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[2008] ZALCD 5
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KwaDukuza Municipality v South African Local Government Bargaining Council and Others (D187/2006) [2008] ZALCD 5 (10 July 2008)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT DURBAN
CASE
NO : D187/2006
In
the matter between:
KWADUKUZA
MUNICIPALITY
Applicant
and
SOUTH
AFRICAN LOCAL GOVERNMENT
BARGAINING
COUNCIL First
Respondent
K
MADONSELA
N.O. Second
Respondent
B.S.P.
PILLAY (represented by the
SOUTH
AFRICAN MUNICIPAL WORKERS’
UNION Third
Respondent
JUDGMENT
PILLEMER,
AJ:
[1]
The Applicant in this review application is the KwaDukuza
Municipality. Third Respondent is an employee of the Applicant who
sought redress in the South African Local Government Bargaining
Council alleging he had been a victim of an unfair labour practice.
Third Respondent was successful in an arbitration and was effectively
promoted to a grade 2 level by means of what was described
as a
“protected promotion”. The Applicant was not satisfied
with the result and launched the present proceedings to
have the
award issued by Second Respondent, an arbitrator who published the
award under the auspices of the bargaining council,
reviewed and set
aside.
[2]
The review was launched way out of the time limits allowed under the
Labour Relations Act, 1995 (“the LRA”) with
the result
that condonation for this default is sought as an integral part of
the review application papers. The explanation for
the delay is full.
It candidly reveals serious lapses on the part of municipal officials
and identifies negligence and administrative
errors that occurred
after attorneys were instructed, explains that the matter was
overlooked and misfiled in their offices and
ignored by the municipal
officials, who must have realised that something was amiss if they
had given the matter any consideration
at all since they knew of the
problem with the time limits, but never followed up with the
attorneys to ascertain why there was
no progress in the matter. The
review only eventually saw the light of day after the Third
Respondent had taken steps to enforce
the award and, even then, there
was an unsatisfactory further delay while the papers were being
prepared and before they were eventually
issued. I do not propose to
set out the detail of the reasons for the delay in this judgment as,
correctly in my view, it appeared
to be common cause that,
notwithstanding the default, the application at the end of the day
falls into the category where condonation
will only be granted if
prospects of success are good, but if they are good, the default is
not so gross, the delay so excessive
or the explanation so poor that
the Applicant should be shut out of court. The unsatisfactory conduct
can be dealt with adequately
in such a case by an appropriate costs
order and, in the result, the fate of the condonation application
rested on the fate of
the review. The matter was argued on that
basis.
[3]
Although initially there was some jurisdictional challenge as to the
nature of the proceedings that were launched in the bargaining
council, this was not pursued in argument and correctly so. It is
plain that by the time the matter was ripe for arbitration all
the
parties appreciated the nature of the application to be a referral of
an alleged unfair labour practice relating to a promotion
in respect
of which the bargaining council had jurisdiction. The bargaining
council had jurisdiction to determine the dispute and
the challenge
to jurisdiction was bad.
[4]
The Third Respondent challenged the fairness of the appointment
process dealt with below. Although he did not seek an award
setting
it aside or claim relief that impacted on the parties who had been
appointed, in the light of decisions in the Labour Appeal
Court that
seem to contemplate that it may be necessary for all interested
parties to be joined whether or not they will be affected
by the
relief sought, the Third Respondent took steps to join them all. They
were all given notice but seem to have waived their
right to be
joined or at the very least consented to the matter proceeding
without their participation. The contention in the papers
that the
arbitration had been flawed because of an alleged non-joinder was,
wisely in my assessment, not pursued in argument. That
challenge is
also without merit.
[5]
The Third Respondent’s complaint in a nutshell was this. He
contends that he was qualified to be considered for appointment
to a
post falling within the senior management grades of 1-3 and in
particular to the post of Director Traffic/Crime Prevention
(a grade
2 post). He relied upon the applicable collective agreement and the
Applicant’s own categorisation of the grade
1-3 posts in
question as “new posts” which as a result should have
been advertised. Had they been advertised he would
have had an
opportunity to apply to fill the one of the posts. Appointments were
made without advertising the posts which he understandably
contended
was unfair in relation to him. If he had been successful the
consequent appointment would have constituted a promotion
for him and
thus, he contended, he was the victim of an unfair labour practice by
the failure to advertise the posts. The relief
he sought was
promotion to a grade 1 post on what he called “protected
promotion”, intending thereby that he be treated
by way of
benefits and salary as if he had been promoted but would continue
with his current job.
[6]
With the constitutional changes to local government, reorganisation
and restructuring became necessary country wide. Placement
of the
existing workforce into the changed structures produced challenges
for the local authorities and the trade unions representing
the
membership employed by the municipalities. The bargaining council
facilitated a collective agreement in the council dealing
with these
matters. The Third Respondent relies upon that collective agreement,
which is known as the SALGBC Placement Policy.
Clause 3.4.1.4 thereof
deals with new posts and, under the heading “new posts”,
reads as follows: These are posts,
which carry duties and
responsibilities that do not exist in any form in the present
structures. These posts shall be advertised
both internally and
externally and shall be filled giving preference [firstly] to
internal candidates from designated group, [then
to] internal
candidates from non designated groups and [finally to] external
candidates. It was the Third Respondent’s case
that clause
3.4.1.4 applied to the posts he was interested in and for this he
relied upon decisions taken by the Applicant at a
Placement Committee
meeting and the public circular issued pursuant to that meeting which
had classified the posts in question
as “new posts” and
accordingly of the kind that had to be advertised. This followed upon
the resolution of council
recorded as follows “ Council
declared all positions on level 1-3 as falling outside of the
placement category as a means
of promoting transparency. The above
positions were in anyway (sic) classified as New Posts, which in
terms of the guidelines had
to be advertised both internally and
externally.” It might well be that the posts were not really
new posts as defined but
“as a means of promoting
transparency”, whatever that phrase may have been intended to
encompass, were deemed by the
Applicant to be such and were treated
as if they were.
[7]
The applicant eventually found itself on the horns of a dilemma. On
the one hand because nothing had been done pursuant to the
decision
to advertise the posts after two years had passed it had employees in
a pool who had been permitted to act in these posts
for an extensive
period and had expectations arising out of this. On the other hand
advertising the posts could be challenged and,
on top of that, lead
to the persons in the pool losing their employment, which could also
be challenged. It decided to make appointments
into these posts
without advertising them notwithstanding its earlier decision to
treat them as new posts and to advertise them.
The Applicant
recognised that this may well lead to dissatisfaction and it is
recorded in a minute that what was being done was
contrary to the
normal recruitment procedures and must be done in a manner that
“avoids future challenges and expectations”.
Applicant
had managed to manoeuvre itself into a position where whatever it did
someone would have been unhappy and would have
cried foul. It made
its decision and faced up to the challenge of the applicant
contending that it was not unfair to have dealt
with the problem in
the manner it did because that approach avoided retrenchments.
[8]
The arbitrator disagreed and she took the view that the Applicant was
bound primarily by the collective agreement. She pointed
out that the
LRA places a premium on collective agreements and, even balancing the
decision against what she referred to as “the
noble intentions
of council to avoid retrenchments” of those in the pool, she
concluded that this was not a good enough reason
to escape the
consequence that failing to comply with the collective agreement was
unfair
viz-a-viz
Third Respondent and, in the result, amounted to an unfair labour
practice in relation to the Third Respondent.
[9]
The Arbitrator had in mind that the LRA conferred a wide discretion
on her in relation to remedy (s193(4)) and decided that
it would be
fair to say Third Respondent would have been appointed to one of the
posts. She did not know which one and so decided
that a middle ground
of grade 2 should apply and then directed the Applicant to grant the
Third Respondent a level 2 protected
promotion which she explained
would amount to the Third Respondent remaining in his current
position but enjoying all the benefits
and salary scale that are
applicable to a level 2 position. She directed that the protected
promotion should take effect from the
day in which the contested
positions were filled. She then classified the award as compensation
and ruled that the compensation
arising from the protected promotion
had to be paid within 30 working days from the date of her award.
[10]
Ms Nel, who appeared for the Applicant, raised three main arguments
in support of the challenge to the award. In the first
place she
contended that notwithstanding the Applicant’s own decision as
published that categorised the grade 1-3 posts as
posts that would be
advertised and as new posts, they were not actually new posts because
it was not possible for them to fall
within the definition of a post
“which carried duties and responsibilities that do not exist in
any form in the present structures”.
She submitted that the
Third Respondent bore the
onus
of proving that these were new posts as defined and contended that
since all he did was rely upon the council resolution, that
was not
enough to discharge the
onus
.
I do not agree. It may well be that these are actually not new posts
as defined, but that is how they were categorised by the
Applicant
and it never chose to change its stance. It appreciated that it was
deviating from its own policy when it decided not
to advertise as it
had undertaken to its employees it would. It hardly lies in its mouth
to contend that the arbitrator acted as
no reasonable arbitrator
could have acted in accepting at face value the Applicant’s own
position in relation to these posts.
The argument that the arbitrator
was obliged to interrogate the validity of the Applicant’s
stated position and on which
Third Respondent placed reliance before
finding that there had been unfairness in not following what it had
publicly undertaken
it would do does not commend itself to me. In my
view the arbitrator was entitled to deal with the matter on the basis
that it
was unfair not to advertise after having designated these
posts to be new and having undertaken to advertise on the basis of
the
collective agreement. Ms Nel’s second argument
related to the alleged failure of the arbitrator to have regard to
clause
3.1.10 of the collective agreement. This clause provided for
employees who could not be placed to be held in a pool for a period
of at least six months after which if they could not be placed for
retrenchment processes to be put in place. As I read the award,
the
arbitrator did take the problem of possible retrenchments into
account and her award in fact refers to the noble intentions
of
avoiding retrenchments. She balanced that against the violation of
the collective agreement and found the reason not to be sufficient
on
balance to avoid the consequence that what had occurred was an unfair
labour practice. A reasonable arbitrator could well come
to this
conclusion and in my assessment this challenge to the award must also
fail. The third challenge was based upon the nature
of the relief.
Compensation had to be paid in 30 days and, as Ms Nel pointed out,
working out the value of the difference in benefits
and salary over
an entire working career is only possible using an actuary and even
then there are a whole host of unknown factors
that would render that
result unsatisfactory. In addition she argued that protected
promotion is not an appropriate form of compensation
for someone who
has not proven that he would have been successful, but only that he
was unfairly denied the opportunity to compete.
In addition there has
to be a cap on compensation of a year’s remuneration in terms
of section 194(4) and the award is open
ended.
[11]
Protected promotion is a concept that is recognised by the Public
Service Code and in a minority judgment of the Labour Appeal
Court
such an Order would have been granted on the facts in that case (see
Goldstein JA in
Department of Justice v
CCMA and others
[2004] 4 BLLR 297
(LAC)
see also
Willemse v Patelia NO and
others
[2007] 2 BLLR 164
(LC))).
However in a recent judgment the SCA held that it is impermissible
for a court to substitute its own decision – to
give an
effective promotion - for that of the employer (see
Min
of Defence v Dunn
[2007] SCA 75 RSA at
paragraph [39]). Paragraph 1 of the Award seems to do this, but then
again the arbitrator clarified her award
by describing what had been
awarded as compensation under section 194 of the LRA. On either basis
I am satisfied that it was wholly
inappropriate and unreasonable as a
remedy or as a measure of compensation for the reasons advanced by Ms
Nel. In fact had the
arbitrator properly applied her mind to the
question of compensation she would have found that there was
insufficient material
before her to enable her to hold that any
actual damages had been suffered. She had to determine the amount of
compensation, if
any, that would appropriately compensate the Third
Respondent for unfairness in denying to him the opportunity to
compete for a
post for which he seems to have had the requisite
qualifications and in which he may have succeeded had he competed and
been considered.
Ms Nel contended that the evidence did not prove
that the Third Respondent was in fact qualified, but since Third
Respondent when
he testified alleged he had the qualifications and
this was not challenged in the arbitration and appeared to be
accepted by all
involved in the proceedings I am of the view that the
matter is properly dealt with on the basis that he had the
qualifications
and had a chance if he had been given the opportunity
to apply, but there was no probability of success. It does not seem
to me
that in such a context the amount of compensation can ever be
substantial. It is only a most exceptional kind of case where there
is a certainty that the complainant would have been appointed if
considered that actual damages can be proven (as was the case
in
Willemse v Patelia NO and others
[2007]
2 BLLR 164
(LC). This is not one of those cases. Accordingly apart
from out of pocket expenses, if any, compensation in a case like this
can
only be for a
solatium
to redress the injuria. I consider that one of the purposes of the
award of compensation for an unfair labour practice in an appropriate
case will be to compensate for the
injuria
of being treated unfairly (compare
Reckitt
& Coleman (SA) (Pty) Ltd v Bales
[1994] 8 BLLR 32
(LAC) at 48;
Harmony
Furnishers (Pty) Ltd v Prisloo
[1993]
14 ILJ 1466 (LAC)) and, in this instance, of unfairly being denied an
opportunity to compete. The public policy and constitutional
considerations that underlie imposing a punitive element in an award
of compensation against an Organ of State that are set out
in
Fose
v Minister of Safety and Security
[1997] ZACC 6
;
1997
(3) SA 786
(CC) at para
[69]
-
[72]
apply in the present case so no
punitive award should be made.
[12]
Ordinarily I would have remitted the matter to the Arbitrator to
quantify compensation. I was informed from the bar that the
arbitrator is deceased. In those circumstances I am in as good a
position as another arbitrator who would have to be appointed
to deal
with the compensation on the evidence that was before the Second
Respondent. Mr Seery, who appeared for the Third Respondent,
argued
that the matter should be remitted for evidence to be led on damages
because damages or compensation were not the relief
that had been
sought and this aspect had for that reason not been fully canvassed.
He accepts that there is no evidence of damages
having been suffered
other than in the general sense that had Third Respondent been
considered and had he been promoted he would
have been better off. I
do not consider that it is appropriate to remit the matter for
further evidence. The Third Respondent had
his chance to lead
whatever evidence he was advised to lead and there is no basis for
reopening the case to enable him to change
the nature of his relief.
I have also borne in mind that the dispute has festered since
November 2005 and it is in everyone’s
interest that finality is
achieved. In those circumstances I intend to set aside the award and,
since I take the view that an award
of compensation is appropriate
relief to substitute the award of compensation that should have been
made by the Arbitrator and
thereby avoid the delay and additional
expense involved in remitting the matter to the bargaining council
for another arbitrator
to do this exercise.
[13]
In my assessment lump sum compensation that takes the form of general
damages is appropriate to compensate for the
injuria
.
Ms Nel submitted, and I agree with her, that compensation of R5,000
will do justice to the case.
[14]
The award of the Second Respondent accordingly falls to be set aside
and replaced with an award directing the Applicant to
pay
compensation to the Third Respondent in an amount of R5,000, which
shall be paid on or before 1 August 2008.
[15]
It follows from my decision that the review succeeds that the
prospects of success on the review are such that condonation
should
be granted. That leaves the question of costs of the condonation part
of the application. The Applicant sought an indulgence
on the basis
of an explanation that had many unsatisfactory features with the
result that, even though successful in relation to
the condonation
aspect of the application, it should pay the costs associated with
the condonation application. Applicant is also
liable to pay the
wasted costs of the adjournment of the matter on 16 November 2006
when it was adjourned due to the absence of
a record. In relation to
the main review the result is such that even though the Applicant has
been successful, that is only partial
success and I intend to make no
order as to costs on the review portion of the application. It would
be an impossible task for
a taxing master to determine what part
related to condonation and what to the main review and I consider
that it would be fair
to take a robust approach and allocate half of
the costs to the condonation aspect.
[16]
The order I make therefore is the following:
[16.1]
The late launching of this review is condoned.
[16.2]
The award of the Second Respondent dated 14
November 2005 under case
no KPD030502 issued under the auspices of the First Respondent is
reviewed and set aside and replaced
with an award directing the
Applicant (Respondent in the arbitration) to pay as compensation to
the Third Respondent (Applicant
in the arbitration) the amount of
R5,000 and to make that payment on or before 1 August 2008.
[16.3]
The Applicant is ordered to pay the wasted costs
occasioned by the
adjournment of the application on 16 November 2006.
[16.4]
The Applicant is ordered to pay one half of
the Third Respondent’s
costs in the application.
_____________________
M PILLEMER
ACTING
JUDGE OF THE LABOUR COUR
T
Date
of Judgment: 10 July 2008.
APPEARANCES
For
the Applicant:
Adv C Nel
For
the Respondent:
Adv T Seery