Brief Summary

Labour Law — Review of arbitration award — Application for condonation — National Union of Mineworkers applied to review an arbitration award that found the dismissal of its member, Daniel Ramatsetse, to be substantively unfair, awarding compensation instead of reinstatement. The third respondent conceded that the commissioner’s decision was irrational, and the delay in filing the review application was adequately explained. The court held that the commissioner misapplied the legal principles regarding reinstatement, failing to establish any grounds for not reinstating the employee as required by section 193(2) of the Labour Relations Act. Condonation for the late filing was granted, and the court ordered reinstatement from the date of dismissal.

Comprehensive Summary

Summary of Judgment

1. Introduction

This was an application in the Labour Court for the review of an arbitration award issued under the auspices of the Commission for Conciliation, Mediation and Arbitration (CCMA). The review application was accompanied by an application for condonation for the late filing of the review.

The applicants were the National Union of Mineworkers (NUM), acting on behalf of its member, Mr Daniel Ramatsetse (the employee). The respondents were the CCMA, the commissioner (Mr Eric Phindela N.O.) who issued the award, and Lebowa Platinum Mines Ltd (the employer).

Procedurally, the commissioner had found that the employee’s dismissal was substantively unfair (not for a fair reason), but nonetheless granted compensation (nine months’ remuneration) rather than reinstatement. The employer initially opposed both the condonation and the review, but at the hearing confined its opposition to condonation and conceded that, if condonation were granted, the commissioner’s choice of compensation instead of reinstatement was irrational and reviewable, particularly in light of a Supreme Court of Appeal decision referred to by the parties.

The general subject-matter of the dispute concerned the proper remedy for an unfair dismissal under the Labour Relations Act 66 of 1995, specifically whether the commissioner was obliged to order reinstatement in circumstances where none of the statutory exceptions to reinstatement had been established.

2. Material Facts

The material facts for purposes of the Labour Court’s determination were primarily procedural and remedy-related, rather than concerned with the underlying merits of the dismissal.

It was undisputed that the commissioner issued the arbitration award on 7 May 2001, and that the employee’s representatives received it on 15 May 2001. It was also common cause that the review application should have been filed within the prescribed period, which meant it was due on 26 June 2001, but was only filed on 7 August 2001. The resulting delay was approximately six weeks.

As to the explanation for delay, the court accepted that the employee (a union member) relied on assistance from a union official, that there were internal union processes for obtaining authorisation to litigate, that an opinion was obtained from attorneys, and that communication with the employee was difficult because he was unemployed and moving between places while seeking work. It was also accepted that the employee was a lay person and stated that he was not aware of statutory time limits for review applications until consulting attorneys on 7 August 2001.

On the merits of the review, it was not in dispute at the hearing before the Labour Court that the employer did not challenge the commissioner’s finding that the dismissal was not for a fair reason. The dispute before the Labour Court was confined to whether, given the finding of substantive unfairness and the employee’s request for reinstatement, the commissioner was entitled to award compensation instead of reinstatement.

The court’s evaluation of the arbitration record was that it could find no evidence establishing that any of the statutory exceptions to reinstatement in section 193(2) of the Labour Relations Act were present. The commissioner nevertheless refused reinstatement, reasoning (as recorded in the award) that the employee had testified he was perceived as a “bad guy” and that the relationship between the employer and the union was “bad”, and on that basis the commissioner regarded reinstatement as inappropriate.

The employer made a settlement tender in the Labour Court proceedings to reinstate the employee with effect from 1 October 2006, with back pay limited to 12 months’ remuneration calculated at the rate applicable as at 8 September 2000. This tender was rejected, as the applicants sought reinstatement from the date of dismissal.

3. Legal Issues

The central legal questions before the Labour Court were, first, whether the late filing of the review application should be condoned, and second, whether the commissioner’s remedy decision (awarding compensation instead of reinstatement) was reviewable and should be set aside.

The condonation issue required a value-laden assessment of the adequacy of the explanation for delay together with the prospects of success, and ultimately an exercise of the court’s discretion on whether to permit the review to proceed.

The review issue primarily concerned the application of law to fact, namely the correct interpretation and operation of section 193(2) of the Labour Relations Act 66 of 1995, and whether the commissioner could refuse reinstatement absent proof of one of the statutory exceptions. It also involved a review enquiry into whether the commissioner’s approach to remedy reflected a misapplication of the statutory test amounting to reviewable irregularity.

A further remedial question arose as to the appropriate course if the award were reviewed, namely whether the Labour Court should substitute the award with its own order (including the effective date of reinstatement and the implications for back pay), or remit the matter to the CCMA.

4. Court’s Reasoning

On condonation, the court identified that the delay was approximately six weeks, which it characterised as not lengthy. It considered the explanation offered in the founding affidavit, including the employee’s reliance on the union official, the union’s internal process requiring referral of the award to the chief legal adviser and thereafter to attorneys, the obtaining of a written opinion, and the practical difficulties of contacting the employee while unemployed.

Although the third respondent’s response criticised aspects of the timeline and suggested that certain steps could have been taken sooner, the court was satisfied that an adequate explanation had been provided, notwithstanding that it could be criticised in minor respects. A decisive factor in the court’s reasoning was the overwhelming prospects of success on the review, especially in light of the employer’s concession that, if condonation were granted, the commissioner’s remedy decision was irrational and reviewable. The court accordingly granted condonation.

On the review of the remedy, the court’s analysis focused on the statutory framework in section 193 of the Labour Relations Act. The court emphasised that section 193(2) is framed in peremptory terms, meaning that the Labour Court or an arbitrator must order reinstatement or re-employment unless one of the listed exceptions applies. The court treated the provision as allowing no general discretion to refuse reinstatement where the employee seeks reinstatement and the dismissal is substantively unfair, absent proof of an exception.

The court then evaluated the commissioner’s reasoning against the statute. It noted that the commissioner had acknowledged that the employee sought reinstatement and that the dismissal was substantively unfair, and also acknowledged that the employer had placed no evidence indicating that it would be unreasonable to expect reinstatement. Despite this, the commissioner relied on considerations that the employee was perceived negatively and that the employer–union relationship was poor.

Having reviewed the arbitration record, the court could not find evidence establishing that any of the statutory exceptions in section 193(2) were satisfied. The court concluded that the commissioner effectively introduced an additional (non-statutory) basis for refusing reinstatement, which the court described as adding a “fifth requirement” beyond those listed in the Act. On that basis, the court held that the commissioner misapplied the legal principles governing remedies to such an extent that it was unreasonable, resulted in a gross irregularity, and produced a remedy outcome that was not justifiable on the facts available to the commissioner.

On the question of the remedy after review, the court recorded the employer’s tender to reinstate prospectively with limited back pay, and the applicants’ insistence on reinstatement from the date of dismissal. The court recognised that once reinstatement is ordered, section 193(1)(a) confers a discretion as to the effective date of reinstatement (from a date not earlier than the dismissal date), and that relevant considerations may include alternative employment and delays in the process.

The court noted that the employee alleged he had been unemployed since dismissal and that this was not contradicted. It also indicated that the crucial period for its corrective intervention was linked to the commissioner’s award (issued eight months after dismissal), and that the commissioner should have ordered reinstatement. The court further observed that the employer had not brought a counter-review dealing with back pay. It ultimately decided to substitute the compensation remedy with an order of reinstatement from the date of dismissal.

On costs, the court applied the approach that costs should follow the result and found no reason to depart from that outcome.

5. Outcome and Relief

The Labour Court granted condonation for the late filing of the review application.

The court reviewed and set aside the portion of the commissioner’s award that granted the employee nine months’ compensation, and substituted it with an order directing the employer to reinstate the employee from the date of his dismissal (8 September 2000).

The court ordered the third respondent (the employer) to pay the costs of the application.

Cases Cited

Rustenburg Platinum Mines Ltd v Commission for Conciliation, Mediation and Arbitration and Others [2006] SCA 115 (RSA).

Legislation Cited

Labour Relations Act 66 of 1995, section 193(1)(a).

Labour Relations Act 66 of 1995, section 193(2).

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The Labour Court held that the late filing of the review application should be condoned because the delay was not excessive, an adequate explanation was provided, and the prospects of success were overwhelming.

It further held that, given the employee sought reinstatement and the dismissal was substantively unfair, the commissioner was obliged by section 193(2) of the Labour Relations Act to order reinstatement unless an employer proved one of the listed statutory exceptions. As the arbitration record did not establish any exception, the commissioner’s refusal to reinstate (based on perceptions about the employee and a poor employer–union relationship) amounted to a misapplication of the governing legal principles and produced a reviewable outcome.

The compensation award was accordingly set aside and substituted with reinstatement from the date of dismissal, with costs awarded against the employer.

LEGAL PRINCIPLES

Section 193(2) of the Labour Relations Act 66 of 1995 is peremptory in requiring reinstatement or re-employment where a dismissal is found substantively unfair and the employee seeks reinstatement, unless the employer proves that one of the enumerated exceptions applies, namely that the employee does not wish reinstatement, continued employment would be intolerable, reinstatement is not reasonably practicable, or the dismissal is unfair only for procedural reasons.

An arbitrator may not refuse reinstatement on the basis of considerations that do not fall within the statutory exceptions in section 193(2). Where the arbitrator effectively introduces an additional ground beyond the statute for denying reinstatement, and this is not supported by evidence establishing one of the recognised exceptions, the remedy decision is susceptible to review on the basis of a material misdirection and irregularity in the application of the statutory test.

Once reinstatement is ordered, section 193(1)(a) permits the decision-maker to determine the effective date of reinstatement (not earlier than the date of dismissal), which entails a discretionary assessment of relevant contextual factors such as alternative employment and delays, on the facts placed before the court.

National Union of Mineworkers and Another v Commission for Conciliation Mediation And Arbitration and Others (JR988/01) [2006] ZALCJHB 12 (8 November 2006)