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[2008] ZALCJHB 7
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Hyundai/ Kia Motors Polokwane v Venter NO and Others (JR1544/06) [2008] ZALCJHB 7 (3 July 2008)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD AT
JOHANNESBURG
CASE
NO: JR1544/06
In
the matter between:
HYUNDAI
/ KIA MOTORS
POLOKWANE
Applicant
and
R
VENTER
N.O.
First
Respondent
THE
CENTRE FOR DISPUTE RESOLUTION
(MOTOR
INDUSTRIES BARGAINING COUNCIL)
Second
Respondent
ELLIK
SCHUTTE Third
Respondent
JUDGMENT
FRANCIS
J
Introduction
1.
The third respondent was employed by the applicant as a sales manager
at its branch in Polokwane. After he was dismissed,
he referred
a dispute to the second respondent, the Centre for Dispute Resolution
(the MEIBC) for conciliation and arbitration.
He was reinstated
in terms of an arbitration award dated 14 August 2003 made under case
number NT136/03 by the first respondent
(the arbitrator). He
reported for work on 15 October 2003 as instructed by the applicant.
He did not report for work
on 16 October 2003 on the grounds that the
applicant had not complied with the arbitration award which is
disputed by the applicant.
2.
The applicant brought an application for a declarator that in terms
of the arbitration award the third respondent was only entitled
to
reinstatement and remuneration up to and including 15 October 2003;
he is not entitled to any remuneration as back pay from
the applicant
for the period 1 February 2003 to 1 April 2003; that the applicant
will be in full compliance with the arbitration
award upon payment to
the third respondent of his monthly remuneration plus average
commission at the time of his dismissal,
for the period 1 February
2003 to 15 October 2003, less 30 days notice and the period between 1
February and 1 April 2003, which
amounts to R33 000,00 alternatively
R60 500,00, and payment of the third respondent’s taxed costs
on the Highest Magistrates
Court scale.
The
third respondent in its counter application is seeking a declarator
that on a proper interpretation of the arbitration award
the
applicant did not reinstate him on 15 October 2003 in terms of the
arbitration award and is therefore liable to pay him the
sum of R6
000,00 per month in respect of his basic salary and R11 580,93 per
month in respect of commission for the period 4 March
2003 to date of
reinstatement. Further that the applicant is liable to
him in the sum of R2 023 518,00 in the event
of the applicant not
reinstating him, alternatively, if he is not reinstated that
the applicant is liable to pay him the
sum of R616 336,00. The
third respondent also sought urgent interim relief pending the final
adjudication of the application
and counter application that the
applicant pay him the sum of R66 699,00.
The background
facts
4.
The third respondent was employed by the applicant as a sales manager
at its Polokwane branch in June 2000. He was dismissed
by the
applicant on 4 February 2003 with effect from 4 March 2003. He
declared a dispute and referred it to MEIBC for conciliation
and
arbitration. On 14 August 2003 the arbitrator found that his
dismissal on 4 March 2003 was substantively unfair and ordered
the
applicant to reinstate him with retrospective effect from date of his
dismissal on the same terms and conditions of employment
before his
dismissal. The third respondent had to calculate the average
commission that he would have earned from the date
of his dismissal
to the date of his reinstatement based on the average monthly sales
figures from 1 August 2002 to 1 August 2003.
He had to report
for employment within three working days of receipt of the
arbitration award. The applicant had to pay him
costs on the
highest Magistrate’s Court scale.
5.
On 26 August 2003 the third respondent’s former attorney
requested the National Employers Forum to inform him in which
branch
he had to take up employment from 27 August 2003. On 26
September 2003 the applicant filed an application to review
and set
aside the arbitration award. In a letter dated 6 October 2003
to the third respondent’s attorneys, the applicant
instructed
the third respondent to report for work at the applicant’s
Makhado branch on 13 October 2003. The Polokwane
branch where
he had worked had closed down. Should he fail to do so, he
would be considered and accepted to have abandoned
his employment.
On 9 October 2003 the third respondent’s attorney responded to
the letter of 6 October 2003 and stated
that the third respondent
would accept reinstatement on condition that he would be remunerated
fully from the date of the reinstatement
order by the arbitrator.
Further that he would not be subjected to any form of discrimination
during employment pending the
outcome of the review application.
The applicant was to give reasons why Makhado was the only place to
take up reinstatement
as the third respondent had settled in
Gauteng. The applicant responded to the letter on 13 October
2003 and stated that
the third respondent was employed only for the
applicant’s operations in the then Northern province (now
Limpopo) and that
he was instructed to report for duty on 15 October
2003.
6.
Pursuant to the letters dated 6, 9 and 13 October 2003, the third
respondent reported for work to the dealer principal, Glassberg
at
the applicant’s Intercity Delta branch in Makhado on 15 October
2003. He worked the whole day and did not return
to work on 16
October 2003. The third respondent said that when he reported
for work on 15 October 2003 he found to his bitter
disappointment
that he was not appointed on the same terms and conditions of
employment that was in force before his dismissal.
He then told IG
van Niekerk, the financial manager on 16 October 2003 that he could
not continue to work on the terms presented
to him by Glassberg when
van Niekerk agreed that the commission structure and terms of
employment did not then correspond to that
which he had at the time
of his dismissal. The applicant denied that the third respondent ever
spoke to van Niekerk about his commission
and contended that the
conditions of employment were the same.
7.
On 12 November 2003, the applicant received a letter from the third
respondent’s attorneys, stating that the third respondent
had
elected not to continue with the arrangement, due to an alleged
breach of the terms and conditions of employment by the applicant.
He used to get 9% commission on the sales of used motor vehicles and
was told that the commission was now going to be calculated
on a
sliding scale depending on the budget with 3,8% being the maximum
percentage that he could achieve. This was contrary
to the
applicant’s undertaking referred to in its letter dated 13
October 2003. The third respondent also raised the
issue of his
relocation to Gauteng. The applicant responded with a letter
dated 13 November 2003 and stated that the third
respondent had
abandoned his employment with effect from 15 October 2003 and
disputed any change to the terms and conditions of
his employment.
He clearly had no intention of resuming his duties. He was
informed that all of these facts would be
placed before the review
court.
8.
On 4 August 2004 the third respondent applied to make the arbitration
award an order of court in terms of section 158(1)(c) of
the Labour
Relations Act 66 of 1995 (the Act). The review application was
dismissed on 28 October 2005 and the award was
made an order of court
in terms of section 158(1)(c) of the Act. The applicant sought
leave to appeal, which leave to appeal
was dismissed on 28 November
2005.
9.
In a letter dated 1 December 2005 the third respondent’s
attorneys asked when he could take up his position at the applicant,
alternatively that they meet to discuss the finalisation of the
settlement of the matter. On 12 December 2005 the applicant
filed a petition to the Labour Appeal Court for leave to appeal.
The applicant responded in a letter dated 19 January 2006
stating
that reinstatement was out of the question but would consider a
financial settlement. In a letter dated 14 February
2006 the
third respondent’s attorneys stated that his total salary was
R18 402.10, including the average commission.
This amount was
disputed by the applicant in a letter dated 28 March 2006. The
applicant’s petition was refused on
30 March 2006. In a
letter dated 5 May 2006, the third respondent’s attorneys
demanded payment of all the amounts due
to the third respondent in
respect of the initial arbitration award. The amount claimed
was R1.5 million as stated in a letter
dated 6 June 2006.
10.
The applicant then brought this application on 29 June 2006 which was
opposed by the third respondent. The third respondent
has also
filed a counter review application.
11.
In a letter dated 27 October 2006, the applicant offered the third
respondent the position of sales representative at their
Germiston
branch in Gauteng at R5 000.00 per month basic plus commission,
alternatively he was instructed to report for work at
Makhado.
The third respondent responded on 6 November 2006 and rejected the
proposals and stated that he was prepared to
take up employment on
the basis laid down in the arbitration award. On 14 November
2006, the applicant’s attorneys
responded and repeated that as
a settlement offer, the third respondent could accept a position in
Germiston plus R52 000.00 or
a cash offer of R100 000.00. If he
was not willing to settle, the third respondent would have to report
for duty at Makhado.
On 17 November 2006, the third
respondent’s attorneys responded stating that the declarator
application had to go on.
On 24 November 2006, the third
respondent was instructed to report for work at Makhado before 1
December 2006, in terms of the
reinstatement award in the arbitration
award. The third respondent has not attempted to report for
work in Makhado.
12.
On 7 December 2006 this Court, after the third respondent brought an
urgent application, ordered the applicant to make interim
payment of
R60 500,00 within seven days and to pay the costs on an attorney and
client scale. The amount was paid by the
applicant.
The parties
contentions
13.
The applicant contended that the applicant has complied with the
terms and conditions of employment contained in the arbitration
award. The third respondent was employed as a sales manager at
the Polokwane branch at a basic salary of R6 000.00 per month
plus
commission on a sliding scale. As sales manager, the third
respondent focused on the sales of used vehicles. He
was
employed in Limpopo. He discharged his duties in that
province. It was significant that the third respondent did
not
dispute that he was employed for the Limpopo Province in any of the
letters from his attorneys. He had stated in his
answering
affidavit that he had relocated to Johannesburg for medical treatment
and it was against this background that he sought
to be reinstated in
Gauteng. The applicant was well able to offer him employment on
the same terms and conditions of employment
in Gauteng, because the
applicant had branches there and since the third respondent was
residing in Gauteng since February 2003.
What is clear is that
even before determination of this matter on 14 August 2003, the third
respondent on his own version had been
residing in Gauteng since
February 2003. He relocated to Gauteng for his personal
considerations long before he was reinstated.
14.
The applicant contended that reinstatement on the same terms and
conditions is precisely what it means. It simply means
that the
status quo ante
the dismissal is restored. The third respondent was reinstated
as a sales manager focusing on used vehicles in Polokwane
in
Limpopo. Since the Polokwane branch was closed, the applicant
was entitled to place the third respondent for duty
at the
Makhado branch, which was closest to the Polokwane. The third
respondent would, on his own version have received an
additional fuel
allowance of R200 per week to compensate for travel from Polokwane to
Makhado. Had the third respondent not
been dismissed on 1
February 2003, the Polokwane branch would still have closed.
The third respondent would still have moved
to Makhado and would have
travelled from Polokwane to Makhado and be compensated for this as
was the case with effect from 15 October
2003.
15.
The applicant contended that the third respondent could not simply
refuse to work on 16 October 2003. He had other remedies
at his
disposal instead of refusing to work. After he had relocated
permanently to Gauteng in February 2003, he had no intention
of
returning to work for the applicant. The third respondent
clearly thought that the applicant was bluffing when he was
required
to report at Makhado. The third respondent called the bluff,
and it was found not to be a bluff. The third
respondent then
reneged on the agreement. He did not tender his service.
He is therefore not entitled to reinstatement
at the applicant in
terms of the award of the commissioner.
16.
The applicant contended that the third respondent had no intention of
procuring alternative employment and was seeking to retire
at the
expense and costs of the applicant. Upon receiving the third
respondent’s answering affidavit, and reading his
contentions
that he was now permanently residing in Gauteng and had no source of
income or work, and in essence relying on charity,
the applicant
decided to offer the third respondent employment in Gauteng,
alternatively he was instructed to report for work at
Makhado.
The third respondent rejected the proposal and said that he was
willing to take up employment in terms of
the basis laid down in the
arbitration award. He did not specify what taking up employment
on the basis laid down in the
arbitration award meant. This
according to the applicant meant reporting for duty at Makhado which
the third respondent has
not done or tendered to do. The
applicant’s attorneys reiterated the above position and made it
clear that as a settlement
offer, the third respondent could accept a
position in Germiston plus R52 000.00 or a cash offer of R100
000.00. If he was
not willing to settle, the third respondent
would have to report for duty at Makhado. The third
respondent’s attorneys
responded indicating that the current
application had to proceed. Whilst the third respondent was of
course entitled to reject
the settlement proposals, no attempt was
made by the third respondent to report for work at Makhado which the
third respondent
was not entitled to reject. Finally on 24
November 2006, the third respondent was instructed to report for work
at Makhado
before 1 December 2006, in terms of the reinstatement
award in the arbitration award. The third respondent has not
attempted
to report for work in Makhado.
17.
The third respondent contended that the applicant since the
arbitration award on 14 August 2003 has consistently tried to
bulldoze
or railroad him into a position of accepting less favourable
terms than provided for in the arbitration award even after it was
made an order of court on 28 October 2005. This is evident from
the array of court procedures stubbornly resisting the arbitration
award in that it was at all relevant times clear that he was not
permanently disabled although his injuries may be permanent and
correspondence the applicant embarked upon. The applicant had
on each occasion instructed him to report for work and has
failed to
reveal on what precise terms he would be reinstated. The
applicant has all along set up insubstantial technicalities
and
playing games blindfolding itself to the arbitration award made an
order of Court.
18.
The third respondent contended that the arbitration award did not
state that he had to be reinstated in Makhado. He was
later
offered a position of sales representative at the Germiston branch
which was rejected as the terms of reinstatement offered
were
regarded as a flagrant contempt of the said court order. What
was significant is that the applicant has shown by its
said offer
that the third respondent’s position at the date of his unfair
dismissal could reasonably have been created in
its branches in
Gauteng. The applicant has further shown that for more than
three years it acted spitefully and resentfully
by not acceding to
third respondent’s request to be reinstated in the Gauteng
area. The applicant lost sight of the
fact that the third
respondent was compelled to settle in Gauteng following on his
substantially unfair dismissal. The applicant
had instructed
the third respondent to work at Makhado without affording him a fair
consultation before the applicant took the
decision. The
purpose of the requirement of prior consultation is to ensure that
the ultimate decision is genuinely justifiable
for operational
requirements. The function of the court is not to second-guess
the business efficacy of the employer’s
ultimate decision, but
to learn whether that decision is genuine. Reinstatement in the
Gauteng area would be according to
fairness and justice as “Justice
is not served by the court putting on blinkers”.
The issues
19.
The issue to be decided is whether the applicant has reinstated the
third respondent on 15 October 2003 and what amount of back
pay or
otherwise is payable to him. If it is found that the third
respondent was reinstated on 15 October 2003 and was paid
his back
pay, it will not become necessary to consider the third respondent’s
counter application. The amount that
this court ordered the
applicant to pay to the third respondent in the urgent application
was in respect of the commission and
back pay up to the 15 October
2003.
Did the
applicant reinstate the third respondent on 15 October 2003?
20.
The crux of the matter is whether the applicant has complied with the
arbitration award which was to reinstate the third respondent
in his
previous position with no loss of benefits. It must be borne in
mind that the sum of R60 500.00 was paid to the third
respondent
which represents the basic salary and the commission that the
applicant agreed was owing to the third respondent.
The
commissioner did not quantify the commission that the applicant owed
the third respondent. The third respondent should
have referred
this issue to the commissioner to deal with after he could not
resolve it with the applicant.
21.
It is trite that the filing of a review application does not stay the
enforcement of an award unlike appeals. The applicant
was not
happy with the arbitration award and decided to take it on review.
It pointed out to the third respondent that it
would in the interim
reinstate him and the issue of back pay and commission would be left
for the review court to decide.
Should the applicant’s
review application succeed, the third respondent would have to leave
employment and should it fail,
he would remain in employment.
22.
Reinstatement on the same terms and conditions means that the
employee must be placed, as far as it is possible, in the position
that he or she would have been in had he or she not been dismissed.
See
CEPPWAWU & Another v Glass &
Aluminium 2000 CC
(2002) 23 ILJ 695
(LAC);
Food & Allied Workers Union v
General Food Industries Ltd
(2002) 23
ILJ 1808 (LC) and
Chemical Workers
Industrial Union v Price’s Candles (SA)(Pty) Ltd
(1994) 15 ILJ 857 (IC) at 865. This means that in terms of the
arbitration award, the third respondent had to be placed back
as a
sales manager at the applicant’s Polokwane branch as if he were
not dismissed on 1 February 2003. The third
respondent
was employed in Limpopo at the time of his dismissal and should
therefore have been employed there. He could not
have been
reinstated at the Polokwane branch since it had closed down. He
should have raised this issue with the commissioner
about being
allowed to be reinstated in a different province but could not as a
matter of right have insisted to be employed in
Gauteng. He
could only do so if the applicant was agreeable to this. He had
moved to Gauteng for treatment at Millpark
Hospital which was before
his dismissal. The treatment would have been for the period 1
February 2003 to 1 April 2003.
He was employed for the Limpopo
Province and simply refused, despite being instructed to work at
Makhado to do so. He was
going to receive a fuel allowance of
R200 per week to compensate him for travelling from Polokwane that
was closer to Makhado.
23.
The arbitrator made the following order in his arbitration award:
23.1
The applicant was ordered to reinstate the third respondent with
retrospective effect from the date
of his dismissal on the same terms
and conditions of employment that existed before his dismissal.
23.2
The composition of his average which the third respondent would have
earned from the date of his dismissal
to the date of his
reinstatement must be based on the average monthly sales figures over
the period 1 August 2002 to 1 August 2003.
23.3
The third respondent must report for employment within three working
days from receipt of the arbitration
award.
23.4
The applicant is ordered to pay the third respondent’s cost of
the arbitration proceedings which
must be taxed in terms of the
highest Magistrate’s cost scale.
24.
There cannot be a real dispute about whether the applicant reinstated
the third respondent. He was at the time employed
in Limpopo
and would still discharge his duties in the same province but at a
different branch. He did not dispute in any of his
correspondence
that he was employed for the Limpopo Province. It is clear from
correspondence that the third respondent was
instructed to report for
work at Makhado on 15 October 2003, which he did. He was
employed as a sales manager and was going
to resume employment as a
sales manager. As a sales manager, he had focused on the
sales of used vehicles. He
was going to earn the same basic
salary of R6 000.00 per month. This is not in dispute. It
is common cause that the
third respondent was earning a commission.
The arbitrator did not state what the exact amount of commission is
that he was
earning. The arbitrator did not quantify the amount
that he was going to receive as arrear commission. When he was
reinstated, he was told that he would be earning commission.
This was on a sliding scale. He was not happy with this.
The third respondent was now going to be reporting to the general
manager and he was not happy with this. There were now
going to
be two sales managers.
25.
I agree with the applicant’s contentions that the proposal by
the applicant to the third respondent to commence work on
15 October
2003, was in clear and unequivocal terms. These terms were
confirmed in writing before the third respondent reported
for work on
15 October 2003. The first term was that his reinstatement
would be pending the review application being proceeded
with, and
subject to the final determination of the review. This was
interim relief and the third respondent agreed with
it. The
second term was that the third respondent had to report for duty
Makhado. The third respondent agreed to this
and did report for
work in Makhado. The third term was that the issue of back pay
would be determined as part of the determination
of the review
application. The third respondent agreed to this and reported
for work on such basis. The fourth term
was that the applicant
would not be in any way responsible for the fact that the third
respondent relocated to Gauteng, and would
not be responsible for any
payment relating to such relocation and him reporting for work.
The final term was that it would
be on the same terms and conditions
of employment of the third respondent. The applicant undertook
that this would be the
case. The third respondent then reported
for work but alleged that the conditions of employment were
different. The
applicant disagreed and said that there was a
factual dispute between the parties about this. This however
does not detract
from the fact that the applicant undertook, and was
clearly bound by such undertaking and that the terms and conditions
of employment
would be the same. He therefore reported for work
on the above terms, and worked a full day on 15 October 2003 on such
terms.
26.
The third respondent was instructed on several occasions to report
for work after the review application was dismissed.
He simply
refused to do so and sought compensation. He stated that he was
prepared to be reinstated in terms of the arbitration
award but
simply did not arrive at work when he was instructed to do so.
He was more interested in a financial settlement.
Settlement
negotiations failed and this application was filed on 29 June 2006.
In his answering affidavit, he does not tender
services, but demanded
compensation of some R2 million until his retirement. Upon
receiving the third respondent’s
answering affidavit, the
applicant decided to offer him employment in Gauteng. He was
offered the position of a sales representative
at the Germiston
branch in Gauteng, at R5 500,00 per month basic plus commission on 27
October 2006. Alternatively he was
again instructed to report
for work at Makhado. The proposals were rejected by the third
respondent on 6 November 2006 and
showed his willingness to take up
employment in the basis laid down in the arbitration award. He
did not state what taking
up employment on the basis laid down in the
arbitration award means. The applicant views this to mean that
it can only mean
reporting for duty at Makhado, which he has not done
or tendered to do.
27.
I am of the view that the third respondent was not entitled simply to
leave his employment on 16 October 2003. As stated
above, the
applicant had undertaken that the conditions of employment would
remain the same. The fact that he had to report
to a general
manager was clearly not a change to his terms and conditions of
employment. It does not detract from the fact
that he was
reinstated as a sales manager. As for the commission, it
appears from the evidence that the Makhado branch was
much bigger
than the Polokwane branch. His earning potential was greater.
He should have waited for his commission
payment to decide whether
his earnings as he had before would be the same or similar.
Even if the commission then was not
the same, the third respondent
could not simply leave. He could not as a matter of law,
withdraw his services because the
applicant may have made changes to
his commission structure, which is what happened. He should in
my view have declared a
dispute about his commission. He had
other legitimate avenues open to him if he discovered that his
commission had been reduced.
He could either have lodged a
grievance or lodged a dispute at the CCMA in terms of an unfair
labour practice dispute or even lodged
a breach of contract claim
with this Court in terms of section 77 of the Basic Conditions of
Employment Act. He could simply
not leave.
28.
The third respondent was opportunistic. He was driven by greed
and saw this case as an opportunity to become a millionaire
without
having to work. He should have remained in employment on 15
October 2003 after he was reinstated. He should
then have
challenged any non compliance with the arbitration award whilst he
remained in employment. He did not so and it
appears that he
was a victim of poor advice. He was ill advised. Had he
remained in employment he would not have suffered
the financial woes
that he is currently suffering from. He has brought the
financial woes on himself. He was
clearly not interested in
working in Limpopo and saw this as an opportunity to become a
millionaire rather than tendering to work
at Makhado.
29.
The application stands to be granted. It follows that the third
respondent’s counter application stands to be dismissed.
30.
I do not believe that this is a matter where costs should follow the
result.
31.
In the circumstances I make the following order:
31.1
It is declared that the third respondent is not entitled to any
reinstatement in terms of the arbitrator
arbitration award dated 14
August 2003 which was made an order of Court on 28 October 2005;
31.2
It is declared that the third respondent is not entitled to any
further compensation or back pay in
terms of the arbitration award
dated 14 August 2003 which was made an order of Court on 28 October
2005.
31.3
It is declared that the applicant has complied in full with the
arbitrator’s arbitration award
dated 14 August 2003 which was
made an order of court on 28 October 2005.
31.4
The third respondent’s counter application is dismissed.
31.5
The applicant is to pay the third respondent’s costs in terms
of the arbitrator’s award.
31.6
There is no order as to costs.
FRANCIS
J
JUDGE
OF THE LABOUR COURT OF SOUTH AFRICA
FOR THE
APPLICANT
:
ATTORNEY S SNYMAN
FOR THE RESPONDENT
: P STIPP
INSTRUCTED
SHAPIRO & SHAPIRO INC
DATE OF
JUDGMENT
:
3 JULY
2008