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[2008] ZALCJHB 46
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Rowmoor Investment (Pty) Ltd v Wilson and Others (JR485/07) [2008] ZALCJHB 46 (7 March 2008)
IN THE LABOUR COURT OF
SOUTHN AFRICA
HELD AT JOHANNESBURG
In the matter between:
Case no JR 485/07
ROWMOOR INVESTMENT
(PTY)
LTD APPLICANT
And
RANA ANN
WILSON 1
ST
RESPONDENT
GCINA MAFANI
2
ND
RESPONDENT
CCMA 3
RD
RESPONDENT
JUDGEMENT
Molahlehi J
Introduction
[1]
The Applicant seeks an order to have the arbitration award
issued by Second Respondent (the Commissioner) under case number
GAJB
8048-06 dated 9 February 2007 reviewed and set aside.
[2]
In terms of the arbitration award the Commissioner found the
dismissal of the First Respondent, Ms Wilson to be both substantively
and procedurally unfair and ordered compensation in the amount of
R401 400.00.
[3]
The Applicant has subsequent to filing its heads
of argument raised a further ground of review which concerns the
jurisdiction the
CCMA to arbitrate the dispute.
[4]
The Applicant has also applied for condonation for
the late filing of its replying affidavit. The affidavit was about 10
(ten) days
late. The respondent did not oppose the condonation
application. The explanation for the lateness was reasonable and
acceptable.
Accordingly the late filing of the replying affidavit is
condoned.
Background facts
[5]
During August 2005, Snip (Pty) Ltd (Snip) was placed under
provisional liquidation by the High Court. Subsequent to the
provisional
liquidation the ABSA bank perfected its rights in terms
of a notorial bond.
[6]
Thereafter the Applicant made an offer to purchase Snip which offer
was accepted by ABSA bank. In terms of the sale agreement the
Applicant purchased all the assets, intellectual property and trading
name of Snip from ABSA.
[7]
Although this was not a purchase as a going concern, at the
commencement of trading the Applicant offered employment to the
employees
of Snip including Ms Wilson.
And at the
time of appointment by the Applicant, Ms Wilson had been with Snip
for over 17 (seventeen) years as buyer of house wares.
[8]
At the arbitration hearing the Applicant called
only one witness, Ms Pretorius, the HR officer. Her testimony centred
mainly on
the appointment of employees following the purchase of Snip
by the Applicant. She testified that Snip’s employees
were
offered new employment contracts by the Applicant.
[9]
Ms Wilson testified that she commenced her
employment with Snip in 1990, and was promoted during 1997, to the
position of a senior
buyer. This position did not change when her
employment contract was taken over by the Applicant. She further
testified that she
was during 2005, informally offered the position
of marketing manager by the Applicant but this was never implemented.
[10]
On the 6
th
March 2006, Mr Swart, the human resources
manager convened a meeting with Ms Wilson and issued her with a
letter, the heading of
which reads as follows “
Re: DISMISSAL
DUE TO OPERATIONAL REASONS.”
In addition to informing
Ms Wilson that her position “as marketing manager has been
identified as redundant,” the letter
further states that:
“
Rowmoor
Investment 543 (PTY) Ltd. as an employer is committed to the
principles of procedural and substantive fairness as regulated
by the
Labour Relations Act and as a result, conformance to s189 requires
meaningful consultation with the affected employee/s
with specific
reference to the following:
1.
Appropriate measures in an attempt to avoid
dismissal.
2.
Timing of the proposed process.
3.
Severance pay.
4.
Opportunity for the employee to make
appropriate submission.
5.
Prospects for future employment.
Termination of
employment for whatever reason is always considered as very traumatic
and therefore management wishes to engage in
meaningful consultation
in an attempt to reduce the traumatic effect of the process.
Should you however
have any concerns or queries following the discussion of the above
proposed process, please do not hesitate to
contact me.”
[11] On 6
th
March 2006, Ms Wilson was called to a meeting where she was informed
that her position as a marketing
manager
was declared redundant. The purpose of the meeting on the 6
th
March 2006 was, according to Mr Swart to consult with the Ms Wilson.
This was according to the Applicant a consultation in terms
of
section 189 of the Labour Relations Act 66 of 1995 (the LRA)
[12]
In his open remark at the beginning of the
arbitration hearing Mr Swart submitted that once he had explained the
purpose of the
meeting and the contents of the letter, Ms Wilson made
it clear that she was no longer interested in the employ of the
Applicant.
He further submitted that he had no doubt that Ms Wilson
was not interested in consulting further with the Applicant.
[13]
The discussion during the meeting according
to Mr Swart focused on other issues like notice pay, severance pay,
the use of the company
vehicle and use of the cell phone. At
the end of the discussion both Mr Swart and Ms Wilson signed an
agreement regarding
issues like severance pay, the continued use of
the vehicle and the cell phone.
[14]
Ms Wilson in her testimony disputed the allegation
made by Mr Swart that when the Applicant took over from Snip she was
appointed
to the position of marketing manager. The offer to the
position of marketing manager was according to her made during
November
2005. This offer never materialised as she continued as a
buyer until the day of her dismissal.
[15]
As concerning the meeting of 6
th
March 2005, Ms Wilson testified that there was no
consultation but was simply informed at that meeting that the
executive had taken
a decision to declare her position redundant. She
further testified that the letter was handed to her as she entered
the office.
[16]
After being told about the decision of the
executive to declare her position redundant, Ms Wilson enquired about
the buying position
as she was aware that the Applicant required
more buyers and that interviews were infact underway at that stage.
The record
further reveals her having stated during her
testimony:
“
At
that point, I realised that, the decision was final. They do not want
me in the Company [pause] and I was given no options (sic)
[silence]
Must I carry on?”
[17]
Later on in her testimony Ms Wilson testifying
about what transpired at the meeting between her and Mr Swart said:
“
He
then proceeded to explain the payment option, where he said, they
would pay me the 2 months [pause] …that I could use
the
company car for that 2 months…I then asked if I could leave
immediately…,”
[18]
Mr Wilson further enquired about the possibility
of appointing her a buyer in the light of her position having become
redundant.
In response to this inquiry, according to her, Mr Swart
informed her that the Applicant would not be appointing buyers at
that
stage. However 21(twenty one) days thereafter the Applicant
appointed three buyers.
Grounds of review and
award
[19]
The Applicant contended that contrary to the
discussions that the employee had with Mr Swart the Commissioner
found that there was
no invitation to consult with Ms Wilson prior to
the 6
th
March
2006.
[20]
The Applicant further contended that the
Commissioner completely ignored the evidence of Ms Wilson that she no
longer wished to
be employed by the Applicant and as result of this
the consultation would have been a futile exercise.
[21]
As indicated earlier, the Applicant filed an
additional ground for review after the heads of argument were filed.
In this regard
the Applicant relied on the provisions of section 191
(12) of the Labour Relations Act 66 of 1995 (the LRA). The Applicant
contended
that the Commissioner did not have jurisdiction to
entertain this dispute because Ms Wilson attacked procedural fairness
of a dispute
concerning a retrenchment of an individual. The essence
of this argument is that where in a dismissal for operational reasons
the
employee attacks both the procedure and the reason for the
retrenchment, the CCMA does not have jurisdiction.
Ms Riki Anderson,
attorney for the employee, correctly conceded that a jurisdictional
point may be raised at any time during the
proceedings. It should
however be pointed out that the stage in the proceedings at which the
point is raised may have costs implications
for the party raising
such a point.
[22]
The provisions of section 191 (12) of the LRA were
considered in the case of
Rand Water v/s
Adv. R. Bracks NO & Others (unreported case no. JR 1965/05)
.
In that case the court held that:
“…
the
legislature intended that it is only in matters where only
substantive fairness of a dismissal by the employer by reason of
its
operational requirements involving a single employee is to be
determined that the CCMA has jurisdiction to hear the matter.
As soon
as the procedural fairness of the dismissal is put in issue by a
single employee, …section 191(12) of the LRA must
be
interpreted as meaning that such case must still be referred to the
Labour Court and that the CCMA will not have jurisdiction
to hear
them.”
[23]
The facts in Rand Water case are distinguishable
from those of the present case. In that case the dismissal was
following the consultation
process between the affected employee and
her employer. There was also frequent exchange of correspondence
between the parties
as part of the consultation process before the
dismissal.
[24]
In my view, the CCMA’s jurisdiction is
ousted in an individual dismissal for operational reasons where the
facts reveal that
the dismissal was “
following
a consultation procedure in terms of section 189”
of
the LRA. The three jurisdictional facts to be satisfied before the
election could be made by an employee who was dismissed for
operational reasons was correctly pointed out by Mr Boda SC in Rand
Water case. His submissions in the Rand Water case are:
1.
The dismissal had to be by reason of the
employer’s operational requirements.
2.
The retrenchment had to be in respect of a
single employee.
3.
The retrenchment which was due to operational
reasons was effected after “following a consultation procedure
in terms of section
189” of the LRA.”
[25]
The employee in the present case formulated
her dispute in the CCMA LRA Form 7.13 as follows:
“
(1)
No fair procedure followed (sic) prior to retrenchment.
(2) No fair reason
existed for retrenchment.”
[26]
In my view the jurisdictional point raised by the
Applicant would be sustainable on the authority of Rand Water, had
the employee
formulated her dispute as concerning the fairness of the
procedure followed prior to her dismissal. Her case is that, there
was
no procedure followed by the Applicant prior to her dismissal.
[27]
Although this point was not pertinently raised
before the Commissioner, she does seem to have been aware of it in
that, in her analysis
of the evidence and argument she states:
“
Section
189(1) requires consultation prior to retrenchment and not when
the decision is already made.”
[28]
In my view, the essence of the Commissioner’s
conclusion is that the dismissal of the employee was not “
following
procedure in terms of section 189”
of
the LRA. My view on this point is that if the Rand Water decision was
to be regarded as authority then, the CCMA would lack jurisdiction
in
a case where the facts reveals that the dismissal was after the
employer had followed the procedure as required by section 189
of the
LRA.
[29]
For the above reasons, the jurisdictional point
raised by the Applicant is dismissed.
[30]
I now proceed to deal with the grounds of review
as raised by the Applicant in its founding affidavit. In its first
ground of review
the Applicant contended that the Commissioner failed
to apply her mind to what transpired on the 6
th
March 2006, during the meeting between the
employee and Mr Swart. The Applicant contended that this meeting
constituted consultation
as contemplated by section 189 of the LRA.
[31]
After dealing with the provisions of section
189(1) (2) of the LRA, the Commissioner concluded that Ms Wilson
never received a letter
inviting her to consult. The Commissioner
also found that the letter which was given to her on the 6
th
March 2006 was given after she was told that the
executive had taken a decision to declare her post to be redundant.
[32]
In my view the conclusion reached by the
Commissioner cannot be said to be unreasonable. She arrived at this
conclusion on the basis
of the uncontested evidence of the employee.
The only evidence presented by the Applicant was that of Ms Pretorius
which as indicated
dealt only with what transpired after the purchase
of Snip and not what transpired at the meeting of 6th March 2006. In
any case
she would not have testified about what transpired at the
meeting as she was not there. The person who was at the meeting was
Mr
Swart. Mr Swart never testified but during his opening remarks
indicated that he may testify or call witnesses if necessary. He
did
not testify nor call any witness to deal with the critical aspects of
the Applicant’s case.
[33]
The Applicant contended that the letter of the 6
th
March 2006 was not intended to terminate the
employment of the employee but to commence with consultation. This
the Commissioner
dealt with in her award and therefore it is
incorrect to say she failed to apply her mind to the issue.
[34]
The second ground of review relates to the
substantive fairness of the dismissal. The Applicant conceded that it
appointed new buyers
approximately three weeks after the termination
of the employee’s employment. The Applicant however contended
that there
was no evidence in the record that the buyers were
interviewed on the 6
th
March 2006. The Applicant further contended that
although the employee performed certain buyer functions, she was
employed as a
marketing manager.
[35]
I have already indicated that the evidence before
the Commissioner in as far as the critical aspects of this case were
concerned
was not challenged. The employee’s evidence that she
was offered the position of a marketing manager but never occupied
the
position was never challenged. In fact to some extent her version
was supported by the service certificate which was issued by Mr
Swart. The certificate states:
“
This
is to certify that Ms R.A. Wilson was employed by Rowmoor
Investment 543 (Pty) Ltd in the capacity of Senior Buyer/
Marketing
Manager at Head Office.”
Ms Pretorius could not
confirm under cross-examination whether the employee was ever given a
contract as a marketing manager.
[36]
The Commissioner reasoned that the dismissal was
substantively unfair because the Applicant had vacant buying posts
which the employee
could have filled and that the retrenchment was
not the only option available.
[37]
The Commissioner rejected the submission of Mr
Swart that the employee resigned.
[38]
The third ground of review relates to the
contention that the Commissioner committed gross irregularity in
failing to provide reasons
for the amount of compensation she awarded
to the employee.
[39]
Section 194(1) of the LRA provides:
“
The
compensation awarded to the employee whose dismissal is found to be
unfair, either because the employer did not prove that the
reason for
dismissal was fair reason relating to the employee’s conduct or
capacity or the employer’s operational requirements
or the
employer did not follow the fair procedure, or both, must be just and
equitable in all circumstances, but may not be more
than the
equivalent of 12 months’ remuneration calculated at the
employer’s rate of remuneration on the date of dismissal.”
[40]
In
Arashumy v Tee and
other
(1999) JOL 5068
(LC),
the Court
held the arbitration award was reviewable because the Commissioner
failed to provide reasons for awarding compensation
to the employee
to the amount of R18 000.00. The Court further held that it could not
find from the record the basis of the amount
of compensation.
It is clear from the reading of this judgement that had there been a
basis in the record for arriving at
the R18000.00 compensation.
The Court would not have interfered with the award even if the award
did not expressly state
the reasons for arriving at the amount
[41]
The issue whether a Commissioner should give
reasons for the relief granted received attention in the
Bezuidenhout
v Johnston NO & Others
(2006) 27
ILJ 2337(LC) at para [57]
, where the
Court in agreeing with the decision in
Amstrong
v Tee &others (1999) 20 ILJ
2568(LC)
,
held that as a general proposition the Commissioners should give
reasons for their awards. However, the fact that a Commissioner
does
not provide clear and express reasons for each and every conclusion
he or she arrives at, does not in itself render the award
reviewable.
[42]
In
Amalgamated
Pharmaceuticals Ltd v Grobler NO & Others (2004) 25
ILJ
523
(LC) at page 525,
the
Court held that:
“
The
failure or omission by the Commissioner to provide reasons for her
award does not per se render the award irrational and therefore
reviewable on the grounds of gross irregularity.”
[43]
In considering whether failure to provide reasons
for the relief provided, the Court is required to determine from the
Commissioner’s
finding whether he or she anticipated the remedy
or the basis for the remedy is apparent from the record.
[44]
Turning to the facts of the present case, the
Applicant contended the Commissioner awarded the employee a car
allowance in the amount
of
R5000.00 despite
the evidence indicating that the car allowance was estimated at
R4000.00.
[45]
Whilst the Commissioner did not expressly state
the reason for the award issued it is apparent he was influenced in
arriving in
his conclusion by the severity of the unfairness of the
dismissal.
[46]
The severity of the unfairness of the dismissal
outweighs other factors that may have favoured a lesser compensation
in as far as
the interest of the employer was concerned. These
factors are the fact that Ms Wilson secured employment 4 (four)
months
after her dismissal. Her salary in the new employment is
much lower than the one she earned prior to her dismissal.
[47]
In as far as the car allowance is concerned there
is no indication as to on what basis the Commissioner arrived at
R5000.00 when
the estimation by Ms Wilson was R4000.00. I agree with
Applicant that the period of 17 (seventeen) years relates to the
general
experience which Ms Wilson had but not to the period of
employment with the Applicant. The period of employment is
significantly
less than 17 (seventeen) years. This factual
error does not have a material bearing on the decision of the
Commissioner.
[48]
In my view the only criticism to be levelled
against the Commissioner is the calculation of the car allowance.
There is no
evidence on the record showing how the Commissioner
arrived at the amount of R5000.00The estimated costs for the car
allowance
which was not challenged by the Applicant was R4000.00. In
this regard the Commissioner committed a gross irregularity and
therefore
the award stand to be reviewed and corrected.
[49]
In my view fairness and justice require that the
award should be corrected in as far as compensation is concerned.
Eventually the
Commissioner incorrectly calculated the car allowance,
the reading of the award, the record and the circumstances of this
case,
the conclusion of awarding the maximum compensation by the
Commissioner cannot be faulted.
[50]
In as far as substantive fairness is concerned; I
am of the view that the Commissioner’s conclusion cannot be
faulted, as
if it is a conclusion that a reasonable decision maker
could have reached.
[51]
The
other issue raised by the Applicant concerns the complaint that the
Commissioner failed to administer an oath or affirmation
before
taking evidence from the witness of the employee.
[52]
In
Morningside Farm v Van Standen NO & Another (1998) 19 ILJ 1204
(LC)
,
the Court
disagreed with the employee’s contention that the failure to
swear in a witness did not amount to an irregularity.
In arriving at
this conclusion the Court relied on the provisions of s31(1) of the
Supreme Court Act 59 of 1959, which provides
for committal to prison
for a person who refuses to take an oath in or who refuses to make an
affirmation as a witness. The Court
also relied on the provisions of
s142(1)(e) of the Labour Relations Act 66 of 1995 (LRA), which
provides that a Commissioner
who has been appointed to resolve
a dispute may administer an oath or accept an affirmation from any
person called to give evidence.
To this extent the Court held
that:
“
It therefore
must follow that a commissioner who fails to administer the oath or
fails to ensure that affirmation is made by a witness,
commits a
gross-irregularity.”
[53] In criminal cases it
has been held that the testimony of a witness which had not been
properly placed under oath or properly
affirmed or properly
admonished to speak the truth as provided for in section 162 read
with section 163 and section 164 of the
Criminal Procedure Act of
1997, lacks the status and character of evidence and can therefore
not support a conviction in a criminal
trial.
[54] It is clear, that in
criminal matters there is a statutory duty imposed on the presiding
officer to administer an oath or admit
an affirmation. In the context
of the LRA the Commissioner has a discretion in terms of section
142(1) (e) whether or not to administer
an oath or require an
affirmation. However, refusal to take an oath or make an affirmation
when required to do so by the Commissioner,
constitutes contempt of
the CCMA in terms of Section 42(8) (e) of the LRA.
[54] The issue of oaths
and affirmation in private arbitrations is governed by
section
14(1)
(b) (ii) of the
Arbitration Act 42 of 1965
.
[55
]
In
Portnet, A Division of Transnet Ltd v Finnemore & Others (1999)
20 ILJ 1104 (LC),
the Court after noting the decision in
Morningside Farm, that failure to administer an oath is an
irregularity which justify the
intervention of the Court, held that
in private arbitration proceedings evidence need not be led under
oath where there is an agreement
between the parties or where no
objection is taken at any stage, a party cannot subsequently approach
the Court and cry foul. The
Court went further to say:
“
Accordingly, I
do not think that the arbitration award is reviewable because of
failure to administer the oath.”
[55] It is interesting to
note that
rule 24
of the American Arbitration Association provides:
“
Oaths- …
the Arbitrator may, in his discretion, require witnesses to testify
under the oath administered by any duly qualified
person, and if
required by law to or requested by either party, shall do so.”
See Frank Elkour; et
al How arbitration works Fifth Edition Page 263
[56] In my view the
correct approach is the one adopted in Portnet and should apply to
both private and compulsory arbitration proceedings.
Because of
the adversarial nature of the arbitration proceedings, there can be
no doubt that taking an oath or making an affirmation
by witnesses
will always be preferred. However failure to have a witness take an
oath or affirmation before testifying, does
not in my view,
automatically amount to a gross-irregularity. In such cases the
issues turns around the weight and the manner
in which the
Commissioner approaches the evidence tendered without taking an oath
or making an affirmation.
[57] Turning to the facts
of the present case, the evidence of the witness who did not take an
oath had no bearing on the decision
of the Commissioner. It can also
not be said that failure to administer an oath on the witness denied
the Applicant a fair hearing.
[58]
The contentions that the Commissioner allowed
leading questions during examination-in-chief have no merit and
should be dismissed
for that reason.
[59]
In the premises I make the following order:
a.
The part of the review application seeking to
review and set aside the arbitration award in relation to the issue
of substantive
fairness is dismissed.
b.
The part of the review application seeking to
review and set aside the arbitration award in relation to the
compensation awarded
to the third respondent, is reviewed and
corrected to read as follows:
“
The
respondent, Rowmoore Investment (PTY) is ordered to pay
the Applicant, Ms Rana Ann Wilson as follows:
i)
Basic salary x 12 months R26000.00
ii)
Car allowance
R4000.00
iv)
Cell phone allowance R500,
00
v)
Pension
R1950.00
R32450X12=R389400.00
TOTAL
PACKAGE
R389400.00”
MOLAHLEHI
J
Date
of Hearing:
28 November 2007
Date
of Judgement:
07 March 2008
APPEARANCES:
For
the Applicant:
MACROBERT INC
For
the Respondent:
DU TOIT ATTORNEYS