to no more
than the equivalent of the balance of her notice period, ie one
month.
[3]
On appeal, the sole issue is the appropriateness of the quantum of
compensation; ie,
was it just and equitable in the circumstances.
Section 194(1) of the Labour Relations Acts 66 of 1995 (LRA)
regulates that class
of decisions.
[1]
The enquiry proceeds on the premise of the correctness of the
arbitrators’s findings that an unfair dismissal occurred;
findings which were confirmed in the review proceedings. The approach
in terms of the quantum issue is that as set out by Zondo
JP in
Kemp
t/a Centralmed v Rawlins
[2]
‘…
.
When
the discretion that is challenged is a discretion such as the one
exercised in terms of s 194(1) the test that the court, called
upon
to interfere with the discretion, will apply is to evaluate whether
the decision-maker acted capriciously, or upon the wrong
principle,
or with bias, or whether or not the discretion exercised was based on
substantial reasons or whether the decision-maker
adopted incorrect
approach.’
[4]
The critical passage in the judgment
a quo
on the question of
compensation is at [17]:
‘
In
the result, I am not persuaded that the findings made by the Second
Respondent in respect of the fairness of the [appellant’s]
dismissal were unreasonable. Nevertheless, based on the common cause
facts, the amount of compensation that was awarded to the
[appellant]
was unreasonable and cannot be sustained. Since the Third Respondent
had resigned, the maximum amount of compensation
which she should
have been awarded was the balance of her notice period. The
[respondent] accepted that a period of one month could
be taken into
account in this regard. The awarding of compensation beyond the date
when the [appellant] had elected to voluntarily
relinquish her
employment with the Applicant, seems illogical. To reiterate, she had
not referred a constructive dismissal dispute.’
The crucial facts
[5]
The relevant background is thus:
5.1
The appellant had been employed in an
organisation that was later taken over by the respondent. Her
services were transferred in
terms of section 197 of the LRA along
with that organisation as a going concern. Under the new regime, one,
Maboa was seconded
to the business unit so transferred, now part of
the respondent. His role was not fully explained, but it suffices to
say that
he
de facto
participated in the executive management structure and was the
appellant’s senior but not, apparently (so it was found in
the
arbitration proceedings) obviously her line manager. Almost at once
the appellant and Maboa clashed. This resulted in the appellant
experiencing significant discomfort.
5.2
The particular details of the rift are not,
in the light of the award’s undisturbed finding, necessary to
traverse for the
purposes of this judgment.
5.3
The appellant was the only witness and so
there was no rebuttal of her evidence of the events. Her unhappiness
with the attitude
of Maboa towards her was expressed. It seems likely
that an email sent by the appellant on 2 May to the CEO, whilst she
was on
leave, heavily criticising Maboa’s treatment of her and
soliciting the CEO’s intervention, lest she feels obliged to
“…elect to embark upon [steps] to protect [her] rights”,
plainly a veiled threat, heralded the beginning of
the final chapter
of the events that led to her dismissal.
5.4
After returning to the office on 21 May,
she posed questions to staff in the Human Resources Department about
the logistics of a
resignation. She says that she envisioned an
amicable break from the respondent. She expressed a contemplation of
a relocation
to the Cape. Perhaps not coincidentally, that very day
she was suspended pending a disciplinary enquiry.
5.5
Initially, the suspension was on full pay.
Then her salary was stopped without further notice. This was
axiomatically an insult,
and no less, a cause of distress. She
submitted a letter of resignation on 4 September after her salary had
been stopped. She expressed
herself thus:
“
Herewith
my notice of resignation with effect from 5 September 2014.”
5.6
The
respondent refused to accept a resignation on those terms. It
insisted that a notice period be served to the end of September.
It
seems that the appellant acquiesced in this decision. Self-evidently,
the resignation could only putatively become effective
at the end of
the notice period.
[3]
5.7
A disciplinary enquiry proceeded, in her
absence whilst she was ill, and concluded she was guilty of the two
offences and deserved
to be dismissed. This dismissal took effect
before the end of the notice period.
5.8
The appellant responded to the dismissal by
referring a dispute about it to the Commission for Conciliation,
Mediation and Arbitration
(CCMA). In the arbitration that followed,
it was held that several examples of unfairness were manifest. The
charges about absenteeism
did not specify dates and the dates in
question emerged only in cross-examination. Only one of several dates
of allegedly unexplained
absences were not rebutted by the appellant.
The insolence charge was bald of detail. Ultimately the finding was
that her conduct
was not insubordinate but was rather her standing up
for herself.
5.9
After concluding that the restoration of
the relationship was inappropriate as contemplated in section 193 of
the LRA, the arbitrator
awarded her compensation, reasoning thus:
‘
The
Respondent submitted that the remedy of reinstatement is not
appropriate. This is so. The Applicant had already tendered her
resignation and was serving her notice period at the time of her
hearing. The Applicant is currently unemployed and lives in the
Western Cape. Although reinstatement is the primary remedy for unfair
dismissal, section 193(2) of the LRA provides limitations
of which
two are applicable. Firstly, where the circumstances of the dismissal
are such that a continued employment relationship
would be
intolerable and secondly where it is not reasonable practicable. In
view of the unresolved grievances and the tendered
resignation of the
Applicant, it is hard to understand how she can contemplate returning
to the workplace. The relationship of
trust was at mutual low ebb. It
is neither desirable not practicable for her to be reinstated. She is
entitled to compensation.
Factors taken into account are the length
of service, that she is unemployed and the hostile and summary manner
in which the Respondent
treated her. Her grievances and concerns were
not attended to and no progressive disciplinary action was followed.
The only record
of her remuneration is her letter of appointment date
18 October 2012 and compensation is based on this as the best
evidence at
hand. She is awarded 8 months compensation calculated as
follows:
R756
000 ÷ 12 = R63 000 x 8 = R504 000.”
Evaluation
[6]
The elephant in the controversy is what should be done, if anything,
about the tendered
resignation as a factor, supposedly relevant, to
the quantum of compensation and as to whether it was just and
equitable in the
circumstances.
[7]
As a matter of principle, it must be asked, if the clear finding in
the arbitration
was that the employment of the appellant was
terminated by a
dismissal
, what room is there to factor into
the computation of compensation the fact of a tendered resignation?
The premise of a compensation
award is to give recognition to an
unfair act on the part of the employer, whose decision it was to
dismiss and did so unfairly.
Compensation in terms of section 194 of
the LRA serves purposes broader than mere patrimonial damages, as the
express allusion
the award of compensation being just and equitable.
[8]
On the facts, it has been established that the appellant contemplated
a resignation.
On the facts, her deteriorating relationship with
Maboa, which she experienced as abusive and debilitating, was the
context within
which that idea was formulated. On the facts, the
decision to exit such an environment cannot meaningfully or even
usefully be
construed as “voluntary” even if,
self-evidently, she took the initiative to tender a resignation. On
the facts, the
actual resignation, as distinct from the contemplation
thereof, was prompted by the stoppage of her salary. Moreover, on the
facts,
the resignation, intended to be immediate, was rejected. The
appellant acquiesced in the rejection. Thus, she remained in service
at the critical moment when she was dismissed.
[9]
The critical enquiry had to address the tender of the resignation in
the context in
which it had been tendered. The appellant’s
unrebutted evidence is that she did so in response to the predicament
in which
she found herself. Once it is plain that the resignation was
not voluntary, if the fact thereof is to be weighed as a factor
relevant
to the quantum of compensation, then the whole of the
circumstances must be taken into account. In my view, the resignation
in
this context, is irrelevant to the computation of the
compensation. Once the termination was caused by a dismissal the
resignation
plays no further practical role.
[10]
Allusions were made to the fact that the appellant did not prosecute
a case of constructive dismissal
based on an involuntary resignation.
This criticism is misconceived and taking it into account was an
error by the arbitrator.
She was dismissed in the conventional sense;
the rationale for her termination was not the fact of her tendered
resignation, induced
by alleged intolerable conditions, but rather
dismissal for misconduct. True enough, had she not been dismissed,
she could have
alleged a constructive dismissal based on her
perspective of the circumstances. However, as things turned out she
did not need
to do so. Accordingly, the elephant is in truth merely a
red herring.
[11]
The arbitrator took into account:
11.1
her six years of service,
11.2
her unemployed status and its duration,
11.3
The failure of the respondent to resort to
progressive discipline; a consideration that stemmed from the rebuke
that the dismissal
was unfair.
11.4
The unfair (procedural) treatment of the
appellant, as found by the arbitrator.
11.5
The failure to address the appellant’s
grievances (a duplication of the notion of unfair treatment).
[12]
The absence of a consideration of the involuntary tender of a
resignation as a factor in the
computation, which, as found in our
judgment to be irrelevant, does not disturb the coherence of the
evaluation by the arbitrator.
[13]
The Labour Court, curiously, subordinated its perspective wholly to
the fact of a tendered resignation
which approach was inappropriately
narrow and, in any event, misdirected. The argument advanced in
support of the Labour Court’s
view before us, as I understand
the contention, is that the appellant could have no material interest
in her job beyond her notice
period, given the tendered resignation.
Thus, on that premise, there ought to be a cap on any compensation
order commensurate with
that material interest. In our view, this is
not the way to construe the purpose or effect of a compensation order
in terms of
section 193. The contention seems to assume that her
“positive interest”, (ie, the value to the aggrieved
party, had
the contract not been breached) in the job is the defining
consideration, as if this were a straightforward contractual dispute.
That premise is inappropriate in the paradigm regulated by sections
193 and 194 of the LRA. Apart from the questions of fact about
the
character of the tendered resignation not being freely made and the
break in logic between awarding a sum in compensation for
a dismissal
which
ipso facto
rendered the tendered resignation irrelevant,
the function of sections 193 and 194 is not to yield a quantum based
on the concept
of positive interest, but rather is premised on the
broader consideration of fairness, having weighed the circumstances
holistically.
[14]
The rationale offered in the judgment
a quo
fails to reveal a
ground for appropriate interference. The Labour Court’s finding
of impropriety, based on the notion that
the resignation was
voluntary, seems to be the font of the error. If a collateral finding
was necessary on that point, it could
only have been to the contrary;
ie the tendered resignation was not freely made but induced by the
conduct of the respondent in
stopping her salary. Moreover, the
judgment ignores the significance of the fact that the cause of the
termination was a dismissal
that was unfair and that there has to be
consequences for that conduct; the very purpose for which section 193
and 194 have been
enacted.
Conclusions on the
main issue
[15]
In my view, the award is free from criticism and must stand.
Costs
[16]
The appellant seeks a costs order. The question falls to be decided
with reference to law and
equity.
[4]
As an individual, bearing her own costs without the help of a Trade
Union, it is appropriate to give consideration thereto, even
though
the usual approach is that costs do not simply follow the result. It
seems to us that fairness dictates that she be granted
costs in the
review and in the appeal because of the burden such costs would be on
an individual. Moreover, the appellant is a
single parent with three
children.
[17]
In defending the award in the review proceedings and in prosecuting
the appeal, the appellant
has represented herself. To the extent that
she has incurred legal costs, she can recover them, including, in
principle, the value
of her own legal expertise, as an legal
practitioner, devoted to the case.
[5]
It is unnecessary to specify what these costs might include. Thus,
the appropriate costs order is one that is subject to taxation
in the
absence of an agreement between the parties about a sum.
The order
(1)
The appeal is upheld.
(2)
The award of 9 September 2015 is confirmed.
(3)
The sum awarded shall be paid in full
within 10 days of the date of this judgment to an account nominated
by the appellant.
(4)
The respondent shall bear any costs that
are taxable that arise from the review proceedings and the appeal
proceedings and pay such
sum within not less than 15 days of the
taxation master’s decision or of an agreement between the
parties as to the sum to
be paid.
___________________
Sutherland
JA
____________________
Kathree-Setiloane
AJA
____________________
Murphy
AJA
APPEARANCES:
FOR THE APPELLANT:
Appeared in person
FOR THE RESPONDENT:
Adv WR Mokare
SC; with him M K Mathipa
Instructed
by Werksmans.
[1]
Section 194(1):
The
compensation awarded to an
employee
whose
dismissal
is
found to be unfair either because the employer did not prove that
the reason for
dismissal
was a fair reason relating
to the employee's conduct or capacity or the employer's
operational
requirements
or the employer did not follow a fair
procedure, or both, 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
.
[2]
(2009) 30 ILJ 2677 (LAC) at para 55.
[3]
Because of the appellant did not persist with an ‘immediate’
termination, the jurisprudential issue of whether an
employer can
discipline an employee after a resignation did not arise. See:
Naidoo
and Another v Standard Bank SA Ltd and Another
(2019)
40 ILJ 2589 (LC)
[4]
Zungu
v Premier, Kwa-Zulu Natal
(2018)
39 ILJ 523 (CC) at [23] – [26]
[5]
[5]
See:
Knoll
v Van Druten
1953 (4) SA 145
(T) at 147 E – 148C.